# Balance Theory Speech Presentation

## Introduction

Good Evening ladies and gentlemen my name is xxxxx and today I shall enlighten you about a very interesting theory concerning consumer behaviour and Marketing. As practicing marketers, we are well aware of the impact that a celebrities endorsement can have on consumer behaviour but I am pretty sure most of you wouldn’t know the reasoning behind such a phenomenon. What is the Balance Theory?

Ever wondered why firms use celebrities to endorse their products? Well wonder no further because Fritz Heider proposed with his Balance theory that people attempt to maintain a psychological balance and form relationships that balance out their likes and dislikes.

For example if Person A likes a celebrity and the celebrity likes a product but Person A originally disliked the product, then Person A is likely to end up increasing his enjoyment of the product or decreasing his liking of the celebrity or both. All these options create equilibrium. As marketers, it is our goal to achieve market the product successfully to the target audience.

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For example if we were to use Michael Jordan to market golfing products, then the target consumer would most likely end up disliking the product. However, if we were to use Tiger Woods to market the golfing products, then consumers of golfing products would most likely end up liking the products.

## The Balance Theory Explained

So the Balance Theory is made up of a Triangle that consists of 3 elements. The relationship between these 3 elements is known as sentiment relations.

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So the first element is PO, the second element is PX and the third element is OX. If the results of the multiplication of the positive or negative signs of any 2 elements yields a positive result, then the consistency in the triad is maintained and vice versa. This model may seem complicated but it is in essence very basic. So let me simplify this for you with an example.

### Positive Example

Let us assume P is John a basketball fan, O is Michael Jordan a celebrity Basketball player and X is the product being marketed and in this case let’s assume it is a limited edition basketball. So if John is a fan of Michael Jordan, then the sentimental relation PO will be positive. Since Michael Jordan is approves of the product he endorsed, the relationship OX is positive too. Therefore, by default, PX would be positive too.

### Negative Example

However, say if P were to remain John, O were to become Tiger Woods and X were to become a golf set, then PO would become negative since Tiger Woods is a golfer and hence John would not be able to relate to him, OX would remain positive since Tiger Woods loves the product he is endorsing and the eventual result of this would be a negative PX which would mean consistency in the Triad is not maintained and that the celebrity endorsement has not been successful in promoting this product to the consumer.

### Importance of this theory to us

This theory is of interest to us as future marketers as it helps us understand consumer behaviour and psychology with regards to mascots used to endorse/market a product. It also educates us on the 3 way relationship that transpires between product, celebrity and consumer and in turn, we would be able to market our products using the correct celebrities for the correct product.

The End

And that ladies and gentlemen concludes my presentation on Fritz Heider’s Balance Theory. Thank you all for your kind attention.

## Bibliography

1. http://www.investorwords.com/15193/balance_theory.html
2. http://changingminds.org/explanations/theories/balance_theory.htm
3. Roy, Subhadip, Gammoh, Bashar S., Koh Anthony C. (2012).
4. Predicting the effectiveness of celebrity endorsements using the balance theory. Journal of Customer Behaviour. 11 (1), p33-52.