CH-15 Innovations: Adoption, Resistance, and Diffusion – Consumer Behavior : Book Guide

Chapter 15 Innovations: Adoption, Resistance, and Diffusion CHAPTER SUMMARY Innovations are products, services, ideas, or attributes perceived to be new by consumers in a market segment. Innovations can be characterized as functional, symbolic, and/or hedonic/aesthetic in nature. Innovations also vary in the degree of behavioral change their adoption requires. A continuum of innovativeness in products ranging from continuous to discontinuous innovations can be identified. Innovations may represent fads, fashions, or classics, and hence may exhibit a short, moderate, or long life cycle. Product life-cycle length may be fostered by enhancing the breadth of the innovation and by encouraging use innovativeness in consumers. There are three key issues of importance to marketers introducing innovations. First is breaking down consumers’ resistance to innovations, second is facilitating consumers’ adoption of the innovation, and third is affecting the diffusion of the innovation through the marketplace. A high- (vs. low-) effort hierarchy-of-effects adoption process occurs when the innovation is seen as economically, physically, socially, or psychologically risky. Some individuals called innovators adopt products independently of the decisions of others. Special marketing efforts may be geared toward innovators since their adoption directly or indirectly influences the adoption of other consumers (by word of mouth or social modeling). Characteristics of the innovation and the social system in which it is introduced affect resistance, adoption, and diffusion. First resistance is more likely to be overcome when the innovation is perceived to provide value (i.e., involve a relative advantage, low cost, and low switching costs), involve minimal consumer learning (i.e., high compatibility with existing needs, values, and behaviors; trialability; and low complexity), involve relatively high certainty, and be viewed as high in social relevance, legitimacy, and adaptability. Consumers’ perceptions of the characteristics of the innovation can in turn be affected by marketing decisions. Resistance, adoption, and diffusion are also affected by the characteristics of the social system in which the innovation operates. The more dense the social network and the more homophilous the social system, the more likely information will be transmitted from adopters to nonadopters. This information transmission may directly affect adoption likelihood. Although they offer relative advantages, innovations can result in negative social and economic consequences. CHAPTER LEARNING OBJECTIVES After studying this chapter, students will be able to 1. Describe how innovations can be classified in terms of their type, the benefits they offer, and their breadth. 2. Explain how consumers adopt an innovation, why they might resist adoption, and why marketers must understand the timing of adoption decisions. 3. Define diffusion and discuss how diffusion curves relate to the product life cycle. 4. Outline the main factors that affect adoption, resistance, and diffusion, and show how marketers can use their knowledge of these factors to market more effectively. CHAPTER OUTLINE I. Innovations A. Defining an Innovation 1. An innovation is a product, service, attribute, or idea that is perceived as new by consumers within a market segment, and that has an effect on existing consumption patterns. 2. Innovations are classified by (1) the type of innovation, (2) the type of benefits offered, and (3) the breadth of innovations. B. Innovations Characterized by Degree of Novelty 1. Innovations Characterized by Degree of Novelty a) Continuous innovation has limited effect on existing consumption. (1). Most new products on the market are continuous innovations. b) Dynamically continuous innovation has a more pronounced effect on our consumption practices. (1). Often these innovations involve new technology. c) Discontinuous innovation is a product so new that we have never known anything like it before. 2. Innovations Characterized by Benefits Offered a) Functional innovations offer functional performance benefits over existing innovations. b) Aesthetic or hedonic innovations appeal to aesthetic, pleasure seeking, and/or sensory needs. c) Symbolic innovations are products, services, attributes, or ideas that have new social meaning. 3. Innovations Characterized by Breadth a) Refers to the new and different uses to which a new product is put 4. Innovations and Cocreation a) Actively involving consumers in creating value through participation in new product development and marketing activities. II. Resistance Versus Adoption A. Whether Consumers Adopt an Innovation 1. Resistance reflects consumers’ desire not to purchase the innovation, even in the face of pressure to do so. a) Separate concept from adoption B. How Consumers Adopt an Innovation 1. High-effort hierarchy of effects a) The consumer thinks carefully about the product, gathers as much information about it as possible, and forms an attitude based on this information. b) Based on the attitude, the consumer may try the product and, if the trial experience is favorable, may adopt the product. 2. Low-effort hierarchy of effects a) When the new product involves less risk and when fewer people are involved in the buying process, decision-making may be less involved. b) Consumers engage in trial after they become aware of the innovation. c. Assuming attitudes are positive, adoption may follow. C. Marketing Implications 1. Marketers need to know if consumers’ adoption decisions are based on high- or low-effort adoption. a) If the adoption process is low-effort, marketers need to do all they can to encourage trial because trial affects brand attitudes. b) If the adoption process is high-effort, marketers need to do all they can to reduce the perceived risk associated with the innovation. D. Timing of innovation adoption decisions 1. Innovators—2.5 percent a) Venturesome b) Technology enthusiasts 2. Early adopters—13.5 percent a) Respectable b) Visionaries 3. Early majority—34 percent a) Deliberate b) Pragmatic 4. Late majority—34 percent a) Traditional b) Wary of progress 5. Laggards—16 percent a) Skeptical 6. Some researchers say these categories do not exist for all types of innovations. E. Marketing Implications 1. Innovators are important to marketers because they adopt new products independently of others’ opinions. 2. Demographics a) Innovators tend to be younger. b) Have more discretionary income and education c) Culture of origin affects willingness to accept innovations. 3. Social Influence a) Innovators tend to have a great deal of influence beyond their own immediate groups and tend to be opinion leaders. 