Page 202 - DMGT506_CONSUMER_BEHAVIOUR

Unit 14: Opinion Leadership and Diffusion of Innovation

tend to collect more information and evaluate more brands than is the case with early Notes
adopters and, therefore, the process of adoption takes longer. They tend to be price sensitive
and like to see competitors enter the market. They are socially active, somewhat older,
less well educated and less socially mobile than early adopters and are seldom leaders.
They rely heavily on interpersonal sources of information and are an important link in
the process of diffusing new ideas because of their position between earlier and later
adopters.

4. The late majority (34.0 per cent) are somewhat sceptical about innovations. They are
conservative, wary of progress, rely on tradition and generally adopt innovations in
response to group norms and social pressure, or due to decreased availability of the
previous product rather than positive evaluation of the innovation. They tend to be older,
with below average income and education and have less social status and mobility than
those who adopt earlier. In many developing countries, consumers who are just now
learning to use the Internet are late majority consumers. They tend to place high value on
bundled products that include everything they need to connect to the Internet.
5. Laggards represent the last 16.0 per cent of adopters. Like innovators they are the least
inclined to rely on the group’s norms. Laggards are tradition bound, tend to be dogmatic
and make decisions in terms of the past. By the time they adopt an innovation, it is old and
has been superseded by something else. They tend to be suspicious of new products and
alienated from a technologically progressing society and adopt innovations with
reluctance. In the personal computer market consumers who can afford and have yet to
buy a PC are likely to be regarded as laggards.

14.2.6 Rate of Diffusion

Rate of diffusion refers to the cumulative level of adoption of an innovation over time among
groups. For example, it has taken a little over three decades since TV was introduced in India and
not even 70% households own a TV set. Even adoptions of some other low-cost innovations are
much slower in Indian rural markets. Most of the households in rural India do not own a
telephone connection. Even in cities, so far, the use of automatic teller machines is growing
slowly. In developed and relatively fast developing countries the speed of adoption of innovations
seems to be increasing. In a study, Richard W Olshavsky found that consumers are adopting
innovations comparatively more readily than they used to. There are four major reasons that
explain why innovations are adopted more quickly:

1. With the increase in household disposable income, new products are likely to be more
affordable.
2. Rapid technological advances require quicker adoption cycles.

3. As technology is becoming more standardised, it reduces consumers’ risk perception
associated with the adoption of a new product. The rate of diffusion of Pentium processor
based PC was fairly quick because of the acceptance of DOS (Disk Operating System) as the
industry-wide standard.
4. Information regarding innovation is communicated rapidly and is accessible to the
consumers conveniently. Obviously, the more quickly consumers become aware and gain
knowledge about a new product through mass media and Internet, the faster is
communication to various groups.

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