Opinion Leadership Edited

Amity Business School

Consumer Behavior

Mamta Mohan


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.Strong /weak tie source


What is Opinion Leadership?

Opinion Leader

Opinion Receiver

Opinion Seeker


The Needs of Opinion Leaders

• Self involvement• Social involvement• Product involvement• Message involvement


• 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


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


Viral MarketingThe marriage of email and word-of-mouthcommunication

• Buzz Marketing/Wildfire /Avalanche Marketing

These terms describe any strategy that encourages individuals to pass on a marketing message to others;e.g. get yr free private e-mailModels hanging out side night clubs. P& G kiosks


Word-of-Mouth in Action

0% 20% 40% 60% 80%

Restaurants

Computer

Consumer Electronics

Travel

Automotive

Financial Services

% of respondentsthat used a referral to make oneof thse purchases over the past year


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


Measuring Opinion Leadership

SELF-DESIGNATING METHOD

“Do you influence other people in their selection of products?”

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.

OPINION OPINION LEADERSHIPLEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD

SAMPLE QUESTIONS SAMPLE QUESTIONS ASKEDASKED

DESCRIPTION OF METHODDESCRIPTION OF METHOD

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?”


continued

OPINION LEADERSHIP OPINION LEADERSHIP MEASUREMENT MEASUREMENT METHODMETHOD

SAMPLE QUESTIONS SAMPLE QUESTIONS ASKEDASKED

DESCRIPTION OF METHODDESCRIPTION OF METHOD

KEY INFORMANT METHOD

“Who are the most influential people in the group?”

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

Artificially places individuals in a position to act as opinion leaders and measures results of their efforts.

“Have you tried the product?

OBJECTIVE METHOD


Issues In Opinion Leadership and Marketing Strategy

• Programs Designed to Stimulate Opinion Leadership

• Advertisements Stimulating Opinion LeadershipMarket MavenMarket Maven Individuals whose influence stems from a

general knowledge or market expertise that leads to an early awareness of new products and services.


Diffusion of innovations

• Diffusion process- macro process spread of a new pdt to consuming public

• Adoption process-stages thro which the consumer passes while making the purchase decision.

• Consumer innovator categories.E.g. Gillette 40 % of the sales must come fm new

pdts introduced in last 5 yrs.HP revenues are derived fm the pdts introduced in

last 24 mths.When is pdt considered new?


Diffusion ProcessDiffusion ProcessThe process by which the acceptance of an innovation is spread by communication to members of social system over a period of time.Marketer generated info’n sources.Websites , chat roome.g i-pod


Adoption ProcessAdoption 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.


Elements of the Diffusion Process

• The Innovation• The Channels of Communication• The Social System• Time


Defining Innovations

• Firm-oriented definitions• Product-oriented definitions• Market-oriented definitions• Consumer-oriented definitions

Purchase innovativeness ( time of adoption)Use innovativeness

Amity Business SchoolTelephone Innovations

Telephone

Cell Phone

Fax Machine

Telephone answering machines

Call forwardingCall waitingCaller IDBanking by telephoneCall-prompting systems

Hold buttonLine-in-use indicatorRedial buttonAuto dialing featureTouch-tone service800 Numbers900 Numbers

Ability to send/receive emailIncorporate PDA functionsCalendar/PhonebookVoice-activated dialing

Switch from analog to digital

Include cameraRinger stylesPlay games

Fax modemMobile fax machinesHome office systems

(combined fax, copier, computer printer)

Plain paper faxSpeed dial buttonsDelayed sendCopy functionPaper cutter

Discontinuous Innovations

Dynamically ContinuousInnovations

ContinuousInnovations


Product Characteristics That Influence Diffusion

• Relative Advantage- over the existing pdt.

• Compatibility- with the existing needs, values attitudes and practices. (3m scotch pop up tapes, MACH 3 razors ,shaving creams)

• Complexity- degree of difficulty to use or understand.fear of tech’ complexity, obsolescence,social rejection, physical harm.

• Trialability- tried on a limited basis • Observability- degree to be tried on a limited basis.- pdt

can be described , communicated.Pdts may diffuse differently in diff cultures.


Table 15.7 Characteristics That Influence Diffusion

CHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLES

Relative Advantage

Air travel over train travel, cordless phones over corded telephones

Compatibility

Gillette MACH3 over disposable razors, digital telephone answering machines over machines using tape

ComplexityElectric shavers, instant puddings


continuedCHARACTERISTICSCHARACTERISTICS EXAMPLESEXAMPLES

Trialability

Trial size jars and bottles of new products, free trials of software, free samples, cents-off coupons

Observability

Clothing, such as a new Tommy Hilfiger jacket, a car, wristwatches, eyeglasses


Time and Diffusion

• Purchase Time• Adopter Categories• Rate of Adoption

Time Line for Selecting a New

Automobile


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


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


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


Adopter Categories

Innovators2.5%

EarlyAdopters

13.5%

Laggards

16%

Percentage of Adopters by Category Sequence

EarlyMajority

34%

LateMajority

34%


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


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


Stages in Adoption Process

NAME OF STAGE

WHAT HAPPENS DURING THIS

STAGEEXAMPLE

AwarenessConsumer 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.


Table 15.11 Stages in Adoption Process

Trial

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.

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 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.

NAME OF STAGE

WHAT HAPPENS DURING THIS

STAGEEXAMPLE


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?


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