1) Product levels 2) Product width, length and depth 3) Stretching a product line 4) Process of idea generation 5) AIETA model

6) Reason for success of new product and failure of a new product 7) Packaging a silent salesman 8) Positioning strategies 9) Innovation,diffusion and adoption 10) Concept testing 11) Products maps 12) A product manager whether he should be a strategist, a visionist or both
3. Stretching a Product line:A product line extension is the use of an established products brand name for a new item in the same product category. Line Extensions occur when a company introduces additional items in the same product category under the same brand name such as new flavors, forms, colors, added ingredients, package sizes. This is as opposed to brand extension which is a new product in a totally different product category.Line extension occurs when the company lengthens its product line beyond its current range. The company can extend its product line down-market stretch, up-market stretch, or both ways.

Down-Market Stretch A company positioned in the middle market may want to introduce a lower-priced line for any of the three reasons: 1. The company may notice strong growth opportunities as mass retailers such as WalMart, Best Buy, and others attract a growing number of shoppers who want value-priced goods.

2. The company may wish to tie up lower-end competitors who might otherwise try to move up-market. If the company has been attacked by a low-end competitor, it often decides to counterattack by entering the low end of the market. 3. The company may find that the middle market is stagnating or declining.

Up-Market Stretch Companies may wish to enter the high end of the market for more growth, higher margins, or simply to position themselves as full-line manufacturers. Many markets have spawned surprising upscale segments: Starbucks in coffee, Haagen-Dazs in ice cream and Evian in bottled water. Leading Japanese auto companies have each introduced an upscale automobile: Toyota's Lexus, Nissan's Infiniti, and Honda's Acura. Note that they invented entirely new names rather than using or including their own names. Two-Way Stretch Companies serving the middle market might decide to stretch their line in both directions. Texas Instruments (TI) introduced its first calculators in the medium-pricemedium-quality end of the market. Gradually, it added calculators at the lower end taking the share from Bowmar, and at the higher end to compete with Hewlett-Packard. This two-way stretch won Texas Instruments (TI) an early market leadership in the hand-calculator market. Examples include

Zen LXI, Zen VXI Surf, Surf Excel, Surf Excel Blue Splendour, Splendour Plus Coca-Cola, Diet Coke, Vanilla Coke Clinic All Clear, Clinic Plus Reese's Peanut Butter Cups, Reese's Pieces and Reese's Puff Cereal

Product line stretching Downward stretch: Company initially located at the top end of the marketand then 'stretches' downwards to pre-empt a competitor or respond to an attack. Launch of C-Class by Mercedes-Benz.

>>> http://en.wikiversity.org/wiki/Principles_of_marketing

Product Line Stretching - introducing new products into a product line.

Product Management System - a system which ensures that total marketing control of a product lineor brand rests with for the person who it.

has profit responsibility

>>> http://marketinginformationcentre.ca/marketing_definitions_(n-o-p).htm See Product Line; Product Line Depth; Product Line Stretching. Product

Line Featuring a strategyin which certain items in a product line are given special promotional attention, >>> http://www.buseco.monash.edu.au/mkt/dictionary/ppp.html

...

Downward Stretching - introducing a new product into a product line at the lower priced end of themarket. See Product Line Stretching; Upward Stretching; Two-Way DPI abbrev. Disposable Personal Stretching. Income.

>>> http://www.coolavenues.com/mba-journal/marketing/marketing-glossary0?page=0,6

See also: Objectives, Sales, New product, Marketing channel, Price

Process of idea generation:Basic Idea Generating

The bottom line to a successful idea-generating process is to honor the voices in the room and to use different thinking styles. Thats right, intermix the different temperament patterns as well as the divergent perceiving and convergent judging focuses and activities.

Alex Osborn, the advocate of brainstorming, compared divergent and convergent thinking to driving a car. Imagine, he said, that when you are using divergent thinking, your foot is on the gas pedal, all the way to the floor. There are no obstacles, and the roads are in perfect condition. The ideas flow. When using convergent thinking, its as if your foot is on the brake, evaluating, selecting, and judging ideas. His point was this: it is critical to facilitate creative thinking by honoring both processes and keeping them separate. If you dont, its as if you had your foot on the gas pedal and the brake at the same time. You wouldnt get very far, and it wouldnt be good for the transmission either. In essence, from a psychological type perspective, Osborn said to honor the perceiving processes and then honor the judging processes. First, generate information and ideas using Si, Se, Ni, and Ne, and then call on Ti, Te, Fi, and Fe for making decisions. Divergent thinking. Convergent thinking. Sounds simple, and sometimes its challenging. By using divergent and convergent thinking, you are asking people to stretch from their comfort zone.For them to do that, they need to trust you. With the tools provided in this book, along with the right attitude of honoring the many voices of creativity, you will succeed in building trust in your abilities to guide the process for generating new ideas that will become useful. And with that trust will come commitment for doing a good job, confidence in the creativity of yourself and others, competency in using the tools and methods, and capability to use the right techniques at the right time. Step 1: Divergent Thinking

Here are some examples of divergent thinking triggers:

List all the uses you can think of for a shoe. Generate meanings for a nutshell.

