The ADOPTION

and DIFFUSION of Innovations

 The process by which
the acceptance of an
innovation is spread by
Diffusion
communication to
Process
members of social
system over a period of
time.
 The DIFFUSION PROCESS is the spread of an
innovation from its source to the ultimate
consumer that focuses on external forces.

The key elements of Diffusion are:

(1) an innovation is
(2) Communicated through certain channels (types
of change agents & information)
(3) Over time
(4) Among the members of a social system (types
of audiences, community).
 1. INNOVATION
• Innovation can be classified as
a)Firm -oriented defination
b)product -oriented defination
c)market -oriented defination
d)consumer-oriented defination
 FIRM-OREINTED DEFINATION
• This approach treats the newness of a
product from the perspective of the
company producing or marketing it.
• When the product is new to company it is
new, it ignores whether or not product is
actually new to market place.
Product-Oriented Definitions

Continuous Innovation

Dynamically Continuous
Innovation

Discontinuous Innovation
 Product-Oriented Definitions
• Nature of the innovation
– ‘new’ as perceived by individuals or group
• Categories of innovations
– continuous innovation: small changes needed
– dynamically continuous innovation: modest
changes
– discontinuous innovation: large changes
Categories of Innovations
Telephone Innovations

Discontinuous Dynamically Continuous Continuous

Innovations Innovations Innovations
Telephone answering Hold button
machines Line-in-use indicator
Call forwarding Redial button
Telephone Call waiting Auto dialing feature
Caller ID Touch-tone service
Banking by telephone 800 Numbers
Call-prompting systems 900 Numbers

Ability to send/receive email Switch from analog to

Incorporate PDA functions digital
Cell Phone Calendar/Phonebook Include camera
Voice-activated dialing Ringer styles
Play games
Fax modem Plain paper fax
Mobile fax machines Speed dial buttons
Fax Machine Home office systems Delayed send
(combined fax, copier, Copy function
computer printer) Paper cutter
MARKET -OREINTED DEFINATION
• It judges the newness of product in terms of
how much exposure consumers have to
the new product.
1) A product is considered new if it has
been purchased by a relatively small % of
potential market.
2) A product is considered new if it is in the
market for relatively short period of time.
 CONSUMER OREINTED DEFINATION

• New product is any product that a

potential consumer judges to be new.
• Newness id based on the consumers
perception of the product rather than on
physical features/market realities.
Factors Influencing the rate of
Diffusion
CHARACTERISTICS defination

potential cust percieves a new

Relative
product as a superior to existing
Advantage
substitutes eg:Air travel over train
travel, cordless
Feel that new phones
productover
is corded
telephones
consistent with their present
Compatibility
needs , values .eg: Gillette MACH3
over disposable razors,
A new product is difficult to
Complexity understand and use. Eg: Electric
shavers, instant puddings
CHARACTERISTICS defination

A new product is capable of

being tried on limited basis.
Trialability
Eg: Trial size jars and bottles of new
products, free samples,
The degree to which a product’s
benefits/attributes can be
observed ,Imagined or described
Observability to potential customers
Eg : Clothing, such as ralph lauren
jeans , sneakers , Hilfiger jacket, a
car, wristwatches, eyeglasses
 Characteristics That Encourage and
Discourage Diffusion
Encourage Discourage

1. Relative advantage 1. Value barrier

2. Compatibility with 2. Usage barrier
past usage 3. Complexity
3. Simplicity of use 4. Risk barrier
4. Observability
5. Trialability
 2)THE CHANNELS OF COMMUNICATION

• Innovation spreads through a market

depends to a extent on communications
between the marketer and consumers as
well as among consumers.
• Internet as a major consumer-related inter
personal source of information eg:internet
ads ,ecommerce web sites ie act as a direct
mail .
• As of now the growing medium is w.o.m
 Communication in the Diffusion Process

