Consumer InfluenceConsumer Influence

Word-of-Mouth Communication

Opinion Leadership

Diffusion of Innovations

Word-of-Mouth CommunicationWord-of-Mouth Communication

Discussions among consumers regarding marketplace issues.

A pattern of social communication. Referral networks. Spontaneous. Negative WOM weighted more heavily

by consumers than positive WOM.

Marketing Implications of WOMMarketing Implications of WOM

Discourage negative WOM.

Refute rumors.

Stimulate additional direct sales through WOM.

Simulate WOM in advertising.

Opinion LeadershipOpinion Leadership

WOM communication involves consumers who seek and who give information.

How Does Opinion Leadership Work?How Does Opinion Leadership Work?

Multistep Flow of Communication Theory

MassMedia

InformationReceivers

OpinionReceivers/

Seekers

OpinionLeaders

Step 1a

Step 1b

Step 2

Step 3

Opinion Leaders are...Opinion Leaders are...

Technically competent--expert power. Credible--unbiased opinions. Socially active and interconnected in their

communities. Similar to other consumers--referent

power. Among the first to buy new products. Highly involved with certain products.

Highly involved with messages about certain products.

Self-confident. Differentiated from others and choose to

act differently--public individuation.

Opinion Leaders share information because they need...

Opinion Leaders share information because they need...

To reduce perceived risks associated with their purchases.

To talk about products with which they’re highly involved.

To share what they know.

Profile of Opinion LeadersProfile of Opinion Leaders

GeneralizedAttributes AcrossProduct Categories

Category-SpecificAttributes

InnovativenessWillingness to talkSelf-confidenceGregariousnessCognitivedifferentiation

InterestKnowledgeSpecial-interestmedia exposureSame ageSame social statusSocial exposure outside group

Methods of Measuring Opinion LeadershipMethods of Measuring Opinion Leadership

Self-designating methodRespondents’ perceptionsMost commonly used methodSubjective method

Sociometric methodMembers of a social system identify

opinion leaders and seekers for a product category.

Great degree of validityVery costly and complex--better

with self-contained group.

Key informant method Carefully selected informants in a social

system are asked to designate opinion leaders.

Relatively inexpensive and less time-consuming

Requires informants who are thoroughly familiar with the social system.

Objective methodArtificially places individuals in a

position to act as opinion leaders and measures results of their efforts.

Controlled experiments

Marketing ImplicationsMarketing Implications

Design programs using WOM. Simulate opinion leadership/WOM in

advertising. Design products with WOM appeal. Use opinion leaders to trial new products. Directly market to opinion leaders.

Diffusion of InnovationsDiffusion of Innovations

A framework examining how consumers accept new products.

Two related processes:AdoptionDiffusion

What is an Innovation?What is an Innovation?

An idea, process, or invention that is new or different.

Continuous Innovation

Discontinuous Innovation

Dynamically Continuous Innovation

Product-Oriented Definition of Innovation

Continuous InnovationContinuous Innovation

A modified or improved product.

Minor change in product benefits but no disruption of consumer behavior.

Weak category of innovation.

Dynamically Continuous InnovationDynamically Continuous Innovation

Creation of new product or modification of an existing product.

Consumers have to alter their behaviors somewhat to use this innovation.

Moderately strong category of innovation.

Discontinuous InnovationDiscontinuous Innovation

Usually technological new products offering major new benefits.

Consumers must discontinue past patterns of product usage to fit the new product into their lives.

Strong category of innovation.

Telephone

Answering machinesCall forwardingCall waitingCaller IDBanking by telephoneCall-prompting services

Hold buttonLine-in-use indicatorRedial buttonAuto dialingTouch-tone phones800 numbers900 numbers

Discontinuous Innovation

Dynamically Continuous Innovations

ContinuousInnovations

Adoption ProcessAdoption Process

5-step decision process:Awareness InterestEvaluationTrialAdoption (rejection)

Adoption Process ModelAdoption Process Model

Pre-existingproblem or

needAwareness Interest Evaluation Trial

Adoptionor

Rejection

Evaluation

RejectionDiscontinuation or

rejection

Postadoption orpostpurchase

evaluation

Adoption or rejection

Discontinuation

Adopter CategoriesAdopter Categories

InnovatorsInnovators

2.5% of population Adventuresome Open to change and the unfamiliar Rely on their own standards or values Seek variety; change brands frequently Opinion leaders Product-specific Younger, higher incomes, higher education,

higher occupational status

Early AdoptersEarly Adopters

13.5% of population Interested in change and willing to take

risks More involved in social groups than

innovators Guided by group norms Opinion leaders Role models

Early MajorityEarly Majority

34% of population Less willing to take risks, but interested in

new products Adopt products just prior to the average

adoption time Seldom hold leadership positions Want best possible alternative, so

deliberate for some time before adopting

Late MajorityLate Majority

34% of population Skeptical Adopt new ideas just after the average

adoption time Innovations approached cautiously Influenced more by advertising and other

mass media information than by social groups

LaggardsLaggards

16% of population Traditional Suspicious of anything new Oriented to past By the time they adopt, innovators may

be adopting the next version of the product

Tend to be older, lower incomes

Diffusion ProcessDiffusion Process

Research shows that diffusion tends to follow an S-shape

% of U.S.households

using a product

Year

0

50

100

1990 1995 2000 2005

What Influences Diffusion?What Influences Diffusion?

Social system– Generally uncontrollable by marketers

Diffusion more rapid when social system has:– Positive view of change– Positive view of education and science– Members who interact frequently with

other social systems

Price

– Controllable by marketing

Penetration policy

Skimming policy

Product Characteristics– Controllable by marketing

Relative advantage Complexity Observability Compatibility Trialability Perceived risk