List all the resources available for your next project. Make as many sentences as you can using all of the following words: candle, hope, tissue, egg.

Notice how each is an open-ended exercise. No evaluation is required or asked for. None of the questions asked you to meet any criteria whatsoever. The responses are free from any restriction, even if they are outside the parameters you perceive in the question. Thats an important point. Generally, though, we unconsciously know there are right answers and that there is only one right answer to every question. To truly appreciate the gift of divergent thinking, a change of attitude is required. People need to be open to the idea that there may be many right answers. The goal of using divergent thinking is to generate as many potential right answers as possible. In order to do this, the potential wrong answers must be included. One of the benefits of using divergent thinking is knowing that in the second phase, during convergent thinking, the best responses will be selected and ideas not worth considering will be left behind, modified, or saved for later. How do you get outrageous ideas? Ask for them! Research conducted in the 50s showed that when idea-generating participants are asked to generate outrageous ideas, they do. When they are not asked for outrageous ideas, they are not as likely to offer them up. Try it out, and see for yourself. Step 2: Convergent Thinking

Here are some examples to demonstrate convergent thinking.

Which shoe idea is the most novel? Rank your meanings of the nutshell from the most personally meaningful to the least.

Select the resources that are most challenging to maintain. Of all the sentences you made, which is the most intriguing?

Notice each statement or question asks you to use narrow-down thinking. During the convergent stage, we apply critical thinking; that is, we use some criteria to evaluate, select, and analyze the output from the divergent phase. If the divergent output is kept in the verbal realm, only in talking or in conversation, it is quite challenging to do a good job in the convergent stage. As a result, one of the standards for idea generating is to capture the ideas in a way that makes it easy to evaluate the total output later on. Also, if all the idea generating is conducted interactively, you are pulling only on the extraverting processesSe, Ne, Te, and Fe. By doing this you get ideas that fit what is (Se), what might be (Ne), how to organize using principles (Te), and how to organize to meet peoples needs for harmony and connecting (Fe). For balance, consider including opportunities for reflection time for the other four voices to be heardSi, Ni, Ti, and Fi. Factor in occasions to welcome ideas from what was in the past (Si), conceptual considerations and meanings (Ni), framework fit (Ti), and personal values (Fi). Creativity Personality and Type

Buy Now at 16types.com

Cognitive

Processes

and

Idea

Generation

Adapted from Marci Segal, Creativity and Personality Type: Tools for Understanding and Inspiring The Many Voices of Creativity (Telos Publications, 2001) *Used with permission.

Divergent and Convergent Thinking in the Eight Cognitive Process Voices This chart shows how each cognitive process voice may contribute to diverging and

converging activities. Use it as a guide to broaden your approach to stimulate creative thinking. < DIVERGE PERCEPTION Creative ideas > CONVERGE JUDGMENT Creative ideas

where they come from. Consider these: Extraverted Sensing (Se) using each of

how they are evaluated. How well do ideas meet these criteria? Extraverted Thinking (Te) Improve structures, efficiencies, measurements,

Change what is.

Give new uses and tactics for what is

and organizing principles.

contextually happening now, whats right in front of you.

Demonstrate excellence using

provable and profitable standards.

Introverted

Sensing

(Si)

Introverted Improve

Thinking

(Ti) of

Change what was.

understanding

how something works. Recombine elements. past

Provide categorical shifts.

clear

Extraverted iNtuiting (Ne)

Extraverted

Feeling

(Fe)

Change what might be.

Improve people.

harmony

among

Infer

new

patterns,

potentials, and spinoffs from the current situation.

Facilitate and harmony outcome.

cooperation interpersonal in the

Introverted

iNtuiting

(Ni)

Introverted

Feeling

(Fi)

Change the representation of the future.

Align with values, personal and corporate.

Integrate

insights

to

Demonstrate commitment to what is truly important to those impacted and involved.

form new concepts.

1. Idea Generation is often called the "fuzzy front end" of the NPD process

Ideas for new products can be obtained from basic research using a SWOT analysis (Strengths, Weaknesses, Opportunities & Threats), Market and consumer trends, company's R&Ddepartment, competitors, focus groups, employees, salespeople, corporate spies, trade shows, or Ethnographic discovery methods (searching for user patterns and habits) may also be used to get an insight into new product lines or product features.

Lots of ideas are being generated about the new product. Out of these ideas many ideas are being implemented. The ideas use to generate in many forms and their generating places are also various. Many reasons are responsible for generation of an idea.

Idea Generation or Brainstorming of new product, service, or store concepts idea generation techniques can begin when you have done your

OPPORTUNITY ANALYSIS to support your ideas in the Idea Screening Phase (shown in the next development step). 2. Idea Screening

The object is to eliminate unsound concepts prior to devoting resources to them.

The screeners should ask several questions:

Will the customer in the target market benefit from the product? What is the size and growth forecasts of the market segment/target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product? Will the product be profitable when manufactured and delivered to the customer at the target price?

