INNOVATION IN

CONSUMER BEHAVIOR:
ADOPTION, RESISTANCE
AND DIFFUSION


To Access:

1. Classifications of innovations, benefits offered &

breadth
2. Adoption of innovation, why consumers resist
innovation, & timing of innovation
3. Diffusion & its relationship to the product life
cycle
4. Factors affecting adoption, resistance, &
diffusion


What is Adoption, Resistance and Diffusion?

Adoption of innovation: refers to the process by which a consumer

decides to try and ultimately adopt a new product or service. This
process is influenced by various factors such as perceived benefits,
compatibility with existing products, and trialability. It is important for
businesses to understand this process to effectively market and
introduce new products.
Resistance to innovation refers to the reluctance of consumers to adopt
a new product or service. This resistance can be due to various factors
such as price, complexity, and compatibility with existing products.
Understanding these factors can help businesses address and overcome
resistance to their products.


What is Adoption, Resistance and Diffusion?

Diffusion of innovation: refers to the spread of a

new product or service through a population
over time. This process is influenced by various
factors such as innovativeness of the product,
relative advantage over existing products, and
observability of the product. Understanding this
process can help businesses effectively market
and introduce new products.


Classification of Innovation:

•Radical Innovation: Involves the introduction of a

completely new product, technology, or concept that
disrupts existing markets and creates significant
changes in consumer behavior.

•Incremental Innovation: Refers to small or

incremental improvements made to existing
products, services, or processes to enhance their
performance, features, or functionality.
06


Classification of Innovation:
Process Innovation: Involves the implementation of
new methods, techniques, or practices in the
production, distribution, or delivery of products or
services to improve efficiency, reduce costs, or
enhance quality.
Business Model Innovation: Involves the creation or
modification of the business model, which includes
changes in how a company generates revenue,
delivers value to customers, or conducts its
operations. 06


Benefits Offered
by Innovation:
•Improved product performance: Innovations can lead to products or
services with enhanced features, functionalities, and performance,
providing increased value to consumers.

•Increased customer satisfaction: Innovation can result in better customer

experiences, addressing their needs and preferences more effectively,
leading to higher levels of customer satisfaction.

•Competitive advantage: Companies that innovate and bring new products,

services, or business models to the market can gain a competitive edge over
their rivals, leading to increased market share and profitability.


Benefits Offered by Innovation:

•Cost Savings: Innovation in processes or technologies can lead to cost
savings through improved efficiency, reduced waste, or optimized
resource utilization, resulting in higher profitability.

•Enhanced Brand Image: Being seen as innovative can improve a

company's brand image and reputation, leading to positive perceptions
among consumers and stakeholders.

•Market Expansion: Innovations can open up new markets or

customer segments, providing opportunities for business growth and
expansion. 06

Breadth of Innovation:

•Product-Level Innovation: Refers to innovations that are

focused on improving or creating new products or services,
such as introducing new features, functionalities, or design
changes.

•Process-Level Innovation: Involves innovations that are

centered on improving or changing the internal processes,
systems, or operations of a company to enhance efficiency,
reduce costs, or optimize resource utilization.


Breadth of Innovation:
Business Model-Level Innovation: Refers to innovations
that involve changes to the overall business model of a
company, such as modifying revenue streams, distribution
channels, or costumer engageent strategies.

Industry-Level Innovation: Involves innovations that

disrupt or transform entire industries, leading to
significant changes in business practices, consumer
behaviors and market dynamics
06


Adoption of Innovation:
•Innovators, early adopters, early majority, late
majority, and laggards are different categories of
consumers based on their willingness to adopt
innovations.

•Factors influencing adoption include perceived benefits,

perceived risks, relative advantage, compatibility,
complexity, and observability of the innovation.


Adoption of Innovation:

•Innovators are the first to adopt, followed by early

adopters, early majority, late majority, and laggards
in that order.

•Adoption can be influenced by social networks,

opinion leaders, and marketing efforts to create
awareness and promote the benefits of the
innovation.


Reasons for Consumer Resistance to Innovation:

•Lack of awareness or understanding about the innovation,

its benefits, or how it works.

•Skepticism or fear of change- where consumers may be

hesitant to adopt something new or different from what they
are familiar with.

