DIFFUSION OF INNOVATION

CONSUMER BEHAVIOR
PAPER-3201

3RD SEMESTER
MBA

MEANING OF DIFFUSION

The diffusion process is concerned with how innovation spreads, that is how they are
assimilated within a market. More precisely diffusion is the process by which the
acceptance of an innovation, i.e. a new service, new idea, or new practice, is spread by
communication, i.e. mass media, sales people, or informal conversations, to members of
social system, target market, over a period of time.
The definition includes four basic elements of diffusion process. They are-

 Innovation : any item, thought, or process that is viewed to be new by the

consumer
 Communication – the process of the new idea traveling from one person to
another or from one channel to the individual
 Social System – the group of individuals that together complete a specific goal
(adoption)
 Time – how long it takes for the group to adopt an innovation as well as the rate
of adoption for individual.

INNOVATION
An innovation is an item, thought, or process that is new to a certain area but not
necessarily to the world. There are three main types of innovations that are diffused in
different ways.
 Continuous Innovation
This type of innovation is a simple changing or improving of an already existing product
where the adopter still uses the product in the same fashion as they had before. An
example of a continuous innovation is now seen in the automobile industry as it continues
to change and develop.
 Dynamically Continuous Innovation
Here the innovation can either be a creation of a new product or a radical change to an
existing one. Here the consumption patterns of people are altered some. An example of
this type of innovation would be compact discs.
 Discontinuous Innovation
This is a totally new product in the market. This is the big idea innovation. In this
situation, because the product has never been seen before, there are total changes to
consumers buying and using patterns.
PRODUCT CHARACTERISTICS WHICH INFLUENCE DIFFUSION
All products that are new do not have equal potential for customer acceptance. Somme
products seem to catch on almost overnight while takes a very long time to gain
acceptance or never seem to achieve wide spread to achieve wide spread consumer
acceptance. Although there are no precise formulas by which marketer can evaluate a
new products likely acceptance, diffusion researchers have identified five product
categories that seem to influence consumer acceptance of new products.
These are mentioned and described below:
 Relative Advantage
The degree to which potential consumer perceive a new product superior to existing
substitute is its relative advantage. For ex Fax Machine which was diffused rapidly
because of its relative advantage of communicating at the minimum cost of time and
money. In addition to the unique product feature a promotional program also may be
perceived as offering relative advantage and can lead to increased acceptance.
 Compatibility
The degree to which potential consumer feel a new product is consistent with their
present needs, values, and practices is the measure of compatibility. For example, male
shavers shifting towards a new depilatory cream designated cream to remove facial hair.
Although potential simpler to use, a cream would be basically incompatible with most
men’s current values regarding daily shaving practices.
 Complexity
It is the degree to which a new product is difficult to understand and use, affects products
acceptance. Clearly, the easier it is to understand and use a product, the more likely it is
to be accepted.
The issue of complexity is especially important when attempting to gain market
acceptance for high-tech consumer products. the four dominant technological fears are
fear of technological, fear of rapid obsolescence, fear of social rejection and fear of
physical harm.
 Trial ability
Trail ability refers to the degree to which a new product can be tried on a limited basis.
The greater the opportunity to try a new product, the easier it is for consumers to evaluate
it and ultimately adopt it. In general, frequently purchased household products tend to
have qualities that make trial relatively easy.
For instance, many super market products, consumers can make the trial purchases of a
new brand in a similar quantity than they might usually purchase.
 Observability
It is the ease with which a product’s benefits or attributes can be observed, imagined or
described to potential consumers. Products that have a social visibility, such as fashion
items, are more easily diffused than products that are used in private, such as a new type
of tooth brush. Similarly tangible products are promoted more easily than an intangible
one i.e. service.
It was first thought that the communication process of the diffusion of
innovations was only a one-step process, from the mass media channels to t
Communication
It was first thought that the communication process of the diffusion of innovations was
only a one-step process, from the mass media channels to the individual with little or no
interaction between the individuals. This obviously is not the case. Not only do
individuals communicate with each other, some individuals pass along their influence as
well as their knowledge to other individuals. Opinion leaders are individuals in a social
system that others come to for information and guidance. With the understanding of
opinion leaders in society it is clear to see that the original one-step process invalid. Now
the process takes us through mass media channels to opinion leaders then to the
individuals. This two-step flow of communication is probably not complete as well, but
the important idea to arrive at is that no matter how many steps are involved there will
always be a two-step exchange of knowledge/influence at any given step during the
diffusion process.

