CATONSVILLE, MD, October 16, 2019 - Consumers have been relying on opinion leader recommendations to make choices about product quality and purchases for a long time. It is even more prominent now with the prevalence of influencers on social media platforms. The problem is, when there is a wide variety of the same product, consumers question if a positive recommendation is based on quality or personal preferences.
New research in the INFORMS journal Marketing Science looks at what influences these opinion leaders and how firms can adjust their product variety to get the most out of their marketing venture.
Nearly 50% of consumers rely on digital influencers and 40% make purchases because of them, but it is important to note opinion leaders' recommendations are influenced by both product quality and their individual preferences.
The study, "Opinion Leaders and Product Variety," conducted by Dmitri Kuksov of the University of Texas at Dallas and Chenxi Liao of The Chinese University of Hong Kong, found that consumers discount a positive influencer recommendation more when it is about a product that has a large variety.
Researchers say increasing product variety does two things: it increases the likelihood of a positive expert opinion, but it also decreases the consumer certainty that the quality of the product is good based solely on the expert opinion.
"When many types of a product are available, consumers may expect an expert to find a better fit, and this consideration would then reduce consumer expectations of the product quality. As a result, the consumer valuation may decrease, which could lead to a lower profit," said Liao, a professor in the business school at The Chinese University of Hong Kong.
Given that many consumers rely on opinion leaders' recommendations to judge how good a product is, research shows firms should pay attention to this research and adjust their strategies accordingly.
"The firm's product variety can make a difference in their sales, because the opinion leader may just like the product because of its color, which is not relevant to the consumer, instead of liking the product because of its durability," continued Liao. "The firm can adjust the product variety to influence consumers' quality inference and in turn their purchase decisions to earn a higher profit."
Although firms are obviously interested in getting opinion leaders' positive recommendations, increasing product variety may not be the solution. They may want to limit the variety due to the negative effects associated with them.
About INFORMS and Marketing Science
Marketing Science is a premier peer-reviewed scholarly journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at http://www.