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Amity Business School
1
Amity Business School
MBA, Semester II
Consumer Behavior
Ms.Vandana Gupta
Amity Business School
Diffusion of Innovation
Amity Business School
Diffusion
Process
The process by which
the acceptance of an
innovation is spread by
communication to
members of social
system over a period of
time.
Amity Business School
Adoption
Process
The stages through
which an individual
consumer passes in
arriving at a decision to
try (or not to try), to
continue using (or
discontinue using) a new
product.
Amity Business School
Elements of the Diffusion Process
• The Innovation
• The Channels of Communication
• The Social System
• Time
Amity Business School
Defining Innovations
• Firm-oriented definitions
– Product is “new” to the company
• Product-oriented definitions
– Continuous
– Dynamically continuous
– Discontinuous
• Market-oriented definitions
– Based on consumer exposure
• Consumer-oriented definitions
– Consumer judges it as “new”
Amity Business School
What type
of product
innovation
is this
product?
Amity Business School
Telephone Innovations
Amity Business School
Product Characteristics That Influence Diffusion
• Relative Advantage
• Compatibility
• Complexity
• Trialability
• Observability
Amity Business School
Time and Diffusion
• Purchase Time
• Adopter Categories
• Rate of Adoption
Amity Business School
Adopter
Categories
A sequence of
categories that
describes how early (or
late) a consumer
adopts a new product
in relation to other
adopters.
Amity Business School
Adopter Categories
Amity Business School
This ad is
designed to
appeal to
innovators.
Amity Business School
Stages in Adoption Process
NAME OF
STAGE
WHAT HAPPENS
DURING THIS
STAGE
EXAMPLE
Awareness
Consumer is first
exposed to the product
innovation.
Eric sees an ad for a 23-inch thin LCD
HDTV in a magazine he is reading.
Interest
Consumer is interested in
the product and searches
for additional
information.
Eric reads about the HDTV set on the
manufacturer’s Web site and then goes to
an electronics store near his apartment and
has a sales person show him the unit.
Evaluation
Consumer decides
whether or not to believe
that this product or
service will satisfy the
need--a kind of “mental
trial.”
After talking to a knowledgeable friend,
Eric decides that his TV will fit nicely on
top of the chest in his bedroom. He also
calls his cable company and finds out that
he can exchange his “standard” cable box
at no cost for an HDTV cable box.
Amity Business School
Trial
Consumer uses the
product on a limited
basis
Since the HDTV set cannot be “tried” like
a small tube of toothpaste, Eric buys the
TV at this local electronics store on his
way home from work. The store offers a
14-day full refund policy.
Adoption
(Rejection)
If trial is favorable,
consumer decides to use
the product on a full,
rather than a limited
basis--if unfavorable, the
consumer decides to
reject it.
Eric loves his new HDTV set and expects
many year of service from it.
NAME OF
STAGE
WHAT HAPPENS
DURING THIS
STAGE
EXAMPLE
Amity Business School
An Enhanced Adoption Process Model
Amity Business School
Issues in Profiling Consumer Innovators
• Defining the Consumer Innovator
• Interest in the Product Category
• The Innovator Is an Opinion Leader
• Personality Traits
• Media Habits
• Social Characteristics
• Demographic Characteristics
• Are There Generalized Consumer
Innovators?

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13, diffusion of innovation

  • 1. Amity Business School 1 Amity Business School MBA, Semester II Consumer Behavior Ms.Vandana Gupta
  • 3. Amity Business School Diffusion Process The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.
  • 4. Amity Business School Adoption Process The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.
  • 5. Amity Business School Elements of the Diffusion Process • The Innovation • The Channels of Communication • The Social System • Time
  • 6. Amity Business School Defining Innovations • Firm-oriented definitions – Product is “new” to the company • Product-oriented definitions – Continuous – Dynamically continuous – Discontinuous • Market-oriented definitions – Based on consumer exposure • Consumer-oriented definitions – Consumer judges it as “new”
  • 7. Amity Business School What type of product innovation is this product?
  • 9. Amity Business School Product Characteristics That Influence Diffusion • Relative Advantage • Compatibility • Complexity • Trialability • Observability
  • 10. Amity Business School Time and Diffusion • Purchase Time • Adopter Categories • Rate of Adoption
  • 11. Amity Business School Adopter Categories A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters.
  • 13. Amity Business School This ad is designed to appeal to innovators.
  • 14. Amity Business School Stages in Adoption Process NAME OF STAGE WHAT HAPPENS DURING THIS STAGE EXAMPLE Awareness Consumer is first exposed to the product innovation. Eric sees an ad for a 23-inch thin LCD HDTV in a magazine he is reading. Interest Consumer is interested in the product and searches for additional information. Eric reads about the HDTV set on the manufacturer’s Web site and then goes to an electronics store near his apartment and has a sales person show him the unit. Evaluation Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of “mental trial.” After talking to a knowledgeable friend, Eric decides that his TV will fit nicely on top of the chest in his bedroom. He also calls his cable company and finds out that he can exchange his “standard” cable box at no cost for an HDTV cable box.
  • 15. Amity Business School Trial Consumer uses the product on a limited basis Since the HDTV set cannot be “tried” like a small tube of toothpaste, Eric buys the TV at this local electronics store on his way home from work. The store offers a 14-day full refund policy. Adoption (Rejection) If trial is favorable, consumer decides to use the product on a full, rather than a limited basis--if unfavorable, the consumer decides to reject it. Eric loves his new HDTV set and expects many year of service from it. NAME OF STAGE WHAT HAPPENS DURING THIS STAGE EXAMPLE
  • 16. Amity Business School An Enhanced Adoption Process Model
  • 17. Amity Business School Issues in Profiling Consumer Innovators • Defining the Consumer Innovator • Interest in the Product Category • The Innovator Is an Opinion Leader • Personality Traits • Media Habits • Social Characteristics • Demographic Characteristics • Are There Generalized Consumer Innovators?