What Exactly is Product-Diffusion and How Does it Work?

Have you ever heard the term Product-Diffusion before? If you haven't, or if you have but it used to confuse you to death, no worries! 

Today, this article will be talking about the notion of Product-Diffusion in detail, the way it works, and some other terms related to the notion itself and its significance.  Let's get started.✍🏼

What is Product Diffusion?

Product diffusion, at its core, is the process of acceptance of a particular service or product by the target market, being a part of the general market share as a result. It's about the initial communication that starts when the customers hear about a product, give it a try themselves, and share their experiences -creating an indirect influence on the process- with other people. 

Several theories exemplify the mechanics of diffusion. They are as follows:

• The two-step hypothesis 

This theory consists of information and acceptance flows through media, first to opinion leaders, then to the general audience. 

• The trickle-down effect 

This one explains how products tend to be a bit expensive at first, and as a result, they are only accessible to the wealthy target audience. However, as time passes, they become less expensive and are become reachable by more people. 

• The Everett Rogers Diffusion of Innovations Theory

This theory suggests that there are five categories of product adopters for any product category. And they are:

1. Innovators - extroverts, highly educated, multiple sources, they are under the largest influence
2. Early Adopters - social leaders, educated, popular, potential adopters
3. Early Majority - lots of social contacts, deliberate
4. Late Majority - has traditional ideas, doubtful, lower socio-economic status
5. Laggards - Highly skeptical, main direct influences are mostly friends

• Crossing the Chasm

This is a model developed by Geoffrey Moore. It overlays Rogers' adoption curve with a chasm. Moore thinks that marketers should focus on a single group of clients at a time, using each of them as a solid base for the practice of marketing to the next group. Here, the tricky step is to make the transition between Early - initial adopters- and the Early Majority. The chasm he constantly refers to is displaying this specific challenge. Any business or a particular product that fails to cross this chasm will not be able to remain in the market. 

• Technology-driven models

This model is especially relevant when it comes to software diffusion. In most cases, the adoption rate of new technology is determined by critical factors such as the level of usefulness and ease of use.

And what exactly is the rate of diffusion? 

The rate of successful diffusion indicates the pace with which the fresh idea spreads from one client to the next. 

According to Everett M. Rogers, the rate of diffusion is highly dependent on:

• The product's advantages or benefits.
• The riskiness/delay of purchase.
• Ease of product use – complicatedness of the product.
• The immediacy of benefits.
• Observability.
• Cost.

What is the Product Diffusion Curve?

The Everett Rogers Adoption Curve -also referred to as the product diffusion curve- is a theory that demonstrates how individuals and large groups get adapted to new ideas and innovations. It also makes us understand the characteristics of innovations, as well.

The diffusion of innovation pattern, when studied correctly, can be easily seen in people's reactions to innovations. Some of the most iconic diffusion of innovation examples can be recognized in many historical milestones. On the other hand, technology adaptation examples appear in the process of adoption of the printing press, in addition to the use of paper, naturally.

When we go further in Rogers' theory, we can see the claims that people can be categorized based on their rate of adoption. So, naturally, each group of people has a particular interest level, knowledge, and enthusiasm about the service/product purchases and how hard they try to integrate this service into their lives.

If we take the patterns we learned from the Rogers diffusion of innovation framework; we can say the way to customer engagement goes through the five essential steps of technology adoption:

• Knowledge. 

Knowledge leads to awareness. And when this notion becomes repetitive, it increases the likelihood of customer engagement. The tools that can help you with this stage are usually search marketing and, of course, social networks to create a social influence as well. 

• Persuasion.

Naturally, as you start advertising your unique advantages and benefits, the likelihood of increasing your customers' interest will significantly rise. It's basic marketing science.

• Decision.

This part is a bit tricky since the actual buying commitments may happen under unpredictable circumstances; you could step up your marketing strategies by paying extra attention to your advertising at this point.

• Implementation.

After the sale is closed, your new customer will need excellent communication and 24/7 support from your teams to stick around for a long time.

• Confirmation.

This is the part where the diffusion of innovation pattern is, let's say, handled here. It's where your subscriber keeps on an ideal form of communication either directly or through online reviews, and shares opinions about how well the whole diffusion process works out. Providing great customer service, is for sure, the key ingredient to continued engagement.

Applying this diffusion of innovation theory to your company that devotes itself to offering new products and features can change the way you launch your services. 

How?

I invite you to look at a couple of examples to prove my point.

2 Real-Life Examples of Product Diffusion

Starbucks College Achievement Plan

Starbucks College Achievement Plan was introduced back in 2014. It was a plan that focused on helping young employees gain access to college and get their bachelor's degrees. The program was developed primarily for the vast majority of undergraduate students who needed to work while studying to earn enough money to pay for tuition costs and ended up hating the daily life of average Americans. 

After a while, an increasing number of these employees dropped out of school simply because they had difficulties managing the whole situation. This plan enabled these employees to receive full tuition coverage from Starbucks to study whatever they want, choosing from over 70 online degree programs provided through ASU and taught online by ASU faculty.

In addition to the financial support, each employee-student was able to receive support from a professional counselor, an advisor, and a success coach.

