Page 197 - DMGT506_CONSUMER_BEHAVIOUR

Consumer Behaviour

Notes 14.2 Diffusion of Innovation

14.2.1 Diffusion of Innovation Process

The diffusion process is the manner in which innovations spread over time to other consumers
through communication across a market. Diffusion research traces the penetration and acceptance
of an innovation across its life cycle. A new product’s phases of life cycle start from introduction
and progress up to its decline in a typical case. With this progression, there are associated
categories of adopters by the time of adoption.
The diffusion process identifies innovators in the introductory phase of life cycle; there are early
adopters during growth period, the early majority and late majority adopts the product in its
maturity period and laggards (late adopters) are the last to adopt the product. These life cycle
phases are important because they are linked to different marketing strategies during the product
life cycle. During the introductory phase, the marketer’s objectives are related to establishing
distribution, building brand awareness among members of the target market and encouraging
trial to begin the diffusion process. As the product gains some acceptance, the marketer can
define its early adopters. It now tries to strengthen its foothold in the market by shifting from
the objective of creating brand awareness to one of broadening product appeals and increasing
product availability by increasing its distribution.

As the brand matures, competition intensity gradually increases and sales begin to level off. The
marketer starts emphasising price appeals, starts sales promotions and may consider modifying
the product to gain competitive advantage. Majority of the adopters enter the market at this
stage largely because of the influence of early adopters. The majority that has already gone
through the process of product adoption does not rely much on mass media anymore for
information. When the brand is viewed to have entered in its decline phase, lower prices become
more relevant and the marketer considers revitalising the brand, or adopts the strategy of
harvesting or divesting. It is during the decaying maturity and the decline phase of product life
cycle that laggards enter the market.

Figure 14.2: Profile of Adopter Groups

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