MODULE 06

Consumer Influence and the

Diffusion of Innovations
 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
What is Opinion Leadership?

Opinion Opinion
Leader Receiver

Opinion
Seeker
 Dynamics of opinion leadership
process
• The Opinion Leadership process is highly
dynamic in nature. Opinion Leaders
communicate informally about product and
service offerings and/or brands. They offer
product information and advice, and narrate
experiences
 The dynamic nature of Opinion
Leadership is discussed
• Opinion Leaders provide product
information, advice and narrate experiences
• Opinion Leaders provide both positive and
negative information
• Opinion Leaders are influential and
persuasive
• Opinion Leaders are not generic in nature
• Opinion Leaders could also become Opinion
Receivers/Seekers
 Measuring Opinion Leadership

OPINION LEADERSHIP SAMPLE QUESTIONS

DESCRIPTION OF METHOD
MEASUREMENT METHOD ASKED

SELF-DESIGNATING Each respondent is asked a series of “Do you influence other

METHOD questions to determine the degree to people in their selection of
which he or she perceives himself or products?”
herself to be an opinion leader.

SOCIOMETRIC METHOD Members of a social system are asked to “Whom do you ask?”“Who
identify to whom they give advice and asks you for info about that
to whom they go for advice. product category?”
 Measuring Opinion Leadership -continued

OPINION LEADERSHIP SAMPLE QUESTIONS

DESCRIPTION OF METHOD
MEASUREMENT METHOD ASKED

KEY INFORMANT Carefully selected key informants in a social “Who are the most
METHOD system are asked to designate opinion influential people in the
leaders. group?”

OBJECTIVE METHOD Artificially places individuals in a position “Have you tried the
to act as opinion leaders and measures product?
results of their efforts.
 Market Maven
• Consumer Market Mavens. The
term market maven is also used to
describe consumers who have detailed
insights about consumer products,
places to shop and upcoming product
information.
 …
• As with the investing world, their
are consumer market mavens who focus on
niches such as nail products or wearable
technology
• Individuals whose influence stems from a
general knowledge or market expertise that
leads to an early awareness of new products
and services.
• Like to shop and share shopping.
• Not primarily concerned with price.
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
 Creation of Opinion
Leaders
1. They may use conversation as a dissonance
reducing process for products for products they
have bought.
2. They may want to influence a friend or
neighbor
3. They want to be self-involved, when they may
want to confirm their own judgments.
 Diffusion
In consumer behavior terms, refers to research on the
consumer acceptance of new products and services
Involves understanding two closely related processes:

• Diffusion: a macro process concerned with the

spread of a new product--an innovation--from its
source to the consuming public
• Adoption: the micro process concerned with the
stages the consumer goes through in deciding to
accept or reject a new product
 The diffusion process
Diffusion is the process by which
the acceptance of an innovation--a new
product, service, idea or practice is spread by
communication--mass media, salespeople, or
word-of-mouth to members of a social system--
target market over a period of time
 …
• Four basic elements of the diffusion process:
1. The innovation
2. The channel of communication
3. The social system
4. Time
 1. The innovation
• Innovation takes many forms
• There is no universally accepted definition of
the terms product innovation or new product
• Instead, approaches to define the term have
taken place within certain contexts:
– Firm-oriented definitions
– Market-oriented definitions
– Consumer-oriented definitions
– Product-oriented definitions
 2. Channel of communication
• Speed with which an innovation spreads
through the market depends in great part on
communications
– Between the marketer and consumer
– Between consumers (word-of-mouth)
• In recent years a number of new channels of
communication have been developed
 3. The social system
• The physical, social, or cultural environment to
which people belong and within which they
function
• Members of a social system have at least one
characteristic in common that makes them
potential buyers of a particular product
• The values and norms of a social system will
influence the acceptance or rejection of new
products
 …
Three characteristics of a social system influence
spread of new products
1. The degree of compatibility between innovation
and values of members
2. Homogeneity of members
3. A cross cultures, depends on social similarity of
the cultures
 4. Time
Time relates to diffusion in three ways:
1. Amount of purchase time
2. Adopter categories
3. Rate of adoption
 Purchase time
• Refers to the amount of time that elapses
between a consumer’s initial awareness of a
new product or service and the point at which
he or she purchases or rejects it
• Important because is a predictor of the overall
length of time it will take for the product to
achieve widespread adoption
 ADOPTION PROCESS
• Adoption is a micro concept that lays
emphasis on the various phases or stages
through an individual consumer passes while
accepting/rejecting a new product or service
offering.
• The study of adoption is important for a
marketer in the sense that it helps him
understand the various stages through which
a consumer passes right from his initial
awareness to the final acceptance/rejection
 The five stages are explained
below:
i) Awareness- This is the first stage in the
adoption process, where the consumer is
exposed to the new product/service offering,
and gets to know of the product.
• The marketers’ objective here is to provide
some awareness about the innovation, the
features and benefits as also the brand.
 …
ii) Interest: In this next stage, the consumer
begins to develop some interest in the
innovative offering, and thereby puts in some
effort to know more about it.
• The consumer becomes active in his search
for information and tries to elaborate on the
information received at the awareness stage.
• He actively searches for information about the
new product /service and tries to assess how
it can benefit him.
 …
iii) Evaluation: The consumer who has acquired
knowledge about the innovation, now begins to
evaluate; he evaluates whether,
i) More information search is necessary with
respect to the innovation as well as to the brand
ii) He is sufficient with the product/service
information that he possesses.
If he feels that the offering provides “value”, he
goes in for the next stage which is trial; else the
process is aborted, and the innovation rejected.
 …
iv) Trial: The consumer goes and tries out the
innovative offering, but there is not yet any
further purchase (repurchase) commitment.
• The product/service is experienced on a small
scale and used on a limited basis only, to
determine the worth or usefulness.
 …
v) Adoption (Rejection): Based on the trial stage,
and the resultant experience, the consumer
would decide to decision to use/reuse/patronize
the offering.
If the experience is satisfying, and the
evaluation favorable, the innovative offering
would be accepted, else it would be rejected.
 Adopter Categories
A sequence of categories that describes how
early (or late) a consumer adopts a new product
in relation to other adopters.
Categories of innovation adopters
1. Innovators
2. Early adopters
3. Early majority
4. Late majority
5. Laggards
 Innovators: Description

