Chapter 14

Question 1

How are new product and services accepted?

Answer 1

1. Diffusion

2. adoption

Question 2

define adoption

Answer 2

Adoption is a micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product

Question 3

define diffusion

Answer 3

=MACRO PROCESS The process by which the acceptance of an innovation (product/service) is spread by communication (e.g. mass media, sales staff, WOM) to members of a social system (target audience) over a period of time.

Question 4

What are the four basic elements of the diffusion process?

Answer 4

1. The innovation
2. the channels of communication
3. the social system
4. time

Question 5

what are the various definitions of an innovation? (Diff1)

Answer 5

1. Firm- oriented definitions
2. product- oriented definitions
3. market- oriented definitions
4. consumer- oriented definitions

Question 6

define firm- oriented definitions

Answer 6

• The newness of a product depends on the company producing or marketing it
• This includes products that is new to the specific company and not just products that are new to the marketplace
• Copies and modifications of a competitor’s product would also be new for the firm

Question 7

Define product- oriented definitions and the types

Answer 7

focus on features found in the product itself that effects the consumers
established usage patterns
types:
1. Continuous innovation - least disruptive influence on patterns; involves the introduction of a modified product
2. dynamically continuous innovation - more disruptive that still does not alter patterns; creation of new product or modification of existing product (pc to laptop)
3. discontinuous innovation - requires consumers to adopt new behaviour patterns (PC, telephone)

Question 8

Define market-oriented definitions

Answer 8

(1) Product is considered new if it has been purchased by a small, fixed percentage of the potential market
(2) Product is considered new if it has been on the market for a short (specified) period

Question 9

Define consumer-oriented definitions

Answer 9

a new product is any product that a potential customer judges to be new

Question 10

List five product characteristics that seemed to influence consumer acceptance of new products

Answer 10

1. relative advantage – perceive as superior to existing substitutes
2. compatibility – consistent with current needs
3. complexity – easy to understand/use
4. trialability – capable of being tried on limited basis
5. observability – benefits can be observed?
   If these are rejected – said to be resistant to innovation

Question 11

Technological fears:

Answer 11

1. technical complexity
2. rapid obsolescence
3. social rejection
4. physical harm