CHAPTER 9

Reference Groups and Word-of-Mouth

LEARNING OBJECTIVES

After reading, studying and analyzing this chapter, students should be able to understand:
9.1 The credibility of reference groups and their influence on consumer behavior.
9.2 The persuasive power and credibility of spokespersons, endorsers, celebrities, salespersons,
vendors, and media.
9.3 The dynamics and measurement of opinion leadership and word-of-mouth.
9.4 The strategic applications, advantages, and potential perils of word-of-mouth.
9.5 The process for diffusion of innovations, and adopter categories as distinct market segments.

CHAPTER SUMMARY

Learning Objective 9.1: To understand the credibility of reference groups and their influence on
consumer behavior.

Within any setting, including consumer behavior, people are strongly influenced by how others
think and behave. Reference groups are groups that serve as sources of comparison, influence,
and norms for people's opinions, values, and behaviors. Word-of-mouth consists of
communications where satisfied customers tell other people how much they like a business,
product, service, or event, although word-of-mouth can also be negative. The perceived honesty,
objectivity, expertise, and trustworthiness of reference groups make them highly credible
sources. Consumers perceive people whom they know personally as more credible than paid-for
promotional messages. People learn norms and values mostly from families and peers. They also
imitate and adopt the values and habits of persons whom they respect or admire. The groups to
which people belong, as well as groups that they aspire to join, influence their norms and
behaviors. Consumption-related groups also influence consumers’ attitudes and behavior.
Sociocultural groups that determine people’s behavior, norms, morals, and consumption patterns
include family, social class, culture, subculture, and (for global consumers) cross-culture.

Learning Objective 9.2: To understand the persuasive power and credibility of spokespersons,
endorsers, celebrities, salespersons, vendors, and media.

The perceived credibility of spokespersons, endorsers, and other sources that companies use in
their advertising is the key to the ads’ effectiveness. The spokesperson can be an actual
customer, a company employee, a celebrity, or a model. Companies also convey their credibility
through solid past performance, good reputation, high product quality, and good service. Their
perceived credibility is also a function of the image and reputation of the retailers that carry their
offerings and the media where they advertise. Marketers employ celebrities for product
testimonials and endorsements, as well as spokespersons and actors in commercials. Over time,
consumers disassociate messages from their sources; they tend to remember only the message
contents, but not the message sources. Therefore, marketers must regularly repeat messages that
feature high-credibility spokespersons to maintain the messages’ persuasiveness.
Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.

Opinion leadership is the process by which one person—the opinion leader—informally

influences others, who might be either opinion seekers or recipients. This influence occurs
between two or more people, neither of whom represents a commercial seller nor would gain
directly from providing advice or information. Opinion leaders who have expertise in a given
product category provide advice and influence the consumption of others within the same
category. They also follow any new products introduced closely, and are the first to buy new
products. They tend to be self-confident, outgoing, and sociable. Several research methods are
aimed at identifying opinion leaders.

Learning Objective 9.4: To understand the strategic applications, advantages, and potential
perils of word-of-mouth.

Electronic word-of-mouth takes place online and occurs in social networks, brand communities,
blogs, chat rooms, and tweets. Marketers hire buzz agents and initiate viral marketing to
stimulate word-of-mouth in cyberspace. Buzz agents are consumers who promote products
clandestinely and generally receive free product samples but not monetary payments. Viral
marketing is a marketing technique that uses pre-existing social networks and other technologies
to produce increases in brand awareness or to achieve other marketing objectives through
encouraging individuals to pass along online email messages or other content. It is impossible to
control word-of-mouth communications. Negative comments, frequently in the form of untrue
rumors, can sweep through the marketplace and undermine a product. The Internet is a prolific
ground for spreading negative rumors because disgruntled consumers can reach millions of
people easily and exaggerate (or even lie about) their negative experiences with products and
services.

Learning Objective 9.5: To understand the process for diffusion of innovations, and adopter
categories as distinct market segments.

Over time, positive word-of-mouth leads to the widespread adoption of products. However, not
all consumers adopt new products or new versions of existing products simultaneously.
Sociologists who studied the how innovations are adopted within societies identified five
categories of adopters: innovators, early adopters, early majority, late majority, and laggards.
The concept of adopter categories is a classification scheme that depicts where consumers stand
in relation to other consumers in terms of the first time they purchase an innovation (e.g., a new
product). Each category represents a distinct market segment, so marketers must study each
group to target it effectively.

CHAPTER OUTLINE

Introduction
1. Reference groups are groups that serve as sources of comparison, influence and norms for
peoples’ opinion, values and behaviors.
a. People are strongly influenced by what others think and how they behave.
b. The most important reference group is the family because it provides children with the
skills, knowledge, attitudes, and experiences necessary to function as consumers, a
process called consumer socialization.

