1. Consumer Influence and the Diffusion of Innovations
Chapter 15
Consumer Influence and the Diffusion of Innovations

2. 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.

3. What is Opinion Leadership?
Opinion Receiver
Opinion Seeker

4. Opinion Leader
A person who informally gives product information and advice to others.

5. Opinion Seeker
An individual who either actively seeks product information from others or receives unsolicited information.

6. The person who receives an opinion offered by another person.
Opinion Receiver
The person who receives an opinion offered by another person.

7. 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

8. Motivations Behind Opinion Leadership
The Needs of Opinion Leaders
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
Purchase Pals
Surrogate Buyers Versus Opinion Leaders

9. Table 15.1 A Comparison of the Motivations of Opinion Leaders and Opinion Receivers
SELF-IMPROVEMENT MOTIVATIONS
Reduce postpurchase uncertainty or dissonance
Gain attention or status
Assert superiority and expertise
Feel like an adventurer
Experience the power of “converting” others
Reduce the risk of making a purchase commitment
Reduce search time
PRODUCT-INVOLVEMENT MOTIVATIONS
Express satisfaction or dissatisfaction with a product or service
Learn what products are new in the marketplace
Learn how to use or consume a product

10. Table 15.1 continued OPINION LEADERS OPINION RECEIVERS
SOCIAL-INVOLVEMENT MOTIVATIONS
Express neighborliness and friendship by discussing products or services that may be useful to others
Buy products that have the approval of others, thereby ensuring acceptance
MESSAGE-INVOLVEMENT MOTIVATIONS
Express one’s reaction to a stimulating advertisement by telling others about it

11. Table 15.2 Key Differences Between Opinion Leaders and Surrogate Buyers
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 ad screening o 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

12. Table 15.2 Key Differences Between Opinion Leaders and Surrogate Buyers
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

13. Measurement of Opinion Leadership
Self-Designating Method
Sociometric Method
Key Informant Method
Objective Method

14. Figure 15.1 Self-Designating Questions for Measuring Opinion Leadership
SINGLE-QUESTION APPROACH:
1. In the last 6 months have you been asked your advice or opinion about golf equipment?
Yes___ No___
MULTIPLE-QUESTION APPROACH:
(Measured on a 5-point bipolar “Agree/Disagree” scale)
1. Friends and neighbors frequently ask my advice about golf equipment.
2. I sometimes influence the types of golf equipment friends buy.
3. My friends come to me more often than I go to them about golf equipment.
4. I feel that I am generally regarded by my friends as a good source of advice about golf equipment.
5. I can think of at least three people whom I have spoken to about golf equipment in the past six months.

15. SAMPLE QUESTIONS ASKED
Table Methods of Measuring Opinion Leadership: Advantages and Limitations
OPINION LEADERSHIP MEASUREMENT METHOD
DESCRIPTION OF METHOD
SAMPLE QUESTIONS ASKED
ADVANTAGES
LIMITATIONS
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?”
Measures the individual’s own perceptions of his or her opinion leadership.
Depends on the objectivity with which respondents can identify and report their personal influence.

16. SAMPLE QUESTIONS ASKED
Table continued
OPINION LEADERSHIP MEASUREMENT METHOD
DESCRIPTION OF METHOD
SAMPLE QUESTIONS ASKED
ADVANTAGES
LIMITATIONS
SOCIOMETRIC METHOD
Members of a social system are asked to identify to whom they give advice and to whom they go for advice and information about a product category.
“Whom do you ask?”
“Who asks you for information about that product category?”
Sociometric questions have the greatest degree of validity and are easy to administer.
It is very costly and analysis often is very complex. Requires a large number of respondents. Not suitable for sample design where only a portion of the social system is interviewed.

17. SAMPLE QUESTIONS ASKED
Table continued
OPINION LEADERSHIP MEASUREMENT METHOD
DESCRIPTION OF METHOD
SAMPLE QUESTIONS ASKED
ADVANTAGES
LIMITATIONS
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?”
Relatively inexpensive and less time consuming than the sociometric method.
Informants who are not thoroughly familiar with the social system are likely to provide invalid information.

18. SAMPLE QUESTIONS ASKED
Table continued
OPINION LEADERSHIP MEASUREMENT METHOD
DESCRIPTION OF METHOD
SAMPLE QUESTIONS ASKED
ADVANTAGES
LIMITATIONS
OBJECTIVE METHOD
Artificially places individuals in a position to act as opinion leaders and measures results of their efforts.
“Have you tried the product?
Measures individual’s ability to influence others under controlled circumstances.
Requires the establishment of an experimental design and the tracking of the resulting impact on the participants.

