Diffusion of Innovation

Diffusion & Adoption of Innovation:

 Diffusion is a macro process that is concerned with the
spread of a new product from its source to the
consuming public

 Adoption is a micro process that focuses on the stages

through which an individual passes when deciding to
accept or reject a new product
The Diffusion Process:
 This process is concerned with how innovation
spreads

 Four Basic elements of diffusion process are:

 The Innovation
 The channels of communication
 The social system
 Time
The Innovation:
 Innovation is any
thing which
consumer
perceives to be
new
 Three categories
of innovation
based on extent
of consumption
behavior and
buyer pattern
changes are:
 Continuous
Innovation: Has
least disruptive
influence on
established
patterns
 Categories of innovation based on extent of
consumption behavior and buyer pattern changes :
 Dynamically continuous innovation
 Behavior pertaining to existing
patterns change a little
 From camera to digital camera
 Normal taxi service to App based taxi
service
Categories of innovation based on extent of
consumption behavior and buyer pattern changes
(Cont…):
 Discontinuous innovation
 Requires consumers to adopt new
behavior
 Advent of smart phone & apps
 Self driving cars, internet of things
Product Characteristics that influence
diffusion:
 Relative advantage: Degree to which potential customers
perceive a new product as superior to existing substitutes
 Compatibility: Degree to which the potential consumers feel
that the new product is consistent with their needs, values &
practices
 Complexity: Degree to which a new product is difficult to
understand or use
 Trialability: Degree to which a new product is capable of
being tried on a limited basis, e.g. free samples, free soft
wares bundled with other soft wares
 Observability: Degree to which product’s benefits or
attributes are observed & can be conveyed to the customers
The Consumer-Adoption Process
 Adopters of new products move
through five stages:
 Awareness
 Interest
 Evaluation
 Trial
 Adoption