*****Use Key Term reference group Here; Use Figures #9.1 and #9.2 Here *****

Source Credibility and Reference Groups

1. Reference groups, particularly informal ones, have a high degree of source credibility,
defined as a source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.
2. When the source of communications about a product is well respected and highly thought of
by the intended audience, the message is much more likely to be believed.
a. A formal source is either a person or medium providing consumption-related
information and hired and paid by an organization.
b. An informal source is a person whom the message receiver knows personally,
such as a parent or friend who gives product information or advice, or an
individual met and respected online.
3. Source credibility: A source’s persuasive impact, stemming from its perceived expertise,
trustworthiness, and believability.

*****Use Key Terms source credibility, formal source, informal source Here; Use Review
and Discussion Question #9.7 Here*****

4. Reference groups are groups that serve as frames of reference for individuals in their
consumption decisions because they are perceived as credible sources
a. Reference groups influencing broadly defined values or behavior are called normative
reference groups.
b. Reference groups serving as benchmarks for specific or narrowly defined attitudes or
behavior are called comparative reference groups.
c. A group to which a person either belongs or would qualify for membership is called a
membership group.
d. There are groups in which an individual is not likely to receive membership, despite
acting like a member by adopting the group’s values, attitudes, and behavior. This is
called a symbolic group.

*****Use Key Learning terms reference groups, normative reference groups, comparative
reference group, membership group, and symbolic group Here*; Use Review and
Discussion Questions #9.2 and #9.3 Here ****

5. The consumption-related groups that influence consumers’ attitudes and behavior include
friendship groups, shopping groups, virtual communities, and advocacy groups.
 a. Friends fulfill a wide range of needs: They provide companionship, security, and
opportunities to discuss problems that an individual may be reluctant to discuss with
family members.
i. They may be a credible source of information about purchases.
ii. People may shop together just to enjoy shopping or to reduce their perceived risk;
that is, they may bring someone along whose expertise regarding a particular
product category will reduce their chances of making incorrect purchases.
iii. Referral programs are an important element of shopping groups.
iv. Another example of a shopping group is the shared experience of waiting in line.
Retail experts say that by standing in a crowd, shoppers see themselves as making
the right buying decision—a concept known as “social proof.”
v. Many websites encourage consumers to leave comments and have others respond
to them.
vi. Most young adults have extensive “buddy lists” and regularly communicate with
people whom they have met online but never in person.
vii. The fact that people can share their interests, hobbies, and opinions with
thousands of peers online has benefited marketers.
b. There are two types of advocacy groups: entities organized to correct a specific consumer
abuse and then disband, and groups whose purpose is to address broader, more pervasive
problem areas and operate over an extended period of time.
c. The degree of influence that a reference group exerts on an individual’s behavior depends
on the individual, product, and social factors.
d. These factors include conformity, the group’s power and expertise, the individual’s
experience and personality, and the conspicuousness of the product.
e. To influence its members, a reference group must:
i. Inform or make members aware that the brand or product exists.
ii. Provide the individual with the opportunity to compare his or her own thinking
with the attitudes and behavior of the group.
iii. Influence the individual to adopt attitudes and behavior that are consistent with
the group’s norms.
iv. Legitimize the member’s decision to use the same products as other members.

*****Use Table #9.2 Here *****

6. Different reference groups may influence the beliefs, attitudes, and behaviors of individuals
at different times or under different circumstances.
7. Consumers who are primarily concerned with approval from others usually adopt the same
products and brands as those group members who have status.
a. When consumers are preoccupied with the power that a person or group can exert over
them, they often adopt products that conform to the norms of that person or group in
order to be complimented on their choices.
b. Unlike reference groups that are not power based, “power groups” may bring about
behaviors, but not changes in attitudes.

*****Use Table #9.3 Here *****

8. People who are compliant, have a tendency to conform and a high need for affiliation, need
to be liked by others, and are other-directed are more receptive to group influences.
9. Competitive people who desire to control other people and events and are inner-directed are
less likely to look for guidance from reference groups.

Credibility of Spokespersons, Endorsers and Other Formal Sources

1. Source credibility is the believability of the endorser, spokesperson, or individual in an

advertisement.
a. A spokesperson can be an actual customer, a company employee, a celebrity, or a model.
b. Researchers have identified the following dimensions in measuring the credibility of a
person or organization: expertise, trustworthiness, attractiveness, and likability.

*****Use Key Term source credibility Here; Use Learning Objective #9.2 Here *****

2. Consumers recognize that the intentions of commercial sources (e.g., manufacturers, service
companies, financial institutions, retailers) are clearly profit and view them as less credible
than informal reference groups.
a. Companies can convey their credibility through solid past performance, good reputation,
product quality, and good service.
b. Their perceived credibility is also a function of the image and attractiveness of their
spokespersons, the reputation of the retailers that carry their offerings, and the media
where they advertise.
c. Marketers also use institutional advertising, which consists of promoting a company’s
image without referring to any of its specific offerings.

