Manual de funciones

The literature search revealed a vast amount of published material relating to the broad area of diffusion itself. For practical reasons, therefore, discussion in the first sections of this chapter is limited to covering only �efinitions of the key concepts and a description of the historical development of the theory. This provides the necessary background knowlegde to the theory.

Within the broad diffusion area, however, the literature search revealed much less information relating to the specific areas of direct relevance to this thesis: disenchantment discontinuance, and the application of diffusion theory to forecasting and banking. These areas are covered in the final sections of this chapter.

The diffusion of an innovation traditionally has been defined as the process by which innovation "is communicated through certain channels over time among the members of a social system" (Rogers 1 983). As such, the diffusion process consists of four key elements: innovation, communication channels, time, and the social system. An innovation is an idea perceived to be new by an individual. The issue is not whether or not an idea is objectively new. It is the newness of the idea to the individual that determines his/her reaction to it. The essence of innovation is human interaction in which one person communicates an idea to another person.

A social system refers to a population of individuals who are functionally differentiated and engaged in collective problem solving behaviour. The social system under analysis in a diffusion study may be, for instance, all farmers in one country. The spread of a diffusion is not instantaneous. Individual A must tell individual B about the innovation. Before adopting the innovation individual B must go through the adoption process of awareness, interest, evaluation, trial, and adoption.

2.2. 1 The Nature of the Innovation and the Consmner

The literature makes it clear that home banking (and other bank technologies) has had varying rates of success around the world. The diffusion of innovation theory (Rogers,

1 962) _{provides a powerful concept for understanding these differences.}

Dover ( 1 988) _{suggests that the diffusion process is influenced by two basic criteria - the} nature of the innovation and the nature of the consumer adopting the innovation.

1) The Innovation

It is useful to use home banking as an example of an innovation. "Relative advantage" is the extent to which an innovation is superior to ideas it supersedes. Home banking, for instance, allows customers to bank from home.

Perhaps the most discouraging factor for adoption of home banking is the cost _ not only bank charges, but possible outlay for a computer. This points to why the French have succeeded: the Government reduced the initial cost by offering cheap, no-frills terminals. Also, the terminal is extremely easy to use.

"Compatibility" is the extent to which an innovation is consistent with existing values and experiences. Home banking is more of an innovation in distribution than product. Customers carry out transactions that are already familiar to them, from the comfort of their home. As the literature shows in Chapter Ill, consumers who have already used A TMs and personal computers are more likely to adopt home banking since this is compatible with their past experiences. Dover suggests that technological compatibility is also important. For instance, the French will have greater success than the Americans with home banking because they only have one system - compared with the fragmented U.S.A system where many different home banking offerings confuse customers.

"Complexity"· is the extent to which the results of an innovation may be diffused to others. Home banking is a complex service and therefore, when it comes to promotion, personal selling would be more appropriate than mass advertising.

2) The Conswner

Adoption theory makes it quite clear that innovators and early adopters are critical groups of consumers in the adoption process, �ince these groups tend to contain the opinion leaders. The opinion leaders are able to influence others through advice and information on an innovation. If this theory is correct, banks should target these groups first. However in the literature to date, banks appear to have striven for early broad market penetration.

2.2.2 History of Diffusion Theory·

Rogers ( 1 983) suggested that there are six research 'traditions' which have contributed to the development of research in the diffusion area. These are discussed in turn as they give a useful perspective of the historical development of diffusion theory.:

a) Anthropology: The anthropology research tradition is the oldest of the research traditions. The major argument in early anthropology was whether diffusion or parallel invention was more important. That is, the question of whether ideas were independently invented in two cultures, or whether an idea was invented in one culture and diffused to the other.

