1. Word of Mouth Communication and Opinion Leadership
Buzz Marketing
Cool Hunting

2. Word-of-mouth (WOM)
Person-to-person communication between a receiver and a source whom the receiver perceives as non-commercial, regarding a product, service or brand
Highly effective method of communicating information
Particularly effective in communicating negative information
Dissatisfied customer will tell 9 others
13% of unhappy customers will tell >20 others
What does this term mean in this context?
key to note “non-commercial” communication
Examples of products, services or brands where WOM is most effective?
Professional services (doctor, lawyer, accountant)
Personal services (hairdresser, personal trainer)
Home improvements
College, e.g.
Effectiveness:
Movies (success of My Big Fat Greek Wedding due almost exclusively to WOM)
negative information:
According to an OCA study:

3. WOM can be In person Phone Mail Internet Verbal Visual
Does the term mean, literally, what it suggests—that it involves one person speaking to another?
Not necessarily..
Internet has become a very important source of WOM:
In some cases sponsored by the brands themselves
(Go to Saturn.com)
In other cases by consumers who are “anti-brand,” web sites, chat rooms, etc.
(E.g., Forbes article linked above: ”Top Corporate Hate Websites”)
Think about it: one comment, put on a web site, can draw millions of “hits” worldwide!
Fashion is perhaps the best example of visual WOM;
as reading points out, a new fashion trend can sweep the country in weeks.
Cross-cultural aspect as well—look at what young people are wearing even in the most conservative Islamic countries (e.g., Malaysia)
because of what they see in movies and television Americans are wearing

4. Opinion leadership
The process by which one person--the opinion leader--informally influences the actions or attitudes of others who may be opinion seekers or opinion recipients
Term is sometimes used interchangeably with WOM.
What does it mean?

5. Who are opinion leaders?
Can they be recognized by any distinctive characteristics?
Can they be reached through specific media?
Marketers want to know three things about opinion leaders:
Why?
Because it would enable them to design marketing messages that would encourage opinion leaders to influence others about their products

6. Opinion leadership tends to be category specific
Individual who is an opinion leader in one product category may be an opinion receiver in another product category
Profile of opinion leaders is likely to be influenced by the specific product category
Problem is that…
What does that mean?

7. Generalized attributes of opinion leaders
Tend to be consumer innovators
Willing to talk about products and services
Self-confident
Outgoing and gregarious
Same age as opinion seeker
Same social status as opinion seeker
Does that mean you cannot construct a generalized profile of an opinion leader without considering a particular category of product?
No. Research suggests the following…
Think about who you seek out for advice or role modeling, or who your parents and family seek out.
Do they generally fit this description?

8. Diffusion of Innovations
Explain how the consumer behavior theory applies to opinion leadership:
The innovators (the darkest brown 2.5 percent on the far left) are venturesome, the visionaries, the wild-eyed revolutionaries, at least to the others, who feel threatened by change and risk-taking. To the innovators, themselves, the adoption is a no-brainer.
The early adopters (the darker brown 13.5 percent on the left) are respectable opinion leaders. They can function effectively as evangelists and missionaries.
Later, when we talk about buzz marketing, these are the folks the marketers are looking for
The early majority (the 34 percent to the left of middle) is very deliberately ahead of the curve, but willing to make safe investments.
The late majority (the 34 percent to the right of middle) is skeptical and often part of a backlash.
The laggards (the lightest brown 16 percent on the far right)
This concept used by Malcolm Gladwell in The Tipping Point (where the curve gets steep, it’s at a tipping point)

9. Opinion leadership process
Opinion leadership is a very powerful force
Credibility
Particularly credible in negative comments
Why is it so powerful?
Credibility:
Because there is no commercial interest, opinions are believed to be in the recipient’s best interests
Because their comments are usually based on first-hand experience, advice reduces perceived risk/anxiety in buying new products
Why?
Because you never get negative comments from the marketer!

