Product Adoption Cycle

The product adoption cycle is a business model used by many

marketing leaders, executives, and consultants which describes the
adoption of products and services through an analysis of the buying
personality’s common within each stage of the cycle.

In other words it is a sociological model that describes the adoption

or acceptance of a new product or innovation, according to the
demographic and psychological characteristics of defined adopter
groups. The process of adoption over time is typically illustrated as a
classical normal distribution. The model indicates that the first group
of people to use a new product is called “innovators,” followed by
“early adopters”. Next come the early majority and late majority, and
the last group to eventually adopt a product are called “laggards”.

The significance of this theory/model is that it provides insight into

the current market conditions for a technology and a glimpse into
the future. This is achieved by understanding the types of buying
personalities, and the percentage of the population they represent,
as a technology matures and progresses through its adoption life
cycle. TALC follows a normal distribution (bell-shaped curve). As the
following diagram illustrates, the adoption curve defines the quantity
of consumers over time. As with any normal distribution, the
segments (stages) are defined by a standard deviation.

This classification scheme amongst members’ of the target

segment(s), which illustrates where one consumer stands in relation
to another consumer with respect to time, that has lapsed between
the introduction of the new product and service and the adoption by
a consumer(s). Researchers have classified consumers into adopter
and non-adopter categories, which range from two or three or five
category classifications. It is noteworthy that the consumers would
be classified based on the nature of the good or service. The
technology adoption lifecycle appears as a bell curve. It
demonstrates your market growth by sorting your adopters into five
categories

This classification of consumers relates to their willingness to take

risks and to switch purchase behaviours relative to particular product
categories. For example, a consumer may be an innovator or early
adopter of technology products, but perhaps be in the late majority
for household furniture. Therefore, these categories are relevant to
particular products, not necessarily the consumer themselves – but
obviously some people are more risk takers whereas others are more
conservative, so there would be some correlation of behaviors across
related product categories.

Roger’s has proposed a classification of adopters, according to which

consumers can be divided into five categories based on the time
taken by them to adopt a product. These five adopter categories, the
buying personalities within each stage are innovators, early adopters,
early majority, late majority, and laggards. Based on research, it has
been observed that the five categories when plotted on a graph, lead
to a bell-shaped normal distribution curve. Thus Every new
technology goes through an adoption life cycle in which certain
audience segments adopt the product before others are willing to do
so. Here are each of the audience segments—and what you should
consider when marketing to them The five categories are explained
as follows:

1. Technology enthusiasts (a.k.a. innovators)- Innovators are

technology enthusiasts. They like technology for technology’s
sake. They pursue new technology aggressively, learning about
and evaluating new products in an effort to be first. They’re
likely to try anything new. They’re also relatively few in
numbers—so, for marketers, they represent a beachhead, an
important source of references and referrals. The first to
commit to new technology, these individuals love to get their
hands on the latest gadgets. Their role is one of gatekeeper,
providing access to the next segment of buyers. Catch phrase:
This is cool technology. Innovators comprise of 2.5 % of the
target market(s) adopters

They are high on self-confidence, and are always eager to try

out new products/services. They have access to information
about such new offerings, and are quick to purchase; one,
because they have the interest and inclination to buy the
“new”; and two, because they have the purchasing power and
the access. It is important to mention here, that innovators are
not “generic”; they are in most cases “specific” to a product
and service type. Innovators will often have some connection
to the scientific discipline in which a new product is generated
from and will tend to socialize with other innovators in their
chosen product categories.
It’s also important to realize that innovators are comfortable
with the risks that they take. They are aware that some
products that they adopt will not deliver the benefits that are
promised or will fail to win mass market appeal. When
designing for innovators it might be best to remember what
Larry Marine the UI expert says; “It is far better to adapt the
technology to the user than to force the user to adapt to the
technology.”
Consider this real-life example: On June 19th 2007, Apple rolled
out the first iPhone, with a relatively high price tag of $600.
Two months later, Apple lowered the price to $400. And in June
of 2009, the price again dropped, to $200. By that time, the
latest iteration of the iPhone offered twice the storage as the
original.
But despite the inevitable price drops and product
improvements, in 2007, innovators and early adopters camped
out in front of Apple stores in droves, just so they could be
early to get their hands on the new tech.

