8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 1/49
Sunday, May 1, 2011 Prof R S Mathur 1
Innovation Diffusion
Prof. R.S.Mathur
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 2/49
Sunday, May 1, 2011 Prof R S Mathur 2
Invention-Innovation-Diffusion Triology
• 1. Invention:the technological change process including theconception of new ideas.2. Innovation:the innovation process that involves the developmentof new ideas into marketable products andprocesses. "The doing of new things or the doing of things that are already being done in a new way."3. Diffusion
the diffusion stage in which the new products andprocesses spread across the potential market.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 3/49
Sunday, May 1, 2011 Prof R S Mathur 3
Diffusion of Innovation (DoI)
• Some inventions 'take the world by storm'
(archetype: the Sony Walkman).
• Others seem to fail, lie dormant for decades,but when 'their time has come', their use grows
quickly, even explosively (archetype: the fax
machine).
• Most achieve slow penetration at first, then
their adoption grows more quickly, but later
slows down again.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 4/49
Sunday, May 1, 2011 Prof R S Mathur 4
Diffusion of Innovation
Images created and permission granted by Ted Jalbert
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 5/49
Sunday, May 1, 2011 Prof R S Mathur 5
• Learning…….. the nature’s way
In 1953, a young female Macaque monkey in the south of Japanwashed a muddy sweet potato in a stream before eating it. Thisobvious improvement in food preparation was imitated quickly byother monkeys and in less than 10 years it became the norm in herimmediate group; by 1983, the method had diffused completely.
• In 1956, the same monkey innovated again, inventing a techniquein which handfuls of mixed sand and wheat grains were cast uponthe sea, so that the floating cereal could be skimmed from thesurface. Again, by 1983, this method of gleaning wheat had diffused
almost completely throughout the local populations of Macaques.• Besides the obvious fact that humankind does not have a monopoly
on innovation, these examples illustrate a couple of things about thediffusion of innovations: first, when they are clearly better thanwhat went before, new ideas of how to do things will usually spread
via a “learning by observing” process, and second, the process cantake some time; in these cases it took thirty years, and the life cycleof the Macaque monkey is somewhat shorter than ours (Kawai,Watanabe, and Mori 1992).
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 6/49
Sunday, May 1, 2011 Prof R S Mathur 6
Peter F. Drucker
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 7/49
Sunday, May 1, 2011 Prof R S Mathur 7
Innovation
• “Because its purpose is to create a
customer, the business enterprise has two –
and only these two– basic functions:marketing and innovation.”
• Peter Drucker, People & Performance,
• Harper & Row, 1977
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 8/49
Sunday, May 1, 2011 Prof R S Mathur 8
• Gabriel Tarde (1903)
– S-shaped curve for diffusion processes
• Ryan and Gross (1943): adopter categories
– Innovators
– Early adopters
– Early/Late Majorities – Laggards
Original Theorists
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 9/49
Sunday, May 1, 2011 Prof R S Mathur 9
Original Theorists
• Katz (1957) :
– media opinion leaders opinion followers
• Everett M. Rogers
Diffusion of Innovations (1962-95)
– the process by which an innovation is communicated
through certain channels over time among the
members of a social system
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 10/49
Sunday, May 1, 2011 Prof R S Mathur 10
Everett M. Rogers
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 11/49
Sunday, May 1, 2011 Prof R S Mathur 11
Rogers’ Diffusion of InnovationStages of adoption:
1. Awareness - the individual is exposed to the
innovation but lacks complete information
about it
2. Interest - the individual becomes interested
in the new idea and seeks additional
information about it.
3. Evaluation - individual mentally applies the
innovation to his present and anticipated
future situation, and then decides whetheror not to try it
4. Trial - the individual makes full use of the
innovation.
