Characteristics of Adopters and Nonadopters of Alternative Residential Long-Distance Telephone Services
ABSTRACT - Adopters and nonadopters of a service innovation, alternative residential long-distance telephone services, are profiled in terms of demographic and psychographic characteristics and product class experience. Monthly long-distance telephone expenditure was the most significant variable in discriminating between adopters and nonadopters. Adopters were described in psychographic terms as price conscious shoppers, convenience prone, housework enthusiasts, and heavy telephone users. To a large extent the demographic profile of the adopters is similar to that of adopters of a number of other innovations. However, dual income family, not a commonly included dimension in adoption studies, was found to be a significant descriptor of adopters of these services.
Citation:
William E. Warren, C. L. Abercrombie, and Robert L. Berl (1988) ,"Characteristics of Adopters and Nonadopters of Alternative Residential Long-Distance Telephone Services", in NA - Advances in Consumer Research Volume 15, eds. Micheal J. Houston, Provo, UT : Association for Consumer Research, Pages: 292-298.
Adopters and nonadopters of a service innovation, alternative residential long-distance telephone services, are profiled in terms of demographic and psychographic characteristics and product class experience. Monthly long-distance telephone expenditure was the most significant variable in discriminating between adopters and nonadopters. Adopters were described in psychographic terms as price conscious shoppers, convenience prone, housework enthusiasts, and heavy telephone users. To a large extent the demographic profile of the adopters is similar to that of adopters of a number of other innovations. However, dual income family, not a commonly included dimension in adoption studies, was found to be a significant descriptor of adopters of these services. INTRODUCTION Although studies of adoption and diffusion of a wide variety of products have been reported, the majority of the literature has been devoted to physical products (Rogers 1961; Rogers and Shoemaker 1971; Robertson 1967, 1971; King 1965; Boone 1970; Painter and Penegar 1971; Zaltman and Stiff 1975; LaBay and Kinnear 1981; and Dickerson and Gentry 1983). Some notable exceptions include bank credit cards (Plummer 1971, Adcock, Hirschman, and Goldstucker 1977, Porter, Swerdlow, and Staples 1979), automatic teller machines (Lee 1981), community television antenna service (Marks and Hughes 1976), an unidentified telecommunications service (Green, Carmone, and Wachpress 1977), and automotive diagnostic centers (Kegerris and Engel 1969; Engel, Kegerris, and Blackwell 1969). Consequently, relatively little is known about the consumer process of adopting service innovations. The void remains despite the fact that (I) the service sector is the fastest growing segment of the American economy and now accounts for more than half of the gross national product (Survey of Current Business 1985), (2) enough literature has been accumulated on the subject to constitute a critical mass and research into the marketing of services has begun to acquire a degree of sustained commitment (Berry 1980), and (3) differences between consumer evaluation processes for goods and services have been recognized and the effects of these differences upon the adoption of service innovations have been hypothesized (Ziethaml 198 1). The purpose of this paper is to add to this currently sparse literature related to the adoption of services by presenting the findings from a study of the adoption of a service innovation alternative residential long-distance telephone services (any supplier other than AT&T). The research identifies the type of individual most likely to adopt this service innovation. More specifically, the research uses demographic characteristics, psychographic factors, and consumer experience to predict the individuals most likely to adopt the service. CHARACTERISTICS OF THE INNOVATION Robertson (1967) has delineated three types of innovations: continuous, dynamically continuous, and discontinuous. A continuous innovation has the least effect on behavioral patterns and involves the alteration of an existing product. A dynamically continuous innovation causes some, though not substantial, changes in behavioral patterns. It may involve creation of a new product or modification of an existing one. A discontinuous innovation involves a new product and the establishment of new patterns of behavior. Robertson (1971) concluded that while most studies of the adoption of innovations have investigated discontinuous innovations, most innovations fall into the other two categories. Using Robertson's definitional schemes, the alternative services are a dynamically continuous innovationCsimilar to the touch-tone telephone (a physical product and an example Robertson used for the category). The innovation involves the alteration of an existing product (a service historically offered by AT&T) and adoption involves some, though