Chapter 1

1Chapter 11Group Influence and Social Media 2AgendaReference GroupsOpinion Leadership Word-of Mouth CommunicationsSocial media and Consumer Behaviour

3IntroductionConsumers belong to or admire many different groups and are often influenced in their purchase decisions by a desire to be accepted by others.

We conform to the desires of others for one or two basic reasons: We take others behaviour as evidence of the correct way to act or to satisfy the expectations of others and/or to be accepted by the group. 4 Reference Groups A reference group is an actual or imaginary individual or group conceived of having significant relevance upon an individuals evaluations, aspirations, or behaviour. Any external influence that provides social clues.

Types of Reference GroupsFormal vs. InformalMembership vs. AspirationalPositive vs. Negative

As a rule, small informal groups can exert powerful influence on individual consumers

Relative influence of reference groups on purchase decisions

4225 Reference Group Power ReferentPowerExpertPowerCoercivePowerInformationPowerRewardPowerLegitimatePowerSourcesofPower5336 Conformity and Norms Conformity a change in beliefs or actions as a reaction to real or imagined group pressure.

Norms - the informal rules that govern what is right or wrong.

6447Types of Social Influence Normative social influence the conformity that occurs when a person alters his behaviour to meet the expectations of a person or a group.Informational social influence the conformity that occurs because the groups behaviour is taken as evidence about reality.

8Gender DifferencesGroup DynamicsCommitmentFear of DevianceCultural PressureReasons for Conformity 8449Social Comparison Theory Social Comparison Theory the perspective that people compare their outcomes with those of others as a way to increase the stability of their own self-evaluation, especially when physical evidence is unavailable. The self-positivity biasGroup effects on individual behaviour: deindividuation, risky shift, diffusion of responsibility, social loafing. Consumers Do It in GroupsDeindividuation: individual identities become submerged within a group.Example: binge drinking at college partiesSocial loafing: People dont devote as much to a task when their contribution is part of a larger group.Example: we tend to tip less when eating in groupsRisky shift: Group members show a greater willingness to consider riskier alternatives following group discussion than if members decide alone.

Marketing implications 11 Opinion Leadership LegitimatePowerSimilarValuesReduceRisk Knowledge PowerTechnicallyCompetentKeyCharacteristicsofOpinionLeadersOpinion Leaders those people who are knowledgeable about products and who are frequently able to influence others attitudes or behaviours with regard to a product category.

1166Opinion LeadershipThis CTR relates to the discussion on pp. 376-379.Opinion LeadershipAn Opinion Leader is a person who frequently is able to influence others. Opinion leaders are valuable sources of information for several reasons, including:Technical Competence. Opinion leaders are familiar with the specifics of their areas -- they possess expert power and the credibility of one who ought to know. Knowledge Power. Opinion leaders have already prescreened, evaluated, and synthesized product information in the same manner that those who seek their judgment hope to use the product. This makes them unbiased source of knowledge -- they are not selling any particular product.Legitimate Power. Opinion leaders tend to be socially active and highly interconnected to their communities. They tend to hold office in civic organizations and volunteer outside the home. This high social standing gives them legitimate power.Similar Values. Opinion leaders possess referent power on the basis of sharing the same beliefs and values as those they influence. Although they tend to have slightly higher status and educational training, the difference is not so great to place them in a different social class.Reduces Risk. Opinion leaders buy products sooner than do the majority of buyers. Their experience helps reduce the risk for subsequent buyers.Discussion Note: On the following CTR on Diffusion of Innovations, opinion leaders are among the early adopters -- not innovators. Innovators are typically too different from the majority to serve as opinion leaders.The Market MavenMarket maven: Actively involved in transmitting marketplace information of all typesJust into shopping and aware whats happening in the marketplaceOverall knowledge of how and where to get productsSurrogate consumers: Hired to provide input into purchase decisions

Identifying Opinion LeadersMany ads intend to reach influencers rather than average consumerLocal opinion leaders are harder to findCompanies try to identify influencers in order to create WOM ripple effectExploratory studies identify characteristics of opinion leaders for promotional strategiesMost commonly used technique to identify opinion leaders is simply ask individuals whether they consider themselves to be opinion leaders.

14 Word of Mouth (WOM) Communication Word of mouth communication the information transmitted by individual consumers on an informal basis. Guerrilla marketing promotional strategies that use unconventional locations and intensive word-of-mouth campaigns to push products.

Application to World Wide WebViral marketing the strategy of getting customers to sell a product on behalf of the company that creates it.

Negative WOM Rumours distortion in the word-of-mouth process.

1455Social Media and Consumer Behaviour Social networking, where members post information and make contact with others who share similar interests and opinions, changes the way we think about marketing.As the Internet continues to develop, companies and consumers increasingly interact directly. The wisdom of crowds perspective argues that, under the right circumstances, groups are smarter than the smartest people in them. If this is true, it implies that large number of consumers can predict successful products.

1516Virtual Communities Emerging marketing strategies try to leverage the potential of web to spread information from consumer to consumer extremely quickly. Viral marketing techniques enlist individuals to recommend products, services, websites, etc., to others on behalf of companies.