Market positioning Strategy :3. In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for itsproduct, brand, or organization.And what adds value to the customers. 4. Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market. 5. De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market. 6. The original work on Positioning was consumer marketing oriented, and was not as much focused on the question relative to competitive products as much as it was focused on cutting through the ambient "noise" and establishing a moment of real contact with the intended recipient. In the classic example of Avisclaiming "No.2, We Try Harder", the point was to say something so shocking (it was by the

standards of the day) that it cleared space in your brain and made you forget all about who was #1, and not to make some philosophical point about being "hungry" for business. 7. The growth of high-tech marketing may have had much to do with the shift in definition towards competitive positioning. An important component of hi-tech marketing in the age of the world wide web is positioning in major search engines such as Google, Yahoo and Bing, which can be accomplished throughSearch Engine Optimization , also known as SEO. This is an especially important component when attempting to improve competitive positioning among a younger demographic, which tends to be web oriented in their shopping and purchasing habits as a result of being highly connected and involved in social media in general Definitions Although there are different definitions of Brand Positioning, probably the most common is: identifying a market niche for a brand, product or service utilizing traditional marketing placement strategies (i.e. price, promotion, distribution, packaging,and competition). Also positioning is defined as the way by which the marketers creates impression in the customers mind. Positioning is a concept in marketing which was first introduced by Jack Trout ( "Industrial Marketing" Magazine- June/1969) and then popularized by Al Ries and Jack Trout in their bestseller book "Positioning - The Battle for Your Mind." (McGraw-Hill 1981) This differs slightly from the context in which the term was first published in 1969 by Jack Trout in the paper "Positioning" is a game people play in todays me-too market place" in the publicationIndustrial Marketing, in which the case is made that the typical consumer is overwhelmed with unwanted advertising, and has a natural tendency to discard all information that does not immediately find a comfortable (and empty) slot in the consumers mind. It was then expanded into their ground-breaking first book, "Positioning: The Battle for Your Mind," in which they define Positioning as "an

organized system for finding a window in the mind. It is based on the concept that communication can only take place at the right time and under the right circumstances" (p. 19 of 2001 paperback edition). What most will agree on is that Positioning is something (perception) that happens in the minds of the target market. It is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. It will happen whether or not a company's management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions. Positioning Statement (As written in the highly revered book Crossing the Chasm. Copyright 1991, by Geoffrey Moore, HarperCollins Publishers) For (target customer) Who (statement of the need or opportunity) The (product name) is a (product category) That (statement of key benefit that is, compelling reason to buy) Unlike (primary competitive alternative) Our product (statement of primary differentiation) Differentiation in the context of business is what a company can hang its hat on that no other business can. For example, for some companies this is being the least expensive. Other companies credit themselves with being the first or the fastest. Whatever it is a business can use to stand out from the rest is called differentiation. Differentiation in todays over-crowded marketplace is a business imperative, not only in terms of a companys success, but also for its continuing survival.* [edit]Brand positioning process Effective Brand Positioning is contingent upon identifying and communicating a brand's uniqueness, differentiation and verifiable value. It is important to note that "me too" brand positioning contradicts the notion of differentiation and should be avoided at all costs. This type of copycat brand positioning only works if the business offers its solutions at a significant discount over the other competitor(s). Generally, the brand positioning process involves: 1. Identifying the business's direct competition (could include players that offer your product/service amongst a larger portfolio of solutions)

2. Understanding how each competitor is positioning their business today (e.g. claiming to be the fastest, cheapest, largest, the #1 provider, etc.) 3. Documenting the provider's own positioning as it exists today (may not exist if startup business) 4. Comparing the company's positioning to its competitors' to identify viable areas for differentiation 5. Developing a distinctive, differentiating and value-based brand positioning statement, key messages and customer value propositions. [edit]Product positioning process Generally, the product positioning process involves: 1. Defining the market in which the product or brand will compete (who the relevant buyers are) 2. Identifying the attributes (also called dimensions) that define the product 'space' 3. Collecting information from a sample of customers about their perceptions of each product on the relevant attributes 4. Determine each product's share of mind 5. Determine each product's current location in the product space 6. Determine the target market's preferred combination of attributes (referred to as an ideal vector) 7. Examine the fit between:

The position of your product The position of the ideal vector

[edit]Positioning concepts More generally, there are three types of positioning concepts: 1. Functional positions

Solve problems Provide benefits to customers Get favorable perception by investors (stock profile) and lenders

2. Symbolic positions

Self-image enhancement Ego identification Belongingness and social meaningfulness Affective fulfillment

3. Experiential positions

Provide sensory stimulation Provide cognitive stimulation

[edit]Measuring the positioning Positioning is facilitated by a graphical technique called perceptual mapping, various survey techniques, and statistical techniques like multi dimensional scaling, factor analysis, conjoint analysis, andlogit analysis. POSE Analysis[1] offers a somewhat more sophisticated approach than perceptual mapping and allows one to not only determine the positioning of a brand but also the overal strength of a brand's proposition. Repositioning a company In volatile markets, it can be necessary - even urgent - to reposition an entire company, rather than just a product line or brand. When Goldman Sachs and Morgan Stanley suddenly shifted from investment to commercial banks, for example, the expectations of investors, employees, clients and regulators all needed to shift, and each company needed to influence how these perceptions changed. Doing so involves repositioning the entire firm. This is especially true of small and medium-sized firms, many of which often lack strong brands for individual product lines. In a prolonged recession, business approaches that were effective during healthy economies often become ineffective and it becomes necessary to change a firm's positioning. Upscale restaurants, for example, which previously flourished on expense account dinners and corporate events, may for the first time need to stress value as a sale tool.