4. Personality a) Innovators have a high need for stimulation. b) Inner directed c) Less dogmatic d) Less planning when making decisions 5. Cultural Values a) Innovativeness is associated with cultures that value individualism, assertiveness, and openness to change. 6. Media Involvement a) Innovators are frequent users of the media and rely on external information extensively. 7. Usage a) Innovators are heavy users within the product category. III. Diffusion A. How Offerings Diffuse Through a Market 1. Diffusion reflects the behavior of the marketplace of consumers as a group. 2. The S-Shaped Diffusion Curve a) Products first spread through the market relatively slowly. b) After a certain period of time, the rate of adoption dramatically increases, and then slows again. 3. The Exponential Diffusion Curve a) A high percentage of the market purchases the product as soon as it is available. b) With each additional time period, the adoption increases at a decreasing rate. B. Factors Affecting the Shape of the Diffusion Curve 1. Perception of social, psychological, economic, performance, or physical risk 2. Consumers may be unsure about how long a product will be on the market. 3. High switching costs 4. Diffusion curves reflect the rate of adoption only, not the time period under analysis. C. How Diffusion Relates to the Product Life Cycle 1. The product life cycle (PLC) concept is as follows: a) Products go through a period of introduction. b) Growth becomes rapid as more competitors enter the market and consumer acceptance increases. c) As competition increases, weaker competitors drop out and product sales stabilize. d) Eventually consumer acceptance wanes, and product sales decline. 2. Diffusion focuses on the percentage of the market that has adopted the product. 3. PLC relates to sales of a product over time. 4. Marketing Implications a) Marketers can try to prevent a product’s decline. b) Marketers can encourage use innovativeness. c) Marketers can try to diagnose their product’s likely life-cycle pattern. (1). Fads have very short PLCs. (2). Fashions or trends have lengthier PLCs than fads. (3). Classics have lengthy PLCs. IV. Influences on Adoption, Resistance, and Diffusion A. Characteristics of the Innovation 1. Perceived Value a) An innovation is perceived to have value if it offers greater benefits or lower costs than existing alternatives. 2. Perceived Benefits a) An innovation’s value to consumers is affected by what it is thought to offer above existing products or its perceived relative advantage. (1). Relative advantage does not exist in a product, but rather it is something the product does for the consumer. 3. Perceived Costs a) Actual purchase cost—the higher the purchase cost, the greater the resistance and the slower the diffusion b) Switching cost—the cost of changing from the current product to a new one 4. Marketing Implications a) If the innovation is not perceived to have a relative advantage, marketers may need to add one by physically redesigning or reengineering the product. b) If the product has an advantage, but it is not perceived by consumers, marketers need to communicate and demonstrate the relative advantage. c) Marketers can use price promotions to reduce perceived costs. d) Marketers can use incentives to switch. B. Uncertainty 1. Doubt about the standard product in the industry 2. Uncertainty about the relative advantage 3. When innovations are resisted because consumers are worried about a short product life cycle, marketers should show how adaptable the product is and hence how likely it is to have a long PLC. C. Consumer Learning Requirements 1. What consumers need to do in order to use the innovation effectively? 2. Compatibility a) The extent to which the innovation or its usage is consistent with consumer values, norms, and behaviors 3. Trialability a) The extent to which an innovation can be tried out on a limited basis before adoption 4. Complexity a) The more difficult consumers think a product is to understand or use, the slower the diffusion. 5. Marketing Implications a) Marketers can enhance the compatibility or reduce the complexity of their innovations. b) Advertising can educate consumers about how compatible the innovation really is with existing needs, values, and norms. c) Marketers can use change agents such as opinion leaders to enhance perceived compatibility. d) Marketers can avoid incompatibility by designing the innovation to fit with an entire system of products. e) Marketers can work with regulators to force the innovation to be used as the industry standard. f) Trialability can be overcome with advertising and promotion tactics. g) Demonstrations can show the benefits of using the product. h) Simulating trials is another way to encourage consumers to try innovations. D. Social Relevance 1. Observability a) The extent to which the innovation is observable to others (1). Consumers are more likely to adopt an observable product visibly consumed by others. 2. Social Value a) The extent to which a product has social cachet (it is seen as socially desirable and/or appropriate and therefore generates imitation. 3. Marketing Implications a) Extensive advertising, promotion, and distribution can be used to overcome observability problems. b) Distinctive packaging, styling, color, or unique promotions can enhance observability. c) Social relevance can be heightened by advertising, particularly advertising that ties product use with potential social approval. d) Social value can be enhanced by associating the product with some social entity, cause, or value. E. Legitimacy and Adaptability 1. Legitimacy refers to the extent to which the innovation follows established guidelines for what seems appropriate in the category. 2. Adaptability refers to the innovation’s potential to fit in with existing products or styles. 3. Marketing Implications a) Legitimacy can be enhanced by demonstrating how the innovation came into being. b) Lack of adaptability can be overcome by showing the product as having uses that extend beyond its original functions. F. Characteristics of the Social System 1. Modernity a) Modern social systems are those that have a positive attitude toward change 2. Physical Distance a) When members of the social system are spread far apart, diffusion is slower. 3. Homophily a) Overall similarity among members of a group (1). Normative pressures may speed adoption and diffusion of an innovation. 2. Opinion Leadership a) Key influencers among members can affect adoption and diffusion through credibility. 