Diffusion of Innovation

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The Diffusion Concept  The process by which and innovation is communicated through certain channels over time among the members of a social system  Elements of Diffusion     Innovation Channels of Communication Time Social System 2 .

practice or object perceived as new by an individual or other unit of adoption  Types of Innovation  Discontinuous Innovation  Dynamic Innovation  Continuous Innovation 3 .Innovation  An idea.

Cell Phone with Camera Moderate Dynamically Continuous Innovations e.g. Telephone Rare Infrequent Frequent 4 Frequency of Occurrence .g.g.Types of Innovation Low Degree of Behavioral Change Required Continuous Innovation e. Cell Phone High Discontinuous Innovation e.

Marketing effort. Need fulfillment/problem solving. and perceived risk 5 . Type of decision.Factors Affecting Innovation Adoption       Relative Advantage Compatibility Complexity Trialability Observability Other factors are Type of social system.

Consumer Resistance to Innovation  The resistance offered by the consumers to an innovation. either because it poses potential changes from a satisfactory status quo or because it conflicts with their belief structure 6 .

2) EARLY ADOPTERS .are local opinion leaders who read magazines and who are integrate into the social system more than the average consumer. Adopter Categories 1) INNOVATORS .Diffusion Process. and willing to take risks. younger. 7 . well educated.are first to buy and typically described as venturesome. financially stable.

more conservative.described as older. Adopter Categories 3) EARLY MAJORITY .solid. middle-class consumers who are more deliberate and cautious 4) LATE MAJORITY . and skeptical of new products 8 .Diffusion Process. traditional.

we will buy X If I have to buy.Diffusion Process. I will No way!  Nonadopters  Refuse to change 9 . Adopter Categories  Laggards     Resist change Conservative Like tradition Often older & lower in socioeconomic status OK.

Consumer Resistance to Innovation Innovation Exposure No Resistance Adoption Yes Flexible to Modification No Rejection Modification 10 .

Communication is a Key element in the Diffusion Process Two types of communication in diffusion are: 1. Communications in the heterophilous groups (groups outside an individual’s personal network) 2.. peer and family) 11 . (i. Communications in the homophilous groups.e.

Time  Time has a bearing on  The adoption process  Innovativeness of the consumers  The innovation’s rate of adoption  Adoption Process – 5 stages      Awareness Interest Evaluation Trial Adoption/Rejection 12 .

exhibitions and fairs TV shows dedicated to innovations Beauty pageants National level awards and game shows 13 .Channels of Communication          Marketers to Consumers Among Consumers Product dedicated websites Company websites Product related magazine and journals Consumer shows.

becoming convinced of the value of the innovation  Decision .putting it to use  Confirmation .learning about the existence and function of the innovation  Persuasion .committing to the adoption of the innovation  Implementation .Rogers also proposed a five stage model for the diffusion  Knowledge .the ultimate acceptance (or rejection) of the innovation” 14 .

An Enhanced Model of Adoption Process Consumer Innovativeness Pre-existing Need Venturesomeness and interest in Product Category Rejection or postponement Evaluation Awareness Interest Trial Adoption Post Adoption Evaluation Continued Adoption Rejection Continued Rejection Discontinuance Later Adoption 15 .

courage (risk) Product Deficiencies (Technical or Design Problems) Inadequate research (Overestimation of Market Size) Poor Execution of Plans (Promotion. etcetera) Result: No differential advantage & Failure to Meet Customer Needs 16 . Price. Why?       Unreal time pressure & vested interest groups Absorption in process: lack of objectivity.Why Some New Products Fail and Others Succeed Absolute failure Relative failure 80 to 90% Fail. Distribution. poor timing.

Inadequate Market Analysis New Product Success • Offer a unique benefit (a differential advantage) • Solve a consumers problem or provide an opportunity.Why Some New Products Fail and Others Succeed 80 to 90% Fail. Why?  #1. Performance & Price New product failures generally offer the same or worse performance … than competing products with … the same or higher price  #2. a reward 17 .

Thank you 18 .

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