Question

1a. Describe the five characteristics of an innovation that assist in determining the rate of acceptance or resistance of the market to a product. Please provide examples.

1b. What has become the primary vehicle for doing business in many foreign countries? Explain and justify your answer with example(s).

1c. What are the various techniques that can be used to motivate middlemen? Please illustrate your answer with examples.

Answer 1

Answer 1(a) Five characteristics of an innovation that assist in determining the rate of acceptance or resistance are as follows:-
1) Relative Advantage-  This concept is based on consumer’s perception of the product or service and does not necessarily represent the actual features of the product or service. The concept helps businesses to understand whether consumers would actually prefer to use this product or rather continue to use product he was earlier using produced by competitor manufacturer. For example, Ashu uses pepsodent to brush his and is satisfied with this toothpaste.He will continue to use it no matte how much better toothpaste colgate launches
2) Compatibility - An innovation that is more compatible lifestyle of a person and cognitive characteristics is more likely to be assimilated into an person’s life. For example, Rohit is going to buy a car. He may prefer buying a SUV car because has 8 members in his family.
3) Complexity - It means the level of difficulty that the potential adopters witness with the innovation. It is likely that the more complex or the more tough an innovation is to understand, the lesser is the chance that it will be adopted, and it will spread more slowly. For example, a person using IOS may prefer continuing to use IOS as he may find android complex to use.
4) Triability - It determines the rate of spreading. Being able to examine an innovation or trying it will facilitate the rate of adoption. If it should be experimented.
5) Observability- An innovation will spread through the target customers faster if the benefits are apealing. Observability is a measure of how efficiently inner states of a system can be inferred from knowledge of its external look.For example, Customers are attracted with what they observe in the product.

Answer (b) Trade shows have become the primary vehicle for doing business in many foriegn countries. A trade show is an event held to gather members of a specific industry to show and discuss their latest products and services. Most of the trade shows usually take place in convention centers in larger cities and last for many number of days. Local trade shows are usually held at a local arena or hotel and allow businesses in the area to connect with prospect buyers.
For example, Trade fair which is held in Pragati Maidan, Delhi, India is a type of trade show in which business from various set up their stalls to reach potentional clients of the city and build business relations with them. There are stalls from various countries like South Africa, Pakistan, China, France, Spain, Portugal, Saudi Arabia etc.

Answer (c) Some of the various techniques to motivate middlemen are as follows-
1) Special Discounts - In this method, the manufacturer offers a discount facility to retailers and wholesalers on their purchase. This encourages them to buy more with the greed of more discount. For example, Laxmi das , A wholesaler of chocolates is offered my manufacturer a deal in which if he buys 10,000 units he will get a discount of 20%.
2) Sales Assistance- Under these methods, manufacturers helps to the dealers so that they maintain the friendly relation with them.
3) Trade Allowances- In this method, allowances are provided to retailers and wholesalers for purchasing or promoting particular products. For example, A soap company lux offers to give discount of 30% on buying their newly launched soap of green apple flavour
4) Free Goods- It is in the form of an extra quantity of purchased product, “free“. There may or may not be any limit on the quantity of purchase during the promotion period. For example, if a whole saler buys 20,000 units, he would get 2000 additional units free.
5) Cash Rebate- It is an incentive that gives retail sales person cash rewards for every unit of a product that gets sold. It is a reward given to the Salesforce of the dealers to sell a manufacturers product.