Pacific Business Review International

Volume 10 Issue 4, October 2017

Evidencing Adoption and Diffusion amongst Textile Marketers: A Study

Dr. G. K. Deshmukh Abstract

Assistant Professor, Purpose: The purpose is to study adoption and diffusion of innovation
Institute of Management, amongst textile marketers in the city of Raipur, Chhattisgarh, India
Pt. Ravishankar Shukla University, towards services provided by Wholesale box.
Raipur, Chhattisgarh, India
Design/methodology/approach: Authors have done empirical
research while analyzing the data gathered through primary sources
Dr. Sanskrity Joseph and discussed their viewpoints.
Assistant Professor,
Institute of Management, Findings: Respondents were categorized in to three categories namely
Pt. Ravishankar Shukla University, “first adopters”, “late adopters” and “non adopters.” Merchant and
Raipur, Chhattisgarh, India website factors affect the process of adoption and diffusion of
innovation amongst textile marketers.
Originality/value: This is a fairly original paper which studies and
discusses adoption of innovation.
Keywords: Innovation, Adoption, Diffusion, Merchant Factor,
Website Factor, Purchase Intention.
Paper type: Research Paper

Introduction
Competition is the driving force of monopolistic economy which is
characterized by large number of sellers who offer heterogeneous
offerings to large number of buyers. In monopolistic competition non
price competition has dominated its economy more in comparison to
price competition. Heterogeneous product offerings with different
features, application of all aspects of promotion mix and establishment
of new sources of product procurement and delivery are dominating
the markets for establishing the point of differentiation between two
sellers. The sellers are approaching diverse markets and selling more
commodities to distribute their fixed cost on large number of products
manufactured or distributed by them. In recent times monopolistic
competition is more fueled by advent of information technology.
Information technology is helping the marketers to cover the untapped
markets for product sourcing as well as product delivery from new,
distant as well as remote markets from geographically dispersed
suppliers. Further the symbiotic relationship of marketing and
information technology is also helping the marketers to reach the
untapped markets. The culmination of information technology with
market research has led to development of a scientific approach for
marketers to reach different sellers and procure goods and services
according to needs, preferences, and purchasing power of their target

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 Pacific Business Review International

customers. Market research and information technology diffusion of innovation. The government of respective
have paved way for many innovations. Innovation can be countries which understand the future technological
defined as “an idea perceived as new by the individual” growths can map the market better with regulatory
(Rogers, 1983). Adoption and diffusion of innovation has framework for better growth and spread of innovation.
become more evident and clear in monopolistic economy. Consumer’s perception plays an important role in adoption
New product development, new media for promotion and of and diffusion of new technology as their consumption
new channels of delivery, are making their entry in the pattern decides the fate of innovation in the market. The
markets, are simultaneously adopted by innovators and are consumers are basically the user of an innovation and in this
slowly diffused in the markets on the basis of their respect Kwon and Chidambaram (2000) indicated that
practicality and usage. Adoption and diffusion of innovation Individual characteristics of customers, their perception
in more general terms refer to usage of newly introduced towards ease of usage of a product or service, their
product or service by varied groups of customers in a social perception regarding the usefulness and benefits related
system over a period of time which can be justified or with a innovation, their extrinsic motivations, attitude
tabulated through available information. Schumpeter towards enjoyment/fun, social pressure and apprehensi-
(1939) opined that the final and last stage of development of veness from reference groups play an important role in
technology must be related with diffusion of technology in adoption and diffusion of innovation. Tathod and Pandiya
the market. A large plethora of research has been conducted (2003) opined that marketers are responsible for
to understand the process of adoption and diffusion of preparedness of market for any innovation. The marketers
technology. Rogers (1962) indicated that adoption and must find solutions related with physical distribution,
diffusion is a systematic process which can be studied in five channel management and promotion and marketing
stages namely (i) awareness, (ii) interest, (iii) evaluation, communication which can adversely affect the service as
(iv) trial, and (v) adoption. Researchers have also studied the well as cost aspect. In the above backdrop the researchers
parameters which guide the process of technology adoption have tried to understand the following issues:
and diffusion. Narayanan (2001) opined that technology
(i) Conceptualization of adoption and diffusion of
adoption and diffusion is correlated with developing
innovation
innovation, diffusion or propagation of innovation, time
required by innovation to propagate amongst different units (ii) Factors affecting adoption and diffusion of innovation
of social systems. Further in recent times technology in market.
innovation is relevant for economy due to government
Conceptualization of Adoption and Diffusion of
policies like Make in India and Start up India
Innovation
(Vedpuriswar,2003). Entrepreneurship is linked with
technology and is commercialized in steps like imagining, Innovation in more general terms can be defined as
incubating, demonstrating, promoting and sustaining commercialization of creative idea of an individual or
technologies for marketable use. Change is the key to organization. Baregheh et. al (2009) opined that innovations
innovation. In recent times markets have witnessed are creative ideas which are translated by organizations into
introduction of large variety of new products and services. distinct products and services to gain competitive advantage
The desire for change by consumers have prompted in the markets. Luecke and Katz (2003) further emphasized
marketers to produce better quality products and services on the process of innovation and indicated that innovations
and make them available through new and improved are usually linked with successful introduction of new
delivery systems. The advent of technology and its products and services in the market. Schumpeter (1912)
culmination with marketing has brought a revolutionary provided an economic extension to innovation and indicated
change in large groups of industries mainly that all products and services with which the consumers are
telecommunication, banking and retail. It has become not familiar can be termed as innovation. He further
increasingly essential for marketers to understand the explained that innovation is related with (i) production of
dimensions of adoption and diffusion to take strategic different kinds of products, (ii) adoption of new techniques
advantages in competitive markets. of production, (iii) discovery of new sources’ of raw
materials, (iv) discovery of new markets and (v) change in
Further researchers like Pareek (1999) indicated that the
organization of production. Adoption and diffusion of
slow growth of market with respect to markets can be
innovation is a step by step systematic process which cannot
attributed to factors like distance, diversity and dispersion. It
be replicated for all products. The adoption and diffusion
has become difficult for innovators to understand how their
process depends upon the time duration taken by consumers
idea can be converted into a marketable venture with respect
at every step of the process. The process of adoption and
to innovation adoption and diffusion. Gruber and Verboven
diffusion can stop at any stage when the consumer’s show
(2000) opined that technological and regulatory framework
disinterest towards an innovation. Rogers (2003) provided a
of a country also plays important role in adoption and

