When you read the word Diffusion, the first thing that probably comes to your mind is science class at school where the lesson was mainly about the movement of atoms from regions of high concentration to regions of low concentration.
This however is not what we’re talking about today but instead we’re talking about the Law of Diffusion Innovation in the world of business. It is the process through which an innovation (or a product) is communicated over time within the market. This concept was first introduced by Everett Rogers back in 1962.
According to his research, the introduction of any new product into any market will only attract interest among certain groups of people over different time periods but cannot be expected to be sold to the entire of customer population of the market all at once.
Types of Consumer Groups within the Market
According to the Law of Diffusion of innovation, consumers within a typical market are broken down into 5 categories as per below.
- The Innovators: This would be the group who are first in line to try out a new product that has been just introduced into the market. They do not wait for product reviews to decide whether or not they should buy, they prefer to personally try the product for themselves upon release. This groups makes up about 2.5% of the total market.
- The Early Adopters: This group also likes to try out newly released products early on but the main difference between them and the Innovators is that they wait for an initial proof of value prior to purchasing the product. Early Adopters are usually opinion leaders within the market and as such, have a significant degree of influence over other groups of consumers. This group is around 13.5% of the market.
- The Early Majority: This group is mainly influenced by the Early Adopters group and so, they will wait for their feedback and reviews on newly released products before deciding to buy. They make up 34% of the market.
- The Late Majority: This group waits until the newly released product has proven to be a success in the market over a significant amount of time before considering spending their money on it. As such, the product is usually no longer really new by the time the Late Majority decide it is safe enough to spend money on it. The Early Adopters and Early Majority would have to highly recommend the product for the Late Majority to even start considering the idea of buying. They also make up 34% of the market.
- The Laggards: This is the group most resistant to trying out new products within the entire market consumer base. They do not like change and it is extremely challenging to convince them to try something new. In many of the cases when they do so, it is usually because they were forced so. For example, if a company decides to change the operating system it works with and so, employees will need to follow that change and start working with the new operating system to be able to continue doing their job. This group makes up 16% of the market.
One of the top goals a company should aim to achieve, is to not take too long in transitioning from the Innovators and Early Adopters stage to the Early Majority. This transition period is known as the Chasm and often the difference between business failure and success would depend on the company’s ability to navigate its way through the Chasm phase and break into the Early Majority area which is when mass sales are typically expected.
When you read the word Diffusion, the first thing that probably comes to your mind is science class at school where the lesson was mainly about the movement of atoms from regions of high concentration to regions of low concentration.
This however is not what we’re talking about today but instead we’re talking about the Law of Diffusion Innovation in the world of business. It is the process through which an innovation (or a product) is communicated over time within the market. This concept was first introduced by Everett Rogers back in 1962.
According to his research, the introduction of any new product into any market will only attract interest among certain groups of people over different time periods but cannot be expected to be sold to the entire of customer population of the market all at once.
Types of Consumer Groups within the Market
According to the Law of Diffusion of innovation, consumers within a typical market are broken down into 5 categories as per below.
- The Innovators: This would be the group who are first in line to try out a new product that has been just introduced into the market. They do not wait for product reviews to decide whether or not they should buy, they prefer to personally try the product for themselves upon release. This groups makes up about 2.5% of the total market.
- The Early Adopters: This group also likes to try out newly released products early on but the main difference between them and the Innovators is that they wait for an initial proof of value prior to purchasing the product. Early Adopters are usually opinion leaders within the market and as such, have a significant degree of influence over other groups of consumers. This group is around 13.5% of the market.
- The Early Majority: This group is mainly influenced by the Early Adopters group and so, they will wait for their feedback and reviews on newly released products before deciding to buy. They make up 34% of the market.
- The Late Majority: This group waits until the newly released product has proven to be a success in the market over a significant amount of time before considering spending their money on it. As such, the product is usually no longer really new by the time the Late Majority decide it is safe enough to spend money on it. The Early Adopters and Early Majority would have to highly recommend the product for the Late Majority to even start considering the idea of buying. They also make up 34% of the market.
- The Laggards: This is the group most resistant to trying out new products within the entire market consumer base. They do not like change and it is extremely challenging to convince them to try something new. In many of the cases when they do so, it is usually because they were forced so. For example, if a company decides to change the operating system it works with and so, employees will need to follow that change and start working with the new operating system to be able to continue doing their job. This group makes up 16% of the market.
One of the top goals a company should aim to achieve, is to not take too long in transitioning from the Innovators and Early Adopters stage to the Early Majority. This transition period is known as the Chasm and often the difference between business failure and success would depend on the company’s ability to navigate its way through the Chasm phase and break into the Early Majority area which is when mass sales are typically expected.