10. Overlap of opinion leadership
Opinion leadership tends to overlap across certain combinations of interest areas
Overlap is likely to be highest among product categories that involve similar interests
Now we turn to some issues in opinion leadership…
One question commonly asked is this:
Do opinion leaders in one product category tend to be opinion leaders in other product categories?
Recall saying earlier that opinion leadership tends to be product-specific.
Do they?
Examples?
TV’s and DVDs
high fashion clothes and cosmetics
hunting gear and fishing tackle
(you wouldn’t ask a person who gave you advice about fishing gear to recommend a lipstick!)

11. The motivation of opinion leaders
Self-involvement
Product involvement
Social or ”other” involvement
Message involvement
What motivates people to give opinions, information or advice about products?
Research indicates four possible reasons…

12. 1. Self-involvement Satisfies some basic need of their own Attention
Status
Awareness of expertise
Confirm own good judgment and eradicate post-purchase doubts
What does this mean?
Such as?

13. 2. Product involvement
The greater a person’s involvement with a particular product, the greater their interest in sharing information
What’s this motivation all about?
E.g., I have a friend who loves movies; he always calls me and tells me which ones he likes, etc.
I’m sure you all know people who go to movies all the time and love to talk about them.
Other products that may be “high involvement”?
Cars (one student in class says his father is always looking at cars, even if not buying)
Electronics

14. 3. Social or “other” involvement
Opinion leaders motivated by ‘other involvement’ share information as an expression of friendship, neighborliness and love
What’s this?
If you have a good experience or bad experience with a product, you want friends and family to know

15. 4. Message involvement
Pervasiveness of advertising in our society encourages message involvement
Individuals who are bombarded by commercial messages and slogans tend to discuss them and the products they are designed to sell
What does it mean?
What’s your experience? Do you ever discuss commercials?
What about the “Coors twins” or the “Catfight” ads of the last few years?
What about the Super Bowl ads?
Do you discuss the ads you see?

16. Marketing implications of W.O.M.
Marketers look for opportunities to encourage word of mouth
Product designers sometimes develop their products to maximize word of mouth potential
Strong, favorable word of mouth minimizes the company’s advertising budget
As we have seen, wom is very powerful, mainly because of its credibility relative to commercial advertising; as a consequence…
Products that have succeeded at least in part due to w.o.m. include
Polaroid camera
Sony Walkman
Ipod
Harley Davidson does minimal advertising but is extremely successful due to wom
Movies are an example of the power of w.o.m., particularly where critics have do not like a movie but it has become very popular
(My Big Fat Greek Wedding, e.g.)

17. Stimulating opinion leadership
Teaser campaigns
Ads that disclose just enough information to pique consumers’ interests
the ad itself becomes the basis for discussion, leading to interest in the product
Buzz marketing
Product placement
Where informal wom does not spontaneously emerge from the uniqueness of the product or its marketing strategy, some marketers have deliberately set out to stimulate or simulate opinion leadership
How does a marketer stimulate discussion about its product?
What is it?
Examples of “teaser” ads?
A year or so ago tv ads for Apple Computers—just a head shot with a person talking about how they switched to Apple from PC
Today, ads for Ipod shuffle
Basically no information in the ads (price?)
Two areas we’ll be discussing in more detail…
Buzz marketing subject of video

18. Simulating opinion leadership
Slice of life commercials where actors portray consumers or professionals discussing a product
Testimonials from celebrities are influential, especially where the celebrity is connected in some way to the product
How does a marketer simulate wom?
A couple of ways:

19. What is Buzz Marketing?
A form of marketing where the consumer doesn’t know he or she is being marketed to
Generally, a marketing company pays an actor or socially adept person (opinion leader) to use a product visibly and convincingly in locations where target consumers congregate
The actor talks up the product to people they befriend, handing out samples if it is economically feasible
Show video now?
As we’ll see later, paying someone is considered unethical, but it’s common practice
Though many work for free!
That’s equally scary—in one article it almost sounded like a cult! (NY Times 12/5/04)
(end)
What’s the connection between “opinion leadership” and “word of mouth”
and “buzz marketing”?
They’re inter-related:
Buzz relies on identifying opinion leaders and consumers’ trust in word of mouth from them

20. Also known as:
Undercover marketing
Stealth marketing
Under the radar marketing
Diffusion marketing
Ambient marketing
Viral marketing (on the web)
Product seeding
Roach baiting (to its critics)

21. Diffusion of Innovations
Let’s look at this again.
The “early adopters” are the people buzz marketers are looking for to promote their products.
Later, when we talk about “Cool Hunting” we’ll see that the Innovators are the targets.

