GROUPS

Lecture 9MBA2K10

Consumer Behavior

Lecture Objectives Others, especially those who possess some kind of social power,

often influence us. We seek out others who share our interests in products or

services. We are motivated to buy or use products in order to be

consistent with what other people do. Certain people are particularly likely to influence others’ product

choices. The things that other consumers tell us about products (good and

bad) are often more influential than the advertising we see. Online technologies are accelerating the impact of word-of-mouth

communication. Social networking is changing the way companies and

consumers interact.

Reference Groups Reference group: an actual or imaginary

individual/group conceived of having significant relevance upon an individual’s evaluations, aspirations, or behavior

Influences consumers in three ways:InformationalUtilitarian(practical)Value-expressive

When Reference Groups Are Important Social power: capacity to alter the actions of

others

Referent power Information power

Legitimate power Expert power

Reward power Coercive power

Types of Reference GroupsAny external influence that provides social clues can be a reference group Cultural figure Parents Large, formal organization Small and informal groups

Exert a more powerful influence on individual consumers

A part of our day-to-day lives: normative influence(set fundamental standards of conduct)

Brand Communities and Consumer Tribes A group of consumers who

share a set of social relationships based upon usage or interest in a product

Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product

Brandfests celebrated by community

Membership versus Aspirational Reference Groups Membership reference groups

People the consumer actually knowsAdvertisers use “ordinary people”

Aspirational reference groupsPeople the consumer doesn’t know but

admireAdvertisers use celebrity spokespeople

Factors Predicting Reference Group Membership

Propinquity

Mere exposure

Group cohesiveness

Positive versus Negative Reference Groups

Avoidance groups: motivation to distance oneself from other people/groups

Antibrand communities: coalesce(unite) around a celebrity, store, or brand—but in this case they’re united by their disdain for it

How Consumers Behave in Groups

Deindividuation: individual identities become submerged within a group

Social loafing: people don’t devote as much to a task when their contribution is part of a larger group

Risky shift: group members show a greater willingness to consider riskier alternatives following group discussion than if members made their own decisions

Factors Influencing Conformity Cultural pressures Fear of deviance Commitment Group characteristics

unanimity sizeexpertise

Susceptibility to interpersonal influence

Opinion Leadership Opinion leaders influence

others’ attitudes and behaviorsExpertsUnbiased evaluationSocially activeSimilar to the consumerAmong the first to buy

Old and New Social Networks

The Market MavenMarket maven: actively

involved in transmitting marketplace information of all types

Just into shopping and aware of what’s happening in the marketplace

Overall knowledge of how and where to get products

The Surrogate Consumer Surrogate consumer: a marketing intermediary

hired to provide input into purchase decisionsInterior decorators, stockbrokers, professional

shoppers, college consultantsConsumer relinquishes control over decision-

making functions

Marketers should not overlook influence of surrogates!

How Do We Find Opinion Leaders?

The self-designating methodSimply ask individuals whether they consider

themselves to be opinion leadersEasy to apply to large group of potential

opinion leadersInflation or unawareness of own

importance/influence Key informant method

Key informants identify opinion leaders

Sociometric Methods Sociometric methods: trace communication

patterns among group members

Systematic map of group interactions

Most precise method of identifying product-information sources, but is very difficult/expensive to implement

Network analysisReferral behavior/network, tie strengthBridging function, strength of weak ties

Word-of-Mouth CommunicationWOM is product information transmitted by

individuals to individuals More reliable form of marketing Social pressure to conform Influences two-thirds of all sales We rely upon WOM in later stages of product

adoption Powerful when we are unfamiliar with product

category

Negative WOM and Power of Rumors We weigh negative WOM more heavily than

we do positive comments!

Negative WOM is easy to spread, especially online

Determined enemyInformation/rumor distortion

Cutting-Edge WOM Influences

Social Networking

Crowd Power

Guerilla Marketing

Viral Marketing