Understanding  diffusion process in the context of product dis-adoption

Theoretical bases of economics and management

Diffusion theory is a well-accepted marketing concept that involves regular intervention of customers. But dealing with customers is a staggering task for managers and the challenge becomes stiffer in a dynamic market. It has been seen in the past how (by observing the adoption pattern of individuals) the aforesaid process has helped firms in dealing with innovation adoption. In the present article, we have emphasized the other part of the dichotomy of the adoption process, the dis-adoption, and have thereby formulated a diffusion process incorporating dis-adoption behavior of customers. Moreover, the dependency of imitators on the adoption behavior of innovators regarding the product/service provided by the firm has been highlighted. The proposed sets of models have been categorized on the basis of varying market structure using the exponential and linear market growth functions. Models have been validated and empirically analyzed on two real life sales data sets. Furthermore, a graphical presentation has been shown using ternary plot to see the relationship between the rate of adoption, the rate of dis-adoption and the rate at which new adopters are increasing the market. Our results indicate that the probability of potential discontinuers can be calculated explicitly; we have also discussed the role of previous adopters in contributing to the firm’s growth.