Chapter 15

Innovations: Adoption, Resistance, Diffusion

Learning Objectives~ Ch. 15

To access:

1.Classifications of innovations, benefits offered & breadth

2.Adoption of innovation, why consumers resist innovation, & timing of innovation

3.Diffusion & its relationship to the product life cycle

4.Factors affecting adoption, resistance, & diffusion

Adoption of, Resistance to & Diffusion of Innovations

Innovation

“…an offering that is new to the marketplace… a product, service, or idea…consumers within a market segment perceive as new & that has an effect on existing consumption patterns.”

Innovations can be new products or new services

What is an example of a new service innovation that has changed your life for the better?

Characteristics of Innovations

Degree of novelty– Continuous– Dynamically continuous– Discontinuous

Benefits offered– Functional– Aesthetic/hedonic– Symbolic

Breadth

Innovation Continuum

DiscontinuousDynamically continuousContinuous

Depends on degree of behavioral change

What are examples of each part of the innovation continuum spectrum?

Adoption/Resistance to Innovations

Resistance (e.g., retail resistance, market resistance)

People are inherently resistant to change & to things they are uncertain of

Adoption—hierarchy of effect

– High-effort

– Low-effort

Timing of adoption decisions

– Characteristics of adopter groups

– Application of adopter group categories

High & Low Effort Hierarchy of Effects

Profile of Adopter Groups

Use-Diffusion Patterns

Marketing & Advertising Implications

Demographics

Social influence

Personality

Cultural values

Media involvement

Usage

Event marketing

Social media

Diffusion of Innovations

“…reflects the behavior of the marketplace of consumers as a group…the percentage of the population that has adopted an innovation at a specific point in time.”

Why do some goods diffuse quickly, while others lag?

Diffusion & PLC

Pattern of adoption/diffusion curve– S-Shaped = associated with risk– Exponential = little risk, switching cost low

Product life cycle stages (PLC)– Introduction– Growth– Maturity– Decline– Can a product stay in one PLC cycle for

eternity?

PLC Curve

S-Shaped Diffusion Curve

Exponential Diffusion Curve

PLC Pattern

Fad

Fashion

Classic

Note that PCL is at the product level, not the brand level

Innovation Characteristics

Perceived Value

Perceived Benefits– Relative Advantage– Use innovativeness

Perceived Costs

Risk/Uncertainty

Creating Advantage to Switch

Communicate/ demonstrate advantage

Price promotions to reduce perceived costs

Provide incentives to switch

Consumer Learning & Diffusion

The following impact diffusion rate:

Compatibility

Trialability

Complexity

Social Relevance

Observability—Others Using Innovation

Social Value

– Socially desirable

– Speeds diffusion

Legitimacy & Adaptability

Social System

Characteristics:

Modernity

Homophily

Physical Distance

Opinion Leadership

Consequences of Innovation

Consequences to consumers, businesses, & society

May offer new relative advantages

Negative consequences may arise

– Social

– Economic

Questions?