As the field of anthropology developed, a great number of anthropological studies were concerned with investigating the adoption of Western modern ideas by primitive societies. Kroeber ( 1 923) _{and Wissler} ( 1 923) _{published anthropological works that} directly influenced many later diffusion studies, both in anthropology and other traditions. For example, Wissler ( 1 923) _{traced the diffusion of horses from the Spanish} explorers to American Indian tribes. Linton { 1 936) also made an important contribution to the development of diffusion theory. He was probably the first academic to recognise that the characteristics of an innovation affect the rate of adoption.

b) Early Sociology: One of the first empirical investigations by an early sociologist was Chapin's ( 1 928) analysis of the diffusion of the city manager plan of government. He showed that the adopter distribution for the city manager idea in the U.S.A followed an S-shaped "growth curve". The motivating interest for the early sociologists was mainly in the diffusion of innovations which promised to contribute to major social changes (Katz and Levin, 1 959). Their research tended to be based on secondary data, and the unit of adoption was most often a state, city, or organisation, rather than a single individual.

c) Rural Sociology: It is this area which has produced the greatest number of publications and studies of diffusion. Most of these studies deal with the diffusion of

farm innovations from agricultural scientists to farmers. The background of the tradition dates back to the 1 920s. However the 1 943 investigation by Ryan and Gross into the diffusion of hybrid seed corn, more than any other study, influenced the methods, findings, and interpretations of later students in the rural sociology tradition. A total of 345 farmers were interviewed in two small Iowa communities. The innovation was the result of years of intensive research by agricultural scientists. The major findings from the research were:

1 . The use of hybrid seed followed a bell-shaped distribution overtime (Ryan and Gross, 1 943). Gross classified four adopter categories on the basis of their first use of hybrid seed. The social characteristics, such as age, social status, and cosmopoliteness, of both the earliest and the latest adapters were then determined.

2. Three stages were recognised in the adoption process: awareness, trial, and use. 3. The typical farmer first heard of hybrid seed from a salesperson, but neighbours were the most influential source in leading to adoption. Salespeople were more important for earlier adapters, and neighbours were more important for later adapters.

Despite the methodological problems with this study, the research formed a platform from which subsequent diffusion studies have been launched.

After a relatively slow development in the 1 930s and 1 940s, the number of studies in the rural sociology tradition rapidly increased in the 1 950s and early 1 960s.

d) Education: According to Rogers ( 1 983) the education diffusion tradition is one in which the largest number of studies have been conducted, but this tradition is probably one of lesser significance in terms of its contributions to understandings of the diffusion of ideas.

Most of the education diffusion studies have been done at one institution, Columbia University's Teachers College, under the sponsorship of one researcher, Paul Mort. He was described as the "guiding force" in all the education studies (Ross, 1 958).

Rogers ( 1 983) has listed a number of central findings which have emerged from the education diffusion studies:

- Among the great variety of factors related to innovativeness (or adaptability) among schools, the best single predictor of this dimension is educational cost per pupil ie wealthier schools are more innovative.

- A considerable "time lag" is required for the widespread adoption of new educational ideas. "The average school in America lags 25 years behind the best practice" (Mort, 1 946). _{This is much slower than with rural innovations, possibly due to the lack of an} economic incentive to adopt.

- The pattern of adoption of an educational idea over time approaches an S-shaped curve.

e) Industrial: The industrial tradition of diffusion research includes researchers with a wider range of disciplinary backgrounds than in the case of other traditions. Economic historians, industrial economists, and industrial engineers are represented among those investigating the adoption of new industrial ideas.

Danhof ( 1 949) described four adopter categories that he felt could be observed among industrial firms:

1 . Innovators - the first firms to adopt a new idea.

3. Fabians - the firms who adopted the idea only after its utility was widely acknowledged in a particular industry.

4. Drones - the last firms to adopt new ideas.

Since Danhof's study was published, several researchers have attempted to determine empirically the characteristics of industrial firms associated with innovativeness. The Carter and Williams ( 1 959) study of the innovativeness of 50 English industrial firms is perhaps somewhat typical of the industrial diffusion tradition. Each firm was rated as to "technical progressiveness" on a ten-point scale. The researchers then proceeded to determine the characteristics of the most and least innovative firms. Factors found to be related to innovativeness included:

- A favourable attitude toward science as evidenced by the status given to scientists in the firm.

