New Products Adoption in the Contemporary Market - Essay Example

 In the literature of buyer behavior theories a distinction is made, at least implicitly between the buying behaviors of organizations and consumers. The distinction stems primarily from the assumption that while consumers act as willful individuals when they ‘buy’ products while organizations act as a rational group and make ‘purchases’. The intentionally made subtle distinction between buying and purchasing essentially evinces at the attitude of envisioning individual consumers as idiosyncratic and organizations as a group of professional decision makers in the process of transactions. Because of such differentiation, a bifurcation has been observed in the process of buyer behavior related theoretical development. Although beneficial for the purpose of teaching and planning, according to the author, such divergence has prevented the development of theoretical structures that act as generic to both forms of buyer behavior. Although traditionally consumers are distinguished from organizations particularly in case of buying behavior due to the implicit understanding that while the consumer as an individual decision maker tends to be whimsical and responsive to sudden bursts of irrationality, organizations do not and professional organizational behavior is bound to be rational as it is the result of joint decision making in the presence of constraints like set objectives and priorities which prevent irrational and indulgent choices, the author argues against such distinctions pointing out the individual buyer although does not have to abide by constraints faced by professional organizations, has to make choices always being constrained by being a part of another organization – society. The differentiation is disagreed with by questioning the assumption that same individuals act differently under organizations that are contextually different, one being a professional organization while the other is the society the individual is embedded in. It is posited that theoretical enrichment is to be derived if buyer behavior is studied without differentiating between consumers and organizations. That in spite of consumers and organizations exhibiting different motivations and patterns in buying at times there are significant overlaps which lead to enhanced perceptions regarding the necessity of development of a generic theoretical framework that can elucidate the differences of buying practices which are observed in different contextual settings though treating buyers, organizational or individual as essentially similar but not the same unit. (However, I have felt there are two major drawbacks of the paper itself. First, it although harps on the essentiality of developing a generic model, goes not much beyond identifying the similarities of motives and patterns that may exist between the two types of buyers. The need for pursuing qualitative empirical studies is pointed out. Secondly, I believe consumer behavior theory in itself does a sound job of explaining organizational behavior when the motivations of the two units are the same. The necessity of developing theory to elaborated upon organizational behavior stems from the inability of consumer behavior theory in explaining organizational behavior when organizations act differently compared to consumers. The weaknesses of organizational behavior theory should act as determinants of the direction it has to follow rather than as reasons to completely invalidate its necessity.) The advent of globalization has led to enormous changes across the varied fields of international traveling as well as communications reflected in the very dynamically evolving field of advertising which in turn has led to a significant restructuring and alterations in the nature of consumer markets. New horizons for choices are opening up by the day for the consumer and to cater effectively in the global market effective segmentation is crucial. Against this backdrop the present article attempts to enhance understanding of the bases for segmentation that should be adopted in marketing strategies for successfully generating competitive advantage in the global arena. Identifying the fact that while the “conventional wisdom approach” to global market segmentation which focuses more on recognized region or nation specific geopolitical, economic and cultural factors in development of the market segmentation strategy and thereby ensures the utilization of national media markets, associated with the largest degree of impact, the approach is constrained in that conventional market positioning within individual national markets has to be excluded in the process of planning marketing strategies, the “non-conventional” approach to segmentation that concentrates more on behavioral factors is evaluated. This second approach actually aims to target the global consumer, a generic referring to consumers across the globe with similar primary motivations. The problem with this approach is identified to be the fact that while international integration of markets has enabled consumers to rise above national frontiers, cultural and socio-economic factors remain strong influences in determining the motivations of the individual implying an inability of the second approach to fully capture the targeted global consumer segments simply by focusing on behavioral factors. The authors argue for adoption of an integrated approach. They research in to the segmentation criteria used across the globe through using a questionnaire survey method. Their research supports the position that both macro variables like national income, language, culture etc as well as micro variables like individual motivations and attitudes have significant weightage for market strategy development. In essence the study shows that for effective segmentation, nation specific features must be combined with individual buyer specific variables in the plan. In other words standardization and adaptation should be combined in proper proportions as dictated by the relative strengths of the micro and macro factors, but the approach has to be an integrated strategy that is able to identify groups of buyers with the same motivations and attitudes leading to similar expectations and requirements in characteristically different nations, groups of nations or regions. Although there have been studies focusing upon marketing in the emerging markets of third world countries as well as eastern Europe, the studies mostly have been generalizations of theories applicable to the markets of the developed western nations. It is also true in spite of consumer behavior being likely to be different in these regions, a sound theoretical framework that is able to address global consumer behavior and hence applicable to these nations is yet to be developed. Against this backdrop, the article by Raju, first develops a theoretical framework for global consumer behavior and then applies that framework to the third world and Western Europe nations before finally attempting to present generalized recommendations for effective marketing in these regions. The framework he devises, the A-B-C-D paradigm essentially proposes to evaluate hierarchically and systematically different nations in terms of access, buying behavior, consumption characteristics and disposal properties. Access essentially captures the market’s economic affordability (economic access) and the extent to which the product can be made available given the structural and economic barriers (physical access). The second stage, buying behavior attempts to identify the main influences that figure in the populations buying decisions. The third stage attempts to identify the influences of cultural and social factors in determining the consumption patterns recognizing that these may differ across cultures and societies. The final stage considers the nation’s proclivity for disposal activities particularly with regard to environmental concerns. The marketing strategy is to be based upon the specific classification enabled by the application of the measure. The advantages of this measure lie in the universal applicability of the framework coupled with its relative simplicity. The next part of the study deals with application of the measure to different nations to identify the relevant features of the nations important for organizations aiming to enter the market. By examining different developing nations of the third world and those of Western Europe, the author arrives at a number of conclusions regarding the relevant features of each nation that have to be considered for devising effective marketing strategies. The paper is successful in deriving a model of global consumer behavior that is crucial for evolving marketing strategies for firms particularly considering entering the emerging market economies. There are two facts I would like to point out. First, the A-B-C-D measure lacks dynamism. The approach ensures characterization of a nation at a point of time but does not leave room to contend or introspect the way it is likely to move within a few years or so, given the present state of factors and constraints. The second point is that although the author has used the framework to show how third world and western European market can be segmented in to different groups. The measure I believe can be used to pursue market segmentations in terms of consumer groups as well in the same economy. The present paper is essentially a survey article on diffusion research directed to further the perceptions about diffusion in innovations thereby contributing to the understanding adoption of new products. The paper looks at a large number of original works on the field to point out the fact that research methods, designs as well as measurement approaches have been subject to stereotyping. While this had contributed to generation of a synthesis of the research paradigm, the large extent of standardization has led to the contribution of the research fields of diffusion research being largely limited in the development of more effective social programs and moreover has not contributed to the process of furthering theoretical perceptions about human behavioral patterns and changes. The author identifies the lack of a process orientation, a pro innovation bias, essentially ignorance for causality and significant psychological orientation as the main conceptual and methodological biases that have characterized diffusion researches. Although the scope and coverage of this research field has been huge, there is a significant lack of depth. Against this background, the author has forwarded a number of directions to adopt to enrich the research field itself allowing it to break free from the present stereotyped format it is in as well as enhance the substance of its contributions to theories of behavioral sciences. In spite of such stereotyping and limited depth the author recognizes that diffusion in innovations research has contributed strongly in the restoration of social structures in the process of communications. Network analysis of over-time data as well as field studies are identified as tools with substantial potential. However for realization of such potentials, methods of data collection as well as measurement have to be radically improved. These essentially represent the directions that future research must take. Read More