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Consumer adoption process

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  • 1. How a consumer becomes a customer
    Presenting By:
    Manish Sharma
    Vivek Singh
    Customer Adoption ProcessDiffusion of Innovation &Situational Influences
  • 2. Diffusion
    2
    • Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
    • 3. An innovation?
    • 4. is “an idea perceived as new by the individual.”
  • The four main elements in the diffusion of new ideas are
    3
    (1) The innovation
    (2) Communication channels
    (3) Time
    (4) The social system
  • 5. The innovation
    4
    • Why do certain innovations spread more quickly than others?
    • 6. The innovation, to spread and be adopted should show: The characteristics which determine an innovation's rate of adoption.
    • 7. For example, consider the characteristics of HDTV (High-definition television) in relation to the rate of adoption.
    • 8. Relative advantage (superior to existing products)
    • 9. Compatibility (fits the values and experiences of potential customers)
    • 10. Complexity (difficult to understand or use)
    • 11. Divisibility (tried on a limited basis but still very expensive)
    • 12. Communicability (results of using can be observed or described to others)
    • Relative advantage – new products that are most likely to succeed are those that appeal to strongly felt needs
    • 13. Compatibility – degree to which the product is consistent with existing values and past experience of the adopters
    • 14. Complexity – degree to which an innovation is perceived as difficult to understand and use
    • 15. Trialability – the ability to make trials easy for new products without economic risk to the consumer
    • 16. Observability– reflects the degree to which results from using a new product are visible to friends and neighbours
  • Types of Innovations
    • Continuous – modification or improvement of an existing product
    • 17. Dynamically continuous – may involve the creation of either a new product or the alteration of an existing one ,but does not generally alter established patterns of customer buying and product use
    • 18. Discontinuous – production of an entirely new product that causes customers to alter their behaviour patterns significantly
  • Communication channel
    7
    • Process by which participants create and share
    • 19. Mass media channels - effective in creating knowledge of innovations
    • 20. Interpersonal channels - effective in forming and changing attitudes toward a new idea
    • 21. Influences the decision to adopt or reject a new idea.
    • 22. Most individuals evaluate an innovation, not on the basis of scientific research by experts,
    • 23. but through the subjective evaluations of near-peers who have adopted the innovation.
  • New Product Adoption Theory
    8
    ADOPTION PROCESS
    The consumer decision stages that lead to innovation acceptance/rejection
    A micro process that focuses on internal forces of the consumer
    * Intra Personal (Psych) Influences
    * Inter Personal (Social) Influences
    * Product Selection Criteria
  • 24. New Product Diffusion Theory
    9
    • DIFFUSION PROCESS
    • 25. The spread of an innovation from its source to the ultimate consumer.
    • 26. A macro process that focuses on external forces on the consumer (change agents, channels of information, types of information).
    • 27. Occurs in a social system (a target audience, community, etc.)
  • Introduction
    10
    • The Adoption Process (also known as the Diffusion of Innovation) is more than forty years old.
    • 28. It was first described by Bourne (1959), so it has stood the test of time and remained an important marketing tool ever since.
    • 29. It describes the behavior of consumers as they purchase new products and services.
  • Adoption process
    11
    Awareness
    Interest
    Evaluation
    Trial
    Decision
    Confirmation
    OK, we will
    buy X.
    If I have to buy it I will.
    No way!
  • 30. Categories
    12
  • 31. Adopter classes
    • Innovators - 2.5%
    • 32. Early adopters – 13%
    • 33. Early majority – 34%
    • 34. Late majority – 34%
    • 35. Laggards – 16%
  • Innovators
    14
    • First to adopt & display that they likely to want to be ahead
    • 36. To be the first to own new products, well before the average consumer.
    • 37. They are often not taken seriously by their peers.
    • 38. They often buy products that do not make it through the early stages of the Product Life Cycle (PLC).