not substantial changes in existing behavioral patterns. Rogers (1961) identified five characteristics that affect the rate at which an innovation is adopted: relative advantage, compatibility, complexity, divisibility, (triability), and communicability (observability). Later Fliegel and Kivlin (1972) expanded upon Roger's list and identified financial and social cost, as other relevant characteristics affecting the rate of an innovation's adoption. More recently, Ziethaml (1981) hypothesized that the unique characteristics of services intangibility, nonstandardization, and simultaneous production and consumption negatively affect a service innovation's rate of adoption. Previous research (Robertson 1971; Rogers and Shoemaker 1971) has shown that the adoption process is positively related to the product's relative advantage, compatibility, divisibility, and communicability and negatively related to its complexity and cost. Alternative long-distance telephone services offer relative compatibility with previous usage routines, are not overly complex, and offer a cost advantage. These characteristics should serve to speed the adoption process. However, the inherent characteristics related to services along with the difficulty of divisibility and communicability should tend to slow the adoption process. CHARACTERISTICS OF ADOPTERS The purpose of this section is to review past research that provides profiles of adopters of innovations. Time has traditionally been used to identify adopter categories (Rogers 1962). However, it has been asserted that innovativeness and time of adoption are not synonymous conceptsCthat innovativeness is the degree to which an individual makes innovation decisions independently of the communicated experiences of others (Midgley 1976; Midgley and Dowling 1978). Because of this controversy and since the diffusion process was ongoing, there is no attempt to sub-divide adopters into categories: innovators, early adopters, etc. Demographic Characteristics Virtually all studies of adoption and diffusion have included demographic characteristics as predictor variables. Most of the studies have found that early adopters have more education and higher incomes, than nonadopters (Kegerris and Engel 1969; Boone 1970; Plummer 1971; Robertson 1971; Rogers and Shoemaker 1971; Rogers and Stanfield 1968; Feldman and Armstrong 1975; Adcock, Hirschman and Goldstucker 1977). It was expected that similar results would be found for adopters of alternative long-distance services. Although the adoption of the service does not require the expenditure of a large amount of money (in fact adoption should reduce the total cost of long-distance calls), it was hypothesized that higher income households are prone to make more long-distance calls. Consequently, they have an opportunity to experience greater overall savings. While the service itself and the utilization of the service are not overly complex, more education could be related to easier. understanding and utilization. Findings relative to the role of age in the adoption of innovations have not been consistent. Some studies have found older consumers to more likely be adopters (Rogers and Shoemaker 1971; Dickerson and Gentry 1983), while others have found adopters to be younger (Plummer 1971; Adcock, Hirschman, and Goldstucker 1977; Porter, Swerdlow, and Staples 1979; Lee 1981, Feldman and Armstrong 1975; McClurg and Andrews 1974; LaBay and Kinnear 1981). Gilley and Ziethaml (1985) studied the adoption of technologies among elderly consumers and found that different communications media (direct mail and print) may be necessary in order to effectively reach this growing segment of the population. The different types of products studied can explain some of the contradiction. Since income tends to increase with age, innovations involving high financial risk (e.g. home computers) are more likely to be adopted by older consumers. Innovations, such as automatic teller machines, do not require large financial costs and, therefore, there are no financial obstacles to younger consumers. Since there are no financial obstacles to hinder the adoption of the alternative long-distance services, adopters were expected to be younger than nonadopters. Employment status of spouse (dual-income family) is one demographic characteristic that had not been included in most studies of adoption. However, given the current large number of two income households, this variable was included. Expectation was that dual income families would have higher incomes and, consequently, more likely be heavier users of long-distance telephone service. Therefore, dual income families were hypothesized to be more likely to adopt an alternative long-distance service than one-income families. Psychographic Characteristics Psychographics have been included in the study of adoption of a number of innovations. Some studies have found that early adopters tend to be more active, urbane, fashion conscious, risk-oriented, achievement-oriented, contemporary minded, gregarious, and involved in a number of activities: