Diffusion of Innovation in Consumer Behaviour

Innovation

An innovation is an idea, practice, or product, perceived to be new by an individual or a group .A product is said to be an innovation when it is perceived by the potential market as a change, and not by a technological change brought in it.
New products or new services have been classified as under:
Firm Oriented
If the product is new to the company, it is said to be new.
Product Oriented
It focuses on the features inherent in the product and the effect it has on the consumer’established usage pattern. This leads to three types of product innovation continuous,dynamically continuous, discontinuous innovation.
Market Oriented
It stresses on how much exposure consumers have on the new product:
(i) It can be new if purchased by a small percentage of customers in the market.
(ii) It is new if it has been for a relatively short period in the market.
Consumer-oriented Items
It is based on the consumer’s perception of the product. If he judges it to be new. For example,the Polaroid camera can be considered as an innovation, because a whole lot of people who constitute the market, use it, and can get photographs in minutes. Microwave oven for example is an innovation. It does wonders for cooking and warming of foods. Similarly, mobile phones (cell phones) can be considered an innovation. Not only are they popular, but they were unthinkable a decade or two back. Innovation can be of various degrees. For instance, a microwave oven is more of an innovation than sugar-free cola. In innovation, behavioral change stake place. These behavioral changes can be small, modest, or large. The innovation can be continuous or, dynamically continuous or, discontinuous.

Continuous innovation
In this type of innovation, minor behavioral changes are required for adoption of the product,from ordinary cookware to Teflon-coated cookware, where minor behavioral changes are required.
A modified product, e.g., a new scuba watch, new car model or, low-fat yogurt, etc.
Dynamically continuous innovation
Communicator behavioral changes are required for the adoption of the product. Products in this category include compact disk players, cellular phones, erasable ink pen and disposable diapers.

TV has led to related innovation

Discontinuous innovation
Here the adoption of the product requires major behavioral changes and the product is new,and requires high involvements of the user, along with extended decision-making, which consists of the following steps:

Stages in innovation

• Innovators

• Early adopters

• Early majority

• Late majority

• Laggards.

Innovators (2.5%) – Innovators are the first individuals to adopt an innovation. Innovators are willing to take risks, youngest in age, have the highest social class, have 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)

Early Adopters (13.5%) – 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, 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).

Early Majority (34%) – 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 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 (34%) – 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.

Laggards (16%) – 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 change-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.

 

Diffusion of Innovation in Consumer Behaviour

Diffusion is process by which a new product is accepted and spreads through a market. It is group phenomenon, in which first an idea is perceived, then it spreads throughout the market, and then individuals and groups adopt the product.

Definition
Diffusion is a process by which the acceptance of an innovation/new product, a new idea, a new service, is spread by communication to members of a social system over a period of time.

DIFFUSION PROCESS
Diffusion process is the manner in which innovations spread throughout the market. Spread refers to the purchase behavior where a product is purchased with some continuing regularity. Spread of innovation can be of three types as shown in the Figure below:

The diffusion process follows a similar pattern, overtime, irrespective of the social group or innovation. The typical diffusion process shows a slow growth or adoption. It later rises rapidly, and then a period of slow growth is noticed. In fast diffusion process, the product clicks immediately. The spread of innovation is very quick. People patronize the product immediately, and later on there is again slow diffusion.

In slow diffusion process, the product takes a lot of time to diffuse or spread, and the consumer follows a pattern of adoption slowly by getting acquainted with the product.

Stages of Diffusion Process

(1) Knowledge:

Consumer is exposed to the innovations existence and gains some understanding of how it functions. In this stage, consumers are aware of the product but have made no judgment concerning the relevance of the product to a problem or recognized need. Knowledge of a new product is considered to be result selective perception and is more likely to occur through the mass media than in late stages which are more influenced by opinion leaders.

(2) Persuasion:

In this stage, usually attitude formation takes place that is consumer forms favorable or unfavorable attitudes toward the innovation. Consumer may mentally imagine how satisfactory new product might be in use, i.e., “vicarious trial” of the product in consumer’s mind.

It is also considered as the evaluation of consequences of using the product. This means consumers weigh the potential gains from adopting the product against the potential losses of switching from the product now used.

A person may seek out new stories, pay particular attention to advertising for the product, subscribe to product rating services, talk to experts in that product category etc. This is basically done to reduce perceived risk in adopting new products. Each of the above information search and evaluation strategies has an economic and/or psychological cost.

Many persuasion methods are used by marketers. One of the common arid effective methods is catalogues, specially used for new products because this provides more information than the typical retail setting. For example – marketer can show the advantages ones present solutions of hair problems.

(3) Decision:

Consumer engages in activities that lead to a choice to adopt or reject the innovation (i.e., adoption or rejection). Adoption can be defined as a decision to make full use of an innovation as the best course of action. This means continued use of the product unless situational variables (lack of availability, or money etc.) prevent usage. Rejection means not to adopt an innovation.

There may be some persons who first consider adopting an innovation or at least give a trial, but then deciding not to adopt it. This is called an active rejection. Others never consider the use of the innovation, known as passive rejection.

(4) Implementation:

Implementation means consumer, puts the innovation into use. Until this stage, the process is a mental exercise, but in this stage behavioral change is required Marketing plan is the determinant of whether a good product has been communicated effectively (i.e., actually sales). Marketing mix planned should be such that purchase is made easy. This means proper coordination of the channels of distribution with new products and their communication process.

(5) Confirmation:

Consumer seeks approval/reinforcement for the innovation decision, but may reverse this decision if exposed to conflicting messages about the product. This stage is also influenced by communication sources and consumers evaluate their purchase experiences. After evaluating, they try to support their behaviour and later decide to continue or discontinue using the product.

Marketers consider studying discontinuance to be equally important as the rate of adoption. They study so that marketing strategies can be tailor made with respect to the reasons for the same. It is seen that people who adopt the product later than early adopters, are more likely to discontinue. Therefore, marketers try to upgrade follow – up service and feedback as sales of a new product expands.

Stages in adoption process

1.                  Awareness

·         Consumer in first expose to the product innovation.

·         Lacks in information about the product

·         May only know the name of product and its basic features.

2.                  Interest

·         Consumer is interested in product and search for additional information.

·         He wants to know what is it, how it works and what its potentialities are.

3.                  Evaluation

·         Consumer decides whether or not to believe this product or service.

·         Will it satisfy his needs and requirements?

·         Individual makes a mental trial of the idea.

4.                  Trial

·         Consumer uses the product on a limited basis.

·         During this stage the individual determines the usefulness of the innovation and may search for further information about it.

·         The trial stage is characterized by small-scale experimental use, when it’s possible.

5.                  Adoption or Rejection

·         If trail in favorable consumer decides to use the product

·         If unfavorable the consumer decides to reject it.