  • Early adopters
    15
    • Are also quick to buy new products and services,
    • 39. So are key opinion leaders (KOLs) with their neighbors and friends as they tend to be amongst the first to get hold of items or services.
  • Early Majority
    16
    • Look to the innovators and early majority to see if a new product or idea works and begins to stand the test of time.
    • 40. They stand back and watch the experiences of others.
    • 41. Then there is a surge of mass purchases.
  • Late Majority
    17
    • Tends to purchase the product later than the average person.
    • 42. They are slower to catch on to the popularity of new products, services, ideas, or solutions.
    • 43. There is still mass consumption, but it begins to end.
  • Laggards
    18
    • These tend to very late to take on board new products and include those that never actually adopt at all.
    • 44. Here there is little to be made from these consumers.
  • Situational Influences
    • It includes all those factors particular to a time and place that do not follow from a knowledge of the stable attributes of the consumer and the stimulus and that have an effect on current behavior.
    • 45. Consumers often behave very differently depending on situation.
  • 4 Types of Situational Influence
    • Communication situation
    • 46. Purchase situation
    • 47. Usage situation
    • 48. Disposal situation
  • Communication Situation
    • It is the situation in which consumers receive information has an impact on their behavior.
    • 49. Whether one is alone or in a group, in a good mood or bad, in a hurry or not influences the degree in which one sees and listens to market communications.
  • Cont..
    • Consider the marketing difficulty for these situations:
    • 50. Your favorite team just lost the most important game of the year
    • 51. Your roommates watch only comedy programs
    • 52. You have the flu
    • 53. You are driving home on a cold night without a working heater
  • Purchase Situation
    • It is the situation in which a purchase is made can influence consumer behavior.
    • 54. Marketers must understand the purchase situations in order to develop market strategies to enhance purchases of their product.
    • 55. A mother shopping with her child can be more influenced by her child’s product preferences.
  • Cont..
    • How would you alter your purchase decision for a beverage in the following situations?
    • 56. You are in a very bad mood
    • 57. A good friend says “That stuff is bad for you”
    • 58. The store you are in does no carry your brand
    • 59. There is a long line at the checkout stand when you enter the store
    • 60. You are with someone you want to impress
  • Usage Situation
    • It is the knowledge of the situation in which products are, or may become, appropriate.
    • 61. Using this knowledge, marketers can communicate how their products can create consumer satisfaction in each relevant usage situation.
    • 62. Going further: expanded usage situation strategies can produce major sales gains for established products.
  • Cont..
    • What beverage would you want to consume in the following usage situations?
    • 63. Friday afternoon after your last final exam
    • 64. With your parents for lunch
    • 65. After dinner on a cold snowy evening
    • 66. At dinner with a friend you have not seen in several years
    • 67. When you are feeling sad or homesick
  • Disposition Situation
    • Consumers most frequently dispose of products or product packages before or after product use.
    • 68. The disposition situation can create significant social problems as well as opportunities for marketers
    • 69. Marketers need to understand how situational influences affect disposition decisions to help them provide more effective and ethical products and marketing programs.
  • Cont..
    • How would your disposition decision differ in these situations?
    • 70. You have finished a drink at a mall and there is a trash can nearby but no recycle. What do you do?
    • 71. You and your friends have just finished drinks. Your friends toss them into the recycle. What do you do?
  • Four dimensions of situational influence
    Physical surroundings
    Social surroundings
    Temporal perspectives
    Task definition
  • 72. Physical surroundings
    • Atmospherics is the sum of all the physical features of a retail environment.
    • 73. Atmospherics influences consumer judgments of the quality of the store and the store’s image.
    • 74. Atmosphere is referred to as service when describing a service business such as a hospital, bank or restaurant.
  • Examples of physical surrounds
    • Store location
    • 75. Interior decor
    • 76. Music
    • 77. Smell/aromas
    • 78. Temperature (air-conditioning or heating)
    • 79. Choice provided (by product category or across the categories)
    • Colors
    • 80. Certain colors and color characteristics create feelings of excitement and arousal which are related to attention.
