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Innovation. Offering which Is perceived as new by one or more segments Within cultures Between cultures Affects existing consumption Substitution Complementarity Variety seeking May or may not involve new technology. Some Examples of Cross-Cultural Diffusion and Reinnovation. Food
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Innovation • Offering which • Is perceived as new by one or more segments • Within cultures • Between cultures • Affects existing consumption • Substitution • Complementarity • Variety seeking • May or may not involve new technology
Some Examples of Cross-Cultural Diffusion and Reinnovation • Food • Virtual pets
Reinnovation Over Time • Fashion • Music
Some Examples of Innovations and Reinnovations • GPS systems (*) • Cellular phones • Torn jeans • Hip hop music (*) • Nail polish • ATM cards and machines (*) • Credit cards (*) • High end coffee shops • Vitamin C • Cranberry juice • Refrigerators • E-mail
The Chicken-and-Egg Problem • Some programs require two components, each of which must be present before the other can be attracted • E.g., an online auction site needs both buyers and sellers. Buyers are less motivated to come when there are few sellers, but buyers are needed to attract sellers. • A “jump start” may be needed—e.g., period of free service in return for early signup
Examples of “Chicken-and-Egg” Vulnerable Ventures • Personals sites • Auction sites • Text messaging systems • “Wiki” projects • Carpool systems • Electric cars • Computers and software • Fashion
Types of Innovations—Degree of Innovation • Continuous--same product, just small improvements over time--e.g., typical automobile/stereo system model changes • Dynamically continuous--product form changed, but function and usage are roughly similar--e.g., jet aircraft, ball point pen, word processor • Discontinuous--entirely new product; usage approach changes (e.g., fax)
Types of Innovations--Benefit • Functional: Tangible benefit • Hedonic/aesthetic: Contribution of pleasure—e.g., new foods, music • Symbolic: Self-expression—e.g., fashions; framing of benefits
Innovation by Co-Creation • Consumers participate in the development of new products • Design of custom products • Contribution of new product ideas • May better suit customer needs • May be spread more readily online • Building relationship with the brand
Resistance to Innovation • Concerns over innovations • Difficulty in migrating or learning to use the product • Inertia
DIFFUSION Innovators and Imitators: The Lifecycle of A Product
Adopter Groups: Implications • Demographic groups • Social influence • Personality characteristics • Culture • Usage levels
One Diffusion Pattern— Nicely Balanced... 100% adoption orsaturation point
Longevity of Innovations • Types • Fads • Fashion • Classic • Disadoption
Influences on Diffusion and Resistance • Perceived value • Perceived benefits • Relative advantage • Perceived costs • Uncertainty/risk • Consumer learning requirements • Compatibility • Trialability • Complexity • Social relevance • Legitimacy and adaptability • Social system • Modernity • Physical distance • Homiphily • Opinion leadership