NEW PRODUCT ADOPTION AND DIFFUSION PROCESS
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NEW PRODUCT ADOPTION AND DIFFUSION PROCESS

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NEW PRODUCT ADOPTION AND DIFFUSION PROCESS

NEW PRODUCT ADOPTION AND DIFFUSION PROCESS

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NEW PRODUCT ADOPTION AND DIFFUSION PROCESS NEW PRODUCT ADOPTION AND DIFFUSION PROCESS Presentation Transcript

  • NEW PRODUCT ADOPTION AND DIFFUSION PROCESS (Adoption Theory)
  • The Adoption Decision Process How an individual consumer acts . . . KNOWLEDGE PERSUASION DECISION IMPLEMENTATIONS CONFIRMATION TIME
  • New Product Adoption Theory
    • ADOPTION PROCESS
    • - The consumer decision stages that lead to innovation acceptance/rejection
    • - A micro process process that focuses on
    • internal forces of the consumer
    • * Intra Personal (Psych) Influences
    • * Inter Personal (Social) Influences
    • * Product Selection Criteria
  • Influences on the Rate of Adoption
    • Relative advantage
      • How much better than existing alternatives?
    • Compatibility
      • Fit current values and experiences?
    • Complexity
      • Ease of understanding?
    • Divisibility
      • Can it be tried on a limited basis?
    • Communicability
      • Can the innovation be observed and communicated?
  • New Product Diffusion Theory
    • DIFFUSION PROCESS.
    • - the spread of an innovation from its.
    • source to the ultimate consumer.
    • - a macro process that focuses on external.
    • forces on the consumer (change agents,
    • channels of information, types of.
    • information).
    • - occurs in a social system (a target.
    • audience, community, etc.
  • THE DIFFUSION PROCESS How different segments of the market act PER CENT OF TOTAL MARKET TIME INNOVATIORS-2.5% EARLY ADOPTERS-13.5% EARLY MAJORITY-34% LATE MAJORITY-34% LAGGARDS (INCLUDING NONADOPTERS)-16%
    • is influenced by…
    • * Competitive Intensity (+)
    • * Good Supplier Reputation (+)
    • * Standardization of Technology (+)
    • * Vertical ( ) Channel Coordination (+)
    • * Resource Commitments (+)
    Speed of Diffusion
  • 2.5% Innovators 13.5% Early Adopters 34% Early Majority 34% Late Majority Diffusion Process
    • Product Adopter Categories
  • 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.
    • 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
    Diffusion Process, Adopter Categories
  • Life-Style Characteristics of Innovators and Non innovators
    • Characteristics Innovators Non innovators
    • Product Interest MORE LESS
    • Opinion Leadership MORE LESS
    • Personality :
    • Dogmatism OPEN-MINDED CLOSE-MINDED
    • Social Character INNER-DIRECT OTHER-DIRECT
    • Category Width BROAD NARROW
    • Venturesome ness MORE LESS
    • Perceived Risk LESS MORE
  • Life-Style Characteristics of Innovators and Noninnovators
    • Characteristics Innovators Noninnovators
    • Purchase and Consumption Traits :
    • Brand Loyalty LESS MORE
    • Deal Proneness MORE LESS
    • Usage MORE LESS
    • Media Habits :
    • Magazine Exposure MORE LESS
    • Television LESS MORE
    • Specialized Magazine MORE LESS
  • Life-Style Characteristics of Innovators and Noninnovators
    • Characteristics Innovators Non innovators
    • Demographic Characteristics :
    • Age YOUNGER OLDER
    • Income MORE LESS
    • Education MORE LESS
    • Occupational Status MORE LESS
    • Social Characteristics :
    • Social Integration MORE LESS
    • Group Members MORE LESS
  • Characteristics of New Product Success
    • RELATIVE ADVANTAGE - is an enhanced bundle of benefits or clear-cut advantages over existing offerings (+)
    • Compatibility with existing habits, values and consumption behavior, similar usage as existing products
    Characteristics of New Product Success
    • Trial ability… experience or see the newness
      • Easily tested
      • Low risk
      • Inexpensive
      • No special equipment
      • Free samples or coupons
    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 (-)
    Characteristics of New Product Success
  • Why Some New Products Fail and Others Succeed
    • Failure to Meet Customer Needs
    • Poor Timing
    • Market Conditions
    • Ineffective or Inconsistent Branding
    • Technical or Design Problems
    • Overestimation of Market Size
    • Poor Promotion
    • Insufficient Distribution
    80 to 90% Fail. Why?
  • 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.” Actively seeks influence.
  • Two-Step Flow of Communication and Adopter Categories Early adopters Innovators Early majority Company Message from mass media Product Category Opinion leader(s) Potential target audiences 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