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Consumers andthe Diffusion of

Innovations

CHAPTERFOURTEEN

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DiffusionProcess

The process by which theacceptance of an

innovation is spread bycommunication to

members of a socialsystem over a period of

time.

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Elements of the Diffusion Process

The Innovation

The Channels of Communication

The Social System

Time

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1. The Innovation Firm-oriented definitions

Product is new to the company Product-oriented definitions

A continuous innovation tends to be a small change.It does not really change the consumers pattern.

A dynamically continuous innovation is somewhatmore disruptive. You continue to do something youhave done before, but there are often changes in yourmethods and style.

Most extreme is a discontinuous innovation , wherethe consumer adapts to an entirely new way of doingsomething.

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The Innovation

Market-oriented definitions--based on how much consumers see and knowabout the new product. It is new from a market-oriented perspective if it has been purchased byvery few people and has only been on the marketfor a short time.

Consumer-oriented definitions Consumer judges it as new

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The InnovationProduct Characteristics

Degree to which consumers consider itsuperior to existing substitutesRelative Advantage

Degree to which consumers feel it is consistent

with their present needs, values, and practicesCompatibility

The degree to which it is difficult to understandor useComplexity

The degree to which it can be tried on a limitedbasisTrialability

The degree to which its benefits can beobserved, imagined, or describedObservability

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2. Channels of Communication

Channels of communication Marketer to consumer Consumer to consumer Influential impersonal sources

7

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3. The Social System

Modern social systems accept more innovationdue to their:

Positive attitude toward change Advanced technology and skilled labor force Respect for education and science Emphasis on rational and ordered social

relationships An outreach perspective where members interact

with outsiders A system where members can see themselves in

different roles

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4. Time

Purchase Time Adopter Categories Rate of Adoption

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Adopter Categories

Category 1 -Innovators

First tobuy themininetbook

Category 2 Early adopters

Will buymininetbookshortlyafter itsintroduction

Category 3 Early Majority

Membersof the 1 st of themassmarketwhowouldpurchasethe mininetbook

Category 4 Late Majority

Secondhalf of themassmarketwhowouldpurchasethematuremininetbook

Category 5 Laggards

Very lasttopurchasethe mininetbook,if at all

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Diffusion Curves for Adopter Categories

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AdoptionProcess

The stages throughwhich an individualconsumer passes in

arriving at a decision totry (or not to try), tocontinue using (or

discontinue using) a new product.

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NAME OF STAGE WHAT HAPPENS DURING THISSTAGE

EXAMPLE

Awareness Consumer is first exposed to theproduct innovation.

Eric sees an ad for a 23-inch thin LCDHDTV in a magazine he is reading.

Interest Consumer is interested in theproduct and searches foradditional information.

Eric reads about the HDTV set on themanufacturers Web site and then goesto an electronics store near hisapartment and has a sales person showhim the unit.

Evaluation Consumer decides whether ornot to believe that this productor service will satisfy the need a kind of mental trial.

After talking to a knowledgeable friend,Eric decides that his TV will fit nicely ontop of the chest in his bedroom. He alsocalls his cable company and finds outthat he can exchange his standardcable box at no cost for an HDTV cable

box.

Stages in Adoption Process

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NAME OF STAGE WHAT HAPPENS DURING THISSTAGE

EXAMPLE

Trial Consumer uses the product ona limited basis

Since the HDTV set cannot be triedlike a small tube of toothpaste, Eric buysthe TV at this local electronics store onhis way home from work. The storeoffers a 14-day full refund policy.

Adoption(Rejection)

If trial is favorable, consumerdecides to use the product on a

full, rather than a limited basis if unfavorable, the consumerdecides to reject it.

Eric loves his new HDTV set and expectsmany year of service from it.

Stages in Adoption Process

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The Consumer Innovator

The earliest purchasers of a new product Tend to have higher level of:

Education Social interaction Opinion leadership

Venturesomeness Social Status

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Comparative Profiles of the Consumer Innovator andNoninnovator

Characteristic Innovator Noninnovator

Social Characteristics

Social integration More Less

Social striving More Less

Group memberships More Less

Demographic Characteristics

Age Younger Older

Income Higher Lower

Education More Less

Occupational status Higher Lower

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Are There GeneralizedConsumer Innovators?

Domain-specific vs. global innovativeness Technology and innovators