Involvement Theory:

As per the involvement theory, there are High and Low

involvements consumers and accordingly there are High and Low
involvement purchases.

These two approaches are synthesized with the notion that a

consumers level of involvement depends on a degree of personal
relevance that the products hold.
Under this definition…

High Involvement purchases are those that are very important to

the consumers and therefore provoke Extensive problem solving in
terms of perceived risks

Low involvement purchases are those that are not very important to
the consumers, holds little relevance and less perceived risk and
therefore provoke limited problem solving.
High involvement products

High involvement products are high

capital value goods that is purchased
only after long and careful
consideration, such as car etc.
 Low Involvement Products
• Low-Involvement Products are
those products which are bought
frequently and with a minimum of
thought and effort because they
are not of vital concern nor have
any great impact on the
consumer's lifestyle.
Diffusion of Innovations
Theory
The process of how new ideas
are communicated among people
in social system over time
 Why not diffuse?


• Dvorak keyboard
– More efficient, easier
– Why do we still use QWERTY keyboard?
 Four key elements
• 1. Innovation itself
• 2. Information about innovation
communicated through channels
• 3. Diffusion is a process that unfolds
over time
• 4. Diffusion occurs in specific social
system
3. Diffusion occurs over time
• Five-step process for individuals
– Prior conditions (need/norms/current
practices)
– 1. Knowledge
– 2. Persuasion (think of as “Evaluation”)
– 3. Decision (adopt or not adopt)
– 4. Implementation (could “reinvent”)
– 5. Confirmation (or could discontinue)
Adoption-Decision Steps

1. 2. 3. 4. 5.

Knowledge Persua Decision Implemen Confir

sion / tation m - ation
Evalua (?)
tion

-Rel Adv Reinventi

on
- Rel
Complexity
-Compatibility
-Relability
-Observability
 Innovation Adopter Categories

• 1. “Innovators” = venturesome
– First to adopt, not usually influential
• 2. “Early adopters” = progressive
– Key to observability, takeoff
• 3. “Early majority” = deliberate
• 4. “Late majority” = skeptical
• 5. “Laggards” = traditional
– Can become innovators over time!
 New Product Diffusion
Theory
• DIFFUSION PROCESS.
 - the spread of an innovation from its.
 source to the ultimate consumer.
 - a macro process that focuses on
external.
 forces on the consumer (change
agents,
 channels of information, types of.
 information).
 - occurs in a social system (a target.

 INNOVATIORS - 2 . 5 %

EARLY ADOPTERS - 13 . 5 %
PER CENT OF TOTAL MARKET

EARLY MAJORITY - 34 %

LATE MAJORITY - 34 %

LAGGARDS ( INCLUDING NONADOPTERS )- 16 %

THE DIFFUSION PROCESS
How different segments of the market act

TIME
 Speed of
Diffusion

is influenced by…


* Competitive Intensity (+)

* Good Supplier Reputation (+)
* Standardization of Technology (+)
* Vertical ( ) Channel Coordination
(+)
* ($) Resource Commitments (+)
 Dif fusion Pr ocess
• Product Adopter Categories

2.5% Innovators

13.5% Early Adopters

34% Late Majority 34% Early Majority

 Diffusion Process,
Adopter Categories
• INNOVATORS - are first to buy and
typically described as
venturesome, younger, well
educated, financially stable, and
willing to take risks.

• EARLY ADOPTERS - are local

opinion leaders who read
magazines and who are integrate
 Diffusion Process,
Adopter Categories
• EARLY MAJORITY - solid, middle-
class consumers who are more
deliberate and cautious
•
• LATE MAJORITY - described as older,
more conservative, traditional, and
skeptical of new products
 Brand Loyalty
CIGARETTES 71%
LAUNDRY DETERGENT 51%
GARBAGE BAGS 23%
AUTOMOBILE 47%
MEN 51% AGE 60+ : 60%
WOMEN 43% 18-29 : 42%
Midwesterners 52%
Easterners 42%
 Life-Style Characteristics of
Innovators and Non innovators
Characteristics Innovators Non
innovators
• Product Interest MORE LESS
• Opinion Leadership MORE LESS
• Personality:
 Dogmatism OPEN-MINDED CLOSE-MINDED
 Social Character INNER-DIRECT OTHER-
DIRECT
 Category Width BROAD NARROW
• Venturesome ness MORE LESS
• Perceived Risk LESS MORE
Life-Style Characteristics of
Innovators and
Noninnovators
 Characteristics Innovators
Noninnovators
• Purchase and Consumption Traits:
 Brand Loyalty LESS MORE
 Deal Proneness MORE LESS
 Usage MORE LESS
• Media Habits:
 Magazine Exposure MORE LESS
 Television LESS MORE
 Specialized Magazine MORE LESS
 Life-Style Characteristics
of Innovators and
Noninnovators
 Characteristics Innovators Non
innovators
• Demographic Characteristics:
 Age YOUNGER OLDER
 Income MORE LESS
 Education MORE LESS
 Occupational Status MORE LESS
• Social Characteristics:
 Social Integration MORE LESS
 Group Members MORE LESS
Everett M. Rogers
Diffusion of
Innovations (1962-95)
the process by which an innovation
is communicated through
certain channels over time
among the members of a social
system
 Rogers’ (1995)
Diffusion of Innovation
Stages of adoption:

