mark ch7

Opinion Leaders:

"go-to person" for specific types of information. These individuals actively filter, interpret, or provide product- and brand-relevant information to their family, friends, and colleagues

1st phone= discountinuous iphone= dynamically continuous 2nd phone with rotating numbers= continuous

1st time cigs were created= discontinous e-cigs= dynamically filtered cigs=continous

Dynamically Continuous Innovation:

A product change or new product requiring a moderate amount of adaptation by the consumer. Examples include digital cameras, personal navigators, touch tone phones, self focus cameras, mobile apps,

Discontinuous Innovation:

A product change or new product requiring a significant amount of adaptation by the consumer and creates major change in consumer's life. For example. train, airplane, radio, car, computer, TV.

Dissociative Groups:

Apple won't let bad guys use iPhones in movies, says Knives Out director

Diffusion of innovations theory

Everett Rogers explain how new ideas and technology spread, why they spread and the rate of adoption.

Informational:

Expert Power - A person can be influential because they have information or knowledge individual uses the behaviors and opinions of reference group members as potentially useful bits of information

Asch Phenomenon

Individuals conform to majority rule, even if that majority rule goes against their beliefs

Marketers use all three types of reference group influence when developing advertisements.

Informational influence in advertising uses an expert reference group (e.g. dentists, doctors, and teachers) as the information agent. Normative group influence is not portrayed as much as it once was. It involves the explicit or implicit suggestion that using, or not using, the brand will result in having members of a group you belong to or wish to join rewarding or punishing you. Identification influence is based on the fact that the individual has internalized the group's values and attitudes. The advertising task is to demonstrate that the product is consistent with the group's - and therefore the individual's - beliefs. This often involves showing the brand being used by a particular type of group, such as socially active young singles or parents of young children.

Groups may be classified according to a number of variables:

Membership Type of Contact Strength of Social Tie Attraction

Membership

One is either a member of a particular group or one is not a member of that group. some members feel they really belong to a group, while others lack this confidence.

Visible Public Usage - Group influence is strongest when the use of the product or brand is visible to the group.

Products such as running shoes are highly visible. Products such as vitamins are generally not

Identification (Value Expressive):

Referent Power - If a person is admired, consumer may try to imitate; prominent people can influence others. individual has accepted the group's values as his or her own without any thought of reference group sanctions or rewards.

Normative (Utilitarian):

Reward Power and Coercive Power individual fulfills group expectations to gain a direct reward or to avoid a sanction strongest when individuals have strong ties to the group and the product involved is socially conspicuous Advertisement that rely on normative influence will typically: Promise social acceptance or approval if a product is used Suggest group disapproval if a product is not used, such a s mouthwash or deodorant

Relative Advantage

The better the innovation is perceived to meet the need compared with existing products (performance & cost), the more rapid the diffusion

Fulfillment of Need

The more manifest or obvious the need, the faster the diffusion.

Compatibility

The more the product is consistent with the individual's and group's values/beliefs, the more rapid the diffusion Examples: Microwave ovens and dishwashers - both products suffered slower than anticipated diffusion rates due to their incompatibility with the wife's perceived role in the kitchen.

rate at which an innovation is diffused is a function of the following

Type of Group Type of Decision Marketing Effort Fulfillment of Felt Need Compatibility Relative Advantage Complexity Observability Trialability Perceived Risk

reference group

actual or imaginary individual or group that has a significant effect upon an individual's evaluations, aspirations or behavior group whose presumed perspectives or values are being used by an individual as the basis for his or her own current behavior. a group that an individual uses as a guide for behavior in a specific situation.

firms should consider a "moving target market" approach.

after selecting a general target market, the firm should initially focus on those individuals within the target market most likely to be innovators and early adopters

adoption process

awareness, interest, evaluation, trial, adoption

early majority

cautious about innovations. adopt sooner than most of their social group but also after the innovation has proved successful with others. socially active but seldom leaders older, less well educated, and less socially mobile

