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New Research Examines Triggers for Purchase of
Consumer Technology Products
The AMD Global Consumer Advisory Board (GCAB), released its third study
today, entitled A Theory of Relevancy for Technology Product Adoption.
The study is the first to define what attributes makes a technology
product relevant enough to consumers for them to purchase it.
Building on six attributes of product relevance identified by previous
research, the GCAB study examines how those attributes come together to
trigger product adoption. The study shows, for example, that the
importance of a product's benefit and a consumer's familiarity with a
product affect how a consumer judges its affordability.
"What may surprise the industry most about this study is that it shows
that price is not the most important trigger behind a technology product
purchase," said
Tricia Parks,
founder and president of Parks Associates, principal author of the study
and chairperson of the GCAB's Relevancy Committee. "A large segment of the
consumer electronics industry is going down the wrong path by focusing
solely on lowering prices to jumpstart adoption. The industry must
communicate the benefits of a product to people's lives - because only
once a product is deemed personally beneficial will judgments about its
affordability even matter."
This and previous GCAB studies are available to members of the
technology industry interested in gaining a better understanding of the
consumer market and improving adoption of their products and services.
The study, which surveyed more than 1,000 U.S. nationally
representative households by phone, tested the intensity of six attributes
of relevance that must be present at specific levels for adoption of a
technology product. The six attributes that constitute relevance include:
"familiarity," "importance of product benefit," "affordability,"
"knowledge of where to buy," "perception of ease of install," and
"perception of ease of use." The study examined these attributes for six
different technology products at different states of diffusion, from the
microwave oven (a widely diffused product) to the wireless home network (WHN)
(a less-diffused product).
Specifically, the study found that the rankings (on a scale of one to
seven, with seven the highest ranking) between owners of a product and
those without plans to purchase that product are widest for the attributes
of "importance of benefit to me" and "familiarity." In other words, the
research indicates that before acquiring a product, consumers consistently
rank its benefits and familiarity at certain minimum levels before they're
convinced it's worth purchasing. "Ease of use" came in third place and
"affordability" came in fourth place, followed by "knowledge of where to
buy."
"While it's important, familiarity alone does not make an owner," said
Parks.
"We found that people who are familiar with and know where to buy a
wireless home network (WHN), for example, still do not necessarily have
plans to purchase one; whereas people who are highly familiar with, know
where to buy, and see high levels of personal benefit in a WHN do have
plans to purchase. Marketers of WHNs need to demonstrate a direct,
positive connection to a consumer's life to transform mere awareness into
a purchase."
The study also found that owners of personal digital assistants (PDAs)
ranked "importance of benefit to me" at about four on the scale - the
lowest of all the products surveyed. Conversely, personal computers,
mobile phones and microwaves ranked the highest of all the products, with
owners ranking "importance of benefit to me" at about six.
"From a marketing perspective, the low score of 'importance' by PDA
owners is troubling. It may explain why, according to analysts such as
Parks Associates ... , PDA sales with their current utility may have hit a
plateau," said
Parks.
"On the other hand, personal computers and mobile phones, which scored
high in importance among owners, currently have strong growth in sales,
according to analyst and industry firms such as the Semiconductor Industry
Association, as owners are realizing product benefits and, in turn,
becoming product advocates."
"This study is moving from understanding past adoption patterns to
predicting future patterns. It is the first step toward developing a
Relevancy Adoption Model that would allow technology providers to assess
weaknesses in product relevance, and then prescribe marketing solutions to
address those weaknesses and accelerate adoption," said Patrick Moorhead,
chairman of the GCAB and vice president of corporate marketing at AMD.
"AMD has already begun sharing this research with our consumer electronics
partners to more clearly communicate product relevance, thereby speeding
adoption and helping to increase overall sales."
The AMD GCAB invites the public to review the complete findings of A
Theory of Relevancy for Technology Product Adoption, including
accompanying charts and graphs, which can be found on
www.amdgcab.org.
About the AMD GCAB
The AMD Global Consumer Advisory Board's (GCAB) mission is to improve
the quality of end users' technology experiences. The GCAB consists of 14
consumer and small business experts, academics, journalists and technology
futurists from around the world who seek to improve through research and
advocacy computing technology issues facing home and small business
computer users worldwide.
Members are:
- Patrick Moorhead, GCAB chairman and AMD vice president, corporate
marketing
- Dr. Soonhoon Bae, professor, Korea Advance Institute of Science and
Technology
- Jim Blasingame, creator and host of the U.S. nationally syndicated,
weekday radio/Internet talk show The Small Business Advocate
- Mark Boleat, United Kingdom consumer policy and business
representation consultant and a board member of the National Consumer
Council (NCC)
- Professor Guangnan Ni, member of the Chinese Academy of Engineering
(CAE) and professor at the Institute of Computing Technology, Chinese
Academy of Sciences (CAS)
- Dr. William Halal, professor of management at George Washington
University
- Ken McEldowney, executive director of Consumer Action, a San
Francisco-based consumer advocacy and education membership organization
- Enrico Mercanti, consumer marketing, business consultant and
business manager for BENQ, Italy
- Tricia
Parks, founder and president of Parks Associates, a U.S. consulting
firm
- Jose Antonio Romalho, a Brazilian technology writer and syndicated
columnist
- Dr. Carlos Scheel, professor at the Graduate School of Business (EGADE)
of the Monterrey Institute of Technology in Monterrey, Mexico
- Dr. Bernd Skiera, professor and first Electronic Commerce chair at
the Johann Wolfgang Goethe-University in Frankfurt, Germany
- Dr. Hideyo Waki, professor in the Information and Telecommunication
Department at Tokyo Denki University
- Dr. Barry Wellman, sociology professor at the University of Toronto,
as well as director of the University's NetLab
The GCAB is part of AMD's Consumer Advocacy Initiative (CAI), which
represents the company's commitment to understanding technology end users,
and the company's dedication to putting end users at the forefront of the
industry's technology discussion. Consumers or small businesses with
questions or comments may e-mail the GCAB at
amd.gcab@amd.com. More information
about the GCAB can be found at
www.amdgcab.org.
About AMD
AMD (NYSE:AMD) designs and produces microprocessors, Flash memory
devices and system-on-chip solutions for the computer, communications and
consumer electronics industries. AMD is dedicated to helping its customers
deliver standards-based, customer-focused solutions for technology users,
ranging from enterprises to government agencies and individual consumers.
Founded in 1969, AMD is a Standard & Poor's 500 company with global
operations and manufacturing facilities in the United States, Europe,
Japan and Asia.
AMD on the Web
For more information about AMD products, please visit our virtual
pressroom at
www.amd.com/news/virtualpress/index.html. Additional press releases
and information about AMD and its products are available at
www.amd.com/news/news.html
AMD, the AMD Arrow logo, and combinations thereof, are trademarks of
Advanced Micro Devices, Inc. Other product and company names used in this
publication are for identification purposes only and may be trademarks of
their respective companies.
Contact:
AMD GCAB Public Relations
Tim Martin, 512-602-6047
timothy.martin@amd.com
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