*****Use Key Term institutional advertising Here *****

d. The greater the fit between the celebrity and the product endorsed, the higher the
persuasiveness of the message.
e. Endorsers whose demographic characteristics (e.g., age and ethnicity) are similar to those
of the target audiences are viewed as more credible and persuasive than those whose
characteristics are not.
i. Although consumers may like an ad featuring a famous endorser, they will
buy the product advertised only if they trust the marketer as well.
ii. Marketers who use celebrities in testimonials or endorsements must ensure
that the message contents are congruent with spokespersons’ qualifications.
iii. Marketers must ensure that there is a synergy among the celebrity’s
trustworthiness, expertise, physical attractiveness, and the product or brand
endorsed.
iv. They must also take into account the celebrity’s number of prior
endorsements, because consumers perceive celebrities who appear in
commercials too often as less credible than celebs with lesser commercial
exposure.
 f. Celebrities, particularly movie stars, TV personalities, popular entertainers, and sports
icons, are a symbolic reference group because they are liked, admired, and often have a
high degree of perceived credibility.
g. Credibility is the most important thing the celebrity offers – the audience’s perception of
both the celebrity’s expertise (how much the celebrity knows about the product area) and
trustworthiness (how honest the celebrity is about what he or she says about the product).
h. Marketers employ celebrities in promotion in the following ways:
i. Celebrity testimonial—Based on personal usage, the celebrity attests to the
product’s quality.
ii. Celebrity endorsement—Celebrities appear on behalf of products, with
which they may or may not have direct experience or familiarity, for extended
periods.
iii. Celebrity actor—The celebrity plays a part in a commercial for the product.
iv. Celebrity spokesperson—The celebrity represents the brand or company
over an extended period.

*****Use Key Term celebrity Here; Use Figure #9.6 Here; Use Review and Discussion
Question #9.8 Here; Use Hands-on Assignment #9.11 Here*****

3. Salespeople who engender confidence and who give the impression of honesty and integrity
are most persuasive.
a. A salesperson who “looks you in the eye” often is perceived as more honest than one who
evades direct eye contact.
b. For many products, a sales representative who dresses well and drives an expensive, late-
model car may have more credibility than one without such outward signs of success.
c. For other products, a salesperson may achieve more credibility by dressing in the role of
an expert.
4. The reputation of the retailer who sells the product has a major influence on message
credibility.
a. Products sold by well-known, quality stores carry the added endorsement (and
implicit guarantee) of the store itself.
b. The consumer’s previous experience with the product or vendor has a major impact
on the credibility of the message.
5. Fulfilled product expectations increase the credibility accorded to future messages by the
same advertiser; unfulfilled product claims or disappointing product experiences reduce the
credibility of future messages.
6. The reputation of the medium that carries the advertisement also enhances the credibility of
the message.
a. Most consumers believe that a respectable medium would only advertise products
that it “knows” to be of good quality.
b. Because specialization in an area implies knowledge and expertise, consumers regard
advertising they see in special-interest magazines and websites as more credible than
ads in general-interest sources.
7. One’s disassociation of the message from its source over time, and remembering only the
message content but not its source, is called the sleeper effect.
8. The theory of differential decay suggests that the memory of a negative cue (e.g., a low
credibility source) simply decays faster than the message itself, leaving behind the primary
message content.

*****Use Key Terms sleeper effect, differential decay Here; Use Review and Discussion
Question #9.9 Here *****

Word-of-Mouth and Opinion Leadership

1. Opinion leadership, defined as the process by which one person—the opinion leader—
informally influences others, who might be either opinion seekers or recipients, occurs
between two or more people, neither of whom is or represents a commercial seller or would
gain directly from providing advice or information.
a) The information that opinion leaders transmit includes advice on selecting the best
brands, using the products correctly, where to buy the products, and other aspects.
b) Opinion leaders are especially important in recommending service providers with whom
they have had personal relationships, such as doctors, lawyers, hairdressers, garage
mechanics, restaurants, or travel companies, because small service businesses have very
limited advertising resources, and the main way they can get new customers is via
recommendations by existing clients.
c) Opinion leadership is category specific; that is, opinion leaders often specialize in certain
product categories about which they offer information and advice.
d) The motivations of opinion leaders and receivers are shown in Table 9.4

*****Use Key Term opinion leadership Here; Use Table 9.4; Use Review and Discussion
Question #9.1 Here*****

2. Characteristics of opinion leaders include:

a) Opinion leaders are highly knowledgeable regarding a particular product category, follow
new products that come into the markets, and are often consumer innovators in their area
of expertise.
b) Opinion leaders are self-confident, outgoing, and sociable.
c) Opinion leaders read special-interest publications and regularly visit websites devoted to
the specific topic or product category in which they specialize. They have specialized
knowledge that enables them to make effective recommendations to relatives, friends,
and neighbors.
d) Usually, opinion leaders and receivers belong to the same socioeconomic and age groups.

