Strategic Management: Formulation and Implementation

The Consumer Adoption Process

The consumer-adoption process describes how potential customers learn about new products, try them, and adopt or reject them.

The theory of innovation diffusion and consumer adoption provides clues to identifying early adopters.

"An innovation "refers to any good, service, or idea that is perceived by someone as new. ... Diffusion process is "the spread of new idea from its source of invention or creation to its ultimate users or adopters" (Everett M. Rogers).

Adoption is the decision of an individual to become a regular user of a product. Adopter of new product have been observed to move through the following five stages: awareness, interest, evaluation, trial, adoption.

Manufactures try to bring their new products to the attention of potential early adopters, particularly those with opinion-leader characteristics.

Pricing Strategy

Price determine the total revenue and to a large extent the profitability of any business. The goals of pricing strategy are:

The price strategy is directly affected by the factors that make up the competitive structure of the industry. Thus, in making any pricing decision, the following factors deserve consideration: pricing objectives, cost, competition, the customer, and government regulations.