Question One – Crowdfunding as a marketing tool
Crowdfunding is one of the ways in which businesses utilize to raise money. It uses a company’s minimum amount of capital to raise a large amount of money from individuals to finance a new business. It can also be used as a strategy to promote a product. One of the products that have used crowdfunding as a promotion tool is the Amazfit X Smartwatch. Its features are a curved smartwatch characterized by AMOLED extended display, s4/7 PPG heart-rate monitoring, self-developed AI technology, and PAI health analysis that performs business and sport style.
Smith (2020) explains that the role of crowdfunding is to first get feedback from the technical people who will point out and challenge the conventions and the adoption of new concepts. Influencers and micro-influencers who have a significant number of followers can quickly reach out to a new audience and thus automatically promote the product to a new audience (Smith, 2020). Also, crowdfunding is an effective way to see and test the reaction of the Amazfit X Smartwatch product. People who are keen to invest in the product can be a sign that the idea can work well in the market. Also, when investors can keep track of the progress of the Amazfit X Smartwatch, it helps in the promotion of the brand through their networks. Crowdfunding can also turn the product investors into the most loyal customers through the financing process, eventually promoting and marketing it. Through the process of crowdfunding, backers are appreciated by being offered free samples of the product. As a result, the product would have a positive public relation since it will be spread the benefit of the product to other people and promote the product.
Question Two – Pricing Strategy
Pricing is how much a product is charged whenever selling it to the consumer. It is the sum of all the values that customers give up to benefit from having or using the product or service. The price of the Amazfit X is set at $329. Due to the incorporation of current technology and the inclusion of current features, the pricing strategy used in marking the price of Amazfit X is value-added pricing.
The value-added pricing is appropriate because the sellers are more confident about how much they spend in manufacturing one unit of Amazfit X and do not consider the demand for the product (We
ek 6 – Pricing: Capturing Customer Value). It also creates competition because of the different prices between similar products. Huami’s chose not to lower their prices to challenge its competitors. Rather, they added value to the product instead, convincing the consumer that they are buying something that their competitors cannot offer. The value added to Amazfit X is the 920 curved display, the universal titanium body, and no button (smart device) to the smartwatch’s design, creating a unique and distinguishable product that the consumer is willing to pay for.
Question 3 – Product Characteristics
One of the reasons why the Amazfit X smartwatch is priced higher than other smartwatches is the unique features. On hardware, the smartwatch is water-resistant, weighs less than 50grams (39 grams to be exact), has a display size and resolution of 2.07″ and 206 by 640 pixels. It supports a two-point capacitive touch screen and, therefore, buttonless. The product can also be used as a sporting device since it can keep track of sporting history, speed, and distance reminder. Furthermore, it can measure health-related aspects such as sleep, heart rates, SpO2, and reminder sedentary. Apart from these amazing features, Amazfit has the essential characteristics of a smartwatch such as a compatibility with different operating systems (Android & iOS), Bluetooth broadcast, notification display, Find my Phone capability, and event reminder. The characteristics of the Amazfit X smartwatch are what made it to be priced higher than its competitors since it is easy for the customer to see the unique capabilities.
However, a few aspects of Amazfit X can make hinder its adoption. Although the product is said to capture some related measurements, such as keeping track of sleep, heart rate, and daily step goal set and goal reminders, it is still not a device that can be relied on from a medical perspective. The device should not be used to diagnose or monitor any medical condition, even though it states that it has both Bio-Tracker PPG sensor and Blood Oxygen Measurements. Therefore, it is recommended that Huami focuses on the health perspective of Amazfit X so as it can become dependable by people who are really in need of such services.
Question four – Theories of innovation adoptions
The innovation introduces a new idea, process, or product, and diffusion is the collective adoption process over time. There are various innovation diffusion theories, and Everett Rogers introduced the first one in 1962. Kaur & Kaur (2010) describes that Roger’s diffusion theory has four main components: innovation, communication channel, social system, and time. The diffusion theory can be adopted through five stages, starting with seeking the knowledge about the design and function, persuasion the potential adopter, decide whether to adopt or reject the innovation, implementing the invention to the adopter, and finally, the confirmation stage where the final decision is reinforced (Kaur & Kaur, 2010).
Another theory of innovation is known as the Hall’s Concerns-based Adoption Model (CBAM), was first developed in 1979. Suitable in educational environments, CBAM has three stages, namely the stage of concerns (SoC), Level of Use (LoU), and innovation configuration. Teachers are the adoptees instead of the adopters of the CBAM, but have an important role of a change agent for the model to be successfully adopted in the classroom (Ham, n.d.).
The Technology Acceptance Model (TAM) is a theory that asserts that the attitude and the expectations of the potential adopter affect the chances of its adoption. TAM concepts are based on how the potential adopter perceives the adoption based on the ease of use and how useful it will be for them. According to the theory, there is a higher correlation between perceived usefulness and technology adoption (Ham, n.d.).
The fourth theory is Diane Dormant’s Chocolate model. The model is based on four elements: change, adopters, change agent, and organization (CACAO). The chocolate model is similar to TAM because it also looks into the simplicity and compatibility of the innovation and also what the innovation and social impact will mean for the social structure and climate of the organizational structure (Ham, n.d.).
Out of these theories, the Technology Acceptance Model appears to be the best fit describing the adoption of the Amazfit X smartwatch. Since the smartwatch is incorporated with the latest technology, it has simplified its usage, which will eventually be compatible with the final consumer’s needs.
References
Ham, M. (n.d.). Theories of Innovation Adoption and Real-World Case AnalysesMarcia Ham. Retrieved from https://ohiostate.pressbooks.pub/drivechange/chapter/chapter-1/
Smith, T. (2020, September 07). Crowdfunding Definition. Retrieved November 01, 2020, from https://www.investopedia.com/terms/c/crowdfunding.asp
Top of Form
Kaur, K., & Kaur, M. (2010). Innovation Diffusion and Adoption Models: Foundation and Conceptual Framework. Management and Labour Studies. 35, 289-301.
WeBottom of Form
ek 6 – Pricing: Capturing Customer Value Chapter 9.