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HOW A CONSUMER BECOMES A

CUSTOMER

P R E S E N T I N G B Y :

M A N I S H S H A R M A

V I V E K S I N G H

Customer Adoption ProcessDiffusion of Innovation &Situational Influences



Diffusion2

Diffusion is the process by which an innovation is communicated

through certain channels over time among the members of a

social system.

An innovation?

is “an idea perceived as new by the individual.”



The four main elements in the diffusion of new ideas are

3

(1) The innovation

(2) Communication channels

(3) Time

(4) The social system



The innovation

4

Why do certain innovations spread more quickly than others?

The innovation, to spread and be adopted should show: Thecharacteristics which determine an innovation's rate of adoption.

For example, consider the characteristics of HDTV (High-definition television) in relation to the rate of adoption.

Relative advantage (superior to existing products)

Compatibility (fits the values and experiences of potential customers)

Complexity (difficult to understand or use)

Divisibility (tried on a limited basis but still very expensive)

Communicability (results of using can be observed or described to others)



Relative advantage – new products that are most likely tosucceed are those that appeal to strongly felt needs

Compatibility – degree to which the product is consistent withexisting values and past experience of the adopters

Complexity – degree to which an innovation is perceived asdifficult to understand and use

Trialability – the ability to make trials easy for new productswithout economic risk to the consumer

Observability – reflects the degree to which results from using a

new product are visible to friends and neighbours



Types of Innovations

Continuous – modification or improvement of an existing

product

Dynamically continuous – may involve the creation of either a

new product or the alteration of an existing one ,but does not

generally alter established patterns of customer buying and product use

Discontinuous – production of an entirely new product that

causes customers to alter their behaviour patterns significantly



Communication channel

7

Process by which participants create and share

Mass media channels - effective in creating knowledge of

innovations

Interpersonal channels - effective in forming and changing

attitudes toward a new idea

Influences the decision to adopt or reject a new idea.

Most individuals evaluate an innovation, not on the basis of

scientific research by experts,

but through the subjective evaluations of near-peers who have

adopted the innovation.



New Product Adoption Theory

8

ADOPTION PROCESS

The consumer decision stages that lead to innovation

acceptance/rejection

A micro process that focuses on internal forces of the consumer

* Intra Personal (Psych) Influences

* Inter Personal (Social) Influences

* Product Selection Criteria



New Product Diffusion Theory

9

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 audience, community, etc.)



Introduction

10

The Adoption Process (also known as the Diffusion of

Innovation) is more than forty years old.

It was first described by Bourne (1959), so it has stood the test of

time and remained an important marketing tool ever since.

It describes the behavior of consumers as they purchase new

products and services.



Adoption process

11

1. Awareness

2. Interest

3. Evaluation

4. Trial5. Decision

6. Confirmation

OK, we will

buy X.If I have

to buy itI will.

No way!



Categories

12



Adopter classes

Innovators - 2.5%

Early adopters – 13%

Early majority – 34%

Late majority – 34%Laggards – 16%



Innovators

14

First to adopt & display that they likely to want to be ahead

To be the first to own new products, well before the average

consumer.

They are often not taken seriously by their peers.

They often buy products that do not make it through the early

stages of the Product Life Cycle (PLC).



Early adopters15

Are also quick to buy new products and services,

So are key opinion leaders (KOLs) with their neighbors and

friends as they tend to be amongst the first to get hold of itemsor services.



Early Majority

16

Look to the innovators and early majority to see if a new

product or idea works and begins to stand the test of time.

They stand back and watch the experiences of others.

Then there is a surge of mass purchases.



Late Majority

17

Tends to purchase the product later than the average person.

They are slower to catch on to the popularity of new products,

services, ideas, or solutions.

There is still mass consumption, but it begins to end.



Laggards

18

These tend to very late to take on board new products and include

those that never actually adopt at all.

Here there is little to be made from these consumers.



Situational Influences

It includes all those factors particular to a time and place that

do not follow from a knowledge of the stable attributes of the

consumer and the stimulus and that have an effect on current

behavior.

Consumers often behave very differently depending on

situation.



4 Types of Situational Influence

Communication situation

Purchase situation

Usage situation

Disposal situation



Communication Situation

It is the situation in which consumers receive information

has an impact on their behavior.

Whether one is alone or in a group, in a good mood or bad, in a hurry or not influences the degree in which one

sees and listens to market communications.



Cont..

Consider the marketing difficulty for these situations:

Your favorite team just lost the most important game of

the year

Your roommates watch only comedy programsYou have the flu

You are driving home on a cold night without a working

heater



Purchase Situation

It is the situation in which a purchase is made caninfluence consumer behavior.

Marketers must understand the purchase situations inorder to develop market strategies to enhancepurchases of their product.

A mother shopping with her child can be moreinfluenced by her child’s product preferences.



Cont..

How would you alter your purchase decision for a beverage in the following situations?

