Consumer Behavior, Eighth Edition SCHIFFMAN & KANUK Chapter 15 The Consumer’s DecisionMaking Process 15-1 Opinion Leadership 15-2 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. What is Opinion Leadership? Opinion Leader Opinion Receiver Opinion Seeker 15-3 Examples of Opinion Leadership • During a coffee break, a co-worker talks about the movie he saw last night and recommends seeing it. • A person shows a friend photographs of his recent Australian Outback vacation and the friend suggests that using a polarizing filter might produce better pictures. 15-4 Special Issues • 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 15-5 Chat Rooms and Opinion Leadership 15-6 Reasons for the Effectiveness of Opinion Leadership • Credibility • Positive and Negative Product Information • Information and Advice • Opinion Leadership Is CategorySpecific • Opinion Leadership Is a Two-way Street 15-7 • Buzz Marketing • Wildfire Marketing • Avalanche Marketing Viral Marketing These terms describe any strategy that encourages individuals to pass on a marketing message to others; The marriage of email and word-of-mouth communication 15-8 Yahoo’s Buzz Index 15-9 Figure 15.1 Factors Leading to Negative Word-of-Mouth Behavior Individual Factors Attitudinal Factors Product Involvement + + + Situational Factors + 15-10 Negative WOM - Likelihood of Repurchase Figure 15.2 Word-of-Mouth in Action Financial Services % of Automotive respondents that used Travel a referral to make one Consumer Electronics of these purchases Computer over the past year Restaurants 0% 15-11 20% 40% 60% 80% Motivations Behind Opinion Leadership • • • • The Needs of Opinion Leaders The Needs of Opinion Receivers Purchase Pals Surrogate Buyers versus Opinion Leaders 15-12 The Needs of Opinion Leaders • • • • 15-13 Self involvement Social involvement Product involvement Message involvement 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 15-14 Table 15.3 A Comparison of Motivations (Excerpts) OPINION LEADERS SELF-IMPROVEMENT MOTIVATIONS • Reduce post-purchase uncertainty or dissonance • Gain attention or status • Assert superiority and expertise • Feel like an adventurer PRODUCT-INVOLVEMENT MOTIVATIONS • Express satisfaction or dissatisfaction with a product or service • Learn what products are new in the marketplace 15-15 OPINION RECEIVERS • Reduce the risk of making a purchase commitment • Reduce search time • Learn how to use or consume a product Table 15.4 Key Differences Between Opinion Leaders and Surrogate Buyers OPINION LEADER 1. Informal relationship with end-users 2. Information exchange occurs in the context of a casual interaction 3. Homophilous (to a certain extent) to end-users 4. Does not get paid for advice 5. Usually socially more active than end-users 6. Accountability limited regarding the outcome of advice 7. As accountability limited, rigor in search and screening of alternatives low 8. Likely to have used the product personally 9. More than one can be consulted before making a final decision 10. Same person can be an opinion leader for a variety of related product categories 15-16 Table 15.4 Key Differences SURROGATE BUYER 1. Formal relationship; occupation-related status 2. Information exchange in the form of formal instructions/advice 3. Heterophilus to end users (that is, is the source of power) 4. Usually hired, therefore gets paid 5. Not necessarily socially more active than end-users 6. High level of accountability 7. Search and screening of alternatives more rigorous 8. May not have used the product for personal consumption 9. Second opinion taken on rare occasions 10. Usually specializes for a specific product/service category 15-17 Measurement of Opinion Leadership • Self-Designating Method • Sociometric Method • Key Informant Method • Objective Method 15-18 Table 15.5 Measuring Opinion Leadership OPINION LEADERSHIP MEASUREMENT METHOD DESCRIPTION OF METHOD SAMPLE QUESTIONS ASKED SELF-DESIGNATING METHOD 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. “Do you influence other people in their selection of products?” 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?” 15-19 Table 15.5 continued OPINION LEADERSHIP MEASUREMENT METHOD DESCRIPTION OF METHOD SAMPLE QUESTIONS ASKED KEY INFORMANT METHOD Carefully selected key informants in “Who are the most a social system are asked to influential people in designate opinion leaders. the group?” OBJECTIVE METHOD Artificially places individuals in a “Have you tried the position to act as opinion leaders product? and measures results of their efforts. 