GROUP PROJECT ARTICLE

THE DIFFUSION OF INNOVATION

(Consumer Behavior)

FORE School of Management, Qutub Institutional Area,

New Delhi, Delhi 110016

Submitted By: Submitted To:

CB 1 - Group 5 Prof. Nirmalya Bandyopadhyay
024006: Aman Jain
024018: Gnaneswara Kumar Maripi
024036: Pulkit Dhanava
024042: Ronit Guha Roy
024070: Piyush Kukreja
281010: Anmol Raina
 DIFFUSION OF INNOVATION
Diffusion of Innovation (DOI) Theory, developed by E.M. Rogers in 1962, is one of the oldest
social science theories. It originated mainly with respect to communication aspect in order to
explain how, over time, an idea or product gains momentum and diffuses (or spreads) through a
specific population or social system. The end result of this diffusion is that people, as part of a
social system, adopt a new idea, behavior, or product. Adoption means that a person does
something differently than what they had previously (i.e., purchase or use a new product, acquire
and perform a new behavior, etc.). The key to adoption is that the person must perceive the idea,
behavior, or product as new or innovative. It is through this that diffusion is possible. This model
helps a business to understand how a buyer adopts and engages with new products or technologies
over time. Companies can use it when launching a new product or service, adapting it or
introducing an existing product into a new market.

Adoption of a new idea, behavior, or product (i.e., "innovation") does not happen simultaneously
in a social system; rather it is a process whereby some people are more apt to adopt the innovation
than others. Diffusion goes beyond the two-step flow theory, centering on the conditions that
increase or decrease the likelihood that an innovation, a new idea, product or practice, will be
adopted by members of a given culture. In multi-step diffusion, the opinion leader still exerts a
large influence on the behavior of individuals, called adopters, but there are also other
intermediaries between the media and the audience's decision-making. One intermediary is the
change agent, someone who encourages an opinion leader to adopt or reject an innovation.

Researchers have found that people who adopt an innovation early have different characteristics
than people who adopt an innovation later. When promoting an innovation to a target population,
it is important to understand the characteristics of the target population that will help or hinder
adoption of the innovation. There are five established adopter categories, and while the majority
of the general population tends to fall in the middle categories, it is still necessary to understand
the characteristics of the target population. When promoting an innovation, there are different
strategies used to appeal to the different adopter categories. Here, the criterion for adopter
categorization is innovativeness. This is defined as the degree to which an individual is relatively
early in adopting a new idea then other members of a social system. Innovativeness is considered
"relative" in that an individual has either more or less of it than others in a social system.

Adopter distributions closely approach normality. The above below shows the normal frequency
distributions divided into five categories: innovators, early adopters, early majority, late majority
and laggards. Innovators are the first 2.5 percent of a group to adopt a new idea. The next 13.5
percent to adopt an innovation are labeled early adopters. The next 34 percent of the adopters are
called the early majority. The 34 percent of the group to the right of the mean are the late majority,
and the last 16 percent are considered laggards.
1. Innovators – They are eager to try new ideas, to the point where their entrepreneurship
mindset almost becomes an obsession. Innovators’ interest in new ideas leads them out of
a local circle of peers and into social relationships more cosmopolite than normal. Usually,
innovators have substantial financial resources, and the ability to understand and apply
complex technical knowledge. While others may consider the innovator to be rash or
daring, it is the hazardous risk-taking that is of salient value to this type of individual. The
innovator is also willing to accept the occasional setback when new ideas prove
unsuccessful.

2. Early Adopters – They tend to be integrated into the local social system more than
innovators. The early adopters are considered to be localities, versus the cosmopolite
innovators. People in the early adopter category seem to have the greatest degree of
opinion leadership in most social systems. They provide advice and information sought by
other adopters about an innovation. Change agents will seek out early adopters to help
speed the diffusion process. The early adopter is usually respected by his or her peers and
has a reputation for successful and discrete use of new ideas.

3. Early Majority - These people are rarely leaders, but they do adopt new ideas before the
average person. That said, they typically need to see evidence that the innovation works
before they are willing to adopt it. Strategies to appeal to this population include success
stories and evidence of the innovation's effectiveness.

4. Late Majority - These people are skeptical of change, and will only adopt an innovation
after it has been tried by the majority. Strategies to appeal to this population include
information on how many other people have tried the innovation and have adopted it
successfully.
 5. Laggards - These people are bound by tradition and very conservative. They are very
skeptical of change and are the hardest group to bring on board. Strategies to appeal to this
population include statistics, fear appeals, and pressure from people in the other adopter
groups.

The stages by which a person adopts an innovation, and whereby diffusion is accomplished,
include awareness of the need for an innovation, decision to adopt (or reject) the innovation, initial
use of the innovation to test it, and continued use of the innovation. There are five main factors
that influence adoption of an innovation, and each of these factors is at play to a different extent
in the five adopter categories.

1. Relative Advantage - The degree to which an innovation is seen as better than the idea,
program, or product it replaces.
2. Compatibility - How consistent the innovation is with the values, experiences, and needs
of the potential adopters.
3. Complexity - How difficult the innovation is to understand and/or use.
4. Triability - The extent to which the innovation can be tested or experimented with before
a commitment to adopt is made.
5. Observability - The extent to which the innovation provides tangible results.

For example, let’s say that an established software company is rolling out a new product.

Through DOI model, we can identify how each of the adopter categories described above can be
targeted using different strategies to promote the product and achieve high rates of adoption.

In order to target Innovators, it would make sense to promote the new software on popular tech
websites and media outlets. Displaying promotional marketing collateral on these sites will put the
product in the light of already having been adopted by key stakeholders in tech.

Early Adopters could be targeted by creating case studies in which like-minded people are
describing their experiences with the new product. This will ensure these early adopters that they
aren’t the ones doing the preliminary trials of the product, and that people are already using and
finding success with the new product.

To have the most success with people in the Early Majority category of adoption, it would make
sense to get granular with the market collateral that drives the promotion of the new product.
Things like ‘how to’ videos, and blog posts describing the product and the experiences it provides
would serve well here.
Reviews are the key to engaging the Late Majority category. The more reviews you can collect
and promote on different platforms, the more comfortable these folks will feel since they will start
to feel like they are missing the train.

When it comes to Laggards, not much is under your control in terms of inspiring them to adopt.
It’s a better idea to focus on targeting people in the other categories of adoption, and letting the
process run its course until the laggards are on board.

Limitation of Diffusion of Innovation Theory

This theory is mainly useful when developing new products. But in a FMCG company which
launches many new products or lines in a year, it may be less effective as it’s not practical to create
individuals strategies for hundreds of products.