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BSI Brand Communities

Marketing 2.0 Conference, Hamburg 2005
BSI



          Join the conversation
  MARKETING 2.0 CONFERENCE
      Paris, France 28/29 March 2011
         www.marketing2conference.com
Brand Communities
                          October, 6th, 2005
 Word-of-Mouth Conference, Hamburg

                                               Prof. Dr. Paul Dholakia, Rice University, Houston/US
                                               Prof. Dr. René Algesheimer, University of Zurich/CH




© 2005, Algesheimer/Dholakia                                                                          1
2005-02-04 - 4.200.000
                               2005-01-27 - 4.100.000
                               2005-01-19 - 4.000.000
                               2005-01-14 - 3.900.000
                               2005-01-08 - 3.800.000
                               2005-01-03 - 3.700.000
                               2004-12-28 - 3.600.000
                               2004-12-21 - 3.500.000
                               2004-12-01 - 3.000.000
                               2004-11-26 - 2.900.000
                               2004-11-17 - 2.800.000
                               2004-11-13 - 2.700.000
                               2004-11-12 - 2.600.000
                               2004-11-04 - 2.500.000
                               2004-10-31 - 2.400.000
                               2004-10-23 - 2.300.000
                               2004-10-12 - 2.200.000
                               2004-10-03 - 2.100.000
                               2004-09-25 - 2.000.000
                               2004-09-20 - 1.900.000
                               2004-09-14 - 1.800.000
                               2004-09-07 - 1.700.000
                               2004-09-02 - 1.600.000
                               2004-08-28 - 1.500.000
                               2004-08-17 - 1.400.000
                               2004-08-08 - 1.300.000
                               2004-08-04 - 1.200.000
                               2004-07-27 - 1.100.000
                               2004-07-22 - 1.000.000
                                2004-07-16 - 900.000
                                2004-07-09 - 800.000
                                2004-07-02 - 700.000
                                2004-06-24 - 600.000
                                2004-06-16 - 500.000
                                2004-05-28 - 400.000
                                2004-05-08 - 300.000
                                2004-04-06 - 200.000
                                2004-02-26 - 100.000
                                 2004-02-07 - 50.000
                                 2004-01-22 - 1.500




© 2005, Algesheimer/Dholakia                            2
© 2005, Algesheimer/Dholakia   3
Agenda

       1.     Motivation
       2.     Introduction
       3.     Examples
       4.     Research
       5.     Implications
       6.     Contacts




© 2005, Algesheimer/Dholakia   4
Motivation




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer                5
Introduction




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer                  6
Perspective


                                      Business-to-Consumer (B-C)               Business-to-
                                                                           Consumer-to-Consumer
                                                                                 (B-(C-C))

                                Transactional-                Relational            Network-
                                 Perspective                 Perspective           Perspective

                        1                            2                     3
                                                                                             C
                            B              C             B            C        B
                                                                                             C




© 2005, Algesheimer/Dholakia                                                                      7
Motivation

       • The effectiveness of consumer-to-consumer
         influence is greater than that of marketer-to-
         consumer influence
              – Examples: positive or negative WoM, opinion leadership
       • Consumer interactions determine critical
         variables like brand decision making process,
         willingness to pay, and brand loyalty.
              – Examples: K-Swiss sneakers, bottled water during Hurricane Rita
       • Over 250 million consumers world-wide
         participate in virtual and FtF brand
         communities
              – Examples: H.O.G.-Community, Linux-Communities




© 2005, Algesheimer/Dholakia                                                      8
Brand Communities: Definition

       Constitutive Elements:
       • Social network of individuals
       • Organisation => role structures
       • Interaction
       • Mutual influence
       • Sense of belonging, “we-ness“
       • Cohesion
       • Common language, rituals, traditions
       • Common focus: one unique brand

       Sources: McAlexander/Schouten/Koenig 2002, Muniz/Guinn 2003,
                 Algesheimer/Dholakia/Herrmann 2005