    • 81. Brighter colors are more arousing than dull ones.
    • 82. Warm colors such as reds and
    yellows are more arousing than
    cool colors such as blues and
    grays.
  • 83.
    • Music
    • 84. Music influences consumers moods and in turn, influences a variety of consumption behaviors.
    • 85. Firms exist to develop music programs to meet the unique needs of specific retailers.
    • 86. An emerging trend is having music more in the foreground so it becomes part of the shopping experience and drives store image.
    • Crowding
    • 87. Most consumers find feelings of crowding to be unpleasant resulting in:
    • 88. Less time in the store and less buying
    • 89. Faster decisions and less use of information
    • 90. Crowding can lead to less satisfactory purchases, unpleasant shopping, and reduced likelihood of returning to the store.
    • 91. Marketers need to design outlets to reduce crowding perceptions.
  • Social Surroundings
    • Social surroundings are the other individuals present in the particular situation.
    • 92. Social influence is a significant force.
    • 93. Individuals tend to comply with group expectations, particularly when the behavior is visible.
    • 94. Shopping is a highly visible activity.
    • 95. The use of many publicly consumed brands are subject to social influences.
  • Cont..
    • Embarrassment is a negative emotion influenced both by the product and the situation.
    • 96. Certain products are more embarrassing than others, and
    • 97. Embarrassment is driven by the presence of others.
    • 98. For extremely sensitive products,
    strategies include home delivery
    options.
  • 99. Examples of social surroundings
    • Types of customers in the store.
    • 100. Queues and crowding.
    • 101. Whether the consumer is likely to be known by others/ recognized.
    • 102. Whether there are high-profile people/celebrities shopping at that store.
    • 103. Whether the product will be consumed privately or in the presence of others.
  • Temporal Perspectives
    • Temporal perspectives deal with the effect of time on consumer behavior.
    • 104. Limited purchase time often limits search
    • 105. Internet shopping is growing
    rapidly as a result of the time
    pressures felt by consumers.
  • 106. Examples of temporal influences
    • Whether the product is seasonal
    • 107. Whether the product is urgently required (snack between lectures)
    • 108. Time available for shopping limited/excess (the product may be an excuse for shopping)
    • 109. How long the previous product lasted or was expected to last.
  • Task Definition
    • Task definition is the reason the consumption activity is occurring.
    • 110. Major distinction between purchases for self versus gift.
    • 111. Consumers give gifts for many reasons:
    • 112. Social expectations
    • 113. To elicit return favors
  • Examples of task influences
    • Is the product utilitarian or used as a status symbol?
    • 114. Is it a gift or for oneself?
    • 115. Must the product be long-lasting/tough? (e.g. an everyday watch)
    or decorative?
    (e.g. a dress watch)
    • Is the product intended for several uses? (e.g. a family computer for study and internet access)
    • Moods
    • 116. Moods tend to be less intense than emotions and may operate without the individual’s awareness.
    • 117. Although moods may affect all aspects of a person’s behavior, they generally do not completely interrupt ongoing behavior as an emotion might.
    • 118. Consumers actively manager their mood states, often seeking situations, activities, or objects that will alleviate negative moods or enhance positive ones
    • Momentary Conditions
    • 119. As with moods, individuals attempt to manage their momentary conditions, often through the purchase or consumption of products and services.
    • 120. Thus, a great deal of marketing
    activity is directed toward
    momentary conditions
  • 121. Examples of antecedent states
    • Moods
    • 122. Feeling sad triggers buying sweets or seeing a funny movie
    • 123. Feeling rejected triggers buying games software
    • 124. Momentary conditions
    • 125. Can’t eat ice cream because teeth hurt
    • 126. Can’t buy a book because the credit card was left at home
    • 127. Buy more groceries because hungry before shopping
  • THANK YOU

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