GURU GHASIDAS VISHWAVIDYALAYA

(A CENTRAL UNIVERSITY ESTABLISHED BY CENTRAL UNIVERSITIES

ACT, 2009)

BILASPUR (C.G.) 495009

DEPARTMENT OF MANAGEMENT STUDIES

MASTER OF BUSINESS ADMINISTRATION (M.B.A.) PROGRAMME

SESSION: 2020-21

M.B.A. 3rd SEMESTER

CONSUMER BEHAVIOUR

TOPIC: Diffusion Of Innovation And Opinion Leadership Family

Decision Making

SUBMITTED TO: SUBMITTED BY:

MR. GR BEHERA ADARSH SAHU

(Assistant Professor) SHIV KUMAR SAHU
Dept. of Management Studies SACHIN SINGH UIKE
GGV, BILASPUR ASHWANI KUMAR SAHU

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 ACKNOWLEDGEMENT

Our efforts are never really individual they are the results of the collective inputs of
several people who have inspired, supported and empowered us in many ways. I
would like to thank all the people who have, directly or indirectly contributed to this
project.

Who I am, is a result of all the people who have nurtured my intellect and have
taught me to think and to rethink, to question inquire and to challenge! I am
indebted to my parents, who have always taught me to excel. My teachers – too
because they have touched my life and left me richer in learning.

My special thanks to Mr.GR BEHERA (Assistant Professor), Department Of

Management Studies Guru Ghasidas Vishwavidyalaya, Bilaspur (C.G.), for their
valuable guidance during the whole project. They always motivated me go get more
then expectation and taught me, how to reach respondents and analyze the data being
collected through questionnaire. I have special regard to him for sharing his most
valuable time with me.

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 INDEX

S.NO. CONTENT PAGE

NO.
1 Meaning (What Is Innovation?) 5
2 Definition Of Innovation 5-8
3 Definition And Meaning Of Diffusion Innovation And 9
Adoption
4 History Of Diffusion 9-10
5 Diffusion Process 10-15
6 Adoption Process 15-20
7 Factors Affecting Diffusion Of Innovation/Adoption 20-23
Process
8 Profile Of Innovator 23-26
9 Opinion Leadership 26-27
10 Characteristics’ Of Opinion Leadership 28-29
11 Importance Of Opinion Leaders In Marketing 30-31
12 Adoption Diffusion Model And Opinion Leadership 31-32
13 Types Of Opinion Leadership 32
14 Families And Family Decision Making 33-37
15 Conclusion 38
16 Bibliography 39

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 INNOVATATION

WHAT IS INNOVATION?

In a highly competitive environment, where number of players exist and vie for a share of
the market, the introduction of new product and service offerings becomes crucial for
existence and long term survival; thus, marketers are always on the move towards
introduction of new product and service offerings that would help meet the evolving
needs and wants of the consumer segment(s). The products that are offered may be
slightly different from the existing alternatives, some may be highly different, and some
totally new. They all fall under the purview of what is referred to as an “innovation”, and
the product and services, referred to as “innovative products and services”. Wherever
they fall on a continuum, they illustrate a change in one of few or all of the 4Ps, be it in
product form (product features, attributes, benefits, packaging or even brand name) , the
price (price, terms of payment, installments etc), place (physical versus electronic formats
or even personal selling) and/or promotion (media strategy, message strategy etc.).
Whatever be the changes that a marketer offers, it is the changing needs and desires
amongst the consumers that the former attempts to address; and, so it is important for him
to understand how the segment(s) would react to such a product and service offering.

DEFINITION:

— Norman Bodek, PCS Inc.

Innovation is a process to bring new ideas, new methods or new products to an

organization. Unfortunately, in the past, in America, innovation has been limited to
looking for a “big” idea to advance an organization’s competitive position. Management
seems to be always looking for the “silver bullet,” a new “I Phone, etc.,” while true
innovation is involving every single employee to look around their work area to identify
small problems around them and to be empowered and responsible to solve them. The
average Japanese company receives 24 ideas per worker per year and saves $4,000 per

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employee. From this process of involving all employees in continuous improvement will
come daily improvements in quality and productivity and miraculously great commercial
ideas will also “pop” out.

Varying perspectives to defining “Innovation”:

The term “innovation” has been described with varying perspectives and orientations,
viz., firm oriented, product-oriented, market-oriented, and consumer-oriented. Let us
discuss each one of these:

a) FIRM-ORIENTED: As per this approach, a product or service offering is regarded as

“new,” if the company starts manufacturing or marketing it for the first time. In other
words, the firm orientation treats the “newness” in terms of the company’s perspective. -
the product is “innovative”, if it is “new” for the company. -the existence of the product
in the market (as competitor’s offering, or even as consumers’ awareness) is disregarded;
as long as it is “new” to the company, it is regarded as an innovation.

b) PRODUCT-ORIENTED: A product and service offering is regarded as an

“innovation”, if the product changes in terms of form, attributes, features, and overall
benefits; such changes havea twofold connotation, one, in terms of technology, and two,
in terms of consumption usage and behavioral patterns.

-the product is “innovative”, if it is “new” in terms of form, attributes and features.

-there are changes in technology, as well as impact on consumer consumption behavior.

There are two sub-approaches to classify “innovative products” as per the product-
oriented definition; viz.:

APPROACH I: This approach classifies innovative products based on the degree to

which the new product and service offering would upset established consumer usage and
behavioral patterns. As per this approach, innovations can be classified into three
categories, continuous innovations, dynamically continuous innovations, and
discontinuous innovations.

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- Continuous Innovation: A product is regarded as a continuous innovation, if it is a
modification over an existing product; it is not essentially a new product, but an
improvement over the already existing one; they could also be line extensions, and as
such continuous innovations do not disrupt established usage and behavior patterns; For
example, improvements in laser jet printers, digital TVs, shaving razors, or changes in
call plans (Airtel, Cell One).

- Dynamically Continuous Innovation: An innovation is regarded as dynamically

continuous, if it exerts some influence on usage and behavior patterns, but this influence
is not totally disruptive; it does not totally change behavior patterns; For example, the
walkman giving way to the portable CD player, or the pager giving way to the cell phone.

