ADVERTISING AND CONSUMER BEHAVIOUR

UNIT-I
1. Define IMC. What makes it different from traditional promotion
programs? What are the steps in preparing a marketing plan?
A:
Integrated Marketing Communications (IMC) refers to integrating all the
methods of brand promotion to promote a particular product or
service among target customers. In integrated marketing communication,
all aspects of marketing communication work together for increased sales
and maximum cost effectiveness.
Let us go through various
Communication:

components

of

Integrated

Marketing

1. The Foundation - As the name suggests, foundation stage involves

detailed analysis of both the product as well as target market. It is
essential for marketers to understand the brand, its offerings and endusers. You need to know the needs, attitudes and expectations of the
target customers. Keep a close watch on competitors activities.
2. The Corporate Culture - The features of products and services ought
to be in line with the work culture of the organization. Every
organization has a vision and its important for the marketers to keep
in mind the same before designing products and services. Let us
understand it with the help of an example.
Organization As vision is to promote green and clean world. Naturally
its products need to be eco friendly and biodegradable, in lines with
the vision of the organization.
3. Brand Focus - Brand Focus represents the corporate identity of the
brand.
4. Consumer Experience - Marketers need to focus on consumer
experience which refers to what the customers feel about the product.
A consumer is likely to pick up a product which has good packaging
and looks attractive. Products need to meet and exceed customer
expectations.
5. Communication Tools - Communication tools include various modes
of promoting a particular brand such as advertising, direct selling,
promoting through social media such as facebook, twitter, orkut and so
on.
6. Promotional Tools - Brands are promoted through various
promotional tools such as trade promotions, personal selling and so on.
Organizations need to strengthen their relationship with customers and
external clients.
7. Integration Tools - Organizations need to keep a regular track on
customer feedbacks and reviews. You need to have specific software
like customer relationship management (CRM) which helps in

measuring the effectiveness

communications tools.

of

various

integrated

marketing

Integrated Marketing Communication is different from traditional advertising

and promotion. IMC uses a variety of communication tools to recognize the
value, which involves coordinating the various promotional elements and
other marketing activities that communicate with a firms customers.
Moreover, IMC is recognized as a business process that helps companies
identify the most appropriate and effective methods for communicating and
building relationship with customers and other stakeholders. However, the
traditional

advertising

relies

primarily on

using

the

mass

media to

communicate with the target audience, but mass media can lose peoples
viewers, listeners, and readers.
There are number of reasons why more marketers are taking an IMC
perspectiveto their advertising and promotional programs. The IMC approach
to marketing communications planning and strategy is being adopted by both
large and small companies and has become popular among firms marketing
consumer products and services as well as business-to-business marketers.
By coordinating their marketing communications efforts, companies can
avoid duplication, take advantages of synergy among promotional tools, and
develop more efficient and effective marketing communication programs.
Marketers recognize the value of strategically integrating the various
communication functions rather than having the operated autonomously. As
marketers become more sophisticated and develop a better understanding of
IMC, they are recognizing that it involves more than just coordinating the
various elements of their marketing and communication programs into a one
look, one voice approach.
10 Steps to Marketing Plan :

Marketing plans are flexible but generally include your goals, product or
service descriptions, target markets, competitive analysis, pricing,
distribution methods (print, digital, mobile, etc.) and action plan. These 10
steps can help you prepare your plan:

1.

Mission: This is your cornerstone. Write a short paragraph that defines

what compelling advantage or value you offer, including how it solves a
problem and makes the customers life easier. Be specific. Pinpoint the
customer pain that your product or service will relieve. Before you can
effectively market yourself create ads, websites or online campaigns
you must decide what type of problem solver you want your business
to be.

2.

Market research: This is how you identify customers needs and

wants. Build a detailed, trait-by-trait profile of your ideal prospects.
Again, be as specific as possible. Later, when you create your marketing
messages, aim those messages at those prospects. The research does
not need to be complex or costly. Online research, one-on-one
interviews with prospects, informal focus groups and email or webbased surveys are all inexpensive and relatively easy to do.

