Consumer Influence and Diffusion of Innovations

  1. Opinion Leadership
    • The process by which one person
    • (the opinion leader) informally influences the actions or attitudes of others, who may be opinion seekers or merely opinion recipients

    Opinion leadership involves contact with people as individuals NOT as the representatives of a larger social group. The contact can take the form of face-to-face, telephone etc.. The parties involved in opinion leadership are

    • (a) Opinion leader: offers advice / information about a product
    • or service.

    (b) Opinion seeker: actively seeking advice or information.

    (c) Opinion receiver (recipient): receive information / advice that they have not actively sought (i.e. recipients of unsolicited information or advice about a product/service).
  2. Viral Marketing
    • A marketing strategy that encourages
    • consumers to pass on a marketing message to other consumers, such that the potential for awareness and influence growth of that message is exponential.

    Typically combines WOM with electronic communications (e.g. email / SMS / blogs).
  3. Word-of-mouth (WOM)
    • Informal conversations concerning a
    • product or a service
  4. Dynamics of the Opinion Leadership Process
    • CPICT
    • Credibility

    Positive and negative product information

    • Information and advice
    • Opinion leadership tends to be category-specific

    Opinion leadership is a two-way Street
  5. Factors Leading to Negative WOM
    • Individual
    • Attitudinal
    • Involvement
    • Situational
  6. Role of Surrogate Buyers
    Instead of seeking out an opinion leader, some consumers go straight to a consultant and pay them to help with the purchase decision.

    Becoming increasingly more common and consumer may not even be aware that others are making decisions on their behalf.

    • Examples: Personal fashion consultants or interior design
    • consultants.
  7. Measurement of Opinion Leadership
    Self Designating Method – respondents state how much they provide info/advice to others.

    • Sociometric Method – respondents state specific individuals
    • they give or receive info/advice from.

    Key Informant Method – person in social group asked to identify opinion leaders in the group.

    Objective Method – like a controlled experiment where information is given to a group and then the dispersion of the info. is tracked.
  8. The Interpersonal Flow of Communication
    Two step flow: mass media to opinion leaders to opinion receiver.

    Multi-step flow: mass media to opinion leader and information/opinion receivers, and opinion receivers back to opinion leaders.
  9. Diffusion of Innovations
    Diffusion process: (macro process) The process by which the acceptance of an innovation is spread by communication to members of the social system over a period of time.

    Adoption process: (micro 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.
  10. Consumer Innovativeness
    The degree to which consumers are receptive to new products / services / practices.
  11. The 4 Elements of the Diffusion Process
    • The Innovation.
    • The Channels of Communication.
    • The Social System.
    • Time.
  12. How to Define Innovations?
    • FPMC
    • Firm-oriented definitions: When a product is ‘new’ to the company, it is considered new.

    Product-oriented definitions: Focuses on the product itself and the likely effect it will have on the established usage patterns of consumers.

    • Continuous – not much change.
    • Dynamically continuous – some change.
    • Discontinuous – adopt new behaviours.
    • Market oriented definitions: Product newness is judged by the amount of exposure consumers have to the new product.

    Consumer-oriented definitions: Any product that consumers judge to be new.
  13. Product Characteristics That Influence Diffusion

    Relative Advantage: Perception of whether new product offers greater benefits to existing substitutes.

    Compatibility: Fit with present needs / values / lifestyle.

    Complexity: Ease of understanding / use.

    Trialability: Ease of trying a product on a limited basis

    Observability or Communicability: Ease of seeing / imagining / describing the benefits of the new product.
  14. Barriers & Resistance to Innovation
    • Barriers: Technological Fears
    •  Fear of technical complexity.
    •  Fear of rapid obsolescence.
    •  Fear of social rejection.
    •  Fear of physical harm.

    • Resistance
    • Innovation overload – too many options can impede decision-making.

    Too little time and too much stress → don’t want the hassle of complex products.
  15. Adopter Categories
    • Innovators
    • Early adopters
    • Early Majority
    • Late Majority
    • Laggards
  16. Rate of Adoption
    • How long it takes a new product to be adopted by members of
    • a social system (i.e. target market).
Card Set
Consumer Influence and Diffusion of Innovations
Consumer Influence and Diffusion of Innovations