Repositioning a company involves more than a marketing challenge. It involves making hard decisions about how a market is shifting and how a firm's competitors will react. Often these decisions must be made without the benefit of sufficient information, simply because the definition of "volatility" is that change becomes difficult or impossible to predict. Positioning is however difficult to measure, in the sense that customer perception on a product may not tested on quantitative measures.

Seven Market Position Strategies The seven market position strategies described below are relevant to a large number of situations. 1. Monosegment positioning. As the name suggests, monosegment positioning involves developing a product-and-marketing program tailored to the preferences of a single market segment. Successful implementation of this strategy would give the brand an obvious advantage within the target segment, but would not generate many sales from customers in other segments. This strategy is best used with mass-marketing. 2. Multisegment positioning. This consists of positioning a product so as to attract consumers from different segments. This is an attractive strategy since it provides higher economies of scale, requires smaller investments, and avoids dispersion of managerial attention. It is particularly appropriate when individual segments are small, as is generally the case in the early stages of the product's life cycle. 3. Standby positioning. It may not be in the best economic interest of a firm to switch from a multisegment positioning strategy to a monosegment strategy (assuming the use of several brands, each positioned to serve the needs of only one segment) even if it increases

total market share. In such a case, the firm may decide to implement a monosegment positioning strategy only when forced to do so, In order to minimize response time, the firm prepares a standby plan specifying the product(s) and their attributes as well as details of the marketing program(s) that would be used to position the new product. 4. Imitative positioning. This is essentially the same as a head-on strategy where a new brand targets a position similar to that of an existing successful brand. It may be an appropriate strategy if the imitative firm has a distinctive advantage beyond positioning, such as better access to channels of distribution, a more effective salesforce, or substantially more money to spend on promotion, including price deals. 5. Anticipatory positioning. A firm may position a new brand in anticipation of the evolution of a segment's needs. This is particularly appropriate when the new brand is not expected to have a fast acceptance, and market share will build as the needs of consumers become more and more aligned with the benefits being offered. At its best, this strategy enables a firm to preempt a market position that may have a substantial long-term potential. At its worst, it may cause the firm to face a difficult economic situation for an extended period if the needs of a segment do not evolve as expected. 6. Adaptive positioning. This consists of periodically repositioning a brand to follow the evolution of the segment's needs. 7. Defensive positioning. When a firm occupies a strong position in a market segment with a single brand, it is vulnerable to imitative positioning strategies. The firm may preempt competitive strategies by introducing an additional brand in a similar position for the same segment. This will reduce immediate profitability, but it may allow the firm to better protect itself against competitors in the long term. For

example, Procter & Gamble has seven brands of laundry detergents, such as Tide and Bold, several of which occupy similar positions in consumers' minds. Market Positioning Strategy and How a Company Selects a Positioning

This blogpost by the experts ofAssignmenthelpexperts.comwould explain about what is market positioning and how a company select a particular positioning for its product.

Marketing positioning refers to a process through which marketers try to establish an image or identity in the minds of their target market in regard to their product, brand or company. It is an act of designing a firms product and image to attain a significant place in the minds of its target market (Cant, Strydom & Jooste, 2009). The aim of this positioning is to locate a specific brand in the minds of consumers so that potential benefits for firm can be maximized. An effective positioning helps a firm in its marketing strategy by elucidating the brands access, how its helps consumers in attaining specific goals and by explaining that how it will do so in a distinctive manner (Darling, 2001).

How

company

selects

particular

positioning

for

its

product

Marketing

positioning is

firms use of its own marketing strategy to establish and maintain a specific image in the minds of its target market consumers. Subsequent to the identification of a target market, marketers try to affect that how consumers see their product or brand and how that company is perceived in comparison to the existing competition (Darling, 2001). All marketers are aware with the fact that consumers formulate mental positions for specific products that are based on a single characteristic or imperfect experience.

In this regard, marketers carry out research to understand that how its consumers develop positions and what are the positions of their offerings among consumers. To develop a positioning, marketer of a product normally makes use of a three-step process. Initially, marketer selects a positioning concept that assist in finding out what is significant to consumers (Kurtz, MacKenzie & Snow, 2009). Like Dominos Pizza company knows that for its consumers delivery, speed and good quality is important so its positioning concept is A good, hot pizza delivered to your door within 30 minutes of ordering (Kotler & Armstrong, 2008).