19. Table 15.4 Profile of Opinion Leaders
GENERALIZED ATTRIBTES ACROSS PRODUCT CATEGORIES
CATEGORY-SPECIFIC ATTRIUTES
Innovativeness
Willingness to talk
Self-confidence
Gregariousness
Cognitive differentiation
Interest
Knowledge
Special-interest media exposure
Same age
Same social status
Social exposure outside group

20. Table 15.5 Car and Driver Research Supporting Subscribers Are Opinion Leaders
AREA OF OPINION LEADERSHIP
GIVEN ADVICE PAST 12 MONTHS
AVERAGE NO. OF PEOPLE ADVISED*
AVERAGE NO. WHO FOLLOWED SUBSCRIBERS’ ADVICE
AVERAGE NO. WHO SUBSEQUENTLY BOUGHT*
Gave advice in past year
69%
Passenger car
53%
7.8
2.7
3.2
Pickups, SUVs, Vans
31%
4.5
1.2
1.5
Automotive parts
24%
20.5
17.2
18.3

21. Table 15.5 continued Maintenance/appearance products 28% 18.2 14.8
AREA OF OPINION LEADERSHIP
GIVEN ADVICE PAST 12 MONTHS
AVERAGE NO. OF PEOPLE ADVISED*
AVERAGE NO. WHO FOLLOWED SUBSCRIBERS’ ADVICE
AVERAGE NO. WHO SUBSEQUENTLY BOUGHT*
Maintenance/appearance products
28%
18.2
14.8
15.8
Tires
32%
8.3
6.7 70
Auto sound equipment
17%
8.2
3.7
4.0
Other electronic accessories
24%
6.2
3.1
3.4
*Among those who gave advice (i.e., 69%). Base: Total subscribers (multiple responses).

22. Market Maven
Individuals whose influence stems from a general knowledge or market expertise that leads to an early awareness of new products and services.

23. The Interpersonal Flow of Communication
Two-Step Flow
Views opinion leader as a middleman between the impersonal mass media and the majority of society
Multistep Flow
Takes into account the fact that information and influence often are two-way processes

24. Flow of Communication Theory
Two-Step
Flow of Communication Theory
A communication model that portrays opinion leaders as direct receivers of information from mass media sources who, in turn, interpret and transmit this information.

25. Figure 15.2 Two-Step Flow of Communication Theory
Mass Media
Opinion Leaders
Opinion Receivers (the masses)
Step 1
Step 2

26. Flow of Communication Theory
Multistep
Flow of Communication Theory
A revision of the traditional two-step theory that shows multiple communication flows: from the mass media simultaneously to opinion leaders, opinion receivers, and information receivers; from opinion leaders to opinion receivers; and from opinion receivers to opinion leaders.

27. Figure 15.3 Multistep Flow of Communication Theory
Mass Media
Opinion Leaders
Opinion Receiver/ Seekers
Step 1a
Step 3
Step 1b
Information Receivers

28. Issues In Opinion Leadership and Marketing Strategy
Programs Designed to Stimulate Opinion Leadership
Advertisements Simulating Opinion Leadership
Word of Mouth May Be Uncontrollable
Creation of Opinion Leaders

29. 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.

30. 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. The five stags of the traditional adoption process are awareness, interest, evaluation, trial, and adoption.

31. Elements of the Diffusion Process
The Innovation
The Channels of Communication
The Social System
Time

32. Defining Innovations Firm-oriented definitions
Product-oriented definitions
Market-oriented definitions
Consumer-oriented definitions

33. Product-Oriented Definitions
Continuous Innovation
Dynamically Continuous Innovation
Discontinuous Innovation

34. Continuous Innovation
A new product entry that is an improved or modified version of an existing product rather than a totally new product. A continuous innovation has the least disruptive influence on established consumption patterns.

35. Dynamically Continuous Innovation
A new product entry that is sufficiently innovative to have some disruptive effects on established consumption practices.

36. Discontinuous Innovation
A dramatically new product entry that requires the establishment of new consumption practices.