3. Consumer researchers can measure the degree of opinion leadership and its impact on
consumption behavior by using one of the following methods:
a) The self-designating method employs a self-administered questionnaire that requires
respondents to evaluate the extent to which they have provided others with information
about a product category or specific brand or have otherwise influenced the purchase
decisions of others.
 b) The sociometric method measures the person-to-person communications about a product
or brand among members of a community where most people know each other by name
(e.g., a college dormitory or sorority). Respondents are asked to identify:
i. The specific individuals (if any) to whom they provided advice or
information about the product or brand under study.
ii. The specific individuals (if any) who provided them with advice or
information about the same product or brand.
c. Researchers can also study opinion leadership by using a key informant, that is, a person
who is keenly knowledgeable about the nature of social communications among members
of a specific group.
d. Klout scores measure people’s degree of influence online.

*****Use Key Terms key informant, sociometric method, self-designating method, Klout
scores Here; Use Table 9.6 Here; Use Review and Discussion Question #9.5 Here *****

Strategic Applications of Word-of-Mouth

1. In marketing, word-of-mouth consists of transmitting advice and other types of information

about products, brands, and shopping experiences.
2. Word-of-mouth taking place online is called e-wom and occurs in social networks, brand
communities, blogs, chat rooms, and tweets.

*****Use Key Term e-wom Here; Use Learning Objective #9.4 Here *****

3. Online, social networks are virtual communities where people share information about
themselves with others, generally with similar interests, with whom they have established
relationships that, for the most part, exist only in cyberspace. The major social networks are
Facebook, YouTube, Twitter, and MySpace.
4. Three dimensions factor into consumers’ engagement in e-wom:
a. Tie strength—the degree of intimacy and frequency of contacts between the
information seeker and the source.
b. Similarity among the group’s members in terms of demographics and lifestyles.
c. Source credibility—the information seeker’s perceptions of the source’s expertise.
5. Negative reviews of hedonic (i.e., products used mainly for pleasure) products were
considered less useful/attributed to the reviewer; negative reviews for utilitarian products
were attributed to the product.
6. Involved consumers transfer and receive more rational product information than information
appealing to emotions.
7. A brand community is a specialized, nongeographically bound community formed on the
basis of attachment to a product or brand.
8. A blog is a discussion or informational site published on the Internet and consists of discrete
entries (“posts”).
9. A microblog has less content than the traditional blog and allow users to exchange small
elements of content, such as short sentences, individual images, and video links, mostly via
Twitter.
 *****Use Key Term social networks, brand community, blog, Twitter Here; Use Learning
Objective #9.4 Here; Use Review and Discussion Question #9.6 Here *****

10. Marketers long ago realized the power of word-of-mouth communications between
consumers, which is almost always more effective than promotional messages paid for by
advertisers, and they often encourage it in ads.
11. Viral marketing (viral advertising) is a marketing technique that uses pre-existing
social networks and other technologies to produce increases in brand awareness or to achieve
other marketing objectives through encouraging individuals to pass along messages.
a. Investigation of the motivations for passing along emails found that people were
receptive only to emails from people they knew. The kind of emails they received
included jokes, virus alerts, inspirational stories, requests to vote on certain issues,
video clips, and links to other websites.
b. The main reasons for not forwarding emails were outdated, dull, and
inappropriate contents. About one-third of the forwarded emails included
personalized notes from the forwarders, and most of the senders did not alter the
emails’ original subject lines.
c. The key reasons for forwarding emails were enjoyment (e.g., fun, entertaining,
exciting) and helping others (i.e., let others know that the senders care about
them).
12. Many firms enlist typical consumers to serve as their buzz agents—consumers who
promote products clandestinely and generally receive free product samples but not
monetary payments.
13. Consumers share negative experiences with others much more readily than positive ones.
Consumers attend to negative information because it is less common than positive
information and to protect themselves.
14. Online media made it easier for consumers to spread negative word-of-mouth.
a. One study discovered that some consumers who posted unfavorable information
wanted to vent negative feelings or warn others.
b. Others sought exposure, self-enhancement, social benefits, and even economic
rewards.

