Adoption is an individual’s decision to become a regular user of a product and is followed by the consumer- loyalty process. New-product marketers typically aim at early adopters and use the theory of innovation diffusion and consumer adoption to identify them.
1. STAGES IN THE ADOPTION PROCESS
An innovation is any good, service, or idea that someone perceives as new, no matter how long its history. Everett Rogers defines the innovation diffusion process as “the spread of a new idea from its source of invention or creation to its ultimate users or adopters.”111 The consumer-adoption process is the mental steps through which an individual passes from first hearing about an innovation to final adoption.112 They are:
- Awareness—The consumer becomes aware of the innovation but lacks information about it.
- Interest—The consumer is stimulated to seek information about the innovation.
- Evaluation—The consumer considers whether to try the innovation.
- Trial—The consumer tries the innovation to improve his or her estimate of its value.
- Adoption—The consumer decides to make full and regular use of the innovation.
The new-product marketer should facilitate movement through these stages. A water filtration system manufacturer might discover that many consumers are stuck in the interest stage; they do not buy because of their uncertainty and the large investment cost.113 But these same consumers would be willing to use a water filtration system at home on a trial basis for a small monthly fee. The manufacturer should consider offering a trial-use plan with option to buy.
2. FACTORS INFLUENCING THE ADOPTION PROCESS
Marketers recognize the following characteristics of the adoption process: differences in individual readiness to try new products, the effect of personal influence, differing rates of adoption, and differences in organizations’ readiness to try new products. Some researchers are focusing on use-diffusion processes as a complement to adoption process models to see how consumers actually use new products.114
Readiness TO try new products and personal influence Everett Rogers defines a person’s level of innovativeness as “the degree to which an individual is relatively earlier in adopting new ideas than the other members of his social system.” Some people are the first to adopt new clothing fashions or new appliances; some doctors are the first to prescribe new medicines.115 See the adopter categories in Figure 15.7. After a slow start, an increasing number of people adopt the innovation, the number reaches a peak, and then it diminishes as fewer nonadopters remain.
The five adopter groups differ in their value orientations and their motives for adopting or resisting the new product.116
- Innovators are technology enthusiasts; they are venturesome and enjoy tinkering with new products and mastering their intricacies. In return for low prices, they are happy to conduct alpha and beta testing and report on early weaknesses.
- Early adopters are opinion leaders who carefully search for new technologies that might give them a dramatic competitive advantage. They are less price sensitive and are willing to adopt the product if given personalized solutions and good service support.
- Early majority are deliberate pragmatists who adopt the new technology when its benefits have been proven and a lot of adoption has already taken place. They make up the mainstream market.
- Late majority are skeptical conservatives who are risk averse, technology shy, and price sensitive.
- Laggards are tradition-bound and resist the innovation until the status quo is no longer defensible.
Each group requires a different type of marketing if the firm wants to move its innovation through the full product life cycle. In addition to or instead of targeting opinions leaders, some experts advocate targeting revenue leaders with a new product—those customers with higher customer lifetime-values—to accelerate the path to profitability.117
Personal influence, the effect one person has on another’s attitude or purchase probability, has greater significance in some situations and for some individuals than others, and it is more important in evaluation than in the other stages. It has more power over late than early adopters and in risky situations.
Companies often target innovators and early adopters with product rollouts. When Nike entered the skateboarding market, it recognized an anti-establishment, big-company bias from the target market that could present a sizable challenge. To gain “street cred” with teen skaters, it sold exclusively to independent shops, advertised nowhere but skate magazines, and gained sponsorships from admired pro riders by engaging them in product design.118
CHARACTERISTICS OF THE INNOVATION Some products catch on immediately (roller blades), whereas others take a long time to gain acceptance (diesel engine autos). One new-product concept that quickly took hold was StubHub online ticket reselling service.119
STUBHUB The cofounders of StubHub, Jeff Fluhr and Eric Barker, came up with the idea for their site when they were Stanford MBA students. Realizing there were far too many unused tickets for sporting events, theater events, and concerts, they decided to set up an “eBay for tickets” where sellers could set a price higher or lower than face value depending on demand. StubHub would take a 10 percent cut from the buyer and a 15 percent cut from the seller on every purchase. The service had to negotiate state laws restricting ticket reselling, but by 2006 it was making $100 million in revenue, split between sports (75 percent), concerts (20 percent), and theater (5 percent) in a market estimated to be worth $4 billion in the United States. StubHub was sold to eBay for $310 million in 2007. Original-ticket seller Ticketmaster and its Live Nation parent have fought the company from the start, threatening legal action, introducing paperless tickets that limit reselling, and launching the TicketExchange service to compete. StubHub has sets its sights on being more than a ticket seller and becoming a multiplatform e-commerce site. A brand-building multimedia campaign launched in 2012 was designed to add emotional components to the company’s functional message, including the idea of tickets “growing on trees.” With 40 percent of primary tickets going unsold, StubHub is also emphasizing helping consumers discover events and attend more of them.
Five characteristics influence an innovation’s rate of adoption. We consider them for digital video recorders (DVRs) for home use, as exemplified by TiVo.120
- Relative advantage—the degree to which the innovation appears superior to existing products. The greater the perceived relative advantage of using a DVR, say, for easily recording favorite shows, pausing live TV, or skipping commercials, the more quickly it was adopted.
- Compatibility—the degree to which the innovation matches consumers’ values and experiences. DVRs are highly compatible with the preferences of avid television watchers.
- Complexity—the degree to which the innovation is difficult to understand or use. DVRs are somewhat complex and therefore took a slightly longer time to penetrate into home use.
- Divisibility—the degree to which the innovation can be tried on a limited basis. This provided a sizable challenge for DVRs—sampling could occur only in a retail store or perhaps a friend’s house.
- Communicability—the degree to which the benefits of use are observable or describable to others. The fact that DVRs have some clear advantages helped create interest and curiosity.
Other characteristics that influence the rate of adoption are cost, risk and uncertainty, scientific credibility, and social approval. The new-product marketer must research all these factors and give the key ones maximum attention in designing the product and its marketing program.
ORGANIZATIONS’ READINESS TO ADOPT INNOVATIONS The creator of a new teaching method would want to identify innovative schools. The producer of a new piece of medical equipment would want to identify innovative hospitals. Adoption is associated with variables in the organization’s environment (community progressiveness, community income), the organization itself (size, profits, pressure to change), and the administrators (education level, age, sophistication). Other forces come into play in trying to get a product adopted into organizations that receive the bulk of their funding from the government, such as public schools. A controversial or innovative product can be squelched by negative public opinion.
Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.