An Illustration of Potential Sources of Concept‐Test Error*

A critical step in prelaunch market analysis needing improvement is concept testing. This article reviews the literature on the three basic design decisions inherent to concept testing: (1) stimuli design; (2) respondent selection; and (3) response measurement. By incorporating findings from diffusion theory, the current review identifies a number of potential sources of concept‐test error (e.g., failing to account for adoption orientation could unintentionally mask the response of earlier adopters). Through an exploratory study that replicates in many ways a typical concept test, the present study illustrates how results of conventional concept testing can be sensitive to respondents' adoption orientation and the response measure used. This study offers implications for NPD practice that include accounting for the adoption orientation of respondents, using appropriate response measures such as affective questions for later adopters, and incorporating more product‐related information and repeat exposure for later adopters.     

The impact of emerging institutional norms on adoption timing decisions: evidence from C‐TPAT—A government antiterrorism initiative

Drawing upon an institutional theoretic perspective, this study explores the performance outcomes associated with adoption timing and level of investment in a government antiterrorism initiative—the Customs Trade Partnership Against Terrorism (C‐TPAT). Using a large‐scale sample of C‐TPAT certified importers, this study found that performance outcomes for high levels of investment in adoption processes differ depending upon the strength of institutional forces. Specifically, early adopters of C‐TPAT processes in a weak institutional context that reported high levels of investment performed no better than firms who invested nominally in the processes, while late adopters in a strong institutional context that reported high investment levels outperformed those that invested nominally. This finding can be explained by viewing C‐TPAT as an ‘emerging’ institution, where forces are coalescing. Copyright © 2011 John Wiley & Sons, Ltd.     

Understanding early diffusion of digital wireless phones

There is increasing empirical evidence from academic research and strong recognition among policymakers that wide diffusion and innovative uses of digital wireless phones are important sources of a country's economic growth and social development. Adopters do not necessarily adopt digital wireless phones at the same time though. Although the diffusion of innovation theory suggests five adopter categories according to their degree of innovativeness, this approach lacks theoretical justification and, more importantly, it makes a critical assumption of a normal distribution of adopters that needs empirical validation. This study investigates the basis for defining different adopter categories and factors that affect adoption decisions of digital wireless phones using the aggregate data on 46 developed and developing countries from 1992 to 2002. This paper utilizes a two-step analysis approach. The first step evaluates the distribution of adopters over time using various diffusion models. The second step uses iterative survival analysis to examine the patterns of influential factors on adoption behavior by evaluating the survival models using a 1% increment of cumulative penetration as the targeted events. The results of the best-fitting diffusion models indicate that digital wireless phone adoption patterns did not follow a normal distribution and did not map exactly into Rogers’ five adopter categories. The results from the iterative survival analysis suggest four adopter categories (innovators, early adopters, breakthrough adopters, and mainstream adopters) among the first 30% of adopters. Different factors are observed to influence various adopter categories’ adoption decisions. The results offer insights to support telecommunication operators to develop strategies to attract these adopters. It also supports policymakers’ efforts to design effective regulatory frameworks.     

Segmental new-product diffusion of residential broadband services

Aggregate models of innovation diffusion do not capitalise on valuable consumer adoption dynamics that may be useful to policy makers and market planners. The non-diffusion choice literature shows quite clearly that these dynamics may indeed be very important factors in the diffusion process. The authors present a segmental broadband diffusion model that is estimated from consumer survey data that measure the effect that household income has on its propensity to adopt this technological product. The results suggest that early broadband adopters are mostly made up from wealthy households and only as time progresses do less well off households adopt. The findings presented in this paper will be important to market planners and policy makers requiring a relatively simple technique that forecasts segmental innovation diffusion.     

The diffusion of interactive communication innovations and the critical mass: the adoption of telecommunications services by German banks

Interactive innovations are distinctive in that their adoption depends on the perceived number of others who have already adopted the innovation. Thus their rate of adoption does not take off in the familiar “S” shape until a critical mass of adopters has been reached. Data on the adoption of 12 telecommunications services by 392 German banks are used to explore our theoretical perspective on the role of the critical mass in the diffusion of interactive innovations. The most important obstacle to the adoption of new telecommunications services by banks is a low degree of diffusion (which suggests the general importance of the critical mass). These obstacles do not differ for the innovators and other adopter categories. The importance of direct network externalities in influencing the rate of diffusion of new telecommunications services should be determined for each new service, rather than assumed to always exists.     

