Managing Innovation: Diffusion of Innovation Theory and its Application in BrewDog

Managing Innovation
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Innovation Theory..................................................................................................................3
Processes of the theory...........................................................................................................5
Evaluation of the theory.........................................................................................................5
Application of the Innovation Theory....................................................................................6
Future Development...............................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Innovation can be defined as a change that is made to an existing product or idea. In order
to gain a competitive advantage, a business should consistently innovate its products and services
(Aarikka-Stenroos and et. al., 2017). Innovation helps in solving complex problems easily by
developing creative solutions which in turn increases the overall productivity of the company.
Different creative as well as innovative ideas help a business to market itself effectively. This
can be done by creating a new brand or by developing a unique business that the customers find
to be attractive. Innovation today has become an important aspect of any organisation if it wants
to beat the competition and stand out in the crowd. Diffusion of Innovation theory is one of the
oldest theories of innovation that was developed by E.M. Rogers in the year 1962 (Diffusion of
Innovation Theory, 2019). The theory explains how does a product or an idea gain strength over
time and spread through a particular population. This model is generally used when an
organisation launches a new product or service in the market, or launches an existing product in
a new market.
MAIN BODY
Innovation Theory
The Diffusion of Innovation theory helps an organisation in understanding the way in
which buyers adopt new products or technologies and engage with them. The theory was
developed in the year 1962 by E.M. Rogers. The theory also explains how and why new ideas
are adopted by consumers It primarily focuses on how a new idea or a product diffuse among
groups of people (Biemans, 2018). Innovation is not always adopted by all the people at the same
time but in a proper sequence and can be classified into different adopter categories depending
on the time they take to adopt the idea or product. When an organisation plans to launch or
introduce a new idea in the market, it should have a clear understanding to the characteristics of
its buyers. The adopters are categorised into five different groups which are explained below -
 Innovators – People who fall in this category are the first ones to try out a new
innovative or new product that is launched in the market. They are always interested in
trying out new products and ideas. They are willing to take risks and an organisation
needs to do very little innovation to appeal to this category of people. Innovators usually
have a strong financial background and a setback or failure of a new idea usually does not
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affect them. Thus, innovators are easy to attract by the organisations as there no special
need of making efforts in order to gain their attention.
 Early Adopters – Early adopters are the people who represent opinion leaders and enjoy
opportunities of change. They are already aware of their need to adopt change and hence
don't find it very difficult to adopt new ideas or products (Griesar, Bessant and
Bernschneider‐Reif, 2018). This category of adopters does not need any information to
convince them to adopt change. Early adopters provide advice as well as information that
the other adopters are searching for about the product or the service. Thus, companies
need to show early adopters a good reason to adopt the new product in order to attract
and encourage them to purchase the products.
 Early Majority – People who fall in this category are very rarely leaders but also adopt
any new idea before any other average person. These people often need to see evidence if
the innovation will work for them before they adopt the change. Strategies used by
marketers to appeal this category of adopters is usually success stories as well as
evidence of the effectiveness of the innovation. The decision time about adopting
innovation of the adopters in the early majority is relatively longer as compared to
innovators as well as early adopters.
 Late Majority – People who fall in the category of late majority are primarily doubtful
about adopting the change and go for it only when the innovation or product has been
tried by majority of people and won't try out the innovation before they see an
accountable proof that the product of innovation is actually effective (Wymbs, 2016).
Strategies that work for this population is information about how many people have
already tried the product or innovation and adopted it. Also, in order to adopt the change,
there is a strong pressure from friends or family to do so.
 Laggards – Laggards are people who are traditionalists and very conservative (Johnson,
2016). They are highly doubtful about adopting the change and are generally the hardest
category to be influenced by marketers to adopt change. Strategies like statistics, hard
data, pressure from peers and fear appeals should be adopted by marketers of different
organisation. The decisions that are made by people in this category are highly influenced
by previous generations.
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