3.

Define your product or service: Carefully identify every product or

service you offer. Some products or services can be broken into pieces
and priced separately. List all the benefits that you can offer. You will
want to incorporate those in your marketing message.
4. Check the competition: Identify your key competitors both direct
and indirect including their strengths and weaknesses, and how your
business compares. Write down your analysis and make it part of your
plan.
5. Prepare proper pricing: Analyze your pricing structure and avoid the
markup mistake. That is when a business merely calculates the costs
and adds a set markup. Instead, use your market research to establish
what customers arewilling to pay and build the pricing around that.
6. Build a budget and promotion mix: Dont think of marketing as a
cost, but rather as your ace in the hole. This is what gives you the edge
over competitors who dont do marketing or do it poorly. Also, your
employees are better motivated when your business is in the public
eye. Look for marketing partners that can offer you multiple ways to
split your spend through a single provider, or that offer some type of
action guarantee.
7. Match marketing to your target terrain: If yours is a local market,
then thats where your marketing focus should be. Once you have the
basics covered, consider marketing neighborhood by neighborhood,
block by block and even customer by customer.
8. Marketing metrics: Build testing and metrics into your plan.
Marketing should not be risky or single-focus. One advantage of
advertising online is the ability to track results effortlessly.
9. Prepare a marketing message that resonates: Craft a rallying cry
a small, repeatable phrase that becomes the slogan for promoting
your product, idea or business. Fine-tune all messages. Edit, revise and
hone every word so they are as focused and punchy as possible.
Coordinate key phrases in all your marketing materials. For maximum
impact, repeat critical messages verbatim whenever you can.
10. Include an action plan: Simplify everything; eliminate potential
interruptions in the sales process and make decision-making as painless
as possible for your customers. Make sure your employees grasp your
objectives and strategy and plan to market continuously. Your effort
must be ongoing or people will quickly forget.
UNIT-II
4. Write short notes on the following:
(a) DAGMAR
(b) Audience analysis.

A: (a) DAGMAR: Defining Advertising Goals for Measured Advertising

Results abbr. DAGMAR was an advertising model proposed by Russel H.
Colley in 1961. DAGMAR is a marketing approach used to measure the results
of an advertising campaign. DAGMAR is an acronym that stands
for defining advertising goals
for measured advertising results.
DAGMAR
seeks to guide consumers through five phases of regarding the product
unaware, aware, comprehension, conviction and action while also setting
specific, measurable objectives to determine the overall success of the
campaign.
DAGMAR Approach is the task of measuring ad effectiveness aswell as the
objectives or goals of advertising.In 1961, Russel H. Colley wrote a book
under the sponsorship ofthe association of National Advertisers called
Defining advertisinggoals for measured advertising result. The book has
becomeknow as the DAGMAR approach.Colley distinguished 52 advertising
goals that might be used withrespect to a single advertisement.
Persuade a prospect to visit a show room
GOALS :The goals may pertain to sales, image, attitudeand awareness. Some
of the goals are:
Persuade a prospect to visit a show room & ask for ademonstration.
Build up the moral of the companys sales force.
Facilitate sales by correcting false impression,misinformation
Build up the moral of the companys sales force.
ask for ademonstration. & Provide information regarding benefits
other obstacles. & superior features of brand.
The DAGMAR method understands that potential customers are all initially
unaware of the product's existence and focuses on leading consumers
smoothly through the audience's cycle. The ultimate goal is that the
customer purchases the product. The company must identify the target
market

for

the

product

to

make

this

method

effective.

According to DAGMAR, each purchase prospect goes through 4 steps:

1. Awareness
2. Comprehension
3. Conviction
4. Action
These steps are also known as ACCA advertising formula. ACCA/DAGMAR is a
descendant of AIDA advertising formula and considered to be more popular
and

comprehensive

than

AIDA.