bank credit cards (Adcock, Hirschman, and Goldstucker 1977; Plummer 1971; Porter, Swerdlow and Staples 1979); men's fashions (Darden and Reynolds 1972; 1979); shopping patterns (Darden and Perreault 1976); and automatic teller machines (Lee 1981). It was expected that the psychographic profile of the adopter of alternative long-distance telephone services would be similar to that found in the earlier studies. Previous Experience Although prior related experience has not commonly been a part of the study of adoption of innovations, it is logical to expect that experience with a broad product class affects the adoption of an innovation related to that product class. Zaltman and Stiff (1973) reported that the amount of experience a consumer had with a product category positively affected the rate at which an innovation was adopted. Taylor (1977) found innovative behavior to be very dependent on product class use. Hirschman (1980b) suggested that prior knowledge or experience with a product category may lead to increased ability to determine superior new products within the category, positively affecting the rate of adoption. One of the two components Hirschman (1980a, 1980b) offered as determinants of a consumer's creativity was the individual's repertoire of consumption situations. The repertoire should be a function of the number of similar purchase experiences (Hirschman 1980b). Therefore, it was expected that the amount of experience (as measured by monthly long-distance telephone expenditures) would positively affect the rate of adoption. HYPOTHESES The purpose of this study was to gain insight into the adoption of alternative long-distance telephone services by investigating the demographic and psychographic characteristics that tend to differentiate between adopters and nonadopters of this service innovation. The following hypotheses were tested: Hypothesis 1: Adopters of alternative long-distance telephone services will be younger, in a dual income family, have higher incomes and more education than nonadopters. This hypothesis is consistent with the generalized profile of adopters of innovations cited above, with one addition, dual income family. Hypothesis 2: Adopters of alternative long-distance telephone services will be described by the psychographic factors of price conscious shopper, fashion conscious, community concerned, new brand trier, heavy telephone user, and convenience prone to a greater extent than will nonadoPters. Hypothesis 2 is also consistent with the generalized profile of adopters of other innovations. Hypothesis 3: Adopters of alternative long-distance telephone services will have had more experience with long-distance telephone service, i.e., adopters will be heavier users of long-distance than nonadoPters. Hypothesis three is based upon the finding of Zaltman and Stiff (1973) that the amount of experience a consumer has with a product category positively affects the rate of adoption and Taylor's (1977) finding that innovative behavior is very dependent on product class use. METHODOLOGY The universe for the research was limited to a large Southern metropolitan area. Since, at the time the -research was conducted, the incidence of subscription to an alternative residential long-distance telephone service was relatively low, a random sample of residences would have had to be very large in order to locate an adequate number of adopters for meaningful analysis. Therefore, instead of obtaining a single large random sample, cooperation was secured from two alternative long-distance suppliers who furnished random samples of their subscribers. Utilization of these lists insured an adequate number of adopters for meaningful analysis. In addition, a mailing list of telephone-owning households was purchased. The supplier constructed the mailing list in the following manner. First, the relative population by zip code area was determined. The proportion of questionnaires mailed to each zip code was the same as that zip code's proportion of the total population. Then a random sample was selected for each zip code. The mailing list served both as a measure of the rate of adoption and as a source for locating nonadopters. The approach was similar to LaBay and Kinnear (1981) and Dickerson and Gentry (1983). An equal number of questionnaires was mailed to each group (1,000 to the mailing list and 1,000 to the subscriber listsC500 to each company's subscribers). A reminder postcard was mailed one week after the original mailing. The four-page questionnaire contained an introductory section which included awareness and experience variables, a psychographic section and a demographic section. A summary of the specific variables is shown in Table 1. Standard demographics were used and need no further elaboration. The psychographic variables are described below. SUMMARY OF VARIABLES USED IN THE STUDY INDEPENDENT VARIABLES Psychographic Variables Respondents were asked to use a five point Likert agree-disagree scale to rate themselves on 43 lifestyle statements. The majority of these statements were taken