Diffusion of Innovation

The Diffusion Concept

The process by which and innovation is communicated through certain channels over time among the members of a social system Elements of Diffusion
Innovation Channels of Communication Time Social System
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Innovation
An idea, practice or object perceived as new by an individual or other unit of adoption Types of Innovation
Discontinuous Innovation Dynamic Innovation Continuous Innovation

Types of Innovation
Low

Degree of Behavioral Change Required

Continuous Innovation e.g. Cell Phone with Camera

Moderate
Dynamically Continuous Innovations e.g. Cell Phone

High
Discontinuous Innovation e.g. Telephone

Rare

Infrequent

Frequent

Frequency of Occurrence

Factors Affecting Innovation Adoption

Relative Advantage Compatibility Complexity Trialability Observability Other factors are Type of social system, Type of decision, Marketing effort, Need fulfillment/problem solving, and perceived risk
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Consumer Resistance to Innovation

The resistance offered by the consumers to an innovation, either because it poses potential changes from a satisfactory status quo or because it conflicts with their belief structure

Diffusion Process, Adopter Categories

1) INNOVATORS - are first to buy and typically described as venturesome, younger, well educated, financially stable, and willing to take risks. 2) EARLY ADOPTERS - are local opinion leaders who read magazines and who are integrate into the social system more than the average consumer.
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Diffusion Process, Adopter Categories

3) EARLY MAJORITY - solid, middle-class consumers who are more deliberate and cautious 4) LATE MAJORITY - described as older, more conservative, traditional, and skeptical of new products

Diffusion Process, Adopter Categories

Laggards
Resist change Conservative Like tradition Often older & lower in socioeconomic status

OK, we will buy X

If I have to buy, I will

No way!

Nonadopters
Refuse to change

Consumer Resistance to Innovation

Innovation Exposure No

Resistance

Adoption

Yes

Flexible to Modification

No

Rejection

Modification

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Communication is a Key element in the Diffusion Process

Two types of communication in diffusion are: 1. Communications in the heterophilous groups (groups outside an individuals personal network) 2. Communications in the homophilous groups. (i.e., peer and family)

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Time
Time has a bearing on
The adoption process Innovativeness of the consumers The innovations rate of adoption

Adoption Process 5 stages

Awareness Interest Evaluation Trial Adoption/Rejection
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Channels of Communication
Marketers to Consumers Among Consumers Product dedicated websites Company websites Product related magazine and journals Consumer shows, exhibitions and fairs TV shows dedicated to innovations Beauty pageants National level awards and game shows
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Rogers also proposed a five stage model for the diffusion

Knowledge - learning about the existence and function of the innovation Persuasion - becoming convinced of the value of the innovation Decision - committing to the adoption of the innovation Implementation - putting it to use Confirmation - the ultimate acceptance (or rejection) of the innovation
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An Enhanced Model of Adoption Process

Consumer Innovativeness Pre-existing Need Venturesomeness and interest in Product Category

Rejection or postponement

Evaluation

Awareness Interest Trial

Adoption Post Adoption Evaluation Continued Adoption

Rejection

Continued Rejection
Discontinuance

Later Adoption

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Why Some New Products Fail and Others Succeed

Absolute failure Relative failure

80 to 90% Fail. Why?

Unreal time pressure & vested interest groups Absorption in process: lack of objectivity, courage (risk) Product Deficiencies (Technical or Design Problems) Inadequate research (Overestimation of Market Size) Poor Execution of Plans (Promotion, Distribution, Price, poor timing, etcetera) Result: No differential advantage & Failure to Meet Customer Needs

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Why Some New Products Fail and Others Succeed

80 to 90% Fail. Why?
#1. Performance & Price New product failures generally offer the same or worse performance than competing products with the same or higher price #2. Inadequate Market Analysis

New Product Success Offer a unique benefit (a differential advantage) Solve a consumers problem or provide an opportunity, a reward
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Thank you
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