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Opinion Leadership & Celebrity Endorsement Presentation on OL + CE

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<ul><li>Opinion Leadership </li></ul><ul><li>Celebrity Endorsement </li></ul>AGENDA OL + CE

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<ul><li>Books </li></ul><ul><li>Websites </li></ul><ul><ul><ul><li>www.iitk.ac.in </li></ul></ul></ul><ul><ul><ul><li>www.rediff.com </li></ul></ul></ul><ul><ul><ul><li>www.indiatimes.com </li></ul></ul></ul><ul><ul><ul><li>www.financialexpress.com </li></ul></ul></ul>Sources OL + CE

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Opinion Leadership (Word-of-Mouth communications) is the process by which one person (the opinion leader) informally influenced the action or attitudes of others, who may be opinion seekers or merely opinion recipients. What is Opinion Leadership ?

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They key characteristics of influence is that it is interpersonal and informal and takes place between two or more people, none of whom represents the commercial selling that would gain directly from the sale of something. This often called word-of-mouth communication or the opinion leadership process What is Opinion Leadership ? Contd...

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word-of-mouth implies personal, or face-to-face, communication, although it may also take place in a telephone conversation or in the context of chat group on the internet What is Opinion Leadership ? Contd...

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<ul><li>CREDIBILITY </li></ul><ul><li>POSITIVE AND NEGATIVE PRODUCT INFORMATION </li></ul><ul><li>INFORMATION AND ADVICE </li></ul>Dynamics of the Opinion Leadership Process

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OPINION LEADERSHIP IS CATEGORY SPECIFIC 9% Financial Services 18% Automotives 22% Travel 24% Consumer Electronics 36% Computer HW/SW 69% Restaurants

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<ul><li>The consumer who are opinion leaders in one product-related situation my become opinion receivers in another situation. </li></ul>OPINION LEADERSHIP IS TWO WAY STREET

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<ul><li>NEEDS OF OPINION LEADERS </li></ul><ul><li>NEEDS OF OPINON RECEIVERS </li></ul>THE MOTIVATION BEHIND OPINION LEADERSHIP

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<ul><li>There are four basic measurement techniques. </li></ul><ul><li>The self-designating method </li></ul><ul><li>The sociometric method </li></ul><ul><li>The key informant method </li></ul><ul><li>Objective method </li></ul>MEASUREMENT OF OPINION LEADERSHIP

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The self-designation method is the most commonly used technique in opinion leader identification. Here, respondents are asked to evaluate the extent to which they have provided other with information about a product category or specific brand or have otherwise influenced the purchase decisions of others. SELF-DESIGNATING METHOD

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The Self-designating technique is used more often than other methods for measuring opinion leadership because consumer researchers find it easy to include in market research questionnaires. Because this method relies on the respondent’s self-evaluation. SELF-DESIGNATING METHOD Contd…

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SINGLE-QUESTION APPROACH: In the last six months have u been asked you advice or opinion about “ golf equipment” SELF-DESIGNATING METHOD

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<ul><li>MULTIPLE-QUESTION APPROACH: Measured on a 5-point bipolar “Agreeisagree” scale) </li></ul><ul><li>Friends and neighbors frequently ask my advice about golf equipment </li></ul><ul><li>I sometimes influence the types of golf equipment friends buy. </li></ul>SELF-DESIGNATING METHOD

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<ul><li>My friends come to me more often than I go to them about golf equipment </li></ul><ul><li>I feel that I am generally regarded by my friends as a good source of advice about golf equipment </li></ul><ul><li>I can think of at least three people whom I have spoken to about golf equipment in the past six months. </li></ul>SELF-DESIGNATING METHOD

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Sociometric, the second method, involves tracing the communication patterns among group members. It measures the person-to-person informal communication of consumers concerning products or product categories. In this method respondents asked to identify (1) the specific individuals (if any) to whom they provided advice about the product or brand under study and (2) the specific individuals (if any) who provided them with advice about the product or brand under study. SOCIOMETRIC METHOD

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<ul><li>Members of social systems are asked to identify to whom they give advice and to whom they go for advice and information about a product category. </li></ul><ul><li>Sociometric questions have the greatest degree of validity and are easy to administer. </li></ul><ul><li>Sociometric is the most precise method, but it is expensive and very difficult to execute and complex. </li></ul><ul><li>Requires a large number of respondents. </li></ul>Contd…

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SAMPLE QUESTION ASKED: “ Whom do you ask?” “ Who asks you for information about that product category?” Contd…

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Opinion leadership can also be measured through the use of a key informant, a person who is keenly aware of or knowledgeable about the nature of social communication among members of a specific group. The key informant is asked to identify those individuals in the group who are most likely to be opinion leaders. KEY INFORMANT METHOD

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Carefully selected key informants in a social system are asked to designate opinion leaders. This method is relatively inexpensive because it requires that only one individual or at most several individuals be intensively interviewed, where as the self-designating and sociometric methods require that a consumer sample or entire community be interviewed. Informants who are not thoroughly familiar with the social system are likely to provide invalid information. Contd…

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SAMPLE QUESTION ASKED: “ Who are the most influential people in the group?” Contd…

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Objective method is much like a “controlled experiment” – it involves placing new products or new-product information with selected individuals and then tracing resulting “web” of interpersonal communication concerning the relevant products. It artificially places individuals in a position to act as opinion leaders and measures results of their efforts. OBJECTIVE METHOD

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SAMPLE QUESTION ASKED: “ Have you tried the product?” Contd…

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SAMPLE QUESTION ASKED: “ Whom do you ask?” “ Who asks you for information about that product category?” Contd…

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SAMPLE QUESTION ASKED: “ Whom do you ask?” “ Who asks you for information about that product category?” Contd…

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CELEBRITY ENDORSEMENT

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Cost Credibility Crisis Factor Factors Critical in Celebrity Advertising

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As spoke person In print and electronic advertisements In outdoor media like hoardings As brand ambassadors The use of brands by celebrities in movies . Forms of Celebrity Endorsement

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Brand has close substitutes available. Need to create a clear differentiation. Entry into the market. When the life cycle of the brand is feared short. Reasons for Celebrity Endorsement

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CUSTOMERS BRAND CELEBRITY Advisement Advisement Advisement

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Huge compensation Level of Acknowledgement Endorsement breeds Endorsement Why Celebrity themselves would like to endorse products…

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Messages Celebrity Expertise perceived relevant Celebrities are perceived Trustworthy Ambitious psych e Physical Attractio n Why Customers accept the Celebrities

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Duration of endorsement Multiple endorsement Celebrity Life Cycle Vampiring Critical Issue Related To Celebrity Management

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1.Cost incurred on the celebrity as a percentage of budget 2.Currently or recently endorsements of the celebrity with another entity 3.Whether the celebrity is strongly identified with another product, company or not. Possible Check List before a Celebrity Endorsement is done

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4.The number of commercials or ads the celebrity has appeared in over his or her career 5.Does the celebrity identify with a trend or fashion style? 6.Is the celebrity regarded as controversial? 7.Is the celebrity likely to alienate certain market segments? Contd...

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Improper positioning Brand-celebrity disconnect Clutter Flutter Dissatisfaction with product quality Confusion When it doesn’t work

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Is it smart to use celebrity endorsements for branding?

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The rewards of using celebrities for your brands

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CONCLUSION

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Is it smart to use celebrity endorsements for branding?

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