...inventing a successful innovation is an uphill task. In this study, we chose two products, the portable MiniDisc player and the MP3 player, to represent the various innovations in the consumer electronics market. A two-stage pluralistic research was carried out; with the use of focus group discussions followed by a survey in order to gather the views and insights of consumers with regard to their adoption behaviour. From the research findings, we ranked the seven factors influencing adoption ranked according to their degrees of importance.

Keywords: new product, adoption process and behaviour, consumer behaviour, consumer electronics industry, lifestyle

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With the crunch in the consumer electronics industry, manufacturers are under tremendous pressure to create new products. The consumer electronics industry has seen a wave of innovation sweeping the industry, with companies experimenting with a wide range of products from handheld gadgets to portable music devices. Given the advent of new technologies and shorter product development cycles, new products are constantly making their ways to the shelves. Examples of such consumer electronic products include the MiniDisc, recordable CDs, the digital audio tapes, and the MP3 player.

The main aim of this research was to shed some light on the adoption behaviour of consumers in relation to new audio consumer electronics innovations. Specifically, we wished to find out the factors that influence adoption. This study utilised two products from the same category; comparing one that is experiencing much success, (MP3 player) and the other with limited success (MiniDisc player).

Research Objectives

Our research objective was to explore the difference in the rate of adoption of portable audio products. Specifically, the research addressed the following issues:

* Determine the length of time taken by consumers to be aware of new portable audio products.

* Assess the sources of information that result in the awareness of new portable audio products.

* Determine the factors that affect consumers' adoption of portable audio products.

* Evaluate the varying degrees of importance these factors affect consumers' adoption.

A two-phase pluralistic approach was used for this research. In the qualitative phase, two focus group discussions were conducted to obtain the views of consumers as well as to gather information for the quantitative stage. In the quantitative phase, a cross sectional survey was carried out to address the objectives of the research.

Literature Review

New products and innovations often come with high risks as most of them failed in the marketplace, (Cooper, 1993). There has been extensive research carried out to unveil and discover the critical success factors affecting adoption as well as on the process of innovation diffusion itself.

Development of Theories on Adoption

Rogers (1962) introduced five main dimensions that influenced the adoption of an innovation, namely, complexity, compatibility, observability, trialability, and relative advantage. Rogers and Shoemaker (1971) further discussed these five dimensions which formed the foundation of subsequent studies on adoption of new innovations. Ostlund (1974) built on this research by adding a sixth dimension, the perceived risk of adoption. Perceived risk and risk attitudes were further discussed in various literature. For instance, Rogers (1995) indicated that early adopters tend to be less risk averse than late adopters, hence providing an association between risk attitudes and adoption of innovation. Smith and Andrews (1995) explained that when the perceived risk of the innovation increased, it would have a negative impact on the evaluation of the product; this further correlated risk with the adoption of innovation.

The number of dimensions thought to effect adoption continued to expand through the years with Tornatzky and Klein (1982) proposing 10 dimensions. They conducted a meta-analysis of all past studies on the innovation characteristics that had an impact on innovation adoption. Of the 10 dimensions they introduced, five were those proposed by Rogers (1962). The additional five new dimensions introduced were cost, communicability, divisibility, profitability, and social approval. Of these additions, communicability tended to mirror observability; and divisibility and cost paralleled trialability; the original dimensions laid down by Rogers (1962).

Of these newly introduced dimensions, cost of innovation to consumers received much attention by researchers and as a result, various studies on prices affecting rate of adoption followed. Kalish and Lilien (1986) postulated that the price of the innovation would affect its market potential. However, Jam and Rao (1990) contended that prices affect the rate of adoption rather than the market potential. In an earlier study, Kamakura and Balasubramanian (1988) had suggested that prices of innovation affect the timing of adoption and not whether consumers would adopt the product or not. They believed that lower prices would encourage consumers to buy the product at an earlier date, but not necessarily motivate them to buy just for that reason. They also stated that prices affecting rate of adoption would be true only to products with a narrow price range. Another view of price affecting rate of adoption was by Mason (1990), who provided empirical evidence that product attributes rather than price should be the ma in impetus for adoption.

In view of the various opinions, Moore and Benbasat (1990) tried to summarise and redefine the various dimensions. After an extensive instrument development process, they arrived at a classification of seven characteristics, that included compatibility, complexity, trialability, relative advantage, result demonstrability, visibility, and image. However, they did not incorporate price as one dimension but treated it as part of trialability.

Besides exploring the factors that influence adoption, some researchers have proceeded to explore the impact of marketing mix on new product adoption. In Thomas and Hirokazu (1999), witnessed extensive coverage on how advertising could affect new product adoption and in Thomas and Charlotte (1999), we saw how product characteristics affected the rate of adoption.

Innovation Adoption Process

In addition to the dimensions that influenced adoption, the process by which individuals adopted an innovation was also crucial, as an understanding of the these two areas would be imperative for the success of an innovation. The following review highlighted the various studies on the process of the adoption of new innovations.

Mansfield (1961) hypothesised that the proportion of individuals who adopted an innovation increased with more information available and on greater experience of the product. The population of consumers generally could be segregated into five categories with reference to their propensity to adopt a new product. The categories are innovators, early adopters, early majority, late majority, and finally laggards, (Rogers, 1995).

Late adopters normally adopted products on having more information and on greater exposure to the product. As such, late adopters were generally considered to be more risk averse. Though the risk perception among individuals were different, the decision process which lead to final adoption...

NOTE: All illustrations and photos have been removed from this article.




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