Diffusion of Innovations: Segmenting by Adopter Categories

1. The concept of adopter categories is a classification that depicts where consumers stand in
relation to other consumers in terms of the first time they purchase an innovation (e.g., a new
product or model).
2. Sociologically, the model assumes that all members of a given society would, eventually,
adopt the innovation.
3. The number of people belonging to each category was calculated in a manner resembling a
statistical normal distribution: innovators— the first 2.5% to adopt; early adopters—the next
13.5%; early majority—the next 34%; late majority—the following 34%; and the laggards—
the last 15%.
 ***** Use Learning Objective #9.5 Here; Use Review and Discussion Question #9.4 Here
*****

4. The innovators are the earliest consumers to buy new products.

a. They are prepared to take the risk that the product will not work well, become
unavailable, or be quickly replaced by an improved model (i.e., they are broad
categorizers).
b. They are often willing to pay somewhat higher prices for newly introduced products,
because they enjoy being the first to own gadgets and show them off.
5. The early adopters are consumers who buy new products within a relatively short period
following introduction, but not as early as the innovators.
a. They are venturesome, likely to engage in word-of-mouth.
b. They are likely to assist others who are considering adopting the new products.
6. The early majority consists of consumers who buy innovations after the early adopters have
done so.
a. This segment is larger than the preceding two groups combined.
b. Risk aversion is defined as the reluctance to take risks and low tolerance of ambiguous
situations.

*****Use Key Terms innovators, early adopters, early majority Here; Use Table #9.8 Here
*****

7. Members of the late majority are risk averse and slow to adopt innovation. They wait until
most other consumers have adopted the new product before buying it.
8. The laggards are the very last consumers to adopt innovations.
9. Marketers often “write off” non-adopters, but not all non-adopters are the same, and
understanding nonusers is important.

*****Use Key Terms late majority, laggards Here *****

REVIEW AND DISCUSSION QUESTIONS

9.1 Why is an opinion leader a more credible source of product information than an
advertisement for the same product? Are there any circumstances in which information
from advertisements is likely to be more influential than word-of-mouth?

Communication with an opinion leader is interpersonal, informal and takes place between
two or more people. Feedback is part of the communication process. The opinion leader does
not represent a commercial selling source and therefore does not gain directly from the sale
of something. The opinion leader often bases his/her product comments on firsthand
experience. The opinion leader is perceived as highly credible.

An advertisement is designed primarily to sell a product. Commercial gain is the intent,

therefore credibility may be questioned.
 When the intentions of an advertisement is clearly profit making, then reputation, expertise,
and knowledge become important factors in message credibility. The credibility of
commercial messages is often based on the composite evaluation of the reputation of the
company sending the message, the retail outlet that carries the product, the medium that
carries the message, and the company spokesperson (the actor or sales representative who
delivers the message). When the source of a message is well respected and highly thought of

Individual, Moderate, 15-20 minutes

Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective Thinking

9.2. What are reference groups? List and discuss at least four groups that influence your
purchases. For each group, indicate whether its major influence is comparative or
normative and explain your answers.

Reference groups serve as comparative and normative frames of reference for a person’s
values and behaviors. Responses about the four reference groups will vary. Normative
influence consists of learning and adopting a group’s norms, values, and behaviors. The most
pertinent normative influence comes from groups to which people naturally belong, such as
family, peers, and other members of one’s community. Comparative influence arises when
people compare themselves to others whom they respect and admire, and then adopt some of
those people’s values or imitate their behaviors.

Individual, Moderate, 20-25 minutes

Learning Objective 9.1: To understand the credibility of reference groups and their influence
on consumer behavior.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective Thinking

9.3. What is the difference between membership groups and symbolic groups? List one
membership group and one symbolic group that influence your purchases. Explain
which group influences you more and why this is so.

A group to which a person either belongs or would qualify for membership is called a
membership group. There are groups in which an individual is not likely to receive
membership, despite acting like a member by adopting the group’s values, attitudes, and
behavior. This is called a symbolic group. Student responses to the membership and
symbolic groups that influence their purchases are likely to vary. Responses may reference
normative and comparative influence.

Individual, Moderate, 10-15 minutes

 Learning Objective 9.1: To understand the credibility of reference groups and their influence
on consumer behavior.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application of knowledge

9.4. How can companies strategically use buzz agents and viral marketing? Illustrate with
examples.

Buzz agents are enlisted to share products with their friends/family and/or to use products in
public. These “agents” typically do not receive payment but are motivated by being called
upon to serve as opinion leaders. They may bring a particular brand of barbeque sauce to a
picnic to introduce it to others or read a book on mass transit. Viral marketing uses existing
social networks/encourages individuals to pass on a message to others, thus creating the
potential for exponential growth in the message’s exposure and influence. An example is
Netflix asks users to share what they are watching on Facebook so other friends will be
encouraged to enroll in and use Netflix.

