Word of Mouth and Opinion Leader
The importance of interpersonal communication in consumer decision processes has been documented again and again in consumer behavior research, with numerous studies describing the frequency of consumer word-of-mouth and its influence on recipients (Arndt 1967; Katz and Lazarsfeld 1955; Leonard-Barton 1985; Technical Assistance Research Programs 1981). Even in this era of mass communications and mass advertising, it has been estimated that as much as 80% of all buying decisions are influenced by someone’s direct recommendation (Voss 1984).
Opinion Leadership is the process by which the opinion leader informally influences the actions or attitudes of others, who may be opinion seekers or merely opinion recipients. Opinion receivers perceive the opinion leader as a highly credible, objective source of product information who can help reduce their search and analysis time and percieved risk.
Opinion leaders are motivated to give information or advice to others, in part doing so enhances their own status and self image and because such advice tends to reduce any post purchase dissonance that they may have.Other motives include product involvement, message involvement or any other involvement.
Market researchers identify opinion leaders by such methods as self designation, key informants, the sociometric method and the objective method.
Studies of opinion leadership indicate that this phenomenon tends to be product category specific, generally one of their interest. An opinion leader of one product range can be an opinion receiver for another product category.
Generally, opinion leaders are gregarious, self confident, innovative people who like to talk. Additionally, they may feel differentiated from others and choose to act differently (or public individuation).
They acquire information about their areas of interest through avid readership of special interest magazines and ezines and by means of new product trials.
Their interests may often overlap into adjacent areas and thus their opinion leadership may also extend into those areas.
Who is a market maven ?
The market maven is an intense case of a opinion leader kind of person. These consumers possess a wide range of information about many different types of products, retail outlets, and other dimensions of markets.
They both initiative discussions with other consumers and respond to requests for market information over a wide range of products and services.
Market mavens are also distinguished from other opinion leaders because their influence stems not so much from product experience but from a more general knowledge or market expertise that leads them to an early awareness of a wide array of new products and services.
The opinion leadership process usually take place among friends, neighbours and work associates who have frequent physical proximity and thus have ample opportunity to hold informal product related conversations. These conversations usually occur naturally in the context of the product-category usage.
The two – step flow of communication theory highlights the role of interpersonal influence in the transmission of information from the mass media to the populations at large. This theory provides the foundation for a revised multi step flow of communication model, which takes into account the fact that information and influence often are 2 way processes and that the opinion leaders both influence and are influenced by opinion receivers.
It is important for the marketers to segment their audiences into opinion leaders and opinion receivers for their respective product categories. When marketers can direct their promotional efforts to the more influential segments of these markets, these opinion leaders will transmit the information to those who seek product advice.
Marketers try to simulate and stimulate opinion leadership. They have also found that they can create opinion leaders for their products by taking socially involved or influential people and deliberately increasing their enthusiasm for a product category.
The diffusion process and the adoption process are 2 closely related concepts concerned with the acceptance of new products by customers.
The diffusion process is a macro process that focuses on the spread of an innovation from its source to the consuming public.
The adoption process is a micro process that examines the stages through which an individual consumer passes when making a decision to accept or reject a new product.
The definition of the term innovation can be
- Firm oriented(new to the firm),
- Product oriented(a continuous innovation, a dynamically continuous innovation, or A discontinuous innovation),
- Market oriented(how long the product has been on the market or an arbitrary percentage of the potential target market that has purchased it), or
- Consumer oriented (new to the customer).
Market-oriented definitions of innovation are most useful to consumer researchers in the study of the diffusion and adoption of new products.
Five Product Characteristics influence the consumers acceptance of a new product:
- Relative Advantage
Diffusion researchers are concerned with 2 aspects of communication – the channels through which word about a new product or service is spread to the public and the types of messages that influence the adoption or rejection of new products or services.
Diffusion is always examined in the context of a specific social system, such as a target market, a community, a region or even a nation.
Time is an integral consideration in the diffusion process. Researchers are concerned with the amount of purchase time required for an individual customer to adopt or reject a new product/service, with the rate of adoptions and with the identification of sequential adopters.
The 5 adopter categories are innovators, early adopters, early majority, late majority and laggards.
Marketing Strategists try to control the rate of adoption through their new product pricing policies. Companies who wish to penetrate the market to achieve market leaderships try to acquire wide adoption as quickly as possible by using low prices. Those who wish to recoup their developmental costs quickly use a skimming pricing policy but lengthen the adoption process.
The traditional adoption process model describes 5 stages through which an individual consumer passes to arrive at the decision to adopt or reject a new product:
To make it more realistic, an enhanced model is recommended as one that considers the possibility of a pre existing need or problem, the likelihood that some form of evaluation might occur through the entire process, and that even after adoption there will be post adoption or purchase evaluation that might either strengthen the commitment or alternatively lead to discontinuation of the product/service.
Companies marketing new products are vitally concerned with identifying the consumer innovator so that they may direct their promotional campaigns to the people who are most like to try new products, adopts them and influences others.
Consumer Research has identified a number of consumer related characteristics, including product interest, opinion leadership, personality factors, purchase and consumption traits, media habits, social characteristics, and demographic variables that distinguish consumer innovators from later adopters. These serve as useful variables in the segmentation of markets for new product introductions.