- Discontinuous Innovation: Discontinuous innovations lead to disruption of usage

andconsumption behavior patterns; there is a change not only in the technology, but also
requires consumers to change to new behavioral patterns in terms of usage and
consumption.For example, the postal mail giving way to email and internet, the
radio/record player giving way to portable music and sound, the telephone giving way to
the mobile phone, or the traditional glucose and diabetes blood test giving way to the
home kit.

Approach II: According to another approach, innovative products can be classified on

the basis of how the “newness” in form, features and attributes can impact consumer
satisfaction; the greater the degree of satisfaction, higher it ranks on the scale of
“innovativeness.” Innovations can be classified as artificially new, marginally new, and
genuinely new.

- Artificially New: Embody not much of a change, and do not much impact user
satisfaction; For example, a new flavor of an ice-cream.

- Marginally New: Here, there is some level of change in customer satisfaction, because
the product is new, differs a little over the existing products and provides greater benefit;
For example, the laser printer replacing the dot-matrix printers.

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- Genuinely New: This implies a totally new product that impacts user satisfaction
completely; it differs from existing product and service offerings, and leads to customer
satisfaction, as the usage gives greater benefit. For example, microwave owens, cell
phones, home medical tests and kits.

c) Market-Oriented: The market-oriented approach views “innovation” purely from a

marketers’ perspective, in the sense that a product is regarded as “new”, depending on
how much exposure the consumers’ have about the new product or service offering, and
the total sales penetration that has occurred in the specified short period of time.

- the product is regarded “new” if the market does not have much exposure of it.

- sales penetration has been low .Here again, there can be two bases that underlie a
market oriented definition; viz.,

i) a product or service offering is regarded as “new”, if it has been in the market for a
short period of time.

ii) mark et. it is “new”, if it has been purchased/used/consumed by a small portion of the
total potential

d) Consumer-Oriented: The consumer-oriented approach to defining “innovation”, is a

favored approach over others, especially in consumer behavior research, and more
specifically in research related to diffusion of innovation, and adoption; the reason is that
the concept of “newness” or “innovation” is dealt through focus on consumer, and his/her
reaction towards the new product and service offering, in terms of acceptance and
rejection. As per this approach,

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DEFINITION AND MEANING OF

i) DIFFUSION OF INNOVATION, and ii) ADOPTION:

There are two issues that a marketer needs to address while launch of new products and
services, i) whether the modified/new product and service offering would be accepted by
the segment(s), and ii) how quickly would the product and service offering be accepted
by the segment(s). The two issues are dealt with within the purview of “Diffusion of
Innovation.” “Diffusion” is regarded as a macro process that deals with the spread of a
new product or service offering amongst the potential market; it relates to the
acceptance/rejection of an innovation by the segment(s). “Adoption”, on the other hand is
a micro concept that lays emphasis on the various phases or stages through an individual
consumer passes while accepting/rejecting a new product or service offering.

HISTORY OF DIFFUSION

The concept of diffusion was first studied by the French sociologist Gabriel Tarde in late
19th century and by German and Austrian anthropologists and geographers such
as Friedrich Ratzel and Leo Frobenius. The study of diffusion of innovations took off in
the subfield of rural sociology in the midwestern United States in the 1920s and 1930s.
Agriculture technology was advancing rapidly, and researchers started to examine how
independent farmers were adopting hybrid seeds, equipment, and techniques. A study of
the adoption of hybrid corn seed in Iowa by Ryan and Gross (1943) solidified the prior
work on diffusion into a distinct paradigm that would be cited consistently in the future.
Since its start in rural sociology, Diffusion of Innovations has been applied to numerous
contexts, including medical sociology, communications, marketing, development
studies, health promotion, organizational studies, knowledge management, conservation
biology and complexity studies, with a particularly large impact on the use of medicines,
medical techniques, and health communications. In organizational studies, its basic
epidemiological or internal-influence form was formulated by H. Earl Pemberton, such as
postage stamps and standardized school ethics codes.

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In 1962, Everett Rogers, a professor of rural sociology, published his seminal
work: Diffusion of Innovations. Rogers synthesized research from over 508 diffusion
studies across the fields that initially influenced the theory: anthropology, early
sociology, rural sociology, education, industrial sociology and medical sociology. Using
his synthesis, Rogers produced a theory of the adoption of innovations among individuals
and organizations. Diffusion of Innovations and Rogers' later books are among the most
often cited in diffusion research. His methodologies are closely followed in recent
diffusion research, even as the field has expanded into, and been influenced by, other
methodological disciplines such as social network analysis and communication.

DIFFUSION PROCESS:

“Diffusion” is defined as a macro process that deals with the spread of a new product or
service offering amongst the potential market; it relates to the acceptance/rejection of an
innovation by the segment(s). “Diffusion of Innovation” is defined as a process by which
an innovation spreads amongst and gets the absorbed/accepted or assimilated by the
market. Schiffman defines “diffusion”, as “the process by which the acceptance of an
innovation (a new product, new service, new idea, or new practice) is spread by
communication (mass media, salespeople, or informal conversations) to members of a
social system (a target market) over a period of time”. The definition comprises four
basic elements of the diffusion process:

- innovation: the term “innovation” refers to the newness of the product/service offering.

- channels of communication: this includes

i) Marketing communication that takes place between the marketer and the potential
market, or the target segment; it could be personal (salesperson and consumer) or
impersonal (via print or audio visual media).

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ii) Interpersonal communication that takes place between the consumers themselves or
within members of the target segment(s); it could be word of mouth communication
within consumers or through an opinion leader.

-social system: this refers to the social setting in which the diffusion takes place; it
actually refers to the market segment(s) or the target market(s). The definition and scope
of the social system depends on the product and service in question, its usefulness and its
very basis for existence. In a way, it reflects the target market(s) for whom the product
and service is designed, and within what segment(s), it would be diffused. For example,
for a new herbal anti-wrinkle cream, the social system 8 would be confined to ladies who
are in their late 40s. The social system has wide repercussions on the diffusion of a
product/service:

i) First, the new product and service is discussed and or evaluated within members of the
social system through interpersonal communication, opinion leadership and word-of-
mouth.

ii) Second, the philosophy and the resultant orientation, with respect to culture,
traditions, values and norms also impacts the diffusion process. Thus, the social system
impacts the ultimate adoption and assimilation of the innovative offering; in order to be
accepted quickly and penetrate successfully, the marketer needs to keep this social
system in mind and design his product and the marketing mix accordingly.

