Intro to Marketing Concepts

3.1) Adoption and Diffusion of New Products

Question 1)

Once new products are innovated, they do not satisfy customer needs until they are introduced into the market, and consumers buy and use them. For our new battery-operated, plug-in rechargeable electric automobile, several factors determine the rate of diffusion or adoption by consumers. For all new products, these factors exist, and they will affect our new product as well. The first factor is observability, which means how visible the new product will be to the consumers. This visibility includes the ability to identify its benefits and uses to the consumers who might be potential purchasers. For our new product, it will be worth to ensure that consumers can view it from anywhere in the market. For instance, it should be well displayed in the showrooms. More so, people must be in position to see its benefits from the first purchasers of the product. When a potential customer sees the features of the car, its economic value in terms of fuel consumption, this will increase the rate of adoption considering the sensitivity of fuel economic vehicles in the market. Without a good observability, our product may take long to be adopted since this is the first factor that affects diffusion of the product (Solomon, Marshall and Stuart 239).

The second factor in diffusion of a new product is triallbility, which is the ease at which consumers can sample or try the product, and notice its benefits the first time they try the new product (Solomon, Marshall and Stuart 239). For instance, in adoption of microwaves, to try its benefits, consumers were given a chance to try food made form a microwave to notice the difference and its time saving efficiency. For our product, customers must have a chance to try the new car. This way, the consumers will be in a position to notice the benefits of not having to refuel their car, which is quite expensive in the current fuel scarcity. Any other added benefits must be realized by the consumers during trial of the new product (Solomon, Marshall and Stuart 239).

The third factor influencing the new product diffusion is complexity or ease of the new product in terms of use (Solomon, Marshall and Stuart 239). For our product, the complexity comes in the recharging of the battery. Some consumers might see it as a complex matter having to recharge the battery, especially time it will take to recharge the battery, as well as how many miles the vehicle can cover before the battery runs out of power. The consumers must understand how to make use of their cars especially in terms of ensuring optimum functioning of the vehicle as well as its maintenance considering the people may not want to have complications in maintaining their vehicles.

The fourth factor affecting diffusion rate of new products is compatibility. Compatibility concerns the rate at which the product is complying with the current issues concerning the products of its kind, such as standards set by the society (Solomon, Marshall and Stuart 238). Currently, concerning cars, the society is much concerned with vehicles that are economic, environmental friendly and efficient. For our product, these factors are well looked at considering the car will not be using fossil fuel and this will reduce air pollution. Another compatibility revolves around its use to the consumers such as does is satisfy the consumers in terms of what the vehicle does. Does it have the same capabilities of other cars?

Finally, relative advantage it the fifth factor determining the diffusion rate of the new product. This is the perception of the consumers that a particular product has advantages that are more superior (Solomon, Marshall and Stuart 238). This will affect our product if it has no superior advantage to offer the customer in order to entice them into preferring our product to competitor’s products. However, our added advantage comes from the fact that the vehicle abides to the currents issues surrounding the quality of vehicles. Many people see the advantage of a car in its economic efficiency and environmental friendly. However, additional features should be added to meet customer needs such as comfort.

Question 2)

Apart form the above-mentioned factors affecting diffusion, which concern the product itself, other factors exist to continue to affect diffusion rate of a new product in the market. These factors are awareness of the product. As soon as a product is innovated, the awareness to people affects the rate of adoption since without knowing that a product exits one cannot be seeking to purchase it. Another factor that does influence me is the marketing mix used especially the 4Ps, price, place, promotion and product. Product is discussed above in question one. Many people are sensitive when it comes to price, hence, the company should be very keen to price the car at a price that fits the value of the car. Place matters a lot when it comes to purchasing. Placing the item at the right place is crucial. For a car, getting the right show room is very crucial, a place where all customers can be able to see it. When it comes to promotion, the strategies used make a big impact such as advertising. The kind of advertisement placed on an item goes a far way to encourage people, and could discourage them if it does not appeal to them. A good promotional; mix should be used.

Question 1) Success Factors of Earth Buddy

Earthbuddy is a company that has gone through a tremendous success within a very short time to rise above its competitors. Despite being new in the toy business in 1994 and having many ‘grass heads’ competitors, Earthbuddy still won the biggest retail clients in the market. Its success factors came from its strong selling skills adopted by its entrepreneur. One of their success factors was selecting the best time to sell the product when they made the first 5000 copies of the toy to sell during mothers’ day as gifts.