Lifestyle orientations and the adoption of Internet-related technologies in Taiwan

Using Rogers' diffusion of innovation model as the theoretical framework, this study examined the relationships between lifestyle orientations and the adoption of nine Internet-related technologies in Taiwan including IPTV, digital cable, emails, Internet instant messages, Facebook, scanners, notebooks, printers and personal computers. A telephone survey was conducted to collect data, and 506 valid questionnaires were obtained, representing a response rate of 58.6%. The results showed that lifestyle orientations were a powerful predictor for the adoption of information-oriented and entertainment-oriented technologies, but not for the adoption of interpersonally oriented technologies. Furthermore, this study found that while demographics were the most powerful variable that distinguished the adopters from the non-adopters, mass media use was not.     

Innovation in the Retail Banking Industry: The Diffusion of Credit Scoring

We study technology diffusion in the retail banking industry. Our contribution to the empirical literature is twofold: Firstly, we explore technology diffusion in the financial sector, whose relevance has often been neglected; secondly we focus on credit scoring adoption, a relevant process innovation still under-explored. Estimating a set of duration models, we analyze the patterns of diffusion of this technology among Italian banks. We find that credit scoring is firstly introduced by large banks with broad branch networks, which can fully exploit scale economies. We present robust evidence that banks with large market shares operating in more concentrated markets are early adopters, providing a direct support of the Schumpeterian hypothesis that market power enhances innovation.The views expressed here are those of the authors and do not necessarily reflect those of the Bank of Italy.     

Overcoming consumer resistance to innovations – an analysis of adoption triggers

Traditionally, innovation adoption research has focused on the determinants of the states ‘adoption’ and ‘nonadoption’. Aiming at a more detailed understanding of innovation adoption and resistance behavior, this study takes a different perspective and analyzes the transition stage between the nonadoption state and the adoption state to investigate triggers that overcome initial consumer resistance. The study seeks to answer three questions within this novel perspective: (1) What are triggers that lead nonadopters to become adopters? (2) Do adopters and nonadopters differ in their assessment of adoption triggers? and (3) How do adoption triggers relate to innovation adoption barriers? We apply a qualitative exploratory approach that relies on 160 face‐to‐face interviews with both adopters and nonadopters about nine different innovations to generate a framework of adoption triggers. The results reveal that adoption triggers fall into three broad categories: ‘increasing innovation attraction’, ‘reducing barriers’ or ‘tilting the system’. In addition, we find that adopters and nonadopters differ significantly in their assessment of (potential) adoption triggers. Nonadopters mention performance improvements more frequently as crucial adoption triggers than adopters do. In contrast, adopters indicate knowledge acquisition and a social system push significantly more often than nonadopters do. However, adoption triggers and corresponding adoption barriers do not appear to be linked in a systematic way. Instead, adoption triggers such as a social system push exert influence independent of the existing adoption barriers. We suggest strategies for pre‐ and postlaunch strategies to facilitate adoption triggers. We also discuss the implications of our findings for theory and present further research opportunities.     

Adoption of Technologically Based Innovations: The Neglected Role of Bounded Rationality