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Volume 10 Issue 4, October 2017

framework to discuss the flow of innovation. Innovation understand the steps involved in adoption diffusion process.
Diffusion was considered a five step process which began Narayanan (2001) indicated that adoption diffusion process
with Knowledge shaped by personal characteristics, social begins with chance discovery of researched innovation
economic background and communication behavior of which is propagated by marketers in a time frame where the
customers and was followed by persuasion which is a result units of social system accept and use the commercialized
of perceived benefits associated with relative advantage, innovation. The diffusion process in particular which
compatibility, complexity, trialabilty and observeability and highlights the rate and degree of adoption is affected by
decisions which is related with adoption in terms of internal and external factors working in the economy.
continued adoption or later adoption or rejection marked by Rogers (2003) indicated that diffusion of technology can be
discontinuance or continued rejection, implementation studied through an S shaped curve which is studied through
where innovation is put into practice and confirmation parameters like innovation, adopters, communication
where customers looks for support of their decision from the channels, time and social system.
reference group. The researchers have however tried to
Figure 1: Diffusion of Innovations according to Rogers (1969)

(Source: https://en.wikipedia.org/wiki/File:Diffusion_of_ideas.svg)
Rogers divided the market on the basis of interest shown by models. Bass (1969) propounded a model which indicated
consumers towards an innovation. He highlighted that the that adopters can be classified in two categories namely (i)
market is divided in five distinct category namely (i) innovators and (ii) imitators. Further the model suggested
Innovators, (ii) Early Adopters, (iii) Early Majority, (iv) that diffusion of innovation depends on the extent of
Late Majority and (v) Laggards. Researchers, academicians innovativeness and the rate of imitation amongst adaptors in
and practitioners over the years have tried to understand the market.
concepts of adoption and diffusion with the help of various
Figure 2: Bass Diffusion Model

(Source: https://en.wikipedia.org/wiki/File:Bass_diffusion_model.svg)
Further Kano et. al (1984) classifies the customer satisfaction and dissatisfaction towards presence and
requirements into four categories: Must-Be, One- absence of an innovative feature.
dimensional, Attractive and Neutral. Kano model studies

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 Pacific Business Review International