3. Marketing Implications a) Marketing efforts can affect resistance, adoption, and diffusion by affecting the social system. b) Marketers can identify those who have not adopted the innovation. (1). Passive consumers are those who have tried the product but are unlikely to provide information to others about it. (2). Active rejecters are those who have tried the product and are likely to provide unfavorable word of mouth. c) Marketers can encourage word of mouth to help diffuse a product faster. d) Negative word of mouth can be overcome by: (1). Correcting the problem so WOM will not be negative (2). Counteracting with advertising and personal selling V. The Consequences of Innovations A. Innovations often offer relative advantages that may not have previously existed, but they are not always good from the standpoint of society. ADDITIONAL LECTURE TOPICS In the chapter, there are various issues raised with respect to how consumers adopt innovations and how innovations diffuse through the marketplace. Many students will not make the connection between the characteristics of innovations, and the implications for marketers. In the case of each issue of diffusion, ask students to draw out the marketing implications of the issue at hand. The following is an example of how such a question might be phrased. Relative advantage suggests that consumers must perceive the additional value of an innovation before they will continue adopting it. Therefore, the marketer must consider how to communicate the advantage so that it is perceived by potential customers. What can marketers do to enhance the consumer’s understanding of relative advantage in an innovation? (Consider giving an example innovation for discussion.) The following table provides more ideas about discussing different barriers to innovation adoption, and potential marketing solutions. You might use this to guide a class discussion by placing the left-hand column on the board and having the students generate their own ideas for the right-hand column. Innovation Problem Potential Marketing Solution Value Barrier • Lack of Perceived Relative Advantage Redesign product Use comparative advertising Add value via positioning Invent, create, or borrow an image Use endorsements by credible sources • Perceived High Cost Use price-oriented promotions Use warranties or guarantees Pass manufacturing savings to consumers • Perceived High Switching Costs Provide incentives for switching Demonstrate problems of not switching Force the innovation to be the industry Standard Uncertainty Barrier • Uncertain Standards Force the innovation to be the industry standard • Uncertain Life-Cycle Length Enhance the life cycle by adapting the product to new uses Consumer Learning Barrier • Lack of Perceived Compatibility Understand cultural traditions via research Stress consistency with norms and values via education Use change agents Develop a systems perspective Integrate the innovation with a precedent product Force the innovation to be mandatory via government regulation • Lack of Trialability Use free samples if possible Use demonstrations and advertising to show product functions Use high-service outlets • High Perceived Complexity Distribute through high-service outlets Use skilled salespeople Use product demonstrations Social Relevance Barrier • Lack of Observability Extensive advertising and promotion Enhance product visibility via distinctive packaging, styling, coloring, promotions Associate the product with a visible referent • Lack of Social Value Associate the product with a social entity, cause, or value Associate the product with a visible referent • Legitimacy Barrier Show the product’s relationship to legitimate precursors • Adaptability Barrier Build adaptability into the product. Use communications to demonstrate adaptability This table is adapted from Jagdish N. Sheth and S. Ram, Bringing Innovation to Market (John Wiley Sons, 1987); Del Hawkins et al., Consumer Behavior (Irwin / McGraw-Hill); and Hubert Gatignon and Thomas S. Robertson, “Innovative Decision Processes,” in Thomas S. Robertson and Harold Kassarjian, eds., Handbook of Consumer Behavior (Prentice-Hall, 1991), 316–348. QUESTIONS FOR REVIEW AND DISCUSSION Possible answers are as follows. 1. How can innovations be described in terms of degree of novelty and types of benefits? How does the degree of novelty affect consumers’ behavioral change? Answer: Innovations can be described in terms of degree of novelty from an innovation that has limited effects on existing consumption patterns (continuous innovation), to an innovation that has a pronounced effect on consumption practices and often involves new technology (dynamically continuous innovation), to an offering that is so new that we have never known anything like it before (discontinuous innovation). In terms of types of benefits, innovations may be functional, aesthetic or hedonic, and symbolic. The degree of novelty may have a profound impact on our behavior if the product becomes adopted by society. Inventions such as the personal computer, telephone, television, and phonograph, all have had extreme effects on consumer behavior. Although, the Internet was invented in 1964 it didn’t gain in popularity until the Netscape browser helped to make it simple to use the Internet. When innovations happen, companies tend to overestimate its immediate impact on society (for instance, when television was invented, it took decades before televisions were in the majority of homes). When the dotcoms were wildly popular in the late 1990s, businesses were convinced the shopping mall would be replaced by Internet sites. 2. What is cocreation and what are its potential benefits? Answer: Cocreation is when a consumer (or other party besides the manufacturer) works together to create a brand, product, service, or other offering. This is a smart way to involve customers, and to get their feedback at a higher level. For instance, Doritos had an opportunity for a customer to design their Superbowl ad, and they received many entrants. They gave a prize away, and in return got a free ad production. A related idea is to have consumers suggest a new flavor for their chips. Potential benefits: cost saving, increased consumer involvement, being consumer-driven, avoids managerial myopia. 3. What is the difference between adoption and diffusion? How does the concept of resistance relate to adoption? Answer: Adoption is the purchase of an innovation by an individual consumer or household. Diffusion is the percentage of the population that has adopted that particular innovation at a specific point in time. Resistance is the desire to not adopt an innovation, even in the face of pressure to do so. For instance, people over forty years old resisted the change to computers when they first came out. In the business world, it is hard to communicate without using email. 