- TIME: time is an important factor in the diffusion of innovation, as it determines the

pace of adoption and resultant assimilation of the innovative offering; researchers have
studied the impact of time in the following ways:

i) The Amount Of Purchase Time: the amount of purchase time refers to the average
time that a consumer would take to adopt a new product and service offering; this would
include the total time between the consumers’ initial awareness to the final
acceptance/rejection of the new product or service. Time as a factor has relevance for the
diffusion process in the sense that it helps assess the total time that it would take for a

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new product or service offering to get totally diffused and adopted by the market at large;
when the average purchase time is less, it can be assumed that the rate of diffusion would
be faster.

ii) The Rate Of Adoption And The Identification Of Adopter Categories: Rate of
adoption: The rate of adoption refers to the period that it is taken for a new product or
service to be accepted by the target market(s). It is a measure of how long it takes a new
product or service offering to be adopted by the members of the target market. With
global advances in all respects, be it socio-economic, political, cultural and technological,
the rate of adoption is getting faster. The marketer also aims at a rapid acceptance of his
innovative offering, so that he can gain maximum advantage as a first-mover; thus he
designs his marketing mix as per the needs of the segment(s), across international
cultures and communities.

Adopter Categories: This refers to a classification scheme amongst members’ of the

target segment(s), which illustrates where one consumer stands in relation to another
consumer with respect to time, that has lapsed between the introduction of the new
product and service and the adoption by a consumer(s). Researchers have classified
consumers into adopter and non-adopter categories, 9 which range from two or three or
five category classifications. It is noteworthy that the consumers would be classified
based on the nature of the good or service.

Roger’s has proposed a classification of adopters, according to which consumers can be

divided into five categories based on the time taken by them to adopt a product. These
five adopter categories are innovators, early adopters, early majority, late majority, and
laggards. Based on research, it has been observed that the five categories when plotted on
a graph, lead to a bell-shaped normal distribution curve (See Figure). The five categories
are explained as follows:

A) Innovators: Innovators comprise 2.5 percent of the target market(s) adopters; they
are those consumers’ who are the first to go and purchase a new product or service

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offering. They purchase the new product and service offering not because they possess a
need, but because they desire new ideas and concepts, and seek product and service
innovations. They are high on self-confidence, and are always eager to try out new
products/services. They have access to information about such new offerings, and are
quick to purchase; one, because they have the interest and inclination to buy the “new”;
and two, because they have the purchasing power and the access. It is important to
mention here, that innovators are not “generic”; they are in most cases “specific” to a
product and service type.

B) Early Adopters: The next 13.5 percent of the target market(s) adopters are called
early adopters. These are those consumers’ who purchase the new product and service
offering not because they are fascinated towards the “new”, but because they possess a
need. They generally tend to have some idea on the product/service category, and after
gathering some more information about the product and or brand, they go in for purchase.
Early adopters rely on group norms and also turn out to be good opinion leaders, and
could be easy targets for the marketer.

C) Early Majority: The early majority is similar to the early adopter in the sense that
they buy the product/service offering because they possess a need and wants to fulfill it;
however, they are not as quick as the early adopters and take longer to enter into
purchase. This is because unlike the earlier two categories, the early majority does not
have much interest in the product/service category. Thus, the consumers that fall into this
category have to collect information, evaluate it, deliberate carefully and then take a
decision; thus, the process takes longer. The early majority make up the next 34 percent
of the adopters.

D) Late Majority: The next 34 percent of the adopters are referred to as the late
majority. They are referred to as “late,” because i) members of their social class,
reference group and peer group have already made the purchase; and the social influence
is strong, and ii) they themselves have evaluated the new product and or service and are
ready to buy it. They have a need, and after careful thought and deliberation as well as

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with social influence and pressure, the “late majority” makes the purchase. By nature
they are skeptical and confirm to social pressure. Interpersonal communication has a
major role to play.

E) Laggards: The laggards are the last to adopt a new product or service offering, and as
such make up the last 16 percent of the target market. They are slow in buying the
innovative offering because, i) they are uninvolved with the product and service; ii) they
do not possess much information; iii) they remain uninfluenced by social pressure, and
social ties are not very strong; iv) they believe in making routine purchases and prefer to
buy the “familiar”, than the “unfamiliar”.

Roger’s classification only includes the adopters; there also exist in the market a group of
people who do not venture out into seeking a particular product or service, as it may not
confirm to their culture, socio-economic class or they may not have the need for such a
product/service. Such people fall into a class referred to as the non-adopters; a class that
never adopts the new product/service, and in general comprises a very small portion of
the entire population. Non-adopters may be classified into five categories, viz., the
unaware group, symbolic rejectors, symbolic adopters, trail adopters and trial rejectors.
The inclusion and study of the non-adopter category is crucial as it is reflective of reality,
as not all consumers adopt all new product and service offerings.

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- unaware group: the non-adopters who are unaware about the new product or service
offering.

- symbolic rejectors: those among the non-adopters who are aware of the product but feel
that it is not meant for them because it does not meet a need or does not conform to
socio-economic cultural norms.

- symbolic adopters: the symbolic adopters are aware of the innovative offering, and
believe that the product or service may be of relevance for them, but they are yet to try
the innovative offering.

- trail adopters: such non-adopters have tried the innovative offering, but have not yet
made a purchase; if they have made a trial purchase, they have yet not made a repurchase
to confirm liking or habit formation.

- trial rejectors: trial rejectors are those non-adopters who have tried the new product or
service, but have not found it suitable; they have no intention in further purchase or
repurchase.

