The document discusses diffusion of innovations theory, which seeks to explain how new ideas and practices are adopted over time. It involves two processes: diffusion, which is the spread of an innovation from its source to consumers, and adoption, which refers to a consumer's decision to accept or reject an innovation. Key aspects of diffusion include the innovation itself, communication channels, the social system, and the passage of time. Adoption depends on factors like an innovation's relative advantage, compatibility, trialability, observability, and complexity. The document also examines characteristics of innovators, early adopters, and other categories of adopters.

1. DIFFUSION IN
INNOVATION
“ DIFFUSION
PROCESS ” Submitted By :
MAHIN KARIEM
S3-MBA

2. What is Innovation???
Transformation of an idea into
something useful.
There are two different kinds of
innovations
1.New things
2.Development of new things.

3. Diffusion of Innovation
 The diffusion of innovations theory
seeks to explain how and why new
ideas and practices are adopted, with
timelines potentially spread out over
long periods.
 It is designed in two process:
1. Diffusion
2. Adoption

4. 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

5. 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.

6. •PROESS B WHICH NEW IDEA OR PRODUCT
IS ACCEPTED BY MARKET
•RATE OF DIFFUSION IS THE SPEED IN
WHICH THE NEW IDEA SPREADS OVER
FROM ONE CONSUMER TO ANOTHER

7. Stages in Diffusion
 Innovators
 Early adopters
 Early majority
 Late majority
 Laggards.

8. 2.5% Innovators
13.5% Early Adopters
34% Early Majority34% Late Majority
Diffusion Stages
• Product Adopter Categories

10. 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.

11. 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
Adopter Categories

12.  Laggards
 Resist change
 Conservative
 Like tradition
 Often older & lower in socioeconomic status
 No adopters
 Refuse to change
Adopter Categories

13. INNOVATION
CHANNELS OF COMMUNICATION
SOCIAL SYSTEM TIME

14. The diffusion process
The innovation Various
approaches have
been taken to
define new product:
1.Firm oriented
2.Product oriented
3.Market oriented
4.Consumer oriented
The channels of
communication
The social system
Time

15. The diffusion process

16. The diffusion process

17. The diffusion process

18. is influenced by…
* Competitive Intensity (+)
* Good Supplier Reputation (+)
* Standardization of Technology (+)
* Vertical ( ) Channel Coordination (+)
* Resource Commitments (+)
Speed of Diffusion

19. The Adoption Decision Process
How an individual consumer acts . . .
KNOWLEDGE PERSUASION DECISION
IMPLEMENTATIONSCONFIRMATION
TIM
E

20. •Consumer is exposed to the innovations existence and gains some
understanding of how it functions
.
•no judgment concerning the relevance of the product to a problem or
recognized need.
•perception is more likely to occur through the mass media than in late
stages which are more influenced by opinion leaders.

21. •In this stage, usually attitude formation takes place that is consumer forms
favorable or unfavorable attitudes toward the innovation.
•Consumer may mentally imagine how satisfactory new product might be in
use, i.e., “vicarious trial” of the product in consumer’s mind.
•evaluation of consequences of using the product

22. •Consumer engages in activities that lead to a choice to adopt or
reject the innovation (i.e., adoption or rejection).
•Adoption can be defined as a decision to make full use of an
innovation as the best course of action. This means continued
use of the product unless situational variables (lack of availability,
or money etc.) prevent usage.
•Rejection means not to adopt an innovation.
•There may be some persons who first consider adopting an
innovation or at least give a trial, but then deciding not to adopt it.
This is called an active rejection. Others never consider the use of
the innovation, known as passive rejection.

23. •Puts the innovation into use.
•Until this stage, the process is a mental exercise, but in
this stage behavioral change is required Marketing plan
is the determinant of whether a good product has been
communicated effectively (i.e., actually sales).
•Marketing mix planned should be such that purchase is
made easy. This means proper coordination of the
channels of distribution with new products and their
communication process.

24. •Consumer seeks approval/reinforcement for the
innovation decision, but may reverse this decision if
exposed to conflicting messages about the product.
•This stage is also influenced by communication
sources and consumers evaluate their purchase
experiences.
•After evaluating, they try to support their behaviour
and later decide to continue or discontinue using the
product.

25. 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
Risk LESS MORE

26. Life-Style Characteristics of Innovators and Non
innovators
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

27. Characteristics of New Product
Success
RELATIVE ADVANTAGE - is an enhanced
bundle of benefits or clear-cut advantages
over existing offerings (+)

28. Compatibility with existing habits,
values and consumption behavior,
similar usage as existing products
Characteristics of New Product
Success

29. Trial ability…experience
or see the newness
 Easily tested
 Low risk
 Inexpensive
 No special equipment
 Free samples or coupons
Characteristics of New Product
Success

30. 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

31. 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?

32. Communication Flows
Two-Step Flow of Communication
COMPANY
MESSAGE
OPINION
LEADERS
TARGET AUDIENCES

33. 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.

34. 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

35. 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