•Perceived risks- such as financial risks, performance risks, or

safety risks associated with the innovation.


Reasons for Consumer Resistance

to Innovation:
•High costs- where consumers may resist adopting an
innovation due to its price or associated costs.

•Compatibility issues- where the innovation may not align

with consumers' existing beliefs, values, or practices.

•Social influence- where consumers may resist an

innovation if it is not accepted or endorsed by their social
or cultural groups.


Timing of Innovation:

•The timing of innovation refers to the point at which an

innovation is introduced into the market or adopted by consumers.

•Innovators are typically the first to adopt innovations, followed by

early adopters, early majority, late majority, and laggards in a
sequential fashion.

•The timing of innovation can impact its success, as early adopters

and early majority can influence the adoption behavior of late
majority and laggards.


Timing of Innovation:

•Timing is also critical in terms of market readiness,

competition, and consumer demand. Introducing an
innovation too early or too late can affect its adoption and
diffusion in the market.

•Companies need to carefully consider the timing of their

innovation strategies, taking into account market trends,
consumer needs, and competitive landscape to maximize the
chances of success.


Diffusion & its relationship

to the product life cycle:
Diffusion refers to the process by which an innovation spreads
through a population over time.

The product life cycle is a concept that describes the stages a product
goes through from introduction to decline in the market.

The PLC (Product Life Cycle) stages includes:

-Introduction
-Growth
-Maturity
-Decline


Diffusion & its relationship

to the product life cycle:
•In the introduction stage of the product life cycle, the innovation is
initially introduced to the market and starts to gain awareness among
consumers.

•As the innovation gains more acceptance and adoption among

consumers, it moves to the growth stage of the product life cycle, where
sales and market share increase.

•The diffusion of the innovation plays a crucial role in the growth stage,
as the rate of adoption determines the speed at which the product
moves from the introduction stage to the growth stage.


Diffusion & its relationship

to the product life cycle:

•The maturity stage of the product life cycle is

characterized by the widespread adoption of the
innovation and a relatively stable market share.

•In the decline stage of the product life cycle, the

diffusion of the innovation slows down, and sales and
market share decline as the market becomes saturated
and new innovations may replace the older ones.


Diffusion & its relationship

to the product life cycle:

•Strategies such as marketing efforts, pricing, distribution,

and promotion can be used to influence the diffusion of
the innovation and extend the product's life cycle.

•Understanding the relationship between diffusion and the

product life cycle can help companies plan their marketing
and innovation strategies effectively and adapt to changing
consumer behaviors and market dynamics


Factors affecting adoption, resistance, and diffusion:

•Perceived Relative Advantage: The extent to which the
innovation is perceived as superior to existing alternatives in
terms of benefits, effectiveness, efficiency, or convenience.

•Compatibility: The extent to which the innovation is perceived as

compatible with the values, needs, and existing behaviors of the
target population.
•Complexity: The level of difficulty or complexity associated
with adopting and using the innovation.


Factors affecting adoption, resistance, and diffusion:

•Trialability: The ability to try out the innovation on a limited

basis before committing to full adoption.

•Observability: The extent to which the results or benefits of

the innovation are visible or observable to others.

•Social Influence: The influence of social networks, peers,

opinion leaders, and reference groups on the adoption and
diffusion of the innovation.


Factors affecting adoption, resistance, and diffusion:

•Individual Characteristics: Personal factors such as age,
education, income, personality, and lifestyle that may
influence the adoption or resistance to the innovation.

•Risk Perception: The perceived risks associated with adopting

and using the innovation, including financial risks,
performance risks, safety risks, and social risks.

•Innovativeness: The willingness and tendency of individuals to

adopt new innovations early or late in the diffusion process.


Factors affecting adoption, resistance, and diffusion:

•External Factors: Factors in the external environment such as

economic conditions, technological advancements, legal and
regulatory factors, and cultural influences that may affect the
adoption, resistance, or diffusion of the innovation.

•Marketing and Communication efforts: The effectiveness of

marketing and communication strategies used by companies to
promote and educate consumers about the innovation, including
product positioning, branding, pricing, and promotional
activities
Thank You!