Diffusion and Adoption

DIFFUSION AND ADOPTION Adoption  The development development of the consumers consumers awareness awareness of a product product to the point they actually use the product on a regular basis – the stages that an individual , household or organization goes through in accepting an innovation Diffusion  The process by which an innovation develops develops from its inception to its its actual use by consumption consumption – the acceptance of an innovation throughout the social system over a period of time.

How is diffusion defined in Rogers' Model? Diffusion is a process by which an innovation is communicated through certain channels over time among the members of a social system.  The definition definition indicates that: that:

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 The adopters can can be an individual, individual, groups, groups, or organization organization at different different levels of social system.  The target is innovation

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 The process is communication communication

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 The means is communication communication channels channels

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 The context of innovation innovation is a social system system

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It is a change over time.

How can we categorize different types of adopter?

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Innovators (risk takers) Early adopters (hedgers)

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Early majority (waiters)

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Late majority (skeptics)

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Late adopters (slowpokes)

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What are the factors affecting the rate of adoption of an innovation? According to Rogers (1995), there are five major factors affecting the rate of  adoption: 1. Perceived Perceived Attribut Attributes es of Innovati Innovation on An innovation is a idea, practice or object that is perceived as new by an

individual or other unit of adoption. How the adopter perceived characteristics of the innovation has impacts on the process of adoption. •

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Relative advantage: the degree to which an innovation is perceived as better than the idea it supersedes. The underlying principle is that the greater the perceived relative advantage of an innovation, the more raid its rate of  adoption Compatibility: the degree to which an innovation is perceived as being consistent with the existing values, past experiences, and needs of potential adopters Complexity: the degree to which an innovation is perceived as difficult to understand and use  Trialability: the degree to which an innovation may be experimented with on a limited basis. If an innovation is trialable, it results in less uncertainty for adoption Observability: the degree to which the results of an innovation are visible to others. The easier it is for individuals to see the results of an innovation, the more likely they are to adopt.

Speed of Diffusion of New Products is driven by: Relative Advantage: Whether innovation is perceived as better than what it is replacing. Compatibility: Whether the innovation is perceived as compatible with existing consumer behavior Complexity : Whether the innovation is perceived as difficult to understand and use Trialability: Whether the innovation can be experimented with on a limited basis Observability : Whether the innovation is visible to other people (social effects) Risk : The degree to which adopting the innovation is perceived as leading to a bad experience for the user that the user cannot protect himself from

Customer buying process for new products How do customers approach the process of buying a new product? How does this differ from the process for buying a product which the customer has bought before? What is meant by a “new product”? A new product can be defined as:

"A good, service or idea that is “perceived” by some potential customers as new. It may have been available for some time, but many potential  customers have not yet adopted the product nor decided to become a regular user of the product" Research suggests that customers go through five stages in the process of adopting a new product or service: these are summarised below:

(1) Awareness - the customer becomes aware of the new product, but lacks information about it (2) Interest - the customer seeks information about the new product (3) Evaluation - the customer considers whether trying the new product makes sense (4) Trial - the customer tries the new product on a limited or small scale to assess the value of the product (5) Adoption - the customer decides to make full and/or regular use of the new product What is the role of marketing in the process of new-product adoption? A marketing team looking to successfully introduce a new product or service should think about how to help customers move through the five stages. For example, what kind of advertising or other promotional campaign can be employed to build customer awareness? If customers show a desire to trial or sample a product, how can this be arranged effectively? Research also suggests that customers can be divided into groups according to the speed with which they adopt new products. Rogers, in his influential work on the diffusion of innovations, suggested the following classification:

 The “innovators” (those who adopt new products first) are usually relatively young, lively, intelligent, socially and geographically mobile. They are often of a high socioeconomic group (“AB’s”). Conversely, the “laggards” (those who adopt last, if at all) tend to be older, less intelligent, less well-off and lower on the socioeconomic scale. It follows from the above model that when a business launches a new product or service, the customers who buy first are likely to be significantly different from those who buy the product much later. This needs to be borne in mind when developing the marketing mix.