15-20 Table 15.6 Profile of Opinion Leaders GENERALIZED ATTRIBUTES ACROSS PRODUCT CATEGORIES Innovativeness Willingness to talk Self-confidence Gregariousness Cognitive differentiation 15-21 CATEGORY-SPECIFIC ATTRIBUTES Interest Knowledge Special-interest media exposure Same age Same social status Social exposure outside group Market Maven 15-22 Individuals whose influence stems from a general knowledge or market expertise that leads to an early awareness of new products and services. The Interpersonal Flow of Communication • Two-Step Flow – A communication model that portrays opinion leaders as direct receivers of information from mass media sources who, in turn, interpret and transmit this information. • Multistep Flow – A revision of the traditional two-step theory that shows multiple communication flows 15-23 Figure 15.4 Two-Step Flow of Communication Theory Step 1 Mass Media 15-24 Step 2 Opinion Leaders Opinion Receivers (the masses) Figure 15.5 Multistep Flow of Communication Theory Step 2 Mass Media Step 1a Step 1b 15-25 Opinion Leaders Step 3 Opinion Receivers/ Seekers Information Receivers Issues In Opinion Leadership and Marketing Strategy • Programs Designed to Stimulate Opinion Leadership • Advertisements Stimulating Opinion Leadership • Word of Mouth May Be Uncontrollable • Creation of Opinion Leaders 15-26 15-27 Diffusion Process 15-28 The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time. Adoption Process 15-29 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. Elements of the Diffusion Process • • • • The Innovation The Channels of Communication The Social System Time 15-30 Defining Innovations • • • • Firm-oriented definitions Product-oriented definitions Market-oriented definitions Consumer-oriented definitions 15-31 Product-Oriented Definitions Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation 15-32 Figure 15.6 Continuous Innovation 15-33 Figure 15.7 Telephone Innovations Discontinuous Innovations Telephone Cell Phone Fax Machine 15-34 Dynamically Continuous Innovations Continuous Innovations Telephone answering machines Call forwarding Call waiting Caller ID Banking by telephone Call-prompting systems Hold button Line-in-use indicator Redial button Auto dialing feature Touch-tone service 800 Numbers 900 Numbers Ability to send/receive email Incorporate PDA functions Calendar/Phonebook Voice-activated dialing Switch from analog to digital Include camera Ringer styles Play games Fax modem Mobile fax machines Home office systems (combined fax, copier, computer printer) Plain paper fax Speed dial buttons Delayed send Copy function Paper cutter Product Characteristics That Influence Diffusion • • • • • 15-35 Relative Advantage Compatibility Complexity Trialability Observability Figure 15.8 Ad Stressing Ease of Use and Convenience 15-36 Table 15.7 Characteristics That Influence Diffusion CHARACTERISTICS Relative Advantage Compatibility Complexity 15-37 EXAMPLES Air travel over train travel, cordless phones over corded telephones Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape Electric shavers, instant puddings Table 15.7 continued CHARACTERISTICS Trialability Observability 15-38 EXAMPLES Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses Time and Diffusion • Purchase Time • Adopter Categories • Rate of Adoption See Table 15.8 Time Line for Selecting a New Automobile 15-39 Adopter Categories 15-40 A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters. Figure 15.9 Adopter Categories Early Adopters 13.5% Innovators 2.5% Laggards Early Majority 34% Late Majority 34% Percentage of Adopters by Category Sequence 15-41 16% 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 15-42 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 15-43 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 15-44 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 15-45 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 15-46 Table 15.11 Stages in Adoption Process WHAT HAPPENS NAME OF DURING THIS STAGE STAGE EXAMPLE Awareness Consumer 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. 15-47 Table 15.11 Stages in Adoption Process WHAT HAPPENS NAME OF DURING THIS STAGE STAGE Trial Adoption (Rejection) 15-48 EXAMPLE 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. 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. Figure 15.11 An Enhanced Adoption Process Model Discontinuation or Rejection Rejection Evaluation Pre-existing problem or Need Awareness Interest Evaluation Adoption or Rejection Discontinuation 15-49 Trial Adoption or Rejection Postadoption or Postpurchase Evaluation Figure 15.12 The Relative Importance of Different Types of Information Sources in the Adoption Process High Personal and interpersonal sources Importance Impersonal mass-media sources 15-50 Adoption Trial Evaluation Interest Awareness Low 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? 15-51 Figure 15.13 Ad Appeals to Fashion Innovators 15-52