ADOPTION PROCESS:

The second major process in Diffusion of Innovation is “Adoption”. Adoption is a micro

concept that lays emphasis on the various phases or stages through an individual
consumer passes while accepting/rejecting a new product or service offering. The study
of adoption is important for a marketer in the sense that it helps him understand the
various stages through which a consumer passes right from his initial awareness to the
final acceptance/rejection. It may so happen that the innovative offering may be existing
for long in the market, but the consumer is unaware of it; or, it may have existed in the
market for long, but is regarded as “new” because the consumer has heard of it for the
first time. This implies that consumers could differ in the manner they complete their
purchase activity, right from initial awareness to the final act of purchase. This could

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mean that the marketer needs to design his selling strategy accordingly. Schiffman
defines adoption as “the stages through which an individual consumer passes while
arriving at a decision to try or not to try or to continue using or to discontinue using a
new product”.

Consumer researchers have proposed a number of models to describe the steps in the
adoption process, viz., Heirarchy of Effects’ Model, Robertson’s model, and Roger’s
model (see table). The models explain the stages through which a prospect passes to end
up being a consumer, right from the stage of initial awareness to final adoption.

Generally speaking, the consumer passes through five stages of adoption, viz., awareness,
interest, evaluation, trial, and adoption (or rejection). The assumption underlying this
general model of adoption is that when a new product/service is introduced, prospects go
through an information search which could range between limited to extensive; of course,
for some products this search is highly limited (routine purchases). The five stages are
explained below:

I) Awareness: This is the first stage in the adoption process, where the consumer is
exposed to the new product/service offering, and gets to know of the product. The
marketers’ objective here is to provide some awareness about the innovation, the features
and benefits as also the brand. The consumer is generally passive and acts as a mere
recipient of information. He becomes aware but lacks sufficient knowledge about the new
offering.

II) Interest: In this next stage, the consumer begins to develop some interest in the
innovative offering, and thereby puts in some effort to know more about it. The consumer
becomes active in his search for information and tries to elaborate on the information
received at the awareness stage. He actively searches for information about the new
product /service and tries to assess how it can benefit him.

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III) Evaluation: The consumer who has acquired knowledge about the innovation, now
begins to evaluate; he evaluates whether, i) more information search is necessary with
respect to the innovation as well as to the brand; ii) he is sufficient with the
product/service information that he possesses. The consumer also evaluates the
innovative offering in terms of the attributes, features, and overall benefits, as compared
to existing alternatives; he assess the “value” of the product/service offering and the
brand. If he feels that the offering provides “value”, he goes in for the next stage which is
trial; else the process is aborted, and the innovation rejected.

IV) Trial: The consumer goes and tries out the innovative offering, but there is not yet
any further purchase (repurchase) commitment. The product/service is experienced on a
small scale and used on a limited basis only, to determine the worth or usefulness.

Table 1: Various Models of the Adoption Process

Model Stages
Hierarchy of -Awareness: the stage involves initial awareness on the part of the consumer of the
innovative product /service offering.
Effects
Model -Knowledge: the consumer gets to know about the product/service, the attributes,
features, benefits, price etc. -Liking: he develops feeling of like/dislike towards the
innovation.

-Preference: the feeling of like/dislike gets deeper into preference to buy or not to buy
the innovative product/service.

-Conviction: the consumer develops confidence and decides with certainty to buy the
product/service. -Adoption: he finally goes and purchases the offering and uses it.
Robertson’s -Problem recognition: the consumer realizes that there is a need.

Model
-Awareness: he becomes aware of the product/service offering.

-Comprehension: he gathers information on the various product/service offerings as

also on the brands; he comprehends this information and develops an understanding of

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 the product/service offering and the various brands.

-Attitude: based on his comprehension, the consumer develops a feeling of

liking/favorableness or dislike/unfavorableness towards the product/service offering and
the various brands.

-Legitimization: the liking/favorableness or dislike/unfavorableness towards the

product/service offering and the various brands is confirmed with facts and logic as well
as social influence.

-Trial: the consumer goes and tries out the offering, but there is not yet any further
purchase commitment.

-Adoption: he has evaluated his experience with the product/service through trial, and
finally goes and purchases the offering.

-Dissonance: the consumer faces a dilemma as to whether he has made the right
decision with respect to purchase and usage of the product/service.
Roger’s -Knowledge: the consumer becomes aware of the innovative product/service offering,
and gains knowledge and understanding about the offering, features, attributes, benefits,
Model
value, price etc.

-Persuasion: this is the stage of attitude formation; the consumer forms a

favorable/unfavorable feeling towards the innovation. This depends on the perceived
characteristics of the innovation (in terms of relative advantage, compatibility,
complexity, trialability and observability).

-Decision: based on his attitude, the prospect mentally decides to adopt/reject the
product/service offering; he may purchase and use the offering, reject it or go in for
another alternative.

-Implementation: the consumer implements his decision; the stage involves trial and use
of the innovative offering.

-Confirmation: the consumer moves from a stage of trial (which entails no commitment
to purchase/ repurchase), to final adoption (decision to use/reuse /patronize the
offering). At this stage, he may seek some reinforcement and reassurance.

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V) Adoption (Rejection): Based on the trial stage, and the resultant experience, the
consumer would decide to decision to use/reuse/patronize the offering. If the experience
is satisfying, and the evaluation favorable, the innovative offering would be accepted,
else it would be rejected.

While this five staged procedure constitutes a general model of adoption of innovation, it
has been criticized to be very general that lacks the complexities of real life buying and
consumption. Researchers argue that:

- The model does not indicate a need recognition stage or a problem solving scenario;
critics argue that when faced with a problem, the prospect’s approach towards an
innovative offering would be much different, than when he is not faced with one.

- Evaluation takes place both before and during trial; in fact it takes place throughout the
process.

- Trial is no guarantee for future purchase or repurchase; although experience may be

satisfactory, a consumer may never use the product/service offering again.

- The model makes no mention of post purchase behavior; it does not speak of cognitive
dissonance, neither does it speak of post purchase evaluation leading to a commitment to
use/reuse/patronize the offering in future.

Thus, keeping in view these realities, the model has been modified, and consumer
researchers have incorporated two more stages between trial and adoption, viz., direct
product experience (consequences), and product evaluation (confirmation). Direct
product experience refers to experience with the product/service offering on a longer
duration; so as to experience its consequences and to assess it better. Product evaluation
refers to assessing the consequences of the experience so as to accept the innovation or
reject it After modification, the stages of the model stand as Awareness, Interest,
Evaluation, Trial, Direct product experience, Product evaluation, and Adoption.

