Definition of the Subject
Adoption of innovation is one of the most interesting fields in marketing, with high monetary importance as more than 50% of firms profits are influenced from new products performances. Innovations are also an important factor for society as it influences many aspects in life.
Because adoption of an innovation involves risks, learning periods, and sometimes adaptations, individuals tend to consult with their friends and peers before making an adoption decision. The interactions between large numbers of consumers is one of the trademarks of complex system. Innovation markets are complex systems, and the complexity approach can become an important tool, both scientifically and practically.
Introduction
Having been established as a scientific field only as recently as the late 1960s, marketing can be considered a young discipline in the social sciences. Nevertheless in a relatively short time, this field had rapidly matured into...
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Abbreviations
- Glossary:
-
All terms in this glossary relate mainly to the case of Innovation.
- Aggregate models:
-
Models that use market level data of adoption, with less if any emphasis on individuals’ data.
- Consumer behavior:
-
Consumers make decisions and choices according to preferences, personalities but mainly according to some heuristics and rules. In Marketing , the field that investigates this behavior is defined consumer behavior.
- Diffusion of innovation :
-
A research field in marketing that deals with the dissemination of a new product in the marketplace.
- Early adopters:
-
Similar to the innovators, they like innovations and they also not risk averse. Contrary to innovators they are interested in product advantages and new benefits. on average they are estimated as 13.5%.
- Early and late majority:
-
Together they are estimated as 66%. they adopt the dominant designs, products that are compatible, bugs free, reliable, user friendly, and after the price has been stabled on a reasonable level.
- Innovation:
-
A new product or service that provides new benefits, typically by new product or process or technology. Innovation can be Radical (extremely new) or incremental (moderately new).
- Innovators:
-
First adopters, typically consist of 2.5% of the population, interested mainly in the technology and new features, and less interested in the advantages. They are not risk averse, and they are not concerned from products with bugs.
- Laggards:
-
Individuals who do not like to adopt innovation and prefer to avoid it if possible (estimated as 16% of the population).
- Marketing efforts:
-
A firm’s activity to increase awareness of the new product and the propensity to try it.
- Penetration and product life cycle:
-
Product life cycle is a general model that describes the “life” of a product by flat growth of sales followed by a take off in which sales are increased exponentially until a peak of sales and decline until the product “dies”. Product life cycle can be examined by sales or by units sold. penetration is measured by counting the first adoption on each individual.
- Saddle:
-
A dual peak penetration pattern that is characterized by an initial peak of sales, followed by a slump, and then a recovery until a second (much larger) peak is obtained.
- Word of mouth (w-o-m):
-
Interaction between consumers in which information and recommendation is passed. There are other paths of information transfer that fall under this classification as well like imitation in which no conversation is needed.
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Goldenberg, J., Shapira, D. (2009). Marketing: Complexity Modeling , Theory and Applications in. In: Meyers, R. (eds) Encyclopedia of Complexity and Systems Science. Springer, New York, NY. https://doi.org/10.1007/978-0-387-30440-3_319
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