Accounting for Word‐of‐Mouth Effects in Preference‐Based Market Forecasts

ABSTRACT Consumers differ in their involvement in new product purchase decisions. Opinion leaders usually show a higher involvement in their purchase decisions than other consumers. This leads to a higher stability in their answers when being asked about their preferences. An important question that previous research has not analyzed yet is whether and how to capture this finding in preference‐based market forecasts. The authors study these aspects for a representative sample of 364 consumers in the mobile phone market of a large European country. They find that assigning higher weights to the preferences of opinion leaders in aggregate market forecasts results in estimates that are more consistent with observed market shares than forecasts in which all consumers are given equal weights. The authors further test different measures of opinion leadership and find that sociometric indicators outperform psychographic constructs to account for the outcome of opinion leadership in preference‐based market forecasts. Copyright © 2013 John Wiley & Sons, Ltd.