5. Adoption - the individual decides tocontinue the full use of the innovation
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 12/49
Sunday, May 1, 2011 Prof R S Mathur 12
Diffusion of Innovation Model
Knowledge
Persuasion
Decision Confirmation
Communication Channels
Adoption Rejection
Adopters• Personality A• Social characteristics• Perceived need for innovation
Social System• Social system norms
• Tolerance of deviancy• Communication
integration
Characteristics of
Innovations
• Relative advantage• Compatibility• Complexity• Triability• Observability
• Later Adoption• Continued Rejection
• Continued Adoption• Discontinuance
Time
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 13/49
Sunday, May 1, 2011 Prof R S Mathur 13
Diffusion of Innovation Model
Knowledge
Persuasion
Decision Confirmation
Communication Channels
Adoption Rejection
Adopters• Personality characteristics• Social characteristics• Perceived need for innovation
Social System• Social system norms
• Tolerance of deviancy• Communication
integration
Characteristics of
Innovations
• Relative advantage• Compatibility• Complexity• Triability• Observability
• Later Adoption• Continued Rejection
• Continued Adoption• Discontinuance
Time
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 14/49
Sunday, May 1, 2011 Prof R S Mathur 14
Diffusion of Innovation Model
Knowledge
Persuasion
Decision Confirmation
Communication Channels
Adoption Rejection
Adopters• Personality characteristics• Social characteristics• Perceived need for innovation
Social System• Social system norms
• Tolerance of deviancy• Communication
integration
Characteristics of
Innovations
• Relative advantage• Compatibility• Complexity• Triability• Observability
• Later Adoption• Continued Rejection
• Continued Adoption• Discontinuance
Time
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 15/49
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 16/49
Sunday, May 1, 2011 Prof R S Mathur 16
Valente (1996)Social network thresholds
• Personal network thresholds: number of members within personal network that must
have adopted before one will adopt - Accounts for some variation in overall
adoption time
-“Opinion leaders” have lower thresholdsand influence individuals with higherthresholds
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 17/49
Sunday, May 1, 2011 Prof R S Mathur 17
Factors affecting diffusion
1. Innovation characteristics
2. Individual characteristics
3. Social network characteristics
4. Others…
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 18/49
Sunday, May 1, 2011 Prof R S Mathur 18
Innovation characteristics• Observability
– The degree to which the results of an innovation are visible to potentialadopters
• Relative Advantage
– The degree to which the innovation is perceived to be superior to currentpractice
• Compatibility – The degree to which the innovation is perceived to be consistent with socio-
cultural values, previous ideas, and/or perceived needs
• Trialability
– The degree to which the innovation can be experienced on a limited basis
• Complexity – The degree to which an innovation is difficult to use or understand.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 19/49
Sunday, May 1, 2011 Prof R S Mathur 19
Individual characteristics
• Innovativeness
– Originally defined by Rogers: the degree to
which an individual is relatively earlier in adopting an
innovation than other members of his social system
– Modified & extended by Hirschman (1980):
• Inherent / actualized novelty seeking
• Creative consumer
• Adoptive / vicarious innovativeness
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 20/49
Sunday, May 1, 2011 Prof R S Mathur 20
Other individual characteristics
• Reliance on others as source of
information
• Adopter threshold
• Need-for-change / Need-for-cognition
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 21/49
Sunday, May 1, 2011 Prof R S Mathur 21
Network characteristics
• Opinion leadership: number of
nominations as source of information
• Number of contacts within each adopter
category
• Complex structure
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 22/49
Sunday, May 1, 2011 Prof R S Mathur 22
Other possible factors:
-Social environment of diffusion of
innovation
– Marketing strategies employed
– Institutional structures (e.g., government)
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 23/49
Sunday, May 1, 2011 Prof R S Mathur 23
The Buyer Decision Process
Post purchaseBehavior
Purchase
Decision
Informatio
nSearch
NeedRecognitio
n
Evaluationof
Alternatives
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 24/49
Sunday, May 1, 2011 Prof R S Mathur 24
Stages in the Adoption ProcessStages in the Adoption Process
AwarenessInterest
Evaluation
Trial
Adoption
Buyer Decision Process
for New Products
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 25/49
Sunday, May 1, 2011 Prof R S Mathur 25
Model of Consumer Behavior
Marketing and
other stimuli
Marketing
Product
Price
Place
Promotion
Other
Economic
Technological
Political
Cultural
Buyer’s
Black Box(mind)
Buyer
characteristics
Buyer DecisionProcess
Buyer
Responses
Product choice
Brand Choice
Dealer choice
Purchase timing
Purchase amount
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 26/49
Sunday, May 1, 2011 Prof R S Mathur 26
SignificantDifferences
betweenbrands
Complex
buying behavior
Lowinvolvement
FewDifferences
betweenbrands
Dissonance-
reducing buying
behavior
Habitual buying
behavior
Variety-seeking
buying behavior
Highinvolvement
Types of Buying-Decision
Behavior
Four Types of buying behavior
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 27/49
Sunday, May 1, 2011 Prof R S Mathur 27
The Buyer Decision Process
• Need recognition
• Information search
• Evaluation of alternatives
• Purchase decision
• Post purchase behavior
• Needs can be triggered by:
– Internal stimuli• Normal needs become
strong enough to drive
behavior
– External stimuli
• Advertisements
• Friends of friends
ProcessProcessStagesStages
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 28/49
Sunday, May 1, 2011 Prof R S Mathur 28
Technology Acceptance ModelPerceived
Ease of use
Decision Actual
Behavior
Perceived
Usefulness
Perceived
Ease of
use
DecisionActual
Behavior
R M d l
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 29/49
Sunday, May 1, 2011 Prof R S Mathur 29
Rogers ModelCOMMUNICATION CHANNELS
Knowledge Persuasion Decision Implementation Confirmation
1.Adoption
2.Rejection
Continued
AdoptionLater Adoption
Discontinuance
ContinuedRejection
PRIORCONDITIONS1. Previous
practice2. Felt needs/
problems
3.Innovativness4. Norms of
the socialsystem
Characteristics
of the Decision-Making Unit1 Socio-economic Characteristics2. Personality
variables3.
