Diffusion within use: cross-situational specialisation of a new product from the perspective of a dynamically continuous innovation

Abstract

Use-diffusion, which explains the patterns through which adopters of a new product put the product to use, remains important for innovative firms to engage in future innovations. Although innovations can be discontinuous (DI), continuous (CI), or dynamically continuous (DCI), the extant marketing literature usually examines use-diffusion of new products from the perspective of a DI or a CI rather than a DCI. While the perspective of a DI assumes the entry of a new product into a non-existing category, that of a CI assumes the entry of a new product into a single category with an evolutionary path. Such assumptions ignore new products, which form new subcategories in major existing categories through DCIs. The present study adopts the perspective of a DCI and develops a cross-situational specialisation model within use-diffusion by a) relaxing the assumption of a non-existing, and assuming a single, category with multiple subcategories, and b) incorporating complementarity and substitutability in-use. The model consists of cross-situational use patterns, which explain the application of new and existing products as complements and substitutes in-use between and within situations, and its determinants and outcomes. The study tests the model drawing on a survey data from 315 students, attending Australian universities, who own and apply a tablet PC to learning and educational uses. Clearly, the tablet PC remains relatively newer, and it forms a new subcategory-in-use alongside existing device(s), in the PC category. The study analyses the data with two-stage least squares, multinomial logistics regression, and analysis of variance. Results of the analyses show that the determinants of cross-situational uses of the new product explain substitution-in-use better than they do for complementarity-in-use between situations. However, within situations, the results reverse in favour of complementarity-in-use. From the outcomes of cross-situational uses, although consumers perceive the new product to enhance the uses of existing products across situations, the perception remains higher within, compared with between, situations of minimal application of existing products. However, consumers’ perception of the new product’s essentialness amongst existing ones remains higher between, when compared to within, situations of easier accessibility of uses of the new product. The findings offer key managerial implications and theoretical implications for future research.