Who buys what? Research finds clues to marketing innovation

Jul 27, 2010

Introducing innovative new products and ideas to the marketplace can be a tricky proposition. Sometimes they take off immediately (like the iPod) and sometimes they can take a while to garner consumer confidence (like the Segway). A troubled economy can make it more difficult to convince consumers to take a leap on a new product. But new research from North Carolina State University finds that targeted marketing to opinion leaders makes it more likely that consumers will buy into innovative products and ideas.

"There are lots of reasons why it might be difficult to get buy-in for a new idea or product," says Dr. Jon Bohlmann, associate professor of marketing in NC State's College of Management and co-author of a new paper on how acceptance of spreads in the marketplace. "There may be a lack of consumer understanding, uncertainty about whether a product is viable, or it may be that tough make people more hesitant to buy something new." So Bohlmann and his co-authors looked at how are connected to each other, to see what they could learn about how the relationships between consumers affects the "diffusion of innovation."

For products that were difficult to diffuse, meaning they were not readily accepted by consumers, the researchers found that clustered networks could be a key to getting greater buy-in from consumers. Clustered networks are social networks where a person's friends are likely to be friends of each other, rather than being connected to random individuals. People are more likely to take a risk on a new product if someone in their close network cluster is trying the product, rather than if they see an advertisement for the product.

In addition, the presence of well-connected opinion leaders can mean the difference between a new idea catching on or not. In some social networks, large numbers of people are connected by links to a relatively small number of people. For example, every person who reads a popular blog is connected to the person who writes that blog, but they are not necessarily connected to each other. The blogger serves as a sort of hub, serving as the primary link for the network and offering a potential kick-start to the innovation.

"How consumers are connected to each other is essential to understanding the spread of new products," Bohlmann says, "because social communication is the key to diffusing innovation."

Bohlmann explains that this finding could be important given the economic climate. "People are being more judicious in spending their marketing money, and we found that spending money to reach out to a large audience would be better spent focusing on well-connected, influential members of a social network - such as opinion leaders on blogs, industry leaders, and so on," Bohlmann says. "Instead of an ad campaign, I'll seek out the opinion leaders in the network I'm marketing to.

"But," Bohlmann adds, "we found that it is not only about getting people on board, but getting people on board who are influential in their social network. Not just having a lot of connections, but having strong connections. Depending on the kind of innovation we're talking about, these influential people could be community leaders, members of trade groups, et cetera."

For example, Bohlmann says, some nationally influential physicians may prescribe an innovative drug. This might influence some regionally prominent physicians to follow suit. Soon you have a domino effect, with local physicians willing to prescribe the new drug.

Explore further: Tax benefits for housing not as outsized as previously thought, study says

More information: The study, "The Effects of Market Network Heterogeneity on Innovation Diffusion: An Agent-Based Modeling Approach," was co-authored by Bohlmann, Dr. Roger Calantone of Michigan State University and Dr. Meng Zhao of California State University, Dominguez Hills. The paper is published in the September issue of the Journal of Product Innovation Management.

Related Stories

Studies show that nice guys finish first in business world

Mar 17, 2009

When it comes to leading a team tasked with developing new products and bringing them to market, new research from North Carolina State University shows that being nice and playing well with others gives you a very real competitive ...

Following the leader: Social networks of schoolchildren

May 12, 2009

Kids always seem to be ahead of trends, and marketers realize the importance of new products and services taking off with the younger set. A new study in the Journal of Consumer Research helps identify which children might ...

Negativity is contagious, study finds

Oct 04, 2007

Though we may not care to admit it, what other people think about something can affect what we think about it. This is how critics become influential and why our parents’ opinions about our life choices continue to matter, ...

New study shows it pays to shop around online

Nov 24, 2008

Holiday shopping season has arrived, and tough financial times mean that more people will probably be shopping around for the best price. But a new study co-authored by North Carolina State University's Dr. Jonathan D. Bohlmann ...

Recommended for you

The tyranny of realism in energy planning

Aug 20, 2014

A report exploring the political economy of energy planning under democracy and the Integrated Energy Planning (IEP) process due to conclude this year was launched by the British High Commission, Project ...

Organising is the key to efficient purchasing

Aug 19, 2014

A well-functioning purchasing organisation is a powerful tool for companies. Chalmers researcher Ingrid Hessel shows in her thesis that internal purchasing operations affects and is affected by relationships ...

User comments : 0