Study Notes on Group Influence and Word of Mouth Marketing

Reference Group: A group or individual (opinion leader) that has significant relevance upon one’s evaluations, aspirations, and/or behavior.

Reward Power:
- Definition: Influence due to a reference group or individual’s ability to dispense reward.
- Explanation: Individuals may align their behavior with a person or group, anticipating rewards such as approval or material benefits.
Coercive Power:
- Definition: Influence due to a reference group or individual’s ability to administer punishment.
- Explanation: This includes the fear of negative consequences that may result from not conforming to the desires of the group.
Referent Power:
- Definition: Influence due to the influenced person’s desire to identify with someone or to be like them.
- Explanation: Individuals are inspired to emulate behaviors or choices of those they admire, often leading them to adopt similar attitudes and practices.
Expert/Informational Power:
- Definition: Influence due to the influenced person’s tendency to heed expert advice or to follow those with specialized knowledge.
- Explanation: This power comes from perceptions of wisdom or knowledge, where individuals trust the guidance of perceived experts.
Legitimate Power:
- Definition: Influence due to the influenced person’s feelings of obligation.
- Explanation: This can stem from formal authority, where individuals comply out of duty or respect for the holder of legitimate power.

Definition: Product information that individuals transmit to other individuals.

Source Credibility: W.O.M. is often perceived as more credible because it originates from trusted sources.
**Influence on Sales:
- Statistic: W.O.M. influences approximately two-thirds of sales, particularly potent in product categories where consumers lack familiarity.
Negative W.O.M.: Consumers pay closer attention to negative W.O.M. than positive, indicating that adverse opinions can significantly impact brand perception.

Definition: Promotional strategies that utilize unconventional locations or nontraditional media to generate W.O.M.
Examples:
- Mars Truck Size
- Coops Paint
- La Liga Contra el Cancer
- P&G Tremor

Definition: Utilization of online spaces where people share interests and opinions with friends.

Definition: Strategies designed to encourage people to visit a website or social media and relay that information to friends.

Description: E.L.F. developed a song and hashtag (#eyeslipface) prompting users to post videos showcasing their eyes, lips, and faces to the song.
Results:
- User-Generated Content: Over 3 million videos created.
- Impressions: 250 million (equivalent to $27 million in advertising value).
- Target Audience: Specifically focused on Gen Z consumers, highlighting the brand as a budget cosmetic line.

Mediums: Radio, television, print ads, billboards.
Strengths:
- Reaches large audiences at a lower cost per impression.
- Allows repeated message delivery.
- Enhances brand/product appeal.
Weaknesses:
- High absolute dollar expenditure.
- Difficult to assess direct sales impact.
- Generally less persuasive than W.O.M.

Types: Guerilla, viral, and social media marketing.
Strengths:
- Higher source credibility.
- Efficient and effective, particularly for new or premium products.
Weaknesses:
- Less control over narratives, especially concerning negative W.O.M.
- Challenges in converting awareness into actionable outcomes and evaluation.

Jonah Berger's Assertion: Both content and the way it is shared matter, shifting the focus to the importance of the message itself.
Comparison to Malcolm Gladwell's Views: Gladwell emphasizes the role of the messenger (influencers) as pivotal, suggesting that social epidemics arise from exceptional individuals.

Context: Focus on artisanal coffee production.
Competitions: Multiple direct competitors present (11 coffee shops in Chino Hills).
Task: Develop an extraordinary coffee shop concept that stands out and generates W.O.M. with minimal advertising efforts.

Experience: Aimed at providing the best steakhouse experience possible.
Sample Menu Items:
- Russian caviar.
- Overnight FedEx Alaskan halibut.
Statistical Note: 25% of restaurants fail within the first 12 months, 60% within 36 months.
Rating: Barclay Prime holds a 4.5-star review.
Notable Dish: A $120 cheesesteak sandwich featuring:
- Wagyu beef.
- Lobster tail.
- Veuve Clicquot champagne pairing.

BOOKS: "Contagious: Why Things Catch On" has attained New York Times Bestseller status.
Awards: Berry-AMA Book Prize winner, showcasing his distinction in marketing research.
Professional Background: Professor of Marketing at the Wharton School, University of Pennsylvania.

Social Currency:
- Definition: Features within a brand or idea that enable consumers to be perceived positively by others.
- Factors: Inner remarkability, how it makes people feel special, and leveraging game mechanics (e.g., loyalty programs).
Triggers:
- Definition: Contextual cues that can enhance recall of products or ideas.
- Approach: Create associations that keep the product top-of-mind.
Emotion:
- Definition: Feelings associated with communications around the product.
- Insight: Positive and high-arousal stories are more likely to be shared. Physiological arousal magnifies sharing likelihood.
Public:
- Definition: The visibility of the product or idea.
- Concept: Can other people observe when someone is using the product or idea?
Practical Value:
- Definition: The utility in discussing the product.
- Purpose: Package information in a way that benefits those sharing it.
Stories:
- Definition: The narratives that include the product or idea, making them enjoyable to share.
- Question: What story can be created that encourages sharing (Trojan Horse story)?

Summary of Key Takeaways:
- Importance of reference groups and the five types of social powers.
- Various strategies for W.O.M. including guerilla, viral, and social media tactics.
- Recognition of strengths and weaknesses in traditional vs. word of mouth channels.
- Application of STEPPS to enhance viral marketing and generate organic discussion about brands.