Increasing Product Adoption

Part 2

Prof. Siddharth S. Singh

Diffusion of Innovation

“People Differences”

versus

“Product Differences”

2
People-Based Approach to Understanding
Diffusion

Early
Adopters

Innovators Laggards
Late Majority
Early
Majority

3
 Product-Based Approach to Understanding
Diffusion

 Complements “People-Based” approach

 Roger’s five factors of diffusion

 Explain and predict the marketplace success and failure of
product
 Explain 49% to 87% of the variance in the rate of diffusion
across innovations

 Advantage:
Understanding and managing these factors allows
 Better prediction of likely rate of diffusion
 Develop products that are more likely to be adopted
 Tailor marketing efforts for better diffusion
 leverage those factors on which innovation does well and overcome
others

4
Roger’s five factors of diffusion
Factor # 1: Relative Advantage

“the degree to which an innovation is perceived as being better than the idea it supersedes”

 Economic, social status, prestige

 Rate of adoption of innovation increases with its relative advantage
 Widely recognized as necessary but not sufficient driver of innovation diffusion

Factor # 2: Compatibility

“the degree to which an innovation is perceived as consistent with values and experiences of the potential
adopter”

 Compatibility with previously introduced ideas, values, beliefs, needs, habits, experiences
 Compatibility => expectations about the way things should be
 Generally accepted that rate of product adoption increases with compatibility

5
Roger’s five factors of diffusion
Factor # 3: Complexity
“degree to which an innovation is perceived as relatively difficult to understand and use”

 Rate of diffusion decreases with increase in perceived complexity of innovation

 Primary tool to overcome complexity is customer education

Factor # 4: Trialability
“the degree to which an innovation may be experimented with on a limited basis”

 Rate of adoption increases with trialability of innovation

Factor #5: Observability

“the degree to which the results of an innovation are visible to others”

 The more visible or observable the usage and outcome of an innovation, the greater the rate of
adoption

6
Framework for Product Evaluation and
Development

Relative Compatibility Complexity Trialability Observability

Advantage

Product 1

Product 2

Product 3

Product 4

7
Questions?