4. Under what circumstances might a consumer follow the high-effort hierarchy of effects in adopting an innovation? Answer: Consumers are more likely to follow a high-effort decision-making process when the innovation is discontinuous because they know less about the innovation and must learn about it. A high-effort adoption process may also be used when many people are involved in the decision. 5. How can consumers be categorized in terms of their timing of adoption relative to other consumers? Answer: Five adopter groups illustrate the timing of adoption and can be represented graphically by a relatively normal bell-shaped curve. These groups, in order of adoption are innovators, early adopters, early majority, late majority, and laggards. 6. What is the product life cycle, and how does it differ from product diffusion? Answer: The product life cycle has four primary phases, introduction, growth, maturity, and decline. It differs from product diffusion in that diffusion focuses on the percentage of the market that has adopted the product. The product life cycle deals with sales of the product over time. 7. How do consumer learning requirements and social relevance affect resistance, adoption, and diffusion? Answer: Consumer learning requirements reflect the difficulty in understanding what consumers need to do to effectively use an innovation. If an innovation can increase its level of compatibility with consumers’ values, norms, and behaviors, that increases the extent to which an innovation can be tried prior to adoption (trialability), and decreases the innovation’s complexity so that consumers will likely adopt the product. Social relevance indicates the extent to which the innovation can be observed or the extent to which having others observe it having social cachet. Increasing the innovation’s social relevance will improve the diffusion rate of the product. 8. What characteristics of the social system affect an innovation’s acceptance within a market? Answer: The extent to which consumers in a society have a positive attitude toward change (modernity), are overall very similar (homophily), are concentrated (physical distance), and are influenced by opinion leaders, positively affects an innovation’s acceptance within a particular market. CONSUMER BEHAVIOR CASE It Is Brewing: Single-Serve Coffeemakers Are Hot Brands such as Nespresso, Keurig, and Senseo are competing for the attention of dedicated coffee lovers who want to brew one very good cup of coffee at a time without taking a lot of time. Although each brand’s single-serve coffeemaker works a little differently, they are actually a system with two vital parts, similar to the combination of razor and blade. First is the “razor,” that is, a coffeemaker designed to heat the right amount of water to the precise temperature needed to bring out the most flavor from the “blade,” a pre-measured capsule of coffee or espresso grounds. Once consumers own the coffeemaker, they simply buy a supply of replacement capsules to enjoy their choice of fresh-brewed coffees, ready in a matter of seconds at the touch of a button. In addition, consumers usually have to buy espresso cups when they switch to single-serve machines, because traditional coffee mugs are too large for most of the new machines. In fact, thanks to so many consumers making the switch, stores report that espresso cups are outselling coffee mugs these days. Despite being significantly more expensive than traditional drip coffeemakers, these innovative single-serve coffeemakers have taken the world by storm in the past decade. Global sales of all brands in this category are currently perking along at more than 28 percent per year, whereas sales of drip coffeemakers are growing at only 6 percent per year. Not surprisingly, this meteoric rise in sales has brought more brands into the market and expanded consumers’ alternatives year after year. One of the top brands in single-serve coffee is Nespresso, owned by the Swiss food giant Nestle. Nespresso markets its equipment and capsules through branded boutiques and upscale stores in 50 countries. It has a long history in this category, having sold more than 13 million single-serve coffeemakers during the past 25 years. Today, Nespresso rings up $3 billion in annual global sales from its line of single-serve machines and replacement coffee, espresso, and tea capsules. Nespresso is especially strong in Europe, although it has been targeting U.S. markets in recent years amid growing interest in single-serve coffeemakers. It prices its capsules at about 55 cents apiece, which works out to roughly $62 per pound of coffee—giving Nestle a tasty profit margin each time a customer brews up a new cup. Philips and its partner Douwe-Egberts have scored a major marketing hit with their Senseo single-serve coffee systems in Europe, North America, and Brazil. Now Philips is building on that success. As customers switch to single-serve coffeemakers, some come to enjoy their espresso so much that they later upgrade to a more sophisticated espresso machine. To meet the growing demand for full-size espresso makers, Philips bought the Italian espresso machine company Saeco, and is profiting from this stepping-stone effect. The dominant brand in North America is Keurig. Owned by Vermont-based Green Mountain Coffee Roasters, Keurig has deals with Starbucks, Dunkin’ Donuts, Folgers, and other coffee brands to make capsules specifically for its machines. Having a 71 percent share of the $1 billion U.S. market for single-serve coffeemakers and pods has given Keurig a big financial boost. Since 2006, Keurig’s sales have increased more than 60 percent a year. However, Keurig’s capsule patents are expiring and, as a result, it is facing more rivalry than in the past. Companies are launching their own capsules to fit Keurig machines, and undercutting Keurig’s capsule pricing to capture sales. The same will happen to Nespresso as its patents expire. What’s ahead for these marketers as the single-serve phenomenon rolls on and more brands brew up machines and capsules for coffee drinkers all over the world? Case Questions 1. Do you think single-serve coffeemakers are discontinuous, dynamically continuous, or continuous? What are the implications for adoption and resistance of this innovation? Answer: Single-serve coffeemakers are continuous innovations because they don’t significantly change the way in which people consume coffee or the amount of coffee they drink each day. 2. Is the decision to adopt single-serve coffeemakers likely to follow the high-effort or low-effort hierarchy of effects? Explain your answers. Answer: Decisions about single-serve coffeemakers are likely to follow a high-effort hierarchy because they belong to an older, well-established market that is dominated by traditional drip coffeemakers, which are less expensive than single-serves. While consumers may not spend as much time gathering information on a coffeemaker as a new car, they are still likely to compare benefits between manufacturers and drip coffeemakers, forming their attitude before buying the machine. 