Individual, Easy, 10-15 minutes

Learning Objective 9.4: To understand the strategic applications, advantages and potential
perils of word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application of knowledge

9.5. Compare the advantages and disadvantages of the four methods of measuring opinion
leadership.

The self-designating method employs a self-administered questionnaire that requires

respondents to evaluate the extent to which they have provided others with information about
a product category or specific brand or have otherwise influenced the purchase decisions of
others. It is easy to add to questionnaires, but often consumers overestimate their influence.

The sociometric method measures the person-to-person communications about a product or

brand among members of a community where most people know each other by name (e.g., a
college dormitory or sorority). Respondents are asked to identify:
1. The specific individuals (if any) to whom they provided advice or information about the
product or brand under study.
2. The specific individuals (if any) who provided them with advice or information about the
same product or brand. If respondents identify one or more individuals to whom they
have provided some form of product information and those individuals confirm this
attribution, the respondents receive “opinion leadership points.” On the basis of these
interviews, respondents receive “opinion receivership points.”
 The results of this method are most valid, but the questioning is expensive, analysis is
complex, community members must know each other/it is not applicable in large
populations.

Researchers can also study opinion leadership by using a key informant, that is, a person
who is keenly knowledgeable about the nature of social communications among members of
a specific group. This method is inexpensive, but it is often difficult to find the right person.

The Klout score measures people’s influence online based on their abilities to generate
engagement and feedback to what they post. The Klout score measures how much
conversation an individual generates, but the number of sources it pulls from are still
somewhat limited and the conversation measurement is limited to data mined from online
sources.

Individual, Moderate, 20-25 minutes

Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Analytical thinking; Information technology

9.6. How can marketers use social networks, brand communities, and weblogs to locate new
customers and target them?

E-wom occurs in social networks, brand communities, blogs, chat rooms, and tweets. Three
dimensions underly consumers’ engagement in e-wom: 1. Tie strength—the degree of
intimacy and frequency of contacts between the information seeker and the source. 2.
Similarity among the group’s members in terms of demographics and lifestyles. 3. Source
credibility—the information seeker’s perceptions of the source’s expertise. Social networks
are virtual communities where people share information about themselves with others,
generally with similar interests, with whom they have established relationships that, for the
most part, exist only in cyberspace. A brand community is a specialized, nongeographically
bound community formed on the basis of attachment to a product or brand. A blog is a
personal online journal initiated and managed by a blogger, which includes comments from
the reader. These online journals are now probably the most powerful platform for the
exchange of consumption-related information. However, marketers cannot control what is
written or the comments in any of these forums. However, marketers can listen in to learn
about opportunities for improvement and generate new product ideas, and can profile brand
users and non-users, which can help them identify new consumers to target.

Individual, Moderate, 10-15 minutes

Learning Objective 9.4: To understand the strategic applications, advantages and potential
perils of word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application of knowlege; Information technology
9.7. List and discuss factors that affect the credibility of formal communications sources of
product information. What factors influence the perceived credibility of informal
communications sources?

Informal sources such as friends, neighbors, and relatives have a strong influence on
receiver’s behavior because they are perceived as having nothing to gain from a product
transaction they recommend. Among formal sources, neutral rating services or editorial
sources have greater credibility than commercial sources because of the likelihood that they
are more objective in their product assessments.

Individual, Moderate, 5-7 minutes

Learning Objective 9.2: To understand the persuasive power and credibility of
spokespersons, endorsers, celebrities, salespersons, vendors and media.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Analytical thinking

9.8. You are the marketing vice president of 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. Discuss the reference group factors that you
would consider before the celebrity is hired.

Reference groups can be classified by membership status. Celebrities often constitute a

symbolic group—a group in which an individual (consumer) is not likely to receive
membership, despite acting like a member by adopting the group’s values, attitudes, and
behavior.

When a firm considers employing a celebrity numerous issues should be explored. One issue
concerns effectiveness of the spokesperson as related to the message itself. When message
comprehension is low, receivers rely on the spokesperson’s credibility in forming attitudes
toward the product, but when comprehension is high, the expertise of the spokesperson has
far less impact on a receiver’s attitudes.

In addition, the synergy between the endorser and the type of product or service advertised is
important as celebrities are conditioned with the products they promote. When there is an
appropriate fit between the celebrity and the product endorsed, the conditioning is more
effective, robust and enduring.

Celebrities who have demographic and ethnic characteristics that are similar to those of the
target audience are viewed as more credible and persuasive than those that do not.

The endorser’s credibility may impact the audience’s attitudes toward the ad but the
endorser’s credibility is not a substitute for corporate credibility.
 The marketer for the beverage company also needs to make sure that the celebrities who give
testimonials or endorses the soft drink use specific wording within the recognized
competence of the spokesperson. To be believable, the celebrity must drink the beverage and
be able to articulate the benefits and features of the beverage.

