After a product is launched in the market, its consumption typically follows a kind of diffusion pattern. The adoption of innovation by different groups of consumers over time is referred to as the ‘diffusion of innovation’. The diffusion process describes how the innovation will be adopted by different types of consumers and What factors typically govern the degree and pace of adoption of the innovation. The factors which determine the pace of adoption of innovation are typically the characteristics of the consumers, the product itself and also the marketing activities of the organisation. Consumers are deemed to be adopters if they purchase the product and use it in the fulfilment of their needs. This process of adoption typically goes through several stages, where the consumer decides on whether he will buy the product or reject it. These stages are referred as AIDA. The affective model (in which the consumer decides on the basis of emotion) describes AIDA as ‘attention’, ‘interest’, ‘desire’ and ‘action’. On the other hand, the cognitive model (where the consumer decides on the basis of logical thought) describes the same as ‘awareness’, ‘information’, ‘decision’ and ‘action’.
The acceptance of new innovations by consumers is explained by a significant research area called the diffusion of innovations. Researchers, who study the diffusion of innovation, are broadly concerned with two related concepts, i.e., the diffusion process and the adoption process. Very broadly, diffusion can be explained as a macro process which explains how an innovation or new product spreads from the source to the consumers. On the Other hand, adoption refers to a micro process consisting Of the Stages which the consumer passes through, before he decides whether to consume the innovation Or not.
Diffusion Process
Diffusion defines the way in which innovation spreads from the source to the consumer. It is different from adoption in the sense that diffusion is concerned with how a group of individuals behave whereas adoption is an individual affair. In other words, diffusion is a macro activity whereas adoption is a micro activity. The length of diffusion period may be recorded from the time the first individual adopted the new product or innovation, to the time When all individuals in the society have adopted the same. The three parameters which are used to characterise diffusion are- diffusion pattern, diffusion rate, and the possible penetration level. The diffusion rate is the pace with which the diffusion of the innovation happens. The outline of the diffusion curve (i.e., the percentage of people who become adopters in the different stages of the diffusion) reflects the diffusion pattern. The possible penetration level shows the maximum market in which the diffusion can spread. It can also be understood as the maximum sales that can accrue to product or innovation over time.
Diffusion can be considered as a communication process in which the innovation is conveyed over time through several channels to all the members of the social system. The only difference is that the message which is communicated in the diffusion process is in the form of new ideas. Generally, in communication process, individuals reach a common understanding by developing and exchanging information.
Therefore, diffusion of innovation can also be considered as the way in which new ideas and cultures are spread across different social systems and cultures. This gives a new dimension to the whole aspect of diffusion. It also leads to the advent of some uncertainty. The uncertainty occurs because the outcomes cannot be predicted accurately and different alternatives are presumed with respected probabilities of occurrences. Information helps to clear away uncertainty. It also helps in the evaluation of alternatives. Technology innovation helps in the spread Of information and helps in reducing uncertainty.
Basic Elements of Diffusion Process
Diffusion process is a combination Of several interrelated elements. These elements are essential for the successful diffusion. The different elements of the diffusion process are as follows:
- Innovation
- Communication Channels
- Social System
- Time
Innovation: The most basic and essential element of any diffusion process is innovation. Innovation can take the form of a new product or idea or a new technology. It need not to be new in terms of relation with time but should be perceived as new by the individual and society. The perceived originality of the idea or technology determines the reaction of the individual towards it. If the idea or technology is perceived as new, then it can be considered as innovation.
Communication Channels: The communication channel is the medium through which the message/innovation is conveyed to other members. The process of communication is dependent upon the relationship between the source and the recipient of the message and this relationship influences the actual transmission of information between the two individuals. Communication channels in diffusion process can take many forms. They may be in the form of mass communication channels like mass media or the internet or any other form They may also be in the forni of inter-personal communication. Diffusion is thus, a social process comprising of inter-personal communication relationships.
