Chapter 15 Consumer Influence and the Diffusion of Innovations
May 20, 2015
Chapter 15
Consumer Influence and the Diffusion of Innovations
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Opinion Opinion LeadershipLeadership
The process by which one person (the opinion leader) informally influences the consumption actions or
attitudes of others who may be opinion seekers or
opinion recipients.
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What is Opinion Leadership?
Opinion Leader
Opinion Receiver
Opinion Seeker
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Opinion Opinion LeaderLeader
A person who informally gives product information
and advice to others.
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Opinion Opinion SeekerSeeker
An individual who either actively seeks product
information from others or receives unsolicited
information.
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Opinion Opinion ReceiverReceiver
The person who receives an opinion offered by another
person.
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Reasons for the Effectiveness of Opinion Leadership
• Credibility• Positive and Negative
Product Information• Information and Advice• Opinion Leadership Is
Category-Specific• Opinion Leadership Is a
Two-way Street
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Motivations Behind Opinion Leadership
• The Needs of Opinion Leaders– Self involvement– Social involvement– Product involvement– Message involvement
• The Needs of Opinion Receivers– New-product or new usage information– Reduction of perceived risk– Reduction of search time– Receiving the approval of the opinion leader
• Purchase Pals• Surrogate Buyers Versus Opinion Leaders
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Table 15.1 A Comparison of the Motivations of Opinion Leaders and Opinion Receivers
OPINION LEADERS OPINION RECEIVERS
SELF-IMPROVEMENT MOTIVATIONS• Reduce postpurchase uncertainty or
dissonance• Gain attention or status• Assert superiority and expertise• Feel like an adventurer• Experience the power of “converting” others
• Reduce the risk of making a purchase commitment
• Reduce search time
PRODUCT-INVOLVEMENT MOTIVATIONS
• Express satisfaction or dissatisfaction with a product or service
• Learn what products are new in the marketplace
• Learn how to use or consume a product
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Table 15.1 continued
OPINION LEADERS OPINION RECEIVERS
SOCIAL-INVOLVEMENT MOTIVATIONS
• Express neighborliness and friendship by discussing products or services that may be useful to others
• Buy products that have the approval of others, thereby ensuring acceptance
MESSAGE-INVOLVEMENT MOTIVATIONS
• Express one’s reaction to a stimulating advertisement by telling others about it
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Table 15.2 Key Differences Between Opinion Leaders and Surrogate Buyers
OPINION LEADER 1. Informal relationship with end-users 2. Information exchange occurs in the context of a casual
interaction 3. Homophilous (to a certain extent) to end-users 4. Does not get paid for advice 5. Usually socially more active than end-users 6. Accountability limited regarding the outcome of advice 7. As accountability limited, rigor in search ad screening o
alternatives low 8. Likely to have used the product personally 9. More than one can be consulted before making a final decision10. Same person can be an opinion leader for a variety of related
product categories
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Table 15.2 Key Differences Between Opinion Leaders and Surrogate Buyers
SURROGATE BUYER 1. Formal relationship; occupation-related status 2. Information exchange in the form of formal
instructions/advice 3. Heterophilus to end users (that is, is the source of power) 4. Usually hired, therefore gets paid 5. Not necessarily socially more active than end-users 6. High level of accountability 7. Search and screening of alternatives more rigorous 8. May not have used the product for personal consumption 9. Second opinion taken on rare occasions10. Usually specializes for a specific product/service category
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Measurement of Opinion Leadership
• Self-Designating Method• Sociometric Method• Key Informant Method• Objective Method
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Figure 15.1 Self-Designating Questions for Measuring Opinion Leadership
SINGLE-QUESTION APPROACH:1. In the last 6 months have you been asked your advice or opinion about golf
equipment?Yes___ No___
MULTIPLE-QUESTION APPROACH:(Measured on a 5-point bipolar “Agree/Disagree” scale)
1. Friends and neighbors frequently ask my advice about golf equipment.2. I sometimes influence the types of golf equipment friends buy.3. My friends come to me more often than I go to them about golf equipment.4. I feel that I am generally regarded by my friends as a good source of advice
about golf equipment.5. I can think of at least three people whom I have spoken to about golf
equipment in the past six months.
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Table 15.3 Methods of Measuring Opinion Leadership: Advantages and Limitations
SELF-DESIGNATING METHOD
“Do you influence other people in their selection of products?”
Each respondent is asked a series of questions to determine the degree to which he or she perceives himself or herself to be an opinion leader.
