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Chapter 9 Reference Groups and Word-of-Mouth 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? Opinion leaders are often seen as more credible sources of product information than advertisements for several reasons: 1. Personal Connection: Opinion leaders are usually people known to the individual, such as friends, family, or respected individuals in the community. Their recommendations are often perceived as more trustworthy because of the personal relationship. 2. Experience-based: Opinion leaders often share their experiences with products, which can be more persuasive than advertisements that are perceived as biased or one-sided. 3. Authenticity: Opinion leaders are seen as giving authentic, unbiased opinions, whereas advertisements are viewed as being designed to sell a product, which can lead to skepticism. 4. Two-Way Communication: Word-of-mouth communication allows for two-way interaction, where questions can be asked and answered in real-time, providing more detailed and personalized information compared to advertisements. However, there are circumstances in which information from advertisements can be more influential than word-of-mouth: 1. Brand Awareness: Advertisements can build brand awareness and create a positive image for a product, making consumers more likely to trust the product even without personal recommendations. 2. Information Gap: In cases where there is limited information available from other sources, advertisements can provide valuable details about a product that consumers may not otherwise have access to. 3. Emotional Appeal: Advertisements can create emotional connections with consumers through storytelling, music, or visuals, which can be more impactful than purely informational word-of-mouth. 4. Repetition: Advertisements can reach a wider audience and be repeated multiple times, which can reinforce the message and make it more memorable compared to word-of-mouth communication. In summary, while opinion leaders are generally considered more credible for product information, advertisements can still be influential in certain circumstances, particularly in building brand awareness and creating emotional connections with consumers. 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. 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. 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. 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. 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. 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. 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. 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. 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 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. 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. I haven't served as an opinion leader or sought consumption-related advice from an opinion leader, as I don't have personal experiences. However, I can provide hypothetical examples based on common situations: Situations as an Opinion Leader: 1. Fashion Advice: As someone who keeps up with the latest fashion trends, I might provide advice to friends or family members on what clothing styles or brands to consider. 2. Technology Recommendations: Given my interest in technology, I might recommend specific gadgets or devices to colleagues or classmates based on my research and experience. Situations Seeking Advice: 1. Travel Recommendations: When planning a trip, I might seek advice from a friend who is known for their extensive travel experiences and knowledge of different destinations. 2. Product Reviews: Before making a significant purchase, such as a new laptop or camera, I might consult online reviews from experts or enthusiasts in the field to make an informed decision. In these hypothetical situations, the circumstances align with those described in the text's material regarding word-of-mouth communications. Opinion leaders are often sought out for their expertise or knowledge in specific areas, and individuals tend to rely on their recommendations or advice when making consumption-related decisions. 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. 9.13 Find ads that encourage consumers to engage in word-of-mouth communications and present them in class. Here are a few examples of ads that encourage consumers to engage in word-of-mouth communications: 1. Apple "Shot on iPhone" Campaign: Apple's "Shot on iPhone" campaign features photos and videos taken by iPhone users. The ads showcase the quality of iPhone cameras and implicitly encourage consumers to share their own photos and videos taken with iPhones on social media, thus promoting the brand through word-of-mouth. 2. Coca-Cola "Share a Coke" Campaign: Coca-Cola's "Share a Coke" campaign involved personalized Coke bottles with popular names and phrases. The campaign encouraged consumers to find and share bottles with their names or the names of friends and family, creating a buzz on social media and generating word-of-mouth promotion for the brand. 3. Doritos "Crash the Super Bowl" Contest: Doritos' "Crash the Super Bowl" contest invited consumers to create their own Doritos commercials for a chance to have their ad aired during the Super Bowl. This campaign not only engaged consumers in creating content but also encouraged them to share their entries and vote for their favorites, generating word-of-mouth buzz around the brand. These examples demonstrate how brands can leverage word-of-mouth communications through creative advertising campaigns that encourage consumer participation and sharing. 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. 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. 