Figure 3: Kano's Model of Customer Satisfaction

(https://en.wikipedia.org/wiki/File:Kano_model_showing_transition_over_time.png
Further customers can be grouped on the basis of their established that current purchase in market is the linear
response into adopter categories. The marketers must function of prior purchases made in the market by a
analyze the attributes the presence of which will lead to consumer. Bass studied diffusion of innovation against time
satisfaction or dissatisfaction amongst customers. The and found that there are only two categories of customers in
attributes need to be assessed and the marketers must try to the markets namely innovators and imitators. The
practically fix the operational aspects of implementation of innovators are basically early adaptors who had early
innovation demanded by the customers. patronized new technologies in form of purchases.
Robinson and Lakhani (1975) indicated that price of product
Factors Affecting Adoption and Diffusion of Innovation
is the major decision variable which influences adoption and
in Market
diffusion of product and services in market. The price of the
The researchers have tried to analyze the adoption and product exponentially effects the adoption and diffusion in
diffusion process using the models suggested by various almost all categories. Kamakura and Balasubramanian
researchers across globe. Sahin (2006) reviewed the Rogers’ (1988) further added factors like price index, population
Innovation diffusion model to assess the usage of this model growth and product replacement parameters as factors
in understanding technology diffusion in an economy. She which affect the adoption and diffusion in an economy.
concluded that Rogers’ Model is a widely used model to Kalish (1985) highlighted that adoption and diffusion of
study diffusion related with technology innovation. Her new product can be studied in two levels (i) diffusion of
study concluded that knowledge of innovation and awareness and (ii) adoption of product. The first stage is
persuasion by the marketers will lead to better diffusion of represented by cumulative sale of product, potential product
innovation. Isleem (2003) studied the level of computer market, price of product, advertising of product and
usage for instructional purposes by faculties of Ohio public awareness of product. The second stage of adoption and
school. Her study concluded that teachers perceived that diffusion is dependent upon cumulative sales, initial
access to technology and attitude towards computers are potential market, and the information about price and new
basic antecedents which lead to diffusion of technology product provided by initial adopters. Horsky and Simon
amongst them. Further Medlin (2001) highlighted that (1983) opined that initial sales is the result of advertising at a
diffusion of innovation is shaped by social, personal and point of time, effectiveness of advertising, cumulative sales
organizational motivational factors which forces them to and market potential.
accept or reject an innovation. The study further emphasized
Research Methodology
that opinion of reference group, infrastructural support of
organization and personal interest for better performance The researchers studied the adoption and diffusion of
and improved efficiency motivates an individual to adopt a innovation of Wholesalebox service amongst retailers and
technology. A host of studies have also been conducted to wholesalers in Raipur City. Wholesalebox is an online web
understand the characteristics of early adaptors in market. platform for buying and selling of mainly textile materials
Jacobson (1998) highlighted that early adopters are able to started by a group of technology and business experts. The
comprehend the relative advantage, related with an researchers identified four unique services features offered
innovation better in comparison to other customers and are by Wholesalebox, namely, single platform for buying and
more compatible with the new innovation due to their need selling online (F-1), cost reduction on procurement of order
for higher self efficacy. Bass (1969) mathematically (F-2), complete marketing support (F-3), drop-shipping

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Volume 10 Issue 4, October 2017

