Download - NEW PRODUCT ADOPTION AND DIFFUSION PROCESS
NEW PRODUCT ADOPTION AND DIFFUSION PROCESS
(Adoption Theory)
The Adoption Decision ProcessHow an individual consumer acts . . .
KNOWLEDGE PERSUASION DECISION
IMPLEMENTATIONSCONFIRMATION
TIME
New Product Adoption Theory
ADOPTION PROCESS - The consumer decision stages that lead to
innovation acceptance/rejection - A micro process process that focuses on
internal forces of the consumer* Intra Personal (Psych) Influences* Inter Personal (Social) Influences* Product Selection Criteria
Influences on the Rate of Adoption
Relative advantage How much better than existing alternatives?
Compatibility Fit current values and experiences?
Complexity Ease of understanding?
Divisibility Can it be tried on a limited basis?
Communicability Can the innovation be observed and communicated?
New Product Diffusion Theory
DIFFUSION PROCESS.
- the spread of an innovation from its.
source to the ultimate consumer.
- a macro process that focuses on external.
forces on the consumer (change agents,
channels of information, types of.
information).
- occurs in a social system (a target.
audience, community, etc.
THE DIFFUSION PROCESSHow different segments of the market act
PER CENT OF TOTAL MARKET
TIME
INN
OV
AT
IOR
S-2
.5%
EA
RL
Y A
DO
PT
ER
S-1
3.5%
EA
RL
Y M
AJO
RIT
Y-3
4%
LA
TE
MA
JOR
ITY
-34%
LA
GG
AR
DS
(IN
CL
UD
ING
NO
NA
DO
PT
ER
S)-
16%
is influenced by…
* Competitive Intensity (+)
* Good Supplier Reputation (+)
* Standardization of Technology (+)
* Vertical ( ) Channel Coordination (+)
* Resource Commitments (+)
Speed of Diffusion
2.5% Innovators
13.5% Early Adopters
34% Early Majority34% Late Majority
Diffusion Process• Product Adopter Categories
Diffusion Process,Adopter Categories
INNOVATORS - are first to buy and typically described as venturesome, younger, well educated, financially stable, and willing to take risks.
EARLY ADOPTERS - are local opinion
leaders who read magazines and who are integrate into the social system more than the average consumer.
EARLY MAJORITY - solid, middle-class consumers who are more deliberate and cautious
LATE MAJORITY - described as older, more conservative, traditional, and skeptical of new products
Diffusion Process,Adopter Categories
Laggards Resist change Conservative Like tradition Often older & lower in
socioeconomic status
Nonadopters Refuse to change
Diffusion Process,Adopter Categories
Life-Style Characteristics of Innovators and Non innovators
Characteristics Innovators Non innovators Product Interest MORE LESS Opinion Leadership MORE LESS Personality: Dogmatism OPEN-MINDED CLOSE-MINDED Social Character INNER-DIRECT OTHER-DIRECT Category Width BROAD NARROW Venturesome ness MORE LESS Perceived Risk LESS MORE
Life-Style Characteristics of Innovators and Noninnovators
Characteristics Innovators Noninnovators Purchase and Consumption Traits:
Brand Loyalty LESS MORE
Deal Proneness MORE LESS
Usage MORE LESS Media Habits:
Magazine Exposure MORE LESS
Television LESS MORE
Specialized Magazine MORE LESS
Life-Style Characteristics of Innovators and Noninnovators
Characteristics Innovators Non innovators Demographic Characteristics: Age YOUNGER OLDER
Income MORE LESS Education MORE LESS Occupational Status MORE LESS
Social Characteristics: Social Integration MORE LESS Group Members MORE LESS
Characteristics of New Product Success
RELATIVE ADVANTAGE - is an enhanced bundle of benefits or clear-cut advantages over existing offerings (+)
Compatibility with existing habits, values and consumption behavior, similar usage as existing products
Characteristics of New Product Success
Trial ability…experience or see the newness Easily tested Low risk Inexpensive No special equipment Free samples or coupons
Characteristics of New Product Success
OBSERVABILITY - is the opportunity for buyers to see the newness (+)
COMPLEXITY - is a disadvantage for new products which slows diffusion and may be offset by simplifying usage or through extensive education (-)
Characteristics of New Product Success
Why Some New Products Fail and Others Succeed
Failure to Meet Customer Needs Poor Timing Market Conditions Ineffective or Inconsistent Branding Technical or Design Problems Overestimation of Market Size Poor Promotion Insufficient Distribution
80 to 90% Fail. Why?
Communication Flows
Two-Step Flow of Communication
COMPANYMESSAGE
OPINIONLEADERS
TARGET AUDIENCES
Positions of Status
OPINION LEADER - one who occupies a position of informal influences over the attitudes and overt behavior of others. Opinion leadership is earned not assumed.
CHANGE AGENT - one who occupies a professional position of formal influence associated with a given role of status. Change agent status is assumed, not necessarily earned
FOLLOWER - not a “passive patsy.” Actively seeks influence.
Two-Step Flow of Communication and Adopter Categories
Earlyadopters
Innovators Earlymajority
Company Messagefrom mass media
Product CategoryOpinionleader(s)
Potential targetaudiences
Opinion recipient 1Opinion recipient 2Opinion recipient 3
Characteristics of Opinion Leadersin contrast with their followers
More like, than unlike, their followers More technically competent More socially accessible More cosmopolitan More innovative (receptive to change) Higher media exposure (more informed) Higher social status More conformist with social norms and values