3. In which stage of the product life cycle would you place single-serve coffeemakers? Why should competitors in this industry pay attention to the life cycle? Answer: Single-serve coffee makers are still in the growth stage, particularly since several patents will be expiring soon allowing more manufacturers to enter the market. It’s important for competitors to know what stage of the lifecycle the product is in to determine their marketing strategy. Manufacturers with large market shares will try to saturate the market with their products before the rush of new entrants occurs when patents expire. 4. How is diffusion likely to be affected by the expiration of patents and the introduction of lower-priced coffee capsules? Answer: The pace of diffuse will increase as soon as the patents expire because new, less expensive products will be introduced, once the market becomes saturated the pace will slow down as there will be little room for growth. SUGGESTED EXERCISES AND TEACHER GUIDELINES 1. Read several publications like BusinessWeek, Fortune, or the Wall Street Journal and identify two innovative products and/or services. (a) Why are these offerings innovations? (Relate your answers to the chapter’s definition of an innovation.) (b) What type of innovations are they––continuous, dynamically continuous, or discontinuous? Functional, aesthetic, symbolic? (c) Describe whether you think adoption and diffusion of these offerings will be fast or slow by using concepts associated with the innovations, such as relative advantage, operability, and legitimacy. (d) Indicate how marketers might overcome resistance and speed adoption and diffusion for those offerings whose diffusion is likely to be slow. Answer: Ask students to consider other publications that might contain more innovations such as a computer or electronics-related publication. How does the nature of the publication influence the type of innovations contained in advertisements in that publication. Can one find ads for innovations in popular magazines like People or Sports Illustrated? 1. Tesla Cybertruck (a) Innovation Reasoning: Radically new design and materials in the pickup truck market. (b) Type of Innovation: Discontinuous and functional. (c) Adoption and Diffusion: Likely slow initially due to design but accelerated by its advanced features and electric vehicle trend. (d) Overcoming Resistance: Highlight benefits, offer incentives, and target tech enthusiasts and eco-conscious buyers. 2. ChatGPT by OpenAI (a) Innovation Reasoning: Advanced conversational AI improving human-computer interaction. (b) Type of Innovation: Dynamically continuous and functional. (c) Adoption and Diffusion: Likely fast due to its practical advantages and growing AI legitimacy. (d) Overcoming Resistance: Showcase benefits, provide tutorials, and address privacy and ethical concerns. 2. Consider a product that you think represents an innovation but that you have not yet purchased. Using the terms discussed in this chapter, indicate why your resistance to this product is high or low. Answer: Satellite radio might be an example of a product category that is in the early adoption phase of diffusion. While some new car models come equipped to receive satellite radio, most consumers need to purchase special equipment to be able to subscribe to a satellite radio service. Resistance to date may still be high as there might be some degree of uncertainty to the total amount of cost and effort required to be able to receive satellite transmission (high degree of complexity). The inability to try the product before purchasing may also be high. Social relevance, however, may positively influence the diffusion as using this service may reflect positively on consumers. Finally, the product appears to be compatible with consumer lifestyles, given the degree of importance that music has for many consumers and therefore should positively affect the adoption rate of this product. Product: Apple Vision Pro (Mixed Reality Headset) Resistance Reasoning: High Resistance: • Cost: High price makes it a significant investment. • Complexity: New technology may be difficult to use initially. • Uncertainty: Limited real-world applications and content availability. Low Resistance: • Relative Advantage: Offers advanced features in mixed reality. • Innovation Awareness: Growing interest in VR/AR technology. To lower resistance, marketers could focus on demonstrating practical uses, offering demos, and providing financing options. 3. Identify a new product that you consider to be a fad. Why is it likely to be a fad? What can marketers do to enhance the length of this product’s life cycle? Answer: The Atkins diet is a great example of a fad. It is a fad because it is an unsustainable diet plan that promises quick and easy results. When a fad catches on, consumers gravitate to it because it is the next big thing. Marketers can use celebrity spokespeople, news media, and other events to help push the Atkins diet. In fact, they created a line of food products based on the Atkins diet—now the company is in bankruptcy court. The key with diets and weight loss pills is that long-term results can only be sustained by changing habits, not symptoms. Changing habits is harder to do, as most people do not like to change, even if their behaviors may be destructive. For instance, in all weight loss ads there is a disclaimer at the bottom of the ad that states, “These results are not typical.” The reason they are not typical is it takes a considerable discipline to change our eating behaviors. Another example you could use with students is Trim Spa (another weight loss product) which the late Anna Nicole Smith once used to lose weight. What they won’t tell you is she was given a personal trainer, changed her diet, exercised, and took Trim Spa. Was it the Trim spa, or the fact that she worked out and ate fewer calories? Product: Fidget Spinners Why It's Likely a Fad: • Short-Term Appeal: Novelty and simple design led to rapid but temporary interest. • Limited Functionality: Provides minimal long-term utility. Enhancing Product Life Cycle: • Diversify Usage: Introduce variations or incorporate additional features. • Target New Markets: Expand into different age groups or uses. • Promote Quality: Emphasize durable materials and design improvements. 