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COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Types of Personal Influence Influences: Normative Groups Individuals Value Expressive Informational
Transmission
This model begins with the source & type of influence, proceeding through transmission of influence and degree of effect and ending with the influence on behaviors, lifestyles, purchases and consumption.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Word-of-Mouth Communication
Word-of-mouth communication:
informal transmission of ideas, comments, opinions, and information between two people, neither one of which is a marketer The receiver gains information about behaviors and choices, which is valuable to the receiver in the decision process The sender increases their confidence in the personal product or behavior choice by persuading others to do the same
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Benefits of Word-of-Mouth
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Opinion Leadership
Opinion leadership: the sender of information is often considered an opinion leadera person who influences the decisions of others Opinion leaders might be experts in one area but not in others The greater the perceived knowledge of a category, the more likely that persons opinions are to influence others decisions Personal influence in the form of opinion leadership is likely to occur when:
An individual has limited knowledge of a product or brand The person lacks the ability to evaluate the product or service The consumer does not trust advertising and other sources of information Other information sources have low credibility with the consumer
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Opinion Leadership
The individual has a high need for social approval Strong social ties exist between sender and receiver The product is complex The product is difficult to test against objective criterion The product is highly visible to others
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Opinion Leadership
Product innovators: similar to opinion leaders, these individuals are the first to try new products Overlapping Opinion Leadership Market mavens: gather much of their information from shopping experiences, openness to information and general market awareness, making them more aware of new products than other people Surrogate consumers (shoppers): an individual who acts as an agent to guide, direct, and conduct activities in the marketplace
Service Encounters
Service encounters: occurs when there is personal communication between a consumer and a marketer May be a consumption experience within a storethe various trans-actions and services that occur during a retail purchase
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
May be an experience consuming the specific service a consumer purchases Service providers must understand the needs of different customers and match the appropriate sales associate or sales approach to each individual customer Which customers desire a great deal of assistance and which ones prefer little interaction Salespeople foster a relationship between buyer and seller Customer intimacy: detailed understanding and focus on customers needs lifestyles and behaviors in an effort to create a deep cultural connections with the customers Reverse customer intimacy: how well marketers facilitate customers knowing the marketer
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Stimulating Word-Of-Mouth
Firms may stimulate WOM by giving away or loaning products to opinion leaders to display and use Organizations may induce opinion leaders to influence consumers
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Curbing Negative WOM When something goes terribly wrong, denying the problem is not the answer The best strategy is immediate acknowledgement by a credible company spokesperson as negative WOM rarely goes away by itself Make sure you have all your facts straight and tell the truth
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Diffusion of Innovations
Innovation: any idea or product perceived by the potential adopter to be new Product innovation: any new product recently introduced to the market or perceived to be new when compared to existing products Consumers can view innovations subjectively or objectively Subjective Innovation: a definition derived from the thought structure of a particular individual or entity Objective innovation: based on external criteria; innovations are ideas, behaviors, or things that are qualitatively different from existing forms
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Types of Innovations
Classified based on the impact of the innovation on behavior in the social structure Continuous innovation Dynamically continuous innovation Discontinuous innovation
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Continuous Innovation
The modification of an existing product rather than the establishment of a totally new product Modification may be in the taste, appearance, performance, or reliability of the existing product
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Discontinuous Innovation
Involves the introduction of an entirely new product that significantly alters consumers behavior patterns and lifestyles Examples include automobiles, televisions, videocassette recorders, and computers
Types of Innovations
While innovations are usually considered in terms of new products, they might also be usage basedfinding new uses for old products
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Relative Advantage
The degree to which consumers may perceive the innovation to offer substantially greater benefits than the product they currently use To what degree will the new product be a substitute for existing ones or complement those already in consumers inventories? New products most likely to succeed appeal strongly to felt consumer needs
Compatibility
The degree to which a new product is consistent with an individuals existing practices, values, needs, and past experiences of the potential adopters How does the innovation blend with products consumers might own? Will it replace other products or will it become a part of an existing system? How does the innovation fit current purchase or consumption behaviors?
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Complexity
The degree to which an innovation is perceived as difficult to understand and use The more complex, the more difficult it will be to gain acceptance Complexity is a deterrent of trying new technology How difficult is the innovation to understand? How easy is it to explain to consumers in written form and oral communication? How frustrating will it be to consumers when evaluating products or learning how to use new innovation? How much time will consumers have to devote to learning how to use and care for the product?
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Trialability
New products are more apt to succeed when consumers can experiment with or try the idea on a limited basis, with limited financial risk How can a company encourage consumers to try a new product? Where will consumers be able to try the innovation and how will they receive answers to their questions?
Observability
The degree to which results from using a new product are visible to friends and neighbors If consumers can see others benefiting from the use of a new product, that innovation is more likely to be successful and diffuse faster
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Diffusion of Innovation
OrganiOrganization
Influencer
(X number of people)
Demise of Innovation
Speed of Diffusion
Diffusion will be faster if: Supplier is intensely competitive Suppliers reputation is good Standardized technology is used Vertical coordination among channel members exists Resource commitments are significant
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Knowledge: begins when the consumer receives physical or social stimuli that gives exposure and attention to the new product and how it works How a person receives and interprets the knowledge is affected by their personal characteristics
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Persuasion: refers to the formation of favorable or unfavorable attitudes towards the innovation Persuasiveness is related to the perceived risks and consequences of adopting and using the new product
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Decision: involves a choice between adopting and rejecting the innovation Adoptors are people who have made a decision to use a new product whereas other are nonadoptors Rejection may be active or passive
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Knowledge
Persuasion Decision
Adoption
Rejection
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Implementation: occurs when the consumer puts an innovation to use The process has been a mental exercise until this point where it requires a behavioral change The strength of the marketing plan may be the critical determinant in a sale resulting
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Confirmation: during this stage, consumer seek reinforcement for their innovation decision Consumer may reverse previous decision due to conflicting messages resulting in dissonance Discontinuance is a serious concern to marketers who strive for continued acceptance
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Knowledge
Persuasion Decision
ImplemenImplemenConfirmation tation
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
Adopter Classes
A= Innovators (2.5%) B= Early Adopters (13.5%) C= Early Majority (34%) D= Late Majority (34%) E= Laggards (16%)
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.
COPYRIGHT 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.