Diffusion and Adoption of Innovations

Innovation
An innovation is any product or service perceived to be new by consumers.
(Marketers try to anticipate and cater to new needs or markets)
Diffusion
Diffusion of Innovations refers to the process whereby a new product, service or idea spreads through a population.
(Diffusion is a macro process to relate)
4 Ways of Perceiving (4 Elements)
E1: The Innovation
E2: Channels of Communication
E3: The Social System
E4: Time
E1: The Innovation
Firm-oriented definitions – Product is new to that company.
Product-oriented definitions – Continuous, Dynamically Continuous & Discontinuous.
Market-oriented definitions – Based on Consumer exposure.
Consumer-oriented definitions – Consumer judges the product as new.
Continuous, Dynamically Continuous and Discontinuous
Continuous – No change in use of product, just improvements.
Dynamically Continuous – The way in which the consumer changes their behaviour towards a product.
Discontinuous – Change. Completely new product.
Product Characteristics
Where more or one is present, a product is more likely to be accepted.
Characteristics – Relative Advantage
Degree to which consumers consider it superior to existing substitutes.
Characteristics – Compatibility
Degree to which consumers feel it is consistent with their present needs, values and practices.
Characteristics – Complexity
The degree to which it is difficult to understand or use.
Characteristics – Trialability
The degree to which is can be tried on a limited basis.
Characteristics – Observability
The degree to which its benefits can be observed, imagined or described.
E2 – CoC Marketer to Consumer
Impersonal (e.g: PR campaigns and advertisements)
Interpersonal (e.g: Sales staff and direct marketing tactics)
E2 -CoC Consumer to Consumer
Through word of mouth.
People will talk to each other about a product or service that they like.
Important way to diffuse opinion leaders.
E2 – CoC New Channels
Social Media.
The internet – Websites, Blogging, etc.
E3 – The Social System
‘climate to work in’
Related to culture, norms and values of the target audience.
E3 – Modern Social Systems
Modern social systems are more accepting of innovation due to their:
– Positive attitude towards change.
– Advanced technology and skilled labour force.
– Respect for education and science.
– Emphasis on rational and ordered social relationships.
– An outreach perspective where members interact with outsiders.
– A system where members can see themselves in different roles.
– More challenged by the ‘new’.
E4 – Time
Purchase Time – Time between awareness of product and the decision to purchase.
Rate of Adoption – How quickly does it take to spread across the market?
Adopter Categories
‘Not everyone responds at the same rate’
5 adopter categories:
Innovators
Early Adopters
Early Majority
Late Majority
Laggards
The Adoption Process
The stages through which an individual consumer passes in arriving at a decision to try (or not to try) to continue using (or discontinue) a new product.
Stages in Adoption Process – Stage 1
Awareness – Consumer is first exposed to the product innovation.
Stages in Adoption Process – Stage 2
Interest – Consumer is interested in the product and searches for additional information.
Stages in Adoption Process – Stage 3
Evaluation – Consumer decides whether or not to believe that this product or service will satisfy the need. Almost like a ‘mental trial’.
Stages in Adoption Process – Stage 4
Trial – Consumer uses the product on a limited basis to test it out.
Stages in Adoption Process – Stage 5
Adoption (or Rejection) – If the trial is favourable, the consumer decides to use the product on a fuller basis. If unfavourable, the consumer decides to reject it.
The Consumer Innovator
The earliest purchasers of a new product.
A valuable customer to marketers as they become a powerful channel to spread the word.

Tend to have higher levels of:
-Education.
-Social Interaction.
-Opinion Leadership.
-Venturesomeness.
-Social Status.