Selling the product at such an event was a sure way of catching a big crowd; hence, the big retailers noticed their efforts when the products sold well. Considering they are retailers, their need to provide the best selling product is a key priority. This idea brought the product to the people, considering not many were aware of it since it was a new product. The factor that contributed to this is the idea knowing when best to launch a new product and targeting the right people at the right place and event. Had they tried to launch the product without using the mothers’ day, it could have cost more than they had. During mothers’ day, people buy gifts more than other usual days; hence, it was a good strategy to launch the product during this day. Many products are innovated or brought in new markets but few succeed. However, success does not only depend on the product itself but also when the launching of the product is done. The first impression is usually critical in determining the success of a new product.

Question 2) Product Strategy of Air Hogs

Since the success of Earth Buddies, the Spin Masters have come up with other product lines designed to satisfy the customers’ needs as well as product concepts. One the successful product lines have been the Air Hogs that have been a major hit for the Spin Masters.

Product concept

The Air Hogs’ core product concept is satisfying children who are interested in things that fly. Many children love planes and giving them a plane toy that can fly over 100 yards is quite satisfying for them. The actual product concept is the plane itself that the child gets to have and fly. It is made up of a plastic body with a propeller that flies when pumped with air. This is the core concept of all the Air Hogs. The augmented product concept of Air Hogs is not the best, but they have stated that the product’s wings are not meant to last for long; hence, there is need to keep replacing them. However, the company does offer replacement for products found with defects.

Product line

The product line strategy of Air Hogs is well developed with many models of planes made with the name Air Hogs to appeal to all kinds of consumers, such as those who love helicopters and those who love jets. They have also extended their product line to include cars, water and bike toys that are remote-controlled to capture the market for car toys and use the same brand name. By increasing the products in the line, they manage to increase their product line depth. Their strategy is to reach as many customers as possible through satisfying every customer with their preferred model, which are priced at different prices. Many companies use this strategy where the same product is made in different models but with same features and same theme to satisfy different tastes.

Question 3) Branding Strategy

One important strategy of marketing a product is branding (Solomon, Marshall and Stuart 285). A brand is a unique name or symbol that identifies a product with the particular firm that makes it, differentiating it from other competitor’s goods. Air Hogs is the brand that identifies the flying toys that come in different models and shapes. There are many models of Air Hogs, ranging from indoor planes to outdoor, together with helicopters and jet planes. Air Hogs uses a family or umbrella branding strategy where there are many models of Air Hogs under this name. In addition, each of the toys is advertised individually under the same name; hence, the umbrella strategy.


The advantage of using an umbrella brand is managing to maintain consistency with the consumers where the success will depend on the performance of the previous product. As such, the company does not have a hard time while introducing new products as opposed to having individual brands where each product has its brand. For Air Hogs, since the brand is strong, an umbrella branding suits them better for other products they innovate. When consumers identify a brand name they like on a toy, their perception of the particular brand depending on previous products plays a big role in marketing the product.


The disadvantages of umbrella branding are developing it at first. For a new company, developing an umbrella brand is hard. Another disadvantage is the dependence of new products on previous performances. If a particular product did not perform as customer expected, selling another product under the same name might be quite hard. Hence, when a product does not perform well or is under any controversy, all other products under that name might be under the same kind of threat since people first associate the products with the particular brand (Solomon, Marshall and Stuart 285).

Question 4) Marketing Recommendation

One of the factors of sustaining a brand or development of a toy company is the innovations of new products and marketing them as fast as possible. Hence, in order to market the Air Hogs and maintain an international growth, a strong strategy is crucial. Toys are made with certain concepts that can vary within a certain region. Hence, for faster growth, Spin Masters need to have innovators in all its markets. This way, diversity can be achieved and each region’s needs can be achieved and satisfied. In managing the brand, it is a good idea that Spin Masters deploy a manager to monitor the supplier’s accounts. I would recommend that each region have its management team to monitor the sales of each product and have the ability to make decisions concerning the particular region.

One of the best ways to market the Air Hogs is using promotion at the various markets and considering the 4 Ps to each different level considering that in some countries, people might be more price sensitive than others might. The company should look at each market individually so that it can suit every consumer preference. In addition, since people at different places relate in different ways to particular needs, the company can identify products that consumers at particular markets like in order to collaborate with them (Solomon, Marshall and Stuart 284). This way, the company can develop a better presence in the market. In addition, advertisement should be directed at consumers using their role models such as using famous people in the adverts. Considering that toys target the children who are keen to advertisements, using such a strategy can highly place the product (, 2005).

Question 5) Life Cycle Stage of Air Hogs

In my opinion, the air pressure toys are in the growth stage where the sales increase rapidly within a short period. This can also be considered as the income stage where the company makes as much profit from the increasing sales as possible. The air pressure toys are in the stage where the customers are desperately looking for the product. The market is now quite aware of the product, and considering there are profits, promotional marketing can be done since the goal at this point is to sell as much as possible. Hence, the profit margin is high since prices are still high and economies of scale are coming in.

