"INNOVATION" review ( Article-7 )

INTRODUCTION

Recently I enrolled for a Mini-degree in "Digital Psychology and Persuasion" from CXL Institute. I would love to share whatever I will learn from this Mini-degree through a series of articles.

This is my 7th "Digital Psychology and Persuasion" review article in a series of a total of 12 articles. I will be posting an article on each weekend for consecutive 5 upcoming weeks in which I will cover all the tactics and principles of Digital psychology, Consumer Behavior, and Persuasion and Neuro-Marketing which will surely help anyone passionate about marketing.

What is INNOVATION?

Innovation is something that deals with mandatory changes to be done in product components and design in order to stay up to date with the current market trends and consumer interest. Selling 10 million iPhones in the product’s first year not only boosted Apple’s profits; it also established the company as a typical competitor in a highly competitive mobile and electronics product category in which it had had no previous experience.

Innovation is so important for any company or brand's future that the top management teams in successful companies receive monthly reports on the most promising products in development and Innovation. Given the role that new products play in a company’s sales and profitability, it is very important for marketers to understand new products and what drives their success.

How Consumers react to INNOVATION?

A new product, or an innovation, is an offering that is new to the marketplace. Services such as movie downloads and identity fraud insurance can be innovations, as can ideas. Products, services, attributes, packages, and ideas are innovations if they are perceived as being new by consumers, whether or not they actually are new. Because the success of their new offerings is so important to companies, marketers need to understand how a consumer or household chooses to buy or adopt an innovation. Initially, marketers are interested in learning whether consumers would even consider the adoption of innovation or whether they would choose to resist buying it. Marketers also want to know how consumers adopt products and how they decide whether to buy innovation. Finally, marketers are interested in learning when a consumer would buy innovation in relation to when other consumers would purchase it.

Adoption VS Resistance

Adoption will take place only if consumers do not resist innovation. Consumers who resist an innovation chooses not to buy it, even in the face of pressure to do so. Most of the rejection for innovations is a risk factor in the consumer's mind. Battles between incompatible technology standards, for instance, have affected the adoption of products such as DVD players over the past two decades. Data shows that consumers often resist new technologies until they perceive that the negative effects of having to deal with something new are outweighed by the positive effects the new product might bring. Research also indicates that consumers with low needs for change and cognition are most likely to resist innovations, whereas consumers with high needs for change and cognition are least likely to resist them.

Note that resistance and adoption are separate concepts. There are a number of innovations that performed very badly in the market and ultimately failed. This is only because if the newness in your product is too hard to understand and it goes beyond the thinking of average human expectations then people will deny such a change because humans still have Old brain which strictly resists any changes in the normal living and the existing modes of survival. Typically, marketers can use a number of tactics to reduce consumers’ resistance to innovation.

How Consumers Adopt Innovation?

Whether consumers choose to adopt or resist an innovation depends on the mindset and the past experiences of consumers with similar product enhancements. Some of the consumers might wish to try something new while some of the consumers are very safe-side minded and usually avoid trying something new and uncertain. Consumers, who are either passionate about the brand or whose priority is advancement and growth, are more likely to adopt new offerings, at least when the risks are not very high. At a point, the consumer becomes aware of innovation, thinks about it, gathers information about it, and forms an attitude based on this information. If his or her attitude is favorable, the consumer may try the product. If the test or trial product is very engaging to the customers and they found the product very economical and useful and the product makes a status factor in the surroundings of the consumers then consumers are more likely to adopt new innovation and even spread it by mouth to mouth about it's experienced to their friends and family. 

Motivation for INNOVATION

Consumers’ motivation, ability, and opportunity to determine whether a high-effort adoption process occurs. A high-effort adoption process often takes place when consumers think the innovation involves psychological, social, economic, financial, or safety risks. Some consumers may respond to innovation for example that wearing a new style of clothing is socially risky and will wait for others to buy it first. In earlier times, consumers carefully considered the benefits of buying a DVD player because of the high cost of replacing an entire collection of videotapes or albums with DVDs. The replacement factor often failed some of the biggest Innovations in history.

Also, a high-effort adoption process may be used when many people are involved in the decision, as in a family or an organization. Here, consumers devote less decision-making effort to considering and researching the product before they try it, and then they form attitudes based on the trial. If their attitudes are positive, they may adopt the innovation. With a low-effort hierarchy of effects, the time between awareness of the innovation and its trial or adoption may be brief.

Innovation adoption curve :

Consumers differ in when they adopt an innovation. One framework identifies five adopter groups based on the timing of their adoption decisions. The first 2.5 percent of the market to adopt the innovation are described as innovators. The next 13.5 percent are called early adopters. The next 34 percent is called the early majority. The late majority represent the next 34 percent of adopters. The last 16 percent of the market to purchase the product are called laggards.

So it is good to have enough cash to build products in order to reach at least to the "Early Majority" point before expecting the success of an INNOVATION.

As a conclusion, we must not underestimate the powers of human behavior and marketing psychology in order to get success as a good marketer and to grow our business exponentially.

Congrats! You are now one step ahead in the competition after understanding Marketing Psychology and Consumer behavior.

Stay tuned for the next Article!

 (This article is a review for the mini degree, "Digital Psychology and Persuasion" from CXL institute".)

Thanks :-)

Gaurav Panwar