OPINION OPINION LEADERSHIP LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE SAMPLE QUESTIONS QUESTIONS
ASKEDASKED
DESCRIPTION DESCRIPTION OF METHODOF METHOD
Measures the individual’s own perceptions of his or her opinion leadership.
ADVANTAGESADVANTAGES
Depends on the objectivity with which respondents can identify and report their personal influence.
LIMITATIONSLIMITATIONS
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Table 15.3 continued
SOCIOMETRIC METHOD
“Whom do you ask?”“Who asks you for information about that product category?”
Members of a social system are asked to identify to whom they give advice and to whom they go for advice and information about a product category.
OPINION OPINION LEADERSHIP LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE SAMPLE QUESTIONS QUESTIONS
ASKEDASKED
DESCRIPTION DESCRIPTION OF METHODOF METHOD
Sociometric questions have the greatest degree of validity and are easy to administer.
ADVANTAGESADVANTAGES
It is very costly and analysis often is very complex. Requires a large number of respondents. Not suitable for sample design where only a portion of the social system is interviewed.
LIMITATIONSLIMITATIONS
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Table 15.3 continued
OPINION OPINION LEADERSHIP LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE SAMPLE QUESTIONS QUESTIONS
ASKEDASKED
DESCRIPTION DESCRIPTION OF METHODOF METHOD
KEY INFORMANT METHOD
“Who are the most influential people in the group?”
Carefully selected key informants in a social system are asked to designate opinion leaders.
ADVANTAGESADVANTAGES
Relatively inexpensive and less time consuming than the sociometric method.
LIMITATIONSLIMITATIONS
Informants who are not thoroughly familiar with the social system are likely to provide invalid information.
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Table 15.3 continued
OPINION OPINION LEADERSHIP LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE SAMPLE QUESTIONS QUESTIONS
ASKEDASKED
DESCRIPTION DESCRIPTION OF METHODOF METHOD
OBJECTIVE METHOD
“Have you tried the product?
Artificially places individuals in a position to act as opinion leaders and measures results of their efforts.
ADVANTAGESADVANTAGES
Measures individual’s ability to influence others under controlled circumstances.
LIMITATIONSLIMITATIONS
Requires the establishment of an experimental design and the tracking of the resulting impact on the participants.
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Table 15.4 Profile of Opinion Leaders
GENERALIZED ATTRIBTES ACROSS PRODUCT CATEGORIES
CATEGORY-SPECIFIC ATTRIUTES
InnovativenessWillingness to talkSelf-confidenceGregariousnessCognitive differentiation
InterestKnowledgeSpecial-interest media exposureSame ageSame social statusSocial exposure outside group
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Table 15.5 Car and Driver Research Supporting Subscribers Are Opinion Leaders
Gave advice in past year
69%
Passenger car 7.853%
AREA OF OPINION LEADERSHIP
AVERAGE NO. OF PEOPLE ADVISED*
GIVEN ADVICE PAST 12 MONTHS
Pickups, SUVs, Vans
4.531%
Automotive parts
20.524%
2.7
AVERAGE NO. WHO FOLLOWED SUBSCRIBERS’ ADVICE
1.2
17.2
3.2
AVERAGE NO. WHO SUBSEQUENTLY BOUGHT*
1.5
18.3
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Table 15.5 continued
Maintenance/appearance products
18.228%
Tires 8.332%
AREA OF OPINION LEADERSHIP
AVERAGE NO. OF PEOPLE ADVISED*
GIVEN ADVICE PAST 12 MONTHS
Auto sound equipment
8.217%
Other electronic accessories
6.224%
14.8
6.7
AVERAGE NO. WHO FOLLOWED SUBSCRIBERS’ ADVICE
3.7
3.1
15.8
70
AVERAGE NO. WHO SUBSEQUENTLY BOUGHT*
4.0
3.4
*Among those who gave advice (i.e., 69%). Base: Total subscribers (multiple responses).
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Market Market MavenMaven
Individuals whose influence stems from a general knowledge or market
expertise that leads to an early awareness of new products and services.
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The Interpersonal Flow of Communication
• Two-Step Flow– Views opinion leader as a middleman between
the impersonal mass media and the majority of society
• Multistep Flow– Takes into account the fact that information and
influence often are two-way processes
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Two-Step Two-Step Flow of Flow of
Communication Communication TheoryTheory
A communication model that portrays opinion leaders as
direct receivers of information from mass
media sources who, in turn, interpret and transmit this
information.