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The Adoption Process and the Facilitators:

Information sources act as a strong facilitator in the adoption process; right from the stage
of awareness to that of final adoption, information remains a strong determinant.
Marketing communication and in particular, impersonal sources like print and audio-
visual media have a major role to play in creating awareness about a new product/service
offering. Thereafter, their impact goes to on decline relatively, and that of interpersonal
sources (family, friends, peers and colleagues, as well as salespeople) goes on to increase.
In fact interpersonal influence that gets reflected in social influence and/or social
approval acts as a major determinant in adoption of innovative products and services,
primarily in stages of trial and final adoption.

FACTORS AFFECTING DIFFUSION OF INNOVATION/ADOPTION

PROCESS.

There are certain factors that negatively affect diffusion of innovation and subsequently
the adoption process. These barriers have been dealt with extensively by consumer
researchers and incorporated even in models on innovation resistance. They could range
at the micro level from product characteristics, to the more macro, socio-cultural,
economic, situational and technological forces.

While product characteristics like relative advantage, compatibility, trialability, and

observability, do boost the rate of diffusion and adoption, perceived complexity in
purchase and usage of innovative offerings, retard the process. Innovations could also
meet resistance from socio-cultural, economic, situational and technological forces. The
innovative offering may not with compatible with social norms, values and lifestyle; or
may not go well with the economic strata; or be technologically complex, leading to fear
to usage, obsolescence and risk. The basic barriers to the diffusion process and
subsequent adoption are as usage, value, risk and psychological factors.

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A)Usage: “usage” as a barrier to innovation diffusion and adoption is said to exist when
the social system (the target market) finds it incompatible to the existing usage and
consumption behaviors and thus, finds it difficult to accept and use; in other words, they
.find it to be incompatible with their existing behaviors. The barrier is more
psychological, based on deep rooted values, beliefs, attitudes and perception, resultant in
such behavior of non-acceptance and non-usage. For example, people are often reluctant
to enter into online monetary transactions for fear of loss of privacy and fraud.

Communication from the marketer based on rational and informational may not be
sufficient to overcome such a barrier; he would need to use credible spokespersons,
celebrities and experts to motivate people to change their existing lifestyle patterns and
resultant behavior, and adopt the innovation.

B) Value: Consumers could also resist acceptance of an innovation, as they may feel low
about the perceived value; consumers may perceive the new product/service offering to
be the same as existing offerings, and “nothing new” or “better in value.” For example,
while assessing mobile charges, people compare the post-paid plans with the pre-paid
plans in terms of rental as well as call charges, and conclude that the former are cheaper,
inspite of rental being high.

The perceived lack of value may be i) the product/service does not provide much benefit
over the existing alternatives; ii) the product/service is costly, and doesn’t seem to be of
worth the price.

Consumers’ perception of “high price” always takes over the perception over product
value or product benefit; in fact, values is always assessed in terms of price; Also, price is
a “catchy” issue than the benefits attached; price appears more tangible, than benefits;
and, consumers generally tend to know more quickly about price, than they do about the
benefits that the product brings along with it.

C) Risk: Risk also acts as a barrier to diffusion of innovation. Consumers show

reluctance to use an innovative product/service offering out of fear of taking risks. There

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could be six types of risks that a consumer could face, viz., functional risk (would the
product perform as expected), physical risk (would the product usage and or consumption
pose a threat), social risk (would it cause risk of social embarrassment), financial risk
(would the product will be worth the cost), psychological risk (would the innovation hurt
consumers’ ego), and time risk (would it lead to wastage of time spent while making the
purchase).

The perceived risk barrier acts as a big barrier to the diffusion and adoption process;
consumers are fearful of purchase, usage and consumption of innovative offerings, and
thereby continue to patronize the existing alternatives, rather than adopt new ones (for
fear of making a wrong decision).

In order to overcome this problem, the marketers could make use of both marketing
communication (via audio-visual or print media, or company salespersons), as well as
interpersonal communication (opinion leadership, word-of-mouth communication). Trials
(free or discounted) as well as interpersonal communication with peers, colleagues and
friends can also encourage personal experience by the consumer and help overcome this
risk.

D) Psychological Factors: Psychological factors also prevent a consumer from adopting

a new product/service offering. These factors relate to a person’s background, attitude
and belief, perception, values, lifestyles, culture etc. They may find the innovation to be
psychologically threatening. The two common threats are i) tradition barrier, and ii)
image barrier.

Tradition barrier relates to socio-culturally accepted norms of behavior that are regarded
as “right and appropriate,” by the consumer segment. Anything that is new and does not
support traditional patterns is regarded as psychologically threatening; this includes usage
and adoption of innovative products and services. For example, wearing western outfits is
a taboo for women in the Middle East, and as such they would never attempt to wear
skirts or trousers. Another example, Kelloggs Cornflakes, found it difficult to penetrate

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the Indian soil, primarily because it was positioned as a quick breakfast cereal to be had
in cold milk, as opposed to the traditional Indian concept of cornflakes or cereal in hot
milk.

Image barrier refers to the consumer’s attitude and feelings about the product/service
offering, the brand, or the dealer, or even the country of origin. It also relates to
personality and self image (actual and ideal). Consumers’ may resist adoption of new
products/services if they are patriotic and ethnocentric; or if they do not regard the
innovation or the marketer/dealer to be of their “class” in terms of socio-economic status
or even quality. Thus, marketers try to come up with variants in offerings, and have
separate names for separate variants depending upon the segment(s) for which they are
aimed.

PROFILE OF AN INNOVATOR

Not all people are receptive to innovative offerings. People vary in degree with respect to
their receptivity towards new product/service offerings. This has been dealt with in the
section above, where we have also discussed the categories of innovators. The marketer
needs to have an understanding on what constitutes an “innovator”, and what
differentiates him from late adopters or non-innovators, so that he can design his
marketing mix, and more specifically the promotion mix accordingly. The traits/qualities/
characteristics that differentiate an innovator from a non-innovator, indicate that separate
media and message strategy need to be formulated for the two of them. For innovators,
the marketer should focus on the print media with informative and rational appeal. On the
other hand, for the late adopters and the rest of them, the marketer should focus on the
audio-visual media with social and emotional appeals.

