DIFFUSION OF DIFFUSION OF INNOVATIONINNOVATION

DIFFUSION OF DIFFUSION OF INNOVATIONINNOVATION

Diffusion of Innovation

• It is the process by which acceptance of an innovation (new products or new service or new idea) is spread by communication (mass media, sales people, informal conversation) to members of the target market over a period of time.

Elements Of Diffusion Process

• Innovation• Channels of communication• Social system• Time

Innovation

Allen & Hamilton identified six categories of new product in terms of their newness to the company and to the market place. They are:

• New to the World• New product lines• Additions to the existing product lines• Improvements or revision to existing products• Repositioning• Cost Reductions

Channels of Communication

Two types of communication:

• Communication between marketers & consumers

• Communication among consumers

Consumer information source categories

• Commercial sources – Sales people, advertising, sales promotion techniques.

• Personal sources – Family, friends, neighbours, acquaintances.

• Experimental sources – Demonstrations, handling samples.

• Public sources – Mass media, Consumer rating organizations

Social system

Time

• Time is the important factor for estimating the rate of diffusion.

• Early• Late• Average

Consumer’s Adoption Process

Consumer’s Adoption Process

– Awareness - the individual is exposed to the innovation but lacks complete information about it

– Interest - the individual becomes interested in the new idea and seeks additional information about it

– Evaluation - individual mentally applies the innovation to his present and anticipated future situation, and then decides whether or not to try it

– Trial - the individual makes full use of the innovation

– Adoption - the individual decides to continue the full use of the innovation

Adopter Categories

• Innovators• Early Adopters• Early Majority• Late Majority• Laggards