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Figure 15.2 Two-Step Flow of Communication Theory
Mass MediaMass Media Opinion Leaders
Opinion Leaders
Opinion Receivers
(the masses)
Opinion Receivers
(the masses)
Step 1 Step 2
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Multistep Multistep Flow of Flow of
Communication Communication TheoryTheory
A revision of the traditional two-step theory that shows multiple communication
flows: from the mass media simultaneously to opinion leaders, opinion receivers, and information receivers;
from opinion leaders to opinion receivers; and from opinion receivers to opinion
leaders.
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Figure 15.3 Multistep Flow of Communication Theory
Mass MediaMass Media
Information Receivers
Information Receivers
Opinion Receiver/ Seekers
Opinion Receiver/ Seekers
Opinion Leaders
Opinion Leaders
Step 1a
Step 1b
Step 2
Step 3
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Issues In Opinion Leadership and Marketing Strategy
• Programs Designed to Stimulate Opinion Leadership
• Advertisements Simulating Opinion Leadership
• Word of Mouth May Be Uncontrollable
• Creation of Opinion Leaders
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Diffusion Diffusion ProcessProcess
The process by which the acceptance of an innovation is spread by communication to members of social system
over a period of time.
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Adoption Adoption ProcessProcess
The stages through which an individual consumer passes in arriving at a decision to
try (or not to try), to continue using (or
discontinue using) a new product. The five stags of the traditional adoption process are awareness,
interest, evaluation, trial, and adoption.
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Elements of the Diffusion Process
• The Innovation• The Channels of Communication• The Social System• Time
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Defining Innovations
• Firm-oriented definitions• Product-oriented definitions• Market-oriented definitions• Consumer-oriented definitions
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Product-Oriented Definitions
Continuous Innovation
Dynamically Continuous Innovation
Discontinuous Innovation
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Continuous Continuous InnovationInnovation
A new product entry that is an improved or modified
version of an existing product rather than a totally new product. A continuous
innovation has the least disruptive influence on
established consumption patterns.
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Dynamically Dynamically Continuous Continuous InnovationInnovation
A new product entry that is sufficiently innovative to
have some disruptive effects on established consumption
practices.
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Discontinuous Discontinuous InnovationInnovation
A dramatically new product entry that requires the establishment of new
consumption practices.
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Figure 15.5 The Telephone Has Led to Related Innovations
Telephone
Pager
Fax Machine
Telephone answering machinesCall forwardingCall waitingCaller IDBanking by telephoneCall-prompting systems
Hold buttonLine-in-use indicatorRedial buttonAuto dialing featureTouch-tone service800 Numbers900 Numbers
Nationwide paging serviceStock market quotation devicesSports scores deliveryTwo-way pagingPager watch
Silent alertMessage displaysBuild-in alarm clockInterchangeable fashion
color cases
Fax modemMobile fax machinesHome office systems
(combined fax, copier, computer printer)
Plain paper faxSpeed dial buttonsDelayed sendCopy functionPaper cutter
Discontinuous Innovations
Dynamically ContinuousInnovations
ContinuousInnovations
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Product Characteristics That Influence Diffusion
• Relative Advantage• Compatibility• Complexity• Trialability• Observability
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Table 15.6 Product Characteristics That Influence Diffusion
CHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLESDEFINITIONDEFINITION
Relative Advantage
Air travel over train travel, cordless phones over corded telephones
The degree to which potential consumers perceive a new product as superior to existing substitutes
Compatibility
Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape to make recordings
The degree to which potential consumers feel a new product is consistent with their present needs, values, and practices
Complexity
Products low in complexity include frozen TV dinners, electric shavers, instant puddings
The degree to which a new product is difficult to understand or use
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Table 15.6 continued
CHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLESDEFINITIONDEFINITION
Trialability
Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons
The degree to which a new product is capable of being tried on a limited basis
Observability
Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses
The degree to which a product’s benefits or attributes can be observed, imagined, or described to potential customers
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Table 15.7 Barriers to Diffusion of an Innovation--On-Line Banking
FUNCTIONAL BARRIERS
Usage • Initial use requires a great deal of consumer learning• Continuing use requires total commitment of system• Partial or inconsistent use results in incorrect account balances
Value barriers • Requires purchase of software and supplies• Generally has additional monthly fee
TYPES OF BARRIERSTYPES OF BARRIERS DEFINTIONS AND EXAMPLESDEFINTIONS AND EXAMPLES
Risk barriers • Performance risk is high• Economic risk is moderate• Social risk is low
PSYCHOLOGICAL BARRIERS
Traditional barriers • Not the way the consumer is accustomed to paying bills, etc.
