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Rogers' Five Factors

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go …

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/Rogers-Five-Factors-169

This document discusses Rogers' Five Factors, framework for analyzing and understanding the diffusion and adoption of product innovations.

Businesses are interested in understanding how innovations diffuse, so that they can better predict and manage this consumer adoption. A popular framework for this is the Consumer Adoption Lifecycle (or Product Lifecycle), which traces the adoption of a product as it passes through 5 categories of consumers. This is a viewpoint that focuses on people.

Rogers' Five Factors is a product-focused framework that should be used in conjunction with the Consumer Adoption Lifecycle. Developed by Everett Rogers, this framework proposes that the rate of innovation diffusion is largely driven by 5 product-based factors:
1. Relative advantage
2. Compatibility
3. Complexity
4. Trialability
5. Observability

This document explains the framework, provides examples, shows how to use this framework with the Production Adoption Lifecycle, and includes PowerPoint templates that can be leveraged in your own analysis.

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  • 1. Crowdsourced Business Presentation Design Service Rogers’ Five Factors Product-focused Framework to Innovation Adoption February 25, 2014 Rogers’ Five Factors is a product-focused framework for analyzing innovation adoption and diffusion. It is often used in conjunction with the people-focused framework, Consumer Adoption Lifecycle (or Product Lifecycle). This document explains Rogers’ Five Factors, provides examples, and templates to be used in your own analysis. ORIGINAL PROJECT DETAILS http://pptlab.com/ppt/Innovation-Diffusion-Rogers-Five-Factors-15
  • 2. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 4 Contents Templates Case Example Summary Rogers’ Five Factors Overview This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 3. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 7 The diagram below illustrates the Production Adoption Lifecycle and shows the percentage of consumers that fall into each segment Product Adoption Lifecycle Early Adopters Early Majority Late Majority LaggardsChasm Percentage of Consumers 2.5% 13.5% 34% 34% 16% time market share Innovators 50% 25% This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 4. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 10 The Five Factors that determine innovation diffusion are Relative Advantage, Compatibility, Complexity, Trialability, and Observability DEFINITION Relative Advantage • The degree to which a product is better than the product it replaces Compatibility • The degree to which a product is consistent with existing values and experiences Complexity • The degree to which a product is difficult to understand and use Trialability • The degree to which a product may be experimented with on a limited basis Observability • The degree to which product usage and impact are visible to others Rogers’ Five Factors – Definitions 1 2 3 4 5 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 5. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 13 Compatibility measures the degree a new product is consistent with existing ideas and beliefs Factor 2. Compatibility As the Compatibility of an innovation with existing concepts, habits, and experiences increases, the rate of adoption also increases. Source: Note on Innovation Diffusion: Rogers’ Five Factors, Harvard Business School Publishing Relative Advantage Compatibility ComplexityObservability Trialability • Compatibility is the degree in which an innovation is perceived as consistent with existing values and experiences of the potential adopter • This compatibility can be with any of the following: • Previously introduced ideas • Values and beliefs • One’s needs • In short, being compatible with existing concepts is less threatening, seems more familiar, and fits more closely with a person’s impressions of the way things ought to be • It is important to note that we might want to avoid compatibility with previous innovations that failed DESCRIPTION EXAMPLES • People expect that fine wines will be in sealed cork stoppers, despite the fact that about 10% of fine wines are spoiled due to faulty corks • As a result, there is limited acceptance of the twist-off metal cap, despite it reducing such spoilage • When concentrated liquid laundry detergent (requiring half the dosage) came out, consumers were using more dosage than necessary • They were locked into their previous method of measuring laundry detergent and not confident that the newer product could be twice as effective This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 6. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 16 Observability measures the degree the results and usage of the new product can be seen by others Factor 5. Observability The more observable the usage and outcome of an innovation, the greater the rate of product adoption. Source: Note on Innovation Diffusion: Rogers’ Five Factors, Harvard Business School Publishing Relative Advantage Compatibility ComplexityObservability Trialability • Observability is the degree to which the results of an innovation are visible to others • Highly observable products may spur others to adopt the same new products • Note that a highly observable product that invites ridicule will discourage others from adopting that product • In contrast, products that are rare or difficult to observe are less likely to influence others to adopt these products DESCRIPTION EXAMPLES • Observable products include second cars, satellite TVs, Hummer SUVs • Difficult to observe products include preventative medicines, radon-testing devices, tax-preparation software This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 7. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 19 … we see in its early years, it had no/minimal Relative Advantage, low Compatibility, high perceived Complexity, and very limited Trialability… Case Study – Telephone Adoption (2 of 3) Source: Note on Innovation Diffusion: Rogers’ Five Factors, Harvard Business School Publishing Compatibility • Today, the telephone seems highly compatible with our values, norms, and ideas • However, in the late 1800s, the thought of a voice emanating out of a metal box was unsettling—even frightening • Furthermore, the already adopted telegraph had the distinct advantage of a permanent “hard copy” of a loved one’s or client’s words 2 Complexity • While the telephone was simple to use, it was incredibly complex to understand • The result was a set of concerns that could hinder adoption— e.g. Can it transmit diseases? Can I get electrocuted? Does it speak my language? 3 Trialability • Originally, the telephone was limited to the very wealthy and to high-end businesses • The typical consumer knew few people who owned a telephone, thus limiting the ability to test and learn about the telephone 4 This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 8. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 22 For a holistic analysis to innovation adoption and diffusion, it is best to utilize both the people-focused and product-focused frameworks Holistic Approach to Adoption Source: Note on Innovation Diffusion: Rogers’ Five Factors, Harvard Business School Publishing Rogers’ Five Factors and the Consumer Adoption Lifecycle are complementary tools strategists can use to manage and accelerate product adoption and diffusion. Rogers’ Five Factors Consumer Adoption Lifecycle • By focusing on product differences, we can better understand and possibly enhance the appeal of a product—independent of the consumers doing the adopting • We achieve this by increasing its perceived relative advantage, increasing its perceived compatibility relative to values and norms, decreasing its perceived complexity, increasing its trialability, and increasing its observability • At the very lease, we can passively anticipate the rate of adoption • Once the perceived characteristics of a product are determined, we can focus on people differences to manage the adoption process • By knowing which consumers are predisposed to adopt early and which are predisposed to lag the masses, a company can manage its limited resources to consumer segments that will be most likely to adopt This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 9. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 25 Headline Rogers’ Five Factors – Template Relative Advantage • Filler text Compatibility • Filler text Complexity • Filler text Trialability • Filler text Observability • Filler text 1 2 3 4 5 STATUS This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 10. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 28 Headline Consumer Adoption Lifecycle - Template Early Adopters Early Majority Late Majority LaggardsChasm time Innovators • Filler text • Filler text • Filler text • Filler text • Filler text • Filler text • Filler text • Filler text • Filler text This document is a partial preview. Full document download can be found on Flevy: http://flevy.com/browse/document/rogers-five-factors-169
  • 11. 1 Flevy (www.flevy.com) is the marketplace for premium documents. These documents can range from Business Frameworks to Financial Models to PowerPoint Templates. Flevy was founded under the principle that companies waste a lot of time and money recreating the same foundational business documents. Our vision is for Flevy to become a comprehensive knowledge base of business documents. All organizations, from startups to large enterprises, can use Flevy— whether it's to jumpstart projects, to find reference or comparison materials, or just to learn. Contact Us Please contact us with any questions you may have about our company. • General Inquiries support@flevy.com • Media/PR press@flevy.com • Billing billing@flevy.com

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