Where am I going with this?

See, the goal of Starbucks was to have 25,000 of their employees graduate via the College Achievement Plan by 2025 with an average degree. The first year this plan was announced, the first graduates were only 3. This number soon -one year later- rose to 100, and by 2017, they were 330. 

Philip Reiger, the CEO of EdPlus at ASU, estimated the number of graduates via the help of the program to reach 1,000 by the end of 2017. This estimation soon proved to be correct since the graduating class from the program in 2017 even exceeded 1,000 students while more than 9,000 employees were also current students in the program as well.

What Reiger did not think about was the possibility of ASU partnering with other large companies. In August 2017, ASU partnered with Adidas and they created a similar program in January 2018.

Long story short, this case of Starbucks College Achievement Plan in partnership with ASU can be examined through Rogers' Innovation Theory with some slight changes. Keeping in mind the four key factors of diffusion -the innovation, communication channels, social system, and time- it's obvious that the notion of innovation in this Starbucks case is the practice of new online degree programs offered by ASU to offer access to education and lead to achievement for employees. Communication of the plan also took place via internal channels over time, ASU News and the website of the university, The Atlantic Magazine, and online journals as well as presentations, interviews, and of course, word of mouth. 

Next, the social system and culture at Starbucks that created room for this innovation began at the founding of the company. Starbucks CEO Howard Schultz stated that he has always dreamt of a company based on providing opportunities, hiring veterans, refugees, and the youth that's at risk. 

And finally, the time given for the plan's implementation began approximately from 2017 to 2025 and most possibly even beyond. 

Oklahoma State University’s Mixed Reality Lab

In 2015, Oklahoma State University established the Mixed Reality Lab within the College of Human Sciences. The lab cooperates with the Department of Design Housing and Merchandising. At first, it was specifically working on design classes. However, Chandrasekera, an associate professor from the department, hoped to include numerous classes from other fields outside of design to bring innovation to the lab. 

This lab provided art virtuality (VR) augmented reality (AR) equipment for its students, faculty as well as the researchers themselves to benefit from it in their academic studies. Their funding came from the College of Human Sciences although the state of Oklahoma was in partnership with Crytek - a video game creation company primarily focusing on 3D games - to become one of the 50 universities across the globe taking part in the company's instructive VR innovation. This innovation primarily supported the integration of the latest technology into the works of the lab. 

In 2018, the College of Human Sciences hosted a hackathon, held in the Mixed Reality Lab. Five teams of students, community members, and faculty worked to resolve real issues threatening our world. Walmart also co-sponsored this hackathon, and the judges consisted of the Oklahoma State and Walmart reps. 

During this event, it was made sure that team participants came from various departments around the university, ranging from design and engineering to educational technologies. 

Throughout the hackathon, all kinds of data were collected on how the VR and AR technology was being used to find answers to the problems and how the teams managed to work collaboratively. 

Now, coming back to our four components of the diffusion theory within this adoption process of the Mixed Reality Lab at Oklahoma State, innovation is, for sure, the most critical factor. 

However, there's a slight issue.

Although integrated with numerous design classes in the College of Human Sciences, the broader course offers and compatibility with all sizes of university research is not observable since the Mixed Reality Lab showed interest in new technologies and was the first lab that did so on campus. Therefore, the complexity of the lab is critical. However, people operating the lab are supporting everyone interested in trying out the innovation, which results in a high trialability rate. 

The observability of the actions that took place in the lab has improved with further outreach efforts by the faculty that controls the lab to other departments to use the lab. Observability, at this point, was boosted during the promotion of the hackathon and will for sure continue to increase as the findings that happened in the lab are constantly presented via conferences and articles. 

But, let's keep in mind that the widespread use of the technology was still not diffused across society or the state itself at a high rate yet. 

When we look at Roger’s innovation curve in figure 1, we can call these people the late adopters; and those who are using the lab for research and classes would be early adopters in that case.

Further on, unless the faculty of particular departments do not see the advantages of altering their practices and strategies for education or research purposes to include VR/AR practices, the possibility for them to easily adapt to this technology is relatively slight. 

At this point, what usually happens is that difficulty in changing the perceived lack of usefulness occurs. There usually is no amount of possible support resources to pursue the audience that the new service is, in fact, helpful and for the better.

What does this mean?

This indicates that the use of the Mixed Reality Lab has not yet achieved the rapidly increasing part of the innovation curve, demonstrating the notion of adoption highlighted in IDT by Rogers.

For the Mixed Reality Lab to succeed, both the lab faculty and its staff need to be on the same page and decide their communication forms about how various departments might benefit from this use of technology. 

Final Word

Adopting innovation can be a challenge, not even to mention diffusing the innovation across an organization, team, group, or society.

I hope this article achieved to show you the basics of Product Diffusion - what it means and how it works. But, keep in mind that there are many models -and theories- for innovation adoption and diffusion that contradict each other when it comes to some aspects and overlapping. Some models may best suit your specific situations, but others -Rogers' Innovation Diffusion Theory- may be so broad in and deep in the topic and their flexibility. Therefore, you should always be careful about applying them in certain contexts. See you next time! ✨