Consumer Behavior, SCHIFFMAN & KANUK

DIFFUSION OF INNOVATION
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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.

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What is Opinion Leadership?

Opinion Leader Opinion Receiver

Opinion Seeker

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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.
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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
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Chat Rooms and Opinion Leadership

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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
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 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
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Yahoos Buzz Index

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Figure : Factors Leading to Negative Word-of-Mouth Behavior

Individual Factors Attitudinal Factors Product Involvement + + + Negative WOM Likelihood of Repurchase

Situational Factors +

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Motivations Behind Opinion Leadership

The Needs of Opinion Leaders The Needs of Opinion Receivers Purchase Pals Surrogate Buyers versus Opinion Leaders

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The Needs of Opinion Leaders

Self involvement Social involvement Product involvement Message involvement

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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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Table : 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 OPINION RECEIVERS Reduce the risk of making a purchase commitment Reduce search time

Learn how to use or consume a product

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Measurement of Opinion Leadership

Self-Designating Method Socio metric Method Key Informant Method Objective Method

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Table : 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?

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Table : continued
OPINION LEADERSHIP MEASUREMENT METHOD DESCRIPTION OF METHOD SAMPLE QUESTIONS ASKED

KEY INFORMANT METHOD

Carefully selected key informants in a social system are asked to designate opinion leaders.

Who are the most influential people in the group?

OBJECTIVE METHOD

Artificially places individuals in a Have you tried the position to act as opinion leaders and product? measures results of their efforts.

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Table : Profile of Opinion Leaders

GENERALIZED ATTRIBUTES ACROSS PRODUCT CATEGORIES Innovativeness Willingness to talk Self-confidence Gregariousness Cognitive differentiation CATEGORY-SPECIFIC ATTRIBUTES Interest Knowledge Special-interest media exposure Same age Same social status Social exposure outside group

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Market 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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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.

Multi-step Flow
A revision of the traditional two-step theory that shows multiple communication flows
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Figure : Two-Step Flow of Communication Theory

Step 1 Mass Media Mass Media Opinion Opinion Leaders Leaders Step 2 Opinion Opinion Receivers Receivers (the masses) (the masses)

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Figure : Multistep Flow of Communication Theory

Step 2 Step 1a

Mass Media

Opinion Leaders

Step 3

Opinion Receivers/ Seekers

Step 1b

Information Receivers

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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

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Diffusion Process

The process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.

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Adoption 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

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Product-Oriented Definitions
Continuous Innovation Dynamically Continuous Innovation Discontinuous Innovation
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Figure Continuous Innovation

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Figure : Telephone Innovations

Discontinuous Innovations Dynamically Continuous Innovations
Telephone answering machines Call forwarding Call waiting Caller ID Banking by telephone Call-prompting systems Ability to send/receive email Incorporate PDA functions Calendar/Phonebook Voice-activated dialing Fax modem Mobile fax machines Home office systems (combined fax, copier, computer printer)

Continuous Innovations
Hold button Line-in-use indicator Redial button Auto dialing feature Touch-tone service 800 Numbers 900 Numbers Switch from analog to digital Include camera Ringer styles Play games Plain paper fax Speed dial buttons Delayed send Copy function Paper cutter

Telephone

Cell Phone

Fax Machine
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Product Characteristics That Influence Diffusion

Relative Advantage Compatibility Complexity Trial ability Observability

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Figure : Ad Stressing Ease of Use and Convenience

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Table : Characteristics That Influence Diffusion

CHARACTERISTICS EXAMPLES

Relative Advantage Compatibility

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

Complexity
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Table : continued
CHARACTERISTICS EXAMPLES

Trial ability

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

Observability

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Time and Diffusion

Purchase Time Adopter Categories Rate of Adoption

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Adopter Categories

A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters.

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Figure : Adopter Categories

Early Adopters 13.5% Innovators 2.5%

Laggards Early Majority 34% Late Majority 34% 16%

Percentage of Adopters by Category Sequence

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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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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

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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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Table : Stages in Adoption Process

WHAT HAPPENS NAME OF EXAMPLE DURING THIS STAGE STAGE Consumer is first exposed Janet sees an ad for a new MP3 player in Awareness to the product innovation. the magazine she is reading. Consumer is interested in the product and searches for additional information. Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of mental trial. Janet reads about the MP3 player on the manufacturers Web site and then goes to an electronics store near her apartment and has a salesperson show her a unit. 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 units size is small enough to easily fit into her beltpack.

Interest

Evaluation

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Table : Stages in Adoption Process

NAME OF STAGE WHAT HAPPENS DURING THIS STAGE EXAMPLE

Trial

Consumer uses the Since an MP3 player cannot be tried like product on a limited basis 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.

Adoption (Rejection)

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Figure : An Enhanced Adoption Process Model

Rejection Discontinuation or Rejection Evaluation

Pre-existing problem or Need

Awareness

Interest

Evaluation

Trial

Adoption or Rejection

Adoption or Rejection

Postadoption or Postpurchase Evaluation

Discontinuation
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Figure : The Relative Importance of Different Types of Information Sources in the Adoption Process
High Personal and interpersonal sources Importance Impersonal mass-media sources Low Evaluation Awareness Interest Adoption Trial

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Issues in Profiling Consumer Innovators

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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?

Figure : Ad Appeals to Fashion Innovators

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