The purpose of this research is to examine the possibility of distinguishing between adopters and nonadopters when conceptualizing the drivers of the decision to adopt technologically based innovations. A second research objective is to examine factorial validity through the assessment of the explanatory power of the investigated conceptualization. In the pursuit of these objectives, the theory of bounded rationality represents the underlying theoretical framework, and Internet banking (IB) represents the nomological framework, in which two alternative conceptualizations, one for IB adopters and a second for nonadopters, are considered. “Intention to adopt” and “adoption” are the criterion variables, respectively. To meet the objectives of the study, two different populations are examined: adopters of IB and nonadopters. The former was used to examine the hypothesized framework for predictive validity against actual adoption; the latter was used to examine the predictive validity regarding intention to adopt. To collect data from IB adopters, the four leading banks, which account for approximately 73% of adopters, agreed to place a link to a Web‐based questionnaire at the log‐in page of their IB system inviting customers to participate in the study. Through this process, 858 useable questionnaires were produced. To reach the nonadopters population, a convenience sample of executive M.B.A. students from two leading Greek universities was employed. Respondents from this sample were screened to ensure that they had never used IB. This process yielded 418 useable questionnaires from the nonadopters population. A major finding from this investigation is that the decision to adopt improves the understanding of adopters regarding the benefits delivered by an innovation. Consequently, they hold a precise, less ambiguous perception of how specific innovation attributes translate into benefits. Hence, when recalling the decision process through which they adopted an innovation, adopters relate specific innovation attributes, including specific benefits received. This situation is displayed in the ability of a direct, first‐order model to capture the relationships between specific innovation attributes and the adoption decision. In contrast, nonadopters, having no direct experience with the innovation, lack this familiarity. They require a significantly greater amount of information in order to associate innovation attributes with potential benefits. The intangibility of technologically based service innovation further increases a nonadopter's need for information. However, this increased need for information renders nonadopters subject to cognitive strain, which causes them to aggregate innovation attributes into more abstract constructs. That aggregation was displayed in the ability of a second‐order model to capture the relationships between specific innovation attributes and the nonadopters' intention to adopt the innovation in the future. In both occasions though, the instrumental drivers of adoption represent the most powerful explicators of the adoption decision. From a practitioner's perspective, this study shows that managers can structure the content of their communication to facilitate the rise of societal drivers, but they should avoid relying on such elements to quicken the pace of the adoption rate. Rather, at the core of communication campaigns, practitioners should place brief and clear claims demonstrating the instrumental arguments in favor of the adoption decision.     

Commercializing Technological Innovation: Learning from Failures in High‐Tech Markets*

Commercialization is known to be a critical stage of the technological innovation process, mainly because of the high risks and costs that it entails. Despite this, many scholars consider it to be often the least well managed phase of the entire innovation process, and there is ample empirical evidence corroborating this belief. In high‐tech markets, the difficulties encountered by firms in commercializing technological innovation are exacerbated by the volatility, interconnectedness, and proliferation of new technologies that characterize such markets. This is clearly evinced by the abundance of new high‐tech products that fail on the market chiefly due to poor commercialization. Yet there is no clear understanding, in management theory and practice, of how commercialization decisions influence the market failure of new high‐tech products. Drawing on research in innovation management, diffusion of innovation, and marketing, this article shows how commercialization decisions can influence consumer acceptance of a new high‐tech product in two major ways: (i) by affecting the extent to which the players in the innovation's adoption network support the new product; (ii) by affecting the post‐purchase attitude early adopters develop toward the innovation, and hence the type of word‐of‐mouth (positive or negative) they disseminate among later adopters. Lack of support from the adoption network is found to be an especially critical cause of failure for systemic innovations, while a negative post‐purchase attitude of early adopters is a more significant determinant of market failure for radical innovations. There follows a historical analysis of eight innovations launched on consumer high‐tech markets (Apple Newton, IBM PC‐Junior, Tom Tom GO, Sony Walkman, 3DO Interactive Multiplayer, Sony MiniDisc, Palm Pilot, and Nintendo NES), which illustrates how commercialization decisions (i.e., timing, targeting and positioning, inter‐firm relationships, product configuration, distribution, advertising, and pricing) can determine lack of support from the innovation's adoption network and a negative post‐purchase attitude of early adopters. The results of this work provide useful insights for improving the commercialization decisions of product and marketing managers operating in high‐technology markets, helping them avoid errors that are precursors of market failure. It is also hoped the article will inform further research aimed at identifying, theoretically and empirically, other possible causes of poor customer acceptance in high‐tech markets.     

Follow the small? Information‐revealing adoption bandwagons when observers expect larger firms to benefit more from adoption

We extend understanding of information‐revealing bandwagons by considering a common condition under which adoption of a practice by small organizations, rather than large ones, has a disproportionate influence on future adoption propensities. We hypothesize that when the value of adoption increases with organizational size, smaller adopters have such disproportionate influence because they allow observers better to infer that adoption will be profitable for their own organization. We elaborate the theory by predicting that alternative information sources moderate the influence of smaller adopters. Empirically, we test our theory with longitudinal data on the adoption of the ISO 9000 quality management standard. Copyright © 2007 John Wiley & Sons, Ltd.     

