Opinion leaders’ role in innovation diffusion: A simulation study. The Journal of Product Innovation Management - Van Eck, Jager & Leeflang - 2011 - Article

One important requirement for marketing is understanding consumers. Sellers and developers need to recognize the decision-making process that individual customers and groups of customers undergo. Nowadays, in the modern digital world, it is really important to understand word of mouth (WoM) and the role of social media (Facebook and Twitter). The use of social media is one of the top three breakthroughs for marketing in 2008. In the past years, there has been an increase in the number of potential channels for addressing people, like television channels (telemarketing) and the rise of the internet and because of this, marketers should reconsider their focus on mass media efforts. It is important to know how information communicated through mass media (external influence) and then spread through WoM (internal influence) affects the process of consumer adoption. This means that the new product diffusion has great importance. Many studies have looked at the role and measurement of WoM. Bass suggested forty years ago that the dispersion of new products and practices can be studied by suggesting aggregate modelling. This type of research tries to explain how marketing mix strategies can affect new product diffusions and the studies found that WoM effectively encourages people to start using a product. There are also other types of modelling which researchers have used to study WoM. The current study used agent-based simulation models to investigate the role of WoM in processes of diffusion.

Agent-based simulation models are useful when the population is heterogeneous or when the topology of the interactions is heterogeneous. This methodology also allows to incorporate findings from other fields that focus on individual differences and social network structures (for explaining the process of WoM). But these social marketing interactions have complex dynamics and because of this, it is difficult to predict outcomes. Consumers can use social networks to express their opinion about a product, read reviews online or influence each other by using the product in a visible way. To address all these different influences, multi-agent simulation models use different WoM dynamics and investigate various viral marketing strategies of product diffusion in a social network. These models look at different types of heterogeneity, like the different consumers, the network structures that may affect consumer decision making and the various types of influence that consumers can have. There is limited empirical evidence for the assumption on which these models are based. There are only a few studies that relate individual agent properties to their network positions.

The current study investigates how the knowledge and personal characteristics of influential consumers affect the adoption process. The writers think that different types of influential consumers possess varying characteristics, which implies their varying influence on the consumers around them. The writers mark three different types of consumers:

Innovators/ early adopters: they influence other consumers through their innovative behaviour and knowledge about a specific product

Market mavens: they may not have knowledge about a specific product category but they have knowledge about markets in general

Opinion leaders: they represent a combination of innovative behaviour and market knowledge

Opinion leaders and early adopters have similar characteristics and the writers think that opinion leaders are early adopters and vice versa. However, there is a difference between these two. The concept of early adopters refers only to the position of the consumer in the adoption process and the concept of opinion leaders refers to the influence those consumers have on others. Opinion leaders are therefore interesting to study.

There are many studies that have attempted to understand the roles and attributes of opinion leaders. Studies found that their central position, innovativeness and interpersonal influence may affect their influence. There are two important types of interpersonal influence. The first one is informational and the second one is normative influence. The former refers to the tendency to accept information from other people as evidence of reality. Opinion leaders often influence other people by giving them advice and directions about their purchase or use of a product. The latter type of influence refers to the tendency to conform to the expectations of others. Normative opinion leaders will show social pressure and social support and will in that way influence the decision-making process of the consumer. People want to have meaningful social relationships and they will therefore show behaviour that is approved by others, like adopting a product to appeal to other people who have that same product. The situation as well as the product will determine which type of influence is more important. Privately consumed goods will go more together with the informational influence, whereas publicly consumed goods will go together with both types of influence.

When you compare an opinion leader to somebody who seeks their advice, you will notice that the opinion leader has more experience or expertise with the product, has been exposed to more information about the product, exhibits more innovative behaviour with the product and shows higher levels of involvement with the product category. There have been many studies about the characteristics of opinion leaders, but no research combines their characteristics.

