Paul Trott, Innovation Management and New Product development 4th Edition, Chapter 2: : Innovation Diffusion Theories

1. Innovation Diffusion
Theories

2. What is meant by diffusion
theories?

• Theories that try to explain how an
innovation is “diffused” spreads in a social
system over time.
• The adoption of an innovation is part of a
wider diffusion process.

3. Why are we interested in
diffusion theories?

 The Study of how and why consumer buy goods and
services falls within the area of consumer buyer
behavior, and there many textbooks that deals with
the subject in details.
 The reason is just to introduce the reader to the body
of research of how and why some new innovation
products are successful and some are not.

4. Rogers Diffusion Theory

 Everett Rogers: credited of introducing the diffusion
theory to the Business community.
 He applied his theory to new product innovations in
the market
 He was able to demonstrate different categories of
consumers on the basis of relative time of adoption.

5. Cont. Rogers Diffusion Theory
 He plotted his theory on the s-curve cumulative basis


6. Cont. Rogers Diffusion
Theory

 Rogers classified different adopters based on their
standard deviation positions from the mean time of
innovation
 He utilized the average and a normal distribution of
adopters in order to group them into five categories

7. Cont. Rogers Diffusion
Theory


8. Moore’s Chasm


9. Pause for thought

Given that internet banking has been
available for over ten years do you think
internet banking has crossed the ‘chasm’? Is
it always just a matter of time and so long as
you are patient products will always
eventually succeed?

10. Given that internet banking has been available for
over ten years do you think internet banking has
crossed the ‘chasm’?

 No, I don’t think it has crossed the “chasm”, because
in my opinion it is still in its early stages, it has more
time to expand, in addition to that still it has not
been popular because of mistrust that exists among
people about doing their business online.

11. Is it always just a matter of time and so long as you
are patient products will always eventually succeed?

 In theory this may be true or partly true at least but
the main problem here of course is that firms and
their shareholders do not have unlimited time and
require a return on their investment. It is certainly
true that many products have taken a long time to be
successful. All the electronics goods in Figure 2.4,
page 58 show that from launch to 70% penetration
can be more than 20 years as is the case for the
personal computer.