Customer Adoption Process

Diffusion of Innovation &

Situational Influences

H O W A C O N S U M E R BE C O M ES A
CUSTOMER

PRESENTING BY:
MANISH SHARMA
VIVEK SINGH

Diffusion
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Diffusion is the process by which an innovation is communicated

through certain channels over time among the members of a

social system.
An innovation?

is an idea perceived as new by the individual.

The four main elements in the diffusion of new ideas are

3

(1) The innovation

(2) Communication channels
(3) Time
(4) The social system

The innovation
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Why do certain innovations spread more quickly than others?

The innovation, to spread and be adopted should show: The

characteristics which determine an innovation's rate of adoption.

For example, consider the characteristics of HDTV (High-

definition television) in relation to the rate of adoption.

Relative advantage (superior to existing products)

Compatibility
(fits the values and experiences of potential customers)
Complexity
(difficult to understand or use)
Divisibility
(tried on a limited basis but still very expensive)
Communicability (results of using can be observed or described to others)

 Relative advantage new products that are most likely to

succeed are those that appeal to strongly felt needs

Compatibility degree to which the product is consistent with
existing values and past experience of the adopters
Complexity degree to which an innovation is perceived as
difficult to understand and use
Trialability the ability to make trials easy for new products
without economic risk to the consumer
Observability reflects the degree to which results from using a
new product are visible to friends and neighbours

Types of Innovations
Continuous modification or improvement of an existing

product
Dynamically continuous may involve the creation of either a
new product or the alteration of an existing one ,but does not
generally alter established patterns of customer buying and
product use
Discontinuous production of an entirely new product that
causes customers to alter their behaviour patterns significantly

Communication channel
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Process by which participants create and share

Mass media channels - effective in creating knowledge of

innovations
Interpersonal channels - effective in forming and changing
attitudes toward a new idea

Influences the decision to adopt or reject a new idea.

Most individuals evaluate an innovation, not on the basis of

scientific research by experts,

but through the subjective evaluations of near-peers who have

adopted the innovation.

New Product Adoption Theory

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ADOPTION PROCESS
The consumer decision stages that lead to innovation
acceptance/rejection
A micro process that focuses on internal forces of the consumer
* Intra Personal (Psych) Influences
* Inter Personal (Social) Influences
* Product Selection Criteria

New Product Diffusion Theory

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DIFFUSION PROCESS

The spread of an innovation from its source to the ultimate consumer.

A macro process that focuses on external forces on the consumer
(change agents, channels of information, types of information).
Occurs in a social system (a target audience, community, etc.)

Introduction
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The Adoption Process (also known as the Diffusion of

Innovation) is more than forty years old.

It was first described by Bourne (1959), so it has stood the test of
time and remained an important marketing tool ever since.
It describes the behavior of consumers as they purchase new
products and services.

Adoption process
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1.
2.
3.
4.
5.
6.

Awareness
Interest
Evaluation
Trial
Decision
Confirmation

OK, we will
buy X.

No
way!

If I
have to
buy it I
will.

Categories
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Adopter classes
Innovators - 2.5%
Early adopters 13%
Early majority 34%
Late majority 34%
Laggards 16%

Innovators
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First to adopt & display that they likely to want to be ahead

To be the first to own new products, well before the average

consumer.
They are often not taken seriously by their peers.
They often buy products that do not make it through the early
stages of the Product Life Cycle (PLC).

Early adopters
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Are also quick to buy new products and services,

So are key opinion leaders (KOLs) with their neighbors and

friends as they tend to be amongst the first to get hold of items

or services.

Early Majority
16

Look to the innovators and early majority to see if a new

product or idea works and begins to stand the test of time.

They stand back and watch the experiences of others.
Then there is a surge of mass purchases.

Late Majority
17

Tends to purchase the product later than the average person.

They are slower to catch on to the popularity of new products,

services, ideas, or solutions.

There is still mass consumption, but it begins to end.

Laggards
18

These tend to very late to take on board new products and include

those that never actually adopt at all.

Here there is little to be made from these consumers.

Situational Influences

It includes all those factors particular to a time and place that

do not follow from a knowledge of the stable attributes of the

consumer and the stimulus and that have an effect on current
behavior.
Consumers often behave very differently depending on

situation.

4 Types of Situational Influence

Communication situation
Purchase situation
Usage situation
Disposal situation

Communication Situation
It is the situation in which consumers receive information

has an impact on their behavior.

Whether one is alone or in a group, in a good mood or

bad, in a hurry or not influences the degree in which one

sees and listens to market communications.

Cont..
Consider the marketing difficulty for these situations:
Your favorite team just lost the most important game of

the year
Your roommates watch only comedy programs
You have the flu
You are driving home on a cold night without a working
heater

Purchase Situation
It is the situation in which a purchase is made can

influence consumer behavior.

Marketers must understand the purchase situations in

order to develop market strategies to enhance

purchases of their product.
A mother shopping with her child can be more

influenced by her childs product preferences.