How to market to them:

You have to win the innovators early, and you have to tell them
the truth. They don’t need or want cleverness or hype: they
want facts. Other factors:
• They want access to knowledgeable people to answer their
technical problems.
• They want everything cheap—no use for “value-added”
arguments.
• They can be reached on the Web, or via direct e-mail.
• Direct response works well—offer literature or a free demo.

Early adopters (a.k.a. visionaries)- The next 13.5 percent of the

target market(s) adopters are called early adopters. Relying on
intuition and vision, these individuals appreciate the benefits of
a new technology. They are driven to embrace the new
technology to gain a competitive advantage. The early adopters
are willing to accept a solution that is not entirely complete,
and they are prepared to commit the required resources and
effort to make the technology work. Catch phrase: I can see the
impact.

Early adopters are visionaries, not technologists. When it

comes to high-tech products, they’re looking for fundamental
breakthroughs, not small improvements. They care about ROI
and see new technology as helping them reach a business goal
in a hurry, before their window of opportunity closes.

E.g. People in India who are now exploring ecommerce

Another best example to understand the early adopters are –

let us consider the company ‘Apple.’ Now the company Apple is
one of the four largest companies in the world today, and a
significant part of its success is because of these early adopters.
When the iPhone was first launched in the year 2007, its price
we nearly $600. This is a significant amount of money and a
huge deal because it had to invest this amount in products they
have no experience with. But still many of the early adopters
did not hesitate a bit in buying it. Although just two months
after the launch of the product the prices of the iPhone went
down to $400 a then after some time to $200 too.

Those were the early adopters how got their hands on this new
technology before their peers could because they wanted to be
the first to try this new product that was launched in the
market.
Whenever the company launches the new version of the
iPhone the early adopters make sure that they buy it first.
Although they are not much aware of the new technologies or
feature that it will come with or how much of a utility will it
prove to be, they buy the hipness whenever it gets launched.

Therefore, early adopters, as opinion leaders, are a foundation

to gaining widespread adoption of the new product. Usually the
shift of the product life cycle from the introduction to the
growth phase is driven by the transition from purchases by
innovators to purchases by the early adopters.
How to market to them:
Early adopters are the key to opening up the market for your
high-tech product. They are the least price-sensitive, easy to
sell, and hard to please. Other factors:
• They like a project orientation, starting with a pilot project. •
Success requires careful account management, including
frequent contact at the executive level.
• A top-level direct sales force works well to reach them.
• They typically find you (you don’t find them) by maintaining
relationships with technology enthusiasts.

Early majority (a.k.a. pragmatists)- Methodical and pragmatic

in their approach to solving problems, these individuals rely on
hard, proven data and facts,ie. They’re ready to buy when
someone else has taken the risk and worked out the bugs. Their
goal is to make a percentage improvement, rather than a
quantum leap. They tend to buy from the market leader.

They see a technology decision as something they’re going to

have to live with for a long time, so service is important. Once
you win them, they’re extremely loyal.

The decision to use new technology is made to make the

company more effective. They look for a safe purchase. Catch
phrase: Show me
These categories of people are not as quick as the early
adopters and take longer to enter into purchase. This is
because unlike the earlier two categories category., the early
majority does not have much interest in the product/service
Thus, the consumers that fall into this category have to collect
information, evaluate it, deliberate carefully and then take a
decision; thus, the process takes longer. The early majority
make up the next 34 percent of the adopters.
e.g. People using cloud services

Consider this real-life historical example: On June 19, 2007,

Apple rolled out the first iPhone, with a relatively high price tag
of $600. Two months later, Apple lowered the price to $400.
And in June of 2009, the price again dropped, to $200. By that
time, the latest iteration of the iPhone offered twice the
storage as the original.
But despite the inevitable price drops and product
improvements, in 2007, innovators and early adopters camped
out in front of Apple stores in droves, just so they could be
early to get their hands on the new tech.
By contrast, early majorities were more inclined to wait for
cheaper version of the product, which they reluctantly bought
only after seeing innovators and early adopters embrace the
technology.

Another example is-a new cell phone may have technological

advancements like a 13MP camera with enhanced space,
waterproof to a larger depth of water and extremely thin
bendable body to attract the technology enthusiasts
(innovators/early adopters), but the technology should be
inexpensive and simple enough to be understood and adopted
by the lay man (early majority). The early majority represents a
large proportion of the market and getting success in this
section of the market generally leads to better awareness and
acceptability of the technology/product.

