consumer and diffusion of innovation-unit 4

8/10/2019 Consumer and Diffusion of Innovation-Unit 4

1/43

Consumer Influence and

Diffusion of Innovations

UNIT 3


2/43

Opinion Leadership

The process by which one person (the opinionleader) informally influences the consumption

actions or attitudes of others who may be opinion

seekersor opinion recipients


3/43

What is Opinion Leadership?

Opinion

LeaderOpinion

Receiver

Opinion

Seeker


4/43

Special Issues

Opinion leaders are four times more likely to beasked about political issues, three times more likelyto be asked about computers or investments, andtwice as likely to be asked about restaurants

Information seekers seek a strong-tie sourcewhen they know little about a topic, and weak-tiesources when they have some knowledge


5/43

Purchase Pals and Surrogate Buyers

Purchase Pals

Information sources who accompany a consumer

on a shopping trip

Surrogate Buyers

Professional buyers who help consumers with their

purchases


6/43

(continued)


7/43

Figure 13-1 (continued)


8/43

Market Maven Individuals whose influence stems from a general knowledge or

market expertise that leads to an early awareness of newproducts and services.

A slang term used to describe an investor who is "in-the-know."The term "market maven" usually refers to an individual who is amarket participant with a great deal of knowledge and

connections, thus having a trusted opinion on market events orspeculation. Historical success in the market is typically thedriving force behind those who are considered mavens andthose who are not.

Market mavens are also distinguished from other opinion leadersbecause their influence stems not so much from productexperience but from a more general knowledge or marketexpertise that leads them to an early awareness of a wide arrayof new products and services.


9/43

Motivations Behind Opinion

Leadership

The Needs of Opinion Leaders To reduce their own post-purchase dissonance

For tangential personal benefits

Because of high levels of product involvement

Because of message involvement


10/43

Motivations Behind Opinion

Leadership

Motivations of Opinion Seekers To obtain new product or new usage information

To reduce their risk by getting knowledge

To reduce search time

To receive the approval of the opinion leader


11/43

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-

Providing the media with quotable quotes is a

two-way street. Your community group or

organisation certainly benefits from coverage inthe media through developing strong contacts.


12/43


13/43


14/43


15/43

The Interpersonal Flow of

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. Multi-step Flow

A revision of the traditional two-step theory that showsmultiple communication flows


16/43


17/43


18/43

Measuring Opinion Leadership

SELF-DESIGNATING

METHOD

Do you influence

other people in their

selection ofproducts?

Each respondent is asked a

series of questions to

determine the degree to whichhe or she perceives himself or

herself to be an opinion leader.

OPINION LEADERSHIPMEASUREMENT

METHOD

SAMPLEQUESTIONS ASKED

DESCRIPTION OF METHOD

SOCIOMETRIC

METHOD

Members of a social system are

asked to identify to whom theygive advice and to whom they

go for advice.

Whom do you

ask?Who asks youfor info about that

product category?


19/43

Measuring Opinion Leadership -

continued

OPINION

LEADERSHIP

MEASUREMENT

METHOD

SAMPLE

QUESTIONS

ASKED

DESCRIPTION OF METHOD

KEY INFORMANT

METHOD

Who are the most

influential people inthe group?

Carefully selected key informants in

a social system are asked todesignate 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


20/43

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 communication


21/43

Diffusion Process

The process by which the acceptance of aninnovation is spread by communication to

members of social system over a period of time.

Diffusion is the macro process concerned with

the spread of a new product (an innovation) fromits source to the consuming public. In contrast

adoption is the micro process that focuses on the

stages through which an individual consumer

passes when deciding to accept or reject a newproduct.


22/43

Adoption Process

The stages through which an individual consumerpasses in arriving at a decision to try (or not to

try), to continue using (or discontinue using) a

new product.

The traditional adoption process model describes5 stages through which an individual consumer

passes to arrive at the decision to adopt or reject

a new product:

Awareness,

Interest,

Evaluation

Trial


23/43

Defining Innovations

Firm-oriented definitions- Product-oriented definitions

Market-oriented definitions

Consumer-oriented definitions


24/43

Firm Oriented Definitions- This approach treatsthe newness of a product from the perspective of

the company producing or marketing it. When the

product is new to the company it is considered

new. This definition ignores whether the productis new to the market place. From this view copies

or modifications of a competitors products will

qualify as new.



25/43

Product Oriented Definitions- this approach focuseson the features inherent in the product itself and onthe effects these features are likely to have on theconsumers established usage patterns. One product

oriented framework considers the extent to which anew product is likely to disrupt established behaviourpatterns. It defines three types of definitions:

A continuous innovation- Has the least disruptive

influence on established patterns, is somewhat whichinvolves the introduction of the modified productrather than a totally new product.



26/43

Product oriented definitions(contd..)

A dynamically continuous innovation is somewhat

more disruptive than the continuous innovation

but still does not alter established behaviour

patterns. It may involve creation of a new productor the modification of an existing product.

A discontinuous innovation requires consumers

to adopt new behaviour patterns e.g. automobiles

and internet.



27/43

Market Oriented Definitions- approach judgesthe newness of a product in terms of how much

exposure consumers have to the new product.

Two market oriented definitions of product

innovation have been extensively used:A product is considered new if it has been

purchased by a relatively small (fixed) percentage

of the potential market.

A product is considered new if it has been on themarket for a relatively short (specified) period of

time.



28/43

Consumer-Oriented Definitions- In defininginnovation a new product is any product that

potential consumer judges to be new. Newness is

based on the consumers perception of the

product rather than the physical features ormarket realities.



29/43

Product-Oriented Definitions

Continuous

Innovation

DynamicallyContinuous

Innovation

Discontinuous

Innovation


30/43

Factors That Affect the Diffusion

of Innovations

The Innovation The Channels of Communication

The Social System

Time


31/43

Product Characteristics That

Influence Diffusion

Relative Advantage Compatibility

Complexity

Trialability

Observability


32/43

Social System and Diffusion

Does the target market have:

A positive attitude towards change?

Technological skill?

A general respect for education and science?

A focus on rational and ordered social relationship?

An outreach perspective?

The ability to accept different roles?


33/43

Time and Diffusion

Purchase TimeAdopter Categories

Rate of Adoption


34/43

Adopter Categories

A sequence of categories that describes howearly (or late) a consumer adopts a new product

in relation to other adopters.


35/43


36/43

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


37/43

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


38/43

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


39/43

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


40/43

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


41/43


42/43

The Profile of a Consumer

Innovator

Interest in the Product Category

The Innovator Is an Opinion Leader

Personality Traits Purchase and consumption characteristics

Media Habits

Social Characteristics

Demographic CharacteristicsAre There Generalized Consumer Innovators?

Diff i P d M k i


43/43

Diffusion Process and Marketing

Strategy

Identify diffusion inhibitors and find ways tocompensate for these

Identify innovators and early adopters and caterto them

Move consumers from awareness to adoption Make effective use of word-of-mouth

communications

consumer and diffusion of innovation-unit 4

Documents