The innovation adoption curve, sometimes referred to as the diffusion curve classifies adopters of innovations. It shows the natural rate of adoption of an innovation over time until 100% of potential users are on-board with the product or service.
Rogers, E.M., published a book in 1962 titled Diffusion of Innovations where adoption theory was first explored. Rogers describes an adoption curve of potential users of a product.
When a product first appears on the market 2.5% of your total population will purchase or use your innovation immediately – these are categorized as innovators. Next is 13.5% of the total population who are categorized as early adopters. Then you have your early majority users who are 34% and bring you up to 50% market share of potential buyers / users.
(Image Credit Wesley Fryer)
Your last people to adopt in the latter half of the life-cycle of your innovative product or service are your late majority (34%) and finally your laggards (16%).
When all of the laggards have used the product then it is said to have been fully adopted in the marketplace.
This distribution is said to always be present in market dynamics.
If you were to plot the cumulative total of users over time on the adoption curve above then it would follow an s-shaped curve. Depending on the innovation this can be a very stretched out S that takes many years for all potential users to adopt.
The S-Curve is also an indication of sales over time. Marketing and sales strategies are usually focussed on increasing the early adoption rate of a product giving the s-curve a steeper appearance early on to represent the faster uptake from individuals using the product.
Other names for the S-shaped adoption curve include a Bass Diffusion Model, A Gompertz Curve or a Type 1 Curve.
Rates of adoption speed can be affected by such things as:
Diffusion is complete when 100 percent of the market have purchased the product.
Incremental innovations can extend a product's life-cycle an example of this would be touch tone telephones replacing rotary-dial phones.
Rotary Dial Phone (Photo Credit Flickr postbear)
The rotary dial phone sales were completely replaced by the new touch tone innovation.
Incremental innovations are used as a strategy to prevent a products decline in use.
Some product innovations have an extremely short product life-cycle curves. Such innovations are often described as a fad and would include such examples as certain diets, Pokemon cards, etc.
Product innovations with a longer and potentially cyclical product life-cycle are described as fashions such as the latest shoes or the latest foods like Thai or Greek.
Finally there are product innovations with a long product life-cycle which are described as classics. Coca cola would fall into this category.