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Amity Business School
Consumer Behavior
Mamta Mohan
Amity Business School
Opinion Leadership
The process by which one person (the opinion leader) informally influences the consumption actions or attitudes of others who may be opinion seekers or opinion recipients.Strong /weak tie source
Amity Business School
What is Opinion Leadership?
Opinion Leader
Opinion Receiver
Opinion Seeker
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The Needs of Opinion Leaders
• Self involvement• Social involvement• Product involvement• Message involvement
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• Opinion leaders are four times more likely to be asked about political issues, three times more likely to be asked about computers or investments, and twice as likely to be asked about restaurants
• Information seekers seek a “strong-tie” source when they know little about a topic, and “weak-tie” sources when they have some knowledge
Amity Business School
Reasons for the Effectiveness of Opinion Leadership
• Credibility• Positive and Negative Product
Information• Information and Advice• Opinion Leadership Is Category-
Specific• Opinion Leadership Is a Two-way
Street
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Viral MarketingThe marriage of email and word-of-mouthcommunication
• Buzz Marketing/Wildfire /Avalanche Marketing
These terms describe any strategy that encourages individuals to pass on a marketing message to others;e.g. get yr free private e-mailModels hanging out side night clubs. P& G kiosks
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Word-of-Mouth in Action
0% 20% 40% 60% 80%
Restaurants
Computer
Consumer Electronics
Travel
Automotive
Financial Services
% of respondentsthat used a referral to make oneof thse purchases over the past year
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The Needs of Opinion Receivers
• New-product or new usage information• Reduction of perceived risk• Reduction of search time• Receiving the approval of the opinion leader
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Measuring Opinion Leadership
SELF-DESIGNATING METHOD
“Do you influence other people in their selection of products?”
Each respondent is asked a series of questions to determine the degree to which he or she perceives himself or herself to be an opinion leader.
OPINION OPINION LEADERSHIPLEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE QUESTIONS SAMPLE QUESTIONS ASKEDASKED
DESCRIPTION OF METHODDESCRIPTION OF METHOD
SOCIOMETRIC METHOD
Members of a social system are asked to identify to whom they give advice and to whom they go for advice.
“Whom do you ask?”“Who asks you for info about that product category?”
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continued
OPINION LEADERSHIP OPINION LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD
SAMPLE QUESTIONS SAMPLE QUESTIONS ASKEDASKED
DESCRIPTION OF METHODDESCRIPTION OF METHOD
KEY INFORMANT METHOD
“Who are the most influential people in the group?”
Carefully selected key informants in a social system are asked to designate opinion leaders.
Artificially places individuals in a position to act as opinion leaders and measures results of their efforts.
“Have you tried the product?
OBJECTIVE METHOD
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Issues In Opinion Leadership and Marketing Strategy
• Programs Designed to Stimulate Opinion Leadership
• Advertisements Stimulating Opinion LeadershipMarket MavenMarket Maven Individuals whose influence stems from a
general knowledge or market expertise that leads to an early awareness of new products and services.
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Diffusion of innovations
• Diffusion process- macro process spread of a new pdt to consuming public
• Adoption process-stages thro which the consumer passes while making the purchase decision.
• Consumer innovator categories.E.g. Gillette 40 % of the sales must come fm new
pdts introduced in last 5 yrs.HP revenues are derived fm the pdts introduced in
last 24 mths.When is pdt considered new?
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Diffusion ProcessDiffusion ProcessThe process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.Marketer generated info’n sources.Websites , chat roome.g i-pod
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Adoption ProcessAdoption Process
The stages through which an individual consumer passes in arriving at a decision to try (or not to try), to continue using (or discontinue using) a new product.
