Diffusion of Innovation: Meaning, Stages, Elements, Examples, Model, Barriers, Characteristics and More


Diffusion of innovation is the process by which the adoption of an innovation spreads over a period of time to other consumers through communication. The study of diffusion of innovation explains how new ideas, practices, products, and services spread within and between communities and the social system through interpersonal communication.

Learn about:- 

1. Meaning of Diffusion of Innovation 

2. Characteristics that Influence Diffusion Process 

3. Consumer goes through Stages in the Process of Adopting New Products (With Limitations and Examples)

 4. Multiplicative Innovation Adoption (MIA) Model 

5. Classification of Adopter Categories Identified by Everett Rogers 

6. Barriers.

Diffusion of Innovation: Meaning, Stages, Elements, Examples, Model, Barriers, Characteristics and More….

Diffusion of Innovation 

Diffusion of innovation is the process by which the adoption of an innovation spreads over a period of time to other consumers through communication.

Group communication is an important (or primary) source of information and can influence consumer decision making. Group communication can occur within or across groups. Communication within groups refers to word-of-mouth influence which is considered to be highly credible since it comes through family, friends, peers, and neighbors.

The process of diffusion will occur for new products as informational influence and is likely to affect the adoption of new products across groups. Consumer researchers trying to explore the area of consumer acceptance of new products are primarily interested in understanding two closely related processes.

The diffusion process is a macro process related to the spread of a new innovation from its source (or manufacturer) to the final consumers. Whereas adoption is a micro process focusing on the stages through which an individual passes when deciding to accept or reject a new innovation Over and above these two interrelated processes, marketers are also interested in identifying the “Consumer innovators “, those who are first to purchase a new product for it is felt that this group will play a major role in the success or failure of the innovation.

A consumer is likely to find a new idea, or product, or even a new service attractive. But the organization which is trying its hand at the new innovation is likely to be concerned about how fast the diffusion of the innovation is likely to take place. Even though, it is only after intensive research that a new concept or product is launched, there is always an element of risk involved. Through research, answers to certain questions are sought.

1. Does the innovation cater to the need of the target customer?

2. Have the target consumer understood how innovation is relevant to their need?

3. Is the new product available and being demonstrated widely?

4. Has the firm identified the opinion leaders? If yes, is the firm making efforts to convert opinion leaders into committed customers?

5. Is the company providing suitable incentives to sceptics to get them converted to adopters?

These questions are pertaining to certain broad areas which can be of concern to marketers launching new products. One way of educating customers about new innovations will be by communicating the benefits the new innovations would provide. Thus diffusion of innovation is a challenge before the marketer to identify the ‘value-added benefits’ that can be associated with the product and communicate it to the consumer.

There are two issues that a marketer needs to address while launching new goods and services – one, whether the modified/new good and service offering would be accepted by the segment(s), and two, how quickly would the good and service offering be accepted by the segment(s). The two issues are dealt with within the purview of ‘diffusion of innovation’.

‘Diffusion’ is regarded as a macro-process that deals with the adoption and spread of a new product or service offering amongst the potential market. It relates to the acceptance/rejection of innovation by the segment(s). ‘Adoption’, on the other hand, is a micro-concept that lays emphasis on the various phases or stages through which an individual consumer goes through while accepting/ rejecting a new product offering.

While diffusion is a group phenomenon, which explains how a new product or service is spread in the marketplace, adoption is an individual process, which explains the stages one goes through from first hearing about the innovation to finally adopting it.

The word ‘diffusion’ has its origin in the Latin word ‘diff under’, which means ‘to spread’. The study of diffusion of innovation explains how new ideas, practices, products, and services spread within and between communities and the social system through interpersonal communication. Studies on the diffusion of innovation draw heavily from psychology and rural sociology.

Top 5 Characteristics that Influence the Diffusion Process 

All new products or innovations are not always easily accepted by consumers. Some products gain easy acceptance or are easily accepted by consumers. For instance, Nirma detergent powder (when HLVs Surf was the market leader), Maruti 800 c.c. car etc. While there are other new products or ideas which took a long time to be accepted.

