DIFFUSION OF INNOVATION IN

INDUSTRIAL MARKETS
Diffusion of innovation is a social phenomenon which discuss the spreading process of an innovation
across populations.The word diffusion is used to denote the spreading process of an innovation.In
industrial markets,diffusion of innovation is communicated over time among the participants like
agents and leaders.Diffusion of innovation helps us to understand how innovation is adopted by the
industrial markets,how much time it takes to spread,and finally whether the innovation actually
succeeds in bringing a change in industrial market or whether it fails in the running process.

Diffusion of innovation theory analyses how the industrial market members adopt the new
innovative ideas and how they make the decision towards it.Innovation,Communication
Channel,Time and Social system in industrial markets are the major elements of diffusion of
innovation.

Innovation:Innovation should be perceived as new and must also be capable of getting acceptance
and bringing some industrial changes.The speed and nature of diffusion process is highly depended
on the innovation.

Communication Channel:The channel through which the ideas of communication is spread like
newspaper,social media.

Time:Duration or length of time to spread innovation in industrial markets.

Social System:Social system refers to all kinds of components which construct the industrial market.

There are three way decisions in a social system.They are:

1.optional way

2.collective way

3.way of authority

In industrial markets,Adaptation plays an important role in diffusing an innovation.Adaptation is the

individual process which is accepting an innovation by an individual.Based on the degree to which an
individual in the industrial market adopts the innovation,the adoptors have been categorised into
five different groups.They are innovators,early adaptors,early majority,late majority and laggards.
The above graph gives the pictorial representation of no. of people vs passage of time in diffusion of
innovation.The mechanism of diffusion of innovation can be classified in five stages.These five stages
are knowledge,persuation,decision,implementation and confirmation.Knowledge is the awareness
about various aspects of the innovation.Persuation is the stage in which people in the in the
industrial markets shows more interest in the new innovation.In decision stage,people analyse the
positives and negatives of the innovation and decide wheather to accept or reject the in the
innovation.It is the most relevant phase of diffusion.If the decision is positive the diffusion process
move positively otherwise it is a break for the diffusion process.Implementation is the stage where
the people starts to use the innovation.In Confirmation stage,people finalize the decision and
continue to use innovation with full potential in the industrial market.

The strategic approach in industrial markets by diffusion of innovation process try to reduce
complexity and mange the relationships with market actors,to promote and diffuse their new
products.