Social System: The process Of diffusion is not possible without a social system as members of a given social system panicipate in the actual diffusion process. Here, social system refers to the socio-cultural and physical setting, where buying decisions are made by individuals. Whereas, organisations define social system as the target market, where the product or innovation is launched. In several ways, the social structure can be considered as a borderline, within which the effects of diffusion can be seen. It can also create obstacles in the path Of diffusion. For example, in case Of lawyers Or doctors, there is a lawyer union or a council, which governs the activities of these professionals and defines their social and professional conducts.
Time: Time is a very important element Of the diffusion process. An innovation’s rate of diffusion in a system, is usually measured as the number of members of the System who adopt the innovation in a given time period. In most of the behavioural sciences, the aspect of time is ignored and not given much importance. However, in the case of diffusion this is not so. The Inclusion of time dimension makes diffusion more robust, whereas the measurement of the time dimension (this is often done by the respondents recall) has given cause for much criticism Of the diffusion process. The time element is captured in the diffusion process in:
- The innovation-decision process, through which the individual passes, after getting exposed to the innovation, to finally accepting or rejecting it, and
- In determining how early or late the individual or the unit of adoption takes up the innovation compared to other members of the social system.
Factors Influencing Rate of Diffusion
All perceived new products do not have the same potential in terms of consumer approval. Some products are accepted faster, whereas, Others have a much slower rate of diffusion. Some products like cordless phones have been accepted very fast whereas others like trash compactors do not have the same speed of diffusion.
One of the biggest problems in product marketing pertains to uncertainty. This uncertainty can reduce to a large extent if the marketers could anticipate how the different consumers Will react or accept their products. For example, if the marketer is aware that certain features in a product its rapid acceptance insociety then they would either reduce those features in their design strategy or design a promotional campaign that seeks to overcome these negative features.
Although, there is no set method by which the marketers can measure the acceptance or rejection of a product, there are ten traits that influence the acceptance of the product. These factors influencing Rate of Diffusion are:
- Types of Group
- Types of Decision
- Marketing Effort
- Fulfilment of Felt Need
- Relative Advantage
- Compatibility
- Complexity
- Trialability (or Divisibility)
- Cost
Type Of Group: Some groups Of consumers are more prone to accept new products and technologies than others. It has been seen that segments like young, wealthy and highly educated consumers are more ready to accept new product and new technology innovations. The target market thus, is a very important determinant of the rate at which the diffusion will spread.
Type of Decision: The rate of diffusion also depends on whether the decision is of an individual or is a group decision. If the purchase decision is an individual decision, then the rate of diffusion is much faster.
Marketing Effort: The rate Of diffusion is also directly proportional to the marketing efforts of the company. The company can influence the speed of diffusion to some extent.
Fulfilment of Felt Need: The rate of diffusion is faster if the product or technology is seen as the solution to some immediate need of the consumer. For example, the fast speed of diffusion of the hair care product, Rogaine, can be attributed to the felt need of customers to arrest the problem of hair loss.
Relative Advantage: Relative advantage can be defined as the degree to which the new product or innovation is considered superior to earlier products to which the consumer has been exposed. This superiority can be in the form of longer life, easier maintenance, etc. Products which are perceived by customers as having a relative advantage will be adopted by them faster.
Compatibility: Compatibility is the degree to which the innovation corresponds to the existing values, beliefs and past experiences of the consumer. If the product does not correspond to the consumers’ norms then the acceptance will be slow.
Complexity: The innovation process becomes difficult if the product aspects are confusing and difficult to understand. The simpler the product, the more rapid is the diffusion of the innovation.
Trialability: The diffusion of the product increases if the product can be sampled on a limited basis. In the absence of this, the acceptance of the product is affected.
Observability: Observability refers to how visible the product is in social situations. This leads to its wide acceptance through word Of mouth. The fast diffusion Of Apple phones can be attributed to their observability.
Cost: Cost refers to the financial aspect of adopting the innovation. Innovations that are costly are more difficult to adopt than those that are less in cost. However recent studies indicate that cost is not such an important aspect of the diffusion of innovation.