Developed

for

the

measurement

of

advertising effectiveness it maps the states of mind that a consumer passes

through.
Important parts of the DAGMAR model are definitions of target audience,
(people whom the advertising message is addressed to) and objectives (goals
of advertising message).
A: (b) Audience analysis: Audience analysis is a task that is often
performed by technical writers in a project's early stages. It consists of
assessing the audience to make sure the information provided to them is at
the appropriate level. The audience is often referred to as the end-user, and
all communications need to be targeted towards the defined audience.
Defining an audience requires the consideration of many factors, such as
age, culture and knowledge of the subject. After considering all the known
factors, a profile of the intended audience can be created, allowing writers to
write in a manner that is understood by the intended audience.
4 COMPONENTS OF A COMPLETE AUDIENCE ANALYSIS
1. Demographics: Demographics enable marketers to make reasonable
estimates, as people in different age groups likely have different proclivities.
For example, it's plausible to assume that the typical 60-year-old may not be
an avid Twitter user.

2. Psychographics: Also known as interest, activities and opinions (IAO),

psychographics abandons
quantitative
analysis
and
instead
categorises a target audience's sentiments towards a particular
subject, product, service, event or situation. Specifically, it focusses on
how individuals make choices based on their values and beliefs.

3. Prior knowledge: Prior knowledge refers to a person's preconceived

assumptions, interpretations and perceptions of a situation, service,
product or the like. The University of Florida maintained that prior
knowledge often translates to either positive or negative viewpoints
regarding specific subjects.

4. Usage patterns
Usage patterns measure how people interact with certain products or
services. This definition can also be expanded to include how individuals
behave when exposed to specific scenarios.
5. What do you understand by appropriation of advertising budgets?
Outline various methods of advertising appropriations. Also highlight
the conditions/industry in which each can be used?
A: The terms budget and appropriation are very often used
interchangeably as if they are having the same meaning. However, there is
fine technical difference between the two. An Advertising appropriation is
the total amount granted or earmarked by the top management for
advertising. These separate figures together makeup an advertising

appropriation. Budgeting suggests planning the size of the appropriation on

the basis of specific advertising objectives and the cost of attaining them.
Thus, advertising appropriation is that part of companys communication
budget which is to be spent or say invested on media, men and other
ancillary services so as to communicate the message to target consumers
impersonally.
The most important factors governing the size of the budget are:
1. The objectives to be attained.
2. The coverage expectations.
3. The product class.
4. The stage of the product life-cycle.
5. The prevailing economic conditions.
6. The age of the company.
7. The size of the company.
8. The funds available.
9. The competitive activities.
10. The approach to advertising.
Methods of advertising appropriations:
Though, determining the appropriate advertising outlay is the most difficult
task even for the most seasoned companies, several methods are developed
ranging somewhere between two to twenty-four. Of these, the most
commonly accepted are four which are narrated here.
These are:

1. Percentage of sales method.

2. Objective and task method.
3. Competitive parity method.
4. Affordability method.
1. Percentage of sales method:
It is the most widely used method of appropriation though it has declined in
its importance. There are several variations in the actual application of this
method. The percentage may be based on last years sales or on the
estimated sales for the coming period or the combination of the two.
Under the method, the advertising funds required are equal to rupee sales
multiplied by the expected percentage. For instance, if the estimated sales
are rupees 10 million and the expected percentage is 3, then the funds
earmarked will be of the order of rupees 0.30 million.
The merits of this method are:
(a) It is simple.
(b) It works on affordability.
(c) It is consistent.
The demerits are:
(a) Wrong stressing.
(b) Static in approach.

(c) Ignores long-range planning.