How to market to them:

Be patient with pragmatists. You can smooth your path if you
develop alliances with other vendors they already know. Other
factors:
• Pragmatists like to buy from market leaders who are known
for quality and service.
• Become conversant with the issues that dominate their
particular business.
• Attend industry specific conferences and trade shows.
• Work to be mentioned in articles that run in the magazines
they read.

Late majority (a.k.a. conservatives)

The next 34 percent of the adopters are referred to as the late
majority. They are referred to as “late,” because i) members of
their social class, reference group and peer group have already
made the purchase; and the social influence is strong, and ii)
they themselves have evaluated the new product and or
service and are ready to buy it. They are Price-sensitive and
demanding, these individuals adopt new technology so that
they are not left behind. Late majority adopters are
conservative. They’re content to be followers, and often are
not comfortable in their ability to handle new technology.
They’re not going to buy until lots of others have the product,
and what they’re using instead has become inconvenient. They
are extremely service oriented and want lots of support. They
won’t support high price margins. Like the pragmatists, they
require facts and a proven track record, but this information
needs to be extremely thorough and proven to be reliable.
Catch phrase: Everyone else is doing it, so I guess we have to
For example- People who have just started using debit/credit
cards
How to market to them:
Know that you’re not going to sell to this audience until late in
your product life cycle, when your product has probably
become the accepted industry standard.
Other factors:
• They like to buy preassembled packages with everything
bundled, at a heavily discounted price.
• To maintain leadership in a mainstream market, you must at
least keep up with the competition.
• Promote service and value-added features to this audience

Sceptics (a.k.a. laggards)- The laggards are the last to adopt a

new product or service offering, and as such make up the last
16 percent of the target market. They are slow in buying the
innovative offering because, i) they are uninvolved with the
product and service; ii) they do not possess much information;
iii) they remain uninfluenced by social pressure, and social ties
are not very strong; iv) they believe in making routine
purchases and prefer to buy the “familiar”, than the
“unfamiliar”
So these are consumers that may not even adopt the product
at all. They are very conservative in their actions (or are quite
elderly people) who prefer not to change purchase behaviour.

Never adopting new technology, these individuals are more

prone to criticizing it. They use established legacy systems until
the option is no longer available. In fact, their major role in the
high-tech marketplace is to block purchases by pointing out
that new systems don’t deliver on the promises that are made
at the time of purchase. Catch phrase: That will never work.
The old way is the best way.
For example, some of consumers may still have a VCR/video
player that they have maintained for many years. Those who
are buying Apple iPhone 4(with respect iPhone, these people
are laggards)
 Thus they may be troubled by adopting new technology and
learning new things or simply have a preference for stability.
Either way, laggards are generally not an overly attractive
target and usually not worth the effort to try and persuade their
thinking. From a marketing perspective, it is just worth
considering that there is a proportion of consumers that are
prone to avoid
How to market to them:
In a word, don’t. They really don’t want to buy your product.
The best thing you can do is neutralize their influence so they
don’t block others from purchasing. And the best way to do this
is to make sure your high-tech product lives up to all the claims
your marketing materials make.

Pragmatic and conservative buyers account for the majority of the

population. In correlation with a normal distribution, these segments
cover the spread of -1 to +1 standard deviation. This represents
approximately 68% of the market, split evenly between the two
stages. Combined, the technology enthusiasts and early adopters
represent a mere 16% of the market (-3 and -2 sigma). The skeptics
complete the curve with the remaining 16% of the population. From
these numbers, it can be seen that a technology will not experience
substantial growth and acceptance until the early majority buys into
and welcomes the technology. If the adoption curve presented a
smooth transition from stage to stage, as previously illustrated, it
would be somewhat predictable and easy to navigate. However, this
continuous curve ignores a critical element, the chasm. This critical
point in the TALC, identified in the following diagram, emphasizes a
disconnect between stages two and three. The name of this stage is
significant, because it is a true representation of the chaos and
turmoil existing at this point in the adoption life cycle. If not properly
bridged, a new technology can stall and possibly fall to the bottom of
the chasm, never to be heard from again. The chasm is created by
the extreme differences between the buying habits of the visionaries
and those of the pragmatists.

