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Chapter 14 - Consumer Decision-Making and Diffusion of Innovations

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63 views15 pages

Chapter 14 - Consumer Decision-Making and Diffusion of Innovations

Uploaded by

Aya Abbou
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Consumer Decision-

Making and Diffusion


of Innovations
• Explain the five stages of the consumer

Learnin decision-making process


• Identify the factors that influence

g consumer decision-making
• Describe the types of consumer decision-

Objectiv
making strategies
• Understand the diffusion of innovations
theory and its applications
es • Analyze the characteristics of innovations
and adopters
• Problem recognition: The consumer realizes a need or
a problem that needs to be solved The Five
• Information search: The consumer seeks information
about the possible solutions or alternatives
Stages of
• Alternatives evaluation: The consumer compares and Consumer
evaluates the alternatives based on various criteria
• Purchase decision: The consumer chooses the best
Decision-
alternative and makes the purchase Making
• Post-purchase evaluation: The consumer assesses the
satisfaction or dissatisfaction with the purchase Process
Factors
The consumer decision-making process is influenced by
various factors, such as:

Influencin Internal factors: The consumer’s personality, motivation,


perception, learning, attitudes, and lifestyle

g External factors: The consumer’s culture, subculture,

Consume social class, reference groups, family, and situational


factors

r Marketing factors: The product’s features, price,


distribution, promotion, and service

Decision- These factors affect the consumer’s problem recognition,

Making information search, alternatives evaluation, purchase


decision, and post-purchase evaluation
Stages in the Adoption Process (AIDA, Hierarchy of Effects and Dagmar)
Types of Extended problem solving: The consumer
engages in a high level of information search
and alternatives evaluation, usually for high-
Consume involvement and high-risk products or services

r Limited problem solving: The consumer


engages in a moderate level of information
Decision- search and alternatives evaluation, usually for
low-involvement and low-risk products or

Making
services
Habitual or routine problem solving: The

Strategie consumer engages in a low or no level of


information search and alternatives evaluation,
usually for familiar and low-cost products or
s services
The diffusion of innovations theory
The explains how, why, and at what rate
new ideas and technologies spread
Diffusion through a social system
The theory was popularized by Everett
of Rogers in his book Diffusion of Innovati
ons, first published in 1962
Innovatio
ns The theory proposes that five main
elements influence the diffusion of an
Theory innovation:
The five The innovation itself: The new idea, product, or
service that is perceived as new by the potential
main adopters
The adopters: The individuals or groups that adopt
elements or reject the innovation

that The communication channels: These are how the


influence innovation is communicated among the members
of the social system
the The time: The duration of the diffusion process,
from the first exposure to the adoption or rejection
diffusion of the innovation

of an The social system: The set of interrelated units


that are engaged in joint problem-solving to
innovation accomplish a common goal
Relative advantage: The degree to which the
innovation is perceived as better than the existing
alternatives
Compatibility: The degree to which the innovation
is perceived as consistent with the existing values,
The needs, and experiences of the potential adopters

Characterist Complexity: The degree to which the innovation is


perceived as difficult to understand and use
ics of
Innovations Trialability: The degree to which the innovation
can be experimented with on a limited basis before
adoption
Observability: The degree to which the results of
the innovation are visible and communicable to
others
The
Characteristic
s of Adopters
• Rogers classified
adopters into five
categories based on
their innovativeness, or
the degree to which
they adopt new ideas
earlier than others in
the social system.
The five categories of adopters are:

Innovators: The first 2.5% of the adopters, who are venturesome, risk-taking, and eager to try
new ideas

Early adopters: The next 13.5% of the adopters, who are opinion leaders, respected, and
influential

Early majority: The next 34% of the adopters, who are deliberate, cautious, and pragmatic

Late majority: The next 34% of the adopters, who are skeptical, conservative, and resistant to
change

Laggards: The last 16% of the adopters, who are traditional, isolated, and suspicious of new ideas
• The diffusion of innovations theory has been
applied to various contexts and domains,
such as:
Applicatio
• Marketing: To design and implement
ns of the effective marketing strategies for new
Diffusion products or services, such as segmentation,
targeting, positioning, pricing, distribution,
of and promotion
Innovation • Communication: To understand and
enhance the communication process and
s Theory channels for disseminating new ideas or
information, such as mass media,
interpersonal, and social media
• Development: To promote and facilitate
Applicatio social change and development in various
sectors, such as agriculture, health,
ns of the education, and environment
Diffusion • Health: To encourage and support healthy
of behaviors and practices among individuals
and communities, such as smoking
Innovation cessation, vaccination, HIV prevention, and
family planning
s Theory
• The consumer decision-making process is a series of
steps that consumers go through when they purchase a
product or service
• The five stages are problem recognition, information
search, alternatives evaluation, purchase decision, and
post-purchase evaluation
• The consumer decision-making process is influenced by
various factors, such as internal, external, and marketing
Summary factors
• The consumer decision-making process can vary in
complexity and involvement depending on the type of
product or service, the level of risk, and the consumer’s
involvement
• There are three types of consumer decision-making
strategies: extended, limited, and habitual or routine
problem solving
• The diffusion of innovations theory explains
how, why, and at what rate new ideas and
technologies spread through a social system
• The five main elements that influence the
diffusion of an innovation are the innovation,
the adopters, the communication channels, the
time, and the social system
Summary • The characteristics of innovations and adopters
affect the rate and extent of their diffusion and
adoption
• The diffusion of innovations theory has been
applied to various contexts and domains, such
as marketing, communication, development,
and health

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