2. Objective and task method:
This method is gaining ground because, it directs the attention to the
objectives to be attained by the marketing programme, the role that the
advertising is to play in attaining such objectives and works on the fact that
advertising plays vital role in stimulating demand and is not the result of
sales. It decides the appropriation of advertising funds on the basis of the
objectives to be achieved and the tasks involved therein.
This method involves three steps:
(a) Defining the objectives in quantitative terms.
(b) Outlining the tasks to achieve the goals so set.
(c) Estimating the cost of performing these tasks so outlined.
The merits of this method are:
(a) It is more objective.
(b) It is review based.
(c) It is individualistic.
The demerits are:
(a) It is irrelevant.
(b) Difficulty of converting objectives into tasks.
(c) It is unscientific.

3. Competitive parity method:

In essence, this method consists of setting the appropriation by relating it to
the expenditure pattern of the major competitor or competitors. It is a matter
of matching the annual expenditure of the competitor or an attempt to
maintain the same set of relationship between the expenditures of the firm
and that of a competitor.
In other cases, this method may involve the use of average percentage so
the sales spent by the firms in the entire industry and then applying that
percentage to the firms sales to arrive at the appropriations. For this
purpose, the company must collect relevant, up-to-date and authentic data
about competitors appropriations in terms of sales, ratios, percentages of
advertising costs and sales.
The merits of this method are:
(a) It respects the superiors.
(b) It kills competitive wars.
(c) It is simple.
The demerits are:
(a) It is not logical.
(b) It is a misfit.
(c) It encourages competitive wars.

4. Affordability method:
What a company can afford to spend is more important than what it thinks in
terms of wonderful ambitious plan of advertising. Here, the company thinks in
terms of its ability to spend depending on the prevailing business conditions
and the resources at its command.
This means that the advertising appropriation is possible only when the other
more important and urgent needs is met. Under the method, the advertising
expenditure is related to either the company profits or the assets. Thus, the
management may decide say, 15 per cent of its profits or 5 per cent of its
liquid assets for ad programme for the ensuing period.
The merits of this method are:
(a) It is practical.
(b) It is simple.
(c) It is flexible.
The demerits are:
(a) It overlooks opportunities.
(b) It is short-sighted.
(c) It ignores the ability of advertising.
From the foregoing discussion it is crystal clear that each method has its own
theme and merits and demerits. None of these methods says about
optimum advertising expenditure that a firm should attempt and get on.
Under these circumstances, still the age old economic theory provides us with

the best conceptual frame-work as to how much the firm is going to spend on
advertising.
The economic principle involved is that the advertising budget should be
raised to that level where the last rupee spent on advertising just pays for
itself in additional profit. In actual practice, it is not that easy to locate this
optimum point.
However, it is generally possible to make a reasonable judgment whether the
returns from advertising would be increased or decreased by changing the
amount with respect to any given level of advertising expenditure. Logically,
the advertising expenditure should go up as long as it is in the increasing
returns.
UNIT-III
7. In consumer research, differentiate between qualitative and
quantitative research designs. What are the differences between the
two in terms of study purpose, data collection methods and sampling
methods ?
Qualitative Methods

Quantitative Methods

Surveys, structured interviews &

Methods include focus groups, in- observations, and reviews of records
depth interviews, and reviews of or documents for numeric information
documents for types of themes
Primarily inductive process used to Primarily deductive process used to
formulate theory or hypotheses
test
pre-specified
concepts,
constructs, and hypotheses that
make up a theory
More subjective: describes a problem More objective: provides observed
or condition from the point of view of effects (interpreted by researchers) of
those experiencing it
a program on a problem or condition
Text-based

Number-based

More in-depth information on a few Less in-depth but more breadth of

cases
information across a large number of

cases
Unstructured
or
response options
No statistical tests

semi-structured Fixed response options

Statistical tests are used for analysis

Can be valid and reliable: largely Can be valid and reliable: largely
depends on skill and rigor of the depends on the measurement device
researcher
or instrument used
Time expenditure lighter on the Time expenditure heavier on the
planning end and heavier during the planning phase and lighter on the
analysis phase
analysis phase
Less generalizable

