Trusted Old Or Thrilling New
My sixteen years old nephew came to me and said “Our neighbor Mr. Saxena has bought a new car, its Alto. Why did he buy Alto? He could have bought other latest models like Eon at the same price.” “But what is the problem in buying Alto then? Don’t you like it?” I asked “If it is the latest model, everyone looks at you and your car. Moreover a new look and latest technology are the additional benefits. Why don’t people buy only the latest models of cars?” he was curious The question stuck in my mind. Why some people buy the latest models, while others don’t? Concept of Product Life Cycle and Consumer Adoption Behavior: Products have a limited life and every product has a life cycle. Profits rise and fall at different stages. Products require different strategies at different stages. At different stages of life cycle, the challenges and opportunities are different. Customers are also different at different stages. As people are different, they think differently and so is their buying behavior. Some people are the first to adopt new product, while others adopt it later. A customer does not buy the same brand of any product throughout his life. Depending on his readiness to try new products and personal influence, he purchases different brands of the same product during different time periods. One, who had purchased an Alto ten years back, might not purchase it today again even if he wants a car at the same price level and he is satisfied with an Alto. Ten years back, Alto was at different stage of PLC and now it is at different stage. With the help of our Alto example lets us see that which type of people buy a brand/product at different stages of PLC. The categories of adoption in graph can be matched with corresponding stages in PLC graph. People as customers are divided into five categories:
1) Innovators: Innovators are those people who buy the products/brands as soon as it is launched i.e. at the introduction stage of PLC. They are technology enthusiasts, venturesome and enjoy tinkering with new products and mastering their intricacies. As we know that new products have more financial, social, functional, physical and psychological risks, innovators are risk takers and are not afraid of the product’s failure. 2) Early Adopters: These people are opinion leaders and are very careful while searching for new technologies that might give them a competitive advantage. They are less price sensitive and adopt the product if they get personalized solutions and good service support. Early adopters buy a product which is in introduction or growth stage. They don’t buy any product which is in maturity or decline stage of PLC. One, who wishes to buy a latest model car so that everyone looks at it, might belong to this category of customers. 3) Early Majority: They don’t tend to take risks with new products or technologies so adopt the new technology when its benefits are proven and a lot of adoption has already taken place. These people make mainstream market and are responsible for adding growth and maturity to PLC. 4) Late majority: They are technology shy and price sensitive, so buy the products which are in maturity or decline stage of PLC. They tend to get the benefits of additional discounts in later stages of PLC. They have been seeing their relatives and friends using certain products/brands and so they dream of owning the same products. Most of the marketers launch new versions of old brands with “All New” tag to give these people a feeling of ‘latest model’ with the reliability of a trusted brand. In case of cars, when a product is in maturity or decline stage, cost of maintenance also declines. Because of known technology, most of the mechanics are able to repair it, lowcost spare parts are also available in replacement market and thus risk also declines.
5) Laggards: They are tradition-bound and resist the innovation until they find that the status quo is no longer defensible so they buy the products which are in the decline stage of PLC. Thus we see that at every stage of PLC marketers find some customers for their products. Depending on readiness to try new products, some people buy the latest products/brands while others purchase older and trusted brands/products.
Key Words: Product Life Cycle, Consumer Adoption Process, Buying Behavior.
Naveen Arora Assistant Professor, Jagran Institute of Management, Kanpur Email: naveenarora080@gmail.com, naveenarora_80@yahoo.com