For example, ownership of a personal credit card. There are still others which in spite of being available in the market for quite some time, (the new product) had never gained widespread consumer acceptance as anticipated by the marketers.

The uncertainties associated with product marketing can be greatly reduced if marketers could anticipate how consumers would react to new products and develop a promotional strategy accordingly. The characteristics of the new product or innovation also affect its rate of adoption or the adoption process.

Five characteristics have been identified which play an important role in influencing the diffusion process:

Characteristic # 1. Relative Advantage:

The first characteristic is the new product’s relative advantage i.e., the degree to which it appears to be better and superior than the existing products. If the consumer perceives, the new product to be relatively superior as compared to the existing products, more is the chance of the innovation being adopted. For example, ‘E-mail’ and Fax were considered to be better and superior to Telex.

Similarly, cellular phones over took pagers, because they were accepted to have better communicative features in comparison. This perception of greater relative advantage in using ‘E-mail’ as well as cellular phones as a communication network, resulted in sooner acceptance of this concept or new idea.

Characteristic # 2. Compatibility:

The degree to which potential consumers feel that the new product is consistent with their existing needs, values and practices is a measure of its compatibility. Greater the degree of compatibility, sooner will the innovation be acceptable to the consumer. For example, ‘Laptop’ computers are highly compatible with the needs and lifestyle of senior executives of companies.

Characteristic # 3. Complexity:

The third characteristic is the innovation’s complexity. This means the extent or degree to which the new product is relatively difficult to understand or use. Greater the degree of complexity, more time will be required for the product to be accepted. For example, personal computers are complex and therefore took a lot of time to penetrate Indian homes. This issue of complexity is important when entering a market with hi-tech consumer products.

Characteristic # 4. Divisibility or Facilitates Trial:

The degree to which the new product may be tried on a limited basis. This means the extent to which the new product can be tried on a small scale basis before going for full-fledged use of the same. If the consumers have got the option of trying out the product and then decide to buy if trial result found satisfactory, the innovation’s rate of adoption increases.

For instance, when ‘Braun India’ pioneered the ‘epilator’ in a market, where its target consumers were using the traditional method of waxing, the company needed to convince women that using ‘Silk Epil’ was more convenient, so it offered a six-day money back trial offer to its consumers, reassuring that if she didn’t feel comfortable with the product, she (the consumer) could always return it.

At times marketers, when introducing products such as shampoo or detergent powder or toothpaste, use small trial packs (free samples) or rupees-off coupons to enable consumers have a first-hand direct experience with the product. Even car manufacturers such as Maruti, Hyundai, Ford etc., offer ‘test drive’ for their new car models to provide customers a direct product experience.

Characteristic # 5. Communicability or Observability:

The fifth characteristic is the innovation’s communicability. The degree to which the results are observable or can be described to others or the ease with which a new product’s salient features are observed.

A new product concept will work if the new technology or new product usage can be described and demonstrated. For example, ‘Eureka Forbes’ has been able to gain easy acceptance of its products such as the ‘Aquaguard’ and ‘Vacuum cleaner’ through adopting the method of observation through demonstration.

The above are the typical product characteristics which can influence an innovation’s diffusion process but, apart from the above, there are certain other characteristics which could influence the rate of adoption like initial costs, ongoing costs, risk and uncertainty, scientific credibility, selection of channel of communication and social system or social approval.

These characteristics are also important determinants affecting the rate of adoption. So marketers involved in new products development have to undertake research and also consider the above factors.

When Air Deccan had entered the market as a low cost air flier, it had used various mass media (T.V newspaper, magazines etc.,) to communicate about the various product services, offering benefits such as low costs, saving of time spent on travel and so on, in an attempt to woo potential customers.

The key factor affecting the diffusion process may vary from product to product. So marketers have to pay maximum attention to the key ones while developing new products and then design a suitable marketing programme accordingly.

5 Stages involved in the Process of Adopting New Products 

Marketers are interested in knowing how consumers learn about new products and the decision making process involved in adopting them. Adoption process may be defined as the mental process through which an individual passes from first hearing about an innovation to final adoption. So adoption can be said to be the decision by an individual to become a regular user of the product.