(can sell products not in stock) (F-4). Than researchers Data Analysis and Interpretation
prepared a structured questionnaire to study adoption and
Kano Analysis
diffusion of innovation as per the framework suggested by
Kano. Every service feature was containing two sets of The researchers made a comprehensive analysis of retailers’
questions in functional and dysfunctional form. Functional response about innovative services features offered by
form was seeking respondents’ opinion if the particular Wholesalebox and extent of their satisfaction with these
feature is present and dysfunctional form was seeking their services features using Kano evaluation table. Table no. I
opinion if the particular feature is absent or not available. shows scheme of categorization of respondents after
The data was collected from 80 retailers and 20 wholesalers evaluating their response for functional and dysfunctional
operating in biggest cloth market of Raipur. The data was form of a question with respect to a particular service
collected through a questionnaire and analyzed with the help feature.
of KANO model. After getting respondents response about
Table No. I: Categories of Attribute based on Kano
innovative services feature of Wholesalebox the researchers
Model
conducted structural equation modeling to study
respondents online shopping behavior. The researchers As per the methodology suggested by Kano the response of
formulated the following hypothesis: retailers are summarized in to different categories as shown
in Table no. II along with satisfaction and dissatisfaction
H1: There is significant relationship between merchant
score.
factors (MF) and the respondents’ intention for web-
shopping (Intention). Table No. II: Respondents Opinion about Innovative
Features of Wholesalebox
H2: There is significant relationship between website
factors (WF) and the respondents’ intention for web- Feature one (F-1) and four (F-4) are found in “attractive
shopping (Intention). category” with 71% and 79% score. If they are not present,
dissatisfaction is negligible 0.122 & 0.14 and if they are
H3: There is significant relationship between the
present degree of satisfaction is high 0.755 & 0.85, meaning
respondents’ intention for web-shopping (Intention) and
respondents are satisfied when this service feature is present
their online-shopping behavior (OSB).
but in case of absence they have no feeling. Feature two (F-
H4: There is significant relationship between online- 2) is found in “one dimensional” category with 78% score. It
shopping behavior (OSB) and frequency of online shopping means respondents are satisfied if this service feature is
(F). present and dissatisfied in case of absence. Feature three (F-
3) is found in “attractive category” with a score of 42%. It is
H5: There is significant relationship between online-
also reveals that this service feature has a significant score of
shopping behavior (OSB) and expenditure during online
34% in “must be” category. This shows that if this service
shopping (Ex).
feature is absent dissatisfaction is significant (0.64) and
H6: There is significant relationship between online- incase of presence of this service feature satisfaction is 0.62,
shopping behavior (OSB) and buying product online (PB). meaning respondents are slowly migrating towards “must
be” category.
H7: There is significant relationship between online-
shopping behavior (OSB) and selling product online (PS).
Figure 4: Satisfaction Potential of Services Features of Wholesalebox

(Source: Survey Data)

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 Pacific Business Review International

Figure 4, shows the set of service features, with the potential the Wholesalebox they may have greatest potential of
for dissatisfaction on the left and the potential for dissatisfaction. All the service features have almost similar
satisfaction on the right. It also reveals that if service feature potential for satisfaction on the basis of analysis.
two (F-2) and service feature three (F-3) are not included in
Figure 5: Adopter Categories for Services/ features of Wholesalebox

(Source: Survey Data)

Respondents whose responses fall in one dimensional reliability tests of the structural model were conducted by
category and must be category belong to “First Adopters” the researchers. Construct validity of the model was tested
and are likely to avail services of Wholesalebox in near which includes factor loadings, convergent validity,
future. First Adopter category includes 12% respondents for composite reliability and discriminant validity. Composite
service feature one (F-1), 87% for service feature two (F-2), reliability of all construct variables were above 0.74 which
54% for service feature three (F-3), 14% for service feature is indicative of good scale reliability as per the rule of thumb
four (F-4). Respondents whose responses fall in attractive suggested Hair et al (2010); Nunnally and Bernstein (1994).
category belong to “Late Adopters,” they are interested in Discriminant validity of all the constructs were above .83
the services features of Wholesalebox but will delay their and average variance extracted (AVE) were between .67 to
decision to avail until its popularization. Late Adopter .85 as suggested by Hair et al. (1998). All these values met
category includes 71% respondents for service feature one the recommended guidelines and indicted that constructs in
(F-1), 10% for service feature two (F-2), 42% for service this study are adequate. According to the suggestions of
feature three (F-3), 79% for service feature four (F-4). Andreson and Gerbing (1992) the researchers first
Respondents whose responses fall in indifferent category conducted confirmatory factor analysis (CFA) to identify
belong to “Non Adopters,” they are not interested in the core goodness-of-fit index for the variables than hypothesized
services features of Wholesalebox and will not use this in the model was tested with structural equation modeling (SEM)
foreseeable future. Non Adopter category includes 15% using AMOS 21 software to identify the relationship
respondents for service feature one (F-1), 3% for service between constructs. CFA results validated the
feature two (F-2), 4% for service feature three (F-3), 4% for distinctiveness of the constructs and revealed that the
service feature four (F-4). Responses of questionable and hypothesized model fits the data adequately (Chi square =
reverse category constitute error hence not included in the 37.427; df = 24; GFI = .916; NFI = .903; IFI = .938; TLI =
analysis. .927; CFI = .916; RMSEA = .64) after imposing constraints
as modification indices (Steiger, 1990). Chi square / df ratio
Structural Equation Modelling
is less than 3.00 and CFI and other incremental fit indices are
The data in this study was considered normal on the basis of more than above 0.90 then satisfactory model fit can be
mean scores (above the midpoint of two), standard deviation inferred (Kline, 2005). RMSEA value also shows model fit.
range (between .43 to .67), skew index (between -.31 to .29), RMSEA value 0.64 indicates reasonable fit. RMSEA value
kurtosis index (between -.58 to .26). All these values are should be .08 or lower to indicate good model fit (Browne
under recommended guidelines (Kline, 2005) and data is and Cudeck, 1992).
found fit for structural equation modelling. Various

