KS School OF MGMT

MBA Class of 2018, Semester

III Consumer
Behavior
 The process by which
one person (the
opinion leader)
informally influences
Opinion
the consumption
Leadership
actions or attitudes of
others who may be
opinion seekers or
opinion recipients.
 Friends

OpinionLeaders

Family
 The process by which one person (Opinion Leader) informally
influences the action or attitudes of others who may be opinion seekers
or merely opinion recipients .

 How to use a specific product ?

 Which of several brands is best ?
 Which is the best place to shop ?
AUTOMOBILES
 Opinion leaders forcolgate

Mothers.
Dentist.
Advertisements showing it as
paste for complete protection.
„100% vegetarian‟ sentiment.
Free Cavity Check-up.
 How is he an opinionleader

Subject experts and have tremendous knowledge .

Heis self-confident, extrovert and gregarious just like in
advertisements of Boroplus , Dairy Milk and Nano Clean.
Opinion Leaders like Amitabh Bachhan would recommend a product
and/or brand that he has been able to monetarily afford and use and
it would also be something that the Receivers/ Seekers can also
afford.
“KuchMeetha hoJaaye”—Dairy
“Safed teeka-taaki sardi ki nazar na lage”-
-Boroplus Mil
k
In 2003 associated with Juhi
Chawla!!!
What Is Opinion Leadership?

Opinion Opinion
Leader Receiver

Opinion
Seeker
Word of Mouth in
Actio
Figure
n 15-1
 Dynamics of the Opinion Leadership Process

• Credibility
• Positive and Negative Product Information
• Information and Advice
• Opinion Leadership Is Category-Specific
• Opinion Leadership Is a Two-way Street
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
viral marketing
Also known as “buzz marketing,”
“wildfire marketing,”
“avalanche marketing,”

It is named viral because it allows the message(information) about

product to spread like a virus.

viral marketing describes any strategy that encourages individuals

to pass on a marketing message to others, creating the potential
for exponential growth in the message’s exposure and influence.

Purchase Pals
Purchase pals serve as information sources that actually accompany consumers
on shopping trips.
Ex: friends, family, relatives, other social media sources are best purchasing pals
 Viral Marketing
The marriage of email and word-of-mouth
communication
• Buzz Marketing/Wildfire /Avalanche
Marketing
These terms describe any strategy that
encourages individuals to pass on a
marketing message to others;
e.g. get yr free private e-mail
Models hanging out side night clubs.
P& G kiosks
 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
 Amity Business School

Many not-for-
profit
organizations
that hope to
change
behavior, count
on opinion
leaders.
 Motivations BehindOpinion Amity Business School

Leadership
Issues
• The Needs of • Self-involvement
Opinion Leaders • Social involvement
• The Needs of • Product involvement
Opinion Receivers
• Message involvement
• Purchase Pals
• Surrogate Buyers
versus Opinion
Leaders
 Motivations BehindOpinion Amity Business School

Leadership
Issues
• The Needs of • New product or new usage
Opinion Leaders information
• The Needs of • Reduction of perceived
Opinion Receivers risk
• Purchase Pals • Reduction of search time
• Surrogate Buyers • Receiving the approval of
versus Opinion the opinion leader
Leaders
 Motivations BehindOpinion Amity Business School

Leadership
Issues
• The Needs of • Actually accompany
Opinion Leaders consumers on
• The Needs of shopping trips
Opinion Receivers • Used 25 percent of
the time for purchases
• Purchase Pals
of electronic
• Surrogate Buyers equipment
versus Opinion
Leaders
 Motivations BehindOpinion

Leadership
Issues
• Surrogate buyers may
• The Needs of replace opinion leaders
Opinion Leaders
• An example is a
• The Needs of wardrobe consultant
Opinion Receivers who helps in the
• Purchase Pals purchase of business
• Surrogate Buyers clothes
versus Opinion
Leaders
 Key Differences Between Opinion Leaders and
Surrogate Buyers Amity Business School
Part I: Opinion Leaders

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
 Key Differences Between Opinion Leaders and
Surrogate Buyers Amity Business School
Part II: Surrogate Buyers

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
 Amity Business School

Measurement of Opinion Leadership

• Self-Designating Method
• Sociometric Method
• Key Informant Method
• Objective Method
 Measuring Opinion Leadership
Amity Business School

OPINION LEADERSHIP
SAMPLE
MEASUREMENT DESCRIPTION OF METHOD
QUESTIONS ASKED
METHOD

SELF-DESIGNATING Each respondent is asked a “Do you influence

METHOD series of questions to determine other people in their
the degree to which he or she selection of
perceives himself or herself to products?”
be an opinion leader.

SOCIOMETRIC Members of a social system are “Whom do you

METHOD asked to identify to whom they ask?”“Who asks you
give advice and to whom they for info about that
go for advice. product category?”
 Amity Business School

OPINION
SAMPLE
LEADERSHIP
DESCRIPTION OF METHOD QUESTIONS
MEASUREMENT
ASKED
METHOD

KEY INFORMANT Carefully selected key informants in “Who are the most
METHOD a social system are asked to influential people in
designate opinion leaders. the group?”

