Académique Documents
Professionnel Documents
Culture Documents
Process
Personal Influence, Diffusion of
Innovation & CB Model
Module 8
In this section
Opinion leadership
Characteristics of an
opinion leader
Applications of opinion
leadership
Other dimensions in
personal influence/
WOM / Opinion
leadership
Diffusion of innovation
Types of innovation
Factors influencing
spread of innovation
Adopter categories vs.
Promotion Strategies
Innovation analysis and
Diffusion Enhancement
Strategies
In this section
Consumer Decision Making
Levels of consumer Decision Making
Models of Consumer Views
Consumer Decision Making Model
Opinion leadership
(WOM communication)
Opinion leadership
The process by which one person
(opinion leader) informally
influences the actions or attitudes
of others who may be opinion
seekers or opinion recipients
Opinion
leader
Opinion receiver
Key characteristics
Between
two or
more
people
Interperso
nal &
informal
Across
mediums
i.e. phone,
mail, chat
Opinion
leadership
None
represents
a
commercial
selling
source
Categor
y
specific
Info &
advice
Credibility
Highly credible as they are
seen as being objective
about the product or
service or the advice
Have the best interest of
the opinion seeker in mind.
No compensatory benefits
OL base comments on firsthand experience. Therefore
it reduces risk or anxiety for
OS
Balanced perspective
OLs give both favourable
and unfavourable
information which adds to
their credibility
Consumers tend to
remember ive comments
(more that +ve) and actively
avoid products with -ve buzz
-ve buzz can kill a product.
Windows Vista is a classic
example of ve buzz killing
a product
Category specific
It is category specific as OLs
specialise in certain product
categories about which they
offer information or advice
Two-way street
One cannot be an opinion
leader about everything in this
world. Opinion leadership is
specific to a category
An OL in a particular situation
may become an OS in another,
even for the same product
Motivations of opinion
leaders
Message
involveme
nt
motivation
s
Social
involvemen
t
Motivations
Motivations
of Opinion
Leaders
Self
improvem
ent
motivation
s
Product
involvemen
t
motivations
Self-improvement
Motivations
Reduce
post
purchas
e
dissona
nce
Gain
Attentio
n/
status
Assert
superiori
ty &
expertis
e
Feel like
an
adventu
rer
Power of
converti
ng
others
Self-improvement
Motivations
Reduce
post
purchase
dissonanc
e
Gain
Attention
/ status
Assert
superiorit
y&
expertise
If an OL has
purchased a
product , he may
want to reassure
himself that hes
made the right
choice by talking up
Being an OL, is a
sure -shot way of
being in the lime
light. You get the
maximum attention
and status as add
ons
Opportunity to also
demonstrate and
assert knowledge
and superiority in a
particular domain
Self-improvement
Motivations
Feel like
an
adventur
er
As an OL you tend to
keep up with
developments in your
specialised area.
Keeping up with the
changes and telling
others feels like an
Power of
convertin
g others
Motivations of opinion
leaders
Message
involveme
nt
motivation
s
Social
involvemen
t
Motivations
Motivations
of Opinion
Leaders
Self
involveme
nt
motivation
s
Product
involvemen
t
motivations
Motivations of opinion
leaders
Product
involvemen
t
motivations
OLs may want to
share their views
with others if they
are pleased or
disappointed with a
product
Social
involvemen
t
Motivations
In this type of
motivation, OLs
share their product
knowledge as
expressions of
friendship & love
Message
involveme
nt
motivation
s
In this case the
message it self may
be so powerful and
alluring that the OL
may want to share
it with others
INTERPERSONAL FLOW OF
COMMUNICATION
Mass
Media
Opinion
Leaders
Opinion
Seekers
Multi-step Flow
Information & influence is a two
way process and that OL both
influence and are influenced by
OS
First the information flows from
mass media to OL, OS &
information recipients (neither
influence nor are influenced)
In the next step there is
transmission of info & influence
from OL to OS. The 3rd steps
shows transmission from OS to
OL
Mass
Media
Opinion
Leaders
Informatio
n
Receivers
Opinion
Seekers
APPLICATIONS OF OPINION
LEADERSHIP
Create
products
with inbuilt
buzz
potential
Strategy
designed to
stimulate
buzz
Create
products
with inbuilt
buzz
potential
Strategy
designed to
stimulate
buzz
Books
Comics
Games
Viral marketing
Any strategy that encourages
individuals to pass on a
marketing message to others,
creating the potential for
exponential growth in the
messages exposure &
influence
Viral marketing is the marriage
of e-mail & word of mouth. It is
called viral as it enables the
message to spread like virus
DIFFUSION OF INNOVATION
Diffusion of Innovation
The two key concepts we
need to understand are
Diffusion process &
Adoption process
Diffusion of Innovation
Diffusion process is
concerned with the spread of