Innovators are those consumers’ who are the first to go and purchase a new product or
service offering; they comprise 2.5 percent of the target market(s) adopters, and they
purchase the new product and service offering not because they possess a need, but
because they desire new ideas and concepts, and seek product and service innovations.

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They have the interest and inclination to buy the “new”; and also have the purchasing
power and the access to do so. They possess the following traits/qualities/
characteristics:

A) Innovators are not “generic”; they are “specific” to a product and service type.
Consumers who are innovators of one product are more likely to be innovators of other
new product/service offerings in the same general product category. Hence, they possess
interest in the product category; those who innovate within a specific product category
will innovate again within the same product category. Innovators are desirous of new
products/services in a particular category, and so they seek formal information from
marketers, and informal information from their peers/friends/colleagues. Because of their
interest in the product/service category, their search for information is active and
ongoing, followed by deliberation, evaluation and assimilation of information.

B) Consumer innovators are generally younger than late adopters or non-innovators; they
have more formal education, occupational status, and higher income and purchasing
power. While education facilitates greater awareness, income facilitates a risk bearing
ability (as they feel that they can afford to make a mistake).

C) After a while, innovators tend to become opinion leaders. Innovators possess a level
of interest in the product/service category; they gather information on an ongoing basis,
they are the first to purchase the innovative offering, and are a powerful source of
information for other consumers. Other consumers like early majority and early adopters
and early majority look up to innovators for advice and guidance about the new
products/services. The advice given by innovators acts as a major influence, and impacts
acceptance/rejection of the innovative offering. The marketer should keep in mind that
his offering leads to satisfaction for the innovator; if the innovator is satisfied with the
innovation, the product would generate a favorable response from him as an opinion
leader, and lead to quicker acceptance by the public.

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D) Innovators also possess certain personality traits.

- They are low on dogmatism, and as such open and willing to try out new
products/services and/or brands. They are receptive towards the “new” and “unfamiliar.”
Non-innovators, on the other hand are closed, and approach the “new” with considerable
anxiety and discomfort.

- They are inner-directed, and decide to take risk with the “new”, relying on their
attitudes, perception, values etc. They take independent decisions rather than relying on
others, and are self governed. Non-innovators, are other-directed or socially-directed,
whose decisions/judgments depend on others; they wait and watch and they decide to go
for the “new”.

- While on one hand, innovators tend to inner-directed, they are socially more accepted
and more involved than non-innovators. They are accepted by others as “experts”, and
thus assume roles as opinion leaders.

- They are also variety novelty seekers. They like to try out new offerings.

- Innovators happen to be high on optimum stimulation levels. They are willing to seek
adventure, seek novelty and they enjoy unusual experiences. As a corollary, they enjoy
taking risks.

- Innovators are risk takers, and are ever willing to take risks. This is because they are
low risk perceivers. Perceived risk is a measure of uncertainty or fear that a consumer
feels with respect to the consequences of a purchase and or usage of a new product.
Consumer innovators score low on perceived risk, and they experience little or no fear in
trying out the “new”. This is primarily because they are well informed, and possess
enough purchasing power. So the likelihood to try new product/service offerings and/or
brands is high.

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- Innovators also display the quality of venturesomeness, which implies the their
willingness to accept the risk of purchasing new product/service offerings.

- They also exhibit the need for novelty and uniqueness. They want to be the first to try
out the “unique”, and also possess it. Thus, they go out and purchase the innovative
offering.

OPINION LEADERSHIP

“Opinion leaders are influential members of a community, group, or society who

others turn to for advice, opinions, and views” – Business Dictionary

When looking at the definition of opinion leaders, we see that this definition perfectly
describes the two examples listed in the Introduction section of this article. Your friends
are people you trust who are a part of your group and community. They are the ones you
count on to give you some insight on something you are not very familiar with. They are
your opinion leaders in some regards. The people in your immediate circle or second- or
third-degree connections who are your acquaintances can have an influence in your
purchasing choices. Opinion leaders do play a vital role in marketing goods, something
we will look at later on in this article.

As you can see, opinion leadership is the degree to which an individual can influence
other people’s attitudes or behavior in a nuanced way in order to incite a certain action in

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people. An opinion leader influences the actions or attitudes of other people who are
looking for an expert opinion.

For the examples listed thus far, you were directly looking for advice from your friends
when you wanted to buy a new dress or a new car. They are your expert advice for
helping you make a purchase. In the case of industry leaders, they indirectly influenced
you through brand marketing and product marketing, planting in you the seeds of the
importance of using their products and services.

Vloggers, Youtubers and social media personalities have greatly influenced consumer
behaviour by trialing, reviewing and recommending products online through social media
platforms. These posts are then viewed by millions of followers everyday.

‘Opinion leaders are generally people who have the ability to influence others. They
usually have deeper expertise in a certain area, and are often looked to for help in making
consumer decisions’ (Boundless, 2016). ‘Since most consumers are followers and rely on
opinion leaders word of mouth, targeting highly imaginative opinion leaders appears
more financially effective’ (Cowan et al. 2014).

Opinion leaders not only imagine for themselves, but imagine for followers’ (Goldsmith,
Heitmeyer, & Freiden, 1991). ‘Opinion followers, with lower tendencies and confidence,
prefer the advice of others’. We often look to opinion leaders for help in our consumer
decisions. ‘Opinion leaders are usually people who are more knowledgeable about a
certain product or service than the average consumer. As such, opinion leaders can shape
how a product is viewed’ (Boundless, 2016)

An example of an opinion leader in the beauty industry is Zoella. She is a social media
personality known for beauty product reviews, make up tutorials, product
recommendations, influence on fashion and a life style vlogger.
‘As a self-confessed beauty junkie, I chat through my favourites, share my beauty

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 purchases, tips and tricks’ (Zoella 2017). She has 11.7 million subscribers on Youtube,
11 million followers on Instagram and 8.3 million followers on Twitter, making her a
significant online opinion leader.