Subsequent to the selection of a positioning statement, marketers design the dimension or attributes that can significantly express the position to the target market consumers. A product position can be expressed with the help of different product elements like its

appearance, brand name, slogan and the place where it is sold and as well as in several other ways. Like Benson & Hedges position its cigarettes in regard to taste and lightness whereas While Edgars is recognized for its high quality garments (Cant, Strydom & Jooste, 2009).

All these attributes and elements need to be adjusted or changed for developing a positioning strategyin accordance to changing consumer needs and competition. In addition to above discussed elements, a marketer can also position its product in regard to several alternatives (Kotler & Armstrong, 2008). One key alternative used in present is to position a product directly against the competition. For instance, Southwest Airlines has significantly positioned itself as the low-cost alternative in comparison to the major airlines (Peter & Donnelly, 2002).

Subsequent to positioning a product on specific attributes and aspects, it is essential to distinguish specific product or brand and create differential advantage that can be done on the basis of its price and quality (Hassan & Craft, 2005). Nowadays most of the hotel chains distinguish themselves from their competitors on the basis of price and quality offered. In present some dry cleaning stores promote their offerings on the basis of their use of environment friendly cleaning agents that depict that how a marketer can position its produc

Diffusion of innovations From Wikipedia, the free encyclopedia

The diffusion of innovations according to Rogers. With successive groups of consumers adopting the new technology (shown in blue), its market share (yellow) will eventually reach the saturation level. In mathematics the S curve is known as the logistic function. Diffusion of Innovations is a theory that seeks to explain how, why, and at what rate new ideas and technology spread through cultures.Everett Rogers, a professor of rural sociology, popularized the theory in his 1962 book Diffusion of Innovations. He said diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system. The origins of the diffusion of innovations theory are varied and span multiple disciplines. Contents [hide]

1 History 2 Elements 3 Decisions 4 Mechanism 5 Rates of adoption 6 Rogers' 5 Factors

7 Adopter categories 8 Heterophily and communication channels 9 Opinion leaders within a social system 10 Organizations 11 Consequences of adoption
o o

11.1 Public vs. Private 11.2 Benefits vs. Costs

12 Mathematical treatment 13 International Institute for Applied Systems Analysis (IIASA) 14 Diffusion data 15 Criticism 16 Electronic communication social networks 17 See also 18 References
o o

18.1 Notations 18.2 Notes

19 External links [edit]History Sociology

Portal

Theory History

Positivism Antipositivism Functionalism Conflict Middle-range Mathematical Critical theory Socialization theory

Structure and agency Research methods

Quantitative Qualitative Historical Computational Ethnographic Topics Subfields

Cities Class Crime Culture Deviance Demography Education Economy Environment Family Gender Health Industry Internet Knowledge Law Medicine Politics Mobility Race and ethnicity Rationalization Religion Science Secularization Social networks

Social psychology Stratification Categories Lists

Journals Sociologists Article index Outline

e The concept was first studied by the French sociologist Gabriel Tarde (1890) and by German and Austrian anthropologists such as Friedrich Ratzel and Leo Frobenius.[1] Its basic epidemiological or internal-influence form was formulated by H. Earl Pemberton,[2] who provided examples of institutional diffusion such as postage stamps and compulsory school laws. In 1962 Everett Rogers, a professor of rural sociology published Diffusion of Innovations. In the book, Rogers synthesized research from over 508 diffusion studies and produced a theory for the adoption of innovations among individuals and organizations. The book proposed 4 main elements that influence the spread of a new idea: the innovation, communication channels, time, and a social system. That is, diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system. Individuals progress through 5 stages: knowledge, persuasion, decision, implementation, and confirmation. If the innovation is adopted, it spreads via various communication channels. During communication, the idea is rarely evaluated from a scientific standpoint; rather, subjective perceptions of the innovation influence diffusion. The process occurs over time. Finally, social systems determine diffusion, norms on diffusion, roles of opinion leaders and change agents, types of innovation decisions, and innovation consequences. To use Rogers model in health requires us to assume that the innovation in classical diffusion theory is equivalent to scientific research findings in the context of practice, an assumption that has not been rigorously tested.[3] The origins of the diffusion of innovations theory are varied and span across multiple disciplines. Rogers identifies six main traditions that impacted diffusion

research: anthropology,

early

sociology, rural

sociology, education,

industrial,

and medical sociology. The diffusion of innovation theory has been largely influenced by the work of rural sociologists.[4] [edit]Elements The key elements in diffusion research are:

Element

Definition

Innovation

Rogers defines an innovation as "an idea, practice, or object that is perceived as new by an individual or other unit of adoption". [5]

Communication channels

A communication channel is "the means by which messages get from one individual to another".[6]

"The innovation-decision period is the length of time required to pass Time through the innovation-decision process".[7] "Rate of adoption is the relative speed with which an innovation is adopted by members of a social system".[8]

Social system

"A social system is defined as a set of interrelated units that are engaged in joint problem solving to accomplish a common goal". [9]

[edit]Decisions Two factors determine what type a particular decision is :

Whether the decision is made freely and implemented voluntarily, Who makes the decision.

