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Diffusion of Innovations
This topic investigates key issues concerning with how various innovations get diffused in the market-place after their initial
launch.
Objectives:
1. To study theories about diffusion
2. To look at consumer segments which facilitate diffusion processes.
Key Ideas:
Diffusion is a process by which an innovation is communicated through certain channels over time amongst members of a given social system.
There are four key elements:
The Innovation:- a product or an idea
Communication:- through different channels.
Time: time taken by an individual to ado pt an innovation.
Social system:- this sets the boundary within which diffusion takes place i.e. a group of people, a society etc.
What is an innovation?
A totally new concept
Copied products
Modifications
Robertson (1967) provides three categories of Innovation:
Continuous Innovation:- These innovations are a modification of present products and are the least disruptive in
their impact on consumption behavior.
Dynamically Continuous:- Either a creation of a new product or an alteration of an existing one. These innovations have some disruptive influence on consumption behavior, but do not change the established behavior.
Discontinuous Innovation:- These innovations are radically new. They have a considerable disruptive impact on consumption behavior.
What makes an innovation successful?
Rogers suggests the following characteristics:
Relative advantage:- Is an innovation offering more benefits than the existing one? If it is then it will be more likely to diffuse successfully.
Compatibility:- How compatible (consistent) an innovation is with existing experience of potential adopters?
Complexity:- Degree to which an innovation is perceived to be easy or complex to use and understand. The more complex the innovation the less likely it is to succeed.
Triability:- An innovation is more likely to succeed if potential adopters can try it out first. For instance, a new shampoo could be packed in miniature bottles and given out as shampoo which would allow consumers to form an opinion about it before a purchase made.
Observability:- Is concerned with the degree to which an innovation can be seen by friends and neighbours. The higher the visibility the more likely it will be for an innovation to diffuse.
What is Innovativeness?
It is “any idea or product perceived by potential adopters to be new”, regardless of the time it has been in the marketplace.
Who buys new products?
Rogers suggests the following:
The photocopy displayed provides some generalisation about characteristics of adopter categories. For instance the evidence indicates that Innovativeness is strongly related to Education, Ability to cope with uncertainties and change.
Communication process:
Information regarding a new product is communicated within a given social system as follows:
The two-step flow model:
This theory postulates that effects of mass-media are not directly received by majority of people instead are picked by a small number of people who in turn disseminate information to others in a society (labeled as opinion leaders).
Multi-phasic model:
Several researchers have challenged the two step flow of information and put forward an alternative theory. This theory emphasises that the audience are not passive but actively seek information regarding products. Sources that they may consult are:
Mass-media i.e. television, magazines
Word -of- mouth i.e. friends, neighbors
Neutral sources i.e. consumer reports.
SELF- TEST QUESTIONS?
What is Innovation?
What are the main elements of Innovation?
What characteristics are required to assist diffusion?
What are the theories that explain the communication process?
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