Determinants of Social Contagion during New Product Adoption

Abstract

Social contagion has been shown to play an important role during new product adoption by consumers. Social contagion is the process by which consumers influence each other to adopt and use a product in a specific way. Current literature makes a basic assumption that social contagion is caused by the characteristics of consumers, who they interact with or who they live near to, and thus are most likely to come into contact with. However, the role that the product has in stimulating social contagion is conspicuously absent in this research. The current study focuses on identifying determinants of social contagion and investigates their indirect effect on the market demand for a new product. Determinants are drawn from both product attributes and consumer characteristics. Based on a three‐part theory of social contagion, the authors propose variables that influence the fecundity, fidelity, and longevity of a product. Fecundity is the extent to which many consumers make copies of the behavior related to the adoption or use of that product. Sometimes, they will have to buy the product beforehand (like mobile telephony), and sometimes they will not (like Internet banking, assuming they already have a bank account and an Internet connection). The fidelity of a product is the extent to which consumers make accurate copies of the product‐related behavior, in other words how the product supports the users in easily carrying out the behavior. The longevity of the product is the extent to which consumers keep on expressing the behavior over a long period of time. The main contributions of this study are that the relative importance of these determinants of social contagion are investigated empirically, and that the predictive power of this approach for estimating market demand is examined. Data are analyzed from 124 product–segment combinations of information and communication technology products from the telecom and financial sectors. These are mass‐market products that have passed their initial growth phase. Using partial least squares path modeling, the main determinants of social contagion are identified, and the positive, significant relationship between social contagion and market demand is confirmed. Specifically, a main finding is that consumer characteristics have only a weak effect on the probability that social contagion occurs, while the main success factors are those product attributes that stimulate the creation of new copies of the product‐related behavior; that is, product fecundity. This study offers product developers a new approach to assess the market potential for innovations, and the results provide recommendations for improving their products to increase the market potential. The authors note with respect to the practical applicability of their method that it does not require a working prototype, a market pilot, or other costly steps. It can be carried out with simply a description of the product, which means that it can be applied very early in the product development process.

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