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Consumer adoption process

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Consumer adoption process

  1. 1. How a consumer becomes a customer<br />Presenting By:<br /> Manish Sharma<br />Vivek Singh<br />Customer Adoption ProcessDiffusion of Innovation &Situational Influences<br />
  2. 2. Diffusion<br />2<br /><ul><li>Diffusion is the process by which an innovation is communicated through certain channels over time among the members of a social system.
  3. 3. An innovation?
  4. 4. is “an idea perceived as new by the individual.”</li></li></ul><li>The four main elements in the diffusion of new ideas are<br />3<br />(1) The innovation<br />(2) Communication channels<br />(3) Time<br />(4) The social system<br />
  5. 5. The innovation<br />4<br /><ul><li>Why do certain innovations spread more quickly than others?
  6. 6. The innovation, to spread and be adopted should show: The characteristics which determine an innovation's rate of adoption.
  7. 7. For example, consider the characteristics of HDTV (High-definition television) in relation to the rate of adoption.
  8. 8. Relative advantage (superior to existing products)
  9. 9. Compatibility (fits the values and experiences of potential customers)
  10. 10. Complexity (difficult to understand or use)
  11. 11. Divisibility (tried on a limited basis but still very expensive)
  12. 12. Communicability (results of using can be observed or described to others)</li></li></ul><li><ul><li>Relative advantage – new products that are most likely to succeed are those that appeal to strongly felt needs
  13. 13. Compatibility – degree to which the product is consistent with existing values and past experience of the adopters
  14. 14. Complexity – degree to which an innovation is perceived as difficult to understand and use
  15. 15. Trialability – the ability to make trials easy for new products without economic risk to the consumer
  16. 16. Observability– reflects the degree to which results from using a new product are visible to friends and neighbours</li></li></ul><li>Types of Innovations<br /><ul><li>Continuous – modification or improvement of an existing product
  17. 17. 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
  18. 18. Discontinuous – production of an entirely new product that causes customers to alter their behaviour patterns significantly</li></li></ul><li>Communication channel<br />7<br /><ul><li>Process by which participants create and share
  19. 19. Mass media channels - effective in creating knowledge of innovations
  20. 20. Interpersonal channels - effective in forming and changing attitudes toward a new idea
  21. 21. Influences the decision to adopt or reject a new idea.
  22. 22. Most individuals evaluate an innovation, not on the basis of scientific research by experts,
  23. 23. but through the subjective evaluations of near-peers who have adopted the innovation.</li></li></ul><li>New Product Adoption Theory<br />8<br />ADOPTION PROCESS<br />The consumer decision stages that lead to innovation acceptance/rejection<br />A micro process that focuses on internal forces of the consumer<br /> * Intra Personal (Psych) Influences<br /> * Inter Personal (Social) Influences<br /> * Product Selection Criteria<br />
  24. 24. New Product Diffusion Theory<br />9<br /><ul><li>DIFFUSION PROCESS
  25. 25. The spread of an innovation from its source to the ultimate consumer.
  26. 26. A macro process that focuses on external forces on the consumer (change agents, channels of information, types of information).
  27. 27. Occurs in a social system (a target audience, community, etc.)</li></li></ul><li>Introduction<br />10<br /><ul><li>The Adoption Process (also known as the Diffusion of Innovation) is more than forty years old.
  28. 28. It was first described by Bourne (1959), so it has stood the test of time and remained an important marketing tool ever since.
  29. 29. It describes the behavior of consumers as they purchase new products and services.</li></li></ul><li>Adoption process<br />11<br />Awareness<br />Interest<br />Evaluation<br />Trial<br />Decision<br />Confirmation<br />OK, we will<br />buy X.<br />If I have to buy it I will.<br />No way! <br />
  30. 30. Categories<br />12<br />
  31. 31. Adopter classes<br /><ul><li>Innovators - 2.5%
  32. 32. Early adopters – 13%
  33. 33. Early majority – 34%
  34. 34. Late majority – 34%
  35. 35. Laggards – 16%</li></li></ul><li>Innovators<br />14<br /><ul><li>First to adopt & display that they likely to want to be ahead
  36. 36. To be the first to own new products, well before the average consumer.
  37. 37. They are often not taken seriously by their peers.