Image barriers • Negative (“hard to use”) image of personal computers in general and on-line banking in particular
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Time and Diffusion
• Purchase Time• Adopter Categories• Rate of Adoption
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Table 15.8 Time Line for Selecting a New Large-Screen TV Set
WEEK PRECIPITATING SITUATIONS/FACTORS
0 Current family room 19-inch TV set works fine but is 10 years old and cannot access a number of the cable channels. The wife has recently purchased a new sofa and new carpeting for the family room, and she and her husband have spoken about possibly having a cabinet built for the wall opposite the sofa that would contain the TV, stereo, tape deck, CD player, and VCR. Several friends have purchased large-screen TVs and have turned their family rooms into home entertainment centers. Couple decides, therefore, to also look at projection TVs.
1-4 Consumer senses a need to learn more about the features and availability of large-screen TVs, both those with conventional tubes and projection TVs.
DECISION PROCESS BEGINS
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Table 15.8 continued
WEEK THE TV IS OUT OF MIND
5-8 The transmission in the older of the couple’s two cars, a 1987 Honda, begins to shift erratically. Because of the expense of this repair (the transmission had to be replaced), the hunt for a new TV is put on the back burner.
9 The wife reads a article in one of the magazines hat she periodically buys at the supermarket about a family that purchased a Zenith 52-inch projection TV for their family room and created a home entertainment center. She shows the article to her husband.
INTEREST IS RETRIGGERED
CONSUMER ACQUIRES A MENTOR (OPINION LEADER)
The husband asks a neighbor to serve as a mentor (opinion leader) with regard to home entertainment centers. He agrees.
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Table 15.8 continued
WEEK FEATURES AND BRAND OPTIONS ARE REVIEWED
10 With the advice of the mentor, the decision is made to use a projection TV in the 46- to 50-inch range as the nucleus of the home entertainment center. The couple visits several department store and appliance store TV departments and narrows down the choices to projection units from Pioneer, Sony, and Zenith.
11-12 The toll-free 800 numbers of the three TV manufacturers (which were featured in ads) are called to request additional detailed information (brochures and booklets).
OBTAINING MORE FOCUSED INFO ABOUT OPTIONS
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Table 15.8 continuedWEEK PERIOD OF SELF-STUDY
13-14 After reading the brochures and discussing the pros and cons of the alternatives with their mentor (comparing models with regard to features such as picture-in-picture and surround sound capability), a decision is made.The 46-inch Sony is selected because of a magazine review that give it very high marks in terms of its screen brightness and sharpness, and because it offered colored picture-in-picture.
Sunday’s newspaper contains an advertisement from a local appliance store chain stating that any projection TV purchased within the next week can be paid for with 6 monthly payments, at no interest charge--the first payment beginning 6 months after the TV is installed. The couple decides to drive to the store and talk to a salesperson about the deal. When the salesperson agrees to lower the price of the Sony 46-inch set to match the lowest price the couple had been quoted, they decide to make the purchase. The TV arrives in the appliance dealer’s truck and is installed in the couple’s family room.
ORDERING THE TV
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Adopter Adopter CategoriesCategories
A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters. The five
typical adopter categories are innovators, early
adopters, early majority, late majority, and laggards.
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Figure 15.10 Adopter Categories
Innovators2.5%
EarlyAdopters
13.5%
Laggards
16%
Percentage of Adopters by Category Sequence
EarlyMajority
34%
LateMajority
34%
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Innovators: Description
• 2.5% of population• Venturesome• Very eager to try new ideas• Acceptable if risk is daring• More cosmopolite social relationships• Communicates with other innovators
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Early Adopters: Description
• 13.5% of population• Respected• More integrated into the local social system• The persons to check with before adopting a
new idea• Category contains greatest number of
opinion leaders• Are role models
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Early Majority: Description
• 34.0% of population• Deliberate• Adopt new ideas just prior to the average
time• Seldom hold leadership positions• Deliberate for some time before adopting
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Late Majority: Description
• 34% of population• Skeptical• Adopt new ideas just after the average
time• Adopting may be both an economic
necessity and a reaction to peer pressures• Innovations approached cautiously
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Laggards: Description
• 16% of population• Traditional• The last people to adopt an innovation• Most “localite” in outlook• Oriented to the past• Suspicious of the new
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Table 15.10 The Importance of Time in the Diffusion Process
TYPE OF TIME
MEANING EXAMPLES
Purchase time
Time between awareness and purchase
I you look at your car’s gas gauge and it reads “empty,” you stop at the next gas station you come to. If you’re shopping or an additional VCR for your home, you may take quite a while to make a purchase, as long as your present VCR is working properly.
