Lecture 10 Innovations- Adoption, resistance, diffusion

Question 1

What are innovations?

Answer 1

An innovation is an offering that is perceived as new by consumers within a market segment and that has an effect on existing consumption patterns

Question 2

What are the 3 classifications of innovations?

Answer 2

1. Their degree of novelty (change in consumption patterns)
2. The type of benefits they offer (functions, attributes, advantages)
3. Their breadth (new and different uses)

Question 3

What can innovations be classified on based on their degree of novelty?

Answer 3

1. Discontinuous innovation (complete change)
2. Dynamically continuous innovation (pronounced effect)
3. Continuous innovation (limited effect)

Question 4

What can innovations be classified on based on the type of benefits offered?

Answer 4

1. Functional innovations (utilitarian/functional benefits)
2. Hedonic/aesthetic innovations (appeals 2 aesthetic, pleasure-seeking, sensory needs)
3. Symbolic innovations (new social meaning)

Question 5

What can innovations be classified on based on their breadth?

Answer 5

1. High-breadth innovations (many different uses)

2. Low-breadth innovations (limited uses)

Question 6

What is co-creation theory?

Answer 6

Actively involving consumers in creating value through participating in new product development among other marketing activities

Question 7

What is adoption?

Answer 7

A purchase of an innovation by an individual customer or household → negative consequences are outweighed by positive ones

Question 8

What is resistance?

Answer 8

A desire not to buy an innovation, even in the face of pressure to do so → high perceived risk

Question 9

How do consumers adopt innovation?

Answer 9

1. High-effort hierarchy of efforts: purchase based on considerable decision making effort; awareness → info search → attitude formation → trial → adoption
2. Low-effort hierarchy of efforts: purchase based on limited decision-making effort; awareness → trial → attitude formation → adoption

Question 10

What is Roger’s theory?

Answer 10

Different adopter groups: innovators (2.5%), early adopters (12.5%), early majority (34%), late majority (34%), laggards (16%)

Question 11

How can marketers use adoption to understand product timing?

Answer 11

Can help to determine the number of groups, their size and what times consumers adopt new products into the market → examining this rate can assist in understanding how innovation diffuses across different markets

Question 12

What is diffusion?

Answer 12

The percentage of the population that has adopted an innovation at a specific point in time

Question 13

What are diffusion curves?

Answer 13

1. S-shaped diffusion curve: adoption begins relatively slowly and then increases rapidly; high risk and switching costs
2. The exponential diffusion curve: quick start, then increases slower; low risk and switching costs

Question 14

How does diffusion relate to the product life cycle?

Answer 14

PLC is sales over time vs D which is % of market over time, PLC curve declines but D is cumulative

Question 15

What is the 1st factor affecting resistance, adoption and diffusion?

Answer 15

Characteristics of the innovation:

• Perceived value (greater p benefits or lower p costs)
• Relative advantage (benefits superior to existing)
• Use innovativeness (use different from intended use)
• Perceived costs (switching costs)

Question 16

What is the 2nd factor affecting resistance, adoption and diffusion?

Answer 16

Uncertainty (industry standards, advantages, length of PLC)

Question 17

What is the 3rd factor affecting resistance, adoption and diffusion?

Answer 17

Consumer learning requirements

• Compatibility (consistent with needs/values/norms)
• Trialability (tried on limited basis before adoption)
• Complexity (complicated and difficulty to understand/use)
• Social relevance (extent of observation or social observation)

Question 18

What is the 4th factor affecting resistance, adoption and diffusion?

Answer 18

Legitimacy and adaptability

L: extent to which an innovation follows established guidelines in category
A: extent to which innovation can foster new styles

Question 19

What is the 5th factor affecting resistance, adoption and diffusion?

Answer 19

Characteristics of the social system

• Modernity (extent of positive attitudes towards change)
• Physical distance ( > closeness of members of social system, the > diffusion)
• Homophily (> similarities of members of social system > diffusion)
• Opinion leadership (credibility people can promote diffusion)

Question 20

How do marketers overcome consumer resistance to innovation?

Answer 20

• Enhance compatibility or reduce complexity
• Use change agents such as opinion leaders
• Fit with a system of existing products
• Force an industry standard
• Use proportions to enhance trialability
• Simulate trial (free trial periods)