You are in a very bad mood

A good friend says “That stuff is bad for you” The store you are in does no carry your brand

There is a long line at the checkout stand when youenter the store

You are with someone you want to impress



Usage Situation

It is the knowledge of the situation in which products are,

or may become, appropriate.

Using this knowledge, marketers can communicate how

their products can create consumer satisfaction in eachrelevant usage situation.

Going further: expanded usage situation strategies can

produce major sales gains for established products.



Cont..

What beverage would you want to consume in the

following usage situations?

Friday afternoon after your last final exam

With your parents for lunchAfter dinner on a cold snowy evening

At dinner with a friend you have not seen in several years

When you are feeling sad or homesick



Disposition Situation

Consumers most frequently dispose of products or

product packages before or after product use.

The disposition situation can create significant social

problems as well as opportunities for marketersMarketers need to understand how situational influences

affect disposition decisions to help them provide more

effective and ethical products and marketing programs.



Cont..

How would your disposition decision differ in these

situations?

You have finished a drink at a mall and there is a trash can

nearby but no recycle. What do you do?You and your friends have just finished drinks. Your

friends toss them into the recycle. What do you do?



Four dimensions of situational influence

1. Physical surroundings

2. Social surroundings

3. Temporal perspectives4. Task definition



Physical surroundings

Atmospherics is the sum of all the physical features of a retail

environment.

Atmospherics influences consumer judgments of the quality of

the store and the store’s image.

Atmosphere is referred to as service when describing a service

business such as a hospital, bank or restaurant.



Examples of physical surrounds

Store location

Interior decor

Music

Smell/aromas Temperature (air-conditioning or heating)

Choice provided (by product category or across thecategories)



Colors

Certain colors and color characteristics create feelings of

excitement and arousal which are related to attention.

Brighter colors are more arousing than dull ones.Warm colors such as reds and

yellows are more arousing than

cool colors such as blues and

grays.



Music

Music influences consumers moods and in turn,

influences a variety of consumption behaviors.

Firms exist to develop music programs to meet the uniqueneeds of specific retailers.

An emerging trend is having music more in the

foreground so it becomes part of the shopping experience

and drives store image.



Crowding

Most consumers find feelings of crowding to beunpleasant resulting in:

Less time in the store and less buying

Faster decisions and less use of information

Crowding can lead to less satisfactory purchases,unpleasant shopping, and reduced likelihood of returningto the store.

Marketers need to design outlets to reduce crowding perceptions.



Social Surroundings

Social surroundings are the other individuals present in

the particular situation.

Social influence is a significant force.

Individuals tend to comply with group expectations, particularly when the behavior is visible.

Shopping is a highly visible activity.

The use of many publicly consumed brands are subject to

social influences.



Cont..Embarrassment is a negative emotion influenced both

by the product and the situation.

Certain products are more embarrassing than others, and

Embarrassment is driven by the presence of others.

For extremely sensitive products,

strategies include home delivery

options.



Examples of social surroundingsTypes of customers in the store.

Queues and crowding.

Whether the consumer is likely to be known by others/recognized.

Whether there are high-profile people/celebrities

shopping at that store.

Whether the product will be consumed privately or inthe presence of others.



Temporal Perspectives

Temporal perspectives deal with the effect of time on

consumer behavior.

Limited purchase time often limits search

Internet shopping is growingrapidly as a result of the time

pressures felt by consumers.



Examples of temporal influences

Whether the product is seasonal

Whether the product is urgently required (snack between

lectures)Time available for shopping limited/excess (the product

may be an excuse for shopping)

How long the previous product lasted or was expected to

last.



Task Definition

Task definition is the reason the consumption activity is

occurring.

Major distinction between purchases for self versus gift.Consumers give gifts for many reasons:

o Social expectations

o To elicit return favors



Examples of task influences

Is the product utilitarian or used as a status symbol?

Is it a gift or for oneself?Must the product be long-lasting/tough? (e.g. an everyday

watch)

or decorative?

(e.g. a dress watch) Is the product intended for several uses? (e.g. a family

computer for study and internet access)



Moods

Moods tend to be less intense than emotions and may

operate without the individual’s awareness.

Although moods may affect all aspects of a person’s behavior, they generally do not completely interrupt

ongoing behavior as an emotion might.

Consumers actively manager their mood states, often

seeking situations, activities, or objects that will alleviatenegative moods or enhance positive ones



Momentary Conditions

As with moods, individuals attempt to manage their

momentary conditions, often through the purchase or

consumption of products and services.

Thus, a great deal of marketing

activity is directed toward

momentary conditions



Examples of antecedent states

Moods

Feeling sad triggers buying sweets or seeing a funnymovie

Feeling rejected triggers buying games software

Momentary conditions

Can’t eat ice cream because teeth hurtCan’t buy a book because the credit card was left at home

Buy more groceries because hungry before shopping

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