More generalizable

Data collection in qualitative research is not seldom based on

unstructured or semi-structured, but methodologically flexible techniques,
e.g. individual depth interviews or group discussions, that are suited to
elicit great detail and a comprehensive view. Quantitative research uses
highly structured, rigid techniques such as online questionnaires, on-street
or telephone interviews. Unlike qualitative research, which allows
unlimited expression from respondents, quantitative research relies
responses to pre-formulated questions.
Sample selection in qualitative research is usually based on a smaller
number of not-necessarily representative cases. Respondents are
frequently selected with the expectation that they fulfill certain criteria. In
quantitative research, sample selection seeks out a large number of cases
that are expected to best represent the population of interest. Individual
respondents are selected at random.
Unit 3
Q8. Discuss in detail the information search process of consumers. How is it
influenced by level of consumer involvement?
A:
The information search process (ISP) is a six-stage process of information
seeking behavior in library and information science. The ISP was first
suggested by Carol Kuhlthau in 1991. Information search is considered the
second of five stages that comprise the Consumer Decision Process. During
this stage, a consumer who recognizes a specific problem or need will then
likely be persuaded to search for information, whether it be internally or
externally. This is also when the customer aims to seek the value in a
prospective
product
or service.
Information search can be categorized as internal or external research:

Internal research refers to a consumer's memory or recollection of a product,

oftentimes triggered or guided by personal experience. This is when a person
tries to search their memory to see whether they recall past experiences with
a product, brand, or service. If the product is considered a staple or
something that is frequently purchased, internal information search may be
enough to trigger a purchase.
External research is conducted when a person has no prior knowledge about
a product, which then leads them to seek information from personal sources
(e.g. word of mouth from friends/family ) and/or public sources (e.g. online
forums, consumer reports) or marketer dominated sources (e.g. sales
persons, advertising) especially when a person's previous experience is
limited or deemed inefficient.

Examples of personal sources that are marketer dominated, include sales

person advice in a retail store.
Personal sources that are not marketer dominated include advice from
friends and family.
Television advertising and company websites are examples of nonpersonal sources that are marketer dominated
Online forums are non-personal sources that are non-marketer dominated.

ii) Consumers engage in both internal and external information search.

Internal search involves the consumer identifying alternatives from his or her
memory. For certain low involvement products, it is very important that
marketing programs achieve top of mind awareness. For example, few
people will search the Yellow Pages for fast food restaurants; thus, the
consumer must be able to retrieve ones restaurant from memory before it
will be considered. For high involvement products, consumers are more likely
to use an external search. Before buying a car, for example, the consumer
may ask friends opinions, read reviews in Consumer Reports, consult several
web sites, and visit several dealerships. Thus, firms that make products that
are selected predominantly through external search must invest in having
information available to the consumer in neede.g., through brochures, web
sites, or news coverage.

UNIT-IV
Q9)
(a) Customer lifetime value.
(b) Cognitive dissonance.
(c) Band congruence.
(d) Reference group theory.
A: (a) Customer lifetime value.
In marketing, customer lifetime value (CLV or often CLTV), lifetime customer
value (LCV), or life-time value (LTV) is a prediction of the net profit attributed
to the entire future relationship with a customer. The prediction model can
have varying levels of sophistication and accuracy, ranging from a crude
heuristic to the use of complex predictive analytics techniques. CLV
(customer lifetime value) calculation process consists of four steps:
1. forecasting of remaining customer lifetime (most often in years)
2. forecasting of future revenues (most often year-by-year), based on
estimation about future products purchased and price paid
3. estimation of costs for delivering those products
4. calculation of the net present value of these future amounts [