© 2005, Algesheimer/Dholakia                                          9
Brand Communities: Interest

       • Enable consumers to form a strong bond with the brand
            (Algesheimer/Dholakia/Herrmann 2005)
       • Learn how customers evaluate products in a high-credibility
         environment
            (Keller 1999)
       • Obtain early-warning-signals regarding success/failure
            (Muniz/Guinn 2003)
       • Influence members‘ intentions and behaviors
            (Muniz/Schau 2005)
       • Diffusion of relevant information by WoM
            (Brown/Kozinets/Sherry 2003)
       • Cooperation with highly loyal customers
            (Franke/Shah 2003)




© 2005, Algesheimer/Dholakia                                           10
“The link is more important
                                           than
                                        the thing!“
                                            B. Cova




© 2005, Algesheimer/Dholakia                                 11
Examples




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer              12
© 2005, Algesheimer/Dholakia   13
Brand Communities: H.O.G.




© 2005, Algesheimer/Dholakia       14
Jeep Community




                               Jeep Fest: Schouten, McAlexander and Koenig 2002, Journal of Marketing
© 2005, Algesheimer/Dholakia                                                                            15
Smart Community




© 2005, Algesheimer/Dholakia   16
eBay Community




© 2005, Algesheimer/Dholakia   17
Apple Newton Community




                               Muniz and Schau, Journal of Consumer Research, 2005
© 2005, Algesheimer/Dholakia                                                         18
Research




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer              19
ISSUE 1:

           Why do Customers Join and Participate in
           Brand Communities?




© 2005, Algesheimer/Dholakia                          20
General motivations for participating in a brand
       community


          Purposive Value


               Self-discovery


                                                   Brand Community
           Maintaining Interpersonal
                                                   Participation
           Connectivity


             Social Enhancement


                Entertainment




                                       Source: Dholakia, Bagozzi and Klein Pearo (2004)
© 2005, Algesheimer/Dholakia                                                              21
Value perceptions                Social influence variables             Decision making and participation




                                                 Mutual
        Purposive
                                               Agreement
          Value

                                  Group
                                  Norms
      Self-Discovery

                                               Mutual
      Maintaining                          Accommodation
     Interpersonal
   Interconnectivity                                                                   We-           Participation
                                                                      Desires       intentions         Behavior
        Social
     Enhancement


                                            Social
     Entertainment                         Identity
         Value



                               Cognitive   Affective   Evaluative
                                  SI          SI           SI



        A social influence model of brand community participation
                                                                    (Dholakia, Bagozzi, and Klein Pearo 2004)
© 2005, Algesheimer/Dholakia                                                                                         22
ISSUE 2:

           What are the different types of Brand
           Communities?

           Small Groups vs. Networks




© 2005, Algesheimer/Dholakia                       23
DEFINITION
                                     Small Customer
          Customer Networks             Groups

       • “A specialized non-      • “A group of individuals
         geographically bound       with a consciously
         community, based on        shared social identity,
         a structured set of        whose members act
                                    jointly in group actions
         social relationships       to accomplish group
         among participants         goals and/or express
         with common interest       mutual sentiments and
         in a particular brand”     commitments”
         (Muniz and O’Guinn         (Dholakia, Bagozzi, and
         2001, JCR)                 Klein Pearo 2004, IJRM)




© 2005, Algesheimer/Dholakia                                   24
PRIMARY FOCUS
                                      Small Customer
          Customer Networks              Groups