The study

The writers of this article wanted to assess the assumption that opinion leaders have more contact, exert different types of influence and are among the earliest adopters and they conducted an empirical study. In that study they considered the role of opinion leaders in the diffusion of free Internet games for children. This study helps to distinguish between normative and informative influences and helps to show more about how children influence each other. This study also notes the influence of different characteristics of opinion leaders, which can help give some insight into how influential affect the behaviour of others. The writers assumed that opinion leaders play an important role in the diffusion of information about products and the products themselves. They therefore investigated the diffusion of both information and product. Opinion leaders may influence diffusion by increasing the speed of diffusion and/or increasing the maximum adoption percentage. The writers also decided to investigate two factors which may affect the role of opinion leader in the adoption process. These are the use of mass media by firms and the number of opinion leaders within the network. These two factors might affect how the opinion leader influences the speed of the information or product diffusion and the maximum adoption process.

Hypotheses

The writers of this article focus on three main characteristics of opinion leaders. They think that an opinion leader’s innovative behaviour might enhance the adoption percentage rate. Opinion leaders exert social pressure and social support, so their normative influence makes it more likely that followers adopt the product as well. The writers hypothesized that innovative behaviour by opinion leaders results in a higher adoption percentage, and that that effect is stronger if normative influence is more important to followers.

As said before, opinion leaders spread information by giving advice and directions to costumers. That active, informational influence may increase the speed of information diffusion. The follower is more likely to follow the opinion leader, because the opinion leader has more expertise. This means that the informational influence of the opinion leader enhances the speed of information diffusion. Both types of influence are important, but the writers think that opinion leaders and followers differ in the type of influence that is more important to them. The second hypothesis of the writers is that for opinion leaders the importance of normative influence relative to informational influence is lower than it is for the followers. The lower importance of normative influence leads to a higher adoption percentage and this adoption percentage increases more when the importance of normative influence for opinion leaders decreases.

The third hypothesis of the writers is that opinion leaders are better at judging products, which results in a faster information and product diffusion.

According to the writers, there are also other factors influencing the role of the opinion leader and they also had two hypotheses about these factors. According to the writers, Word of Mouth should be more likely than mass media to activate people to act upon received advice. There are many scientists who think that Word of Mouth has the most important influence in the consumer making decision-process. However, there are also many scientists who say that high mass media by firms can increase the speed of information diffusion, since more people come aware of a product. If mass media are extensive, than Word of Mouth may become less important as a means to make people aware of the product and this means that there will be a decrease in the role the opinion leader plays in the information diffusion process. The fourth hypothesis is that less extensive use of mass media by firms leads to a stronger influence of the opinion leader’s product-judgment quality on the speed of information and product diffusion.

For some products, there are many opinion leaders. This is because for some things, many people have an opinion. Almost everybody has an opinion about music and movies. Social media makes it relatively easy to share opinions and influence a great number of other people. With complex and extensive products, like computers and cell phones, people should be less likely to make a decision on the basis on messages on Twitter or Facebook. There will be no big group of opinion leaders, because it takes time to become an expert about these products. Fewer opinion leaders will also probably result in a lower adoption percentage. Their fifth hypothesis is that a smaller percentage of opinion leaders in a network enhances the influence of innovative behaviour of the opinion leaders in terms of increasing the adoption percentage. This is especially the case if normative influence is important to followers.

Empirical study

In the empirical study, the writers wanted to know more about the Word of Mouth behaviour of children. This was done in the context of the diffusion of free Internet games. The games in the study invite children to make their own radio or television program. They can be used easily and messages can be send to friends to invite them to see the creations. Children may also talk about these games at school. The investigate the role of children as opinion leaders, the writers used an online questionnaire. The writers used three big online applications. Visitors of the three sites can see the work of others. On the sites, only the best news items are broadcast and so it is an honour if the children’s news items are broadcast on the site. If a child wishes to get his or her news item broadcast on the main site, he or she is probably sensitive to normative influences because wanting your news item to come on the main site, means you care about what others think of your work. To identify opinion leaders, the writers used an opinion leadership scale and they defined the 29,4% who score highest on the scale as opinion leaders (OL). The other 70,6% of the subjects are followers or non-leaders (NL).