Perceived
Characteristics of the Innovation
1. Relativeadvantage2. Compatibility3. Complexity
4. Trialability5. Observability
Knowledge Persuasion Decision Implementation Confirmation
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 30/49
Sunday, May 1, 2011 Prof R S Mathur 30
Product CharacteristicsProduct Characteristics
TrialabilityCan the innovationbe used on a
trial basis?
TrialabilityCan the innovation
be used on atrial basis?
ComplexityIs the innovation
difficult tounderstand or use?
ComplexityIs the innovation
difficult to
understand or use?
ObservabilityCan results be easily
observed or describedto others?
Observability
Can results be easilyobserved or described
to others?
CompatibilityDoes the innovationfit the values andexperience of the
target market?
CompatibilityDoes the innovation
fit the values andexperience of the
target market?
Relative
AdvantageIs the innovationsuperior toexistingproducts?
RelativeAdvantage
Is the innovationsuperior toexistingproducts?
Buyer Decision Process
for New Products
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 31/49
Sunday, May 1, 2011 Prof R S Mathur 31
Diffusion
• Innovation is of little value unless it diffuses
• Curiously, diffusion theory’s dominant
paradigm emanated in rural sociology
• Everett M. Rogers’ Diffusion of Innovations
was published in 1962 and is one of the most
cited books in the social sciences. Now in its5th edition.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 32/49
Sunday, May 1, 2011 Prof R S Mathur 32
Innovation Adoption Decision
1. Innovation decisions may be optional (wherethe person or organisation has a realopportunity to adopt or reject the idea),
2. Collective (where a decision is reached byconsensus among the members of a system),or
3. Authority-based (where a decision is imposedby another person or organisation whichpossesses requisite power, status or technicalexpertise).
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 33/49
Sunday, May 1, 2011 Prof R S Mathur 33
Adopter Categories
• Different categories are identified as:
1. Innovators (venturesome);
2. Early adopters (respectable);
3. Early majority (deliberate);
4. Late majority (sceptical);
5. Laggards (traditional).
Ad ti L l f
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 34/49
Sunday, May 1, 2011 Prof R S Mathur 34
Innovators / Leading edge:
• Experiment frequently with emerginginnovations
• Leaders
Adoption Levels of Technology
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 35/49
Ad ti L l f
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 36/49
Sunday, May 1, 2011 Prof R S Mathur 36
Earlyadopters:
• Uses advancedfeatures ingenerallyadoptedinnovations
Adoption Levels of Technology
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 37/49
Sunday, May 1, 2011 Prof R S Mathur 37
2. EARLY ADOPTERS
The next 13.5% of adopters are "Early Adopters".
• They are the social leaders, popular and educated.
• They are the visionaries in their market and arelooking to adopt and use new technology to achieve arevolutionary breakthrough that will achieve dramatic
competitive advantage in their industries.• They are attracted by high-risk, high-reward projects
and are not very price sensitive because they envisiongreat gains in competitive advantage from adopting a
new technology.• They typically demand personalized solutions and
quick-response, highly qualified sales and support.