- Cosmopoliteness as indicated by the worldwide travel of executives, and lack of secretiveness with plant visitors.

- Adequate information sources as measured by subscriptions to scientific journals and degree of contact with universities.

- A high growth rate for the firm.

- Lack of "shop-floor resistance to innovation" as evidenced by the conservatism of foremen and union resistance.

f) Medical Sociology: This tradition was somewhat slower to get started than the other traditions. One of the first studies of the diffusion of a medical drug was by Caplow

( 1 952) and Caplow and Raymond ( 1 954). They sought to determine the degree of influence of opinion leaders in the diffusion of drugs among medical doctors. Their results were somewhat inconclusive.

According to Rogers ( 1 983) the classic study in the medical sociology tradition is that by three sociologists, Elihu Katz, Herbert Menzel, and J ames Coleman, who were in Columbia University's Bureau of Applied Social Research . The drug study analysed the diffusion of a new antibiotic (gammanyn) that appeared in late 1953. The researchers interviewed 1 25 general practitioners and each doctor was asked to name:

- His three best friends among physicians

- The three or four physicians with whom he most often discussed cases or therapy; and - The colleagues whom he most frequently called when in need of special information or special advice on questions of drug therapy.

Three major findings emerged:

1 . The detailed data secured from the physicians allowed an analysis in depth of the patterns of influence through which the drug spread in the medical community. The relationship between opinion leadership' and innovativeness was established.

2. _{The drug study also established the correlates of innovativeness for a type of} respondent that had not previously been studied in this regard. Most of the variables related to innovativeness (such as cosmopoliteness, social status, opinion leadership, size

of operation, and communication behaviour) had already been investigated for samples of farmers and public schools. It was also . important to learn that these same relationships of innovativeness with other concepts held for physicians.

3. The third major contribution of the drug study was the methodological technique of determining the date of doctors' first use of the drug from prescription records rather than from recall.

g) Marketing: Marketing has only become strong as a research tradition in the 1 960s (Rogers and Shoemaker, 1971). Marketing managers have become interested in diffusion research mainly due to the large number of new product failures. While much research has been conducted in relation to diffusion, the vast majority of it has remained confidential to the company. It was not until the early 1 960s that diffusion research began to receive attention from university faculty members in graduate schools of marketing. It was a result of this that access to diffusion studies in marketing became more publicly available. Most of the studies took the form of field experiments, with financial support coming from a sponsoring company. For example Arndt ( 1 967) conducted a study of new food products. He sent a letter about the innovation enclosing a coupon allowing its purchase at one-third its· normal price to 495 housewives living in a married student apartment complex. Personal interviews were then conducted with these consumers after sixteen days of the diffusion campaign. Arndt found that interpersonal communication about the innovation frequently led to its purchase, especially if the interpersonal messages about the new product were favourable. Housewives who perceived the innovation as risky were more likely to seek the advice of opinion leaders about it.

According to Rogers and Shoemaker ( 1 971 ) the marketing tradition has borrowed heavily from the older diffusion traditions, especially rural sociology.

2.2.3 Relationship Between Diffusion and Adoption

The diffusion process is often confused with the �doption process. The adoption process is the development of the consumers' awareness of a product - ranging from the point when they first become aware of a new product's existence to the point when they actually use or adopt the product on a regular basis. Hence the diffusion process is the aggregate of all individual adoptions over time. Therefore it is necessary to first gain an understanding of adoption. From the time when an individual first hears of an innovation to the time when adoption occurs has been recognised as consisting of several stages. The Ryan and Gross ( 1 943) study was probably the first to recognise that the adoption of a new idea consisted of stages. They distinguished between "awareness" of

hybrid seed corn, "conviction" of its usefulness, trial "acceptance"' and "complete adoption" of the innovation. In more modern times, adoption has been divided into five similar stages:

1 ) Awareness stage: The individual is exposed to the innovation but lacks complete information about it, or the individual is aware of the innovation but is not yet motivated to seek further information.