37. Figure 15.5 The Telephone Has Led to Related Innovations
Discontinuous
Innovations
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
Telephone
Nationwide paging service
Stock market quotation devices
Sports scores delivery
Two-way paging
Pager watch
Silent alert
Message displays
Build-in alarm clock
Interchangeable fashion color cases
Pager
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
Fax Machine

38. Product Characteristics That Influence Diffusion
Relative Advantage
Compatibility
Complexity
Trialability
Observability

39. Table 15.6 Product Characteristics That Influence Diffusion
DEFINITION
EXAMPLES
Relative Advantage
The degree to which potential consumers perceive a new product as superior to existing substitutes
Air travel over train travel, cordless phones over corded telephones
Compatibility
The degree to which potential consumers feel a new product is consistent with their present needs, values, and practices
Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape to make recordings
Complexity
The degree to which a new product is difficult to understand or use
Products low in complexity include frozen TV dinners, electric shavers, instant puddings

40. Table 15.6 continued CHARACTERISTICS DEFINITION EXAMPLES Trialability
The degree to which a new product is capable of being tried on a limited basis
Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons
Observability
The degree to which a product’s benefits or attributes can be observed, imagined, or described to potential customers
Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses

41. Table 15.7 Barriers to Diffusion of an Innovation--On-Line Banking
TYPES OF BARRIERS
DEFINTIONS AND EXAMPLES
FUNCTIONAL BARRIERS
Usage
Initial use requires a great deal of consumer learning
Continuing use requires total commitment of system
Partial or inconsistent use results in incorrect account balances
Value barriers
Requires purchase of software and supplies
Generally has additional monthly fee
Risk barriers
Performance risk is high
Economic risk is moderate
Social risk is low
PSYCHOLOGICAL BARRIERS
Traditional barriers
Not the way the consumer is accustomed to paying bills, etc.
Image barriers
Negative (“hard to use”) image of personal computers in general and on-line banking in particular

42. Time and Diffusion
Purchase Time
Adopter Categories
Rate of Adoption

43. Table 15.8 Time Line for Selecting a New Large-Screen TV Set
WEEK
PRECIPITATING SITUATIONS/FACTORS
Current family room 19-inch TV set works fine but is 10 years old and cannot access a number of the cable channels. The wife has recently purchased a new sofa and new carpeting for the family room, and she and her husband have spoken about possibly having a cabinet built for the wall opposite the sofa that would contain the TV, stereo, tape deck, CD player, and VCR. Several friends have purchased large-screen TVs and have turned their family rooms into home entertainment centers. Couple decides, therefore, to also look at projection TVs.
DECISION PROCESS BEGINS
1-4
Consumer senses a need to learn more about the features and availability of large-screen TVs, both those with conventional tubes and projection TVs.

44. Table 15.8 continued WEEK THE TV IS OUT OF MIND 5-8
The transmission in the older of the couple’s two cars, a 1987 Honda, begins to shift erratically. Because of the expense of this repair (the transmission had to be replaced), the hunt for a new TV is put on the back burner.
INTEREST IS RETRIGGERED 9
The wife reads a article in one of the magazines hat she periodically buys at the supermarket about a family that purchased a Zenith 52-inch projection TV for their family room and created a home entertainment center. She shows the article to her husband.
CONSUMER ACQUIRES A MENTOR (OPINION LEADER)
The husband asks a neighbor to serve as a mentor (opinion leader) with regard to home entertainment centers. He agrees.

45. Table 15.8 continued WEEK FEATURES AND BRAND OPTIONS ARE REVIEWED 10
With the advice of the mentor, the decision is made to use a projection TV in the 46- to 50-inch range as the nucleus of the home entertainment center. The couple visits several department store and appliance store TV departments and narrows down the choices to projection units from Pioneer, Sony, and Zenith.
OBTAINING MORE FOCUSED INFO ABOUT OPTIONS
11-12
The toll-free 800 numbers of the three TV manufacturers (which were featured in ads) are called to request additional detailed information (brochures and booklets).

46. Table 15.8 continued WEEK PERIOD OF SELF-STUDY 13-14
After reading the brochures and discussing the pros and cons of the alternatives with their mentor (comparing models with regard to features such as picture-in-picture and surround sound capability), a decision is made.
The 46-inch Sony is selected because of a magazine review that give it very high marks in terms of its screen brightness and sharpness, and because it offered colored picture-in-picture.
ORDERING THE TV
Sunday’s newspaper contains an advertisement from a local appliance store chain stating that any projection TV purchased within the next week can be paid for with 6 monthly payments, at no interest charge--the first payment beginning 6 months after the TV is installed. The couple decides to drive to the store and talk to a salesperson about the deal. When the salesperson agrees to lower the price of the Sony 46-inch set to match the lowest price the couple had been quoted, they decide to make the purchase. The TV arrives in the appliance dealer’s truck and is installed in the couple’s family room.

