Consumer Influence
Diffusion of Innovation
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Opinion Leaders
- The process by which one person informally influences the consumption of others who may be opinion seekers.
What is Opinion Leader
Opinion Leader
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Opinion Seeker
Opinion Leader
A person who gives product and advice.
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Opinion Seeker
An individual actively seeks information and receives info
Opinion Receiver
The person who opinion offered per:
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Dynamics of opinion
Opinion Leaders
An Opinion Leader is Someone Knowledgeable About Products and is Taken Seriously By
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Are Often Among the First to Buy New Products
Are Similar to the Consumer in Values and Beliefs
Opinion Leaders
Are Socially Active in Their Community
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Characteristics of Opinion Leaders
Are Opinion Seekers
Key Characteristics of Opinion Leaders
Innovative Communicators
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Opinion Leadership Scale
Mass Media
TRADITIONAL MODEL
Opinion Leaders
UPDATED MODEL
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Gatekeepers
Opinion Leaders
Mass Media
Measuring Opinion Leadership
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| OPINION LEADERSHIP MEASUREMENT METHOD | DESCRIPTION OF METHOD |
|---|---|
| SELF-DESIGNATING METHOD | Each respondent is asked a series of questions to determine the degree to which he or she perceives himself or herself as an opinion leader. |
| SOCIOMETRIC METHOD | Members of a social system are asked to identify to whom they give advice and to whom they go for advice. |
Measuring Opinion Leaders
| OPINION LEADERSHIP MEASUREMENT METHOD | DESCRIPTION OF METHOD |
|---|---|
| KEY INFORMANT METHOD | Carefully selected key informants in a social system are asked to designate opinion leaders. |
| OBJECTIVE METHOD | Artificially places individuals into a position to act as opinion leaders and measures results of their efforts. |
The Market Maven
Market maven: active in transmitting marketplace information of all types.
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- Just into shopping and keeping up with what's happening in the marketplace
- Overall knowledge of how and where to get products
Opinion Leadership and Marketing Strategy
- Identify and provide samples to opinion leaders
- Design programs to stimulate opinion leadership
- Develop ads simulating opinion leadership
- Create opinion leaders
- Control negative word-of-mouth
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How to create opinion leaders
- 1- Tell the truth: – Always tell the truth to the consumer, if not, it will harm your company and the goodwill of the consumer. When a company believes its products, then it is easy to create opinion leaders.
- 2- Do not create enemies: – Creating enemies is very dangerous. If you create negative opinion leaders, they will kill your brand and it will be difficult to enter in such target segment.
- 3- The brand value: - Brand value is the most important thing that can make opinion leaders, for example, celebrities. Obviously the opinion leaders are high for the company because of its brand value and the trust.
- 4- Experience: – Opinion leaders must have experience with the value and the benefits of the product or service, if not, there is no opinion leader. This is why celebrities are used as opinion leaders for almost all the personal care products.
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The Interpersonal 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.
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- Multi-step Flow
- A revision of the traditional two-step theory that recognizes multiple communication flows
FIGURE 13-8 Two-Step Flow of Communication
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Step 1
Step
Mass Media
Opinion Leaders
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FIGURE 13-9 Multi-step Flow of Communication
Step 2
Step 1a
Mass Media
Opinion Leaders
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St
Step 1b
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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Elements of the Diffusion
- The Innovation
- The Channels of Communication
- The Social System
- Time
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Defining Innovation
- Firm-oriented definitions
- Product-oriented definitions
- Market-oriented definitions
- Consumer-oriented definitions
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Product-Oriented Definitions
Continuous Innovation
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Discontinuous Innovation
Dynamically Innovation
Continuous Innovation
A new product that is an improved or modified version of an existing product rather than a totally new product. This type of innovation has less disruptive influence on established consumption patterns.
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Amazon's Continuous Innovation
Innovation Examples
Manager
- Kindle
- Web services
- Amazon Prime
- Drones?
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- Think
- Focus
- Disrupt Kindle
- Set up Lab 12
- Acqui
- Missio disrupt (calcu
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Dynamically Continuous Innovation
A new product that is sufficiently innovative to have some disruptive effects on established usage patterns, but does not generally alter practice.
Dynamically Continuous
- Dynamically continuous innovation
- A pronounced modification to an existing product
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- Requires a small amount of behavior change
iPhone 5C iPhone 5S iPhone 6 iPhone 6 Plus
WATCH
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Discontinuous Innovation
A dramatically new product entry that requires the establishment of new consumption patterns.
2005
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2010
Continuous
Discontinuous
Social System and Diffusion
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Does the target market have:
- A positive attitude toward change?
- Technological skill?
- A general respect for education?
- A focus on rational and orderly relationships?
- An outreach perspective?
- The ability to accept difference?
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Time and Diffusion
- Purchase Time
- Adopter Categories
- Rate of Adoption
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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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FIGURE 13-18 An Enhanced Adoption Process
Pre-existing Problem or Need
Awareness Interest Evaluation Trial
Evaluation
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Rejection
Discontinuation or Rejection
Adoption 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 13-15 Sequence and Proportion of Adopters among Population That Eventually Adopts
Innovators
2.5%
Early Adopters 13.5%
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Early Majority 34%
Late Majority 34%
Percentage of Adopters by Category Segment
Early Adopters: Description
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- 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
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- 34% of population
- Skeptical
- Adopt new ideas just after the average time
- Adopting may be both an economic necessity and a response to social 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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Rate of Adoption
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- Insert Figure 13-16 A, B and C as small thumbnails, if not possible, then have one or two of them.