Adopter categories
A classification scheme that indicates where a consumer stands, in relation to others, when adopting a new product.
Innovators are the first to adopt a new product, and laggards are the last.
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Table 15.10 continued
TYPE OF TIME
MEANING EXAMPLES
Rate of adoption
How long it takes a new product or service to be adopted by members of a social system
Black-and-white TVs were adopted by consumers much more quickly than their manufacturers had envisioned; in contrast, trash compactors have never been widely adopted
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Table 15.11 The Stages in the Adoption Process
NAME OF STAGE
WHAT HAPPENS DURING THIS
STAGEEXAMPLE
AwarenessConsumer is first exposed to the product innovation.
David sees an ad for a new digital camera in the newspaper.
Interest
Consumer is interested in the product and searches for additional information.
David reads about the camera on the manufacturer’s Web site, ad then goes to a camera store near his office and has a salesman show him the camera.
Evaluation
Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of “mental trial.”
After talking with a knowledgeable friend, David decides that his camera should be able to provide him with the photos he needs to use in PowerPoint presentations. He also likes the fact that it uses “standard” floppy disks for storage.
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Table 15.11 The Stages in the Adoption Process
Trial
Consumer uses the product on a limited basis
Since camera cannot be “tried” like a small bottle of a new shampoo, David buys the camera from a dealer offering a 14-day full refund policy.
Adoption (Rejection)
If trial is favorable, consumer decides to use the product on a full, rather than a limited basis--if unfavorable, the consumer decides o reject it.
David finds that the camera is easy to use and the results are excellent; consequently, he keeps the digital camera.
NAME OF STAGE
WHAT HAPPENS DURING THIS
STAGEEXAMPLE
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Figure 15.11 An Enhanced Adoption Process Model
Pre-existing problem or
NeedAwareness Interest Evaluation Trial
Adoption or
Rejection
Postadoption or Postpurchase
Evaluation
Evaluation
Adoption or Rejection
Discontinuation
Discontinuation or Rejection
Rejection
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Figure 15.12 The Relative Importance of Different Types of Information Sources in the
Adoption Process
Importance
High
Low
Aw
aren
ess
Ad
opti
on
Tri
al
Eva
luat
ion
Inte
rest
Personal and interpersonal sources
Impersonal mass-media sources
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Issues in Profiling Consumer Innovators
• Defining the Consumer Innovator• Interest in the Product Category• The Innovator Is an Opinion Leader• Personality Traits• Media Habits• Social Characteristics• Demographic Characteristics• Are There Generalized Consumer Innovators?
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EMBRACING INNOVATIONSChasing the AdvancesInnovation Fascination
Figure 15.13 The Innovator Buying Cycle
INNOVATION SATIATIONProduct Accumulation in the Closet
Cumulative Innovation DisappointmentPace of Innovation Slows Down
INNOVATOR NO MOREWhat I’ve Got is Good Enough Now
Innovator Becomes Extremely Cautious, Careful BuyerMoving On
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Table 15.12 Comparative Profiles of the Consumer Innovator and the Noninnovator or
Later Adopter
Product interest More Less
Opinion Leadership More Less
Personality
Dogmatism Open-minded Closed-minded
Need for uniqueness Higher Lower
Social character Inner-directed Other-directed
Optimum stimulation level Higher Lower
Variety seeking Higher Lower
Perceived risk Less More
Venturesomeness More Less
CHARACTERISTIC INNOVATORNONINNOVATOR
(OR LATE ADOPTER)
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Table 15.12 continued
CHARACTERISTIC INNOVATORNONINNOVATOR
(OR LATE ADOPTER)
Purchase & Consumption Traits
Brand Loyalty Less More
Deal proneness More Less
Usage More Less
Media Habits
Total magazine exposure More Less
Special-interest magazines More Less
Television Less More
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Table 15.12 continued
Social Characteristics
Social integration More Less
Social striving More Less
Group Memberships More Less
Demographic Characteristics
Age Younger Older
Income Higher Lower
Education More Less
Occupational status Higher Lower
CHARACTERISTIC INNOVATORNONINNOVATOR
(OR LATE ADOPTER)