Diffusion Of Innovations
Product Adoption Process
Research shows that consumers differ in how quickly they decide to adopt (buy) a product after they become aware of it. Everett M. Rogers' theory Diffusion of Innovation, explores what type of person, adopts products at each stage of the product life cycle. Under Rogers' Diffusion of Innovations theory, a product will encounter five types of purchasers as it moves through its life cycle.
The diagram below explains the categories in Roger's Diffusion of Innovations Theory
Diffusion of Innovations: Innovator Stage
Roger's Diffusion of Innovations theory states that Innovators are the first to purchase a product and make up 2.5% of all purchases of the product. Innovators purchase the product at the beginning of the life cycle. They are not afraid of trying new products that suit their lifestyle and will also pay a premium for that benefit. Sales to innovators are not usually an indication of future sales as innovators simply buy because the product is new.
Diffusion of Innovations: Early Adopters Stage
The next group of purchasers are called Early Adopters and they make up 13.5% of purchases. This group of purchasers adopt early but unlike innovators, adoption is after careful thought. Early Adopters are usually opinion leaders in their circle (of friends, family and colleagues) so adoption by this group is crucial for the success of the product. Early adopters help the product's journey in becoming "socially acceptable".
Diffusion of Innovations: Early Majority Stage
The Early Majority are a cautious group of purchasers, making up 34% of purchases. The Diffusion of Innovations theory states that this group will not buy a product until it has become "socially acceptable". Early majority purchases are needed for the product to achieve wide spread acceptance.
Diffusion of Innovations: Late Majority Stage
Late Majority make up another 34% of sales and they usually purchase the product during the late stages of the product's life cycle. They are more cautious than the early majority and will only buy after the majority of people have purchased the product.
Diffusion of Innovations: Laggard Stage
According to the Diffusion of Innovations theory the final group of people to purchase a product are called Laggards. Laggards make up 16% of total sales and purchase the product near the end of its life. Some laggards will never purchase a product, whilst others will buy it because their existing product is broken and it can not be repaired or replaced with an identical product. Laggards may wait to see if the product will get cheaper and by the time they purchase the product a new version of the product is often on the market.
Diffusion of Innovations Conclusion
All of the five groups described above will have opinion leaders that the group like to follow. Opinion leaders are people who are good at selecting the next big thing such as the latest fashion trend or electronic gadget. The challenge for firms is to persuade opinion leaders to adopt their product. Identifying opinion leaders can be challenging, as product type will dictate the product adoption behaviour of a person. For example a person may be an innovator for IT products but a laggard for kitchenware products.