The Role of Early Adopters in the Diffusion of New Products: Differences between Platform and Nonplatform Innovations

This paper takes a contingency view to investigate how the role of early adopters (EAs) in the diffusion process changes between platform and nonplatform innovations, what launch decisions firms take to leverage the role of EAs, and how these decisions change between platform and nonplatform innovations. Relying on an exploratory multiple case study of eight industrial product innovations launched in Italy in the 2000s, the paper suggests that the EAs of these innovations play two distinct roles in the diffusion process. The first role, called dissemination, sees EAs triggering and bolstering the propagation of information regarding their opinion about the value for money, properties, advantages, and disadvantages of the new product after they have bought and applied it in their operations. The second role, labeled imitation, consists of EAs inadvertently communicating to later buyers the fact that they have bought the new product, which propels imitative behavior and thus subsequent adoption. A key finding of the paper, which supports a contingency view of innovation diffusion, is that the dissemination role played by EAs has an impact on the adoption of platform innovations, whereas the imitation one is the mechanism through which EAs stimulate subsequent adoption in the case of nonplatform new products. Furthermore, the paper's results point to a constructive view of the process of launching an innovation, whereby firms target at launch different segments of EAs, whose identity is shaped depending on the platform versus nonplatform nature of the innovation and thus on the role they are expected to play in the diffusion process. Concerning managerial implications, this study provides a first tentative understanding of the launch decisions that product and marketing managers may use to target the most appropriate segments of EAs, to leverage their roles and ultimately to favor diffusion. As regards platform innovations, targeting decisions should be driven by the goal to improve the chances that EAs will be willing to disseminate their experience and opinion regarding the new product. As regards instead nonplatform innovations, firms should target EAs whose specific characteristics increase the likelihood of an imitative reaction by later buyers that fear to suffer a competitive disadvantage if they do not conform to EAs' behavior.     

Is direct seeded rice a boon for economic performance? Empirical evidence from India

The direct-seeded rice (DSR) establishment method can improve productivity and labor efficiency while taking into account the soil and hydrologic conditions of the field, the availability of appropriate land equipment, and irrigation-drainage systems. Using plot- and household-level data, we analyze the impacts of DSR adoption in two rice-growing states of India. We account for observed and unobserved heterogeneity using endogenous switching regression. We analyze the yield and costs effects of DSR adoption. Our study shows a small but significant effect of DSR adoption on yield and costs. We find increase in rice yields (by 3.74%) for DSR adopters; an increase in rice yields (by 6.79%) if the DSR method were adopted on puddled transplant rice (PTR) parcels. We find a 7.51% reduction in total costs for DSR adopters; a decrease in total costs (by 3.71%) if the DSR method was adopted on PTR parcels. DSR farmers can significantly reduce their fertilizer and land preparation costs. Hence, the decision to adopt DSR may help households with limited resources to reduce their cost of production without compromising the yield.     

Effectual and causal reasoning in the adoption of marketing automation

Research on technology adoption in organizations traditionally assumes that these organizations follow rational, strategic and planned adoption processes. However, a gradually emerging view is that the adoption of technology is also characterized by entrepreneurial or effectual reasoning, primarily due to technological and market uncertainties that call for more agile and experimental approaches at the digital age. Drawing on effectuation theory, we develop a research framework to examine the managerial reasoning during the adoption of marketing automation technology. Based on the results of a comparative multiple-case study on four large-sized industrial firms, we develop a maturity model of marketing automation adoption and show that even large-sized B2B companies apply effectual reasoning, which problematizes the rationality assumption in the technology adoption literature. Second, we show that during the adoption process, organizations' dominant reasoning mode follows an iterative pattern in which the adopting organization moves back and forth between effectuation and causation. Finally, we identify five key domains of marketing automation (customer knowledge, information systems infrastructure, analytics, interdepartmental dynamics and change management) and describe their gradual evolution at different stages of the adoption process.     

Fast and expensive: the diffusion of a disappointing innovation

Firms seek to imitate innovations that yield competitive advantage, but imitation can presage disappointment when the innovation value is below expectations. Empirical research has only rarely examined the diffusion of such disappointing innovations, and it is not known whether negative information from past adopters will halt the diffusion process. Likewise, the effect of heterogeneity in the innovation value on its spread has not been systematically investigated. Here, a unique dataset on a disappointing innovation is used to examine how adoption decisions are imitated, but actual use and subsequent abandonment can yield information that reduces the likelihood that others will adopt. The findings show imitation of the adoptions of other firms, but avoidance of the innovation once these firms start using the innovation or abandon it. Copyright © 2011 John Wiley & Sons, Ltd.     