CHARACTERSTICS OF OPENION LEADERS

Opinion leaders can build their organization’s brand by enabling themselves to be

advocates for their products and services. Back in the day, the chairpersons and CEOs of
a company would almost never go out of their way to appear on TV and press
conferences to present their new goods.

Nowadays, with the likes of Elon Musk and Steve Jobs, many CEOs have become very
influential in their spheres and their consumers. Even people who are not members of an
organization can be opinion leaders. Case in point, your friends who do not work at the
company they are praising.

We have enumerated some of the characteristics opinion leaders embody that make them
very good at the things they do – giving advice to others in need of it.

1. They are respected

2. They have a view that carries weight and significance in the community

3. They are very interested in an issue

4. They catalyze the formation of public opinion on any subject matter

5. They are very knowledgeable in their field

6. They let their opinions be known

7. They actively share information to the public on social media

8. They consume and interpret media content

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Opinion leaders have to be deemed credible by the audience listening to them. If you
have friends who you trust and rely on for advice, you certainly respect their opinions on
some topics because you find them to be credible. They have a breadth of knowledge of a
particular topic and you can see it in their eyes and hear it in their voice how passionate
they are about a cause. If you have a friend who loves technology and is a gadget freak,
you probably ask them for advice when you buy, say, a new smartphone or a TV.

They can give you some incredible insight into these products. They know the landscape
of tech and they know you, so they will guide you in buying something that is good for
you. They will be there with you as you walk through the electronics store or be at your
home as you browse through the electronics section of Amazon.

When opinion leaders happen to be people in your circle, you trust them even more
because they provide unbiased information and advice. Oftentimes, when somebody acts
as a spokesperson for a brand, they are usually doing it because a company paid them.
They receive some sort of commission for the boost in sales they are responsible for and
generally, they will only say positive things about a product or service. They will paint an
amazing picture of the product, talking about it as if it was perfect and nothing comes
close to it.

On the other hand, your friends or family members, who have no affiliation with a
company in terms of marketing, will mention the pros and cons of any product. They
have your best interests in mind and want you to be happy. They will paint a picture with
all the colors available and show you exactly what it is.

The good opinion leaders, the ones who really matter and have a direct impact on
consumer behavior, are usually very self-confident in their knowledge of the products
they themselves have used. Because they are confident, they are willing to talk to others
about the products and services they used and want others to buy them, too. They are
usually quite friendly and nice, getting along very well with other people because they
tend to come from the same social class as many other customers. This is why they
resonate so well with a vast majority of people; they are one of the crowd. Nobody

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special or elite, just another regular person who is exposed to things that others want to
be a part of.

The Importance Of Opinion Leaders In Marketing

Businesses rely heavily on marketing tactics to get their products and services noticed by
the consumers, to get them interested to buy their goods. Billions, even trillions, of
dollars are spent every year by firms all across the world solely on marketing. The
marketing industry is very expensive, with traditional print media marketing
(newspapers, magazines, banners, etc.) and the newfound digital marketing (search
engine advertising, social media marketing, etc.) being implemented by all of the major
corporations to get their voices heard.

However, relying solely on these forms of marketing is not enough to get into the good
graces of consumers. Since these methods lack a sort of physical touch, many consumers
consider these methods a bit distant. They want something that speaks to them. Literally!
That is where opinion leaders can make a world of difference.

Businesses soon realized that it would be more beneficial to the consumers, and
ultimately themselves, to have opinion leaders brand and market these products on their
behalf. If an organization wants to promote its brand and reach a wider audience by
spreading the good word, they can have an opinion leader do their work for them. Rather
than having things thrown at people in the form of ads, it is far more effective to have an
experienced and influential person talk to the consumers and sell the product for you.
Opinion leaders are perfect for influencing consumer behavior.

As a marketing technique, taking advantage of opinion leaders will surely work in the
favor of a company. Companies do not need to market and advertise their products to an
entire consumer base. If they project that 10 million people will eventually use their
products, they can start very small and advertise only to a group of, say, 10,000 people.

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These 10,000 people are the first customers of a company’s product but more
importantly, they are the influencers who can have a significant influence in how other
people perceive the product.

According to Chris Breikss, Founding Partner of 6S Marketing (a marketing agency

based in Vancouver), “The rise in popularity of key opinion leaders, or influencers, in
marketing strategies is indicative of how influential they are in persuading others to
follow suit and adopt a particular technology.”

Adoption diffusion model and opinion leadership

Opinion leaders are one of the major segments within the adoption diffusion model, a
model designed Everett Rogers that describes the rate of adoption of innovative products,
from initial launch to dissemination and eventually the popularity with the mass public.
The model represents a bell curve (seen below) and consists of 5 divisions – innovators,
early adopters, early majority, late majority, and laggards.

The opinion leaders belong to the early adopters portion of this adoption diffusion model.
They have the greatest influence on the other consumers who start to adopt the product
later in the cycle.

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Since opinion leaders tend to adopt a technology very early, they exert their influence on
everybody else to get them on board and interested in a product or service. They are
usually exposed to mass media and make their voices heard on social media platforms to
reach out to more people. In case they do not use social media, they will simply let their
immediate friends and family members in their community know of a new product.

These early adopters provide guidance to the early majority members who seek expert
opinion from opinion leaders. These opinion seekers in the early majority portion are, in
turn, opinion leaders to the opinion seekers in the late majority segment.

This is how the cycle is. Opinion leaders help opinion seekers and give them new
information. These opinion seekers will in turn help other opinion seekers, becoming
opinion leaders along the way. This is how companies make use of the word of mouth
marketing scheme. This is how opinion leaders work their marketing magic

TYPES OF OPINION LEADERSHIP

Is there one set of all-purpose opinion leaders in a system, or are there different opinion
leaders for different issues? In principle there are two types of opinion leaders:

A) Polymorphic Opinion Leaders

B) Monomorphic Opinion Leaders

Polymorphism is the degree to which an individual acts as an opinion leader for a variety
of topics. The opposite, monomorphism, is the degree to which an individual acts as an
opinion leader for only a single topic. The degree of polymorphic, opinion leadership in a
given social system seems to vary with such factors as the diversity of the topics on
which opinion leadership is measured, whether system norms are innovative or not, and
so on. Example: Village leaders in developing countries are frequently opinion leaders
for health, agricultural, and educational ideas, as well as political and moral issues.