4. Think about a new product or service you have recently encountered. How did the social system of which you are a member influence your knowledge about, attitudes toward, and willingness to adopt this innovation? Answer: The answer to this question will vary. As an instructor I look to make sure that students explain their experience and why they chose to adopt this new product or service. Students are generally surprised to learn that their background tends to help them accept an innovation. For example, as of this writing, the new video iPod is being rolled out in stores. If a person has a regular iPod, they are more willing to move up to a video iPod since their background helps them to understand the benefits of this technology. Product: Eco-Friendly Reusable Water Bottles Influence of Social System: Knowledge: Social media and environmental groups highlighted the benefits, increasing awareness. Attitudes: Peer influence and growing concern about plastic pollution shaped a positive attitude. Willingness to Adopt: Stronger adoption due to social norms favoring sustainability and endorsements from friends and influencers. 5. Identify a set of offerings that you consider to be symbolic innovations. How has the meaning of each innovation changed? What cultural forces explain these changes? Answer: The answer to this question will vary. The key is for students to understand that over time meanings of brands and symbols change. One of the best examples is the word “gay.” In the 1920s, “gay” meant you were a happy person; now it has a different connotation. Cultural forces changed the word “gay” into a slang word for a homosexual group. Another example that seems to interest students is that in the early 19th century, women that were voluptuous (overweight by today’s standards) were considered more attractive then skinny women. This is due to the thinking that women who were overweight were considered to be healthier (since they could afford food). Another interesting example is that richer people in those times avoided getting a tan. It had nothing to do with skin cancer. Instead it conveyed their status because they didn’t work in the field like the common people. Nowadays, tanning beds and lying on the beach to get a nice tan are considered a way to make ourselves more attractive. Offerings: Smartwatches, Electric Vehicles (EVs) Symbolic Innovations: • Smartwatches: Originally seen as tech gadgets, now symbolize health consciousness and lifestyle management. • Electric Vehicles (EVs): Initially niche eco-friendly options, now represent modernity, innovation, and environmental responsibility. Changes in Meaning: • Smartwatches: From tech novelty to symbols of health and personal well-being. • EVs: From environmentally friendly alternatives to mainstream symbols of cutting-edge technology and sustainability. Cultural Forces: • Health Trends: Increased focus on fitness and wellness. • Environmental Awareness: Growing concern about climate change and sustainability drives mainstream adoption. SUGGESTED INTERNET EXERCISES WITH SAMPLE ANSWERS MINIMED INSULIN PUMP Since Drs. Banting and Best first isolated human insulin in the 1920s, physicians and patients have struggled to improve control of Type I (insulin-dependent) diabetes. Insulin injections provide relief from the disease’s effects for many; others will develop severe complications despite their best efforts. A relatively recent innovation in diabetes control is the insulin pump. Mini med manufactures several of the leading models of this device, and maintains an informative website at www.minimed.com. Visit Mini med online, including its links describing what an insulin pump is; how to live with an insulin pump; and how to determine if an insulin pump is right for a patient. In terms of degree of novelty and benefits offered, what kind of innovation is the Mini med insulin pump? How does its use differ from that of traditional insulin treatment? Why might some patients resist using an insulin pump instead of traditional insulin treatment? Instructor Notes The Mini med insulin pump is a dynamically continuous, functional innovation. Its use results in a profound change from the usual routine of insulin injections for Type I diabetics. The insulin pump certainly is a new technology with several important utilitarian benefits to the user. The patient programs the Mini med pump for the right insulin dosage from its reservoir. The infusion set, which resembles an intravenous medicine port, connects to the pump on one end and into the patient’s abdomen on the other. The patient must change the infusion set once every two to three days, instead of injecting insulin several times per day. Because the pump provides a larger dose of insulin at mealtimes and a more gradual dose between meals, its operation more closely mimics the way a healthy pancreas works. The advantages of the Mini med pump over injected insulin are substantial. It allows the diabetic to maintain much closer control over blood glucose levels, avoiding the severe complications that fluctuating glucose levels precipitate. Using the Mini med pump frees the diabetic from the inconvenience of rigidly scheduling meals, physical activity, and sleep as an injection-dependent diabetic must do to maximize control over the disease. Quality of life is vastly improved. However, the insulin pump is more expensive to purchase and maintain than are traditional insulin treatments. Its use requires frequent consultation with health professionals to maximize its effectiveness. These factors may increase the cost of switching beyond what some patients can afford. Also, some diabetics may perceive substantial psychological and physical risk from changing to an insulin pump; they may prefer to forego potential risk of using a relatively new technology if they perceive their disease to be under good control with traditional injections. Additional Uses This exercise also relates to concepts in the following chapters: • Chapter 2, Motivation, Ability, and Opportunity (impact of product knowledge, experience, cognitive style, intelligence, education, and money on ability to process information about insulin pumps) • Chapter 3, From Exposure to Comprehension (miscomprehension of product information about the insulin pump, e.g. diabetics who believe they can eat anything as long as they use the pump) • Chapter 5, Attitudes Based on High Effort (impact of cognitive responses, argument quality, comparative messages on attitudes about the insulin pump) • Chapter 8, Judgment and Decision Making Based on High Effort (evaluating treatment alternatives) • Chapter 10, Post-Decision Processes (positive disconfirmation concerning the insulin pump’s benefits) Discussion Idea In what ways does the adoption of, or resistance to, a medical innovation differ from these processes for non-medical products? ADDITIONAL DISCUSSION QUESTIONS WITH SAMPLE ANSWERS These discussion questions can be used as in-class activities or as thought questions that the students consider while reading the chapter or to test their understanding of the material after the reading and lecture are complete. 