Consumer Behaviour – Viral Marketing

What are celebrity reference groups?
You are the marketing vice president for a large soft drink company. Your company’s advertising agency is in the process of negotiating a contract to employ a superstar female singer to promote your product.
What are the criteria to selecting a celebrity endorsement?
• Trustworthiness
• Expertise
• Familiarity
• Likeability
• Physical attractiveness

“Unfortunately, there’s always the danger that your celebrity, being human, will do something that will embarrass your branding program. You can fire them, but damage can still be done.” -Trout (2007), Forbes
• Michael Phelps
• Tiger Woods

Selecting reference groups
•Recognize the extent of reference group influence in a situation
•Identify the most effective type of reference group influence
•Identify possible reference group members to use in promotions
•Attempt to increase reference group influence
Define the Diffusion Process
The process by which the acceptance of an innovation is spread by communication to members of a social system over a period of time.
Name the orientations of Innovations
•Firm-oriented
•Market oriented
•Consumer-oriented
•Product-oriented (continuous, dynamically continuous, discontinuous)
Define the orientations of Innovations
Firm oriented – product new to company

Market oriented – when consumers haven’t had very much exposure to the product (% penetration or not on market very long)

Consumer oriented – consumer’s perception

Product oriented – continuous innovation, (improved, modified), dynamically continuous (new product that is different enough to have some disruptive effects on consumption i.e. iPod), discontinuous (dramatically new…requires completely new consumption practices)

What are Factors That Affect the Diffusion of Innovations
•The Innovation
-Product characteristics
•The Channels of Communication
-Opinion leaders
• The Social System
• Time
-Purchase time, adopter categories, rate of adoption
List Product Characteristics That Influence Diffusion
• Relative Advantage
• Compatibility
• Complexity
• Trialability
• Observability
• Felt Need
• Risk

R-C-C-T-O-N-R
real city centres take on new residents

What are adopter categories?
A sequence of categories that describes how early (or late) a consumer adopts a new product in relation to other adopters
What are characteristics of a consumer innovator?
• The earliest purchasers
• Interest in the Product Category
• The Innovator Is an Opinion Leader
• Deal-prone; heavy users
• Communicates with other innovators
What are the demographic, media habits, social characteristics and personality traits of most consumer innovator?
Demographic Characteristics
•Younger, more formal education, higher income, higher occupational status

Media Habits
•More magazines, less TV

Social Characteristics
•More social, widely accepted

Personality Traits
•Less dogmatic
•Need for uniqueness
•Inner-directed
•High optimum stimulation level
•Variety seeking
•Low perceived risk
•VENTURESOME

Describe early adopters
• 34% of population
• Deliberate
• Adopt new ideas just prior to the average time
• Seldom hold leadership positions
• Deliberate for some time before adopting
Describe late majority
• 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
Describe Laggards
• 16% of population
• Traditional
• The last people to adopt an innovation
• Most “localite” in outlook
• Oriented to the past
• Suspicious of the new
What is the adoption process?
The 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
What is 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 are characteristics of Opinion Leaders?
•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

What is a Purchase Pal?
Purchase Pals
•Information sources who accompany a consumer on a shopping trip
-May or may not be opinion leaders
What is a Surrogate Buyer?
• Surrogate Buyers
-Professional buyers who help consumers with their purchases
-NOT opinion leaders
What are some differences between purchase pal’s and surrogate buyers?
OPINION LEADER
• Informal
• Casual interaction
• Homophilous
• Unpaid
• Socially more active
• Limited accountability
• Less rigorous search
• Personal experience
• More than one
• Can be opinion leader for variety of products

SURROGATE BUYER
• Formal
• Formal information exchanges
• Heterophilous
• Paid
• Not necessarily socially more active
• Accountable
• More rigorous search
• Personal experience not req’d
• One
• Specializes in one product/category

What is a Market Maven?
Market Maven
•A special category of opinion leaders
•Individuals whose influence stems from a general knowledge or market expertise that leads to an early awareness of new products and services.
•Influence extends beyond high-involvement products
What are the two types of Interpersonal Flows of Communication?
– The two-step flow
– The multi-step flow
What is the two-step flow?
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.
What is the multi-step flow?
Multi-step Flow
A revision of the traditional two-step theory that shows multiple communication flows
Identify the needs of opinion leaders
Needs of Opinion Leaders
•To reduce their own post-purchase dissonance
•For tangential personal benefits
i.e. help others, something to talk about, social capital
Identify the needs 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
Why is opinion leadership effective?
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
What are the four methods for measuring opinion leadership?
1. self designating method
2. sociometric method
3. key informant method
4. objective method
Describe the self designating method of measuring opinion leadership
Self Designating Method:
each respondent is asked a series of questions to determine the degree to which they pecieve themselves to be an opinion leader
Describe the sociometric method of measuring opinion leadership
Sociometric Method:
members of a social system are asked to whom they give advice and to whom they go to for advice
Describe the key informant method of measuring opinion leadership
Key Informant Method:
carefully selected key informants within a social class are asked to designate opinion leaders
Describe the objective method of measuring opinion leadership
Objective Method:
artificially places individuals in a position to act as an opinion leader and then measures the results of their efforts
What is Viral Marketing?
•Aka “buzz”, “reaching the tipping point” or “convergence marketing”
•”Refers to a very specific type of W-O-M communication about a brand or product that leads to explosive self-generated demand – or ruin” (Dobele et al, 2005, p. 144)
•”making email into a form of advocacy or W-O-M referral endorsement from one client to other prospective clients” (Ibid)
What are some advantages to viral marketing?
– Costs less
– May be viewed more favourably by recipient due to voluntary nature of spread
– Offers more effective targeting
List the 5 key factors to successful viral marketing
• Be creative, fun or intriguing
• Be targeted correctly
• Be attached to a product that is easy to use or highly visible
• Be associated with a credible source
• Combine technologies
Why are opinion leaders motivated to be opinion leaders?
Needs of Opinion Leaders
• To reduce their own post-purchase dissonance
• For tangential personal benefits
Why are opinion leaders effective?
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