A) Trickle Up and Trickle Down

The transmission of influence between socioeconomic groups
can be described as a trickle-down process from higher to
lower groups and a trickle-up process from lower to higher
groups. Traditionally, the view has been that diffusion occurs in
a trickle-down manner. The transmission of influence occurs
occasionally in a trickle-up direction, however. For example,
innovators and early adopters of jeans and of bluegrass and
rock music were those in lower socioeconomic classes.
Communication in the Diffusion Process
B. Trickle Across
Mass media also rapidly communicate information on
innovations to all classes. A more likely process of
diffusion is one that occurs across groups, regardless of
socioeconomic status, known as a trickle-across effect.
C. Internet
Will the Internet result in a More
Rapid Rate of adoption & diffusion?
 SOCIAL SYSTEM
• The diffusion of a new product usally takes place
in a social setting frequently refferred to as a
social system.
• A social system is a social,physical,cultural
environment to which people belong and within
which they function.
• The key point to remember is that social system
oreintation is the climate in which marketers
must operate to gain acceptance for their new
products.
 TIME
• Time is the backbone of diffusion process
i)Amount of purchase time
ii)Adopter categories
iii)Rate of adoption
 A sequence of
categories that
describes how early (or
Adopter
late) a consumer
Categories
adopts a new product
in relation to other
adopters.
Diffusion of innovation research traces the spread of
product acceptance across its product life cycle
Market Market Market Sales
Introduction Growth Maturity Decline

Total Industry
Sales

Total Industry
Profit
$0
Time
–
Stage customers:

Early Adopters Early Majority Majority Laggards

 The Diffusion Process …has
identified adopter typologies that are
linked to marketing strategies.

2.5% Innovators
13.5% Early Adopters

34% Late Majority 34% Early Majority

 Diffusion Process,
Adopter Categories

• INNOVATORS - are first to buy and typically

described as venturesome, younger, well
educated, financially stable, and willing to
take risks.

• EARLY ADOPTERS - are local opinion leaders

who read magazines and who are integrate
into the social system more than the
average consumer.
 Diffusion Process,
Adopter Categories
• EARLY MAJORITY - solid, middle-class
consumers who are more deliberate and
cautious

• LATE MAJORITY - described as older, more

conservative, traditional, and skeptical of new
products
 Diffusion Process,
Adopter Categories
• Laggards OK, we will
– Resist change buy X.
– Conservative If I have
– Like tradition to buy it
– Often older & lower in I will.
socioeconomic status

• Nonadopters
– Refuse to change
No way!
Variations from the Normal Adoption Curve
 The stages through
which an individual
consumer passes in
Adoption arriving at a decision to
Process try (or not to try), to
continue using (or
discontinue using) a new
product.
 The Buyer Decision Process for New Products

Adoption process is the mental process an

individual goes through from first learning
about an innovation to final regular use.
Steps in the
Adoption
Process
Table 15.11 Stages in Adoption Process
WHAT HAPPENS
NAME OF EXAMPLE
DURING THIS STAGE
STAGE
Consumer is first Janet sees an ad for a new MP3 player in
Awareness exposed to the product the magazine she is reading.
innovation.
Consumer is interested Janet reads about the MP3 player on the
in the product and manufacturer’s Web site and then goes to
Interest
searches for additional an electronics store near her apartment
information. and has a salesperson show her a unit.
Consumer decides After talking to a knowledgeable friend,
whether or not to Janet decides that this MP3 player will
believe that this product allow her to easily download the MP3 files
Evaluation
or service will satisfy the that she has on her computer. She also
need--a kind of “mental feels that the unit’s size is small enough to
trial.” easily fit into her beltpack.
Table 15.11 Stages in Adoption Process
WHAT HAPPENS
NAME OF EXAMPLE
DURING THIS STAGE
STAGE
Consumer uses the Since an MP3 player cannot be “tried” like
product on a limited a small tube of toothpaste, Janet buys the
Trial basis MP3 player online from Amazon.com,
which offers a 30-day full refund policy.

If trial is favorable, Janet finds that the MP3 player is easy to

consumer decides to use use and that the sound quality is
the product on a full, excellent. She keeps the MP3 player.
Adoption rather than a limited
(Rejection) basis--if unfavorable, the
consumer decides to
reject it.
 An Enhanced Adoption Process Model

Discontinuation or
Rejection
Rejection

Evaluation

Pre-existing Adoption
problem or Awareness Interest Evaluation Trial or
Need Rejection

Adoption or Rejection
Postadoption or
Postpurchase
Evaluation
Discontinuation