Diffusion of innovations

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Diffusion of innovations
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Discontinuous innovations
Dynamically continuous innovations
Continuous innovations
Telephone answering Machines, call
forwarding, Call waiting, Voice Mail Caller
ID Banking by telephone Call-prompting systems
Hold button Line-in-use indicator Redial
button Auto dialing feature Touch-tone
service 800 Numbers, 900 Numbers
Telephone
Nationwide paging Service Stock market
quotation Devices Sports scores delivery Two-way
paging Pager watch
Pager
Silent alert Message displays Built in alarm
clock Interchangeable fashion Color cases
Fax modem Mobile fax machines Home office
systems (Combined fax, copier, Computer printer)
Plain paper fax Speed dial buttons Delayed
send Copy function Paper cutter
Fax Machine
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INNOVATORS 2.5 EARLY ADOPTERS 13.5 EARLY
MAJORITY 34 LATE MAJORITY 34 LAGGARDS 16

PERCENTAGE OF ADOPTERS BY CATEGORY SEQUENCE
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Product characteristics that influence Diffusion
CHARACTERISTICS
DEFINITION
EXAMPLES
Relative advantage The degree to which potential
customers Air travel over train travel,
cordless perceive a new product as superior to
phones over corded telephones existing
substitutes Compatibility The degree to which
potential consumers Gillette MACH3 over
disposable feel a new product is consistent
with their razors, digital telephone answering
present needs, values, and practices machines
over machines using tape to make
recordings Complexity The degree to which a new
product is Products low in complexity
include difficult to understand or use frozen
TV dinners, electric shavers, instant
puddings Trialability The degree to which a new
product Trial size jars and bottles of new is
capable of being tried on a limited products,
free trials of software, basis free
samples, cents-off coupons Observability The
degree to which a products Clothing, such as a
new Tommy benefits or attributes can be
observed, Hilfiger jacket, a car,
wristwatches, imagined, or described to
potential eyeglasses customers
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Barriers to Diffusion of an Innovation on- line
Banking
TYPES OF BARRIERS DEFINITIONS AND EXAMPLES
FUNCTIONAL BARRIERS
Usage barriers . Initial use requires a great
deal of consumer learning . Continuing use
requires total commitment to system . Partial
or inconsistent use results in incorrect account
balances Value barriers . Requires purchase of
software and supplies . Generally has
additional monthly fee Risk barriers .
Performance risk is high . Economic risk is
moderate . Social risk is low PHYCHOLOGICAL
BARRIERS Traditional barriers . Not the way
the consumer is accustomed to paying bills,
etc. Image barriers . Negative (hard to use)
image of personal computers in general and
on-line banking in particular
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The stage in the Adoption Process
NAME OF STAGE
WHAT HAPPENS DURING THIS STAGE
EXAMPLES
Awareness
Consumer is first exposed to the Product
innovation
David sees an ad for a new digital camera in
the newspaper.
Interest
Consumer is interested in the Product and
searches for additional Information.
David reads about the camera on the
manufacturers Website, and then goes to a camera
store near his Office and has a salesperson show
him the camera.
Evaluation
Consumer decides whether or not To believe that
this product or Service will satisfy the need
a kind of mental trial.
After talking with a knowledgeable friend,
David decides that this camera should be able to
provide him with the photos he needs to use in
Power Point presentations. He also likes the
fact that it Uses standard floppy disks for
storage.
Trial
Consumer uses the product on a limited basis
Since a camera cannot be tried like a small
bottle of a new shampoo, David buys the camera
from a dealer offering a 14-day full refund
policy.
If trial is favorable, consumer decides to use
the product on a full, rather than a limited
basis- if unfavorable, the consumer decides to
reject it.
Adoption (Rejection)
David finds that the camera is easy to use and
the results are excellent consequently, he keeps
the digital camera.
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The Importance of time in the Diffusion Process
TYPE OF TIME MEANING
EXAMPLES
Purchase time
Time between awareness And purchase
If you look at your cars gas gauge and it reads
Empty, you stop at the next gas station you
come to. If youre shopping for an additional VCR
for your Home, you may take quite a while to make
a purchase, as long as your present VCR is
working properly.
Adopter categories
A classification scheme that indicates where
a consumer stands, in rela- tion to others, when
adopting a new product
Innovators are the first to adopt a new product,
and Laggards are the last
How long it takes a new Product or service to
be Adopted by members of A social system
Black-and-white TVs were adopted by consumers
much more quickly than their manufacturers had
Envisioned in contrast, trash compactors have
never Been widely adopted
Rate of adoption
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Adoption or Rejection
An Enhanced Adoption Process Model
Pre-existing problem or need
Trial
Adoption or Rejection
Post adoption or Post purchase Evaluation
Awareness
interest
Evaluation
Evaluation
Discontinuation
Discontinuation Or Rejection
Rejection
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The Innovator Buying Cycle
EMBRACING INNOVATIONS Chasing the Advances
Innovation Fascination
INNOVATION SATIATION Product Accumulation
in the Closet Cumulative Innovation
Disappointment Pace of Innovation Slows Down
INNOVATOR NO MORE What Ive Got Is
Good Enough Now Innovator Becomes Extremely
Cautious, Careful Buyer Moving On
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Comparative Profile of the Consumer Innovator and
the Non innovator
CHARACTERISTIC
INNOVATOR
NONINNOVATOR (OR LATE ADOPTER)
PRODUCT INTEREST More Less
OPINION LEADERSHIP More Less
PERSONALITY
Dogmatism Open- minded Closed-minded Need
for uniqueness Higher
Lower Social Character Inner-directed Other-
directed Optimum stimulation level
Higher Lower Variety Seeking
Higher Lower Perceived risk
Less More Venturesomeness
More Less PURCHASE AND CONSUMPTION
TRAITS Brand Loyalty Less
More Deal Proneness More
Less Usage
More Less
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MEDIA HABITS Total Magazine exposure More Less
Special-interest magazines More Less Televisio
n Less More SOCIAL CHARACTERISTICS Social
integration More Less Social striving (e.g.
social, physical, More Less and occupational
mobility) Group memberships More Less DEMOGR
APHIC CHARACTERISTICS Age Younger Older Inco
me Higher Lower Education More Less Occu
pational status Higher Lower