from the Wells and Tigert (1971) study. The remaining statements were directly related to telephone usage and had been included in previous research (Spiers 1975). Inclusion of the telephone related statements is based upon Ostlund's (1974) findings that product perceptions are better predictors of adoption than personal variables. An alpha factor analysis of all 43 items was completed. Following Hair and others (1979), items with factor loading of .30 or higher on a factor and less than .30 on other factors were used for factor construction. The resulting factors closely correspond to those developed by Wells and Tigert (1971). Some minor differences, however, were found. For example, one statement failed to load on each of two expected factors and two statements failed to load on each of two other expected factors. The telephone related statements formed two factors. Coefficient alpha was used to test the internal consistency of the factor items. These are shown in Table 1. The range of coefficient alphas for the factors are somewhat low (.49 to .78) but within the range of acceptability suggested by Nunnally (1967) for basic research and relatively comparable to ranges found in other studies that have used lifestyle measures. The range compares very favorably with the .28 to .81 reported by Dickerson and Gentry (1983). Further, the range is comparable to the .52 to .83 and .55 to .89 split-half reliabilities reported by Darden and Perreault (1976) and Darden and Reynolds (1974). The internal consistency of each of the telephone rated factors was relatively low: .50 for "convenience prone" and .60 for "heavy telephone user." Further, each of the factors consists of only two items. (Convenience prone: "I prefer push-button phones even if they are more expensive," and "I prefer to have several phones in my house for convenience;" Heavy telephone user: "I probably make more long-distance calls than most people I know," and "I spend a lot of time talking on the phone.") Additional development of these concepts is needed in future research. RESULTS Of the 1,000 questionnaires mailed to the alternative long-distance subscribers, 429 were completed and returned, yielding a response rate of 42.9 percent; 303 of the 1,000 questionnaires mailed to the purchased mailing list were completed and returned, yielding a 30.3 percent response rate. The overall response rate was 36.6 percent, yielding 732 usable questionnaires. Since, for reasons of security, the cooperating long-distance suppliers would not release the names of their subscribers to the researchers, it was not possible to investigate non-response bias. Non-response bias has been investigated in similar studies (LaBay and Kinnear 1981; Dickerson and Gentry 1983; Ziethaml, Parasuraman and Berry 1985) and there were no statistically significant differences in the demographics of total respondents and non-respondents or in sub-cells of respondents/non-respondents in any of these reported studies. Consequently, there is little, if any, reason to expect that non-response bias would significantly affect the findings from this study. Adopters of alternative residential long-distance telephone services were defined as those who reported current usage of any company other than American Telephone and Telegraph (AT&T) as either their primary or secondary supplier of long-distance telephone service. Fifty-seven of the respondents from the purchased mailing list were classified as adopters and 24 of the respondents from the subscribers' lists were classified as nonadopters. Nineteen percent of the respondents from the mailing list were adopters, which is about the same as the estimated rate of adoption at that time as reported in the local press (Brennen 1985). The demographic profiles of adopters and non-adopters are shown in Table 2. Hypothesis 1. Hypothesis one stated that adopters of alternative long-distance telephone services are more likely to be younger, be a member of a dual income family, have higher incomes and more education. A stepwise, Wilks discriminant analysis (in which the variable that maximizes the F ratio also minimizes Wilks lambda, a measure of group discrimination) was completed to investigate differences between adopters and nonadopters of the service. (long-distance telephone usage was included in the analysis). The total sample was divided into an analysis subgroup of 425 respondents and a holdout group of 307 respondents. The discriminant function is validated by estimating the function on half of the sample and then applying the function to the hold-out sample. The discriminant function discriminated significantly between the two adopter groups (x2 = 61.6, 4df, p = .0000). The standardized discriminant function is: D = .83 monthly 1.d. telephone expenditure - .33 age + .27 education + .21 dual income of family DISTRIBUTION OF DEMOGRAPHIC CHARACTERISTICS OF THE SAMPLE The analysis correctly identified 69.1 percent of the analysis group and 68.5 percent of the holdout group. The hypothesis was partially supported. Adopters were younger, had more