 Selective exposure
The idea that an individual will be more susceptible to channels of communication, that
already agree with their current attitudes and feelings (a democrat will listen to
democratic media and not republican so they will never hear the other side).
  Selective perception
The idea that an individual will view new ideas in relation to their old ones.
 Selective retention
The idea that an individual will mainly remember a new idea if directly relates to their
own situation or remedy a specific problem

Social Systems
Social systems are referring to the group or groups of people that an innovation diffuses
through. Earlier it was mentioned that who the people are can determine how they will
adopt innovations. Social systems can be split into two categories of norms: traditional
and modern.
According to Rogers traditional norms are characterized by:
(1) (1)A less developed or complex technology
(2) (2)Low levels of literacy and education
(3) (3)Little communication between the social system and outsiders
(4) (4)Lack of economic rationality
(5) (5)One-dimensional in adapting and viewing others
According to Rogers modern norms are characterized by:
(1) (1)A developed technology with complex jobs
(2) (2)Strong importance placed on education
(3) (3)Acceptance of free thought and new ideas
(4) (4)Strong preparation and high importance on economic considerations
(5) (5)Ability to see and understand other peoples situations
Not only do modern systems accept and adapt to innovation faster and easier than
traditional system but the individual is more likely to be innovative in thinking and doing
in a modern society.
TIME

Time is the back bone of the diffusion process. It pervades the study of the diffusion in
three distinct but interrelated ways:
 The amount of purchase time,
  The identification of adopter categories
 The rate of adoption.

Adopters

Although this is not one of the four main elements of the diffusion of innovation it does
have importance to the process. Like the innovations side, there are certain characteristics
that break adopters down into categories, which help us understand who they are and how
they consume. It is very clear that people adopt innovations at different times and for
different reasons. An example of this for everyone who ever attended high school is fads.
Although fads are not necessarily innovations it is a good example to begin to see the
idea of adopters. When a fad starts to become popular, not everyone is immediately
involved. Only a few people adopt the fad in the beginning .As time goes by, more and
more people adopt the fad until the majority is included. The point to be made with this
example is not only do people adopt a fad at different a time, each group affects the
following group. Also it is important to note that not everyone is involved. Complete
adoption is not required for the diffusion process to work. There are five main categories
of adopters.

 Innovators –
These are the risk takers. They are the ones who put themselves up in front. Generally
they are well educated and have a high income to absorb a mistake. They are the smallest
in size of only two and half percent. They enjoy the rush of taking a risk but they also are
willing to accept the consequences of failure.

 Early Adopters –
These groups are the next thirteen and a half percent. They are highly educated and
wealthy like the innovators but are more visible and respected among their peers. Early
adopters play a key role in the adoption process determining the time an innovation will
be adopted by others and to what extent. Because of this reason they are the best target
market for new innovations.

 Early Majority –
They constitute thirty-four percent of adopters. They do not take the risk of being the first
to adopt, like the innovators and early adopters, but do accept an innovation before the
average person. They generally take a long time to fully adopt an innovation. They are
above average in education and income but are followers in their social groups.

 Late Majority –
They jump on right after the average person. Their education and income are limited and
they are not willing to take a chance unless the majority has already fully adopted the
innovation. Reasons for the late majority to adopt are either economic or peer pressure
but are constantly weary. This group also contains thirty-four percent.

 Laggards –
This is the final adoption group and it consists of the final sixteen percent. They are more
in-tuned with the past than the future. They are skeptical of all new ideas and frequently
by the time they adopt an innovation there is a new one already beginning to take its
place. Their educations are small and generally laggards are socially surrounded by other
laggards.
These five categories have developed through years of research and observation in the
diffusion process in many different fields. Although there are exceptions in each group,
this gives a good general breakdown of adopters of innovations.