Adoption Process 2

The Adoption Process ■

The decision stages that focus on internal consumer influences (psychological/social) that lead to innovation acceptance/rejection KNOWLEDGE

PERSUASION

DECISION

TIME

CONFIRMATION

IMPLEMENTATION

Steps in the Adoption Process

Variations from the Normal Adoption Curve

The Dif fus ion Proces s

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has identi fi ed adopter typol ogi es that are linked to marketi ng strategi es. 2.5% Innovators

13.5% Early Adopters

34% Late Majority

34% Early Majority

Diffusion Process, Adopter Categories ■

INNOVATORS - are first to buy and typically described as venturesome, younger, well educated, financially stable, and willing to take risks.

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EARLY ADOPTERS - are local opinion leaders who read magazines and who are integrate

Diffusion Process, Adopter Categories ■

EARLY MAJORITY - solid, middleclass consumers who are more deliberate and cautious

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LATE MAJORITY - described as older, more conservative, traditional, and skeptical of new products

Diffusion Process, Adopter Categories ■

Laggards – – – –

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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 productMarket life cycle Market Market Sales Introduction

Growth

Maturity

Decline

Total Industry Sales + Total Industry Profit

$0

Time

–

Stage customers: Early Adopters

Early Majority

Majority

Laggards

Speed of Diffusion is influenced by… * * * * • •

Competitive Intensity (+) Good Supplier Reputation (+) Standardization of Technology (+) Vertical ( ) Channel Coordination (+) ($) Resource Commitments (+) Brand Loyalty

Two-Step Flow of Communication and Adopter Categories Innovators

Early adopters

Early majority Potential target audiences

Company Message from mass media

Product Category Opinion leader(s)

Opinion recipient 1 Opinion recipient 2 Opinion recipient 3

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 ■

Why Some New Products Fail and Others Succeed Absolute failure

Relative failure

80 to 90% Fail. Why? ■ Unreal time pressure & vested interest groups ■ Absorption in process: lack of objectivity, courage (risk)

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Product Deficiencies (Technical or Design Problems)

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Inadequate research (Overestimation of Market Size)

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Poor Execution of Plans (Promotion,

Distribution, Price, poor timing, etcetera)

Why Some New Products Fail and Others Succeed 80 to 90% Fail. Why? ■ #1. Performance & Price New product failures generally offer the same or worse performance … than competing products with … the same or higher price ■ #2. Inadequate Market Analysis New Product Success

• Offer a unique benefit (a differential advantage) • Solve a consumers problem or provide an opportunity, a reward