group influences on consumer behavior, consumer buying process and different kinds of buying...
TRANSCRIPT
Group Influences on Consumer Behavior,
Consumer buying Process and Different Kinds Of
Buying behaviors
By : -Neeraj Gupta
Sources of influence on consumer behaviour can be described as marketer
dominated or non-marketer dominated and as delivered by mass media or
personally
Marketer dominated Non-marketerdominated
(1)
Advertis ingSales promotionsPublicity
(2)
NewsCrit iques/revi ewsProgramme contentExternal endorsementsCultural heroes/heroines Clubs/organisations
(3)
Salesp ersons
(4)
Family FriendsNeighbours ClassmatesCo -wor ker s
Massdelivered
DeliveredPersonality
Special: Opinion leadersSources: Market mavens
Reach
High
Reach
Low
Low
Two-wayCommunication
High
Low HighCredibility
Market Maven
Individuals whose influence stems from a general knowledge or market expertise that
leads to an early awareness of new
products and services.
When do Groups Exert Influence?
The group influence on an individual's buying behaviour depends on three factors:
Attitude Towards the Group: According to William O. Bearden and
Richard Rose, individual's susceptibility to group influence varies widely.
The buying behaviour of a consumer is more likely to be influenced by the
group if the individual:
1. Views the reference group as a credible source of information about the
product or service.
2. Values the views and reactions of group members with regard to buying
decisions.
3. Accepts the rewards and sanctions allotted out by the group for proper or
improper behaviour.
Nature of the Group: James H. Leigh and Terrance G. Gabel note that reference groups are more likely to influence a group member's behaviour if they are:
i. Cohesive, that is having similar values and norms.
ii. Frequently interacting and thus creating more opportunities to influence members.
iii. Distinctive and exclusive, that is, the membership in the group is highly regarded.
As is case with the Harley-Davidson group example, the group is closely knit and for many members biking has become a full-time hobby. Membership is exclusive and distinctive as they refer to each other as "brothers" and outsiders as "citizens.“
Nature of the Product: The nature of the product also determines the degree of influence a group has on an individual. Groups are more likely to be influential for products, which are: (a) visible such as clothing and (b) exclusive that might speak of status such as a Mercedes.
Cont….
Types of Reference Groups
Reference groups furnish points of comparison by which one can evaluate attitudes and behaviour. An individual can be a member of a reference group such as the family and would be said to be part of a membership group. This same individual may aspire to belong to a cricket club and would be said to be apart of an aspiration group. A disclaimant group is one to which an individual may belong to or join and then reject the group's values. An individual may also regard the membership in a specific group as something undesirable and to be avoided. Such a group is a dissociative group.
Membership Groups
1. Primary Informal Groups
2. Primary Formal Groups
3. Secondary Informal Groups
4. Secondary Formal Groups
Membership Non membershipPositive attitude
Negative attitude
Primary
Secondary
Types of aspiration groups
Contact
Types of membership groups
Informal Formal
No Contact
Anticipatory
Symbolic
Positive membershipgroup
Aspiration group
Dissociative groupDisclaimant-group
Family/Peer Group
Sports/Kitty Party -group
School/Business groupsTeachers/IAS Association
Types of Reference Groups
Aspiration GroupsAnticipatory Aspiration Groups: These are groups that an individual anticipates to join at some future time. The individual, generally, has some direct contact with such group(s). For instance, the individual may wish to join a group higher in the organisational hierarchy.
The ad appeal focuses on anticipation of ultimately reaching at the top in the business organisation.
Appealing to Increase Position
Symbolic
Aspiration
Groups: The
individual
admires these
groups but is
unlikely to join
them despite
acceptance of
the group's
beliefs and
attitudes.
Famous soccer player (David Bekham) endorses Police Sunglasses
Table 10.1 Positive Influences on Conformity
Group Characteristics Attractiveness Expertise Credibility Past Success Clarity of Group Goals
Personal Characteristics Tendency to Conform Need for Affiliation Need to be Liked Desire for Control Fear of Negative
Evaluation
Nature of Reference Groups
Reference groups establish certain norms, roles, status, socialisation and power. These characteristics exert their influence on consumers.
