Diffusion of Innovations theory
This article explains the Diffusion of Innovations theory by Everett Rogers in a practical way. After reading you will understand the basics of this powerful marketing tool.
Each product has a certain useful life. It is not about the degree of wear and tear and the maintenance of quality of each separate product, but also about market value. In his Diffusion of Innovations theory, sociologist Everett Rogers examines this in greater detail and focuses on at what rate a new product or idea spreads through a certain group. His Diffusion of Innovations is particularly famous in the marketing world.
Diffusion of Innovations theory
In his theory on Diffusion of Innovations, Everett Rogers describes a product’s innovation life cycle. In this cycle theory he distinguishes five stages in which the product may find itself with five different user groups that accept the product or idea. These determine the success of a product. Through his theory it becomes clear how a product or idea develops among the users. Depending on the stage of the product, several adjustments take place, for example much or little promotion or a high or low sales price.
When a product is put on the market the first individuals to buy the product are the ‘innovators’. This small group of people wants to be the first to try the product and they are willing to take risks. These exclusive users in this group are therefore trend setters. Subsequently, the product will become increasingly popular and sales will increase.
Just like the innovators, the early adopters like to try out new things and they are not afraid to invest in new products. This group is significantly larger than the ‘innovators’ group and often they already know much about the new product. Because of this knowledge they play an important role in word- of- mouth advertising with respect to the new product as a result of which sales will increase strongly.
The early majority group loves trends, but prefers to wait and see before making a purchase. The product will be bought in droves by this group of people. The product will become extremely popular and this will cause a landslide in demand.
The late majority group actually lags behind and will only buy the product after many other people have bought it and its popularity is already decreasing. The reason why this group does not buy the product from the start has to do with confidence in the product. This group has to be absolutely certain that they are not making a bad buy. The product is also sold frequently in this ‘late majority’ stage.
The laggards group lags behind (consciously or unconsciously) in the trend and does not like innovation or change. It is not until the product is not much in demand any more and is about to leave the market that this group decides to buy the product after all. The most obvious reason is that this group waits until the sales price is lowered.
To maintain a good market position, companies look to sell their products to the five groups. By offering similar products to different groups, companies will spread their risks. In the Netherlands, Philips does this with their coffee machines.
They still carry old-fashioned filter coffee machines for the ‘laggards’. The Senseo coffee machine with its adaptations and innovations is meant for the ‘early’ and ‘late majority’ groups. Luxury espresso machines are meant for the ‘early adopters’ and the copy of the so-called Nespresso coffee machine aims at the ‘innovators’. This machine will make drinking coffee exciting and pleasurable.
It’s Your Turn
What do you think? Is the Diffusion of Innovations theory still applicable in today’s modern economy and marketing? Do you recognize the practical explanation or do you have more additions? What are your success factors for a good product’s innovation life cycle analysis?
Share your experience and knowledge in the comments box below.
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- Rogers, E. M. (2003). Diffusion of innovations. Free Press.
- Rogers, E. M. (1976). New Product Adoption and Diffusion. Journal of Consumer Research, 2 (March), 290 -301.
- Wejnert, B. (2002). Integrating Models of Diffusion of Innovations: A Conceptual Framework. Annual Review of Sociology (Annual Reviews) 28: 297–306.
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