       • “Network of             • “Virtual
         relationships among       communications often
         consumers organized       supplemented by
         around a common           face-to-face
                                   interactions where
         interest and promoted     product-related
         only via non-face-to-     activities intermingle
         face means, where         with other social
         intellectual and          activities and
         utilitarian support       emotional support
         are primary,              among members is
         emotional support         central”
         is secondary”
       • Really “Virtual”         (Dholakia, Bagozzi, and Klein Pearo 2004,
                                  IJRM)
© 2005, Algesheimer/Dholakia                                                  25
Customer                    Small Customer
                       Networks                       Groups
       Primary Managerial Objective
       • “Matching of                             • “Matching of
         Individual Motives”                        social
                                                    proclivities”
       Marketers’ Role
       • Active information      • Passive and
         providers and problem     indirect or silent
         solvers
       Appropriate Application Types
       • Applications of         • Applications of
         purpose (e.g., Archive    Process
         of solutions, “Ask-an-    (e.g., Buddy lists,
         expert”)                  Instant Messaging)
© 2005, Algesheimer/Dholakia
                                  (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM)   26
Customer                                        Small Customer
            Networks                                           Groups
       Appropriate Growth Rate
         • Balance between                                 • Highest possible
           information seekers and                           growth rate
           information providers

       Appropriate marketer influence
         • Relatively more direct.                         • Relatively more indirect.
           e.g., product related                             e.g., exposure to non-
           conversations                                     intrusive advertisements

       How to convey member information to others
         • Reciprocal reputation                            • Mechanisms that
           mechanisms                                         communicate personal
                                                              history
                               (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM)
© 2005, Algesheimer/Dholakia                                                             27
Loyalty-Influence Paradox
          in Brand Communities

                Customers belonging to Small Group Brand
                Communities are less likely to be loyal to a
                particular virtual venue than those belonging to
                Network Brand Communities

                At the same time, Small Group Brand
                Community members are more likely to be
                influenced by their community than those
                belonging to Network Brand Communities




                                       (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM)
© 2005, Algesheimer/Dholakia                                                             28
However, not all the
    news is good...
                                                                               -      Brand
                                                                                     Loyalty
                                                                                    Intentions
                                                    +        Reactance
                                                                               -    Membership
                                                                                    Continuance
                                   Normative
                                                                                     Intentions
                                   Community
                                    Pressure
                                                                               +
                                                                                -   Community
     Brand                            +                                             Relationship
   Community
  Identification
                                                                               +     Intentions

                               +                                                    -
                                   Community
                                   Engagement                                  +    Community
                                                                                     Purchase
                                                                                    Intentions
© 2005, Algesheimer/Dholakia
                                   (Algesheimer, Dholakia and Hermann, 2005)                      29
Attitudes                        Perceived                Intention to                Participation
                                            Behavioral            Participate in BrCO              Behavior
                                             Control
                                                              +
            Positive                                                          Face-to-face
          Anticipated                                                         interactions
           Emotions                                        POSITIVE          IMPACT FOR
                                                                              SMALL
                                                                               with family
                                                                                Other
                                                             GROUPS, NEGATIVE FOR
                                                                                Types of
                                                                   NETWORKS     DSIs
                                                                       Face-to-face
           Negative                                                    interactions
          Anticipated                          Desire                  with friends
           Emotions

                                                                                   Telephone
                                                                                      Use
           Subjective
            Norms                                 Group
                                                  Norms        OVERALL NEGATIVE IMPACT
                                                                        Television
                                                                    FOR EVERYONE Consump-
                                                                           Use
                                Social                                                             tion of
                               Identity                                                            Media
                                                                                   Print Media
                                                                                       Use

      Cognitive                 Affective         Evaluative
                                                                                        Radio
         SI                        SI                 SI
                                                                                         Use

© 2005, Algesheimer/Dholakia
                                               (Bagozzi, Dholakia, and Klein Pearo 2006)                         30
Implications




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer                  31
Implications
                                             Social Experience


                                            Emotional Experience

                                              Accompanying
                                                Services

                                                Funktional
                                                 Product




       •    Consumption is a social act of symbolic importance

       •    The consumer has become a marketer of his own self-image

       •    A product is a bundle of attributes that satisfy functional, emotional and
            social needs.




© 2005, Algesheimer/Dholakia                                                             32
Freitag

670.384@skim.com

                               381.291@skim.com




                                                  670.384@skim.com




© 2005, Algesheimer/Dholakia                                         33
History of Gaming




                      t0       t1   t2




© 2005, Algesheimer/Dholakia             34
Sony Playstation




© 2005, Algesheimer/Dholakia   35
Thank you!




