A culture‐based approach to understanding the adoption and diffusion of new products across countries

For international product managers, one critical question is how fast a new product is likely to be adopted and diffused in different nations. One possible way to answer this question is by collecting data on the diffusion in a large number of countries and analyzing them. However, one of the main problems associated with collecting data are the lack of sufficient early‐period sales data to ensure reliable estimations. The estimation process becomes even harder since word‐of‐mouth and imitation play significant roles in the adoption of a new product given that the spread of information in a social system is complex. The purpose of this paper is to assess the relationship among social interactions, cultural differences, and the adoption of new products, and propose a new technique to work with the complexity arising from social interactions, as well as the few data points.

A conceptual framework is presented and propositions are constructed.

The study suggests that, while social interactions are an important element for adoption of new products in every country, the strength of their impact on adoption varies across countries based on culture.

This study contributes by offering a deeper understanding of the impact of social interactions on international innovation adoption and provides a new foundation for the literature by combining individual heterogeneity, cultural differences, and word‐of‐mouth communication in one study.

Understanding the effect of cultural variations on the adoption of new products in a specific country will help management in the forecasting of demand by decreasing the perceived uncertainty of foreign cultural environments.

Even though diffusion models often describe innovation diffusion patterns over time fairly well, it is unclear how social interaction processes in different countries influence the adoption and diffusion speed of new products. There seems to be a large gap in the international marketing literature since it has long been accepted that personal interactions play a key role in product adoption and dissemination and that individuals communicate differently in the different parts of the world. An understanding of social interactions role on adoption of innovation will contribute to the international marketing field.