Awareness - the individual is exposed to the

innovation but lacks complete information about
it

Interest - the individual becomes interested in

the new idea and seeks additional information
about it

Evaluation - individual mentally applies the

innovation to his present and anticipated future
situation, and then decides whether or not to try
it

Trial - the individual makes full use of the

innovation

Adoption - the individual decides to continue

the full use of the innovation
 Factors affecting diffusion
• Innovation characteristics
•
• Individual characteristics
•
• Social network characteristics
•
• Others…
 Innovation characteristics
• Observability
– The degree to which the results of an innovation
are visible to potential adopters
• Relative Advantage
– The degree to which the innovation is perceived
to be superior to current practice
• Compatibility
– The degree to which the innovation is perceived
to be consistent with socio-cultural values,
previous ideas, and/or perceived needs
• Trialability
– The degree to which the innovation can be
experienced on a limited basis
• Complexity
– The degree to which an innovation is difficult to
use or understand.
 Individual characteristics
• Innovativeness
– Originally defined by Rogers: the
degree to which an individual is
relatively earlier in adopting an
innovation than other members of his
social system


– Modified & extended by Hirschman

(1980):
• Inherent / actualized novelty
seeking
• Creative consumer
• Adoptive / vicarious innovativeness
 Other individual
characteristics
• Reliance on others as source of
information (Midgley & Dowling)
•
• Adopter threshold (e.g. Valente)


• Need-for-change / Need-for-
cognition (Wood & Swait, 2002)
•
 Network characteristics
• Opinion leadership: number of
nominations as source of
information
•
• Number of contacts within each
adopter category (Valente)
•
• Complex structure
 Other possible factors:
• Lyytinen & Damsgaard (2001)


– Social environment of diffusion of

innovation


– Marketing strategies employed



– Institutional structures (e.g.,

government)
• Diffusion of Innovations is a theory of
how, why, and at what rate new
ideas and
technology spread through
cultures. The
concept was first studied by the
French
sociologist Gabriel Tarde (1890) and
by
German and Austrian
anthropologists such
• Speed of diffusion
• •Competitive intensity
•Reputation of the supplier
•Standardised technology
•Vertical coordination
•Resource commitments
•
• The Adoption – Decision Process
• Everett Rogers
• Confirmation
• Knowledge
• Persuasion
• Decision
• Implementation
•
• Adopter classes
• •Innovators - 2.5%
•Early adopters – 13.5%
•Early majority – 34%
•Late majority – 34%
•Laggards – 16%
•

• Innovators
• •Innovators are the first individuals
to adopt
an innovation. Innovators are
willing to take
risks, youngest in age, have the
highest

• social class, have great financial

lucidity,
• very social and have closest contact
• Early Adopters
• This is second fastest category of
individuals who adopt an innovation.
These
individuals have the highest degree of

• opinion leadership among the other

adopter
• categories. Early adopters are typically
younger in age, have a higher social
status,
have more financial lucidity,
advanced
• Early Majority
• •Individuals in this category adopt an
innovation after a varying degree of
time.
This time of adoption is significantly
longer
than the innovators and early
adopters.
Early Majority tend to be slower in
the
adoption process, have above
average social
• Late Majority
• •Individuals in this category will adopt an
innovation after the average member of
the
society. These individuals approach an
innovation
with a high degree of skepticism and after
the
majority of society has adopted the
innovation.
Late Majority are typically skeptical about
an
innovation, have below average social
status, very
little financial lucidity, in contact with
others in
• Laggards
• Individuals in this category are the last to
adopt an
innovation. Unlike some of the previous
categories, individuals in this category
show little
to no opinion leadership. These
individuals
typically have an aversion to change-
agents and
tend to be advanced in age. Laggards
typically
tend to be focused on “traditions”, have
lowest
social status, lowest financial fluidity,
oldest of all