Until the chasm is successfully bridged, the pragmatists will not enter
the market. And until the pragmatists enter the market, the
mainstream market will not be captured, and revenues will
demonstrate little growth. Bridging the chasm requires a solution
that minimizes the risk and impact of using a new technology. In
essence, it must cater to the characteristics of the pragmatists. A
"whole product" must be deliverable. The solution must be provided
such that the anticipated benefits are realized without reworking
existing systems and repairing glitches, and the solution can have no
gaps in the application set. The chasm is particularly dangerous
because the technology stalls just after a period of rapid acceptance
and sales growth. As the visionaries adopt the new technology, many
see this sharp incline in revenues as sustainable. It is at this point
that an industry and its vendors may proclaim that enormous growth
and revenue are just around the corner. These high expectations are
countered by the stall in growth that is associated with the chasm,
causing the optimists to question the future of the technology. The
critical factor in using TALC is a true perception of where a
technology is situated on the curve. RP's position will be deduced
from the unit sales for previous years as provided in the section titled
"Growth trends and sales forecasts" in Part 2. Prior to evaluating RP's
performance, another factor must first be considered: RP's TALC
must accommodate an independent adoption curve that exists for a
related and controlling technology.
Roger’s classification only includes the adopters; there also exist in
the market a group of people who do not venture out into seeking a
particular product or service, as it may not confirm to their culture,
socio-economic class or they may not have the need for such a
product/service. Such people fall into a class referred to as the non-
adopters; a class that never adopts the new product/service, and in
general comprises a very small portion of the entire population. Non-
adopters may be classified into five categories, viz., the unaware
group, symbolic rejecters, symbolic adopters, trail adopters and trial
rejectors. The inclusion and study of the non-adopter category is
crucial as it is reflective of reality, as not all consumers adopt all new
product and service offerings. - Unaware group: the non-adopters
who are unaware about the new product or service offering.

The Chasm

Between every adopter group in the Technology Adoption Life Cycle

(Figure 1), you can see an open space: a gap. This space between
segments indicates the ‘credibility gap’ that arises from seeking to
use the group on the left as a reference base for the group on the
right. This gap exists, because consumers prefer to listen to
references from people that belong to their own adopter group. This
creates a challenging dilemma of course, since you cannot use
people as a reference group if they haven’t bought from you yet! The
gap is widest between the Early Adopters (Visionaries) and the Early
Majority (Pragmatists). These groups differ from each other in such a
way that using one as a reference base for the other, is highly
ineffective. This gap is therefore indicated as ‘the Chasm’. Since the
leap from the Early Adopters to the Early Majority means the
transition from the Early Markets to the Mainstream Market,
crossing the chasm is of upmost importance in order to truly achieve
market success with a newly launched product.

How to Cross the Chasm

According to Moore, successfully crossing the chasm can be achieved

by targeting a very specific niche market within the Early Majority
first. The sole goal of the organization in its attempt to cross the
Chasm should be to secure a beachhead in a mainstream market to
create a pragmatist customer base that is referenceable.
Segmenting is everything here: focus all your marketing resources on
one specific segment at the time and make sure you become market
leader in that specific segment before moving on the next one. This
is a so called ‘Big Fish, Small Pond’ approach. A great marketing
framework that can help picking out the right marketing techniques
for potential customers is the Marketing Funnel or AIDA Model. In
addition, you should make sure that your product offers a complete
solution and that service levels are high (i.e. Whole Product
Solution). The user experience Pragmatists have with your product
will ultimately determine whether they will enthuse their peers as
well. Once you have established a strong word-of-mouth reputation
within different segments of the Early Majority, you have crossed the
chasm properly.

Conclusion:

Faced with a dynamically changing and highly competitive

environment marketers are always with regard to new product
development and introduction as it becomes crucial for existence
and long term survival of any company.

Adoption of a new idea, behaviour, or product (i.e., "innovation")

does not happen simultaneously in a social system; rather it is a
process whereby some people are more apt to adopt the innovation
than others. Thus it is necessary for markers to understand that
people who adopt an innovation early have different characteristics
than people who adopt an innovation later. So that while promoting
an innovation to target population marketers can use different
strategies to appeal to the different adopter categories.
This helps in rapid acceptance of innovative offering so that marketer
can gain maximum advantage as a first-mover advantage.

This project is done by: Vignesh Ramanujam

Roll no: P18067