• 2.5% of population
• Venturesome
• Very eager to try new ideas
• Technology enthusiasts who appreciate technology
for its own sake and are motivated change agents
among their peers
• Acceptable if risk is daring
• More cosmopolite social relationships
• Communicates with other innovators
 Early Adopters: Description

• 13.5% of population
• Respected
• Visionaries looking to adapt and use new technology
to achieve revolutionary change to gain competitive
advantages
• Attracted by high-risk, high-reward projects
• Not price sensitive
• Demand personalized solutions, quick response,
highly-qualified sales and support
• Are role models
 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
• Seek reference from trusted sources to determine
whether to purchase
 Late Majority: Description

• 34% of population
• Adopt new ideas just after the average time
• Adopting may be both an economic necessity and a
reaction to peer pressures
• Innovations approached cautiously
• Very price sensitive
• Motivated to adopt new innovations to maintain
parity with their competition or with the majority
• Often rely on a single, trusted source to help them
interpret the innovation and its application
 Laggards: Description
• 16% of population
• Traditional
• The last people to adopt an innovation
• Likely to block new innovation purchases
• Oriented to the past
• Suspicious of the new
• Will buy only if the alternatives are proven to be
worse and the cost-benefit is guaranteed
Post purchase process
 Post-Purchase Process:
• After the purchase, the consumer might
experience dissonance about their purchase
and be alert to information that supports their
decision.
• Marketing communications should supply
beliefs and evaluations that reinforce the
consumer’s choice and help him or her feel
good about the brand.
• Marketers must monitor post-purchase
satisfaction and post-purchase actions.
 Customer satisfaction and
customer commitment
Satisfaction is a function of the closeness between expectations
and the product’s perceived performance.
- If performance fall short of expectations the consumer is
disappointed.
- If the performance meets expectations the consumer is
satisfied.
- If the performance exceeds expectations the consumer is
delighted.
-Consumer form their expectations on the basis of messages
received from sellers, friends, and other information sources.
-The importance of post-purchase satisfaction suggests that a
product claim must truthfully represent the product’s likely
performance.
 Post purchase dissonance
This is a common consumer reaction after making a
difficult, relatively permanent decision. Doubt or
Anxiety – referred as - post-purchase dissonance.

The probability of a consumer experiencing post-purchase

dissonance, as well as the magnitude of such dissonance, is a
function of:
• Degree of commitment/irrevocability of the decision:
If it is easier for the consumer to change the decision, it is
less likely that the consumer will experience dissonance
• Importance of decision to customer:
it the consumer views the decision as more important, it is likely to
cause dissonance.

• Difficulty of choosing among the alternatives:

If the consumer experiences difficulty in choosing from among the
alternatives because of their number, the number of relevant attributes
associated with each alternative and the extent to which each alternative
offers attributes not available with other alternatives; the consumer will
experience dissonance of greater magnitude.

• Individual’s tendency to experience anxiety:

The personality of some individuals is such that they have a greater
tendency to experience anxiety. If the consumer is more prone to
experiencing anxiety, it is more likely that she/he would experience post-
purchase dissonance.
 Product use and non-use
Product Use
• Product purchase is normally followed by product use (though not always).
• Consumers use products to fulfill needs - it is not the purchase which
generally fulfills the need, but the product use.
• It is of importance to know how the customer uses a product..
• Satisfaction = Benefits - expectations
• To increase satisfaction, it is imperative that consumers receive maximum
possible benefits.
• Need for consumers to use a product so that Actual usage = ideal usage
(to yield maximum level of benefits)
• To determine this, we need monitoring
 Product Non-Use

• Product non-use can be a significant problem

in some categories.
• Non-use can indicate:
– the perception that the utility of the product
has changed.
– situational influences have not been favorable
for product use (need to expand acceptable
range of situations)
Disposition
Disposition of the product or the products’ container may occur before, during,
or after product use. No disposition involved, in case product is completely
consumed (ice cream).

Product disposition
• Recycling
product
package
• Trade-ins
to motivate replacement
• Second hand markets
textbooks
clothes
Cash Converters
God bless you