© 2005, Algesheimer/Dholakia   36
Contacts




© 2004, Algesheimer/Dholakia
  2005, Prof. Dr. René Algesheimer              37
Contact
        Prof. Dr. Paul Dholakia
        Founder and Principal, Empyrean-Crest Marketing Consultancy and
        Assistant Professor of Management
        Jones Graduate School of Management
        Rice University, Houston, Texas,
        USA

        Phone: +1 713 348 5376
        Email: dholakia@rice.edu
        Web: http://www.ruf.rice.edu/~dholakia
        …………….

        Prof. Dr. René Algesheimer
        Assistant Professor of Marketing
        Institute for Strategy and Business Economics
        University of Zurich
        Plattenstrasse 14
        CH-8032 Zurich
        Switzerland

        Phone: +41 44 634 2916
        Email: rene.algesheimer@isu.unizh.ch
        Web: http://www.isu.unizh.ch/algesheimer




© 2005, Algesheimer/Dholakia                                              38

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Brand Communities

  • 1. BSI Brand Communities Marketing 2.0 Conference, Hamburg 2005
  • 2. BSI Join the conversation MARKETING 2.0 CONFERENCE Paris, France 28/29 March 2011 www.marketing2conference.com
  • 3. Brand Communities October, 6th, 2005 Word-of-Mouth Conference, Hamburg Prof. Dr. Paul Dholakia, Rice University, Houston/US Prof. Dr. René Algesheimer, University of Zurich/CH © 2005, Algesheimer/Dholakia 1
  • 4. 2005-02-04 - 4.200.000 2005-01-27 - 4.100.000 2005-01-19 - 4.000.000 2005-01-14 - 3.900.000 2005-01-08 - 3.800.000 2005-01-03 - 3.700.000 2004-12-28 - 3.600.000 2004-12-21 - 3.500.000 2004-12-01 - 3.000.000 2004-11-26 - 2.900.000 2004-11-17 - 2.800.000 2004-11-13 - 2.700.000 2004-11-12 - 2.600.000 2004-11-04 - 2.500.000 2004-10-31 - 2.400.000 2004-10-23 - 2.300.000 2004-10-12 - 2.200.000 2004-10-03 - 2.100.000 2004-09-25 - 2.000.000 2004-09-20 - 1.900.000 2004-09-14 - 1.800.000 2004-09-07 - 1.700.000 2004-09-02 - 1.600.000 2004-08-28 - 1.500.000 2004-08-17 - 1.400.000 2004-08-08 - 1.300.000 2004-08-04 - 1.200.000 2004-07-27 - 1.100.000 2004-07-22 - 1.000.000 2004-07-16 - 900.000 2004-07-09 - 800.000 2004-07-02 - 700.000 2004-06-24 - 600.000 2004-06-16 - 500.000 2004-05-28 - 400.000 2004-05-08 - 300.000 2004-04-06 - 200.000 2004-02-26 - 100.000 2004-02-07 - 50.000 2004-01-22 - 1.500 © 2005, Algesheimer/Dholakia 2
  • 6. Agenda 1. Motivation 2. Introduction 3. Examples 4. Research 5. Implications 6. Contacts © 2005, Algesheimer/Dholakia 4
  • 7. Motivation © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 5
  • 8. Introduction © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 6
  • 9. Perspective Business-to-Consumer (B-C) Business-to- Consumer-to-Consumer (B-(C-C)) Transactional- Relational Network- Perspective Perspective Perspective 1 2 3 C B C B C B C © 2005, Algesheimer/Dholakia 7
  • 10. Motivation • The effectiveness of consumer-to-consumer influence is greater than that of marketer-to- consumer influence – Examples: positive or negative WoM, opinion leadership • Consumer interactions determine critical variables like brand decision making process, willingness to pay, and brand loyalty. – Examples: K-Swiss sneakers, bottled water during Hurricane Rita • Over 250 million consumers world-wide participate in virtual and FtF brand communities – Examples: H.O.G.-Community, Linux-Communities © 2005, Algesheimer/Dholakia 8
  • 11. Brand Communities: Definition Constitutive Elements: • Social network of individuals • Organisation => role structures • Interaction • Mutual influence • Sense of belonging, “we-ness“ • Cohesion • Common language, rituals, traditions • Common focus: one unique brand Sources: McAlexander/Schouten/Koenig 2002, Muniz/Guinn 2003, Algesheimer/Dholakia/Herrmann 2005 © 2005, Algesheimer/Dholakia 9