CLV (Customer Lifetime Value) is a prediction of all the value a business will
derive from their entire relationship with a customer. Because we don't know
how long each relationship will be, we make a good estimate and state CLV as

a periodic value that is, we usually say this customer's 12-month (or 24month, etc) CLV is $x.
The Pareto Principle states that, for many events, roughly 80% of the effects
come from 20% of the causes. When applied to e-commerce, this means that
80% of your revenue can be attributed to 20% of your customers. While the
exact percentages may not be 80/20, it is still the case that some customers
are worth a whole lot more than others, and identifying your All-Star
customers can be extremely valuable to your business.
Taking CLV into account can shift how you think about customer acquisition.
Rather than thinking about how you can acquire a lot of customers and how
cheaply you can do so, CLV helps you think about how to optimize your
acquisition spending for maximum value rather than minimum cost.

Let's Go Fishing!
Consider that acquiring customers is like fishing. You might go fishing in the
Adwords Ocean, Facebook River, or Lake Microsoft. Under a cost minimization
strategy, the results of your strategy might look like this:
Location

Total
Spend

Custome
CAC*
rs

Adwords
Ocean

$100

100

$1

Facebook
River

$150

50

$3

Lake
Microsoft

$250

25

$10

* Customer Acquisition Cost; also known as Cost Per Acquisition (CPA)

You might think that the Adwords Ocean is the best because it gets you
customers for the lowest cost, but looking at Customer Acquisition Cost is

only half the equation. We also need to consider that the lifetime revenue of
customers from each of these channels might be different.
Location

Total
Spend

Custome
CAC CLV
rs

Revenu
Profit *
e

Adwords
Ocean

$100

100

$1

$10

$1000

$900

Facebook
River

$150

50

$3

$30

$1500

$1350

Lake
Microsoft

$250

25

$10 $100 $2500

$2250

* Profit is defined as Revenue (number of customers CAC). For the sake

of this exercise, it does not take into account other costs.
When you consider not just the acquisition cost, but also the value the
customer will bring to your business, your acquisition strategy can be finetuned and result in better customers for less money. In that case, you may
prefer to fish in Lake Microsoft since it has the highest overall profit of the
three channels.
(b) Cognitive Dissonance
Cognitive dissonance refers to a situation involving conflicting attitudes,
beliefs or behaviors. This produces a feeling of discomfort leading to an
alteration in one of the attitudes, beliefs or behaviors to reduce the
discomfort and restore balance etc.
For example, when people smoke (behavior) and they know that smoking
causes cancer (cognition).
Festinger's (1957) cognitive dissonance theory suggests that we have an
inner drive to hold all our attitudes and beliefs in harmony and avoid
disharmony (or dissonance).

Examples[edit]

"The Fox and the Grapes" by Aesop. When the fox fails to reach the grapes,
he decides he does not want them after all. Rationalization is often involved
in reducing anxiety about conflicting cognitions, according to cognitive
dissonance theory.
"The Fox and the Grapes"[edit]
A classic illustration of cognitive dissonance is expressed in the fable "The
Fox and the Grapes" by Aesop (ca. 620564 BCE). In the story, a fox sees
some high-hanging grapes and wishes to eat them. When the fox is unable to
think of a way to reach them, he decides that the grapes are probably not
worth eating, with the justification that the grapes probably are not ripe or
that they are sour (hence the common phrase "sour grapes"). The moral that
accompanies the story is "Any fool can despise what he cannot get". This
example follows a pattern: one desires something, finds it unattainable, and
reduces one's dissonance by criticizing it. Jon Elster calls this pattern
"adaptive preference formation".
c) brand congruence theory (book)
d) Reference group theory : A reference group is a group to which an
individual or another group is compared.
Sociologists call any group that individuals use as a standard for evaluating
themselves and their own behavior a reference group.

