Marketing Prof’s Study Aims to Find Out if Early Adopters
Influence Consumers Purchases of Household Goods
Makers of soft drinks and laundry detergents work to find consumers that influence others to buy what’s new.
Now a study by a marketing professor at the University of Houston C. T. Bauer College of Business contradicts the common wisdom in academia that there’s no evidence of the power of early adopters when new products show up on grocery store shelves.
A study by Rex Yuxing Du, an associate professor of marketing at Bauer, sifted through frequent-shopper card program data for 67 new products seeking statistical evidence that those eager to try new things could have an impact on other consumers.
Specifically the paper looked at when consumers bought those new offerings and where those buyers lived. Du said the data gathered could be imagined as a map of a neighborhood where each house had a light that went on when it made a purchase of one of the new products studied.
The researchers were interested in the diffusion patterns ― simply put, when and where in the neighborhood the lights went up ― to see if there were signs that consumers in the habit of regularly trying new things were influencing others to do the same.
The result of the work published in the Journal of Marketing Research by Du and Wagner Kamakura, of the Fuqua School of Business at Duke University, contradicts the common wisdom among academics.
For higher ticket, long-lasting products from cars to computers, it’s long been known that the decisions of a select group of people who seek out what’s new and share their opinions with others can affect the adoption decisions of other consumers.
To find these power consumers, companies can directly seek them out, using consumer surveys; or indirectly look for signs they exist, using statistical studies. The latter approach takes information on when consumers buy a new product and where they live. It is analyzed to see if there are signs of a pattern that cannot be explained by factors like price promotions and mass advertising.
But in past studies none of those approaches showed a similar cause and effect connection in the sort of products for sale on grocery store aisles.
While frequent shopper card data can identify early adopters, Du said the predominant thinking had been they don’t exert much influence because the low price of packaged goods allows a buyer to make quick decisions without seeking opinions or reviews.
Nonetheless, consumer product companies do try to identify and reach out to early adopters, hoping they will influence others.
The goal is to find buyers who are eager to try new things and somehow can influence others to do the same, so the seller can use a targeted viral marketing approach rather than blanketing the market with coupons and samples.
For retailers with massive databases of consumer purchasing information, the findings in this study could someday lead to new opportunities. Refined versions of this analysis could be used to identify products where there are clear indications this sort of influence is at work. Where that’s the case, grocery stores could help connect those influential shoppers with consumer product makers who could target them when promoting new offerings.
The study identified households only by the address provided by consumers when they requested a frequent-shopper card. The study gathered data on the sale of 67 new products in an unidentified mid-sized Southern city. The time frame of the identified influence is about 4 weeks and geographic reach of the influence is about 1/6 of the market area under study.
Analysis of the data showing when consumers tried new products on the list and where they lived indicated a diffusion pattern that could only be explained by the influence of early adopters. This is known as a contagion effect ― a reference to how contagious diseases can spread.
The paper, recently released online, covered the detailed statistical work used to screen out other factors that could affect these observations, like new product promotions.
The exact mechanism(s) through which early adopters influence others near their homes is not known. Du theorized that they most likely led by example: “You may see that people are drinking it at Little League games or at church functions, which may lead you to try it out when you are in the grocery store.”
Click here to read the complete study on the Journal of Marketing Research’s website.
By Stephen Rassenfoss