Amity Business School

Module V
Opinion Leadership Process
Diffusions of Innovations
Adoption Process.

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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.

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Opinion Leadership

Opinion
Leader

Opinion
Receiver

Opinion
Seeker

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Examples of Opinion Leadership

During a coffee break, a co-worker talks
about the movie he saw last night and
recommends seeing it.
A person shows a friend photographs of
his recent Rajasthan Desert Safari
vacation and the friend suggests that
using a polarizing filter might produce
better pictures.

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Special Issues
Opinion leaders are four times more likely to
be asked about political issues, three times
more likely to be asked about computers or
investments, and twice as likely to be asked
about restaurants
Information seekers seek a strong-tie
source when they know little about a topic,
and weak-tie sources when they have some
knowledge

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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

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Viral Marketing

Buzz Marketing
Wildfire Marketing
Avalanche Marketing
These terms describe any strategy that
encourages individuals to pass on a
marketing message to others;
The marriage of email and word-of-mouth
communication

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Yahoos Buzz Index

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Factors Leading to Negative Wordof-Mouth Behavior

Individual Factors
Attitudinal Factors
Product Involvement

+
+
+

Situational Factors
+

Negative
WOM -

Likelihood
of
Repurchase

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Word-of-Mouth in Action
% of
respondents
that used
a referral
to make one
of these
purchases
over the
past year

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Motivations Behind Opinion

Leadership
The Needs of Opinion Leaders
The Needs of Opinion Receivers
Purchase Pals
Surrogate Buyers (Paid Buyers) versus
Opinion Leaders

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The Needs of Opinion Leaders

Self involvement
Social involvement
Product involvement
Message involvement

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The Needs of Opinion Receivers

New-product or new usage information

Reduction of perceived risk
Reduction of search time
Receiving the approval of the opinion
leader

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A Comparison of Motivations
(Excerpts)
OPINION LEADERS
SELF-IMPROVEMENT
MOTIVATIONS
Reduce post-purchase uncertainty or
dissonance
Gain attention or status
Assert superiority and expertise
Feel like an adventurer
PRODUCT-INVOLVEMENT
MOTIVATIONS
Express satisfaction or dissatisfaction
with a product or service
Learn what products are new in the
marketplace

OPINION RECEIVERS
Reduce the risk of making a purchase
commitment
Reduce search time

Learn how to use or consume a product

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Key Differences Between Opinion

Leaders and Surrogate Buyers
OPINION LEADER
1. Informal relationship with end-users
2. Information exchange occurs in the context of a casual interaction
3. Homophilous (to a certain extent) to end-users
4. Does not get paid for advice
5. Usually socially more active than end-users
6. Accountability limited regarding the outcome of advice
7. As accountability limited, rigor in search and screening of alternatives
low
8. Likely to have used the product personally
9. More than one can be consulted before making a final decision
10. Same person can be an opinion leader for a variety of related product
categories

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Key Differences
SURROGATE BUYER
1. Formal relationship; occupation-related status
2. Information exchange in the form of formal instructions/advice
3. Heterophilus to end users (that is, is the source of power)
4. Usually hired, therefore gets paid
5. Not necessarily socially more active than end-users
6. High level of accountability
7. Search and screening of alternatives more rigorous
8. May not have used the product for personal consumption
9. Second opinion taken on rare occasions
10. Usually specializes for a specific product/service category

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Profile of Opinion Leaders

GENERALIZED
ATTRIBUTES ACROSS
PRODUCT CATEGORIES
Innovativeness
Willingness to talk
Self-confidence
Gregariousness
Cognitive differentiation

CATEGORY-SPECIFIC
ATTRIBUTES
Interest
Knowledge
Special-interest media exposure
Same age
Same social status
Social exposure outside group

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Market
Maven

Individuals whose influence stems from a

general knowledge or market expertise
that leads to an early awareness of new
products and services.

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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.

Multistep Flow
A revision of the traditional two-step theory
that shows multiple communication flows

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Two-Step Flow of Communication

Theory
Step 1
Mass
MassMedia
Media

Step 2
Opinion
Opinion
Leaders
Leaders

Opinion
Opinion
Receivers
Receivers
(the
(themasses)
masses)

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Multistep Flow of Communication

Theory
Step 2

Mass
MassMedia
Media

Step 1a

Step 1b

Opinion
Opinion
Leaders
Leaders

Step 3

Opinion
Opinion
Receivers/
Receivers/
Seekers
Seekers
Information
Information
Receivers
Receivers

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Issues In Opinion Leadership

and Marketing Strategy
Programs Designed to Stimulate Opinion
Leadership
Advertisements Stimulating Opinion
Leadership
Word of Mouth May Be Uncontrollable
Creation of Opinion Leaders

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Diffusion
Process
The process by which the acceptance of
an innovation is spread by
communication to members of social
system over a period of time.