Implication of growth stage

There are implications in the market at this stage, such as competitors entering the market with similar products to commit for the rapidly growing markets. At this point, competition starts to stiffen with more competitors coming in and there is need for adding other features to the product to stay ahead of the competitors.

Other strategies of the 4 Ps should come in such as differentiating to meet different customer needs and capture more markets in the product strategy. This is the point at which a company can make its market share big by fending off competition through blocking competitors from gaining market share through such strategies that ensure customer loyalty. Considering the company has already done the launching, their costs are lower than new entrants are, and lowering the price can further increase the advantage over the competitors. At this stage, the product sales are increasing daily and it is up to the company to keep a continuous supply of the products to the distributors as well as getting to other regions since much of the market is not yet covered. This should be done through more communication to customers such as advertisement and more promotion to the yet covered areas. At this point, the idea is to grow as fast as the company can before the competition becomes stiffer. At this point, the company should be seeking to use all the marketing mix strategies to capture as much as possible such their pricing strategy, distribution, and communication.

3.3 Pricing Strategy

Question 1)

Companies can use the different methods or pricing strategies available to attract more customers as well as ensure they remain loyal to the company. Some of the methods used to attract consumers are use of rebates, which are form of discounts that consumers get upon mailing their redemption rebates to the fulfillment houses. However, such rebates are usually designed to follow quite a long process before customers receive their cheque, some taking years or others are never fulfilled. This makes it hard for customers to redeem them upon purchasing an item after realizing the amount of effort it requires. The secret behind the rebates is to attract as much buyers as possible by putting up two prices, a lower one for those willing to go through a long process to get the discount and regular price for those who may not be willing to redeem rebates. The long process is designed to discourage people from redeeming their rebates upon realizing the process they have to go through; hence, the company ends up not giving much of the rebates.

It is quite ethical to use such a strategy as long as the consumers are aware that there is a process to follow to get the discount. This way, the consumer will be agreeing to go through the process if they purchase the product with the rebate. It would be unethical if all consumers were required to purchase the items with rebates since they would be forced to take a decision they could not have done willingly, hence it would be unfair to make the process long.

Question 2)

Individual customers will always want to receive discounts on items that are costly and may be items that last for a long time probably several years before one may need to purchase another one. Consumers are likely to send in their rebates for products they may not purchase often since the process is quite long and may not fit goods that are purchased everyday. Majority of consumers who redeem their rebates usually purchase long lasting items such as electronics and appliances for the office and home utility seeking to save on costs. Considering that manufacturers seek to entice more customers, the rebates are put up for each item to encourage the consumers to make more purchases from one manufacturer. In business context purchasing

Question 3)

Around November last year, I bought an LCD TV from Sony with a rebate that would have saved me $50. Upon buying, I went home and filled all the details that needed to be submitted before the rebate is issued. I waited for three months when I received a letter saying that my mail was lacking some information. This letter was quite disappointing considering how long I had waited. Considering the amount of work I did while mailing-in the first one, I gave up on the rebate. Since then, when buying any electronic product, I do not mind buying from Sony because they have good items, but my perception or the high regards I had for this company is no longer there. Even though the company itself is not concerned with redeeming the rebates, the fact that it was a product from Sony left me with a less liking for it than before. Since then I have never thought of purchasing an item on rebate.

Question 4)

While a customer chooses to buy an item on rebate, they must be ready to go through the process of mailing-in a rebate for redemption. The customer is free to make his or her choice whether to buy at the regular price or the rebate item. However, considering that manufacturers depend on the slippage to make more profit than issuing cheques for the rebates, they are bound to make it quite hard for the customers to receive their money upon mailing. The customers do have a right to receive their rebates upon redemption as long as the right process is followed. To avoid unethical practices by the manufacturer, the government should come in to regulate how they should be redeemed to avoid shutting many people from receiving their money after purchasing the items at the regular prices. In addition, because the manufacturer are quite aware that many people are not willing to go through the long process of redeeming their rebates, some will put up very good deals on the hope that many of the purchasers will not redeem them. The government should ensure a standard measure or process of redeeming the rebates to avoid such behavior from the manufacturer. Losses could be made when a smaller manufacturer is trying to compete with a larger manufacturer who might be having a better chance of mass production than the smaller one. Therefore, to avoid the large manufacturers from competing unfairly, it is important to have the government or industry regulation to set a fair market competition.

Works Cited The product life cycle and its marketing implications. 2005. Web. 28 October 2011.

Solomon, Michael, Marshall Grey and Stuart Elnora. Real People Real Choices. New York, NY: Prentice Hall, 2008. Print.


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