OBJECTIVE Artificially places individuals in a “Have you tried the

METHOD position to act as opinion leaders product?”
and measures results of their efforts.
 Amity Business School

Profile of Opinion Leaders

GENERALIZED
CATEGORY-SPECIFIC
ATTRIBUTES ACROSS
ATTRIBUTES
PRODUCT CATEGORIES
Innovativeness Interest
Willingness to talk Knowledge
Self-confidence Special-interest media exposure
Gregariousness Same age
Cognitive differentiation Same social status
Social exposure outside group
 Amity Business School

Individuals whose
influence stems from a
general knowledge or
Market
market expertise that
Maven
leads to an early
awareness of new
products and services.
 Amity Business School

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
 Amity Business School

Two-Step Flow of Communication

Theory
 Amity Business School
Multistep Flow of
Communication
Theory
 Amity Business School

Issues in Opinion Leadership and Marketing

Strategy

• Advertisements Stimulating Opinion

Leadership
• Word of Mouth May Be Uncontrollable
 Amity Business School

Marketers Seek to Take Control of the Opinion

Leadership Process

• Creating products with built-in buzz

potential
• Strategy designed to stimulate buzz
• Viral marketing
• Weblogs
 Amity Business School

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.
Marketer generated info’n sources.
Websites , chat room
e.g i-pod
Diffusion
It is a macro process concerned with the
spread of a new product or information (an
innovation) from its source to the consumer (
consuming public).

Adoption
It is a micro process that focuses on the stages
through which an individual consumer passes
when deciding to accept or reject a new
product.
 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.
 Elements of the Diffusion Process

• The Innovation
• The Channels of Communication
• The Social System
• Time
 Product Characteristics That Influence Diffusion
• Relative Advantage- over the existing pdt.

• Compatibility- with the existing needs, values attitudes

and practices. (3m scotch pop up tapes, MACH 3 razors
,shaving creams)

• Complexity- degree of difficulty to use or understand.fear

of tech’ complexity, obsolescence,social rejection, physical
harm.
• Trialability- tried on a limited basis
• Observability- degree to be tried on a limited basis.- pdt
can be described , communicated.
Pdts may diffuse differently in diff cultures.
 Table 15.7 Characteristics That
Influence Diffusion
CHARACTERISTICS EXAMPLES

Air travel over train travel, cordless

Relative
phones over corded telephones
Advantage

Gillette MACH3 over disposable

Compatibility razors, digital telephone answering
machines over machines using tape

Electric shavers, instant puddings

Complexity
 continued
CHARACTERISTICS EXAMPLES

Trial size jars and bottles of new

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

Clothing, such as a new Tommy

Hilfiger jacket, a car, wristwatches,
Observability
eyeglasses
 STAGES OF ADOPTION PROCESS

• First exposure
AWARNESS

• Show interest and searches for more

information
INTEREST

• Mental trial
EVALUATION
• Uses the product on a limited
basis
TRIAL

ADOPTION/ • Decides to use / reject

REJECTION
 Amity Business School

Stages in Adoption Process

WHAT HAPPENS
NAME OF DURING THIS EXAMPLE
STAGE STAGE
Consumer is first Janet sees an ad for a new MP3 player in
Awareness exposed to the product the magazine she is reading.
innovation.
Consumer is interested in Janet reads about the MP3 player on the
the product and searches manufacturer’s Web site and then goes to
Interest
for additional an electronics store near her apartment and
information. has a salesperson show her a unit.
Consumer decides After talking to a knowledgeable friend,
whether or not to believe Janet decides that this MP3 player will
that this product or allow her to easily download the MP3 files
Evaluation service will satisfy the that she has on her computer. She also
need--a kind of “mental feels that the unit’s size is small enough to
trial.” easily fit into her beltpack.
 Amity Business School

Table 15.11 Stages in Adoption Process

WHAT HAPPENS
NAME OF DURING THIS EXAMPLE
STAGE STAGE
Consumer uses the Since an MP3 player cannot be “tried” like
product on a limited a small tube of toothpaste, Janet buys the
Trial basis MP3 player online from Amazon.com,
which offers a 30-day full refund policy.