Cont..
How would you alter your purchase decision for a

beverage in the following situations?

You are in a very bad mood
A good friend says That stuff is bad for you
The store you are in does no carry your brand
There is a long line at the checkout stand when you
enter the store
You are with someone you want to impress

Usage Situation
It is the knowledge of the situation in which products are,

or may become, appropriate.

Using this knowledge, marketers can communicate how
their products can create consumer satisfaction in each
relevant usage situation.
Going further: expanded usage situation strategies can

produce major sales gains for established products.

Cont..
What beverage would you want to consume in the

following usage situations?

Friday afternoon after your last final exam
With your parents for lunch
After dinner on a cold snowy evening
At dinner with a friend you have not seen in several years
When you are feeling sad or homesick

Disposition Situation
Consumers most frequently dispose of products or

product packages before or after product use.

The disposition situation can create significant social
problems as well as opportunities for marketers
Marketers need to understand how situational influences
affect disposition decisions to help them provide more
effective and ethical products and marketing programs.

Cont..
How would your disposition decision differ in these

situations?
You have finished a drink at a mall and there is a trash can
nearby but no recycle. What do you do?
You and your friends have just finished drinks. Your
friends toss them into the recycle. What do you do?

Four dimensions of situational influence

1.
2.
3.
4.

Physical surroundings
Social surroundings
Temporal perspectives
Task definition

Physical surroundings
Atmospherics is the sum of all the physical features of a retail

environment.
Atmospherics influences consumer judgments of the quality of

the store and the stores image.

Atmosphere is referred to as service when describing a service

business such as a hospital, bank or restaurant.

Examples of physical surrounds

Store location
Interior decor
Music
Smell/aromas
Temperature (air-conditioning or heating)
Choice provided (by product category or across the

categories)

Colors
Certain colors and color characteristics create feelings of

excitement and arousal which are related to attention.

Brighter colors are more arousing than dull ones.
Warm colors such as reds and
yellows are more arousing than
cool colors such as blues and
grays.

Music
Music

influences consumers moods and in turn,

influences a variety of consumption behaviors.
Firms exist to develop music programs to meet the unique
needs of specific retailers.
An emerging trend is having music more in the
foreground so it becomes part of the shopping experience
and drives store image.

Crowding
Most

consumers find feelings of crowding to be

unpleasant resulting in:
Less time in the store and less buying
Faster decisions and less use of information
Crowding can lead to less satisfactory purchases,
unpleasant shopping, and reduced likelihood of returning
to the store.
Marketers need to design outlets to reduce crowding
perceptions.

Social Surroundings
Social surroundings are the other individuals present in

the particular situation.

Social influence is a significant force.
Individuals tend to comply with group expectations,
particularly when the behavior is visible.
Shopping is a highly visible activity.
The use of many publicly consumed brands are subject to
social influences.

Cont..
Embarrassment is a negative emotion influenced both

by the product and the situation.

Certain products are more embarrassing than others, and
Embarrassment is driven by the presence of others.
For extremely sensitive products,
strategies include home delivery
options.

Examples of social surroundings

Types of customers in the store.
Queues and crowding.
Whether the consumer is likely to be known by others/
recognized.
Whether there are high-profile people/celebrities
shopping at that store.
Whether the product will be consumed privately or in
the presence of others.

Temporal Perspectives

Temporal perspectives deal with the effect of time on

consumer behavior.
Limited purchase time often limits search
Internet shopping is growing
rapidly as a result of the time
pressures felt by consumers.

Examples of temporal influences

Whether the product is seasonal
Whether the product is urgently required (snack between
lectures)
Time available for shopping limited/excess (the product
may be an excuse for shopping)
How long the previous product lasted or was expected to
last.

Task Definition
Task definition is the reason the consumption activity is

occurring.
Major distinction between purchases for self versus gift.
Consumers give gifts for many reasons:
o
Social expectations
o
To elicit return favors

Examples of task influences

Is the product utilitarian or used as a status symbol?
Is it a gift or for oneself?
Must the product be long-lasting/tough? (e.g. an everyday

watch)
or decorative?
(e.g. a dress watch)
Is the product intended for several uses? (e.g. a family
computer for study and internet access)

Moods
Moods tend to be less intense than emotions and may

operate without the individuals awareness.

Although moods may affect all aspects of a persons
behavior, they generally do not completely interrupt
ongoing behavior as an emotion might.
Consumers actively manager their mood states, often
seeking situations, activities, or objects that will alleviate
negative moods or enhance positive ones

Momentary Conditions
As with moods, individuals attempt to manage their

momentary conditions, often through the purchase or

consumption of products and services.
Thus, a great deal of marketing

activity is directed toward

momentary conditions

Examples of antecedent states

Moods
Feeling sad triggers buying sweets or seeing a funny movie
Feeling rejected triggers buying games software
Momentary conditions
Cant eat ice cream because teeth hurt
Cant buy a book because the credit card was left at home
Buy more groceries because hungry before shopping

THANK YOU