  • 12. Brand Communities: Interest • Enable consumers to form a strong bond with the brand (Algesheimer/Dholakia/Herrmann 2005) • Learn how customers evaluate products in a high-credibility environment (Keller 1999) • Obtain early-warning-signals regarding success/failure (Muniz/Guinn 2003) • Influence members‘ intentions and behaviors (Muniz/Schau 2005) • Diffusion of relevant information by WoM (Brown/Kozinets/Sherry 2003) • Cooperation with highly loyal customers (Franke/Shah 2003) © 2005, Algesheimer/Dholakia 10
  • 13. “The link is more important than the thing!“ B. Cova © 2005, Algesheimer/Dholakia 11
  • 14. Examples © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 12
  • 16. Brand Communities: H.O.G. © 2005, Algesheimer/Dholakia 14
  • 17. Jeep Community Jeep Fest: Schouten, McAlexander and Koenig 2002, Journal of Marketing © 2005, Algesheimer/Dholakia 15
  • 18. Smart Community © 2005, Algesheimer/Dholakia 16
  • 19. eBay Community © 2005, Algesheimer/Dholakia 17
  • 20. Apple Newton Community Muniz and Schau, Journal of Consumer Research, 2005 © 2005, Algesheimer/Dholakia 18
  • 21. Research © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 19
  • 22. ISSUE 1: Why do Customers Join and Participate in Brand Communities? © 2005, Algesheimer/Dholakia 20
  • 23. General motivations for participating in a brand community Purposive Value Self-discovery Brand Community Maintaining Interpersonal Participation Connectivity Social Enhancement Entertainment Source: Dholakia, Bagozzi and Klein Pearo (2004) © 2005, Algesheimer/Dholakia 21
  • 24. Value perceptions Social influence variables Decision making and participation Mutual Purposive Agreement Value Group Norms Self-Discovery Mutual Maintaining Accommodation Interpersonal Interconnectivity We- Participation Desires intentions Behavior Social Enhancement Social Entertainment Identity Value Cognitive Affective Evaluative SI SI SI A social influence model of brand community participation (Dholakia, Bagozzi, and Klein Pearo 2004) © 2005, Algesheimer/Dholakia 22
  • 25. ISSUE 2: What are the different types of Brand Communities? Small Groups vs. Networks © 2005, Algesheimer/Dholakia 23
  • 26. DEFINITION Small Customer Customer Networks Groups • “A specialized non- • “A group of individuals geographically bound with a consciously community, based on shared social identity, a structured set of whose members act jointly in group actions social relationships to accomplish group among participants goals and/or express with common interest mutual sentiments and in a particular brand” commitments” (Muniz and O’Guinn (Dholakia, Bagozzi, and 2001, JCR) Klein Pearo 2004, IJRM) © 2005, Algesheimer/Dholakia 24
  • 27. PRIMARY FOCUS Small Customer Customer Networks Groups • “Network of • “Virtual relationships among communications often consumers organized supplemented by around a common face-to-face interactions where interest and promoted product-related only via non-face-to- activities intermingle face means, where with other social intellectual and activities and utilitarian support emotional support are primary, among members is emotional support central” is secondary” • Really “Virtual” (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM) © 2005, Algesheimer/Dholakia 25
