diffusion-of-innovation

Diffusion Of Innovation Theory And Why It Matters

Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.

Understanding the Diffusion of Innovation Theory

The Diffusion of Innovation Theory was developed by sociologist E.M Rogers in 1962. The basic premise of Rogers’ theory is that people spread, or diffuse, ideas and products through a population. With enough time, they are adopted by wider society as a whole.

Indeed, adoption in this context means that a consumer does something that they hadn’t done previously. Businesses and marketing departments should be most interested in diffusion that results in consumers purchasing a new product and influencing wider society to do the same.

For that process to play out in reality, the right type of consumer must be targeted. In the next section, we will look at how this might be accomplished.

Categories of consumers in the Diffusion of Innovation Theory

Individual consumers within a social system can be classified into five distinct groups according to their propensity for innovation.

1. Innovators 

Innovators are consumers who are the first to buy a new product after it enters the market. In general, they come from higher socioeconomic classes and have the liquidity required for high-risk tolerance. They are also very social and have many close contacts with other innovators.

2. Early adopters

Early adopters are similar to innovators in their degree of liquidity, education level and social status. They are generally more opinionated about their life choices and enjoy a degree of leadership in this area. However, their risk tolerance is lower and as a result, they are more discerning about the type of products they adopt.

3. Early majority

The early majority represents consumers who adopt a new product or technology after a sufficient amount of time has passed. They are not as vocal about their life choices as the early adopters, but their opinions still carry weight in wider society.

4. Late majority

Late majority consumers approach a new product with scepticism because of their low liquidity and social status. They will generally not adopt a new product until the majority of a population of consumers has done so.

5. Laggards

Laggards are the last consumers to adopt a new product. They tend to be found in older demographics who have traditional values opposed to change. They also have small social circles and have little to interesting in voicing their opinions.

Using the Diffusion of Innovation Theory in marketing

For marketing departments, efforts are best served by focusing on the early adopters and early majority. While the temptation may be to market to innovators, businesses should not confuse an innovator’s high tolerance for risk with the popularity of their products.

Efforts are best served by focusing on the early adopters and early majority. Consumers in these segments represent a sweet spot for marketers – with their high levels of disposable income, sociability, and product discernment. 

For these reasons, these consumers create momentum that helps drive a product to its tipping point – or the point at which it becomes widely adopted in society. 

Key takeaways:

  • At its core, the Diffusion of Innovation (DOI) Theory examines how ideas are spread from introduction to much wider adoption and acceptance. 
  • The Diffusion of Innovation Theory proposes that consumers can be grouped into five categories according to their tendency to adopt new ideas.
  • Marketing departments must focus their efforts on certain consumer segments who give more important feedback on product viability than others.

Connected Business Concepts And Frameworks

Change Curve

change-curve
The change curve is a model describing how people emotionally respond to change. The change curve model was created by Swiss-American psychiatrist Elisabeth Kübler-Ross to describe the five stages of grief terminally ill people go through. Further versions comprise eight stages that go from denial, anger, frustration, depression, acceptance, exploration, commitment and growth.

S-Curve

s-curve
The S-Curve of Business illustrates how old ways of doing business mature and then become superseded by newer ways. The S-Curve itself is based on a mathematical concept called the Sigmoidal curve. In the context of business, the curve graphically depicts how an organization grows over a typical life cycle.

Experience Curve

experience-curve
The Experience Curve argues that the more experience a business has in manufacturing a product, the more it can lower costs. As a company gains un know-how, it also gains in terms of labor efficiency, technology-driven learning, product efficiency, and shared experience, to reduce the cost per unit as the cumulative volume of production increases.

Product Life Cycle

product-life-cycle
The Product Life-cycle (PLC) is a model that describes the phases through which a product goes based on the sales of a product over the years. This model is useful to assess the kind of marketing mix needed to allow a product to gain traction over time or to avoid market saturation.

Creative Curve

the-creative-curve-allen-gannett
In his book, The Creative Curve, Allen Gannett describes how popular ideas follow a relationship between familiarity and preference as an upside down U. That is the Creative Curve. When something is very new and unfamiliar, we don’t like it that much. Therefore, according to the Creative Curve, the ideas that become popular have a blend of familiarity and novelty. All ideas reach a point of overexposure where they become cliché, and they start to lose popularity and downfall until they grow out of date.

Other strategy frameworks

More resources:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"