Based on these considerations, three types of innovation-decisions have been identified within diffusion of innovations.

Type

Definition

Optional Decision

Innovation- This decision is made by an individual who is in some way distinguished from others in a social system.

Collective Innovation- This decision is made collectively by all individuals of a social Decision system.

Authority Innovation- This decision is made for the entire social system by few Decision [edit]Mechanism Diffusion of an innovation occurs through a fivestep process. This process is a type of decision-making. It occurs through a series of communication channels over a period of time among the members of a similar social system. Ryan and Gross first indicated the identification of adoption as a process in 1943 (Rogers 1962, p. 79). Rogers categorizes the five stages (steps) as: awareness, interest, evaluation, trial, and adoption. An individual might reject an innovation at any time during or after the adoption process. In later editions of the Diffusion of Innovations Rogers changes the terminology of the five stages to: knowledge, persuasion, decision, implementation, and confirmation. However the descriptions of the categories have remained similar throughout the editions. individuals in positions of influence or power.

Five stages of the adoption process

Stage

Definition

In this stage the individual is first exposed to an innovation but lacks Knowledge information about the innovation. During this stage of the process the individual has not been inspired to find more information about the innovation.

Persuasion

In this stage the individual is interested in the innovation and actively seeks information/detail about the innovation.

In this stage the individual takes the concept of the change and weighs the advantages/disadvantages of using the innovation and decides Decision whether to adopt or reject the innovation. Due to the individualistic nature of this stage Rogers notes that it is the most difficult stage to acquire empirical evidence (Rogers 1964, p. 83).

In this stage the individual employs the innovation to a varying degree Implementation depending on the situation. During this stage the individual determines the usefulness of the innovation and may search for further information about it.

Although the name of this stage may be misleading, in this stage the Confirmation individual finalises his/her decision to continue using the innovation and may end up using it to its fullest potential. [edit]Rates of adoption The rate of adoption is defined as the relative speed with which members of a social system adopt an innovation. It is usually measured by the length of time required for a certain percentage of the members of a social system to adopt an innovation (Rogers 1962, p. 134). The rates of adoption for innovations are determined by an individuals adopter category. In general, individuals who first adopt an innovation require a shorter adoption period (adoption process) than late adopters. Within the rate of adoption there is a point at which an innovation reaches critical mass. This is a point in time within the adoption curve that enough individuals have adopted an innovation in order that the continued adoption of the innovation is self-sustaining. In describing how an innovation reaches critical mass, Rogers outlines several strategies in order to help an innovation reach this stage. These strategies are: have an innovation adopted by a highly respected individual within a social network, creating an instinctive desire for a specific innovation. Inject an innovation into a group of individuals who would readily use an innovation, and provide positive reactions and benefits for early adopters of an innovation. [edit]Rogers' 5 Factors Rogers defines several intrinsic characteristics of innovations that influence an individuals decision to adopt or reject an innovation.

Factor

Definition

Relative Advantage

How improved an innovation is over the previous generation.

Compatibility

The level of compatibility that an innovation has to be assimilated into an individuals life.

Complexity orSimplicity

If the innovation is too difficult to use an individual will not likely adopt it.

How easily an innovation may be experimented with as it is Trialability being adopted. If a user has a hard time using and trying an innovation this individual will be less likely to adopt it.

The extent that an innovation is visible to others. An innovation Observability that is more visible will drive communication among the individuals peers and personal networks and will in turn create more positive or negative reactions. [edit]Adopter categories Rogers defines an adopter category as a classification of individuals within a social system on the basis of innovativeness. In the book Diffusion of Innovations, Rogers suggests a total of five categories of adopters in order to standardize the usage of adopter categories in diffusion research. The adoption of an innovation follows an S curve when plotted over a length of time.[10] The categories of adopters are: innovators, early adopters, early majority, late majority, and laggards (Rogers 1962, p. 150)

Adopter category

Definition

Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have Innovators great financial lucidity, very social and have closest contact to scientific sources and interaction with other innovators. Risk tolerance has them adopting technologies which may ultimately fail. Financial resources help absorb these failures. (Rogers 1962 5th ed, p. 282)

This is the second fastest category of individuals who adopt an innovation. These individuals have the highest degree of opinion leadership among the other adopter categories. Early adopters are typically younger in age, Early Adopters have a higher social status, have more financial lucidity, advanced education, and are more socially forward than late adopters. More discrete in adoption choices than innovators. Realize judicious choice of adoption will help them maintain central communication position (Rogers 1962 5th ed, p. 283).

Individuals in this category adopt an innovation after a varying degree of time. This time of adoption is significantly longer than the innovators and Early Majority early adopters. Early Majority tend to be slower in the adoption process, have above average social status, contact with early adopters, and seldom hold positions of opinion leadership in a system (Rogers 1962 5th ed, p. 283)

Late Majority

Individuals in this category will adopt an innovation after the average member of the society. These individuals approach an innovation with a

high degree of skepticism and after the majority of society has adopted the innovation. Late Majority are typically skeptical about an innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership.