If trial is favorable, Janet finds that the MP3 player is easy to

consumer decides to use use and that the sound quality is excellent.
the product on a full, She keeps the MP3 player.
Adoption rather than a limited
basis--if unfavorable, the
consumer decides to
reject it.
 Amity Business School

Adopter Categories
A sequence of categories that describes
how early (or late) a consumer adopts a
new product in relation to other
adopters.
 Amity Business School

Adopter Categories

Early Laggards
Adopters
13.5% Early Late 16%
Majority Majority
Innovators 34%
34%
2.5%

Percentage of Adopters by Category Sequence

Innovators(2.5%):
Venturesome(bold/daring)-
very eager to try new ideas;
acceptable if risk is daring;
more Professional, high
educated,
high social class,
Huge financial stability
Early Majority(34%)
•Deliberate(careful)-adopt new ideas
just prior to the average time;
•They are elders, well educated and
less socially mobile.
•average social status
•They rely heavily on inter-personal
source of in-formation.
Early Adopters(13.5%)
•have a higher social status,
• have more financial lucidity, advanced
education
•Respect- more integrated into the local
social system;
•the persons to check with before
adopting a new idea;
•Category contains greatest number of
opinion leaders;
•They are role models
Late Majority(34%)
• This are typically skeptical(doubtful)
about an innovation,
• have below average social status,
• very little financial lucidity,
• High in contact with others in late
majority and early majority,
 Amity Business School

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
 Innovators
• Innovators are the first individuals to adopt an
innovation.
• Innovators are the category of consumers who are
interested to adopt the product which is newly
launched and 2.5% of consumers in market are
innovators.

• Innovators are willing to take risks,

youngest in age, high educated professional
have the highest social class,
have great financial lucidity, very social and have closest contact to
scientific sources and interaction with other innovators .
 Amity Business School

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
 Early Adopters(13.5%)
• This is second fastest category of individuals who adopt an
innovation.

• These individuals have the highest degree of opinion leadership

among the other adopter categories.

•They are opinion leaders and provide information to groups, but

they are also concerned about failure.

•Therefore, they weigh advantages and disadvantages of the

product before plunging in for a purchase.

• Early adopters are typically younger in age, have a higher social

status, have more financial lucidity, advanced education, and are
more socially forward than late adopters
 Amity Business School

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
 Early Majority(34%)
• Individuals in this category adopt an innovation after a varying
degree of time.

• This time of adoption is significantly longer than the innovators

and early adopters.
• They are elders, well educated and less socially mobile. They
rely heavily on inter-personal source of in- formation.

• They constitute 34 per cent of the consumers.

• Early Majority tend to be slower in the adoption process, have

above average social status, contact with early adopters, and
show some opinion leadership.
 Amity Business School

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
 Late Majority(34%)
• Individuals in this category will adopt an innovation after
the average member of the society.

• These individuals approach an innovation with a high

degree of skepticism(doubt) and after the majority of
society has adopted the innovation.

• Late Majority are typically skeptical about an innovation,

have below average social status,
very little financial lucidity,
in contact with others in late majority and early majority,
very little opinion leadership.
 Amity Business School

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
 Laggards(16%)
• Individuals in this category are the last to adopt an
innovation.
• These individuals typically have an dislike to change-
agents and tend to be advanced in age.
• They possess limited social interaction and are
• oriented to the past. They adopt the innovations with
great reluctance.
• They constitute a small portion of 16 per cent of the
consumers
• Laggards typically tend to be focused on “traditions”,
have lowest social status, lowest financial fluidity, oldest
of all other adopters, in contact with only family and
close friends, very little to no opinion leadership .
Post purchase behaviour

Post-purchase behavior is the final stage in the consumer decision process when the
customer assesses whether he is satisfied or dissatisfied with a purchase.

How the customer feels about a purchase will significantly influence whether he will
purchase the product again or consider other products within the brand repertoire.

A customer will also be able to influence the purchase decision of others because he will
likely feel required to share his feelings about the purchase.

Factors That Cause Dissonance

1. there is price or total payment cost.
2. there is psychological importance.
3.there is product performance.
4.there is the number of rejected alternatives.
5.is the perceived performance of alternatives rejected.
6.the credibility of the source of new information affects the
amount of dissonance it causes.
Post-purchase Dissonance
• Doubt or anxiety(nervous) experienced after taking a difficult
purchase decision.
• If customer thinks that if he had purchased some other product it
would have been better than the one he brought

Factors Affecting Post-Purchase Dissonance:

– No. of alternatives being considered
– Information available at the time of purchase
– Difficulty in choosing one of the alternatives
– Expected negative reactions from others
– Substitutability – near equal alternatives to choose from
– Attractiveness of foregone alternatives
– Degree of familiarity with the product
– Time and comfort with which the purchase was made
Post-purchase Dissonance
• Doubt or anxiety(nervous) experienced after taking a difficult
purchase decision.
• If customer thinks that if he had purchased some other product it
would have been better than the one he brought

Factors Affecting Post-Purchase Dissonance:

– No. of alternatives being considered
– Information available at the time of purchase
– Difficulty in choosing one of the alternatives
– Expected negative reactions from others
– Substitutability – near equal alternatives to choose from
– Attractiveness of foregone alternatives
– Degree of familiarity with the product
– Time and comfort with which the purchase was made
Post-Purchase Consumer Behavior
 Product disposition
• It is the process of reselling, recycling,
trashing(garbage), repairing, trading and
the like associated with the physical
product, packaging, and its promotional
materials when no longer perceived as
useful by the consumer or marketer.
Disposal Alternatives
Dissatisfaction Response – Customer Complaint Behavior

Passives

Voicers Irates Activists