The document discusses the diffusion of innovation, which is the process by which a new product or idea is adopted by consumers over time. It covers key aspects of diffusion including the innovation itself, communication channels, characteristics of innovations that influence adoption rate, the adoption process, and categories of adopters. The adoption process involves innovators, early adopters, early majorities, late majorities, and laggards. Product characteristics like relative advantage, compatibility, complexity, trialability, and observability impact diffusion. Communication channels between marketers and consumers also impact the speed of adoption.

1. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Diffusion of
I Innovation
PART
I
Chapter 1
• Introduction
CONSUMER BEHAVIOR 2011
• Meaning & Definition
• Diffusion Process
• Adoption Process
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2. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Introduction
• Is the Market today is
CONSUMER BEHAVIOR 2011
consumer oriented?
Yes:
The market is often referred as consumer or
buyers market.
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3. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Definition & Meaning
of
Diffusion of Innovation
CONSUMER BEHAVIOR 2011
It is the process by which acceptance of
an innovation ( new product or services
or new ideas) is spread by
communication (mass media, sales
persons) to members of the target market
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over a period of time.

4. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Basic elements
 Innovation
CONSUMER BEHAVIOR 2011
 Channel of communication
 Social System
 Time
Does the innovation cater to the need of the target
customer?
Has the target customer understand how the
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innovation is relevant to their need?
Is the new product available and demonstrated
widely?

5. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I New product Benefits communicated
Eureka Forbes- Compact, easy to use, to keep home
Vacuum Cleaner clean and tidy, home delivery
CONSUMER BEHAVIOR 2011
Real Value- Fire Portable piece of safety equipment
Extinguisher
Sintex- plastic Water Low cost alternative to the
Tank traditional metal or concrete water
tank.
Vim Bar- HUL Premixed scouring solution in the
form of bar.
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Good Knight – Godrej A mosquito repellent- which has no
Hicare Ltd. smoke, no fumes, no ash, no cream,
( safe , economic and effective)

6. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I The Diffusion Process
a) Innovation
CONSUMER BEHAVIOR 2011
An Innovation can be a new concept
(idea) or product or service which
would appeal and is found to be
attractive by the target market.
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How fast the diffusion of innovation will
take place and gain acceptance among
the target customer?

7. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I The Diffusion Process
Innovation
CONSUMER BEHAVIOR 2011
Ex. of new innovations having found
acceptance among consumer.
The Cellular Phone – a compact,
reasonably priced, wireless
communication instrument, suitable
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for the lifestyle of different categories
of customers.

8. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I The Diffusion Process
Innovation
CONSUMER BEHAVIOR 2011
Ex. of new innovations having found
acceptance among consumer.
The DVD (digital video disk) player
with its CD support format, PMPO
Peak Music Power Output (PMPO)
mega bass effect, Random play feature,
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FM tuning, compact, which is easy to
use and economically priced too.

9. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I The Diffusion Process
Approaches to define a new Innovation
CONSUMER BEHAVIOR 2011
 Firm oriented
 Product oriented
 Market oriented
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10. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Firm oriented
CONSUMER BEHAVIOR 2011
 looks into newness of the
product from the prospective of
the company producing and
marketing it.
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11. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Product oriented
CONSUMER BEHAVIOR 2011
 Will focus on the features inherent
in the product itself and the effect
these features are likely to have on
consumer’s established usages
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patterns.

12. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Product oriented
CONSUMER BEHAVIOR 2011
 A continuous innovation
 A dynamically continuous
innovation
 A discontinuous innovation
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13. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Product oriented
CONSUMER BEHAVIOR 2011
 A continuous innovation
Modified version of exiting
product.
ex. Microsoft latest version of
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operating system.

14. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Product oriented
CONSUMER BEHAVIOR 2011
 A dynamically continuous innovation
Creation of new product or the modifica
-tion of existing product.
Ex. Mobile phones with video recording
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and fm tunings, erasable ink pens,
sanitary napkins.

15. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Product oriented
CONSUMER BEHAVIOR 2011
 A discontinuous innovation
Requires consumers to adopt new
behavior patterns.
ex, movie screen theaters , home
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theaters , fax machine, internet etc

16. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Approaches to define a new Innovation
 Market oriented
CONSUMER BEHAVIOR 2011
 The newness of the product or
services in terms of how much
exposure consumers have to the
new product.
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17. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
 Some products may gain consumer
CONSUMER BEHAVIOR 2011
acceptance quite fast such as
cellular phones or ICICI prudential.
 Other may take long time or never
seems to achieve wide consumer
acceptance like Real value
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Vacuumised Containers.

18. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
CONSUMER BEHAVIOR 2011
 Relative advantage
 Compatibility
 Complexity
 Trial ability
 Observbility
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19. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
CONSUMER BEHAVIOR 2011
 Relative advantage
The extent or degree to which
potential customers perceive a new
product to be superior when
compared to the existing substitute.
Ex, email – traditional letter writing.
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20. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
 compatibility
CONSUMER BEHAVIOR 2011
The extent or degree to which
potential customers feel a new product
is consistent with their present need ,
values and practices.
Ex, disposable diaper – cloth diaper.
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Hair removing lotion (Anne French) -
wax

21. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
 complexity
CONSUMER BEHAVIOR 2011
The extent or degree to which a new
product is complex or difficult to
understand.
Ex, the mixer grinder – traditional
grinding machine.
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22. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
 Trial ability
CONSUMER BEHAVIOR 2011
The extent or degree to which a new
product is capable of being tried on a
limited basis.
Ex, tea, detergent power are available in
the small sample package.
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23. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I b) Product characteristics influence
diffusion.
 Observbility
CONSUMER BEHAVIOR 2011
Refers to the ease with which a
product’s benefits or attributes can be
observed, imagined or described to
potential customers.
Ex, designers wears, jewelers and other
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fashion items get more easily diffused.

24. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I c) Channels of Communication
Determine how quickly an innovation
CONSUMER BEHAVIOR 2011
spreads through the market.
Communication
Between marketers and consumers.
Among consumers
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25. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I c) Channels of Communication
Sources of Consumer Communication
Personal- family, friends, neighbors,
CONSUMER BEHAVIOR 2011
business associates.
Commercial- sales personal,
advertising, sales promotion tactics.
Public- mass medias, consumer rating
organizations.
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Experimental – samples, free coupons,
demonstration.

26. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I c) Channels of Communication
Off line activities :-
CONSUMER BEHAVIOR 2011
Road shows, exhibitions, pop display
and posters, direct marketing, direct
mailers, tele marketing sms and online
marketing- internet marketing , email,
website.
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27. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I d) Social System
Is a physical, social, or cultural
CONSUMER BEHAVIOR 2011
environment to which customers
belongs and within which they
function.
It has its own special values or
norms, which is likely to influence
the acceptance or rejection of new
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products or services.

28. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I d) Social System
 kiran stores – supermarket,
CONSUMER BEHAVIOR 2011
specialty store malls.
More purchasing power
Change of their dressing style
Take active participation in various
fashion shows- miss famina, mega
model, male model
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29. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I e) Time
CONSUMER BEHAVIOR 2011
 The purchase time
 Rate of adoption
Adopter categories
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30. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I e) Time
 The purchase time
CONSUMER BEHAVIOR 2011
The usual route taken for increasing
consumer awareness of the new product
is through coupons, banners, pamphlets
etc
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31. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I e) Time
 Rate of adoption
CONSUMER BEHAVIOR 2011
 Determines how long it will take for a
new innovation to be adopted by
members of a social system.
 The rate of adoption is vary from
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product to product.

32. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I e) Time
 Adopter Category
CONSUMER BEHAVIOR 2011
 The way people display their
readiness to try out new products or
innovations.
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33. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I e) Time
Late Majority
CONSUMER BEHAVIOR 2011
Early
Majority
Early 34% 34% Laggards
adopters
Innovators
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13.5% 16%
2.5%

34. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART
I Adoption Process
CONSUMER BEHAVIOR 2011
 Innovators
 Early Adopters
 Early Majorities
 Late Majorities
 Laggards
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35. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Adoption Process
I
Innovators :
when new product is launched 2.5% of
CONSUMER BEHAVIOR 2011
customers try out the product.
Referred as Innovators or pioneers.
Easily acceptable to new product/ideas.
No feedback is available.
Described as outgoing, gregarious,
educated .
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Willing to follow high social class
status.

36. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Adoption Process
I
Early Adopters:
when new product is launched 13.5% of
CONSUMER BEHAVIOR 2011
customers try out the product.
Purchase or try quite early but after
verifying and gathering more information.
Recognized as opinion leaders.
Carry out lots of weight in the
community.
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 They are educated, hold high social
status

37. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Adoption Process
I
Early Majorities :
when new product is launched 34% of
CONSUMER BEHAVIOR 2011
customers try out the product.
More conservatives, thoughtful, shrewd
and prefer to wait, watch and learn.
Middle class, reasonable education,
occupation and income.
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38. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Adoption Process
I
Late Majorities :
when new product is launched 34% of
CONSUMER BEHAVIOR 2011
customers try out the product.
More conservatives, and do not
immediately respond in favor of change.
Depends on public opinion.
Limited education, average social
status, limited salary, limited purchasing
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power.

39. 1 Welcome to the Fascinating World of Consumers
CHAPTER
PART Adoption Process
I
Laggards :
when new product is launched 16% of
CONSUMER BEHAVIOR 2011
customers try out the product.
Lagging behind the acceptance of an
innovation.
Traditional brand , lot of deliberation,
caution and suspicion.
Traditional outlook.
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