  38. 38. They often buy products that do not make it through the early stages of the Product Life Cycle (PLC).</li></li></ul><li>Early adopters<br />15<br /><ul><li>Are also quick to buy new products and services,
  39. 39. So are key opinion leaders (KOLs) with their neighbors and friends as they tend to be amongst the first to get hold of items or services.</li></li></ul><li>Early Majority<br />16<br /><ul><li>Look to the innovators and early majority to see if a new product or idea works and begins to stand the test of time.
  40. 40. They stand back and watch the experiences of others.
  41. 41. Then there is a surge of mass purchases.</li></li></ul><li>Late Majority<br />17<br /><ul><li>Tends to purchase the product later than the average person.
  42. 42. They are slower to catch on to the popularity of new products, services, ideas, or solutions.
  43. 43. There is still mass consumption, but it begins to end.</li></li></ul><li>Laggards<br />18<br /><ul><li>These tend to very late to take on board new products and include those that never actually adopt at all.
  44. 44. Here there is little to be made from these consumers.</li></li></ul><li>Situational Influences<br /><ul><li>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.
  45. 45. Consumers often behave very differently depending on situation. </li></li></ul><li>4 Types of Situational Influence <br /><ul><li>Communication situation
  46. 46. Purchase situation
  47. 47. Usage situation
  48. 48. Disposal situation</li></li></ul><li>Communication Situation <br /><ul><li>It is the situation in which consumers receive information has an impact on their behavior.
  49. 49. 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.</li></li></ul><li>Cont..<br /><ul><li>Consider the marketing difficulty for these situations:
  50. 50. Your favorite team just lost the most important game of the year
  51. 51. Your roommates watch only comedy programs
  52. 52. You have the flu
  53. 53. You are driving home on a cold night without a working heater </li></li></ul><li>Purchase Situation <br /><ul><li>It is the situation in which a purchase is made can influence consumer behavior.
  54. 54. Marketers must understand the purchase situations in order to develop market strategies to enhance purchases of their product.
  55. 55. A mother shopping with her child can be more influenced by her child’s product preferences. </li></li></ul><li>Cont.. <br /><ul><li>How would you alter your purchase decision for a beverage in the following situations?
  56. 56. You are in a very bad mood
  57. 57. A good friend says “That stuff is bad for you”
  58. 58. The store you are in does no carry your brand
  59. 59. There is a long line at the checkout stand when you enter the store
  60. 60. You are with someone you want to impress</li></li></ul><li>Usage Situation <br /><ul><li>It is the knowledge of the situation in which products are, or may become, appropriate.
  61. 61. Using this knowledge, marketers can communicate how their products can create consumer satisfaction in each relevant usage situation.
  62. 62. Going further: expanded usage situation strategies can produce major sales gains for established products. </li></li></ul><li>Cont..<br /><ul><li>What beverage would you want to consume in the following usage situations?
  63. 63. Friday afternoon after your last final exam
  64. 64. With your parents for lunch
  65. 65. After dinner on a cold snowy evening
  66. 66. At dinner with a friend you have not seen in several years
  67. 67. When you are feeling sad or homesick</li></li></ul><li> Disposition Situation<br /><ul><li>Consumers most frequently dispose of products or product packages before or after product use.
  68. 68. The disposition situation can create significant social problems as well as opportunities for marketers
  69. 69. Marketers need to understand how situational influences affect disposition decisions to help them provide more effective and ethical products and marketing programs. </li></li></ul><li>Cont.. <br /><ul><li>How would your disposition decision differ in these situations?
  70. 70. You have finished a drink at a mall and there is a trash can nearby but no recycle. What do you do?
  71. 71. You and your friends have just finished drinks. Your friends toss them into the recycle. What do you do?</li></li></ul><li>Four dimensions of situational influence<br /> Physical surroundings<br /> Social surroundings<br /> Temporal perspectives<br /> Task definition<br />
  72. 72. Physical surroundings<br /><ul><li>Atmospherics is the sum of all the physical features of a retail environment.
  73. 73. Atmospherics influences consumer judgments of the quality of the store and the store’s image.
  74. 74. Atmosphere is referred to as service when describing a service business such as a hospital, bank or restaurant.</li></li></ul><li>Examples of physical surrounds<br /><ul><li> Store location
  75. 75. Interior decor
  76. 76. Music
  77. 77. Smell/aromas
  78. 78. Temperature (air-conditioning or heating)
  79. 79. Choice provided (by product category or across the categories)</li></li></ul><li><ul><li>Colors
  80. 80. Certain colors and color characteristics create feelings of excitement and arousal which are related to attention.