2) Interest stage: The individual becomes interested in the new idea and seeks

additional information about it. The innovation is favoured in a general way, but is not yet judged in terms of its utility to a specific situation.

3) Evaluation stage: The individual mentally applies the innovation to his or her present and anticipated future situation and then decides whether to try it.

4) Trial stage: The individual uses the innovation on a small scale in order to determine its utility in his or her own situation.

5) Adoption stage: The individual decides to continue the full use of the innovation. This implies continued use of the innovation in the future.

It should be noted that Rogers ( 1 983) _{states that there is very little evidence as to} exactly how many stages there are in the adoption process. Nevertheless, until more evidence is available, it seems conceptually cl�ar and practically sound to utilise the five-stage adoption process.

As a theory of communications, diffusion theory's main focus is on communication channels, which are the means by which information about an innovation is transmitted to or within the social system (Mahajan, Muller, and Bass 1 990). These means consist of both the mass media and interpersonal communications. Members of a social system have different propensities for relying on mass media or interpersonal channels when seeking information about an innovation. Interpersonal communications, including

nonverbal observations, are important influences in determining the speed and shape of the diffusion process in a social system.

Different types of innovations require different degrees of change or adaption in the behaviour, attitudes and beliefs of the target group. Table 2. 1 shows different types of innovation based on required changes in behaviour (Rogers, 1983).

Table 2. 1 _{Innovation Types}

Innovation Type Required Behaviol.D" For Adoption Continuous Innovation Adoption requires minor changes in

behaviour, e.g liquid soap, canned

wines.

Dynamically Continuous Adoption requires a major change in an Innovation area of behaviour unimportant to the

individual.

Discontinuous Innovation Adoption requires major changes in

behaviour in an area of relative

importance to the individual or group, e.g· waterbeds, microwave ovens, solar heating.

Diffusion, as a group process, gives rise to different categories of adapters. Research has shown the adoption behaviour of those different categories exhibits a typical bell­ shape distribution over time (Hawkins et al 1 983). The adopter categories are shown in Table 2.2

Table 2.2 Adopter Categories

Categories Percentage Adoption

Innovators The first 2 . 5% _to adopt innovation

Early Adapters The next 1 3. 5% to adopt innovation

Early Majority The next 34% to adopt innovation Late Majority The next 34% to adopt innovation Laggards The last 1 6% to adopt innovation

The pattern in Table 2.2 is illustrated in Figure 2.1 below.

Figure 2. 1 The Adoption Process

I

2 1. % ₂ I

Innovators 1 3 .1% I 34%

Early Early Majority

X - 2o X - o X

34%

Late Majority

X + o

Time of Adoption of Innovations

Source: Rogers, E.M. Diffusion of Innovations. Free Press of Glencoe, New York, 1962, p162.

People in different categoi-ies are likely to exhibit certain characteristics (Rogers and Shoemaker, 1 97 1 ) . Earlier adapters are typically more : cosmopolitan, venturesome, possessed of relative status in reference groups, commercial, professional, and better communicators. Later adapters tend to exhibit more dogmatism, fatalism and rely more on interpersonal communications.

Why should the adopter distribution be normal? Rogers ( 1 983) _{suggests two reasons:}

1 . Learning Curves: Research has shown that individuals learn a new skill or set of facts through a learning process that, when plotted overtime, follows a normal curve (Hilgard, 1 956). When an individual is confronted with a new situation, he/she makes errors at the beginning, but after a series of trials, the errors decrease until learning capacity is reached. When plotted, this learning curve follows a normal pattern. If one substitutes a social system for the individual in the learning curve, it seems reasonable that experience with the innovation is gained as each successive member in the social system adopts it. Each adoption in the social system is, in a sense, equivalent to a learning trial . by an individual.