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Consumer Influence Word-of-Mouth Communication Opinion Leadership Diffusion of Innovations
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Word-of-Mouth Communication n Discussions among consumers regarding marketplace issues. n A pattern of social communication. n Referral networks. n Spontaneous. n Negative WOM weighted more heavily by consumers than positive WOM.
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Marketing Implications of WOM n Discourage negative WOM. n Refute rumors. n Stimulate additional direct sales through WOM. n Simulate WOM in advertising.
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Opinion Leadership n WOM communication involves consumers who seek and who give information.
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How Does Opinion Leadership Work? Multistep Flow of Communication Theory Mass Media Information Receivers Opinion Receivers/ Seekers Opinion Leaders Step 1a Step 1b Step 2 Step 3
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Opinion Leaders are... n Technically competent--expert power. n Credible--unbiased opinions. n Socially active and interconnected in their communities. n Similar to other consumers--referent power. n Among the first to buy new products. n Highly involved with certain products.
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n Highly involved with messages about certain products. n Self-confident. n Differentiated from others and choose to act differently--public individuation.
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Opinion Leaders share information because they need... n To reduce perceived risks associated with their purchases. n To talk about products with which they’re highly involved. n To share what they know.
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Profile of Opinion Leaders
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Methods of Measuring Opinion Leadership n Self-designating method < Respondents’ perceptions < Most commonly used method < Subjective method
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n 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.
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n 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.
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n Objective method < Artificially places individuals in a position to act as opinion leaders and measures results of their efforts. < Controlled experiments
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Marketing Implications n Design programs using WOM. n Simulate opinion leadership/WOM in advertising. n Design products with WOM appeal. n Use opinion leaders to trial new products. n Directly market to opinion leaders.
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Diffusion of Innovations n A framework examining how consumers accept new products. n Two related processes: < Adoption < Diffusion
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What is an Innovation? n An idea, process, or invention that is new or different. Continuous Innovation Discontinuous Innovation Dynamically Continuous Innovation Product-Oriented Definition of Innovation
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Continuous Innovation n A modified or improved product. n Minor change in product benefits but no disruption of consumer behavior. n Weak category of innovation.
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Dynamically Continuous Innovation n Creation of new product or modification of an existing product. n Consumers have to alter their behaviors somewhat to use this innovation. n Moderately strong category of innovation.
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Discontinuous Innovation n Usually technological new products offering major new benefits. n Consumers must discontinue past patterns of product usage to fit the new product into their lives. n Strong category of innovation.
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Telephone Answering machines Call forwarding Call waiting Caller ID Banking by telephone Call-prompting services Hold button Line-in-use indicator Redial button Auto dialing Touch-tone phones 800 numbers 900 numbers Discontinuous Innovation Dynamically Continuous Innovations Continuous Innovations
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Adoption Process n 5-step decision process: < Awareness < Interest < Evaluation < Trial < Adoption (rejection)
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Adoption Process Model Pre-existing problem or need AwarenessInterestEvaluationTrial Adoption or Rejection Evaluation Rejection Discontinuation or rejection Postadoption or postpurchase evaluation Adoption or rejection Discontinuation
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Adopter Categories
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Innovators n 2.5% of population n Adventuresome n Open to change and the unfamiliar n Rely on their own standards or values n Seek variety; change brands frequently n Opinion leaders n Product-specific n Younger, higher incomes, higher education, higher occupational status
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Early Adopters n 13.5% of population n Interested in change and willing to take risks n More involved in social groups than innovators n Guided by group norms n Opinion leaders n Role models
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Early Majority n 34% of population n Less willing to take risks, but interested in new products n Adopt products just prior to the average adoption time n Seldom hold leadership positions n Want best possible alternative, so deliberate for some time before adopting
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Late Majority n 34% of population n Skeptical n Adopt new ideas just after the average adoption time n Innovations approached cautiously n Influenced more by advertising and other mass media information than by social groups
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Laggards n 16% of population n Traditional n Suspicious of anything new n Oriented to past n By the time they adopt, innovators may be adopting the next version of the product n Tend to be older, lower incomes
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Diffusion Process n Research shows that diffusion tends to follow an S-shape % of U.S. households using a product Year 0 50 100 1990 199520002005
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What Influences Diffusion? Social system –Generally uncontrollable by marketers n 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
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Price –Controllable by marketing n Penetration policy n Skimming policy
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Product Characteristics –Controllable by marketing n Relative advantage n Complexity n Observability n Compatibility n Trialability n Perceived risk
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