Ad ti L l f
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 38/49
Sunday, May 1, 2011 Prof R S Mathur 38
Early Majority /Mainstream:
• Uses generallyadopted innovationsproficiently on aregular basis
• Not prone to
experimentation
Adoption Levels of Technology
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 39/49
Sunday, May 1, 2011 Prof R S Mathur 39
3. EARLY MAJORITY
The next 34% of adopters are formed by the "Early Majority".• They are deliberate and have many informal social contacts.
• Rather than looking for revolutionary changes to gain productivityenhancements in their firms, they are motivated by evolutionary changes.
• They have three principles in the adoption of new technology:
1. - “When it is time to move, let’s move all together”. This principle defines whyadoption increases so rapidly in the diffusion process and causes a landslide indemand.
2. - “When we pick a vendor to lead us to the new paradigm, let us all pick thesame one”. This principle explains which firm will become the market leader.
3. - “Once the transition starts, the sooner we get it over with, the better”. This
principle shows why the transition stage occurs rapidly.
Adoption Le els of
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 40/49
Sunday, May 1, 2011 Prof R S Mathur 40
Late Majority /Reluctant:
• Skeptics
• Try to use generallyadopted innovationsbut have problemsusing basic features
• Will use innovations
or products only whenthe majority are usingit
Adoption Levels of Technology
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 41/49
Sunday, May 1, 2011 Prof R S Mathur 41
4. LATE MAJORITY•
The next 34% of adopters are the "Late Majority".
• They are skeptical, traditional and of lower socio-economic status.
• They are very price sensitive and require completelypreassembled, bulletproof solutions.
• They are motivated to buy technology just to stayeven with the competition and often rely on a single,
trusted adviser to help them make sense of technology.
Adoption Levels of
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 42/49
Sunday, May 1, 2011 Prof R S Mathur 42
Laggards /Avoiders:
• Love to hang onto the old ways
• Critical of new ideas
• Use technology as little aspossible
• Will accept innovation only if ithas become mainstream over aperiod of time
Adoption Levels of Technology
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 43/49
Sunday, May 1, 2011 Prof R S Mathur 43
5. LAGGARDS
•
The last 16% of the adopters consists of "Laggards".
• Laggards are technology skeptics who wantonly to maintain the status quo.
• They tend not to believe that technology canenhance productivity and are likely to block new technology purchases.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 44/49
Sunday, May 1, 2011 Prof R S Mathur 44
Tom Sawyerism
• The most effective means of motivating
other-directed personalities (middle to
late adapters) to accept new thinking andchange is by "Tom Sawyerism,“
• Demonstrating satisfaction from
tangible benefits without direct advocacy.• Painting a fence…
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 45/49
Sunday, May 1, 2011 Prof R S Mathur 45
• Roger’s model has found wide appeal and
application in such disciplines as marketing
and management science. The model’s mostsignificant application is the Bass Diffusion
Model where the process of how new
innovations are adopted through theinteraction of current and potential users is
described mathematically
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 46/49
Sunday, May 1, 2011 Prof R S Mathur 46
Three Sets of Personalities
• Another way to look at any society facingchange is by looking at three distinctpersonalities.
1. There are drivers (early adapters), who drivenew innovations and thinking.
2. There are the riders (middle adapters) whowill eventually ride along with new trends.
3. And there are always the draggers (lateadapters) who are still grousing about usingwordprocessing and the fax machine.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 47/49
Sunday, May 1, 2011 Prof R S Mathur 47
Innovation Diffusion Curve
• Together, these three main groups create a bellcurve of innovation diffusion.
• The amount of time it takes for an innovationto diffuse across society can vary based onmany factors.
• Widespread use of the telephone took 25 years,fifteen years for personal computers, sevenyears for widespread use of the fax machine,and five years for widespread use of the WorldWide Web.
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 48/49
Sunday, May 1, 2011 Prof R S Mathur 48
The S- Curve of Innovation Diffusion
P d t Lif C l &P d t Lif C l &
8/7/2019 RSM InnovationDiffusion
http://slidepdf.com/reader/full/rsm-innovationdiffusion 49/49
Sunday May 1 2011 Prof R S Mathur 49
Innova-
torsEarly
Adopters
Early
Majority
Late
MajorityLaggards
Product Life Cycle &
Diffusion of Innovations
Product Life Cycle &
Diffusion of Innovations
20%
Source: Rogers & Shoemaker,
Communication of Innovations
Top Related