chapter -13

Consumer and the diffusion of

innovations
Sarath sasi
DEFFUSION OF INNOVATION
 DIFFUSION OF INNOVATION
• DEFINITION

“The framework for explore consumer

acceptance of new products is drawn from the
area of research known as the diffusion of
innovation”
 PROCESSES OF INNOVATIONS
• DIFFUSION PROCESSES MACRO PROCESS

• ADOPTION PROCESS MICRO PROCESS

 DIFFUSION PROCESS
• This is concerned with how innovation spread
• Assimilation of product with the market
• It is process of acceptance of an innovation
such as a new product, new services, new
ideas, or new practices.
• Mode of communication may be mass media,
sales people, informal conversation.
Basic elements of diffusion process

The channels of
The innovation communication

The socal system time

 INNOVATION
• NO UNIFORM DEFINITON EXIST
• THERE ARE OTHER FACTORS DEFINE THIS CONCEPT
1. FIRM ORIENTED DEFINITION
2. PRODUCT ORIENTED DEFINITION
3. MARKET ORIENTED DEFINITION
4. CONSUMER ORIENTED DEFINITION
5. FACTORS INFLUENSING THE RATE OF DIFFUSION
 FIRM ORIENTED DEFINITIONS

A firm – oriented approach treats the newness

of a product from the perspective of the
company producing or marketing it. When the
product is new to the company, it is
considered new. This definition ignore
whether or not the product is actually new to
the market place.
 PRODUCT ORIENTED DEFINITION

In contrast to firm oriented definitions, a

product- oriented approach focuses on the
features inherent in the product itself and on
the effects these features are likely to have on
consumers established usage patterns.
 TYPES OF PRODUCT INNOVATION

• CONTINUOUS INNOVATION
• DYNAMICALLY CONTINOUS INNOVATION
• DISCONTINUOUS INNOVATIONS
 MARKET ORIENTED DEFINITIONS

It judges the newness of a product in terms of

exposures

Two definitions
 A product is considered new if it has been
purchased by a relatively small (fixed) percentage
of potential market.
 A product is considered new if it has been on the
market for a relatively short (specified) period of
time.
 CONSUMER ORIENTED DEFINITION

In this context, a new product is any product

that a potential consumer judges to be new.
Newness is based on the consumers
perception of the product, rather than on
physical features or market realities.
FACTORS INFLUENCING THE RATE OF DIFFUSION

Diffusion researchers have identified six

products characteristics that seem to
influence consumer acceptance of new
products:
 Relative advantages
 Compatibility
 Trial ability (or divisibility)
 Observability (or Communicability)
 Cost
 CHANNEL OF COMMUNICATION
• WAYS OF COMMUNICATION
1. BETWEEN THE MARKET & CONSUMERS
2. AMONG CONSUMERS
3. IMPERSONAL SOURCES SUCH AS ADVERTISING
AND EDITORIAL MATTERS
4. INTERPERSONAL SOURCES SUCH AS SALES
PEOPLE AND INFORMAL OPINION LEADERS
5. INTERACTIVE MARKETING MESSAGES (NEW
CONCEPT)
 SOCIAL SYSTEM
A social system is a physical, social, or cultural
environment to which people belong and with in
which they function.
Characteristics of modern social system:
1. A positive attitude towards change
2. An advanced technology and skilled labour force
3. A general respect for education and science.
4. An emphasis on rational and ordered social relationships,
rather than an emotional ones.
5. An out reach prospects
6. A system in which members can readily see themselves in quite
different roles.
 TIME
Time is the backbone of the diffusion process.
three ways
1. Purchase time
2. Adopter categories
3. Rate of Adoption
 PURCHASE TIME

Purchase time refers to the amount of time

that elapse between consumers initial
awareness of a new product or service and
the point at which they purchase or reject it.
 ADOPTER CATEGORIES

It involves a classification scheme that

indicates where a consumer stands in relation
to other consumers in terms of time