1. Explain the relationship between consumer learning requirements and adoption and diffusion of innovations. Answer: Consumer learning requirements are defined as what consumers need to do to effectively use an innovation. They are one of the characteristics affecting resistance, adoption, and diffusion of innovation. There will be less resistance and more diffusion if an innovation requires smaller amounts of consumer learning. Three factors that positively affect adoption and diffusion are compatibility, trialability, and complexity. The more compatible an innovation is to consumers’ norms, values and beliefs, the more it can be tried on a limited basis before it is adopted, and the less complex it is in nature. 2. Discuss the characteristics of the social system that influence adoption, resistance, and diffusion of innovations. Answer: The more positive a social system’s attitude toward change, the more receptive consumers will be to new products. Similarly, the more dense the social network and the more homophilous the social system, the more likely that information will be transmitted from adopters to non-adopters, which, in turn, can influence the likelihood of adoption. Finally, the positive attitude of opinion leaders in a social system regarding an innovation can favorably influence adoption and diffusion. ADDITIONAL QUESTIONS 1. Develop a definition of an innovation. Identify those characteristics of innovations that are important for marketers. Answer: Definition: A new or significantly improved product, service, or process that offers a clear advantage or solves a problem. Characteristics: • Relative Advantage: Better than existing options. • Compatibility: Fits with current practices. • Complexity: Easy to use. • Trialability: Testable on a limited basis. • Observability: Visible benefits. 2. Discuss what it means to introduce a marketing innovation. Develop a process for successfully introducing a marketing innovation. Answer: Introducing a Marketing Innovation Process: 1. Research: Identify needs. 2. Develop: Refine the idea. 3. Pilot: Test in a small market. 4. Evaluate: Assess feedback. 5. Launch: Roll out widely. 6. Monitor: Track and adjust. 3. Recreate the typical adoption/diffusion curve. Identify the factors you believe will influence the actual shape of this curve for a real product. Identify two innovations you are familiar with and discuss how the factors you have identified influenced its diffusion in the market. Answer: Adoption/Diffusion Curve Curve: Innovators → Early Adopters → Early Majority → Late Majority → Laggards Factors: • Relative Advantage • Complexity • Observability Examples: • Smartphones: Fast adoption due to clear benefits. • EVs: Slower due to cost and infrastructure, now accelerating with growing awareness. 4. Create a list of reasons to explain why a marketing innovation might fail. For each of these reasons for failure, propose a way for avoiding the failure. Answer: Reasons for Failure and Solutions 1. Lack of Need: Validate demand. 2. High Complexity: Simplify and support. 3. Poor Timing: Align with trends. 4. Inadequate Promotion: Invest in marketing. 5. High Cost: Balance cost and value. 5. Marketers are responsible for ensuring the successful adoption of new innovations. Select a new innovation and explain what marketers could do to make its adoption successful. Answer: Ensuring Successful Adoption Innovation: Electric Scooters Strategies: • Highlight Benefits • Offer Incentives • Increase Visibility • Provide Support 6. Recreate the curve that shows how consumer segments adopt innovations (innovators, early adopters, and so on). Explain how this curve can be helpful to marketing managers trying to project production, pricing, distribution, and other issues. Answer: Adoption Curve Curve: Innovators → Early Adopters → Early Majority → Late Majority → Laggards Usefulness: • Production: Plan scaling. • Pricing: Set tiered pricing. • Distribution: Plan channels. • Promotion: Tailor messages. 7. Characteristics of an innovation might cause it to be accepted or rejected. Explain what can be done to decrease the likelihood that these characteristics will cause resistance to the innovation. Answer: Decreasing Resistance Characteristics to Address: • Complexity: Simplify. • Compatibility: Ensure fit. • Trialability: Offer trials. • Relative Advantage: Communicate benefits. 8. Describe those characteristics of the social system that might cause an innovation to be accepted or rejected. Propose how marketers can address these potential barriers to adoption. Answer: Social System Characteristics Characteristics: • Norms and Values • Opinion Leaders • Social Networks Marketing Strategies: • Align with Values • Engage Influencers • Leverage Social Media EXPERIENTIAL EXERCISES AND CLASSROOM EXAMPLES Students who learn more readily through visual and tactile stimuli will benefit from the introduction of physical examples into the classroom. 1. “Gotta Have It” Exercise Buy several packets of play money from a local toy store and distribute it in equal amounts to each student in the class. Tell students they are to use the money to bid in an auction of products with limited commercial availability. The items are: Folding bicycle helmet: The only bicycle helmet that folds after use, combining function, convenience, and safety in a streamlined design. The three-piece helmet meets or exceeds international safety standards, providing maximum impact absorption and head protection. Complete with nylon “fanny pack” carrying case. Writing pen with light: This brushed aluminum ballpoint pen with enclosed light is perfect for taking notes in class during videos and PowerPoint presentations. The pen’s patented Accu-Light, which is powered by a replaceable watch battery, illuminates your notepaper without disturbing others in the room. Solar radio: Patented spring-engine technology powers this advanced radio. Simply turn the crank for 30 seconds to generate enough energy to operate the AM/FM radio for one hour. Also operates indefinitely in direct sunlight thanks to a solar panel that draws energy as needed. Virtual viewing TV glasses and headphones: Transform any video source into a personal screening room with these lightweight glasses and accompanying stereo headphones. Glasses connect with video cables (included) to the video output jack of any video source—TV, VCR, LaserDisc, DVD, camcorder. Enjoy video programming as if it were being shown on a 52-inch screen. Cordkeeper hairdryer: This lightweight, 1875-watt, two-speed, two-heat setting hairdryer has a push-button mechanism that