Page 200 - DMGT506_CONSUMER_BEHAVIOUR

Unit 14: Opinion Leadership and Diffusion of Innovation

6. Relative Advantage: If consumers perceive an innovation as better in meeting their Notes
relevant need compared to existing ones, the diffusion will be more rapid. While
considering the relative product advantage, consumers consider both the cost and the
performance. To be successful, an innovation must have either the performance or the cost
advantage over existing alternatives. For example, newer versions of computer processors
have performance advantage over earlier ones and hence their diffusion has been rapid.
7. Complexity: If an innovation is difficult to understand and also difficult to use, its diffusion
would be slower. Product simplicity and ease of use are important factors in speeding up
the process of diffusion. Computer manufacturers, such as IBM and Apple, have tried to
overcome the initial complexity of using personal computers by communicating with
consumers that their computers are user-friendly.

8. Observability: This refers to the ease with which consumers can observe the positive
effects of adopting an innovation. The diffusion will be more rapid if the positive effects
are easily observable. Products, such as cellular phones, fashion items and autos etc. are
highly visible.
9. Triability: It is the degree to which a product can be tried before adoption. This is much
less a problem with low-cost or low-risk items such as cold remedies, but cellular phones,
fax machines and computers etc. can be demonstrated in actual use and tried on a limited
scale. If consumers can purchase a product in small quantity, then trial is relatively easy.
10. Perceived Risk: The more the risk associated with trying a new product, slower the diffusion
process. The risk in adopting an innovation can be financial, physical, performance, or
social. For example, when microwave ovens were introduced, consumers expressed worries
about physical risk from radiation. Technological improvements and consumer education
overcame this perceived risk. Initially, adopters of personal computers perceived economic
and performance risks which have been largely overcome by decreasing prices and
improved software. In case of fashion items, consumers feel social risk until opinion
leaders in consumers’ peer group adopt them. The most effective way to reduce perceived
risks in adopting an innovation is through trial. Free samples are an effective tool in case
of continuous innovations of low-cost items such as detergents, or toothpaste etc. Sony
offered trial of its high-priced discontinuous innovation ProMavica electronic photography
system. It distributed 150 prototypes to large newspaper and magazine publishers. This
allowed publishers to try and experience the product and encouraged its diffusion.

14.2.4 Barriers to Adoption of Innovation

Most of the above mentioned factors could cause consumers to reject an innovation. However,
S Ram and Jagdish N Sheth have mentioned three of the above mentioned as major factors that
inhibit adoption of innovation:
1. Value barrier refers to a product’s relative advantage compared with substitute products.
When cellular phones were introduced, they were too expensive for most general consumers
relative to the value they could get from commonly used telephones. More than a decade
ago BMW introduced a 650 cc motorcycle in India. The price was in excess of 500, 000 and
consumers perceived the cost as too high relative to value.

2. Usage barrier results when an innovation is incompatible with consumers’ long established
practices. Internet shopping is not consistent with most Indians’ shopping habits and its
diffusion is extremely slow in this country. The problem is that consumers like to interact
with store personnel and to see and, if possible, touch the merchandise when they shop.
Furthermore, shopping for most Indian consumers is a social occasion and they often shop
with friends.

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