Consumer decision making and

Diffusion of innovation
 Consumer Behavior

 Process a consumer uses to make purchase decision as

well as to use and purchased goods or services; also
include factors that influences purchase decisions and the
product use.
 Understanding the Consumer Behavior

Consumer make
purchase decision
Consumer behavior HOW=

Consumer use of
product
Consumer decision making process

Need Recognition

Information search
Cultural,social,individu
al and psychological
factors effects all steps Find alternative

Selection and buying

Post paid decision

/feedback
 What is innovation

 Itis any idea or product perceived by the

potential adopter to be new products are
ideas behavior or things that are
qualitatively different from existing forms
Example~ The Audio Industry

 At start, at the ferment stage there was the CASSETTE TAPE which was
invented by Phillips
 Then at take off phase Sony has invented the Walkman that had the ability to
answer the customer's demand of listening to their CASSETTE outside.
 As a result of Sony's Success, the market have arrived to its maturity as a
number of competitors manufactured similar devices.
 The Discontinuity phase appeared when Sony and Phillips have developed the
Compact Disk and by doing so, disrupted the market and started a new
S~Curve.
 Diffusion of innovation
 A process through which a new product
moves from initial introduction to regular
purchase and use.
 A process by which an innovation (idea)is
communicated through certain channels over
time among the members of a social system.
 Stages in Innovation

 Innovators (2.5%)
These people are willing to take risks abd are often the first to develop new ideas.
 Early adopters(13.5%)
These are people who represent opinion leaders.
 Early majority(34%)
These people are rarely leaders, but the adopt new ideas before the average person.
 Late majority(34%)
These people are spectical of change and will not adopt ana innovation after it has been adopt by maturity.
 Laggards(16%)
These people are bound by tradition and very conservative.
 The key elements of
diffusion of research
The diffusion process include these steps:
 The innovation
 The channels of communication
 The social system
 time
Innovation:
There are various approaches have been taken to define the
new product:
 Firm oriented
 Product oriented
 Market oriented
 Consumer oriented
 The channels of communication:

Diffusion , by definition takes place among people

or organization .communication channel allow the transfer
of information from one unit to another unit. there are two
ways of communication.
 Impersonal communication
 Interpersonal communications
Correct communication channels used during the process of diffusion, orriented
towards and preferences of the target category of adopters.
Example:- TV, Radio, banners SMS, Newspapers etc
 Time
It is the backbone of the diffusion process. It pervades the study of diffusion in
three ways.

 The amount of purchase time:-

Purchase time referz to the amount of time that elapses between customer's initial awareness of new product.

 The identification of adopter categories:-

An adopter category involves a classification scheme that indicates where a customer
stands in relation to other customers in terms of time.

 The rate of adoption:-

Adoption Process:-

Five~stage mental processes all prospective customers go through from learning

of a new product to becoming loyal customers or rejecting it.
These stages are:~
 Awareness: prospects come to know about a product but lack sufficient
information about it.
 Interest: they try to get more information
 Evaluation: they consider wheter the product is beneficial.
 Trial: they make the first purchase to determine its worth or usefulness
 Adoption/Rejection: they decide to adopt it or reject it.
 Social system

The social is the combination of internal or external

influences there are many role in the social system and their
combination represent the total influences on a potential
adopter.
There are to types of social system:
1. Traditional social system
2. Modern social system
 Stages of diffusion process:
There are five stages of diffusion process:
1. Knowledge
2. Persuasion
3. Decision
4. Implementation
5. confirmation
 1- Knowledge

 In this stage consumers are aware of the product

but have no judgment concerning the relevance
of the product to a problem o recognized need.
Knowledge about the product is to aware the
people about the innovation and its occur through
the mess media .
 2- Persuasion
 In this stage usually attitude formation takes place that is
consumer forms favorable or unfavorable attitudes towards the
innovation. Consumer may mentally imagine how satisfactory
new product might be in use. A person may seeks out new stories
,pay particular attention to advertising for the product ,subscribe to
product rating services, talk to experts in that product category etc
. this is basically done to reduce perceived risk in adopting new
product
 3- decision
 Consumer engaged in activates that lead to a choice
adopt or reject the innovation .Adoption can be defined
as a decision to make full use of an innovation as the best
course of action . Rejection means not to be adopt the
innovation .there may be some person who first consider
adopting an innovation or at least give a trial, but then
deciding not to adopt it its called active rejection. Other
never use to the innovation its called passive rejection.
 4- implementation
 Implementation means the consumer out the the
innovation into the use .until this stage , the
process is a mental exercise ,but in this stage
behavioral change is required marketing plan is
the determinant of whether a good product has
been communicated effectively.
 5- confirmation
 This stage is also influenced by communication
sources and consumer evaluate their purchase
experiences .after evaluating , they try support
their behavior and late decide to continue or
discontinue using the product marketers consider
studying discontinuance to be equally important
as the rate of adoption.
Conclusion:-

 Diffusion of innovation seeks to explain how innovations are taken up in a population. An

innovation is an idea, behaviour or object that is perceived as new by its audience.