How Social Network and Opinion Leaders Affect the Adoption of New Products

Raghuram Iyengar 1 , Christophe Van den Bulte 1 , John Eichert 2 ,  and Bruce West 2
  • 1 Assistant Professor The Wharton School, University of Pennsylvania, Philadelphia, PA, USA
  • 2 Principal, Rivermark, Doylestown, PA, USA.

Abstract

Do word-of-mouth and other peer influence processes really affect how quickly people adopt a new product? Can one identify the most influential customers and hence those who are good seeding points for a word-of-mouth marketing campaign? Can one also identify those customers most likely to be influenced by their peers? A pharmaceutical company seeking to improve its marketing effectiveness by leveraging social dynamics among physicians set out to answer these questions. There is indeed evidence of social influence, even after controlling for sales calls and individual characteristics. Also, people who are central in the network and those who use the product intensively are more influential. Finally, people who view themselves as opinion leaders are less affected by peer influence, whereas people who others really turn to for information or advice are not differentially affected. This last finding suggests that self-reported opinion leadership captures self-confidence, whereas a central position in the social network captures true leadership. Since sociometric techniques identify true opinion leaders more effectively than self-reports do, word-of-mouth programs targeting sociometric leaders are expected to be more effective than programs targeting self-reported leaders

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