Creation and Diffusion of Culture

Question 1

Continuous innovation:

Answer 1

Modifications to an existing product (like the iPhones)

Question 2

Innovation:

Answer 2

A product/ service that are perceived to be new or novel in some way (activity, brand, variation, manufacturing/ production technique, delivery technique, packaging).

Question 3

Dynamically Continuous Innovation:

Answer 3

A more pronounced change to a product (category) that already exists, that changes behaviour (from a physical keyboard to a digital keyboard on the phone).

Question 4

Discontinuous innovation:

Answer 4

A major change/ a new product category (the phone when it was first invented, for example).

Question 5

Diffusion of innovation:

Answer 5

Process that a product/ service/ idea spreads through the population.

Innovators, Early Adopters, [CHASM] Early Majority, Late Majority, Laggards.

They are different persuasion methods before and after the Chasm.

Question 6

After chasm:

Answer 6

Low involvement -> fun/emotional communication.
Need for conformity, social proof, others have validated the product -> celebrity endorsements, product placement, endorsement/ review from friends (early adopters).
price: in a mature market -> price discrimination (diff price for diff segments).

Question 7

5 Prerequisites for Successful Adoption by Consumers/ Crossing the Chasm

Answer 7

• Relative advantage: Must have advantages that others products don’t have.
• Compatibility: Must fit the consumers’ lifestyle.
• Observability: Those that are observable spread faster. -> Observability refers to the extent to which the benefits and outcomes of an innovation are easily observable or demonstrable to others (can see the benefits and outcomes with their own eyes).
• Trialability: Consumers try it more because of the reduced risk.
• Complexity: The simpler, the better.

Question 8

Diffusion of fashion (stages):

Answer 8

• Introduction: Where fads live (short-lived fashion, that don’t get adopted by the majority).
• Growth: Fashion trend growth.
• Maturity: Class products (products with a long acceptance cycle like white sneakers).
• Decline: Decreasing in popularity.

Question 9

Diffusion of fashion (triangle):

Answer 9

Top: High fashion (high-status consumers).

Middle: Adoption by early adopters with a high need for status (middle-status consumers).

Mass market: Lower-status consumers.

Trickle down effect (fashion acceptance goes up to down)

Can also go down to up (ripped jeans, and flip flops).

Question 10

Before chasm:

Answer 10

• High-involvement = information, utilitarian/functional communication.
• High need for uniqueness -> manage the impression of scarcity (limited supply, invite-only, waiting lists).
• Price (price skimming [Apple], price penetration [Netflix]).