Reference groups are used in order to evaluate and determine the nature of a
given individual or other group's characteristics and sociological attributes. It
is the group to which the individual relates or aspires to relate himself or
herself psychologically. It becomes the individual's frame of reference and
source for ordering his or her experiences, perceptions, cognition, and ideas
of self. It is important for determining a person's self-identity, attitudes, and
social ties. It becomes the basis of reference in making comparisons or
contrasts and in evaluating one's appearance and performance.
Informal & Formal Reference Groups
Most reference groups are informal reference groups, which means that
they are based on the group members' shared interests and goals. Informal
groups are not structured with a specific goal in mind. Group members
interact on a very personal level. Examples of informal reference groups
include:

Families
A group of local mothers
Peer groups

Formal reference groups have a specific goal or mission. They also have a
specific structure and positions of authority. Examples of formal reference
groups include:

Labor unions
Mensa, a society for people with high IQ
Mothers Against Drunk Driving (MADD)

For example, suppose that Susie is a 13-year-old female who transfers to a

new school. Susie may pay attention to what her schoolmates wear, how they
speak, where they hang out, and how they behave. Susie then takes this
information and uses it in order to modify her speech, determine what she
wears to school, how she does her hair, which shows to watch on television,
etc.
A group that we have been a part of in the past or that we will be a part of in
the future can serve as a reference group. A married man may still look to his
single friends as a reference group, even though this is a group that he no
longer belongs to. In the same token, a woman pregnant with her first child
may use women with children as a reference group, even though she does
not yet belong to this group.
10.Discuss the various stages of diffusion of innovation in the market.
What do you understand by Chasm in this context ?
A: This model helps a business to understand how a buyer adopts and
engages with new products or technologies over time. Companies will use it
when launching a new product or service, adapting it or introducing an
existing product into a new market.

It shows how the product can be adopted by five different

categories/customer types and how to engage as a business with these types
of people:
The diagram below explains the categories in Roger's Diffusion of Innovations
Theory

Diffusion of Innovations: Innovator Stage

Roger's Diffusion of Innovations theory states that Innovators are the first to
purchase a product and make up 2.5% of all purchases of the product.
Innovators purchase the product at the beginning of the life cycle. They are
not afraid of trying new products that suit their lifestyle and will also pay a
premium for that benefit. Sales to innovators are not usually an indication of
future sales as innovators simply buy because the product is new.
Diffusion of Innovations: Early Adopters Stage
The next group of purchasers are called Early Adopters and they make up
13.5% of purchases. This group of purchasers adopt early but unlike
innovators, adoption is after careful thought. Early Adopters are usually
opinion leaders in their circle (of friends, family and colleagues) so adoption
by this group is crucial for the success of the product. Early adopters help the
product's journey in becoming "socially acceptable".
Diffusion of Innovations: Early Majority Stage
The Early Majority are a cautious group of purchasers, making up 34% of
purchases. The Diffusion of Innovations theory states that this group will not
buy a product until it has become "socially acceptable". Early majority
purchases are needed for the product to achieve wide spread acceptance.

Diffusion of Innovations: Late Majority Stage

Late Majority make up another 34% of sales and they usually purchase the
product during the late stages of the product's life cycle. They are more
cautious than the early majority and will only buy after the majority of people
have purchased the product.
Diffusion of Innovations: Laggard Stage
According to the Diffusion of Innovations theory the final group of people to
purchase a product are called Laggards. Laggards make up 16% of total sales
and purchase the product near the end of its life. Some laggards will never
purchase a product, whilst others will buy it because their existing product is
broken and it can not be repaired or replaced with an identical product.
Laggards may wait to see if the product will get cheaper and by the time they
purchase the product a new version of the product is often on the market.
As it shows, the real challenge to ensuring an innovation takes hold is
crossing 'the chasm'. If the early adopters succeed in bridging this critical
juncture to the more sceptical masses, we reach a tipping point, allowing the
curve to rise as the masses accept the innovation, and sink again when only
the stragglers remain.
The most interesting end note to this cycle is that while the masses are
starting to take on the technology, the innovators or early adopters are often
turning away as they search for the next big thing.