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Elements of the Diffusion Process
• The Innovation• The Channels of Communication• The Social System• Time
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Defining Innovations
• Firm-oriented definitions• Product-oriented definitions• Market-oriented definitions• Consumer-oriented definitions
Purchase innovativeness ( time of adoption)Use innovativeness
Amity Business SchoolTelephone Innovations
Telephone
Cell Phone
Fax Machine
Telephone answering machines
Call forwardingCall waitingCaller IDBanking by telephoneCall-prompting systems
Hold buttonLine-in-use indicatorRedial buttonAuto dialing featureTouch-tone service800 Numbers900 Numbers
Ability to send/receive emailIncorporate PDA functionsCalendar/PhonebookVoice-activated dialing
Switch from analog to digital
Include cameraRinger stylesPlay games
Fax modemMobile fax machinesHome office systems
(combined fax, copier, computer printer)
Plain paper faxSpeed dial buttonsDelayed sendCopy functionPaper cutter
Discontinuous Innovations
Dynamically ContinuousInnovations
ContinuousInnovations
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Product Characteristics That Influence Diffusion
• Relative Advantage- over the existing pdt.
• Compatibility- with the existing needs, values attitudes and practices. (3m scotch pop up tapes, MACH 3 razors ,shaving creams)
• Complexity- degree of difficulty to use or understand.fear of tech’ complexity, obsolescence,social rejection, physical harm.
• Trialability- tried on a limited basis • Observability- degree to be tried on a limited basis.- pdt
can be described , communicated.Pdts may diffuse differently in diff cultures.
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Table 15.7 Characteristics That Influence Diffusion
CHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLES
Relative Advantage
Air travel over train travel, cordless phones over corded telephones
Compatibility
Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape
ComplexityElectric shavers, instant puddings
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continuedCHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLES
Trialability
Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons
Observability
Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses
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Time and Diffusion
• Purchase Time• Adopter Categories• Rate of Adoption
Time Line for Selecting a New
Automobile
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Adopter CategoriesAdopter CategoriesA sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters.
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Innovators: Description
• 2.5% of population• Venturesome• Very eager to try new ideas• Acceptable if risk is daring• More cosmopolite social relationships• Communicates with other innovators
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Early Adopters: Description
• 13.5% of population• Respected• More integrated into the local social system• The persons to check with before adopting a
new idea• Category contains greatest number of
opinion leaders• Are role models
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Adopter Categories
Innovators2.5%
EarlyAdopters
13.5%
Laggards
16%
Percentage of Adopters by Category Sequence
EarlyMajority
34%
LateMajority
34%
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Late Majority: Description
• 34% of population• Skeptical• Adopt new ideas just after the average
time• Adopting may be both an economic
necessity and a reaction to peer pressures• Innovations approached cautiously
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Laggards: Description
• 16% of population• Traditional• The last people to adopt an innovation• Most “localite” in outlook• Oriented to the past• Suspicious of the new
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Stages in Adoption Process
NAME OF STAGE
WHAT HAPPENS DURING THIS
STAGEEXAMPLE
AwarenessConsumer is first exposed to the product innovation.
Janet sees an ad for a new MP3 player in the magazine she is reading.
Interest
Consumer is interested in the product and searches for additional information.
Janet reads about the MP3 player on the manufacturer’s Web site and then goes to an electronics store near her apartment and has a salesperson show her a unit.
Evaluation
Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of “mental trial.”
After talking to a knowledgeable friend, Janet decides that this MP3 player will allow her to easily download the MP3 files that she has on her computer. She also feels that the unit’s size is small enough to easily fit into her beltpack.
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Table 15.11 Stages in Adoption Process
Trial
Consumer uses the product on a limited basis
Since an MP3 player cannot be “tried” like a small tube of toothpaste, Janet buys the MP3 player online from Amazon.com, which offers a 30-day full refund policy.
Adoption (Rejection)
If trial is favorable, consumer decides to use the product on a full, rather than a limited basis--if unfavorable, the consumer decides to reject it.
Janet finds that the MP3 player is easy to use and that the sound quality is excellent. She keeps the MP3 player.
NAME OF STAGE
WHAT HAPPENS DURING THIS
STAGEEXAMPLE
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Issues in Profiling Consumer Innovators
• Defining the Consumer Innovator• Interest in the Product Category• The Innovator Is an Opinion Leader• Personality Traits• Media Habits• Social Characteristics• Demographic Characteristics• Are There Generalized Consumer Innovators?
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Early Majority: Description
• 34% of population• Deliberate• Adopt new ideas just prior to the average
time• Seldom hold leadership positions• Deliberate for some time before adopting