education, and were more likely to be a member of a dual income family. However, there was no significant difference in the income of adopters and non-adopters. Hypothesis 2. Hypothesis Two stated that adopters of alternative long-distance telephone services would more likely be described as price conscious shoppers, fashion conscious, community concerned, new brand tries, heavy telephone users and convenience prone. The psychographic factors did significantly discriminate between adopters and nonadopters of the services. (X2 = 66.6, 8df, p = .0000). The standardized discriminant function is: D = .48 price conscious shopper - .34 community concerned - .20 fashion conscious - .29 new brand trier + .18 housework enthusiast + .57 convenience prone + .79 heavy telephone user - .18 information seeker. The analysis correctly identified 68 percent of the analysis group and 69 percent of the holdout group. The hypothesis was partially supported. Adopters were price conscious shoppers, convenience prone, heavy telephone users, but also household enthusiast. However, community concerned, fashion conscious, and new brand triers were not descriptors of adopters, nor was information seeker. The failure of "new brand trier" to describe adopters of the service is surprising and contrary to the findings from most studies of adoption. Perhaps the propensity of a consumer to try new physical products does not translate to a propensity to try new service products. Credit usage, self-confidence, social interaction (homebody), and opinion leadership did not significantly discriminate between adopters and nonadopters of the long-distance telephone services. Hypothesis 3. Hypothesis Three stated that adopters of alternative long-distance telephone services will have had more experience, i.e., be heavier users of long-distance than nonadopters. Monthly long-distance telephone expenditure was taken as a measure of this dimension and, as noted above, was included with the demographic characteristics in that discriminant analysis. The hypothesis was supported. SUMMARY AND IMPLICATIONS The profile of the adopter of a service innovation, alternative residential long-distance telephone services, was investigated in this study. To a large extent, the adopter profile is similar to that of the adopters of a number of other innovations demographically adopters were younger and better educated. However, there was no significant difference in the incomes of adopters and nonadopters. Dual income family, not a demographic characteristic commonly included in other studies of the adoption process, was found to be significant in the adoption of the services. In terms of lifestyle, the psychographic factors that were found to be significant predictors of adoption were price conscious shoppers, heavy telephone users, convenience prone, and housework enthusiasts. Adopters were not community concerned, fashion conscious, new brand triers, nor information seekers. "New brand trier" has usually been found to be a description of adopters. Its failure to describe adopters of these services is both surprising and perplexing. Perhaps one's propensity to try new physical goods and new service products differs. Additional research is needed to explore this area. As suggested by previous research (Dickerson and Gentry 1983; Hirschman 1980a; 198Ob; Taylor 1977; Zaltman and Stiff 1973), product class experience played an integral role in the adoption of residential alternative long-distance telephone services. Monthly expenditure for long-distance telephone calls was the most significant variable in discriminating between adopters and nonadopters of the services. The study was limited to one service product and, consequently, the findings are directly relevant only to that product category. However, Lovelock (1983) has suggested that there are some characteristics of services that transcend industry boundaries and that affect the way marketing is practiced. By recognizing which characteristics their own services share with other services, marketing managers may look beyond their immediate competitors for new insights into how to resolve the problems they face. Then, following Lovelock, the findings are potentially relevant to the marketing of future service innovations that are similar to residential alternative long-distance telephone services. Finally, the findings tend to lend support to a hypothesis that the adoption of physical products and service products is similar. However, much additional research into the adoption of service innovations is needed in order to test such a hypothesis. Such research should address the suggestions of Gatignon and Robertson (1985) and consider interactions among diffusion constructs as well as marketing and competitive initiatives. 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Authors
William E. Warren, Northeast Louisiana University
C. L. Abercrombie, Memphis State University
Robert L. Berl, Memphis State University
Volume
NA - Advances in Consumer Research Volume 15 | 1988
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