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Marketing Dictionary:

diffusion of innovation

Describes the manner in which a product is disseminated in the marketplace. The diffusion of innovation spans an unspecified period of time from new product introduction through market saturation and affects the total sales level of a product. Diffusion of innovation relates to products such as the telephone answering machine, home computer, or microwave oven, which had few users when initially introduced but became popular additions to American homes over time. See also adopter categories.

 
 
Wikipedia: Diffusion of innovations

The study of the diffusion of innovation is the study of how, why, and at what rate new ideas and technology spread through cultures.

This research topic began in the 1950s at the University of Chicago with funding from television producers who sought a way to measure the effectiveness of broadcast advertising. It soon became apparent that advertised products or services were "innovations" in the culture. The general result of the study was that the most influential channel of influence was not from some broadcast medium, but down a echelon of levels, from a small number of "early adopters" to a larger number of "secondary adopters", and from them to "tertiary adopters", then to "quadranary adopters", etc. There was also lateral influence within each level. Broadcast messages could reinforce the propagation from one adopter level down to the next, but lower levels are unlikely to respond until the level above them has adopted. It found that people were more likely to adopt, or even consider adopting, if people they know and respect have adopted. Imitation is the strongest influence channel. Therefore, the most effective marketing strategy is to first sell to the early adopters, then reinforce the diffusion to each successive level, but not to waste resources on trying to reach any given level before it is ready for it.

The field has been expanded to examine competitive diffusion processes, in which the diffusion of some innovation stimulates an opposing innovation that also diffuses in competition with the first. Examples of this can include competing products, political candidates, religions, etc. It is sometimes useful to characterize the propensity of an innovation to diffuse with a "coefficient of diffusion". Thus, the course of events in Viet Nam in the 1950s and 1960s can be described in terms that the meme of nationalism had a higher coefficient of diffusion than constitutional republican government.

Competitive diffusion processes have been simulated by various games, such as the Pendulous family of simulated war games, in which control of the most territory on the board is the object of the game, and play consists of encouraging the spread of "forces" that occupy positions.

The S-Curve and technology adoption

The adoption curve becomes an s-curve when cumulative adoption is used.
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The adoption curve becomes an s-curve when cumulative adoption is used.

Rogers theorized that innovations would spread through society in an S curve, as the early adopters select the technology first, followed by the majority, until a technology or innovation is common.

The speed of technology adoption is determined by two characteristics p, which is the speed at which adoption takes off, and q, the speed at which later growth occurs. A cheaper technology might have a higher p, for example, taking off more quickly, while a technology that has network effects (like a fax machine, where the value of the item increases as others get it) may have a higher q.

Caveats and criticisms

Critics of this model have suggested that it is an overly simplified representation of a complex reality. [citation needed]

A number of other phenomena can influence innovation adoption rates, such as -

  1. Customers often adapt technology to their own needs, so the innovation may actually change in nature from the early adopters to the majority of users.
  2. Disruptive technologies may radically change the diffusion patterns for established technology by starting a different competing S-curve.
  3. Lastly, path dependence may lock certain technologies in place, as in the QWERTY keyboard.


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Marketing Dictionary. Dictionary of Marketing Terms. Copyright © 2000 by Barron's Educational Series, Inc. All rights reserved.  Read more
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