When marketers introduce a new product or a new innovation to its target market, a lot of planning goes into managing the resistance to adopt the new innovation. This is because it involves bringing about a change in buyer’s attitude and perception. Generally it is assumed that the consumer goes through five stages in the process of adopting new products.

1. Awareness Stage:

In this stage an individual comes to know about a new innovation or new idea or new product/service. He becomes aware of the innovation from any source of information such as from friends, neighbour, co-workers, commercial sources etc.

The individual only learns about the new innovation from either of the sources of information mentioned above. This means his knowledge about the new innovation is only limited to the extent of the information generated by the source of information from where he first learns about the new innovation.

2. Interest Stage:

After being aware of the new product or innovation, in this stage, the consumer gets stimulated and interested in the innovation. He goes about seeking more information about the new product. He is interested in gathering more detailed information related to the innovation in terms of its utility aspects, performance, durability and so on.

3. Evaluation Stage:

The consumer ‘interested’ in the innovation will seek more information on it from all the sources he finds reliable. After collecting all the information on the innovation, the consumer will mentally try to evaluate the worthiness of the innovation. He will assign weights to the product attributes and work out to what extent the new product will be useful to him and then decide on whether or not to buy the new product.

4. Trial Stage:

After evaluating the worthiness of the new product, the consumer may decide to try out the innovation on a small scale basis initially and make an actual assessment of the value of the new product. This stage also indicates that now the consumer is mentally prepared to try out the innovation, though initially on a small scale.

He/she wants to experiment with the innovation and depending on how comfortable they are with the product, they will decide whether or not new product or innovation, it looks more logical and practical to go for a sample trial before opting for full time usage.

5. Adoption Stage:

On being satisfied with the use of the new product, purchased by him on a trial basis, the consumer now decides to make full and regular use of the innovation. This is the last stage in the adoption process. The consumer takes the decision to go for a full-fledged and continuous use of the new product or innovation.

The marketer must think of ways to help or facilitate easy movement of consumers through all these stages. Understanding how a consumer seeks and processes information about new products and the decision-making process can help marketers to devise suitable ways which will help in the early adoption of the new products.

When the Future group’s Managing Director, Kishore Biyani started Top 10, a store that targets fashion for the college campus, tee-shirts, jeans, accessories and so on and also ranks the top 10 selling items in the store, the store was not able to attract consumers. A study carried out revealed that teenagers always came accompanied by their parents and this meant they wouldn’t buy what they wanted.

So a decision was taken to change the format around. Accordingly clothes were put in bins, on hangers, painted graffiti on the walls — all to make the store look like a really large teenagers room. This decision in fact induced interest, evaluation and trial among the target audience. Thereafter, the shop was full of college-going kids and parents were absolutely not welcome.

Although the above-mentioned traditional adoption process model is very simple to understand, it has got certain limitations.

1. This process has not taken into consideration the fact that there is a need or problem recognition stage confronting a consumer before he becomes aware of the various options or solutions.

2. The model does not consider that there is a possibility of the consumer rejecting the product after the trial or that he may not use the product on a continuous basis.

3. Another fact which is not adequately recognized is that usually, the evaluation takes place through-out the decision-making process and not necessarily at the evaluation stage only.

4. The model does not include the post-purchase evaluation behavior, which may either lead to a firm commitment or a decision to discontinue usage of the product.

In view of the above-cited limitations, consumer researchers have suggested including two more stages between the trial and adoption stages, direct product experience (consequences) and product evaluation (confirmation) stages. The proposed modification to the adoption process is given hereunder.

It is seen that the adoption process starts with- Stage 1 → awareness, which leads to stage 2 → interest and then to stage 3 → evaluation. After this stage, the product can either be rejected or tried out (stage 4) either before or after purchase. The trial stage may lead to stage 5 → direct product experience and the consequences of the experience stage 6 → product evaluation, this will ultimately result in either rejection or adoption (stage 7) of the product.

Examples of adopting innovations which were directly visible in the changes in behavioral pattern and lifestyle of consumers are automobiles, air conditioners, microwave oven, and PC (Personal computer).

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