Arnould

1
Chapter
17
Consumer Innovation
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Objectives

• Distinguish characteristics of innovations that
  influence their rate of diffusion and help
  determine their market success.
• Distinguish diffusion and adoption processes.
• Describe reasons for resistance to change and for
  discontinuance.
• Describe strategies for changing attitudes and
  behavior.
• Identify and distinguish opinion leaders, market
  mavens, and innovative consumers important in the
  diffusion of innovations.
• Describe differences among consumers based on
  their time of adoption of innovations.

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Innovation

• Capitalism encourages the creation of new
  markets, new technologies, and new forms of
  industrial organization.
• Innovation and Change
• Innovation and change are the heart of marketing.
• While some marketers ask consumers to be
  innovative, in terms of what they buy, how they
  buy, and where to buy, others encourage consumers
  to be conservative and resistant to change.
• Innovation refers to new things and ideas and new
  ways of behaving and interacting with things
  (symbolic and technological).
• It is defined by individuals and social groups.
• It include ideas, business practices, behaviors.
• It is one component of the diffusion process.

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Types of Innovations

• Continuous innovations
• Examples?
• Dynamically continuous innovations
• Examples?
• Discontinuous innovations
• Examples?

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Innovation Characteristics that Influence New
Product Adoption

• Pioneering advantage
• Being the first firm to market a product
  successfully in an emerging market.
• Prerequisites for Successful Adoption/AKA
  Barriers to Adoption
• Relative advantage
• Compatibility
• Trialability
• Observability
• Complexity

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New Product Success or Failure Why?

• Nair for MEN Hair Remover Currently in test
  market, this body cream removes hair from back,
  chest, arms and legs. Research by NPW three years
  ago indicated a market for smooth skin among
  active, young men. The big question is how big
  the opportunity is for Carter-Wallaces Nair -the
  leader in hair removal for women.

http//www.newproductworks.com/product_poll/produc
t_poll.html, accessed 2/14/05
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New Product Success or Failure Why?

• e-Moo Manufactured by MAC Farms, Inc., this
  carbonated dairy-based beverage contains all the
  nutrition of skim milk. In 8fl. oz plastic
  bottles and retailing for .69, it comes in
  Orange Sparkle, Bubble Gum and Chocolate
  Raspberry flavors. This patent pending process
  for carbonating milk is geared to kids and
  families as a more healthful fun beverage.

http//www.newproductworks.com/product_poll/produc
t_poll.html, accessed 2/14/05
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New Product Success or Failure Why?

• Campbells Soup to Sip Currently in test
  market, Campbells latest is a plastic 10 3/4 oz
  travel mug. The zip open metal lid is removed
  to heat in the microwave and is then replaced
  with a plastic travel lid. Targeted for on-the-go
  meals, (i.e., portafuels), this product offers
  the taste of Campbells classic soups, (Creamy
  Chicken, Classic Tomato, Blended Vegetable Medley
  and Cream of Broccoli varieties) in the
  convenience of your own disposable travel mug.
  Priced at 1.49 per unit.

http//www.newproductworks.com/product_poll/produc
t_poll.html, accessed 2/14/05
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The Study of Consumer Change

• The Diffusion Process
• the spread of an innovation from its creative
  source across space and time
• Product Life Cycle (PLC)
• a generic PLC takes the shape of an S-curve,
  because it mimics the adoption pattern.
• Key Components
• Space
• Time
• Neighborhood effect
• Fads, Fashions, and Trends

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Exhibit 17.2Diffusion Curves
Arnould et al. slide
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Conservatism, Resistance, and Discontinuance

• Pro-innovation bias
• Innovation resistance
• Discontinuance
• Why?
• E.g., Snob effect

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Exhibit 17.4 Group Influence on Innovative
Behaviors
Arnould et al. slide
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Social Hierarchies

• Social system values and traditions influence
  innovation.
• Trickle down theory of innovation
• Two-step flow model

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Exhibit 17.5 Multistep Media Flow Model of
Communication
Arnould et al. slide
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Adoption

• The adoption process focuses on the stages
  individual consumers or organizational buying
  units pass through in making a decision to accept
  or reject an innovation.
• Adopter Categories
• Lead Users
• Innovators
• Early Adopters
• Early Majority
• Late Majority
• Laggards

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Exhibit 17.6 Diffusion and the PLC
Arnould et al. slide
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The Adoption Process

• Awareness
• Interest
• Trial
• consumer surrogates
• Adoption (or rejection)
• Frequently, marketing objectives are stated in
  terms of where particular market segments are
  desired to be along the adoption process

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19
Online Publishing Case

• Identify the innovations described in the case.
• Classify each innovation in terms of the three
  categories of innovation described in the text.
  Justify your answer.
• Identify barriers to adoption for each
  innovation, from the five identified in the
  chapter.
• What marketing steps could be taken to initiate a
  bandwagon effect for online publishing and
  payment?

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Key Points from the Case

• Discontinuous innovation witnessed in payment
  plan and the way the book was to be purchased and
  read
• Major barriers were relative advantage (most
  importantly), complexity, observability, and
  compatibility trialability was probably the
  only thing it had going for it

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Key Points from the Case

• Bandwagons can be created by soliciting referrals
  and testimonials
• BUT, in the end, have to understand how the
  consumer is going to think about and experience
  the product
• Just because it can be done, doesnt mean it
  should be done