  81. 81. Brighter colors are more arousing than dull ones.
  82. 82. Warm colors such as reds and</li></ul> yellows are more arousing than<br /> cool colors such as blues and <br /> grays.<br />
  83. 83. <ul><li>Music
  84. 84. Music influences consumers moods and in turn, influences a variety of consumption behaviors.
  85. 85. Firms exist to develop music programs to meet the unique needs of specific retailers.
  86. 86. An emerging trend is having music more in the foreground so it becomes part of the shopping experience and drives store image.</li></li></ul><li><ul><li>Crowding
  87. 87. Most consumers find feelings of crowding to be unpleasant resulting in:
  88. 88. Less time in the store and less buying
  89. 89. Faster decisions and less use of information
  90. 90. Crowding can lead to less satisfactory purchases, unpleasant shopping, and reduced likelihood of returning to the store.
  91. 91. Marketers need to design outlets to reduce crowding perceptions.</li></li></ul><li>Social Surroundings<br /><ul><li>Social surroundings are the other individuals present in the particular situation.
  92. 92. Social influence is a significant force.
  93. 93. Individuals tend to comply with group expectations, particularly when the behavior is visible.
  94. 94. Shopping is a highly visible activity.
  95. 95. The use of many publicly consumed brands are subject to social influences.</li></li></ul><li>Cont..<br /><ul><li>Embarrassment is a negative emotion influenced both by the product and the situation.
  96. 96. Certain products are more embarrassing than others, and
  97. 97. Embarrassment is driven by the presence of others.
  98. 98. For extremely sensitive products,</li></ul> strategies include home delivery<br /> options.<br />
  99. 99. Examples of social surroundings<br /><ul><li>Types of customers in the store.
  100. 100. Queues and crowding.
  101. 101. Whether the consumer is likely to be known by others/ recognized.
  102. 102. Whether there are high-profile people/celebrities shopping at that store.
  103. 103. Whether the product will be consumed privately or in the presence of others.</li></li></ul><li>Temporal Perspectives<br /><ul><li>Temporal perspectives deal with the effect of time on consumer behavior.
  104. 104. Limited purchase time often limits search
  105. 105. Internet shopping is growing</li></ul> rapidly as a result of the time<br /> pressures felt by consumers.<br />
  106. 106. Examples of temporal influences<br /><ul><li>Whether the product is seasonal
  107. 107. Whether the product is urgently required (snack between lectures)
  108. 108. Time available for shopping limited/excess (the product may be an excuse for shopping)
  109. 109. How long the previous product lasted or was expected to last.</li></li></ul><li>Task Definition<br /><ul><li>Task definition is the reason the consumption activity is occurring.
  110. 110. Major distinction between purchases for self versus gift.
  111. 111. Consumers give gifts for many reasons:
  112. 112. Social expectations
  113. 113. To elicit return favors</li></li></ul><li>Examples of task influences<br /><ul><li>Is the product utilitarian or used as a status symbol?
  114. 114. Is it a gift or for oneself?
  115. 115. Must the product be long-lasting/tough? (e.g. an everyday watch) </li></ul> or decorative?<br /> (e.g. a dress watch)<br /><ul><li>Is the product intended for several uses? (e.g. a family computer for study and internet access)</li></li></ul><li><ul><li>Moods
  116. 116. Moods tend to be less intense than emotions and may operate without the individual’s awareness.
  117. 117. Although moods may affect all aspects of a person’s behavior, they generally do not completely interrupt ongoing behavior as an emotion might.
  118. 118. Consumers actively manager their mood states, often seeking situations, activities, or objects that will alleviate negative moods or enhance positive ones</li></li></ul><li><ul><li>Momentary Conditions
  119. 119. As with moods, individuals attempt to manage their momentary conditions, often through the purchase or consumption of products and services.
  120. 120. Thus, a great deal of marketing</li></ul> activity is directed toward<br /> momentary conditions<br />
  121. 121. Examples of antecedent states<br /><ul><li>Moods
  122. 122. Feeling sad triggers buying sweets or seeing a funny movie
  123. 123. Feeling rejected triggers buying games software
  124. 124. Momentary conditions
  125. 125. Can’t eat ice cream because teeth hurt
  126. 126. Can’t buy a book because the credit card was left at home
  127. 127. Buy more groceries because hungry before shopping</li></li></ul><li>THANK YOU<br />