Presentation on theme: "Word of Mouth Communication and Opinion Leadership"— Presentation transcript:
1 Word of Mouth Communication and Opinion Leadership Buzz MarketingCool 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 brandHighly effective method of communicating informationParticularly effective in communicating negative informationDissatisfied customer will tell 9 others13% of unhappy customers will tell >20 othersWhat does this term mean in this context?key to note “non-commercial” communicationExamples of products, services or brands where WOM is most effective?Professional services (doctor, lawyer, accountant)Personal services (hairdresser, personal trainer)Home improvementsCollege, 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 leadershipThe process by which one person--the opinion leader--informally influences the actions or attitudes of others who may be opinion seekers or opinion recipientsTerm 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 categoryProfile of opinion leaders is likely to be influenced by the specific product categoryProblem is that…What does that mean?
7 Generalized attributes of opinion leaders Tend to be consumer innovatorsWilling to talk about products and servicesSelf-confidentOutgoing and gregariousSame age as opinion seekerSame social status as opinion seekerDoes 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 forThe 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 forceCredibilityParticularly credible in negative commentsWhy is it so powerful?Credibility:Because there is no commercial interest, opinions are believed to be in the recipient’s best interestsBecause their comments are usually based on first-hand experience, advice reduces perceived risk/anxiety in buying new productsWhy?Because you never get negative comments from the marketer!
10 Overlap of opinion leadership Opinion leadership tends to overlap across certain combinations of interest areasOverlap is likely to be highest among product categories that involve similar interestsNow 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 DVDshigh fashion clothes and cosmeticshunting 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-involvementProduct involvementSocial or ”other” involvementMessage involvementWhat 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 StatusAwareness of expertiseConfirm own good judgment and eradicate post-purchase doubtsWhat does this mean?Such as?
13 2. Product involvementThe greater a person’s involvement with a particular product, the greater their interest in sharing informationWhat’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 loveWhat’s this?If you have a good experience or bad experience with a product, you want friends and family to know
15 4. Message involvementPervasiveness of advertising in our society encourages message involvementIndividuals who are bombarded by commercial messages and slogans tend to discuss them and the products they are designed to sellWhat 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 mouthProduct designers sometimes develop their products to maximize word of mouth potentialStrong, favorable word of mouth minimizes the company’s advertising budgetAs 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. includePolaroid cameraSony WalkmanIpodHarley Davidson does minimal advertising but is extremely successful due to womMovies 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 campaignsAds that disclose just enough information to pique consumers’ intereststhe ad itself becomes the basis for discussion, leading to interest in the productBuzz marketingProduct placementWhere 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 leadershipHow 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 PCToday, ads for Ipod shuffleBasically 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 productTestimonials from celebrities are influential, especially where the celebrity is connected in some way to the productHow 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 toGenerally, a marketing company pays an actor or socially adept person (opinion leader) to use a product visibly and convincingly in locations where target consumers congregateThe actor talks up the product to people they befriend, handing out samples if it is economically feasibleShow video now?As we’ll see later, paying someone is considered unethical, but it’s common practiceThough 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 marketingStealth marketingUnder the radar marketingDiffusion marketingAmbient marketingViral marketing (on the web)Product seedingRoach 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.
23 What are some of the products marketed by “buzz” or “seeding”? AutomobilesFord FocusPT CruiserTelevision showsLostMoviesBlair Witch ProjectVertical LimitBooksPurple CowBeerGuinness StoutClothesHush PuppiesLee jeansAccording to Business Week article, they run from expensive products, like…Purple Cow is particularly interestingAuthor 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 successfulMinimal advertisingMarketed 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 cheapThe rise of the internet makes contact with millions of consumers possibleAppeals to younger consumers skeptical of mass media advertisingPresents opportunities for products like cigarettes and alcoholSee “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 deceivedMay eventually be overdone and become ineffectiveLess effective for “low-involvement” productsFrom 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 messageThus don’t view the message with the suspicion they would ordinarily apply to a commercial messageMarketers often engage children/teens to influence purchase behavior of other children/teensOne of the most criticized buzz campaigns is Tremor, a wom division of Proctor & Gamble(link above)Teens are particularly vulnerable to buzz marketingCell phonesInstant messagingPeer-driven behaviorBut as we’ve seen before, teens are vulnerable
28 Practice is totally unregulated Word of Mouth Marketing Association has drafted ethics codeCode is voluntaryCriticized for being vague
29 Mini Cooper buzz marketing campaign Interesting, recent form of buzz marketing involved the Mini CooperDid 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 market32 million teens in the USLargest demographic group ever (outnumber baby boomers)Spend $100 billion per yearInfluence $150 billion in spending per yearAnother marketing practice related to opinion leadershipAlso 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 outAttempt to identify trends (e.g., clothing) before they developSell the information to marketersMarketers use the information to design products that appeal to youth market
32 “the white trash culture” vs. “designer culture” Lawn bowling Camping Trucker hatsPabst Blue RibbonMiller High LifeHeavy metal music“the white trash culture” vs. “designer culture”Lawn bowlingCampingKnittingAccording 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