2. Definition of Terms
• Innovation – an offering new to the marketplace
• Adoption– purchase
• Resistance – not purchase
• Diffusion - reflects how fast an innovation spreads through the
market
• Relative Advantage - the extent to which it offers benefits superior
to those of existing products.
3. CHARACTERISTICS OF THE INNOVATION
• Can effect resistance, adoption, and diffusion include perceived value,
benefits, and costs.
4. Perceived Value
Consumers perceive that an innovation has
value if it offers greater perceived benefits
or lower perceived costs than existing
alternatives do. Products with high
perceived value may be more readily
adopted than those with low perceived
value.
Ex. Smartphones, for instance, were
adopted quickly because consumers
perceived the value in a handheld device
that could be used for communication and
– with easily downloaded apps - other
function such as streaming entertainment,
playing games, and reading e-books. This
was a big improvement over carrying
multiple single function devices such as
early cellphones, electronic books readers,
portable video games, and portable DVD
players.
5. Perceived Benefits
• An innovation's value to consumers is affected by its perceived
relative advantage, the extent to which it offers benefits superior to
those of existing products. Something new offers a relative advantage
if it can help consumers avoid risks, fulfill their needs, solve problems,
or achieve innovations that have a clear relative advantage tend to be
adopted more quickly.
6. Perceived Benefits
• Relative Advantage – is something the
products does for the consumer – not
something that exists in the product.
• Ex. The relative advantage of hybrid cars such as
Toyota Prius lies not in their features but rather
in the owner's ability to save money on gasoline
and help the environment.
• Consumers are more likely to perceive a
products benefits as being more valuable when
they can adapt it for use in different context.
• USE INNOVATIVENESS –finding use for a product
that differs from the product's original intended
usage.
7. Perceived Costs
Another Aspect of the value of a
product is its perceived costs,
meaning all the types of costs,
including the money, time, and
effort required to adopt the
product. The higher the
purchase cost the greater the
resistance, and hence the
slower the diffusion.
8. MARKETING IMPLICATIONS
If consumers do not perceive that an
innovation has a relative advantage,
marketers may need to add one by
physically redesigning or reengineering
the innovation.
9. Communicate and demonstrate the relative
advantage
The company must educate consumers who
do not understand a product or its relative
advantages.
Ex. the mobile wallet had been available in
different forms for several years, with
offerings by google and other
providers, before Apple Pay was introduced
for the iPhone. Apple and its financial –
service partners, including American Express,
used advertising, social media posts and
media coverage to demonstrate the
convenience and security of mobile – wallet
payments. An increase in mobile wallet
usage was reported by retailers.
Another way of communicating the
advantages of innovation is through highly
credible and visible leaders.
10. Use Price Promotions to Reduce Perceived
Costs
If consumers perceive that a product is
too costly, the company can use special
price-oriented sales promotions such
as price-offs, rebates, or refunds to
reduce the perceived cost. Marketers
can also provide guarantees or
warranties that make the product seem
less expensive.
Alternatively, the Marketer may find a
cheaper way to manufacture the
product and pass on the savings in the
form of lower prices for consumers,
a strategy that marketers of digital
watches used.
11. Provide Incentives for Switching
If innovations are not adopted because
consumers think switching costs are high,
marketers might provide incentives for
switching.
This situation explains why razor companies
often give away free razor handles to get
consumers to switch to new-generation blades.
Companies might also use advertising to inform
consumers about the costs associated with not
switching.
Finally, Marketers might be able to force their
innovation to become the industry standard, for
instance by having such high-quality, ease of use,
or low price that they become the dominant
alternative.
12. UNCERTAINTY
In addition to the characteristics
of the innovation,
Uncertainty surrounding the
innovation can affect its adoption,
resistance, and diffusion.
13. UNCERTAINTY: Aspects of Uncertainty
1. Doubt about what will become the
industry standard
2. The relative Advantage of a
product that requires the
consumer to make a significant
behavioral changes.
3. The length of product life cycle
4. The length of time before
adoption.
14. Marketing Implications
When consumers resist innovations
because they are worried bout an
offering's short life cycle, Marketers
might show how adaptable the
product is and hence how likely it is
to have a long life cycle.
Ex. Amazon's Kindle (e-book reader)
has been upgraded numerous times
to improve the reading experience,
enhance functionality for multiple
uses, and add value even as the price
is reduced.
15. CONSUMER LEARNING REQUIREMENTS
A third characteristic affecting
resistance, adoption, and diffusion
is consumer learning
requirements - or what
consumers need to do to use the
innovation effectively. These
learning requirements involve
compatibility, trialability, and
complexity
16. Compatibility
The extent to which an innovation is
consistent with one's needs, values,
norms, or behaviors.
The more compatible the innovation is
with the consumer's values, norms and
behaviors, the less their resistance and
the greater the product diffusion.
Ex. Patagonia – first jacket made of
Polartec polyester fleece. It is warm, yet
lightweight, durable, and washable.
Polartec is made from recycled material
adding to the eco-friendly appeal.
17. Trialability
The extent to which an innovation can
be tried on a limited basis before it is
adopted.
Ex. Free taste in groceries or New
PC/PS4?etc. games
Trialability is often important to the
innovators and early adopter because they
have little else on which to base the value of
the innovation.
18. Complexity
The extent to which an innovation is
complicated and difficult to understand or
use.
Diffusion will likely be slow if the consumer
will have a difficulty in understanding the
product.
Ex. Digital Photography initially diffused at a
relatively slow pace because consumers
perceived that it would be complex to transfer
digital images from the camera to the
computer, figuring out the software for
enhancing images and printing high-quality
photos.
19. Reference
• Book: Consumer Behavior
• Author: Wayne D. Hoyer, Deborah J. MacInnis, Rik Pieters
• Source: https://books.google.com.ph/books?id=hMa5DQAAQBAJ&
pg=PA418&lpg=PA418&dq=consumer+learning+requirements+a+thi
rd+characteristic+affecting&source=bl&ots=RPC7aPdsiT&sig=Lc_xE1
5FBqHzoKgbPe3yc5uG03k&hl=en&sa=X&ved=0ahUKEwihl_mvqOb
WAhWDVLwKHbLcAi4Q6AEIJjAA#v=onepage&q=consumer%20learn
ing%20requirements%20a%20third%20characteristic%20affecting&
f=false
Editor's Notes
Kung mas mataas yung price ng isang bagay, a person will think twice before buying it this is called resistance resulting in a slower diffusion or pagkalat ng product knowledge.
Pag walang makitang benefits sa isang produkto at hindi masyadong nag sell or boom yungisang product kailangan magredesign para mas mapaniwala/mapabelieve ang consumer na maganda talaga yung product at mas mapapabili na siya ng produktong iyon.
Kung may bagong innovation ang isang company and it's a bit more expensive then their last product the marketer should find a way to get them interested in buying the new product by giving out freebies or through advertising how great the product is.
You give the consumer a chance to try the product in case they have doubts on its quality/value and let them be the judge of it, like a sneak peek into the greater world. Hence once they like it, they'll end up buying it.