Norms: - 'Norms' are generally defined rules and
standards of behaviours that the group establishes. 'Values' are shared beliefs among group members
regarding what behaviours are appropriate or inappropriate. Cultures and sub-cultures largely define the values.
'Roles' refer to functions that an individual assumes or that the group assigns to her/him to accomplish group objectives.
Nature of Reference Groups
'Status' is the achieved or ascribed position that the individual occupies within the group's hierarchy. As one may expect, greater power and influence goes with higher status.
'Socialisation' refers to the process by which new members learn the group's system of values, norms and expected behaviour patterns.
‘Power’ A group’s influence on its members behaviour is closely related to its power. Reward Coercive Expert Referent
Perceived Nature of Objectives source Type of Behaviour influence characteristics power
Informational Knowledge Credibility Expert Acceptance
Comparative Self-maintenance Similarity Referent Identification and enrichment
Normative Reward Power Reward or Conformity coercion
Groups Influences and Consumer Behavior
Types of Reference Group Influences
Informational influence is likely to be more important when consumers perceive financial, social, or performance risk in buying a product.
Groups Influences and Consumer Behavior
Relative Importance of Informational, Comparative and Normative Influence
Product Characteristics: - Consumers tend to be susceptible to informational influence when products are technologically complex such as computers and peripherals, autos, air conditioners and washing machine etc.
Researchers have hypothesised that reference groups can influence two types of decisions: (1) whether we buy a product within a given product category and (2) what brand we buy. The influence would also depend on whether the product is typically consumed in private or public and whether it is a necessity or luxury.
For example, the group will probably not influence whether a member buys Colgate toothpaste or Aquafresh. But the group might influence the purchase of products such as a brand of latest mobile phone, or watch.
Cont….
In Private In Public
Influence weakRazorToilet soapWater heaterMattress
Influence weakClothingWatchesShoesConveyance
Influence strongBody massageDVD playerHot bath tubPrivate swimming-pool
Influence strongCamcorderJewelryHealth clubCustom-madeCar
Where Consumed
Necessity
Type of Product
Luxury
Reference Group Influences on Publicly and Privately Consumed Luxuries and Necessities
Relative Importance of Informational, Comparative and Normative Influence
Consumer Characteristics: - Some consumer personalities are such that make them readily susceptible to influence by others.
Those susceptible to interpersonal influence seek to enhance their self-image by possessing products that they believe others will approve of.
A personality characteristic referred to as "attention to social comparison information" (ATSCI) is also related to normative influence. Those individuals who are high on this personality trait are likely to pay a great deal of attention to what others do and use this information as a guide to their own behaviour.
Marketing Strategies Based on Reference Group Influence Marketers employ informational, comparative and normative group
influences to develop marketing communication strategies. Advertising often makes use of informational influence through
expert spokespersons who communicate information about product features and performance.
Using Persons like Amitabh Bachan to prove to audience that Navrattan Oil is the best, Binani Cement is the best as people believe him to be a credible authority.
Advertising applies comparative influence by using either an actual referent in the form of a ìtypical consumerî or use a celebrity as a symbolic referent with whom consumers identify because she/he is likeable or attractive. The typical consumer (Lalitaji of Surf ad) persuades consumers that people like themselves have used the advertised product.
The ad for Fiat Palio uses Sachin Tendulkar as a symbolic referent.
(a) Actual referent is a “typical” consumer (b) Symbolic referent The famous cricketer
Marketing Strategies Based on Reference Group Influence Marketers frequently use normative influence approach by showing
group approval in ads for a particular brand. Commercials of Orient PSPO, Coca Cola, Pepsi, Taj Mahal tea, brands of paints, clothing and personal care products etc. are examples of advertising ís simulation of social approval.
Celebrities are best used as experts when consumers view them as knowledgeable about the product category and conveying legitimacy in their message.
Cont….
Word-of-mouth Communications
Word-of-mouth is interpersonal communication that takes place between two or
individuals such as members of a family or reference group. All of these people
exert an influence on the consumers' purchase behaviour through such
communications. The saying "a satisfied customer is your best salesperson"
shows the importance of favourable word-of-mouth to the marketer, because
satisfied customers influence relatives and friends to buy the product.