Individuals in this category are the last to adopt an innovation. Unlike some of the previous categories, individuals in this category show little to no opinion leadership. These individuals typically have an aversion to changeLaggards agents and tend to be advanced in age. Laggards typically tend to be focused on traditions, likely to have lowest social status, lowest financial fluidity, be oldest of all other adopters, in contact with only family and close friends, very little to no opinion leadership.

Adoption is a process whereby a person assumes the parenting for another and, in so doing, permanently transfers all rights and responsibilities from the original parent or parents. Unlike guardianship or other systems designed for the care of the young, adoption is intended to effect a permanent change in status and as such requires societal recognition, either through legal or religious sanction. Historically some societies have enacted specific laws governing adoption whereas others have endeavored to achieve adoption through less formal means, notably via contracts that specified inheritancerights and parental responsibilities. Modern systems of adoption, arising in the 20th century, tend to be governed by

comprehensive statutes andregulations. Adoption has a long history in the Western world, closely tied with the legacy of the Roman Empire and the Catholic Church. Its use has changed considerably over the centuries with its focus shifting from adult adoption and inheritance issues toward children and family creation involving the child and its structure moving from a recognition of continuity between the adopted and family that is toward allowing relationships of lessened intensity

Innovation is

the

creation

of

better or ideas that differs

or are

more accepted that

effective products, processes, services, technologies, by markets, governments, andsociety. Innovation

from invention in

innovation refers to the use of a new idea or method, whereas invention refers more directly to the creation of the idea or method itself. Etymology The word innovation derives from the Latin word innovatus, which is the noun form of innovare "to renew or change," stemming from in"into" +novus"new". Diffusion of innovation research was first started in 1903 by seminal researcher Gabriel Tarde, who first plotted the S-shaped diffusion curve. Tarde (1903) defined the innovation-decision process as a series of steps that includes:[1] 1. First knowledge 2. Forming an attitude 3. A decision to adopt or reject 4. Implementation and use 5. Confirmation of the decision [edit]Inter-disciplinary views [edit]Society Due to its widespread effect, innovation is an important topic in the study of economics, business, entrepreneurship, design, technology, sociology, and engineering. In society, innovation aids incomfort, convenience, and efficiency in everyday life. For instance, the benchmarks in railroad equipment

and infrastructure added to greater safety, maintenance, speed, and weight capacity for passenger services. These innovations included wood to steel cars, iron to steel rails, stove-heated to steam-heated cars, gas lighting to electric lighting, diesel-powered to electric-diesel locomotives. By mid-20th century, trains were making longer, more comfortable, and faster trips at lower costs for passengers.[2] Other areas that add to everyday quality of life include: the innovations to the light bulb

from incandescent to compact fluorescent and LEDs which offer longer-lasting, less

energy-intensive, brighter technology; adoption of modems to cellular phones, paving the way to smartphoneswhich meets anyones internet needs at any time or place; cathode-ray tube to flat-screen LCD televisions and others. [edit]Business and economics Main article: innovation economics In business and economics, innovation is the catalyst to growth. With rapid advancements in transportation and communications over the past few decades, the old world concepts of factor endowments and comparative advantage which focused on an areas unique inputs are outmoded Porter points for todays global economy. or Now, the

as Harvard economist Michael

out competitive

advantage,

productive use of any inputs, which requires continual innovation is paramount for any specialized firm to succeed.[3] Economist Joseph Schumpeter, who contributed greatly to the study of innovation, argued that industries must incessantly revolutionize the economic structure from within, that is innovate with better or more effective processes and products, such as the shift from the craft shop to factory. He famously asserted that creative destruction is the essential fact about capitalism.[4] In

addition, entrepreneurs continuously look for better ways to satisfy their consumer base with improved quality, durability, service, and price which come to fruition in innovation with advanced technologies and organizational strategies.
[5]

One prime example is the explosive boom of Silicon startups out of the Stanford Industrial Park. In 1957, dissatisfied employees of Shockley Semiconductor, the company of Nobel laureate and co-inventor of the transistor William Shockley, left to form an independent firm, Fairchild Semiconductor. After several years, Fairchild developed into a formidable presence in the sector. Eventually, these founders left to start their own companies based on their own, unique, latest ideas, and then leading employees started their own firms. Over the next 20 years, this snowball process launched the momentous startup company explosion of information technology firms. Essentially, Silicon Valley began as 65 new enterprises born out of Shockleys eight former employees. [6]

