When a new product is launched,
buyers will start showing signs of engagement at different stages. Some will
run to buy the product as soon as it becomes available, while some others will
be the last to try the product. This trend is captured by the Product Diffusion
Curve model which categorizes buyers on how quickly they engage with a new
product. This categorization leads to a bell-shaped diffusion curve that is
divided into five different product adoption groups. The product diffusion model should be part of your strategic analysis when planning new product launches.

Innovators

Innovators are the first group and represent the first 2.5% to engage with the product. Innovators are risk-takers that are willing to try out an unproven offering. They are usually well-informed and prepared.

Early Adopters

Those are the next to follow after innovators and they represent the 13.5% of the consumers. They are usually educated and informed as well.

Early Majority

Early majority represents the consumers who await for the product to be tried and tested before they engage in a purchase. They rely on feedback from those who have tried it or recommendations from experienced people and tend to avoid risk. This section represents 34% of consumers.

Late Majority

This group represents skeptical consumers that are reluctant to buy a product unless it has become popular in the market. The late majority represents approximately 34% of consumers.

Laggards

Lastly, laggards are consumers who try to avoid the adoption of a new product. They will only engage in a new product only if no other alternatives can be found in the market. Laggards represent about 16% of consumers.

Rate of Adoption

The rate of adoption is reliant
upon many factors. Some of the most common are:

  • Perceived benefits over
    competitors
  • Price
  • Perceived risk with the
    purchase of the product
  • Product advantages
  • Strength of distribution
  • Marketing and advertising
  • Packaging attractiveness
  • Familiarity and strength of
    the brand

Benefits of the Model

The Product Diffusion Curve is a
helpful tool that examines the buyer’s behavior upon the launch of a new
product or service. This can in turn provide the company with useful insights
on the sales forecast, marketing activities, raw materials planning and many
other areas of the business. By understanding how buyers are segmented, a
business can thereafter adjust its marketing strategies for each group and
gradually roll out the change.

Product Diffusion Curve and Product Life Cycle

The two concepts are interrelated
since the Product Diffusion Curve is partly responsible for the life cycle of
the products. The most important thing to note here is that each stage in both
models calls for different management strategies.

Considerations and Limitations

The Product Diffusion Curve has
been heavily criticized for being unproven and too narrowly defined. Within
this context, it has been argued that buyer behavior is affected by numerous
factors that are constantly evolving and there is therefore insufficient
evidence to claim that grouping buyers into these categories is accurate.