Consumer Perception and the Rate of New Product Adoption in Commercial Banks in Kenya

Abstract

Many companies have built competitiveness and obtained tremendous profits through new product development. Launching new products and services on the market represents an important source of increasing the size of a business and the profits of a company (Alves, et al 2004a). Organizations that regularly innovate new products attract consumer innovators and other members of the social system to adopt the innovation (Roger, 2003). The main difference between the response of customers and product perception is that customer’s perceives the product in own way after purchasing a product at a particular price or based on previously purchased product. A customer’s likelihood of product adoption is based on their perception on the value of the product its quality and the level of satisfaction level from acquiring (Roger, 2003). It is through customer perception that customers decide as to whether to adopt a new product introduced by a company or not. Consumer perception involves trying to understand how a consumer’s feeling about a product or service influences their behavior. Positive perception leads to quick adoption while negative perception may lead to no adoption at all (Montoya-Weiss and Calantone, 1994).The study adopted a descriptive survey design and targeted all the forty four registered commercial banks in Kenya. The data was collected using questionnaires using the drop and pick later method. The questionnaires were then edited, coded and analyzed using the statistical package for data analysis (Version 20). The study concluded that there is a positive relationship between the consumer perception and new product adoption. The study also concluded that the new products of the bank respond well to the consumer needs and that the products are reliable to the consumer. The study also concluded that the banks offer assurance, and products and services as per the customers’ needs. The study also concluded that the benefits gotten from the bank products and services are real. The study also concluded that most of the consumers are willing to try out the new products. The study also concluded that the banks understand the consumer behavior and thus develops new products that are relevant, easy to use, and compatible to the customer. The study also concludes that the banks communicate with the customers on the new products. The study recommends that the banks conduct customer surveys to understand the needs of the customers and their behavior. This will be important in innovating of products that will be easily adopted by the customers since they are compatible and meet their needs. The study also recommends that the banks develop products that will be of ease to use and develop different products for its different clientele. The study also recommends that the bank carries out promotions and advertisement so as to communicate to its customers the new product developed and creates awareness for the adoption of the products.