Week 10 Innovation, Ethics & SR PDF

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Week 10 Innovation, Ethics & SR Monday, 29 January 2018

11:53 am

Innovation "… an offering that is new to the marketplace… a product, service, or idea… consumers within a market segment perceive as new and that has an effect on existing consumption patterns." Innovations can be new products or new services. Characteristics of Innovation One way to characterise innovations is to describe the degree of change that they create in our consumption patterns - Continuous innovation: innovation that has limited effect on existing consumption patterns e.g. Ipad to Ipad 2 - Dynamically continuous innovation: innovation that has a pronounced effect on consumption patterns and often involves new technology e.g. film to cameras, computer to laptops - Discontinuous innovation: an offering that is so new that we have never known anything like it before e.g. microwave, planes Factors Affecting Adoption of Innovation Adoption: a purchase of an innovation by an individual or household Resistance: a desire not to buy the innovation, even in the face of pressure to do so • Relative advantage: ○ Perceived value - benefits vs costs ○ How well the benefits are communicated to consumers ○ Perceived risk and uncertainty § Financial costs/risks; switching costs; cognitive costs; social risk • Social relevance ○ Extent to which it can be observed by others ○ Extent to which it is socially desirable • Perceived complexity ○ Extent to which it is complicated and difficult to use/understand Diffusion Through a Market Diffusion of innovation: the percentage of the population that has adopted

Diffusion of innovation: the percentage of the population that has adopted an innovation at a specific point in time • High effort: s curve ○ Discontinuous innovation, dynamically continuous innovation ○ High perceived risk ○ High switching costs • Low effort: exponential ○ Continuous innovation ○ Low perceived risk ○ Low switching costs Overall: Innovation are products, services, ideas or attributes perceived to be new by consumers. They vary in the degree of behavioural change their adoption requires. Three key issues: 1. Break down consumer resistance 2. Facilitate consumer adoption 3. Affect the diffusion of innovation through the marketplace

Ethics Two opposing views when it comes to ethics • Classical view: ○ Management's only responsibility is to maximise profits ○ Doing "social good" adds to the cost of doing business ○ Costs then have to be passed on to customers • Socioeconomic view: ○ Businesses re not just economic institutions ○ Management's social responsibility goes beyond making profits to include protecting and improving society's welfare ○ Businesses have a responsibility to society ○ More organisations around the world have increased their social responsibility When marketers and consumers make decisions they often face potentially conflicting priorities and outcomes, and these conflicts can raise ethical issues Social dilemma: deciding whether to put self-interests or the interest of h fi

others first Temporal dilemma: deciding whether to put immediate or long-term interests first Ethical Issues Five key controversies are related to ethics in consumer behaviour and marketing: 1. Materialistic behaviour 2. Addictive and compulsive behaviour 3. Consumer theft 4. Black markets 5. Targeting vulnerable segments • • •

Fast food, obesity and advertising to children ○ Children are a particularly vulnerable target Advertising and self image ○ Idealised body shapes creating social comparison Consumer privacy

Unethical Marketing Practices • Missing information ○ Disclaimer in small print ○ False/exaggerate claims ○ Misleading labelling...