CHAPTER FOURTEEN

Consumers and the Diffusion of Innovations

Learning Objectives
1. To Understand the Twofold Process of the Spread and Acceptance of Innovative Products and Services Within a Social System. 2. To Understand How Innovative Products and Services Spread (or Fail to Spread) Within a Social System. 3. To Understand How Individual Consumers Decide Whether or Not to Try and Adopt a Particularly Innovative Product or Service. 4. To Understand the Personal Characteristics of Innovators.
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What Is Shown or Stated in This Ad That Is Designed to Attract Consumers to This New Product?

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Chapter Fourteen Slide 3

New Flavor

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Chapter Fourteen Slide 4

Diffusions of Innovation
How are new products and services accepted?

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Diffusion Process

The process by which the acceptance of an innovation is spread by communication to members of a social system over a period of time.

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Elements of the Diffusion Process

The Innovation

The Channels of Communication

The Social System

Time
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The Innovation
Firm-oriented definitions
Product is new to the company

Product-oriented definitions
Continuous Dynamically continuous Discontinuous

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What Kind of Innovation Is Shown Here, and Why?

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Chapter Fourteen Slide 9

Continuous Innovation The Product is Modified

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The Innovation
Market-oriented definitions
Based on consumer exposure

Consumer-oriented definitions
Consumer judges it as new

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The Innovation Product Characteristics

Relative Advantage Compatibility Complexity Trialability Observability
Degree to which consumers consider it superior to existing substitutes Degree to which consumers feel it is consistent with their present needs, values, and practices The degree to which it is difficult to understand or use The degree to which it can be tried on a limited basis The degree to which its benefits can be observed, imagined, or described

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Developing a Marketing Strategy for Diffusing Innovations - Figure 14.4

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Channels of Communication
Channels of communication
Marketer to consumer Consumer to consumer Influential impersonal sources

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The Social System

Modern social systems accept more innovation due to their:
Positive attitude toward change Advanced technology and skilled labor force Respect for education and science Emphasis on rational and ordered social relationships An outreach perspective where members interact with outsiders A system where members can see themselves in different roles
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Time
Purchase Time Adopter Categories Rate of Adoption

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Adopter Categories
Category 1 Innovators
Category 2 Early adopters Category 3 Early Majority Category 4 Late Majority Category 5 Laggards

First to buy the mini netbook

Will buy mini netbook shortly after its introducti on

Members of the 1st of the mass market who would purchase the mini netbook

Second half of the mass market who would purchase the mature mini netbook

Very last to purchase the mini netbook, if at all

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Diffusion Curves for Adopter Categories Figure 14.5

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Discussion Question
Which adopter category are you? Does it differ with different product categories? How about your parents, what category are they? Is age a factor in innovation behavior?

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Rate of Adoption
How long does it take a new product to be adopted by the members of a social system?
Product Pager Telephone Number of years 41 38

Cable television
Fax machine

25
22

VCR
Cell pone

9
9

PC

Time Required for Electronic Products to Penetrate 10 percent of UK market Table 14.3
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Adoption Process

The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.

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Chapter Fourteen Slide 21

Stages in Adoption Process Table 14.4

NAME OF STAGE WHAT HAPPENS DURING THIS STAGE Awareness EXAMPLE Consumer is first exposed to the Eric sees an ad for a 23-inch thin LCD product innovation. HDTV in a magazine he is reading. Consumer is interested in the product and searches for additional information. Eric reads about the HDTV set on the manufacturers Web site and then goes to an electronics store near his apartment and has a sales person show him the unit. After talking to a knowledgeable friend, Eric decides that his TV will fit nicely on top of the chest in his bedroom. He also calls his cable company and finds out that he can exchange his standard cable box at no cost for an HDTV cable box.
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Interest

Evaluation

Consumer decides whether or not to believe that this product or service will satisfy the need a kind of mental trial.

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Stages in Adoption Process Table 14.4 (continued)

NAME OF STAGE WHAT HAPPENS DURING THIS STAGE
Trial Consumer uses the product on a limited basis

EXAMPLE

Since the HDTV set cannot be tried like a small tube of toothpaste, Eric buys the TV at this local electronics store on his way home from work. The store offers a 14-day full refund policy.

Adoption (Rejection)

If trial is favorable, consumer Eric loves his new HDTV set and expects decides to use the product on a many year of service from it. full, rather than a limited basis if unfavorable, the consumer decides to reject it.

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Importance of Information Sources Figure 14.8

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The Consumer Innovator

The earliest purchasers of a new product Tend to have higher level of:
Education Social interaction Opinion leadership Venturesomeness Social Status

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Discussion Questions
Who do you know, personally, that you would consider an innovator? What is it about that person that makes them an innovator? What personality traits might they have which prompt their status?

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Cosmopolitan and Non Cosmopolitan Types - Figure 14.9

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The Consumer Innovator

Interest in product category Opinion leader

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Discussion Questions
Who are the most influential opinion leaders for college-aged people? Why are they influential?

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The Consumer Innovator

Personality traits
Perceived risk and venturesomeness Purchase and consumption characteristics Media habits

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The Consumer Innovator

Social characteristics Demographic characteristics

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Comparative Profiles of the Consumer Innovator and Noninnovator - Table 14.5 (excerpt)
Characteristic
Social Characteristics Social integration Social striving Group memberships Demographic Characteristics Age Income Education Occupational status Younger Higher More Higher Older Lower Less Lower
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Innovator
More More More

Noninnovator
Less Less Less

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Are There Generalized Consumer Innovators?

Domain-specific vs. global innovativeness Technology and innovators

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Chapter Fourteen Slide 33

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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