1. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 15 Innovations: Adoption, Resistance, and Diffusion

2. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Learning Objectives~ Ch. 15 1.Describe how innovations can be classified in terms of their type, the benefits they offer, and their breadth. 2.Explain how consumers adopt an innovation, why they might resist adoption, and why marketers must understand the timing of adoption decisions. 3.Define diffusion and discuss how diffusion curves relate to the product life cycle. 4.Outline the main factors that affect adoption, resistance, and diffusion, and show how marketers can use their knowledge of these factors to market more effectively.

3. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation “…an offering that is new to the marketplace… a product, service, or idea…consumers within a market segment perceive as new & that has an effect on existing consumption patterns.” Innovations can be new products or new services. What is an example of a new service innovation that has changed your life for the better?

4. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Characteristics of Innovations Degree of novelty –Continuous –Dynamically continuous –Discontinuous Benefits offered –Functional –Aesthetic/hedonic –Symbolic Breadth

5. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation Continuum Discontinuous Dynamically continuous Continuous Depends on degree of behavioral change What are examples of each part of the innovation continuum spectrum?

6. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Adoption/Resistance to Innovations Resistance (e.g., retail resistance, market resistance) People are inherently resistant to change & to things they are uncertain of Adoption—hierarchy of effect –High-effort –Low-effort Timing of adoption decisions –Characteristics of adopter groups –Application of adopter group categories

7. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Diffusion & PLC Pattern of adoption/diffusion curve –S-Shaped = associated with risk –Exponential = little risk, switching cost low Product life cycle stages (PLC) –Introduction –Growth –Maturity –Decline Can a product stay in one PLC cycle for eternity?

8. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PLC Pattern Fad Fashion Classic Note that PCL is at the product level, not the brand level

9. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation Characteristics Perceived value Perceived benefits –Relative advantage –Use innovativeness Perceived costs Risk/uncertainty

10. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Creating Advantage to Switch Communicate/demonstrate advantage Price promotions to reduce perceived costs Provide incentives to switch

11. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer Learning & Diffusion The following impact diffusion rate: Compatibility Trialability Complexity

12. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Social Relevance Observability—others using innovation Social value –Socially desirable –Speeds diffusion Legitimacy & adaptability

13. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Social System Characteristics: Modernity Homophily Physical distance Opinion leadership

14. © 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consequences of Innovation Consequences to consumers, businesses, & society May offer new relative advantages Negative consequences may arise –Social –Economic