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The decision stages that focus on internal consumer influences (psychological/social) that lead to innovation acceptance/rejection
KNOWLEDGE
TIME
PERSUASION
DECISION
CONFIRMATION
IMPLEMENTATIONS
A micro process
The DIFFUSION PROCESS is the spread of an innovation from its source to the ultimate consumer that focuses on external forces.
The key elements of Diffusion are:
(1) an innovation is (2)Communicated through certain channels (types of change agents & information) (3) Over time (4) Among the members of a social system (types of audiences, community).
A macro process
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.
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
Laggards
Resist change Conservative Like tradition Often older & lower in socioeconomic status
OK, we will
buy X.
If I have to buy it I will.
Nonadopters
Refuse to change
No way!
Diffusion of innovation research traces the spread of product acceptance across its product life cycle
Market Introduction Market Growth Market Maturity Sales Decline
$0
LATE MAJORITY-34%
EARLY ADOPTERS-13.5%
TIME
Theory
Characteristics Innovators Non innovators Product Interest MORE LESS Opinion Leadership MORE LESS Personality: Dogmatism OPEN-MINDED CLOSE-MINDED Social Character INNER-DIRECT OTHER-DIRECT Category Width BROAD NARROW Venturesome ness MORE LESS Perceived Risk LESS MORE
Speed of Diffusion
is influenced by * Competition Intensity (+) * Channel Coordination (suppliers & distributor reputations) (+) * Standardization of Technology (+) ($) Resource Commitments (+) Communication in groups outside an individuals
personal network (heterophilous groups) and communications among peers and family (homophilous groups)
Communication Flows
OPINION LEADERS
TARGET AUDIENCES
Innovators
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 influence.
Independent variables
Opinion leadership
Income variables
Low
Innovators
Early adopters
Laggards
Discourage
1. 2. 3. 4. Value barrier Usage barrier Complexity Risk barrier
WINNERS: Pharmaceutical Companies - Innovation against disease disability, & death - new tools to prolong life & wellness
LOSERS: Ford, G.M., Chrysler, 1950 - cars moved people from A to B 2000 - high in car mileage & quality , cars still basically move people from A to B (No fundamental change)
with existing habits, values and consumption behavior, similar usage as existing products
products which slows diffusion and may be offset by simplifying usage or through extensive education
Sample size
Demo days
Women Buying a New Food Product Within the Last Month, Their Reasons:
80 to 90% Fail. Why? Unreal time pressure & vested interest groups Absorption in process: lack of objectivity, courage (risk) Product Deficiencies (Technical or Design Problems) Inadequate research (Overestimation of Market Size) Poor Execution of Plans (Promotion, Distribution,
Price, poor timing, etcetera)
New Product Success Offer a unique benefit (a differential advantage) Solve a consumers problem or provide an opportunity, a reward