What is the role of social influence on consumer choice in new product/category building?

Focus

Change in consumption patterns and in consumer lifestyles are main drivers for societal transformations towards sustainability. The goal of this project is to understand the collective socio-behavioural dynamics of central processes conditioning adoption of novel practices and products, such as word of mouth, social exposure, and the buildup of consumer willingness to consider alternative product categories.

Approach

To understand the role of social influence processes in new category adoption, we use multiple methods ranging from empirical analysis of large spatiotemporal datasets, sentiment analysis, semiotic and interpretive analysis, and simulation.

PROJECT STATS

Project period: 2015 – ongoing

Key people: Jeroen Struben, David Keith, John Sterman

Contexts: Generic, hybrid electric vehicles in the USA

Supported by: Ford Motor Company

Consumer Choice Project Outputs:
1. Academic Publications

Supply Constraints and Waitlists in New Product Diffusion

In this article we examine the social influence from waitlisted buyers – through their excitement or frustration – and their effect on diffusion of new product categories. We develop a generalized model of new product diffusion that we estimate for the launch of the Toyota Prius hybrid-electric vehicle in the United States, for which we find evidence of positive word-of-mouth from waitlisted buyers.

What if Technology Worked in Harmony with Nature
In the following article we examine the marketing representations of the Toyota Prius, the first ‘green’ mass-produced automobile. We analyse how using ambiguous messages influences viewers’ knowledge and perception of climate change as well as their sense of responsibility for anthropogenic climate change.

More research within this project

 

WORKING PAPERS:
 

Within-Category Peer Effects in the Diffusion of Hybrid Electric Vehicles (Working paper)

In this paper we explore whether peer effects - central in the diffusion of new products and practices - exist between distinct but related products within the same product category. Using an instrumental variables approach leveraging California’s high-occupancy vehicle (HOV) lane incentive for hybrid vehicle adoption we find evidence for cross-product peer-influence effects.

Spatiotemporal diffusion dynamics of Hybrid-Electric Vehicles. (Working paper)

New products and ideas often exhibit heterogeneity in spatio-temporal diffusion, including spatial clustering at multiple scales. We examine whether such adoption clusters, observable for the arises from differences in local conditions and adopter preferences or from endogenous social influence processes that build consumer familiarity with new products. Developing and testing a novel model we find that variation in Toyota Prius hybrid electric vehicle adoption in the US is primarily explained by social influence through local interactions, amplifying underlying consumer heterogeneities.

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