Finally, one study indicates that when considering a celebrity endorser, issues such as a
careful match with the target audience, product and brand, the celebrity’s overall image, prior
endorsements, trustworthiness, familiarity, expertise, profession, physical attractiveness and
whether the celebrity is a brand user impacts the credibility and success of the advertising
campaign.

Individual, Moderate, 20-25 minutes

Learning Objective 9.1: To understand the credibility of reference groups and their influence
on consumer behavior.
Learning Objective 9.2: To understand the persuasive power and credibility of
spokespersons, endorsers, celebrities, salespersons, vendors and media.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Analytical thinking

9.9. What are the implications of the sleeper effect for the selection of spokespersons and
the scheduling of advertising messages?

The persuasive effects of high-credibility sources do not endure over time. Though a high-
credibility source is initially more influential than a low-credibility source, research suggests
that both positive and negative credibility effects tend to disappear after six weeks or so. This
phenomenon has been termed the sleeper effect. Consumers simply forget the source of the
message filter and then they forget the message itself. Reintroduction of the message by the
source, however, serves to jog the audience’s memory and the original effect re-manifests
itself—that is, the high-credibility source remains more persuasive than the low-credibility
source. The implication for marketers who use high-credibility spokespersons is that they
must rerun the ad or commercial regularly in order to maintain its persuasiveness.

Individual, Moderate, 10-15 minutes

Learning Objective 9.2: To understand the persuasive power and credibility of
spokespersons, endorsers, celebrities, salespersons, vendors and media.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective thinking

9.10. Amazon has introduced a new electronic reader that is more expensive than previous
models but has many more features. How can the company use the adopter categories
in marketing this product?

Adopter Category Promotional Appeal Distribution Pricing

Innovators Appeals that stress Selective Skimming
 the product’s newness
and “snob appeal”
Early Adopters Factual appeals Selective Skimming
stressing the
product’s attributes
and related benefits
Early Majority “Expert” appeals and Intensive Lower prices
endorsements or
testimonials
Late Majority Conformity appeals Intensive A lot of
(e.g., “Everyone competition
in your profession and prices
has it, why not you?”) keep dropping
Laggards Suggesting that the Intensive As above
new product does what
existing competitive
products do, only better

Individual, Moderate, 25-30 minutes

Learning Objective 9.5: To understand the diffusion of innovations process, and adopter
categories as distinct market segments.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application of knowledge

HANDS-ON ASSIGNMENTS

9.11. With a paper and pencil, spend one hour watching a network television channel
during prime time. Record the total number of commercials that aired. For each
commercial that used a celebrity endorser, record the celebrity’s name, the product or
service advertised, and whether the celebrity was used in a testimonial, as an endorser,
as an actor, or as a spokesperson.

This question pairs nicely with Review and Discussion Question 9.8 above. Ask students
which role (testimonial, endorser, actor or spokesperson) is more credible and why. How
persuasive is the endorser? How effective is the commercial? Would it be more or less
effective if an unknown actor was used? Given the topic, students will be engaged in a lively
discussion.

A variation that gives you more control and accuracy would be to make a videotape of
commercials and show it in class. Watching a variety of programs, the students will come up
with a good selection of commercials; it is also likely that many students will list the same
often-shown commercials. During the classroom discussion, the instructor and students
should classify each of the often-shown commercials depicting celebrities into one of the
categories listed in the question.
 Individual, Moderate, 75-90 minutes
Learning Objective 9.2: To understand the persuasive power and credibility of
spokespersons, endorsers, celebrities, salespersons, vendors and media.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective thinking

9.12 Describe two situations in which you served as an opinion leader and two situations
in which you sought consumption-related advice or information from an opinion
leader. Indicate your relationship to the persons with whom you interacted. Are the
circumstances during which you engaged in word-of-mouth communications consistent
with those in the text’s material? Explain.

Instructor’s Discussion
Student answers will differ. Answers should show an understanding of opinion leadership
and word-of-mouth communication. Recognition of the two-way nature of the
communication is also important as is the informal process. Students might also discuss
credibility and how it relates to the choice of opinion leader when information was sought.

Individual, Moderate, 10-15 minutes

Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective thinking

9.13 Find ads that encourage consumers to engage in word-of-mouth communications

and present them in class.

Instructor’s Discussion
Students will show a variety of ads. Ask them if the advertiser was successful in showing
personal, or face-to-face communication. Discuss how different media (television,
newspapers, Web, radio, etc.) can model/demonstrate WOM communication.

Individual, Moderate, 30-45 minutes

Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application of knowledge

9.14. Can you think of negative rumors that you have heard recently about a company or a
product? If so, present them in class.

