Researchers from City, University of London, University of Chicago, and Purdue University published a new paper in the Journal of Marketing that demonstrates that social media can be used to alleviate a major deterrent that hinders the adoption of a new technology: customer uncertainty.
The study, forthcoming in the Journal of Marketing, is titled “Social Media, Influencers, and Adoption of an Eco-Friendly Product: Field Experiment Evidence from Rural China” and is authored by Wanqing Zhang, Pradeep Chintagunta, and Manohar Kalwani.
For decades, pesticides have been applied to protect crops and livestock from pest infestations, to increase crop yields, and to improve food production. However, pesticides are a double-edged sword and have raised serious concerns about food safety, environmental protection, and sprayers’ health. According to the U.S. Environmental Protection Agency, 68 pesticides have been classified as potential carcinogens and every year 200,000 people die because of toxic pesticides. Therefore, promoting the use of safe, sustainable new pesticide technologies is critically needed to preserve ecological security. However, getting a new product adopted, even when it has obvious advantages, is difficult.
The research team implemented a field experiment in 34 villages and with more than 700 farmers in rural China to study how customers, especially those in emerging markets and in rural areas, face several types of uncertainty regarding a new eco-friendly pesticide. These include uncertainty regarding: (i) the authenticity of the new product and supplier given previous experiences with unscrupulous “fly-by-night” operators (for example, the fake seeds problem in China and India); (ii) the “objective” quality of the product or the “match value” of the product to the potential user; and (iii) how to apply the technology to get the best outcomes. Traditional marketing literature has focused on how uncertainty is resolved vis-à-vis objective quality since authenticity is usually not a concern and driving outcomes is usually not an issue in most categories studied. A unique feature of the paper is that the technology and context involves all three types of uncertainty.
The research team uses a randomized control field experiment to measure the causal effects of marketing tools in changing behaviors. The findings provide insights for managers and policy makers who aim to leverage marketing to accomplish social goals. To do good, marketers need to convince consumers to adopt products that are good. An important barrier to such adoption is overcoming the uncertainties associated with the product and the difficulties learning about the features and benefits of the product.
Zhang explains that “We address these issues by understanding the entire process of adoption. When a product is brand new, encouraging trial behavior among prospective users is key. During this stage, overcoming uncertainty about whether the new product is authentic or not is paramount. We document that an influencer, albeit one not familiar with the new technology, works well in an online social media environment to encourage followers to try the new product.” In addition, traditional firm-initiated customized service and support has a significant effect in motivating trial behavior. Both these approaches also lead to improved outcomes in the adoption stage but via different routes. On the social media platform, the ability to exchange information between the product adopters and information broadcasted by the firm promote learning about specific product benefits and the best ways to use it. The more traditional marketing approach also accomplishes these objectives, but via one-on-one communication between the firm and the potential customer. “For marketing to do good, it needs to scale effectively. The social media platform with an influencer wins here because it is more cost-efficient than one-on-one marketing by the firm,” says Chintagunta.
The results also suggest that practitioners should think carefully about how to use social media most efficiently. Although research has documented its use for changing consumer behavior, it is not a panacea and requires careful management. Specifically, at the trial stage of the funnel, the platform underperforms because it cannot, by itself, resolve uncertainty regarding supplier credibility and product authenticity. Thus, creating an online social media platform does not guarantee the peer effects as desired. The research offers a solution to this funnel-holdup problem: having an influencer who can vouch for the credibility of the product and who tries out the product and reports it on the platform. Kalwani says that “The presence of an influencer creates an effective and product-relevant online interaction environment which can foster more active online social learning among participants in the platform. However, the use of social media alone is only beneficial to people who have a high intrinsic value for the new product.”
Full article and author contact information available at: https://doi.org/10.1177/0022242920985784
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