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Adoption
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.

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Elements of the Diffusion

Process

The Innovation
The Channels of Communication
The Social System
Time

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Defining Innovations

Firm-oriented definitions
Product-oriented definitions
Market-oriented definitions
Consumer-oriented definitions

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Product-Oriented Definitions
Continuous
Innovation
Dynamically
Continuous
Innovation
Discontinuous
Innovation

Telephone Innovations
Discontinuous
Innovations

Telephone

Cell Phone

Fax Machine

Dynamically Continuous
Innovations

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Continuous
Innovations

Telephone answering machines

Call forwarding
Call waiting
Caller ID
Banking by telephone
Call-prompting systems

Hold button
Line-in-use indicator
Redial button
Auto dialing feature
Touch-tone service
800 Numbers
900 Numbers

Ability to send/receive email

Incorporate PDA functions
Calendar/Phonebook
Voice-activated dialing

Switch from analog to

digital
Include camera
Ringer styles
Play games

Fax modem
Mobile fax machines
Home office systems
(combined fax, copier,
computer printer)

Plain paper fax

Speed dial buttons
Delayed send
Copy function
Paper cutter

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Product Characteristics That

Influence Diffusion

Relative Advantage
Compatibility
Complexity
Trialability
Observability

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Characteristics That Influence Diffusion

CHARACTERISTICS

Relative
Advantage
Compatibility

Complexity

EXAMPLES

Air travel over train travel, cordless

phones over corded telephones
Gillette MACH3 over disposable
razors, digital telephone answering
machines over machines using tape
Electric shavers, instant puddings

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continued
CHARACTERISTICS

EXAMPLES

Trialability

Trial size jars and bottles of new

products, free trials of software,
free samples, cents-off coupons

Observability

Clothing, such as a new Tommy

Hilfiger jacket, a car, wristwatches,
eyeglasses

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Time and Diffusion

Purchase Time
Adopter Categories
Rate of Adoption

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Adopter
Categories

A sequence of categories that describes

how early (or late) a consumer adopts a
new product in relation to other adopters.

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Adopter Categories

Early
Adopters
13.5%
Innovators
2.5%

Laggards
Early
Majority
34%

Late
Majority
34%

Percentage of Adopters by Category Sequence

16%

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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

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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

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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

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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

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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

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Stages in Adoption Process

WHAT HAPPENS
NAME OF
DURING THIS STAGE
STAGE

EXAMPLE

Awareness

Consumer is first
exposed to the product
innovation.

Janet sees an ad for a new MP3 player in

the magazine she is reading.

Interest

Consumer is interested in
the product and searches
for additional
information.

Janet reads about the MP3 player on the

manufacturers Web site and then goes to
an electronics store near her apartment and
has a salesperson show her a unit.

Evaluation

Consumer decides
whether or not to believe
that this product or
service will satisfy the
need--a kind of mental
trial.

After talking to a knowledgeable friend,

Janet decides that this MP3 player will
allow her to easily download the MP3 files
that she has on her computer. She also
feels that the units size is small enough to
easily fit into her beltpack.

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Stages in Adoption Process

WHAT HAPPENS
NAME OF DURING THIS STAGE
STAGE

Trial

Adoption
(Rejection)

EXAMPLE

Consumer uses the

product on a limited
basis

Since an MP3 player cannot be tried like

a small tube of toothpaste, Janet buys the
MP3 player online from Amazon.com,
which offers a 30-day full refund policy.

If trial is favorable,
consumer decides to use
the product on a full,
rather than a limited
basis--if unfavorable, the
consumer decides to
reject it.

Janet finds that the MP3 player is easy to

use and that the sound quality is excellent.
She keeps the MP3 player.

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An Enhanced Adoption Process Model

Discontinuation or
Rejection

Rejection

Evaluation

Pre-existing
problem or
Need

Awareness

Interest

Evaluation

Adoption or Rejection

Discontinuation

Trial

Adoption
or
Rejection

Postadoption or
Postpurchase
Evaluation

The Relative Importance of Different

of
Amity Types
Business School
Information Sources in the Adoption Process
High
Personal and
interpersonal
sources
Importance
Impersonal
mass-media
sources

Adoption

Trial

Evaluation

Interest

Awareness

Low

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Issues in Profiling Consumer

Innovators

Defining the Consumer Innovator

Interest in the Product Category
The Innovator Is an Opinion Leader
Personality Traits
Media Habits
Social Characteristics
Demographic Characteristics
Are There Generalized Consumer Innovators?

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Ad Appeals
to Fashion
Innovators