a new product (innovation)
from its source to the
consuming public
Adoption is the process
that focuses on the stages
through which an individual
consumer passes when
deciding to accept or reject a
new product
Types of innovation
Consumer
Oriented
Firm
Oriented
Innovation
Types
Market
Oriented
Product
Oriented
Types of innovation
Consumer
Oriented
Firm
Oriented
Innovation
Types
Market
Oriented
Product
Oriented
Product oriented
Continuo
us
Innovatio
n
Dynamically
continuous
innovation
Discontinuou
s Innovation
Continuous innovation
Involves the introduction of a
modified product rather than a
totally new one
Continuous innovation
Discontinuous innovation
Discontinuous innovations
cause a paradigm shift in
technology and/or the market
structure of an industry
They are entirely new-to-the
world products, made to
perform a function for which no
product has previously existed
Discontinuous innovation
requires a good deal of learning
for the incumbentorganisation
and its network, including the
user
Discontinuous
innovationsdisrupt established
routine and may even require a
very different set of capabilities
and new behaviour patterns
Types of innovation
Consumer
Oriented
Firm
Oriented
Innovation
Types
Market
Oriented
Product
Oriented
A product is considered to
be new if it has been in the
market for a relatively short
period of time
Largely subjective, as it is
dependent on the
researcher to define
penetration or time frame
Types of innovation
Consumer
Oriented
Firm
Oriented
Innovation
Types
Market
Oriented
Product
Oriented
Consumer Oriented
Innovation
New product is any product,
which the consumer judges to
be new. Newness is based on
consumers perception of the
product rather than physical
features or market realities
Relative
Advantage
Observabil
ity
Trialability
Compatibil
ity
Complexit
y
Relative advantage
The degree to which consumers
perceive a new product to be
superior to existing substitutes
is its relative advantage
Compatibility
The degree to which consumers
feel a new product is consistent
with their present needs, values
& practices is a measure of its
compatibility
Complexity
The degree to which a new
product is difficult to
understand or use affects
product acceptance
Easier it is to understand and
use, faster will be the
acceptance
Fear of technological
complexity the biggest
deterrent for among consumers
more so when it comes to
buying hi-tech consumer
products
Trialability
The degree to which a new
product is capable of being
tried on a limited basis
Greater the oppourtunity to try
a new product, the easier it is
for the consumers to evaluate
and adopt it
Frequently purchased
household products tend to
make trial and adoption easier
for consumers through trial
packs, couponing or launch
offers
Observability
Ease with which a products
benefits or attributes can be
observed, imagined or
described to potential
consumers
Easier to observe a tangible
product than an intangible one
like service
ADOPTER CATEGORIES
Follows the.
Adopter categories
Indicates where a consumer
stands in relation to other
consumers in terms of time (or
when the consumer adopts a
new product)
The person first to buy into an
innovation is often an individual
who serves as a bridge to other
groups of people
Adopters categories
Adopter categories
As per the normal distribution
curve, one can conclude that
100% of the target market
eventually will accept the
innovation
This is not true. As very few
products fit the exact needs of
all potential consumers. It
would be wise to add a
category of non-adopters i.e.
people who will never buy into
the innovation
Innovators
Innovators are the first
individuals to adopt an
innovation. Innovators are
willing to take risks, youngest in
age, have the highest social
class,
They also have great financial
liquidity, are very social and
have closest contact to
scientific sources and
interaction with other
innovators.
Innovators
Risk tolerance has them
adopting technologies which
may ultimately fail. Financial
resources help absorb these
failures
Very little, if anything, needs to
be done to, market the
innovation to this segment
Early adopters
This is the second fastest
category of individuals who
adopt an innovation. These
individuals have the highest
degree of opinion leadership
among the other adopter
categories
Early adopters
Early adopters are typically
younger in age, have a higher
social status, have more
financial liquidity, advanced
education, and are more
socially forward than late
adopters.
Early adopters
More discrete in adoption
choices than innovators. Realize
judicious choice of adoption will
help them maintain central
communication position
Early majority
Individuals in this category
adopt an innovation after a
varying degree of time. This
time of adoption is significantly
longer than the innovators and
early adopters.