  • 28. Customer Small Customer Networks Groups Primary Managerial Objective • “Matching of • “Matching of Individual Motives” social proclivities” Marketers’ Role • Active information • Passive and providers and problem indirect or silent solvers Appropriate Application Types • Applications of • Applications of purpose (e.g., Archive Process of solutions, “Ask-an- (e.g., Buddy lists, expert”) Instant Messaging) © 2005, Algesheimer/Dholakia (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM) 26
  • 29. Customer Small Customer Networks Groups Appropriate Growth Rate • Balance between • Highest possible information seekers and growth rate information providers Appropriate marketer influence • Relatively more direct. • Relatively more indirect. e.g., product related e.g., exposure to non- conversations intrusive advertisements How to convey member information to others • Reciprocal reputation • Mechanisms that mechanisms communicate personal history (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM) © 2005, Algesheimer/Dholakia 27
  • 30. Loyalty-Influence Paradox in Brand Communities Customers belonging to Small Group Brand Communities are less likely to be loyal to a particular virtual venue than those belonging to Network Brand Communities At the same time, Small Group Brand Community members are more likely to be influenced by their community than those belonging to Network Brand Communities (Dholakia, Bagozzi, and Klein Pearo 2004, IJRM) © 2005, Algesheimer/Dholakia 28
  • 31. However, not all the news is good... - Brand Loyalty Intentions + Reactance - Membership Continuance Normative Intentions Community Pressure + - Community Brand + Relationship Community Identification + Intentions + - Community Engagement + Community Purchase Intentions © 2005, Algesheimer/Dholakia (Algesheimer, Dholakia and Hermann, 2005) 29
  • 32. Attitudes Perceived Intention to Participation Behavioral Participate in BrCO Behavior Control + Positive Face-to-face Anticipated interactions Emotions POSITIVE IMPACT FOR SMALL with family Other GROUPS, NEGATIVE FOR Types of NETWORKS DSIs Face-to-face Negative interactions Anticipated Desire with friends Emotions Telephone Use Subjective Norms Group Norms OVERALL NEGATIVE IMPACT Television FOR EVERYONE Consump- Use Social tion of Identity Media Print Media Use Cognitive Affective Evaluative Radio SI SI SI Use © 2005, Algesheimer/Dholakia (Bagozzi, Dholakia, and Klein Pearo 2006) 30
  • 33. Implications © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 31
  • 34. Implications Social Experience Emotional Experience Accompanying Services Funktional Product • Consumption is a social act of symbolic importance • The consumer has become a marketer of his own self-image • A product is a bundle of attributes that satisfy functional, emotional and social needs. © 2005, Algesheimer/Dholakia 32
  • 35. Freitag 670.384@skim.com 381.291@skim.com 670.384@skim.com © 2005, Algesheimer/Dholakia 33
  • 36. History of Gaming t0 t1 t2 © 2005, Algesheimer/Dholakia 34
  • 37. Sony Playstation © 2005, Algesheimer/Dholakia 35
  • 38. Thank you! © 2005, Algesheimer/Dholakia 36
  • 39. Contacts © 2004, Algesheimer/Dholakia 2005, Prof. Dr. René Algesheimer 37
  • 40. Contact Prof. Dr. Paul Dholakia Founder and Principal, Empyrean-Crest Marketing Consultancy and Assistant Professor of Management Jones Graduate School of Management Rice University, Houston, Texas, USA Phone: +1 713 348 5376 Email: dholakia@rice.edu Web: http://www.ruf.rice.edu/~dholakia ……………. Prof. Dr. René Algesheimer Assistant Professor of Marketing Institute for Strategy and Business Economics University of Zurich Plattenstrasse 14 CH-8032 Zurich Switzerland Phone: +41 44 634 2916 Email: rene.algesheimer@isu.unizh.ch Web: http://www.isu.unizh.ch/algesheimer © 2005, Algesheimer/Dholakia 38