1. Chapter 11 Group Influence and Opinion Leadership

2. Reference Groups
Reference group: an actual or imaginary individual/group that influences an individual’s evaluations, aspirations, or behavior

3. Reference Group Influences
Reference group influences stronger for purchases that are:
Luxuries rather than necessities
Socially conspicuous/visible to others

4. When Reference Groups Are Important
Social power: capacity to alter the actions of others
Types of social power:
Referent power
Information power
Legitimate power
Expert power
Reward power
Coercive power

5. Types of Reference Groups
Any external influence that provides social clues can be a reference group
Friends / Peers
Cultural figure (Barack Obama)
Parents or Family
Large, formal organization
Small and informal groups
Can exert a more powerful influence on individual consumers than larger groups
A part of our day-to-day lives: normative influence

6. Brand Communities and Consumer Tribes
A group of consumers who share a set of social relationships based upon usage or interest in a product
Brandfests or Productfests enhance brand loyalty
Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product
Tribal marketing: linking a product to the needs of a group as a whole

7. Membership & Aspirational Reference Groups
Membership reference groups: people the consumer actually knows and admires
Advertisers use “ordinary people”
Aspirational reference groups: people the consumer doesn’t personally know but admires
Advertisers use celebrity spokespeople

8. Positive versus Negative Reference Groups
Reference groups may exert either a positive or negative influence on consumption behaviors
Avoidance groups: motivation to distance oneself from other people/groups (a.k.a. “Dissociative Groups”)
First class vs. coach on airplanes
Marketers show ads with undesirable people using competitor’s product
Antibrand communities: coalesce around a celebrity, store, or brand—but are united by their disdain for it
rachelraysucks.com
ihatewalmart.com
Delfina in SF (anti-yelp?)

9. Consumers in Groups
Deindividuation: individual identities become submerged within a group
Example: binge drinking at college parties
Example 2: Army training boot camp
Social loafing: people devote less effort to a task when they’re in groups
Example: we tip less when eating in groups
Example 2: Kitty Genovese case
Risky shift: group show a greater willingness to consider riskier alternatives than if members made their own decisions individually (Why?)

10. Consumers in Groups (cont.)
Decision polarization: after group discussion of an issue, opinions become more extreme
Home shopping parties (Tupperware, Pampered Chef, Botox) capitalize on group pressure to boost sales

11. Conformity
Most people tend to follow society’s expectations regarding how to look, act and even feel
Factors influencing conformity:
Cultural pressures
Fear of deviance and being ostracized
Commitment to and benefits of group membership
Group influence, power and size
Susceptibility to interpersonal influence

12. Word-of-Mouth Communication
WOM: product information transmitted by individuals directly to individuals
Most reliable / efficacious form of marketing
Cheapest form of marketing *
Uses social pressure to conform
Influences two-thirds of all sales
We rely upon WOM more in later stages of product adoption / mature products
Especially powerful when we are unfamiliar with product category

13. Negative WOM and Power of Rumors
We weigh negative WOM more heavily than positive WOM.
Negative WOM is easy to spread, especially online
Any one can start a negative WOM thread
Information/rumor distortion
Larger companies can sustain bigger damages, but can cope better than smaller companies
Prentice-Hall, cr 2009

14. The Transmission of Misinformation

15. Negative WOM and the Power of Rumors
Three basic themes found in Web-based “protest” communities:
Injustice: consumers talk about their repeated attempts to contact the company and seek help only to be ignored.
Identity: characterize the violator as evil, rather than simply wrong. (e.g. Starbucks, P&G)
Agency: individual Web site creators try to create a collective identity for those who share their anger with a company. (is this just social bonding?)

16. Virtual Communities
A collection of people who share their love or hatred of a product in online interactions
Chat Rooms (IRC), rings, and lists
Message Boards
Blogs
Great potential for abuse via untrustworthy / questionable practices
Amazon.com lawsuit (charging publishers to post positive reviews of Web site)
Retailers buy off critical Yelpers

17. Virtual Communities
Which type of Web surfer are you?

18. Guerrilla Marketing
Guerilla marketing: promotional strategies that use unconventional locations and intensive WOM efforts to push products
Recruits legions of real consumers for street theater
Hip-hop “mix tapes”/street teams
Brand ambassadors
Stealth Marketers in bars, tourist locations, etc.

19. Viral Marketing
Viral marketing: WOM that spreads electronically (like a virus)
Consumers knowingly or unknowingly forward information to others typically via
Typically drive recipients to web site and encourage them to recruit others, reinforcing the viral cycle

20. Social Networking and Crowd Power
Web sites where members post information about themselves and make contact with similar others
Share interests, opinions, business contacts, etc.

21. Social Networking and Crowd Power (cont.)
Wisdom of crowds perspective: under the right circumstances, groups are smarter than the smartest people in them (“40,000 Frenchmen”)
Some crowd-based Web sites:
CrowdSpirit.com: participants submit ideas for consumer electronics products and the community votes for the best ones
Sermo.com: social network for physicians
Eventful.com: fans can demand events and performances in their town and spread the word to make them happen

22. Opinion Leadership
Opinion leaders: influence others’ attitudes and behaviors
They are good information sources because they:
May be experts
Provide unbiased evaluation
Are socially active and popular
Are similar to the consumer
Are usually among the first to buy (i.e. “adopters” or “innovators”)
Hands-on product experience (absorb risk)
Companies spend lots of $ to court opinion leaders

23. Opinion Leadership (cont.)
Monomorphic vs. Polymorphic Opinion Leaders
Expertise tends to overlap across similar categories (i.e. cosmetics and fashion or appliances and computers)
It is rare to find a “general” opinion leader, but they do exist
Opinion seekers
More likely to talk about products with others and solicit others’ opinions
Typically at lower rungs of the social hierarchy
May lack self-esteem

24. The Market Maven
Market maven: actively involved in accumulating and disseminating marketplace information of all types
Makes efforts to be continuously aware of what’s happening in the marketplace
Know how and where to get stuff
May not actually buy products!

25. Surrogate Consumers
Surrogate consumer: a marketing intermediary hired to provide input into purchase decisions
Interior decorators, stockbrokers, professional shoppers, college consultants
Consumer relinquishes control over decision-making functions
Marketers should not overlook influence of surrogates!