Strength of Social Tie

closeness and intimacy of the group linkages Primary groups, such as family and friends, involve weaker ties and frequent interaction(wield considerable influence.) Secondary groups, such as professional and neighborhood associations, involve weaker ties and less frequent interaction.

adopter categories

consumers can be placed into categories based on their innovativeness as to how quickly they adopt new products. Innovators - Eager to try new ideas when they 1st come out early adopters- join when they see a benefit(after innovators) early majority-join when there is a gain in productivity late majority- join when there is help and support laggards- join when they have to

High purchase involvement is likely for discontinuous innovations

continuous innovations probably trigger limited decision-making

Attraction

desirability that membership in a given group has for the individual (can range from negative to positive). Dissociative reference groups, with negative desirability, can influence behavior just as those with positive desirability do. For example, teenagers tend to avoid clothing styles associated with older consumers. Aspiration reference groups, with positive desirability, also exert a strong influence. Individuals frequently purchase products thought to be used by a desired group in order to achieve actual or symbolic membership in the group.

Type of Contact

direct or indirect Direct contact involves face-to-face interaction; indirect contact does not. The Internet, in particular, has increased the importance of indirect reference groups

Trialability

easier it is to have a low-risk trial of the innovation, the more rapid its diffusion.

Types of Powers:

expert ex)doctor coercive ex(bully) reward ex(a raise) referent ex(celebrity)

Type of Decision

fewer the individuals involved in the purchase decision, the more rapidly an innovation will spread.

Likelihood of Seeking an Opinion Leader

high involvement/knowledge=moderate Likelihood high involvement low knowledge= high Likelihood low involvement high knowledge= low Likelihood low involvement low knowledge=moderate Likelihood

innovation

idea, practice, or product perceived to be new by the relevant individual or group. Whether or not a given product is an innovation is determined by the perceptions of the potential market, not by an objective measure of technological change

Word of Mouth:

individuals sharing information with other individuals in a verbal form, including face-to-face, on the phone, and over the Internet. Consumers generally trust the opinions of people (family, friends, acquaintances) more than marketing communications because, unlike marketing communications, these personal sources have no reason not to express their true opinions and feelings.

forms of reference groups

informational influence, utilitarian influence ,value-expressive influence (range from known person to unknown famous person or character)

Laggards

locally oriented and engage in limited social interaction relatively dogmatic and oriented toward the past resist change and dislike any risk. Their adoption for something comes at the end of the product life cycle

Complexity

more difficult the innovation is to understand and use, the slower the diffusion

Observability

more easily consumers can observe the positive effects of adopting an innovation, the more rapid its diffusion will be.

Perceived Risk

more risk associated with trying an innovation, the slower the diffusion.

Reference group influence can take three forms

normative, informational, and identification.

early adopters

opinion leaders in local reference groups successful, well educated, and somewhat younger than their peers.. willing to take a calculated risk on an innovation but are concerned with failure. Most early adopters move on to the next big thing and may not be loyal to brands.

Groupthink

people tend to confirm with group decisions to avoid feeling outcast, leading to errors in decision-making. When all think alike, then no one is thinking ex) "Yes man" in rapper enteroauge

diffusion inhibitors

potential obstacles

5 Stage Decision Making Process

problem recognition info search eval of alternatives purchase post purchase process

Continuous Innovation:

product change requiring relatively little adaptation by the consumer. when companies reposition Examples include mcdonalds creation of mccafe when they have line extensions ex) Crest Vivid White Night toothpaste when companies improve products ex)all the different iphones

Innovators

risk takers use other innovators rather than local peers as a reference group. younger, better educated, and more socially mobile

late majority

skeptical about innovations adopt more in response to social pressures or a decreased availability of the previous product older and have less social status and mobility want to fit in with the rest of the population

group

two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behaviors are interdependent.

when consumption is not a necessity (public luxury), it has strong reference group influence

what leads to high reference group influence: public usage. high relevance, low confidence in purchase, strong commitment to group, non necessary

two-thirds of all consumer product decisions are influenced by WOM.

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Type of Group

young affluent and highly educated groups accept change, including new products, readily