Early majority
Early Majority tend to be slower
in the adoption process, have
above average social status,
contact with early adopters,
and seldom hold positions of
opinion leadership in a system
Late majority
These individuals approach an
innovation with a high degree
of skepticism and after the
majority of society has adopted
the innovation
Late majority
Late Majority are typically
skeptical about an innovation,
have below average social
status, very little financial
liquidity, in contact with others
in late majority and early
majority, very little opinion
leadership
Late majority
Strategies to appeal to this
segment include information on
how many other people have
tried the innovation and have
adopted it successfully
Laggards
Are the last to adopt an
innovation. Unlike other
categories, individuals in this
category show little to no
opinion leadership. These
individuals typically have an
aversion to change-agents and
tend to be advanced in age.
Laggards
Laggards typically tend to be
focused on "traditions", likely to
have lowest social status,
lowest financial liquidity, be
oldest of all other adopters, in
contact with only family and
close friends
Strategies to appeal to this
segment include statistics, fear
appeals, and pressure from
people in the other adopter
groups
Decision
In the most general terms, a
decision is a selection of an
option from two or more
alternative choices
For a person to make a
decision, a choice of
alternatives must be available
Decision
When there is no alternative
and the person is forced to
make a purchase or take a
particular action then this
single no-choice does not
constitute a decision. This is
also referred to as Hobsons
Choice
Decision making
Decision making is a time
consuming & exhausting
process as the person has to
weigh the pros & cons of all
alternatives
However not all decisionmaking situations require the
same amount of extensive
research or analysis
Decision making
Some decisions are more
important than others and the
amount of effort we put into
each, therefore differs
Information
Search
Result
Alternatives
Evaluation
Product
Choice
Limited
problem
solving
Routinis
ed
respons
e
behavio
ur
Examples
Routinise
d
Limited
Extensive
Approaches : Characteristics
Characteristic
s
Routinised
Limited
Extensive
Purchase
Involvement
Low
Medium
High
Problem
Recognition
Automatic
Semi-Automatic
Complex
Minimal
Limited
Extensive
Post-Purchase
Issues
Negligible
Limited
Complex
Routinised vs Complex
Routinised
Little / no information
processing
Frequently purchased
products
Lower priced products
Low involvement
levels
Complex
Extensive information
processing
Infrequently
purchased products
Higher priced products
High involvement
levels
Marketing implications
Routinised
Complex
Extensive distribution
Little service required
Promotions important
Personal selling : Minimal
Advertising : reminder
medium
High price sensitivity
Selective distribution
Service required
No role for promotions
Personal selling :
Maximum
Advertising : Information
dissemination
Low price sensitivity
` of decision making
Economi
c View
Emotion
al View
Consum
er
Decision
Making
Cognitiv
e View
Passive
View
Economic view
Accordingly to this view, in a
world of perfect competition,
consumer has been
characterised as making
rational decisions. This means
that
: are aware of product
They
options
Capable of ranking each,
benefit-wise
Identify the best option from
Consumers
never have all the
these
info. or adequate degree of
involvement to make the
perfect decision
Economic view
The Economic View is
unrealistic as:
People limited by existing
skills & habits
People are limited by their
existing values & goals
People are limited by the
extent of their knowledge
Consumers operate in an
imperfect world where they
do not maximise their
decisions based on pricequality or price-value or
marginal utility
Economic view
Consumers tend to settle for
a compromised outcome
Emotion
al View
Consum
er
Decision
Making
Cognitiv
e View
Passive
View
Passive view
The passive view is quite
opposite to the rational
economic view
Consumers are essentially
submissive to the promotional
efforts of the companies
In this view, consumers are
seen as impulsive and
irrational buyers who are
willing to be manipulated.
Still relevant in categories
which require hard-core
personal selling, where there
Passive view
This view fails to recognise
that consumers play an equal
and dominant role in buying
seeking info, selecting the
best etc etc
This view also negates all
that we have learnt till date
i.e. motivation, selective
perception, learning,
attitudes, opinion leadership
etc which clearly suggest
that consumers rarely get
manipulated
Emotion
al View
Consum
er
Decision
Making
Cognitiv
e View
Passive
View
Cognitive view
This model showcases
consumers as a thinking
problem solver
Consumers are receptive or
searching for products which
will fulfill their needs or enrich
their lives
In this context, consumers
are seen as info processors.