1. Apple Slowing Down iPhones: There was a rumor that Apple intentionally slowed down older iPhones to encourage users to upgrade to newer models. This rumor led to backlash and lawsuits against Apple, although Apple stated that the slowdowns were intended to preserve battery life. 2. McDonald's Using Worms in Burgers: There have been rumors circulating for years that McDonald's burgers contain worms or other undesirable ingredients. These rumors are false and have been debunked by McDonald's and food safety authorities. 3. Nestle Using Child Labor: Nestle has faced rumors and allegations of using child labor in the production of its cocoa. While Nestle has taken steps to address these issues, the rumors have persisted and have damaged the company's reputation. These examples illustrate how negative rumors can spread quickly and impact the reputation of companies and products, even if they are unfounded or false. It's important for companies to address rumors promptly and transparently to mitigate their effects. 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? 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. I'm unable to register for online companies or keep a diary as a buzz agent, as I can't interact with external websites or sign up for services. However, I can provide guidance on how you might approach this assignment: 1. Locate an Online Company: Search for companies that recruit buzz agents or brand ambassadors. Look for companies that align with your interests or the products/services you are familiar with. 2. Register as a Buzz Agent: Follow the company's instructions for becoming a buzz agent. This may involve filling out an application form, providing some personal information, and agreeing to certain terms and conditions. 3. Keep a Diary: Keep a detailed diary of all your contacts with the organization for about one month. Note any communication you have with the company, such as receiving information about products/services, participating in promotional activities, or interacting with other buzz agents. 4. Present a Summary: After one month, summarize your diary entries in a presentation for your class. Discuss your experiences as a buzz agent, including the types of activities you engaged in, the level of support you received from the company, and any challenges you encountered. 5. Evaluate the Company: Discuss whether you believe the company was right to make you a buzz agent. Consider factors such as the effectiveness of the buzz agent program, the alignment between your interests and the products/services promoted, and the overall experience of being a buzz agent for the company. Remember to adhere to any guidelines or ethical considerations set by the company and to respect the privacy of individuals and organizations involved in your diary entries. 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. 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. One recent example of a viral marketing effort is the "Storm Area 51" Facebook event that took place in 2019. The event, which started as a joke, quickly went viral and garnered widespread attention. The premise of the event was to organize a mass gathering of people to storm the secretive Area 51 military base in Nevada, with the goal of uncovering supposed government secrets about aliens and UFOs. Marketing Effectiveness: The "Storm Area 51" event was highly effective in generating buzz and attracting media attention. It sparked widespread interest and curiosity, with millions of people expressing interest or RSVPing to attend the event. The event also spawned numerous memes, videos, and discussions across social media platforms, further amplifying its reach. Ethical Considerations: While the "Storm Area 51" event was successful in generating buzz, it raised several ethical concerns. Firstly, the event encouraged people to trespass on a secure military facility, which could have led to serious legal consequences and potential harm to participants. Additionally, the event perpetuated conspiracy theories and misinformation about Area 51 and government secrets, which could have misled individuals and contributed to the spread of false information. Impact: Ultimately, the "Storm Area 51" event did not result in a large-scale gathering or any significant attempt to storm the base. Instead, it served as a cultural moment and a reflection of public fascination with conspiracy theories and extraterrestrial phenomena. The event highlighted the power of viral marketing in capturing public attention but also underscored the importance of ethical considerations in such campaigns. 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. For this assignment, each group member should join StumbleUpon and evaluate the accuracy of its recommendations. Keep a journal to track your experiences and note if the accuracy improves over time. Finally, compare your experiences with other group members and write a reflection paper on how StumbleUpon leverages opinion leaders to add value to the web. As you use StumbleUpon, consider the following questions for your reflection paper: 1. How accurate were the recommendations provided by StumbleUpon? 2. Did you find the content recommended by StumbleUpon valuable or interesting? 3. How does StumbleUpon's personalized search engine, which learns the preferences of its users, contribute to its ability to reach early influencers? 4. Do you think StumbleUpon effectively leverages opinion leaders to add value to the web? Why or why not? By evaluating StumbleUpon's recommendations and reflecting on its influence on the web, you'll gain insights into how opinion leaders can shape and amplify online content. 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 What strategies did Keystone Light use to target "The Cruiser" and increase brand engagement with character Keith Stone? How did the Canhole promotion leverage humor and social needs to generate positive word-of-mouth? “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. Solution Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828
