Product characteristics and their impact on rate of adoption

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  • Post last modified:June 10, 2021

Every marketer wants his new product to be successful. However, several factors influence the adoption rate of the innovation. Some products can gain acceptance overnight. For others, it may be difficult to win the market and gain fast adoption from consumers. Apple products are very good examples of products that gained adoption very fast right after their introduction. 

Apple iPod, iPhone, and iPad were very quick to gain acceptance once they were released. They flew off the retailers’ shelves in just no time. However, all the innovations do not gain as fast adoption.

 For example, electric cars were not as common a few years ago and there is still some time before they can become a common sight in various parts of the world. Nissan’s Leaf and Tesla’s Model S were among the earliest models released in the United States. The sales of electric cars in the US and in some other markets have picked up in the past few years. According to Pew Research Center, their numbers have more than tripled between 2016 and 2020. 

However, according to the same research, it seems that the US has been lagging in terms of EV adoption when compared to China. While the US holds only 17% of the total 10.2 million EVs globally, China holds 44% and Europe holds 31%.

The adoption of electric models in the US has grown at a slower rate. Their adoption rate may have grown in recent years and after 2019 but still for them to fully replace the gasoline cars could take years. We know that EVs are good for the health of the environment and the economy. Using them instead of gasoline cars will make our cities environmentally safer and the nation happier. However, there are hurdles that need to be overcome to grow the adoption rate of EVs. 

The government is encouraging consumer adoption of EVs through customer and business friendly policies but things cannot change overnight at least in the case of EVs, which are generally costlier than gasoline cars. It’s not just about the price of an innovation, even if that is a critical decisive factor influencing adoption rate. There are at least five critical characteristics that are important in terms of adoption rate of an innovation. Let’s discuss this in terms of electric vehicles. 

Product Characteristics Influencing Rate of Adoption:

Relative advantage:

The relative advantage that any innovation offers compared to the existing products will initially affect its adoption rate, or simply the degree to which an innovation is superior compared to the existing products.  For example, electric cars do not cost as much for recharging as gasoline cars do. You use clean and less costly energy to recharge and run electric vehicles. This sounds good and can accelerate their adoption rate. On the other hand, the Evs are costlier compared to gasoline cars. Their driving range before recharging is also limited and these two factors can slow down the adoption rate. Everyone may want a Tesla but Teslas are not for everyone. Tesla’s release of Model 3 led to growth in the adoption rate of Tesla cars because it was cheaper. Otherwise, there was big price difference and anyone could own a nice premium car for much less compared to the premium models Tesla had initially released. Now, if buyers can get a premium model that is an EV and also priced somewhat affordably, they are going to adopt it faster.

Apart from that, customers are now more aware of the relative advantage a Tesla model offers. For example, you spend a lot in the form of maintenance costs on a gasoline car and these costs may be even higher if you are buying a premium model or a sports car. Compared to that, the maintenance costs of a Tesla are much lower, which is also driving a higher adoption rate in the US and several more markets. Customers will weigh many factors to get a clear picture of the relative advantage an innovation offers before adopting it. If Tesla cars are safer compared to gasoline cars, that is another plus point that will accelerate the adoption rate. 

Compatibility:

Compatibility or how compatible an innovation is with the values and experiences of potential consumers also affects the adoption rate. For example, there is no need for any new skills to drive an electric car. Anyone who can drive a gasoline car can also drive an EV. However, while it may be easier to find a gasoline station to refill the car, recharging EVs can be a problem if an extensive charger network is not in place. This can discourage potential buyers and slow down the rate of adoption. Tesla has continued to expand its charger network in the US, Europe, chain, and other parts of the world and it has supported faster adoption of its car models in these markets. If the density of chargers in a market is low, the potential consumers will see it as a disadvantage, and then it will not be compatible with their existing experiences.

Complexity:

Complexity means the degree to which an innovation may be difficult to use or understand. If any innovation is complex to understand or use, which means not everyone can use it or it requires learning specific skills to use it, the adoption rate will be slow. However, that is not the case with electric cars. You do not need to have any specific skills apart from your driving skills to own and operate a Tesla. However, most innovations give rise to certain questions initially. The conceptual complexity related to new technologies and how well they will function in the future can slow down the adoption rate.

Divisibility:

Divisibility implies the degree to which an innovation can be tried on a limited basis. Consumers cna test drive an electric car. This is a positive factor which will contribute to the adoption rate of EVs. However, its higher prices are still a major deterrent for a large group of customers. The higher prices of ownership are likely to keep adoption rate slow until the EV manufacturers have created technologies that reduce the costs of manufacturing and bring down the prices for the consumers.

Communicability:

Communicability implies the degree to which the results of using any innovation can be communicated or described to others. If demonstration and description of EVs are easier, their adoption rate is likely to grow. 

There are more characteristics too that influence the rate of adoption among consumers. The initial and ongoing costs (costs of ownership and maintenance), risks and uncertainty, and social approval also influence the adoption rate of innovations. Marketers must study and research these factors before creating new products and their marketing programs to gain faster adoption.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.