22. Influentials Trend-translators Connectors Alphas Hubs Sneezers Bees
Magic people
Also known as:

23. What are some of the products marketed by “buzz” or “seeding”?
Automobiles
Ford Focus
PT Cruiser
Television shows
Lost
Movies
Blair Witch Project
Vertical Limit
Books
Purple Cow
Beer
Guinness Stout
Clothes
Hush Puppies
Lee jeans
According to Business Week article, they run from expensive products, like…
Purple Cow is particularly interesting
Author used buzz marketing to sell his book about buzz marketing
(go to bonus chapter 1)
Hush Puppies mentioned in The Tipping Point

24. How many of you own iPods?
I put iPod in own category because it’s been so successful
Minimal advertising
Marketed in part by giving iPods to opinion leaders, introducing new models at big events, etc.
Huge WoM response

25. Why is it growing so rapidly?
Buzz is cheap
The rise of the internet makes contact with millions of consumers possible
Appeals to younger consumers skeptical of mass media advertising
Presents opportunities for products like cigarettes and alcohol
See “The New Buzz in Marketing” reading assignment

26. What are the down sides? Difficult to measure reach and success
Backlash when people realize they’ve been deceived
May eventually be overdone and become ineffective
Less effective for “low-involvement” products
From the marketer’s perspective…
(Not the ethical issues yet)
“Low involvement”--More likely to consider word of mouth for a car than a brand of soap;
but it’s being used for hot dogs!

27. Ethically, what’s wrong with buzz marketing?
Consumers don’t know they’re being subjected to a commercial message
Thus don’t view the message with the suspicion they would ordinarily apply to a commercial message
Marketers often engage children/teens to influence purchase behavior of other children/teens
One of the most criticized buzz campaigns is Tremor, a wom division of Proctor & Gamble
(link above)
Teens are particularly vulnerable to buzz marketing
Cell phones
Instant messaging
Peer-driven behavior
But as we’ve seen before, teens are vulnerable

28. Practice is totally unregulated
Word of Mouth Marketing Association has drafted ethics code
Code is voluntary
Criticized for being vague

29. Mini Cooper buzz marketing campaign
Interesting, recent form of buzz marketing involved the Mini Cooper
Did this in addition to another great marketing stunt: put them on top of Ford Explorers and drove around country!
See NY Times article dated May 10, 2004 for details

30. What is “cool hunting”? “Reverse marketing” “Sell-back”
Focuses on teen market
32 million teens in the US
Largest demographic group ever (outnumber baby boomers)
Spend $100 billion per year
Influence $150 billion in spending per year
Another marketing practice related to opinion leadership
Also known as…

31. Cool hunters are looking for the 20% of the population who influence the remaining 80%
“Culture spies” visit malls and other places where kids hang out
Attempt to identify trends (e.g., clothing) before they develop
Sell the information to marketers
Marketers use the information to design products that appeal to youth market

32. “the white trash culture” vs. “designer culture” Lawn bowling Camping
Trucker hats
Pabst Blue Ribbon
Miller High Life
Heavy metal music
“the white trash culture” vs. “designer culture”
Lawn bowling
Camping
Knitting
According to a recent article in the NY Times, the latest trend involves the reappraisal of things traditionally deemed uncool:
With this is the resurgence in “ironic pastimes”:

33. Frontline, “The Merchants of Cool”
Show segment 1 (8 minutes) and 2 (5 minutes) if time remains