Bentley College Marketing- Honors

This blog is for MK 402-H01 and the greater Bentley College population.

Sunday, April 02, 2006

The role of advertising in startups and new product categories

The posting “The role of advertising in startups and new product categories” discusses recent research concerning the effectiveness of advertising for innovators and early adopters buying new products. The findings showed that although advertising works best for innovators and early adopters, it is not as effective for early majority buyers, who respond to information gathered from interpersonal communications. The research also looks at the larger picture, finding that interpersonal communication has a stronger effect on buying behavior by about tenfold over mass communication for buyers as a whole. The research also looks beyond the effectiveness of different channels on different consumer segments to the stages of the purchasing cycle. Advertising was found to be most effective in the awareness stage of the buying cycle. However, the buyer might have “the right predisposition to be informed by the ads,” meaning that they are already cued into the product by some other means, such as WOM. If they are not “primed” this way, then the advertising will be tuned out. It is in the preference stage when WOM becomes weighed more heavily.

This research informs marketing because it sheds light on the various factors that should influence the marketing decision making, especially for new products. Special considerations must be taken when new products are being brought to the market. How will consumers respond to the product? What channel and vehicle will be the most effective? Which target markets should be targeted first? If every aspect is not considered, if one step is missed along the way, then the rest of the marketing will be a wasted effort when the product fails.

This posting improved my understanding of marketing because it tied together a lot of the important step in developing an integrated marketing campaign for a new product, but in a short and simple way. It shed just a little bit of light on the major decisions that must be made for new products going to market. All of these decisions in the marketing plan must be optimized in order to reach success. For example, the stages of purchase decision making must be taken into consideration along with the consumer segment. Also, although the posting did not directly mention permission marketing, the concept is present with the idea that a consumer must be “primed” before seeing an advertisement for a new product or it will be tuned out along with all of the other “noise” in our media-rich world. I had never before thought of WOM as permission marketing since the concept is usually thought of as consumers opting in with companies to receive marketing messages. However, this got me thinking about how WOM is permission marketing in a pure form, since the consumer will either ask someone for information or listen willingly to a story about a product, brand, or company. It also seemed ironic to me that “start ups who are peddling new product categories to innovators and early adopters should not waste their time and energy on brand advertising. Instead they should focus their efforts on influencing the influencers so that the right interpersonal conversations can get started.” It seems that “brand building” is of utmost importance in today’s marketplace, but this research is proposing a different approach for new companies and products since if the initial awareness is not in place, the brand message will never be achieved.

The only critique I have of this posting is that it seems fairly general and broad. I would tend to believe that there would be a different approach to new product marketing depending on the product category. Also, if the brand was already established but introducing a new product, a completely different approach would be necessary. It would also be interesting to find out what the impact of negative WOM does to a new product. Also, the discussion of WOM, mostly called “interpersonal communication” in this posting, brings forth all of the difficulties, complications, and doubts associated with this marketing approach. Although it may have been proven more effective for cueing in consumers to new products, it is much more difficult to execute than an advertising campaign.


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