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 Families and Family Decision Making

The Family Life Cycle. Individuals and families tend to go through a "life cycle:" The
simple life cycle goes from

For purposes of this discussion, a "couple" may either be married or merely involve
living together. The breakup of a non-marital relationship involving cohabitation is
similarly considered equivalent to a divorce.

In real life, this situation is, of course, a bit more complicated. For example, many
couples undergo divorce. Then we have one of the scenarios:

Single parenthood can result either from divorce or from the death of one parent. Divorce
usually entails a significant change in the relative wealth of spouses. In some cases, the
non-custodial parent (usually the father) will not pay the required child support, and even
if he or she does, that still may not leave the custodial parent and children as well off as
they were during the marriage. On the other hand, in some cases, some non-custodial
parents will be called on to pay a large part of their income in child support. This is
particularly a problem when the non-custodial parent remarries and has additional

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children in the second (or subsequent marriages). In any event, divorce often results in a
large demand for:

 Low cost furniture and household items

 Time-saving goods and services

Divorced parents frequently remarry, or become involved in other non-marital

relationships; thus, we may see

Another variation involves

Here, the single parent who assumes responsibility for one or more children may not
form a relationship with the other parent of the child.

Integrating all the possibilities discussed, we get the following depiction of the Family
Life Cycle:

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Generally, there are two main themes in the Family Life Cycle, subject to significant
exceptions:

 As a person gets older, he or she tends to advance in his or her career and tends to
get greater income (exceptions: maternity leave, divorce, retirement).
 Unfortunately, obligations also tend to increase with time (at least until one’s
mortgage has been paid off). Children and paying for one’s house are two of the
greatest expenses.

Note that although a single person may have a lower income than a married couple, the
single may be able to buy more discretionary items.

Family Decision Making. Individual members of families often serve different roles in
decisions that ultimately draw on shared family resources. Some individuals
are information gatherers/holders, who seek out information about products of relevance.
These individuals often have a great deal of power because they may selectively pass on
information that favors their chosen alternatives. Influencers do not ultimately have the
power decide between alternatives, but they may make their wishes known by asking for
specific products or causing embarrassing situations if their demands are not met.
The decision maker(s) have the power to determine issues such as:

 Whether to buy;
 Which product to buy (pick-up or passenger car?);
 Which brand to buy;
 Where to buy it; and
 When to buy.

Note, however, that the role of the decision maker is separate from that of the purchaser.
From the point of view of the marketer, this introduces some problems since the
purchaser can be targeted by point-of-purchase (POP) marketing efforts that cannot be

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aimed at the decision maker. Also note that the distinction between the purchaser and
decision maker may be somewhat blurred:

 The decision maker may specify what kind of product to buy, but not which
brand;
 The purchaser may have to make a substitution if the desired brand is not in stock;
 The purchaser may disregard instructions (by error or deliberately).

It should be noted that family decisions are often subject to a great deal of conflict. The
reality is that few families are wealthy enough to avoid a strong tension between demands
on the family’s resources. Conflicting pressures are especially likely in families with
children and/or when only one spouse works outside the home. Note that many decisions
inherently come down to values, and that there is frequently no "objective" way to
arbitrate differences. One spouse may believe that it is important to save for the
children’s future; the other may value spending now (on private schools and computer
equipment) to help prepare the children for the future. Who is right? There is no clear
answer here. The situation becomes even more complex when more parties—such as
children or other relatives—are involved.

Some family members may resort to various strategies to get their way. One
is bargaining—one member will give up something in return for someone else. For
example, the wife says that her husband can take an expensive course in gourmet cooking
if she can buy a new pickup truck. Alternatively, a child may promise to walk it every
day if he or she can have a hippopotamus. Another strategy is reasoning—trying to get
the other person(s) to accept one’s view through logical argumentation. Note that even
when this is done with a sincere intent, its potential is limited by legitimate differences in
values illustrated above. Also note that individuals may simply try to "wear down" the
other party by endless talking in the guise of reasoning (this is a case of negative
reinforcement as we will see subsequently). Various manipulative strategies may also be
used. One is impression management, where one tries to make one’s side look good (e.g.,

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argue that a new TV will help the children see educational TV when it is really mostly
wanted to see sports programming, or argue that all "decent families make a contribution
to the church"). Authority involves asserting one’s "right" to make a decision (as the
"man of the house," the mother of the children, or the one who makes the most
money). Emotion involves making an emotional display to get one’s way (e.g., a man
cries if his wife will not let him buy a new rap album).

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 CONCLUSION
Diffusion of innovation seeks to explain how innovations are taken up in a population.
An innovation is an idea, behavior, or object that is perceived as a new by its audience.

“Diffusion of Innovation” is a process by which an innovation spreads amongst and gets

the absorbed/accepted or assimilated by the market.

As we can see, the importance of opinion leaders in today’s business landscape should
not be underestimated. With the power of word of mouth, products and services can be
advertised for cheap by getting the initial message to the right people who can influence
the purchasing behavior of other consumers who are still on the fence.

Organizations do not need to spend millions of dollars on complex marketing and ad

campaigns. Opinion leaders, with their social engagement, can get people to come off the
fence and actually be interested in a product. All it takes is for opinion leaders to be
trustworthy and dependable, and people will soon buy their message and be convinced to
make a purchase.

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 BIBLIOGRAPHY

1. Loudon, D.L. and Bitta A.J. Della, Consumer Behavior, Fourth Edition, 2002, Tata
McGrawHill, New Delhi.

2. Peter, P.J. and Olson, J.C., Consumer Behavior and Marketing Strategy, Seventh
Edition, 2005, McGraw-Hill Higher Education

. 3. Schiffman, L.G. and Kanuk, L.L., Consumer Behavior, Eight Edition, 2004, Prentice
Hall, India. 4. Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley &
sons, Inc.

4. https://en.wikipedia.org/wiki/Diffusion_of_innovations

5. https://www.consumerpsychologist.com/cb_Diffusion_of_Innovation.html

6. https://www.consumerpsychologist.com/cb_Family_Decision_Making.html

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