Results

They found that opinion leaders exhibit more innovative behaviour than followers do. They also found that the opinion leader children were more involved with the product than the other children and talked more about it, even when they were not using the product. They are also more likely to involve others in the use of the product (such as inviting them to join). The data also shows that opinion leaders do not know more about the product than followers, but they can help others better in using the product. The finding that opinion leaders can help others indicates that they are more capable of interpreting the information they receive and this might be the result of their higher involvement in the product and more expertise with the product. However, it was difficult to obtain information about the actual interactions patterns. The writers did find that opinion leaders used more sources than followers, but that mass media is equally important to both groups. Because opinion leaders used more social sources, they were likely to take a more central position in the network. Also, opinion leaders score high on both informational and normative influence, whereas followers score high on normative influence but not so high on information influence. This supports the second hypothesis: for opinion leaders, the importance of normative influence is lower than for followers. With the help of these results, the writers include three characteristics of opinion leaders in their model. The first one is that opinion leaders are better at judging product quality. Even if they do not know more about the product, they can better interpret the information they receive. The second one is that normative influence is less important for opinion leaders than it is for followers. The third one is that opinion leaders are more innovative than followers. The data also suggests that opinion leaders take a more central role in the network.

The simulation study

The writers developed an agent-based model to test their hypotheses. The model distinguishes between informational and normative influences. Opinion leaders or non-leaders can decide to adopt the product on the basis of the product quality (informational influence) or because the neighbouring agents adopt a product and the agent may feel social pressure to adopt the product as well. In their research, the writers vary five parameters systematically. These five are the innovativeness of opinion leaders, the weight of normative influences, the number of opinion leaders in the network, the reach of mass media and the quality of the product judgment of opinion leaders. They used a certain reference model and the specific parameters and value distributions can be found in the tables of pages 193 and 194 of the article. To test whether opinion leaders have an influence on the product diffusion and the adoption percentage of a product, the writers compared it to another model that excludes opinion leaders.

Results

The writers found that if opinion leaders are active in social networks, information spreads faster, the product diffuses faster over the network and the adoption percentage is significantly higher than in a network without opinion leaders. The capability of opinion leaders to judge product quality is important to the speed of information and product diffusion. Informational influence has a dominant effect on the adoption speed of the product and on the speed of information sharing. The lower sensitivity to normative influence of opinion leaders and their innovative behaviour is more important for the adoption percentage.

The writers found that if followers become more sensitive to normative influence, the adoption percentage declines. This can be due to the stronger effect of innovation behaviour when informational influences increase in the network. But it is more likely that this effect is driven by the low adoption percentage. Opinion leaders can’t force the network to surpass a threshold when the normative pressure against the adoption of the product is higher than the normative pressure in favour of the adoption. The writers also found that a more extensive use of mass media further decreases the effect that opinion leaders have on the speed of information and product diffusion. This is because consumers become aware of the product at a later point in time.

The findings are valuable for marketers because they may help explain why some products fail and they also suggest strategies for introducing new products. It is difficult to ensure that enough people adopt the product to make the product successful. Opinion leaders may be innovative, but they may not be numerous enough to make the product a success. Through online social networks, opinion leaders can reach many people and thus exert their normative influence. In their study, the writers found that opinion leaders immediately recognize a good application and therefore also quickly initiate the diffusion process. Also, they affect the popularity of the online application. The opinion leaders from the study involved other children in the application and they are able to help other children sometimes to use complex applications. Other children might be discouraged to use complex applications without the help of opinion leaders. The writers also found that there needs to be a focused campaign (and not just the random use of mass media) to reach the opinion leader who can initiate the diffusion process. This campaign can only be successful if the opinion leader adopts the product and starts talking about it. If the normative influence in the network is too strong, than opinion leaders might not adopt the product. So a marketing campaign focused on opinion leaders seems to be most successful if opinion leaders do not care that much about normative influence and if the importance of normative influence in the network is relatively low.

The writers found that opinion leaders play a significant role in the adoption process and spread of information about products. Opinion leaders exert normative and informational influences. They also found that opinion leaders are early adopters. Opinion leaders are not (only) influential because of the number of relations they have. All these characteristics should be taken into account when investigating the role of influential consumers.