Consumer Influence
Word-of-Mouth Communication
Opinion Leadership
Diffusion of Innovations

Word-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 WOM
 Discourage negative WOM.
 Refute rumors.
 Stimulate additional direct sales through
WOM.
 Simulate WOM in advertising.

Opinion Leadership
 WOM communication involves consumers who seek and who give information.

How Does Opinion
Leadership Work?
Multistep Flow of Communication Theory
Mass
Media
Step 1a
Opinion
Leaders
Step 2
Step 3
Opinion
Receivers/
Seekers
Step 1b
Information
Receivers

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...
 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 Leaders
Generalized
Attributes Across
Product Categories
Category-Specific
Attributes
Innovativeness
Willingness to talk
Self-confidence
Gregariousness
Cognitive differentiation
Interest
Knowledge
Special-interest media exposure
Same age
Same social status
Social exposure
outside group

Methods of Measuring
Opinion Leadership
 Self-designating method

Respondents’ perceptions
 Most commonly used method
 Subjective method

 Sociometric method
 Members of a social system identify opinion leaders and seekers for a product category.
 Great degree of validity
 Very 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 method
 Artificially places individuals in a position to act as opinion leaders and measures results of their efforts.
 Controlled experiments

Marketing 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 Innovations
 A framework examining how consumers accept new products.
 Two related processes:
 Adoption
 Diffusion

What is an Innovation?
 An idea, process, or invention that is new or different.
Continuous
Innovation
Dynamically
Continuous
Innovation
Discontinuous
Innovation
Product-Oriented Definition of Innovation

Continuous Innovation
 A modified or improved product.
 Minor change in product benefits but no disruption of consumer behavior.
 Weak category of innovation.

Dynamically 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 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.

Discontinuous
Innovation
Telephone
Dynamically Continuous
Innovations
Answering machines
Call forwarding
Call waiting
Caller ID
Banking by telephone
Call-prompting services
Continuous
Innovations
Hold button
Line-in-use indicator
Redial button
Auto dialing
Touch-tone phones
800 numbers
900 numbers

Adoption Process
 5-step decision process:
 Awareness
 Interest
 Evaluation
 Trial
 Adoption (rejection)

Adoption Process Model
Rejection
Discontinuation or rejection
Evaluation
Pre-existing problem or need
Awareness Interest Evaluation Trial
Adoption or rejection
Discontinuation
Adoption or
Rejection
Postadoption or postpurchase evaluation

Adopter Categories

Innovators
 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 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 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 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

Laggards
 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 Process
 Research shows that diffusion tends to follow an S-shape
100
% of U.S.
households using a product
50
0
1990 1995
Year
2000 2005

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