Define and give examples of the five product characteristics

Define and give examples of the five product characteristics that influence the diffusion of innovation. Please be specific.

A product\'s package, guarantees, mass-media advertising for the product, direct marketing for the product, and the selection of distribution channels to move the product from the manufacturer to the consumer are examples of ________.
      
policy factors
      
output factors
      
process factors
      
marketing inputs
      
sociocultural inputs

Marge and Steve treat themselves (a small family unit) to a Caribbean cruise for their 25th wedding anniversary. This is an example of ________.
      
interpersonal gifting
      
intercategory gifting
      
intergroup gifting
      
intrapersonal gifting
      
intragroup gifting

Past experience is considered a(n) ________ source of information.
      
irrelevant
      
risky
      
external
      
internal
      
limited

Solution

Relative advantage: The relative advantage of the innovative product/service offering over already existing products/services, accelerates its rate of adoption by the target market. The degree to which customers perceive a new product/service as superior to similar existing products determines the relative advantage.

Examples of innovations that provide relative advantage are, flash drives versus compact discs, laptops versus computers, or digital libraries versus traditional libraries, ATMs versus bank teller counters.

b) Compatibility: The compatibility of the innovative product and service offering with the existing backgrounds, behavior and lifestyle patterns of consumers also affects its adoption by the consuming public. The compatibility of a product/service measures how closely it relates to needs, value systems and norms, lifestyles, culture etc. The higher the level of compatibility, the quicker the diffusion; and the lower the compatibility, the slower the diffusion.

Example that can be mentioned here is, coconut oil as a medium of cooking would be incompatible to people staying in North India. Even if positioned as “healthy and natural cooking medium”, it would be slow to penetrate and may even fail if launched in North India. The same would penetrate easily in South India, as it is culturally more compatible.

c) Complexity: The level of complexity in a product purchase and usage also affects the diffusion process. An innovative offering would be easily diffused when there is ease of understanding, purchase and use. The easier it is to understand and use a product, the more likely it is to be accepted quickly, and vice versa.

It would be noteworthy to mention here that the youth are more techno savvy and have accepted electronic goods like MP3s and 4s, laptops, I-pods, ATMs etc. much faster than the older generation. This is because the former have been able to deal with the complexity with a higher level of comfort than the older generation.

d) Trialability: The ease with which the product or service can be tested and tried also determines the rate of acceptance. The higher the degree of trialability, the greater would be the rate of diffusion. This is because the prospects get an opportunity to try the product/service, assess it and decide to accept/reject it. Trialability can be encouraged by providing free samples, or providing smaller packs and smaller-than-average sizes, (for FMCG and household goods) or even through demos and test runs (for consumer durables).

Observability: Observability refers to the ease with which the product can be observed. Observability in an innovative product refers to the degree to which a product/service’s benefits can be observed, imagined and perceived by a potential consumer. The higher the degree of observability, the greater the chances of the innovative offering being accepted by the prospects. 5 Those new product offerings that are i) tangible, ii) have social visibility, and iii) whose benefits are readily observed (without much time gap), are more readily diffused than those that are intangible, or have no social visibility or whose benefits accumulate over long periods of time.

2.A product\'s package, guarantees, mass-media advertising for the product, direct marketing for the product, and the selection of distribution channels to move the product from the manufacturer to the consumer are examples of Marketing inputs.

3.Marge and Steve treat themselves (a small family unit) to a Caribbean cruise for their 25th wedding anniversary. This is an example of interpersonal gifting.

4.Past experience is considered as internal source of information.