INNOVATION Consumer Behaviour

Diffusion of Innovation in Consumer Behaviour

An innovation is an idea, practice, or product, perceived to be new by an individual or a group .A product is said to be an innovation when it is perceived by the potential market as a change,and not by a technological change brought in it.
New products or new services have been classified as under:
Firm Oriented
If the product is new to the company, it is said to be new.
Product Oriented
It focuses on the features inherent in the product and the effect it has on the consumer’established usage pattern. This leads to three types of product innovation continuous,dynamically continuous, discontinuous innovation.
Market Oriented
It stresses on how much exposure consumers have on the new product:
(i) It can be new if purchased by a small percentage of customers in the market.
(ii) It is new if it has been for a relatively short period in the market.
Consumer-oriented Items
It is based on the consumer’s perception of the product. If he judges it to be new. For example,the Polaroid camera can be considered as an innovation, because a whole lot of people who constitute the market, use it, and can get photographs in minutes. Microwave oven for example is an innovation. It does wonders for cooking and warming of foods. Similarly, mobile phones (cell phones) can be considered an innovation. Not only are they popular, but they were unthinkable a decade or two back. Innovation can be of various degrees. For instance, a microwave oven is more of an innovation than sugar-free cola. In innovation, behavioral change stake place. These behavioral changes can be small, modest, or large. The innovation can be continuous or, dynamically continuous or, discontinuous.
Continuous innovation
In this type of innovation, minor behavioral changes are required for adoption of the product,from ordinary cookware to Teflon-coated cookware, where minor behavioral changes are required.
A modified product, e.g., a new scuba watch, new car model or, low-fat yogurt, etc.
Dynamically continuous innovation
Communicator behavioral changes are required for the adoption of the product. Products in this category include compact disk players, cellular phones, erasable ink pen and disposable diapers.

TV has led to related innovation

TV has led to related innovation

Discontinuous innovation
Here the adoption of the product requires major behavioral changes and the product is new,and requires high involvements of the user, along with extended decision-making, which consists of the following steps:

Stages-in-adoption-and-decision  making

DIFFUSION PROCESS
Diffusion process is the manner in which innovations spread throughout the market. Spread refers to the purchase behavior where a product is purchased with some continuing regularity. Spread of innovation can be of three types as shown in the Figure below:

Three types of innovation spread

The diffusion process follows a similar pattern, overtime, irrespective of the social group or innovation. The typical diffusion process shows a slow growth or adoption. It later rises rapidly, and then a period of slow growth is noticed. In fast diffusion process, the product clicks immediately. The spread of innovation is very quick. People patronize the product immediately, and later on there is again slow diffusion.

In slow diffusion process, the product takes a lot of time to diffuse or spread, and the consumer follows a pattern of adoption slowly by getting acquainted with the product.

These studies show that the products take a certain amount of time, from when it gets introduced to its saturation. The marketer therefore has to understand what determines the spread of innovation in a given market segment, and how do the early buying consumers differ from those of late purchasers.
The rate of spread of innovation depends on a number of factors listed below:

  • Type of group: Some groups who are young, affluent and highly educated, accept changes faster than the old, traditional and poor groups. This shows that the target market is an important determinant of the rate of diffusion.
  • Perceived risk: The more the risk associated with changing to new innovation, the slower is the rate of diffusion. The risk consists of the product not performing as expected, the risk of the consequences of change-over, and the risk of reverting back to the old product, if not satisfied with the innovative product.
  • Type of decision: An individual vs. a collective decision. Individual decisions head to faster diffusion than collective ones.
  • Marketing effort: This also affects the diffusion process. More aggressive marketing effort, consisting of high and continuous advertising expenditure, diffuses faster than otherwise.
  • Trial: The trial can be taken at low cost and low risk, the diffusion is faster. Some products can be borrowed, rented or, their trial can be taken at retail outlets. These products like medicines, and other low-priced items have faster diffusion. These days even car outlets are giving free trials and rides to prospective customers to make their new models of cars diffuse faster.
  • Fulfillment of felt need: The faster a need is satisfied or fulfilled by a product, the greater is the rate of its diffusion.
  • Compatibility: The more the product is compatible with the beliefs, attitudes and values of the individual or group the faster the diffusion vegetables soup for vegetarians,ordinary microwave, no roasting.

Rapid rate of diffusion

  • Relevant advantage: The advantage could be of price, quality, ease of handling product quality. To have quick diffusion, the product must offer either a price advantage or a performance advantage. Washing machine is expensive, but a lab our saving device.
  • Complexity: If the product is complex (difficult to understand and use) the diffusions slower. The product may be complex but it must be easy to understand. Complexity may be because of many attributes (attributes complexity which are difficult to understand). The other complexity may be trade off complexity. The trade off takes place between cost of purchase and economy. Convenience vs. space or speed of cooking vs. quality of cooking, as in microwave ovens.
  • Absorbability: The more easily the positive effects of the products can be observed,the more discussion takes place and faster the diffusion process, e.g., cell phones.

Fast-and-Slow-difusion


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