47. Adopter Categories
A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters. The five typical adopter categories are innovators, early adopters, early majority, late majority, and laggards.

48. Figure 15.10 Adopter Categories
Early
Adopters
13.5%
Laggards
16%
Early
Majority
34%
Late
Majority
34%
Innovators
2.5%
Percentage of Adopters by Category Sequence

49. 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

50. 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

51. Early Majority: Description
34.0% of population
Deliberate
Adopt new ideas just prior to the average time
Seldom hold leadership positions
Deliberate for some time before adopting

52. 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

53. 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

54. Table 15.10 The Importance of Time in the Diffusion Process
TYPE OF TIME
MEANING
EXAMPLES
Purchase time
Time between awareness and purchase
I you look at your car’s gas gauge and it reads “empty,” you stop at the next gas station you come to. If you’re shopping or an additional VCR for your home, you may take quite a while to make a purchase, as long as your present VCR is working properly.
Adopter categories
A classification scheme that indicates where a consumer stands, in relation to others, when adopting a new product.
Innovators are the first to adopt a new product, and laggards are the last.

55. Table 15.10 continued TYPE OF TIME MEANING EXAMPLES Rate of adoption
How long it takes a new product or service to be adopted by members of a social system
Black-and-white TVs were adopted by consumers much more quickly than their manufacturers had envisioned; in contrast, trash compactors have never been widely adopted

56. Table 15.11 The Stages in the Adoption Process
NAME OF STAGE
WHAT HAPPENS DURING THIS STAGE
EXAMPLE
Awareness
Consumer is first exposed to the product innovation.
David sees an ad for a new digital camera in the newspaper.
Interest
Consumer is interested in the product and searches for additional information.
David reads about the camera on the manufacturer’s Web site, ad then goes to a camera store near his office and has a salesman show him the camera.
Evaluation
Consumer decides whether or not to believe that this product or service will satisfy the need--a kind of “mental trial.”
After talking with a knowledgeable friend, David decides that his camera should be able to provide him with the photos he needs to use in PowerPoint presentations. He also likes the fact that it uses “standard” floppy disks for storage.

57. Table 15.11 The Stages in the Adoption Process
NAME OF STAGE
WHAT HAPPENS DURING THIS STAGE
EXAMPLE
Trial
Consumer uses the product on a limited basis
Since camera cannot be “tried” like a small bottle of a new shampoo, David buys the camera from a dealer offering a 14-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 o reject it.
David finds that the camera is easy to use and the results are excellent; consequently, he keeps the digital camera.

58. Figure 15.11 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

59. 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
Trial
Interest
Awareness
Adoption
Evaluation

60. 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?

61. Figure 15.13 The Innovator Buying Cycle
EMBRACING INNOVATIONS
Chasing the Advances
Innovation Fascination
INNOVATION SATIATION
Product Accumulation in the Closet
Cumulative Innovation Disappointment
Pace of Innovation Slows Down
INNOVATOR NO MORE
What I’ve Got is Good Enough Now
Innovator Becomes Extremely Cautious, Careful Buyer
Moving On

62. Table 15.12 Comparative Profiles of the Consumer Innovator and the Noninnovator or Later Adopter
CHARACTERISTIC
INNOVATOR
NONINNOVATOR
(OR LATE ADOPTER)
Product interest
More
Less
Opinion Leadership
More
Less
Personality
Dogmatism
Open-minded
Closed-minded
Need for uniqueness
Higher
Lower
Social character
Inner-directed
Other-directed
Optimum stimulation level
Higher
Lower
Variety seeking
Higher
Lower
Perceived risk
Less
More
Venturesomeness
More
Less

63. Table 15.12 continued CHARACTERISTIC INNOVATOR NONINNOVATOR
(OR LATE ADOPTER)
Purchase & Consumption Traits
Brand Loyalty
Less
More
Deal proneness
More
Less
Usage
More
Less
Media Habits
Total magazine exposure
More
Less
Special-interest magazines
More
Less
Television
Less
More

64. Table 15.12 continued CHARACTERISTIC INNOVATOR NONINNOVATOR
(OR LATE ADOPTER)
Social Characteristics
Social integration
More
Less
Social striving
More
Less
Group Memberships
More
Less
Demographic Characteristics
Age
Younger
Older
Income
Higher
Lower
Education
More
Less
Occupational status
Higher
Lower