Consumers learn about new products or service and retail outlets etc., from
family members, friends and other reference groups in two ways:
1. By observing or participating with them as they consume a product or
service.
2. By asking for information or advice about a product or service from them.
Cont….
Conditions for Word-of-mouth Communication
Research study by Herr, Kardes and Kim has shown that word-of-mouth is not the dominant influence in each situation. For example, they found that word-of-mouth is not important in the evaluation of an automobile if (1) consumers already have strong impression of the product and/or (2) negative information about the product is available.
1. The product is visible and, thus, purchase behaviour becomes obvious.
2. The product is distinctive and reflects a particular style, taste and other personal norms.
3. The product is new and consumers have not established impressions and attitudes about it.
4. The product conforms to important group norms and belief systems such as reactions to a new soft drink, or teenagers' reactions to pop and rock music.
5. Consumers perceive the purchase of the product as risky and, due to this reason, are more likely to discuss about it and seek information and advice from friends and relatives.
Cont….
Word-of-mouth Communication Process
Two-step Communication Flow
Elihu Katz and Paul F. Lazarsfeld were among the first to identify and describe word-of-mouth communication. According to them, it is two-step flow of information : (1) from the mass media to opinion leaders and (2) from opinion leaders to their followers. They believed that opinion leaders' exposure to mass media is greater than that of followers.
Mass media Opinion leaders Followers
b. Multi-step word-of-mouth communication flow
Mass media Opinion leaders Followers
Gatekeepers
Multi-step Communication Flow
1. Followers may not be active seekers of information; yet they are not totally
passive and may deliberately initiate requests for information. They may
also pay attention to unsolicited opinion of others.
2. Opinion leaders are also likely to receive information from followers and
may be influenced by their word-of-mouth. So, word-of-mouth frequently
turns out to be a two-directional flow of communication between leaders and
followers.
3. Mass media is not restricted only to opinion leaders. They are not the only
ones who receive all the communications. Followers too are exposed to
mass media advertising and are influenced by it. Realisation of this fact led
Katz and Lazarsfeld to think that there may be others who function as
"information gatherers" or "gatekeepers," serving this function.
Opinion Leadership
The process by which one person (the opinion leader)
informally influences the consumption
actions or attitudes of others who may be opinion seekers or opinion recipients.
What Is Opinion Leadership?
Opinion Leader
Opinion Receiver
Opinion Seeker
Word of Mouth in ActionFigure 15-1
Dynamics of the Opinion Leadership Process Credibility Positive and Negative Product Information Information and Advice Opinion Leadership Is Category-Specific Opinion Leadership Is a Two-way Street
Many not-for-profit organizations that hope to change behavior, count on opinion leaders.
Motivations Behind Opinion Leadership
The Needs of Opinion Leaders
The Needs of Opinion Receivers
Purchase Pals Surrogate Buyers
versus Opinion Leaders
Self-involvement Social involvement Product involvement Message involvement
Issues
Motivations Behind Opinion Leadership
The Needs of Opinion Leaders
The Needs of Opinion Receivers
Purchase Pals Surrogate Buyers
versus Opinion Leaders
New product or new usage information
Reduction of perceived risk
Reduction of search time Receiving the approval of
the opinion leader
Issues
Motivations Behind Opinion Leadership
The Needs of Opinion Leaders
The Needs of Opinion Receivers
Purchase Pals Surrogate Buyers
versus Opinion Leaders
Actually accompany consumers on shopping trips
Used 25 percent of the time for purchases of electronic equipment
Issues
Motivations Behind Opinion Leadership
The Needs of Opinion Leaders
The Needs of Opinion Receivers
Purchase Pals Surrogate Buyers
versus Opinion Leaders
Surrogate buyers may replace opinion leaders
An example is a wardrobe consultant who helps in the purchase of business clothes
Issues
Cont….
Characteristics of Opinion Leaders
Much research has been conducted to identify traits of opinion leaders but so far the research is inconclusive. Despite difficulties in identifying opinion leaders, some general traits have been identified.
