The Diffusion Of Innovation


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The Diffusion Of Innovation

  1. 1. The Diffusion of Innovation<br />The diffusion process is concerned with how innovations spread, that is, how they are assimilated with in the market. We have chosen the Tata sky bas our product because it was launched in 2004 and we want to see that customer adopted it or not.<br />*Diffusion is the Process by which the acceptance of an innovation (a new product, new service, new idea, or new practice) is spread by communication (mass media, Salespeople, or informal conversations) to members of social systems (a target market) over a period of time. <br />The four Basic Elements of the Diffusion process: <br /><ul><li>The Innovation,
  2. 2. The channels of Communication,
  3. 3. The social system
  4. 4. Time</li></ul>1) The Innovation: the Innovation is classified in four parts’<br /><ul><li>Firm Oriented Definitions: In the case of Tata Sky it is firm oriented approach because the same Direct To Home facility is provided by the Dish T.V. and many other Direct to home service provider
  5. 5. Product-Oriented Definitions: the product oriented approach focuses on the features in herent in the product itself and on the effects these features are likely to have on consumers usage patterns. There are three types of product innovation:
  6. 6. *Consumer behavior by Schiffman and KanuckA continuous innovation for the Tata sky is that they have modified the product features rather than discovering them. The various features are 150 channels, providing live telecast of various holy places, on demand movies, etc.
  7. 7. A dynamic continuous innovation is more disruptive than continuous innovation but still does not alter established behavior patterns. If we take Tata Sky then there are continuous innovation i.e. paying the monthly bill through the credit card from Tata sky site, recording Live telecast for 48 hours and switch to other channels, activating different facilities like matrimony, games, sports, etc.
  8. 8. A discontinuous innovation requires consumers to adopt new behavior patterns. If we see Tata sky this is not the discontinuous innovation because before launching in India, these facilities are used in many European, American and Australian Countries. </li></ul>Product Characteristics that influence Diffusion: Diffusion researchers have identified five product characteristics that seem to influence consumer acceptance of new products.<br />1). Relative Advantage<br />2). Compatibility<br />3). Complexity<br />4). Trialability and <br />5). Obserbality<br />Relative Advantage. The degree to which potential customers perceive the new product as superior to existing substitutes. In Relative Advantage if we see Tata sky, potential consumers see the difference between the Tata sky direct to home and Cable T.V. Tata sky’s pictures quality is very good if we compare it with cable T.V. Tata Sky has customer care department, but a local cable wala has not. <br />Compatibility: The degree to which potential consumers feels a new product is consistent with their present needs, values and practices .Yes it is a consistent product. Because this is a new product and it is a very consistent to present entertainment needs and desires.<br />Complexity: The degree to which a new product is easy to understand or use. Tata sky is very easy to understand. It has no complexities. Consumers just need to subscribe it and view the T.V. In this product consumer have to understand how to operate or change the channel. <br />Trialability: The degree to which a new product is capable of being tried on a limited basis. In the trialability the consumers have to visit the retailer for the demonstration.<br />Observability: The degree, to which a product’s benefits or attribute can be observed, imagined or described to potential customers. The observability is described through the advertisement. it is done through telling benefits of the TATA SKY.<br /> <br />Time is the backbone of the diffusion process. It is a time between awareness and purchasers. It pervades the study of diffusion in three distinct but interrelated ways:<br /><ul><li>Purchase Time refers to the amount of time that elapses between consumers’ initial awareness of a new product or service and the point at which they purchase or reject. This totally a consumer decision process
  9. 9. An Adopter category involves a classification scheme that indicates where a consumer stands in relation to other consumers in terms of time. The five adopter categories are:
  10. 10. Innovators: these people are high N.C., Highly verbalizes, highly inner directed and detached. Very eager to try new ideas. Not only Tata sky but also with any product these are the people who try the product and recommend.
  11. 11. Early Adopters: these people are also verbalize, other directed, high N.C., and according to CAD theory they are aggressive. Early adopters are integrated into local system (opinions are socially accepted).
  12. 12. Early majority adopt new idea just prior to the average time. These people do not take risks, visualize to high degree and low N.C.
  13. 13. Late Majority adopt new idea just after to the average time .These people are compliant as well as dogmatic.
  14. 14. Laggards are last people to adopt an innovation. These people are traditional and also have lack of exposure. These people are highly dogmatic.</li></ul>Adoption Process<br />Five-stage mental process all prospective customers go through from learning of a new product to becoming loyal customers or rejecting it. These stages are (1) Awareness: prospects come to know about a product but lack sufficient information about it; (2) Interest: they try to get more information; (3) Evaluation: they consider whether the product is beneficial; (4) Trial: they make the first purchase to determine its worth or usefulness; (5) Adoption/Rejection: they decide to adopt it, or look for something else. Another explanation is that the customer moves from a cognitive state (being aware and informed) to the emotional state (liking and preference) and finally to the behavioral or cognitive state (deciding and purchasing). Also called adoption process.<br />