Market & Product
Diffusion
Adoption is similar to diffusion except
that it deals with the psychological processes an individual goes through,
rather than an aggregate market process. In economics it is more often
named "technological change". Diffusion is the process by which a new
idea or new product is accepted by the market. The rate of diffusion
is the speed that the new idea spreads from one consumer to the next.
There are several theories that purport to explain the mechanics of
diffusion:
The two-step hypothesis - information and acceptance flows, via the
media, first to opinion leaders, then to the general population
the trickle-down effect - products tend to be expensive at first, and
therefore only accessible to the wealthy social strata - in time they
become less expensive and are diffused to lower and lower strata.
The Everett Rogers Diffusion
of innovations theory - for any given product category, there are five
categories of product adopters:
 Innovators
– venturesome, educated, multiple info sources;
Early
adopters – social leaders, popular, educated;
Early
majority – deliberate, many informal social contacts;
Late
majority – skeptical, traditional, lower socio-economic status;
Laggards
– neighbors and friends are main info sources, fear of debt.
Crossing the Chasm model
developed by Geoffrey Moore - This is basically a modification of Everett
Rogers' theory applied to technology markets and with a chasm added.
According to Moore, the marketer should focus on one group of customers
at a time, using each group as a base for marketing to the next group.
The most difficult step
is making the transition between visionaries and pragmatists. This is
the chasm that he refers to. If a successful firm can create a bandwagon
effect in which the momentum builds and the product becomes a de facto
standard.
Technology driven models
- These are particularly relevant to software diffusion. The rate of
acceptance of technology is determined by factors such as ease of use
and usefulness.
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