1. The most salient characteristic of opinion leaders is their greater long-term involvement with the product category compared to non-opinion leaders in the group. This trait is referred as enduring involvement and according to G. M. Rose, L. R. Kahle and A. Shoham, it leads to enhanced knowledge about the product and experience with the product category or activity. This enhanced knowledge and experience makes opinion leadership possible.
2. Opinion leadership functions primarily through interpersonal communications and observations. These activities occur most frequently
among individuals with roughly the same social-class position as non-leaders but opinion leaders are likely to be viewed as having higher status in their social-class. It is important to note the significant role family members play in opinion leadership.
3. Opinion leaders tend to be more gregarious and are willing to act differently
even if it attracts the attention of peers. Their exposure to mass media,
relevant to their interest, is greater. For example, opinion leaders to ladies
fashions could be expected to have greater exposure to magazines such as
Femina, Vogue and Women's Era etc. Exposure to interest relevant mass
media helps enhance their potential as opinion leaders.
Knowledge about product/service
High Low
Moderate High
Low Moderate
High
Product/purchaseinvolvement
Low
Situations in which People Seek an Opinion Leader
Marketing Implications
An obvious fact is that consumers talk to other consumers about their personal
experiences with products, services and retail stores. Therefore, it is extremely
important that marketers pay serious attention to product quality and service and
meet or exceed consumer expectations with regard to their products or services.
The firm must make arrangements to respond to customer complaints quickly
and fairly.
Stimulating opinion leadership involves having an acknowledged opinion leader.
For example, the print ad of Colgate Total toothpaste says, "Approved by
independent dental associations in 30 countries."
Consumers’ Buying Decision Process
Problem Recognition
Desired consumer lifestyle Current situation The way consumer would Temporary factors affecting like to live and feel the consumer
Desired state Actual state The condition the consumer The condition the consumer would like to be in at this perceives to be in at this point of time point of time
Nature of discrepancy Differences between the consumer's desired and perceived conditions
Desired state Actual state No difference exceeds actual exceeds desired
state state
Satisfaction Problem recognised
The Problem Recognition Process
Immediacy of solution
Expectancy Immediate ImmediateOf solution solution not
problem required required
Occurrence ofProblem Routine Planning
expected
Occurrence ofproblem Emergency Evolving
unexpected
Example of an Active Problem
Emergency problems are possible but are unexpected and necessarily need immediate solutions. For example, say a consumer meets an accident while on his/her way to office, gets injured and the vehicle is badly damaged. In such an emergency, she/he needs a quick solution to reach hospital's emergency room. Subsequently, she/he may plan to get the vehicle repaired or buy a new one.
Types of Problem Recognition
Cont….
Situations that can Cause Problem Recognition
Influencers
Culture/sub-cultureSocial statusReference groupFamily characteristicsFinancial situationEarlier decisionsIndividual growthEmotionsMotivesSituation
Desiredstate
Evaluation
- Less than?
- Equal to?
- More than?
ActualState
Influencers
Past decisions Normal depletion Brand/productperformance Individual growthEmotionsGovt./consumergroup Product availabilitySituation
Non-marketing Factors Influencing Problem Recognition
Cont….
Role of emotion in problem recognitionThe five of the most common situations
are:
1. Depletion of stocks
2. Dissatisfaction with goods in stock
3. Environmental changes
4. Change in financial situation
5. Marketer initiated activities.
Cont….
Approaches to Activating Problem Recognition
1. Generic problem recognition focuses on helping consumers feel a discrepancy that a number of brands within a product category can reduce. Generally, a marketer will use this approach when the problem is either latent or of low importance and one of the following conditions exists.
i. Product is in the early stage of its life cycle.
ii. The marketer has very high market share.
iii. After problem recognition, consumers' external search tends to be limited.
iv. It is a situation of industry-wide cooperative effort.
Generic problem recognition. Ordinary tap water is not safe.
Cont….
2. Selective problem recognition
focuses on a discrepancy that only a
particular brand can solve. Marketers use
this approach to causing problem
recognition in an attempt to increase or
maintain market share
Selective problem recognition. Getting a job is high priority for most students in India.
