UNIT -IV

Prepared By;
Mrs. Gurpreet Kaur chhabra
 Diffusion of Innovations

• How are new products and services

accepted?

2
 The process by which the
acceptance of an
innovation is spread by
Diffusion
communication to
Process
members of a social
system over a period of
time.
Elements of the Diffusion
Process
 The Innovation
• Firm-oriented definitions
– Product is “new” to the company
• Product-oriented definitions
– Continuous
– Dynamically continuous
– Discontinuous
 Channels of Communication

• Channels of communication
– Marketer to consumer
– Consumer to consumer
– Influential impersonal sources

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 The Social System
• Modern social systems accept more
innovation due to their:
– Positive attitude toward change
– Advanced technology and skilled labor force
– Respect for education and science
– Emphasis on rational and ordered social
relationships
– An outreach perspective where members interact
with outsiders
– A system where members can see themselves in
different roles
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 Time

• Purchase Time
• Adopter Categories
• Rate of Adoption

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Diffusion Curves for Adopter Categories
- Figure 14.5

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 Rate of Adoption

• How long does it Product Number of years

Pager 41
take a new
Telephone 38
product to be
Cable television 25
adopted by the
Fax machine 22
members of a
VCR 9
social system?
Cell pone 9

PC 7

Time Required for Electronic Products to

Penetrate 10 percent of UK market
Table 14.3
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 Stages in Adoption Process
NAME OF STAGE WHAT HAPPENS DURING THIS EXAMPLE
STAGE

Awareness Consumer is first exposed to the Eric sees an ad for a 23-inch thin LCD
product innovation. HDTV in a magazine he is reading.

Interest Consumer is interested in the
product and searches for
additional information.
Evaluation Consumer decides whether or
not to believe that this product
or service will satisfy the need –
a kind of “mental trial.”
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall
Eric reads about the HDTV set on the
manufacturer’s Web site and then goes
to an electronics store near his
apartment and has a sales person show
him the unit.
After talking to a knowledgeable friend,
Eric decides that his TV will fit nicely on
top of the chest in his bedroom. He also
calls his cable company and finds out
that he can exchange his “standard”
cable box at no cost for an HDTV cable
box. 11
 Stages in Adoption Process

NAME OF STAGE WHAT HAPPENS DURING THIS EXAMPLE

STAGE

Trial Consumer uses the product on Since the HDTV set cannot be “tried”
a limited basis like a small tube of toothpaste, Eric buys
the TV at this local electronics store on
his way home from work. The store
offers a 14-day full refund policy.
Adoption If trial is favorable, consumer Eric loves his new HDTV set and expects
(Rejection) decides to use the product on a many year of service from it.
full, rather than a limited basis –
if unfavorable, the consumer
decides to reject it.

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 Models of Consumers: Four
Views of Consumer Decision
Making
• An Economic View
• A Passive View
• A Cognitive View
• An Emotional View

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 An Economic View
• Consumer considered to make rational
decisions.
• Consumer’s rational behavior in economic
sense refers to :
– Consumer being aware of all available product
alternatives.
– Consumer capable of correctly ranking each
alternative in terms of pros and cons.
– Consumer’s ability to identify the best alternative.
• This view considered unrealistic as in reality
consumers rarely have all the information and
adequate degree of involvement to make the
“perfect” decision.
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 A Passive View
• In passive view, consumers considered
as
– Impulsive.
– Irrational purchasers.
– Objects of manipulation.
• Principal limitation: Failure to recognize
that consumer plays an equal role in
many buying situations.
• View is rejected as unrealistic.
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 A Cognitive View
• Consumer considered as a thinking problem
solver.
• The cognitive/ problem solving view
considers consumers as information
processors.
• Consumer cant have complete knowledge
about available product alternatives and thus
cant make perfect decisions but actively
seeks information & attempts to make
satisfactory decisions.
• Consumers behavior considered as goal 16
 An Emotional View
• Emotional/ impulsive view reflects that in
reality:
– Consumers associated with deep feelings/
emotions with certain purchases or possessions.
– These feelings/ emotions likely to be highly
involving.
– Consumer makes an emotional purchase decision
involving less emphasis on pre- purchase
information.
– More emphasis on current mood & feeling.
• Insights w.r.t emotional view of decision
making should be developed into goals and 17
 ONLINE CONSUMER BEHAVIOR
~ Interactive shopping environments that have enabled
manufacturers and retailers to learn on how to satisfy
consumers tastes and preferences more effectively.

~ On one hand it provides the customer, customized

products at reasonable prices that helps them in doing
comparison shopping and hence save their hard earned
money.

~ Further it acts as a medium of marketing

communications. Internet offers a quick and easy way to
shop.

~ The transactions are easy, quick and cost saving. Hence

the on-line buyer gets a much better deal in buying a
product or service on the net than the deal which he/she
will get in traditional form of buyin
 ON-LINE BUYER
CHARACTERISTICS
• Today's tech savvy customer is always on
the move, very mobile, prefers using the
computer and mobile phone and owing to
paucity of time prefers to shop online.
• Prefers a risk free online shopping
experience.
• Prefers personalization of the online
purchase process.
• Best way to handle security issues in
online buying is, through building trust in
their brands
 Tips for online retailers
• online retailers should keep a track of
customer response to various tactics and
make efforts to convert browsers to actual
purchasers.
• research has shown that a website can
break-even only after atleast four repeat
visits from a customer, in a period of
twelve months.
• companies can create blogs to give
brands the much needed human face
through networking and communicating
about their quality products and services.
 END OF SYLLABUS

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