Product adoption and diffusion

1. Product Adoption
and Diffusion

2. • The life cycles of all new products are highly dependent upon how
the market responds to these products. As a result, we need to
spend some time examining a conceptual model of how consumers
adopt new products and how these new products diffuse through
social systems over time.
• The new product adoption process is and individual process in
which a consumer decides to adopt a new product for his or her
personal use.
• The new product diffusion process is the spread of a new product
through a given social system.

3. Product Adoption
The concept of product adoption is concerned with new product.
There are basically there methods for developing new product:
INNOVATIONS
Innovations implies research and
Development activities.
MODIFICATIONS
1) Quality modifications
2) Functional modifications
3) Style modifications
“ME TOO PRODUCTS”
Producing same goods and services those have already rocked the market.

4. • Product adaptation is concerned with how customers learn about
the new product for the first time and make decisions to become its
regular users.
• It is the mental process through which an individual passes form first
learning about an innovation (new product) to its final adoption.

5.  Awareness:
 Awareness is the point at which consumers first become aware of the new product’s existence but lacks enough
information.
 Awareness is a function of, and is highly dependent on, marketing communications and consumer word-of -mouth
behavior.
 Creating awareness and interest in the new product is probably the most critical promotion objective associated with any
new product launch.
 Advertising, publicity, and sales promotions are crucial for creating awareness and interest in new products.
 Interest:
 When the product catches the consumer’s attention and she herself tries to discover more and more about it.
 Once aware of the new product, consumers may establish an interest in that product if they perceive a fit between the
benefits the products delivers and their own wants and needs.
 Consumers who are interested in new products will be more attentive in search of information about those products.
 For example, consumers interested in a new brand of high performance computer may actively seek information about that
computer from internet sites, retail stores, and articles in computer magazines. The consumer also will be more attentive
to advertising for the brand.

6.  Evaluation:
 In this stage, the consumer has enough knowledge about the product and s/he considers its relative benefits and
evaluates it in terms of various factors as cost, aesthetics, competitors’ offering, etc.
 Trial:
 If the evaluation is favorable, consumers are more likely to take the next step, trial. During trial, the product is
sampled on a limited basis and further evaluated.
 Trial can be stimulated by marketing activities. Free samples and coupons are quite effective at stimulating trial
as they effectively reduce the potential risk surrounding trial for many consumer non-durable products,
particularly convenience goods.
 Reducing the risk of trial is most critical for consumer durable products because these products are typically
more expensive. Marketers reduce the perceived risk of trial for such products by offering generous warranties
and return policies. Some products actually can be 'test driven' prior to purchase. Obvious examples are cars and
microcomputers.
 Adoption or Rejection decision:
 This is the stage when the consumer has made up his/her mind whether to remain with the product or switch
back to her earlier product.

7. Product Diffusion
• the diffusion process describes the spread of a new product or innovation through a social group. It
refers to the market development process of new product. The speed with which a new product
diffuses through a social group is a function of the fact that different people adopt new products at
different rates.
• Some people will adopt products more quickly than others. Often the people who adopt the product
first are very different than those people who adopt the product in later time periods.
• Marketers attempt to identify the characteristics of these initial adopters and construct marketing
strategies to influence them. Carefully constructed advertising programs supported by sales
promotions, trade promotions and personal selling efforts that are targeted specifically to the initial
adopters of new products can dramatically speed the diffusion process.
• Because consumers adopt new products at different rates, we can divide up the total population of
all consumers who adopt a given product into five basic categories

9. Pioneers or Innovators:
 Innovators typically are characterized as higher on the socio-economic
ladder than are consumers in subsequent adopter categories. They buy
products during introduction stage of PLC
 They are said to be more venturesome, educated, financially stable, and
willing to take risks associated with new product purchase and adoption.
 Innovators are certainly important from the standpoint that they are the
first consumers to adopt new products. However, innovators are not as
influential as are the individuals in the next category of adopters -- the early
adopters -- when it comes to convincing others to try new products. In other
words, innovators generally do not contribute significantly to word-of-
mouth communications.

10. Early Adopters
 Early adopters are also quick to buy new products and services, and so are key opinion leaders with
their neighbors and friends as they tend to be amongst the first to get hold of items or services.
 the early adopter category consists of 13% to 15% of the adopter population. Early adopters are
important early in a product’s life cycle because this category contains opinion leaders. The
influence of opinion leaders can determine a new product's success or failure in the market place.
As a result, marketers are particularly interested in identifying these individuals and positively
influencing their purchase decisions. Marketers direct a substantial amount of promotion at
opinion leaders very early in a product’s life cycle in order to generate favorable word-of-mouth
communications.
 Effectively targeting and developing demand with the early adopter is perceived as a critical step in
launching a successful new product. Targeting early adopters can be relatively easy.
 Early adopters may have specific preferences for advertising media, such as the types of magazines
and newspapers read, types of television shows viewed, and preferred radio stations. Astute
marketers will target the appropriate communications media required to reach these opinion
leaders with a substantial portion of their promotion budget.

11. Early majority
 The early majority tends to be more deliberate and more
cautious than innovators and early adopters.
 Members of the early majority category are characterized as
"solidly middle class consumers."
 They are somewhat average in socio-economic status.
Successfully targeting the early majority determines whether
a new product will eventually succeed in general use or will
remain a product that serves primarily a narrower niche
market.

12. late majority
 The late majority category is quite similar to the early
majority with respect to its members' characteristics and
propensity to take risks.
 The late majority typically adopt when the product is
approaching or has reached the mature phase of the product
life cycle.
 Thus, the product has already been widely accepted, which
serves to reassure the risk averse consumer in this category
of the product’s merits. Moreover, price competition probably
has substantially lowered the realized price of the product.
Given their lower standing on the socio-economic ladder,
many consumers in this category may only at this point in
time be able to afford this product.

13. Laggards
 Laggards resist new product adoption almost to the point that
they will adopt only after the product has become obsolete and is
in imminent danger of replacement by new products, often based
on new technologies.
 Laggards are characterized as highly resistant to challenges of
tradition, more orientated toward the past, and as highly risk-
averse. These consumers tend to be older in age and lower in
socio-economic status than members of other adopter categories.