[edit]Organizations In the organizational context, innovation may be linked to positive changes in efficiency, productivity, quality, competitiveness, market share, and others. All organizations can innovate, including for example hospitals[7], universities, and local governments. For instance, former Mayor Martin OMalley pushed the City of Baltimore to use CitiStat, a performance-measurement data and management system that allows city officials to maintain statistics on crime trends to condition of potholes. This system aids in better evaluation of policies and procedures with accountability and efficiency in terms of time and money. In its first year, CitiStat saved the city $13.2 million.[8] Even mass transit systems have innovated with hybrid bus fleets to real-time tracking at bus stands. In addition, the growing use of mobile data terminals in vehicles that serves as communication hubs between vehicles and control center automatically send data on location, passenger counts, engine performance, mileage and other information. This tool helps to deliver and manage transportation systems.[9] Still other innovative strategies include hospitals digitizing medical information

in electronic medical records; HUDs HOPE VI initiatives to eradicate citys severely distressed public housing torevitalized, mixed income environments; the Harlem Childrens Zone that uses a community-based approach to educate local area children; and EPAs brownfield grants that aids in turning overbrownfields for environmental protection, green spaces, community and commercial development. [edit]Processes [edit]Sources of innovation There are several sources of innovation. According to the Peter F. Drucker the general sources of innovations are different changes in industry structure, in market structure, in local and global demographics, in human perception, mood and meaning, in the amount of already available scientific knowledge, etc. Also, internet research, developing of people skills, language development, cultural background, skype, facebook, etc. In the simplest linear model of innovation the traditionally recognized source is manufacturer innovation. This is where an agent (person or business) innovates in order to sell the innovation. Another source of innovation, only now becoming widely recognized, is end-

user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs. MIT economist Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, Sources of Innovation.[10] In addition, the famous robotics engineer Joseph F. Engelberger asserts that innovations require only three things: 1. A recognized need, 2. Competent people with relevant technology, and 3. Financial support. [11] Innovation by businesses is achieved in many ways, with much attention now given to formal research and development (R&D) for "breakthrough innovations." R&D help spur on patents and other scientific innovations that leads to productive growth in such areas as industry, medicine, engineering, and government.[12] Yet, innovations can be developed by less formal on-the-job modifications of practice, through exchange and combination of professional experience and by many other routes. The more radical and revolutionary innovations tend to emerge from R&D, while more incremental innovations may emerge from practice but there are many exceptions to each of these trends. An important innovation factor includes customers buying products or using services. As a result, firms may incorporate users in focus groups (user centred approach), work closely with so called lead users (lead user approach) or users might adapt their products themselves. U-STIR, employs a such project to innovate Europes this user workshops. [13] Regarding

surface transportation system,

innovation, a great deal of innovation is done by those actually implementing and using technologies and products as part of their normal activities. In most of the times user innovators have some personal record motivating them. Sometimes user-innovators may become entrepreneurs, selling their product, they may choose to trade their innovation in exchange for other innovations, or they may be adopted by their suppliers. Nowadays, they may also choose to freely reveal their innovations, using methods like open source. In such networks of innovation the users or communities of users can further develop technologies and reinvent their social meaning.[14]

[edit]Value of experimentation When an innovative idea requires a better business model, or radically redesigns the delivery of value to focus on the customer, a real world experimentation approach increases the chances of market success. Potentially innovative business models and customer experiences can't be tested through traditional market research methods. Pilot programs for new innovations set the path in stone too early thus increasing the costs of failure. On the other hand, the good news is that recent years have seen considerable progress in identifying important key factors/principles or variables that affect the probability of success in innovation. Of course, building successful businesses is such a complicated process, involving subtle interdependencies among so many variables in dynamic systems, that it is unlikely to ever be made perfectly predictable. But the more business can master the variables and experiment, the more they will be able to create new companies, products, processes and services that achieve what they hope to achieve.[15][16] [edit]Goals/failures Programs of organizational innovation are typically tightly linked to organizational goals and objectives, to the business plan, and to market competitive positioning. One driver for innovation programs in corporations is to achieve growth objectives. As Davila et al. (2006) notes, "Companies cannot grow through cost reduction and reengineering alone... Innovation is the key element in providing aggressive top-line growth, and for increasing bottom-line results." [17] One survey across a large number of manufacturing and services organizations found, ranked in decreasing order of popularity, that systematic programs of organizational innovation are most frequently driven by: Improved quality, Creation of new markets, Extension of the product, range, Reduced labor costs, Improved production processes, Reduced materials, Reduced environmental damage, Replacement of products/services, Reduced energy consumption, Conformance to regulations.[17] These goals vary between improvements to products, processes and services and dispel a popular myth that innovation deals mainly with new product development. Most of the goals could apply to any organisation be it a manufacturing facility, marketing

firm, hospital or local government. Whether innovation goals are successfully achieved or otherwise depends greatly on the environment prevailing in the firm. [18] Conversely, failure can develop in programs of innovations. The causes of failure have been widely researched and can vary considerably. Some causes will be external to the organization and outside its influence of control. Others will be internal and ultimately within the control of the organization. Internal causes of failure can be divided into causes associated with the cultural infrastructure and causes associated with the innovation process itself. Common causes of failure within the innovation process in most organisations can be distilled into five types: Poor goal definition, Poor alignment of actions to goals, Poor participation in teams, Poor monitoring of results, Poor communication and access to information. [19] Diffusion describes the spread of particles through random motion from regions of higher concentration to regions of lower concentration. The time dependence of the statistical distribution in space is given by the diffusion equation. The concept of diffusion is tied to that of mass transfer driven by a concentration gradient. Diffusion is invoked in the social sciences to describe the spread of ideas.