Marketing Strategy and Problem Recognition
1. Activity Analysis- Such as cleaning house, preparing meal, or travel etc.
2. Product Analysis- Examining the purchase and or use of particular product, service or brand
3. Problem Analysis
4. Human Factors Research-Helpful in identifying consumer functional Problems they are not aware about.
5. Emotion Research
Influencing the desired state
Marketers also attempt to influence consumers' perceptions about their existing state. Women do not want to use a soap that dries their skin. They desire to have fresh and smooth skin and the advertisement of Dove soap is designed to generate concern about the existing state of their skin
Nature of Information SearchExtended decision-making represents a significantly more involving purchase
situation. External information can refer to any of the following:1. The opinions, beliefs, attitudes, behaviours and feelings of relatives, friends,
neighbours and strangers contacted on the Internet.2. Professional information contained in handouts, pamphlets, articles,
magazines, the Internet and provided by personal professional contacts.3. Direct experiences with product through trial, or inspection. 4. Marketer-initiated info included in advertisements, and by sales personnel.
Consumer decision-making requires three types of information:
1. The Evaluative Criteria : An important objective of internal and external search for information is the determination of appropriate evaluative criteria.
Evaluative criteria?
Existing solutions?
Performance level of each solution on
each criterion?
Is the information enough to make a
balanced decision?
Yes
No
Information search
terminates
Information search
continues
Cont….
2. Appropriate Alternatives
Once the consumer has established the evaluative criteria, she/he probably starts searching for the appropriate alternative which could be brands or perhaps stores. As a result of internal search or inquiry, the consumer may recall or learn that the available brands of computers include IBM, Compaq, Dell, Wipro, Zenith, Vintron and Apple.
Decision-alternative Categories
All alternatives Known and unknown
Awareness set Brands known to Brands not known consumer to consumer
Unawareness set
Evoked set Inept set Inert set Brands Brands Backup
Considered avoided brands
Brand Brands considered purchased but not purchased
3. Attributes of Alternative
Consumers compare brands in the evoked set to make their choice. This process of evaluation requires consumers to collect information about each brand on each relevant evaluative criterion. In case of computer purchase, the consumer might collect information about the price, processor, memory, graphic card, monitor, accompanying software and warranty etc., for each brand.
Cont….
Sources of Information for Purchase Decision-making
Sources of Information
External information
Internal information
Acquiredactively
Marketer controlled
Others’ experiences
Acquiredactively
Acquiredpassively
Past searches
Personalexperience
Low-involvementlearning
Personalsources
Independentsources
Cont….
Cost/Benefit View of External Search
Four basic factors influence the perceived benefits and costs of search:
1. Market conditions
2. Product characteristics
3. Consumer characteristics
4. Situational factors.
Cont….
Marketing Strategy Implications
1. Maintenance strategy
2. Disrupt strategy
3. Capture strategy
4. Intercept strategy
5. Preference strategy
6. Acceptance strategy.
Nominal decision Limited decision Extended decision making making making
Position (No search) (Limited search) (Extended search)
Brand in Maintenance Capture Preferenceevoked set strategy strategy strategy
Brand not in Disrupt Intercept Acceptance evoked set strategy strategy strategy
Type of Target Market Decision-Making
Cont….
1. Maintenance Strategy
2. Disrupt Strategy
Product improvement as part of maintenance strategy
This ad attempts to disrupt habitual purchase
Cont….
Capture Strategy
The marketer's objective should be to capture a large share of consumers' purchases.
Intercept Strategy
Intercept strategy is also related to consumers' limited decision-making approach. If the marketer's brand is not part of the evoked set of target market, the appropriate strategy is to intercept consumers during their information search on the brands in evoked set. Preference StrategyPreference strategy is appropriate when the brand is part of the evoked set of consumers in the target market and the approach to decision-making involves extensive information search.
Acceptance Strategy
The basic objective of the marketer is to move the
brand in the evoked set of consumers, rather than try
to "sell" the brand.
