Schiffman Diffusion of Innovation

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Consumers and the Diffusion of Innovations CHAPTER FOURTEEN

Transcript of Schiffman Diffusion of Innovation

Page 1: Schiffman Diffusion of Innovation

Consumers and the Diffusion of

Innovations

CHAPTERFOURTEEN

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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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New Flavor

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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

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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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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 InnovationProduct Characteristics

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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

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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?

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Product Number of years

Pager 41

Telephone 38

Cable television 25

Fax machine 22

VCR 9

Cell pone 9

PC 7

Time Required for Electronic Products to Penetrate 10 percent of UK market

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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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NAME OF STAGE

WHAT HAPPENS DURING THIS STAGE

EXAMPLE

Awareness Consumer is first exposed to the product innovation.

Eric sees an ad for a 23-inch thin LCD HDTV in a magazine he is reading.

Interest Consumer is interested in the product and searches for additional information.

Eric reads about the HDTV set on the manufacturer’s Web site and then goes to an electronics store near his apartment and has a sales person show him the unit.

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

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.

Stages in Adoption Process Table 14.4

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NAME OF STAGE

WHAT HAPPENS DURING THIS STAGE

EXAMPLE

Trial Consumer uses the product on a limited basis

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 decides to use the product on a full, rather than a limited basis – if unfavorable, the consumer decides to reject it.

Eric loves his new HDTV set and expects many year of service from it.

Stages in Adoption Process Table 14.4 (continued)

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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)

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Characteristic Innovator NoninnovatorSocial Characteristics

Social integration More Less

Social striving More Less

Group memberships More Less

Demographic Characteristics

Age Younger Older

Income Higher Lower

Education More Less

Occupational status Higher Lower

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Are There GeneralizedConsumer Innovators?

• Domain-specific vs. global innovativeness• Technology and innovators

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