Processing of info leads to
preferences and ultimately to
an action
Cognitive view
This view also recognises that
consumers are unlikely to get
all possible info
Instead the consumers stop
collecting information when
they realise that they have
the necessary information to
make a satisfactory choice
Cognitive view
The cognitive view describes
consumers as someone who
falls between economic and
passive views
This view recognises that
consumers cannot get all the
information to make a
perfect choice, but seek
information enough to make a
satisfactory choice
Emotion
al View
Consum
er
Decision
Making
Cognitiv
e View
Passive
View
Emotional view
While we may not like to
admit it, all of us associate
emotions, joy, happiness, love,
with certain purchase
In fact, to a large extent, it is
these emotions which are not
only involving but drive
purchases
Most of our purchases are
made on an impulse or an
whim or just because we
were emotionally disturbed
Emotional view
When an emotional purchase
decision is made, there is less
emphasis on search for
information and more
emphasis on current mood
This does not mean that
emotional decisions are not
rational. I deserve it is a
perfectly good and rational
reason to buy a product
Emotional view
Emotion is a response to a
particular environment,
whereas a mood is an
unfocused, pre-existing state;
already present at the time a
consumer experiences a
marketing stimulus
Emotional view
Mood is lower in intensity and
longer lasting. They are not
directly linked to action
Emotional view
Mood is important in decision
making as it impacts when
consumers shop, where they
shop and if they shop alone or
with others. Retailers attempt
to create a particular mood
even though consumers enter
a store with a pre-existing
mood
Input
Process
Output
Input
Input
External influences which
serve as sources of
information and influence the
consumers product related
values, attitude and
behaviour
Input factors
The marketing efforts of the
company
Non marketing socio cultural
influences
Marketing efforts
The marketing efforts are
direct efforts to reach, inform
& persuade consumers to buy
its products
Product : The product,
packaging, SKUs &
guarantees
Promotions : Mass media,
direct marketing, personal
selling etc
Pricing policy
Place : Distribution channels
Sociocultural Inputs
Sociocultural environment
exerts a major influence on
buying behaviour of
consumers
Family, friends, the Internet,
articles, culture, subculture,
social class, are low key, but
actually high impact
influences. Culture and
society subtly tell us that it is
right or wrong
Process
Process
Process part of the model is
concerned with how
consumers make decisions
Psychological issues
(motivation, perception,
learning personality &
attitudes) affect decision
The
act of decision making
making
spans 3 stages : Need
recognition, pre-purchase
search & evaluation of
alternatives
Need
Recogniti
on
Pre-purchase
Search
Evaluation of
alternatives
Need recognition
The recognition of a need is
likely to occour when a
consumer is faced with a
problem
There are two different need
or problem recognition styles.
Actual state and desired
state
Actual state
Actual state types are people
who feel that they have a
problem as their product fails
to perform satisfactorily
Desired state
Desired state types are
people for whom the desire
for something new may
trigger a need
Need
Recognition
Prepurchase
Search
Evaluation of
alternatives
Pre-purchase search
Begins when a consumer
believes that the need can be
satisfied with the purchase of
a product
Normally, past experiences
provide adequate information
to make a choice
However, when consumer has
no experience, extensive
search of the environment is
initiated for info on which the
choice can be based
Pre-purchase search
The consumer searches his
memory / past experiences
before searching for info from
external sources
The greater the relevancy of
past experience the lower the
dependency on external
sources
Risk another factor. High risk
products call for extensive
info search. Low risk products
call for basic or limited search
Pre-purchase search
Quantum of search depends
on the category. Certain
categories demand lower
level of search and certain
categories are searched more
deliberately
Need
Recognition
Prepurchase
Search
Evaluatio
n of
alternativ
es
Evaluation of alternatives
While evaluating alternatives
consumers use two types of
information
Evoked set
Also called the Consideration
set
In the context of consumer decision
making evoked set refers to specific
brands (or models) a consumer
considers in making a purchase
within a particular product category
From a marketing perspective, it is
critical that the brand get into the
evoked set of the consumer and stay
there by being relevant
Evoked set
Output
Post
Purchase purchase
behaviour evaluatio
n
Trial
Purchase
Purchase
Behaviour
Long term
commitme
nt
purchase
Repeat
Purchase
Trial purchase
When the product is
purchased the first time, it is
in smaller quantity and this is
called trial purchase
It is an exploratory purchase
where the consumers
evaluate the brand, as they
are uncertain about it.
Evaluation is done across all
possible dimensions or
parameters
Repeat purchase
A repeat purchase means that
the product meets with the
consumers approval and that
he / she is willing to use it
again & in larger quantity
Approval in trial phase means
that the brand is more than
satisfactory or better than
other brands
Repeat purchase is closest to
brand loyalty as it contributes
to stability for the company &
in market
Purchase
behaviour
Post
purchase
evaluatio
n
Performance = Expectation
Resetting
of
expectatio
n
Performan
ce
matches
expectatio
n
Satisfaction
Neutral
feeling
Restart
eval
process.
Choose a
new brand
Satisfaction
Performan
ce lower
than
expectatio
n
Dissapoint
-ment
Restart
eval
process.
Choose a
new brand
Satisfaction
Performan
ce greater
than
expectatio
n
Satisfaction
Reduced
consumer
experiment
-ation
Brand
loyalty
END OF MODULE