FIGURE 13-19 Relative Importance of Different Information Sources in the Adoption Process
Importance
High
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Low
Awareness
Interest
Evaluation
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Post Purchase Processes
- Post Purchase Processes
- Customer satisfaction
- Customer commitment/ loyalty
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Post-purchase processes, customer satisfaction and consumer loyalty
Final consideration in the consumer decision making process
FIGURE 1.6 / The consumer decision
SITUATION
Problem recognition
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Information search
Evaluation and selection
Store choice and purchase
Postpurchase processes
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Postpurchase process
- Postpurchase dissonance
- Product use and non-use
- Disposal
- Purchase evaluation
- Customer satisfaction, repeat-purchase behaviour and consumer loyalty
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Post purchase dissonance
- Some purchases are followed by post purchase dissonance
- Probability of post purchase dissonance and the magnitude of dissonance are a function of the:
- degree of commitment and/or whether decision can be revoked
- importance of the decision to the consumer
- difficulty of choosing among the alternatives
- individual's tendency to experience anxiety
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Postpurchase Dissonance
Consumption guilt - when guilt feelings are aroused by the product/service use.
Marketers need to focus on validating the consumption for "high guilt" products.
Indulging in chocolate consumption guilt
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Post-purchase consumer
FIGURE 7.1 / Postpurchase consumer behaviour
Purchase
POSTPURCHASE DISSONANCE
Non-use
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Usage
PRODUCT DISPOSAL
Evaluation
CO BEH
Satisfaction
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Loyal customers
Repeat purchases
Increased use
Brand switchin
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Product use and non-use
- Product use
- use innovativeness
- regional variations
- multiple vs single use
- Packaging
- Defective products
- product recalls
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Product Use and Nonuse
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Product Use
Marketers need to understand how consumers use their products.
Use innovativeness refers to a consumer using a product in a new way.
Marketers who discover new uses for their products can greatly expand sales.
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Applications in Consumer Behavior
The Arm & Hammer web site provides another avenue for marketers to communicate new uses!
Unique packaging for competitive
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Product Use and Nonuse
Product Use
Retailers can frequently take advantage of the fact that the use of one product may require or suggest the use of other products, e.g., dresses and shoes.
Retailers can promote such items
- jointly
- display them together, or
- train sales personnel to make relevant complementary sales
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Product Use and Nonuse
Product Nonuse
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Product nonuse occurs when a consumer acquires a product that is not used or only used relative to its potential use.
The division between the initial purchase decision to consume is particularly strong for online purchases.
Disposition
Disposition of product or product container may occur before, during, or after use. Or, for products that are completely consumed, no disposition may be involved.
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A physical product often continues to exist even though it may no longer meet a consumer's needs.
Exploding demand and short product life spans for high-tech items is creating a growing concern over e-waste.
Product disposal marketing strate
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- Recycling
- product
- package
- Trade-ins
- to motivate replacement
- Second-hand markets
- E.g. textbooks, clothes
- 'Cash converters'
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Disposition
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Product Disposition and Marketing Strategy
Five major ways disposition decisions can affect a firm's marketing strategy:
- Reluctance to purchase a new item until consumers have "gotten their money's worth” from the old one.
- Requiring disposition to occur before acquiring a replacement due to space or financial limitations.
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Disposition
Product Disposition and Marketing Strategy
- Consumer selling, trading, or giving away used products may result in a large used-product market.
- Many consumers are concerned with how their purchase decisions affect waste.
- Environmentally sound disposition decisions benefit society as a whole, including the firms that are part of that society.
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Purchase Evaluation and Customer Satisfaction
The Evaluation Process
Determinants of Satisfaction and Dissatisfaction
Instrumental performance relates to the physical functioning of the product.
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Symbolic performance relates to aesthetic or image-enhancement performance.
Affective performance is the emotional response that using the product or outlet provides
Importance of customer satisfaction
- The business of business is getting and keeping customers. (Drucker, 1979)
- Delivering high-quality service and achieving customer satisfaction is closely linked to profitability, profits, cost savings, and market share. (PIMS, Profit Impact of Marketing Strategy)
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Customers Satisfaction, Repeat-Purchase Behavior and Customer Commitment
Customer Satisfaction Outcome
Our total product
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Competitors' total products
Consumer decision process
Superior value expected
Sales
Perceived value delivered
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Customers Satisfaction, Repeat-Purchase Behavior and Customer Commitment
Creating Committed Customers Is Increasingly the Focus of Marketing Efforts
Total Buyers
Satisfied Buyers
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Repeat Purchasers
Committed Customers
Customers Satisfaction, Repeat-Purchase Behavior and Customer Commitment
Repeat purchasers continue to buy the same brand though they do not have an emotional attachment to it.
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Switching costs are the costs of finding, evaluating, and adopting another brand.
Brand loyalty involves commitment to the brand; it is a biased behavioral response expressed over time.
Customers Satisfaction, Repeat-Purchase Behavior and Customer Commitment
Relationship Marketing
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Relationship marketing is an attempt to expand the firm's exchange relationship with its customers.
Relationship marketing involves:
- databases
- customized mass communications
- advanced employee training and empowerment
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Customers Satisfaction, Repeat-Purchase Behavior and Customer Commitment
Relationship Marketing
Customer loyalty programs, such as frequent flyer programs, are designed to generate repeat purchases. However, they do not necessarily create committed customers.
Generating committed customers requires a customer-focused attitude in the firm.
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Measuring customer satisfaction
- Qualitative measurement
- Focus groups
- Monitoring surveys
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