This ad is part of capture or Intercept Strategy as it offers consumers an immediate incentive
Evaluation of alternativesChoice Based on Attitude vs. Attributes Affective Choice (feeling-based choice)
Purchase Decision• Outlet Selection
• Outlet Image
• Retailer Brands
• Retail (local) Advertising
• Location of Outlet and Size
• Consumer Attributes and Outlet Selection
• Risk Perception in Store Choice
• Sales Personnel
Need Information Brand arousal processing evaluation - Purchase needs - Outlet attributes - Shopping needs - Outlet image
Feed back
Post-purchase Retail outlet Evaluation choice
Post-Purchase Evaluation
Cognitive dissonance occurs as a result of some discrepancy between a consumer's prior evaluation and the purchase decision. The dissonance theory was derived from two basic principles: (1) dissonance is unpleasant and will motivate the person to reduce it and (2) individuals experiencing dissonance will avoid situations that produce more dissonance.
The probability that a consumer will experience dissonance and the magnitude of such dissonance, is a function of the following factors:
The degree of irrevocability of the decision The importance of decision to the consumer The difficulty of choosing among the alternatives The individual's tendency to experience anxiety
The consumers may use one or more of
the following approaches to minimising
the dissonance:
1. Increase the desirability of the brand
purchased
2. Decrease the desirability of alternatives
not selected
3. Decrease the importance of the purchase
decision
4. Return the product before using it.
After purchase, customers are more receptive to reinforcing advertisements
Levels of Consumer Decision Making Extensive Problem Solving
A lot of information needed Must establish a set of criteria for evaluation
Limited Problem Solving Criteria for evaluation established Fine tuning with additional information
Routinized Response Behavior Usually review what they already know. There are
some products which are used on a daily basis like food items, soap, shampoo etc. For these products purchase is routinised. Command Low Involvement
Levels of Consumer Decision Making Purchase Involvement is the level of concern for, or interest
in, the purchase process stimulated by the need to consider a certain purchase.
Product involvement refers to a consumer’s level of interest in a certain product. Marketers communicate many sales promotions to increase consumer involvement in a product.
Advertising involvement refers to the consumer’s interest in processing the ad messages. Television is said to be a low involvement medium and consumers process information in a passive manner. In contrast, print is a high-involvement medium as the readers actively process information.
Purchase situation involvement may occur while buying the same item in different contexts.
Limited and Extensive Problem Solving Behaviour
Nominal Decision-making At one end of choice continuum is nominal decision-making, also
referred to as nominal problem solving, habitual decision making, or routine problem solving. Nominal decision-making is generally the outcome of continued satisfaction with a brand which was initially chosen after an extended decision-making process, or the consumer does not attach much importance to the product category or purchase.
Cont….
Limited Decision-Making
Limited decision-making is usually more straightforward and simple. It involves internal (long-term memory) and limited external search, consideration of just a few alternatives, simple decision rules on a few attributes and little post-purchase evaluation. As pointed out earlier, it covers the middle ground between nominal and extended decision-making. Buyers are not as motivated to search for information, or evaluate each attribute enthusiastically, but actually use cognitive shortcuts. According to Wayne D. Hoyer, when the level of consumer involvement is lowest, limited decision-making may not be much different than nominal decision-making. For example, while in a store, the consumer notices a point-of-purchase display of Nescafe and picks up one pack based on her/his memory that its aroma and taste is good. If the consumer's decision rule is to buy the cheapest brand of instant coffee available, she/he looks at different brands of coffee for prices and buys the least priced brand. Sometimes, emotional factors may influence limited decision-making.
Extended Decision-Making
Consumer purchases involving extended decision-making correspond most closely to
the traditional decision-making perspective. Such decisions involve extensive internal
(long-term memory) and external (outside sources) information search followed by a
rigorous evaluation of several alternatives because consumers do not possess any
meaningful information about the product or service and need much of it. The
evaluation often involves careful consideration of attributes of one brand at a time and
taking stock of how the attributes of each brand measure up to a set of desired
characteristics. All this happens in response to a high level of consumer's
involvement in making a purchase decision. Such complex decisions are relatively
few and may relate to buying a computer, stereo system, washing machine, laser
printer, or a new house etc. Post purchase evaluation is more likely to be complex
and dissonance causing.
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