NEW PRODUCT ADOPTION AND DIFFUSION OF INNOVATION (Adoption Theory)

MMII

What is Innovation?
an idea, practice or object that is perceived as new a technological innovation which can be hard ware consisting of tool that embodies the technology as a material or physical object , or software consisting of information base for the tool

 Diffusion is the process by which an innovation is communicated through certain channels over time.

New Product Adoption Theory

Adoption process The consumer decision stages that lead to innovation acceptance/rejection

The Adoption Decision Process

How an individual consumer acts . . .

KNOWLEDGE PERSUASION DECISION

CONFIRMATION

IMPLEMENTATIONS

Everett M. Rogers' theory

Research shows that consumers differ in how quickly they decide to adopt (buy) a product after they become aware of it. Diffusion of Innovation, explores what type of person, adopts products at different stages of the product life cycle. Under Rogers' Diffusion of Innovation, a product will encounter five types of purchasers as it moves through its life cycle.

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.

Diffusion Process, Adopter Categories

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

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 (-)

Communication Flows
Two-Step Flow of Communication
COMPANY MESSAGE

OPINION LEADERS

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.

influence.

Actively seeks

Two-Step Flow of Communication and Adopter Categories

Innovators

Early adopters

Early majority
Potential target audiences

Company Message from mass media

Product Category Opinion leader(s)

Opinion recipient 1 Opinion recipient 2 Opinion recipient 3

Characteristics of Opinion Leaders in 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