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samedi 29 décembre 2012

What is interpersonal communication worth?

 

Word-of-mouth in marketing context

Word-of-mouth is the most frequently used source of information for choosing a product (31%), well ahead of advertisements (14%), in 23 product categories (East, Hammond and Lomax, 2005). The average impact of word-of-mouth on the change in purchase intentions is about 20% (East, Hammond and Lomax, 2008). An anecdote about a product is more persuasive if transmitted by word-of-mouth than if it is written (Herr, Kardes and Kim, 1991). 

But nothing guarantees that such interpersonal flows of information, subject to little control by companies, are based on sound knowledge: they may be incomplete, inaccurate and in some cases dangerous. Nevertheless, they contribute to the formation of brand image and influence consumer choices.

To choose a product, consumers often ask the advice of people around them. In seeking information, consumers must select the sources from whom to ask advice, that is to say, those people who are likely to have sufficient knowledge to provide credible recommendations. 

 Unfortunately, when a consumer needs advices, this means that he or she is novice in a product category or unfamiliar with that category. How to select the best source ?

What sources of advice?

Consumers choose between their friends (ie. "strong ties"), opinion leaders, expert consumers or even individuals combining these characteristics.


Generally, consumers prefer to seek advice from people they feel close to or are similar to, because these are viewed as more likely to understand their requirements, like their friends. 

Besides this, experts are attractive sources. But we can wonder whether a novice would be able to distinguish in his entourage a consumer who only claims to be an expert from another who really is. Identification of experts could take place through “proxies”. Indeed, the tendency to initiate conversations (“talkativeness”) with one’s entourage in one’s area of competence is a good predictor of the perception of expertise. But academic research shows that the number of conversations initiated is not correlated with real expertise, but with other variables, such as self-confidence or dominance. 

On the other hand, unlike experts, opinion leaders tend to communicate a great deal of information about products and brands to those around them, through conversations or by making recommendations. Their opinions are credible because they are perceived as experts by their entourage. Consumers can easily identify and consider the opinion leader as an effective source of recommendations.

 

Estimating knowledge source

This evaluation involves an interpersonal calibration of knowledge, defined by the match between knowledge attributed to the source of information and their degree of objective knowledge. 
Sources whose knowledge is overestimated may well give risky advice. False information from people mistakenly regarded as experts can adversely affect brand image and harm or even endanger consumers, as when the decisions concern household equipment, self-medication or vaccination against certain diseases. Based on a review of academic literature, we formulate four hypotheses:




Methodology

7 populations of second-year students at technical colleges and business schools were surveyed. A first data collection identified each respondent’s strong ties, level of objective and subjective knowledge, and degree of opinion leadership in the product category. Experts were identified through an objective knowledge scale, determined by a series of questions on the technical aspects, terminology, brands, product lines, prices and distribution of laptops. Opinion leaders were identified using the Ben-Miled and Le Louarn (1994) self-determination designation scale. In all, 634 questionnaires were completed. In a second collection, each respondent had to choose a laptop from a list of eight models, with a budget of 1300 euros. To this end, we suggested the name of an initial person in his entourage, and then a second, telling him that he could seek advice from these two friends for choosing a computer from the list.

 

Results




Advice of friends and opinion leaders is most sought after and that their knowledge, moreover, is overestimated. Experts are called upon less, and their knowledge is underestimated.

Recognizing the benefits of seeking advice from strong ties, the consumer rationalizes the choice of this strategy by unconsciously overestimating his friends’ knowledge. 
 

Advice from opinion leaders is sought, but their knowledge of products and brands tend to be overestimated by their entourage. But this is no longer true if opinion leaders correctly calibrate their own knowledge. In fact, only opinion leaders who overestimate their personal knowledge risk misleading other people.

These errors of interpersonal judgment decrease if the source correctly assesses his own knowledge and they increase in the opposite case.

Another major finding of this research is the difficulty, if not the inability, of opinion seekers to identify sources capable of providing them with information with high added value. Counter-intuitively, experts provide a fund of knowledge that remains largely untapped by consumers looking for word-of-mouth information.

Learn more


Bibliography  

Ben Miled H. and Le Louarn P. (1994), Analyse comparative de deux échelles de mesure du leadership d’opinion : validité et interprétation, Recherche et Applications en Marketing, 9, 4, 23-51.
East R., Hammond K. and Lomax W. (2005), What is the effect of a recommendation?, The Marketing Review, 5, 2, 145-157.
East R., Hammond K. and Lomax W. (2008), Measuring the impact of positive and negative word of mouth on brand purchase probability, International Journal of Research in Marketing, 25, 215-224.
Herr P. M., Kardes F. R. and Kim J. (1991), Effects of word-of-mouth and product-attribute information of persuasion: an accessibility-diagnosticity perspective, Journal of Consumer Research, 17, 4, 454-462.

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