allows you to retract the electrical cord to keep it out of sight and out of harm’s way. Tea bag mug: Colorful 12-ounce ceramic mug has a built-in bag holder for soggy tea bags. Use it to carry your fresh tea bag to a favorite spot, and brew your tea then tuck the used bag into the handy holder and sip the tea while it’s hot. Electronic wall calendar: This multifunction, programmable wall calendar lets you keep track of all the important information in your life with the touch of a digital pen. Hang it on your wall and “pencil” in meetings, appointments, holidays, birthdays, anniversaries, and reminders. Includes a shopping list function, calculator, clock/timer, and address book for quick-and-easy access to all the information you need to stay organized and on top of things. Programmable alarm clock: Rest assured that you’ll get to class on time with this electronic alarm clock that allows you to set seven different wake-up times—one for each day of the week—with the touch of two simple buttons. In less than 30 seconds on Sunday night, you can program your rise-and-shine calls for the entire week. Sleep peacefully knowing that, even if you forget about your 8 a.m. class on Tuesday, your alarm clock will not. The instructor has the option of setting reserves (minimum opening bids) on each item or of letting students determine the starting price. Do not be concerned that students will not “get into” the activity—even the quietest individuals often get caught up in a bidding war. After the auction, discuss both the outcome (who ended up with what) and the process (why they bid on specific items and how they determined what their highest bid would be). It usually becomes clear that some students get a great deal of utility out of being the “first on the block” to have something (innovators), while others only bid and bought if they truly needed the product. This leads to a broader discussion of the diffusion process and ways in which marketers can attempt to accelerate the acceptance of new products and services. CLASSROOM GROUP ACTIVITY Innovative Product Advertisement Analysis: 15 Minutes I. Start Up A. Purpose of the activity 1. This activity will give students an opportunity to analyze how marketers use advertising to influence the adoption and diffusion process. B. What the instructor will do 1. The instructor must identify advertisements from one of the following sources a) Assign students to search for advertisements containing innovative marketing initiatives in advance of the class activity. b) Collect advertisements for innovative or new products from current media. c) Select advertisements included in the chapter. 2. The instructor will divide people into small groups, assign them an advertisement for analysis, and be available to coach and help the groups as needed. 3. Optionally, groups may be provided with clear overhead acetates and markers so they can summarize their discussions and make presentations after their analysis and discussion. C. What the participants will do 1. The participants will work in small groups to study how marketers use advertisements to influence the adoption and diffusion process. After a period of small-group discussion, they will make reports to the large group. D. Rules for this experience 1. Groups are to work separately from each other. Individuals should rely on their knowledge from the book and may refer to their notes and the book as necessary. II. Experience A. Group up. 1. Have students form groups of no more than five. This exercise will work in groups of any size; however, room restrictions that do not allow for moving furniture may make group work more difficult. B. Assign advertisements. 1. Each group should be assigned a single advertisement on which to focus. a) These advertisements will come from one of the sources discussed above. C. Specific actions for groups 1. The groups are responsible for (1) developing a list describing how the ads effectively present the innovative product, and (2) developing recommendations for improving the ad. 2. Optionally, groups can summarize their discussions on clear overhead acetates to facilitate presentations after their analysis and discussion. 3. Questions to be answered by small groups a) Consider the advertisement your group has been assigned. Develop a critique of the ad that outlines (1) what the ad does well to present the innovative product (especially how it addresses potential sources of resistance in the marketplace), and (2) what can be done to make the ad (or one like it) potentially more effective. 4. Large-group discussions a) Have each group present its ideas to the class in a round-robin format. III. Debrief and Unveil Concepts A. Discuss the activity itself. 1. The purpose of this discussion is to allow students to express what they felt about the experience itself. 2. Ask students to describe their experiences of doing the activity. a) Likes and dislikes about what just happened b) How they felt during the experience c) What is realistic, unrealistic about the exercise? d) What will be different when they do this for their own advertisement? B. Discuss the content of the experience. 1. The purpose of this discussion is to ensure that students “take away” important learning points. 2. Ask students to describe the important points the experience teaches. a) The role of specific marketing techniques to encourage consumers to adopt new products, services, and ideas. 3. Use the chalkboard to record student responses. a) Write down their ideas as they are presented. b) Concentrate on the principles being discussed rather than the examples being used. c) Help them to see the interrelationships among their responses. IV. Execute A. Apply what has been learned. 1. Lead a discussion on how the concepts can be applied in organizations. a) What barriers may be faced in applying the concepts from the exercise? b) What can be done to help others understand the concepts when you use them at work? B. Transfer and use the knowledge. 1. Encourage students to make a record in their notes about how they will use the ideas in the workplace. 2. Even if they do not have a specific job, how will they remember to use what they have learned? Marina Strauss, “Starbucks Tries to Build a Bridge from Cafes to Grocery-Stores Shelves,” Globe & Mail (Toronto), April 14, 2011, p. B1; Joshua Levine, “Pod of Gold,” Time, March 7, 2011, www.time.com; Harry Wallop, “Espresso Cups Outsell Mugs,” Telegraph (UK), November 11, 2011, www.telegraph.co.uk; and Leslie Patton, “Green Mountain’s Expiring K-Cup Patents Attract Coffee Rivals,” Bloomberg, November 18, 2011, www.bloomberg.com. Solution Manual for Consumer Behavior Wayne D. Hoyer, Deborah J. MacInnis, Rik Pieters 9780357721292, 9781305507272, 9781133435211