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Volume 10 Issue 4, October 2017

Figure 6: Standardised Structural Model Tested by Researchers

Table No. III: Hypothesis Testing Results and Structural market and introduce products and services. The firm
Model estimates specific characteristics or market demanded characteristics
can define an innovative product and increases its market
It can be inferred from table no. III that all the hypothesis are
potential. It is essential for marketers to analyze and
supported by the statistics as path coefficient between the
understand the factors which will lead to innovation and its
constructs are more than 0.20 as suggested by Hair et al.
adoption and diffusion. The textile marketers in Raipur city
(2010) and critical ratios are also above +1.96. Thus it can
indicated that features like finding ready stock for
also be interpreted from the results that merchant factor,
procurement without travelling to distant locations has
website factor together formulate respondents intention for
lowered their operational cost and increased their return on
web-shopping which impacts their online shopping
investment. A further facility like drop shopping is helping
behaviour which is inclusive of frequency of online
them sell products which they don’t have on ready
shopping, expenditure during online shopping, buying
availability but is demanded by customer with the help of
product online and selling product online.
interaction made with their wholesaler through web
Managerial Implications of the Study interface. This facility will help them maintain their
customer base and will avoid retailer switching by
The growth of technology acceptance in recent past has
customers. Further retailers also demanded functional
modeled ways for new internet based products and services.
benefits like expert support and cost reduction as an
Integration of technology for findings solutions related with
essential requirement from a web interface. The retailers and
business problems and minimizing efforts related with day
wholesalers in Raipur city wanted innovative features like
to day life has led to adoption and diffusion of technology
dropshipping, single platform, cost reduction and consumer
based services. The managers and marketers must devote
support from the web based interface for wholesalers and
time to find existing gaps related with need and wants of the
retailers.
Figure 7: Adoption Diffusion Cycle for Web based Interface for Wholesale and Retail Buying

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 Pacific Business Review International

Further for adoption and diffusion it is necessary for the web Ohio Public Schools: A Statewide Survey
platform to create awareness regarding the web based (Doctoral dissertation, The Ohio State University,
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Jacobsen, M. (1998). Adoption Patterns and Characteristics
the innovative features of the service and develop
of Faculty who Integrate Computer Technology for
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based interface to continuously develop competence for
(Doctoral dissertation, The University of Calgary,
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Kamakura, Wagner and Balasubramanian, Siva. (1988).
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Long-term View of the Diffusion of Durables: A
between the purchaser and seller. The marketers must try to
Study of the Role of Price and Adoption Influence
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Process via Test of Nested Models. International
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Appendix
Table No. I: Categories of Attribute based on Kano Model
Category When attribute is Present When attribute is Absent
Attractive (A) Satisfied No feeling
Must be (M) No feeling Dissatisfied
One Dimensional (O) Satisfied Dissatisfied
Indifferent (I) No feeling No feeling
Questionable (Q) Respondent misunderstood the question or gave wrong
answer by mistake
Reverse (R) Dissatisfied Satisfied

Table No. II: Respondents Opinion about Innovative Features of Wholesalebox

Extent of Extent of
(A) (M) (O) (I) (Q) (R)
satisfaction dissatisfaction
Attractive Must be One dimensional Indifferent Questionable Reverse
F-1 71% 9% 3% 15% 0% 2% .755 -0.122
F-2 10% 9% 78% 3% 0% 0% .88 -0.87
F-3 42% 34% 20% 4% 0% 0% .62 -0.64
F-4 79% 11% 3% 4% 1% 2% .85 -0.14

Table No. III: Hypothesis Testing Results and Structural Model estimates
Estimate
Path Coefficient S.E. C.R. P Result
(β)

Intention <--- MF .67 .017 3.671 *** Supported

Intention <--- WF .71 .078 4.029 *** Supported
OSB <--- Intention .94 .097 3.332 *** Supported
F <--- OSB .94 .047 3.645 *** Supported
Ex <--- OSB .57 .082 2.437 *** Supported
PB <--- OSB .81 .063 3.125 *** Supported
PS <--- OSB .63 .065 4.631 *** Supported

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