Agricultural technology adoption and household welfare: Measurement and evidence

Previous studies on the adoption and impacts of improved crop varieties have relied on self-reported adoption status of the surveyed households. However, in the presence of weak variety maintenance and poorly functioning seed certification system, measurement errors in self-reported adoption status can be considerable. This paper investigates how such measurement errors can lead to biased welfare estimates. Using DNA-fingerprinting based varietal identification as a benchmark, we find that misclassification in self-reported adoption status is considerable, with significant false negative and positive response rates. We empirically show that such measurement errors lead to welfare estimates that are biased towards zero and substantially understate the poverty reduction effects of adoption. While the empirical evidence suggests attenuation bias, our theoretical exposition and simulations demonstrate that upward bias and sign reversal effects are also possible. The results point to the need for improved monitoring of the diffusion process of improved varieties through innovative adoption data collection approaches to generate robust evidence for prioritizing and justifying investments in agricultural research and extension.     

Lifestyles and the use of new media technology in urban China

Research in adoption of new mediatechnologies for social identity and its relationship to lifestyle has received little attention. The purpose of thisstudy is to link consumers’ lifestyle orientation and media use to the adoption behavior of new media technologies in urban China. Key findings indicate that (1) lifestyles significantly affect innovativeness; (2) the upscale socioecono-mic profile of earlier adopters was consistent with early research; and (3) adoption of certain new media technologies appeared to project certain social identities such as ‘life expansionists’, ‘sophisticated and fashionable’,and ‘pleasurable and enjoyable’. The results have important implications for marketing managers and media planners.     

The long-run diffusion and techno-economic performance of national telephone networks: a case study of Ireland, 1922–1998

The telephone is one of the most widely used technologies in the advanced industrial economies, typically achieving a household penetration rate in excess of 90%. Over the course of this century, the plain old telephone system (POTS) has become a critical techno-social infrastructure for all sorts of economic, social and personal interactions. The question arises as to what has driven the widespread diffusion of the telephone? How can we describe the adoption of telephony as a core element in economic and social affairs in modern societies? In particular, how can we account for the great disparities in the rate and pace of the diffusion patterns of POTS, taking account of different national and historical contexts? This paper critically interrogates influential universal models or `theory-led’ explanations of the diffusion of telephone systems, especially their capacity to account for the empirically observable national variations. The authors test these models with respect to the historical trajectory of telecommunications development in Ireland, drawing on unique time-series data related to the actual patterns of telephone adoption, use and utility. The authors also re-assess the extent to which existing diffusion models throw some light on aspects of observable diffusion processes and patterns. A key conclusion from the approach adopted here is that in themselves, abstract deductive models are at best unsatisfactory. Whilst a combination of such `universal’ factors derived from more deductive models may be useful in elucidating different parts of the story, they are not sufficiently nuanced or adequate to describe or frame the complex stories of different national historical experiences. With the Irish case study we have attempted to illustrate the value of a historical and empirically based understanding of the socio-economic, political or institutional factors which have served to shape the development of telecommunications services and policy in Ireland.     

Identifying the determinants of broadband adoption by diffusion stage in OECD countries

Governments worldwide actively promote broadband development, owing to its positive impact on economic growth. Although many studies have identified the determinants of broadband adoption, this study re-examines the determinants by applying Arellano–Bond GMM dynamic panel data estimation with more complete panel data for OECD countries. The estimation can not only closely capture the dynamics of broadband diffusion but also solve an endogeneity problem existing in the estimations of previous studies. The estimation results indicate that content is also a significant factor, in addition to previous broadband penetration and platform competition, as commonly identified in previous studies. This study further examines and compares determinants in different stages segmented by adopter categories proposed by Rogers. The results reveal different determinants in different stages. The key determinants are income, education, and content in the innovator and early adopter stage; platform competition and previous broadband penetration in the early majority stage; and broadband price in the late majority and laggard stage. Governments should thus devise and implement appropriate strategies for the major potential adopters in each stage instead of adopting a one-size-fits-all strategy. The results of this study provide a valuable reference for countries in early stages of broadband development or for those planning or reviewing their strategies.