Instructor’s Discussion
 When discussing negative rumors, ask the students if the rumor is true. Do they know? Can
they track how the rumor was started and spread? What role did the web play in spreading
the rumor? What was the motive for starting and spreading the negative rumor? Has the
“accused” responded? How effective was the response?

Individual, Moderate, 20-25 minutes

Learning Objective 9.3: To understand the dynamics and measurement of opinion leadership
and word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Reflective thinking

9.15. Locate an online company that recruits buzz agents and register as one. Keep a diary
of all your contacts with the organization for about one month. Present a summary of
the diary in class. Discuss whether the company was right to make you a buzz agent and
explain why or why not.

Instructor’s Discussion
Buzz agents agree to promote products by bringing them to family gatherings, read books
while riding on mass transit, etc. These “agents” typically do not receive payment but are
motivated by being called upon to serve as opinion leaders. So, one factor in the student’s
response may be whether s/he perceives her/himself as an opinion leader in the selected
category. Another factor might be whether the student was motivated to share information
about the product, which is likely a function of her/his attitudes toward the product and
involvement in the product category. Students may also express opinions about whether the
use of buzz agents is ethical or intrusive, and should be encouraged to share whether they
disclosed they were selected to generate word-of-mouth by the firm and, if so, how that
affected responses from other consumers.

Individual, Moderate, 60-90 minutes

Learning Objective 9.4: To understand the strategic applications, advantages and potential
perils of word-of-mouth.
Learning Outcome 11 Discuss the influence of groups and word-of-mouth (WOM)
communication
AACSB: Application

S.T.A.R. Projects

S.T.A.R. Project #1
Buzz marketing is a way for a marketing message to spread exponentially throughout the
marketplace using e-mail or other Internet formats, such as chat rooms. After reading the
examples from the chapter, your assignment is to find what you perceive to be a viral or buzz
effort that has recently occurred. Analyze the effort for its marketing effectiveness and its
adherence to sound or good business ethics. Think about the effort carefully—was anyone
harmed? Was the truth told? Were facts accurate? Was this the most ethical way to transmit
information about the product or service? Write a short summary report about the viral or buzz
event, its impact, its effectiveness, and any ethical issues of note.

Instructor’s Discussion
This project asks students to review the concept of viral or buzz marketing. Several publications
have examined the phenomenon (see Business Week and others). The emphasis is on whether
this popular idea is ethical or whether the tendency toward excess may doom it.

Small Group Project

StumbleUpon calls itself a “discovery engine” because, at one time, 50.27% of all traffic from a
top 10 list of social sites came from StumbleUpon. Their relatively small group of users (15
million) often out-refers the larger user base from Facebook (over 1.15 billion). In fact, the
influential users of StumbleUpon generate 1 billion page referrals per month. Their users, called
“Stumblers”, introduce other Stumblers and non-users to web content, providing a “map to an
adventure you wouldn’t otherwise have found out about.” The influence of these Stumblers was
deemed valuable by film marketers, who worked with StumbleUpon to promote films like
Jurassic Park 3D and Evil Dead. Stumblers are young and highly engaged, so studios see the
personalized search engine, which “learns” the preferences of its Stumblers, as a way to reach
early influencers. Each group member should go to StumbleUpon (stumbleupon.com), join, and
evaluate the accuracy of recommendations. Students should keep a journal and see if the
accuracy improves over time. Finally, students to compare their experiences and write a
reflection paper on whether/how StumbleUpon leverages opinion leaders to add value to the
Web.

Instructor’s Discussion
This project asks students to review the concept of e-WOM and opinion leadership. Students
should have individual observations as well as a comparison of their individual perspectives.
The emphasis should be on whether the Stumblers represent opinion leaders, as determined by
the group’s consensus.

CASE COMMENTS

Case: Keystone Light/MillerCoors

“Canhole”

Keystone Light and other small, below-premium brands have a difficult time earning attention
from distributors and retailers. Keystone Light marketers wanted to steal market share, volume
and display opportunities from Natural Light and increase brand engagement by introducing
character Keith Stone. The target audience, a simple guy with simple needs named “The
Cruiser”, values “Bro-ments” and memorable experiences. He tells jokes, spends time with his
buddies, and drinks beer. Keystone Light gave away self-contained Cornhole games, called
Canhole, with packs of Keystone Light. The promotion was designed to be humorous and to
generate positive word-of-mouth. It also was geared toward hanging out with buddies. If
consumers found it humorous, they might share the game on their social networks as well. The
emphasis is on affiliation/social needs. Consumers who consider below-premium beer probably
have low involvement in the purchase decision, but the spokesperson might increase
involvement. Cross-merchandising opportunities might include chips or music. Student
responses regarding personality traits and psychographic/geodemographic placements are likely
to vary, but should be consistent with younger, male audiences with lower resources.