Chapter 14 Reference Groups and Family McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

Reference Groups A group consists of two or more people who interact with each other to accomplish some goal. A reference group involves one or more people used as a basis for comparison or point of reference in forming affective and cognitive responses and performing behaviors.

Exhibit 14.1 - Types of Reference Groups

Analyzing Reference Groups Reference groups are cultural groups in that members share certain common cultural meanings. Marketers try to determine the content of the shared meanings of various reference groups. Reference groups can have both positive and negative effects on consumers. Associative reference groups Dissociative reference groups

Types of Reference Group Influence People identify and affiliate with particular reference groups for three reasons: To gain useful knowledge. To obtain rewards or avoid punishments. To acquire meanings for constructing, modifying, or maintaining their self-concepts.

Types of Reference Group Influence (cont.) Informational reference group influence transmits useful information to consumers about themselves, other people, or aspects of the physical environment such as products, services, and stores. Utilitarian reference group influence occurs when the reference group controls important rewards and punishments.

Types of Reference Group Influence (cont.) Value-expressive reference group influence can affect people’s self-concepts. All three types of reference group influence can be accomplished by a single reference group.

Reference Group Influence on Products and Brands Reference groups do not influence all product and brand purchases to the same degree. Influences vary on at least two dimensions: Degree to which the product or brand is a necessity or a luxury. Degree to which the object in question is conspicuous or know by other people. Public good Private good

Exhibit 14.2 - Effects of Public–Private and Luxury–Necessity Dimensions on Reference Group Influence for Product and Brand Choice

Reference Groups and Marketing Strategy An analysis of primary informal group influences can be used to develop marketing strategies, Peer group influence is a major asset of firms that sell in-home to groups. Describing similarities between previous consumers and potential consumers can create a reference group influence. Soliciting experts to aid in the direct sale of products can be a strategy.

Family Marketers are interested in both families and households. A household is a housing unit having people living in it. Nonfamily households include unrelated people living together. A family has at least two people, the householder and someone who is related to the householder by blood, marriage, or adoption. Nuclear family and extended family

Family Decision Making Family decision making refers to how family members interact and influence one another when making purchase choices for the household. Identification of roles of family members in family decision making is important.

Family Decision Making (cont.) Types of decision-making roles include: Influencers Gatekeepers Deciders Buyers Users Disposers

Family Decision Making (cont.) Influences on family decision making Areas explored in research on family decision making are: Differences in product class and their relationship to family decision making. The structure of husband/wife roles. The determinants of joint decision making.

Family Decision Making (cont.) Children and family decision making Children can have major influences on: Budget allocation decisions Purchase choices The birth of a child creates demand for a wide variety of products most couples never would have considered purchasing previously.

Family Decision Making (cont.) Conflict in family decision making Decision conflict arises when family members disagree about some aspect of the purchase decision. Means-end chain model is a useful framework for analyzing decision conflict.

Exhibit 14.3 - Six Common Types of Family Influence Strategies

Exhibit 14.3 - Six Common Types of Family Influence Strategies

Exhibit 14.4 - Patterns or Styles of Influence Behaviors

Exhibit 14.4 - Patterns or Styles of Influence Behaviors

Consumer Socialization Consumer socialization refers to how children acquire knowledge about products and services and various consumption-related skills. Can occur directly through intentional instruction or indirectly through observation and modeling. The consumer knowledge formed in childhood can influence people in later years.

Consumer Socialization (cont.) Developing early brand awareness and loyalty is an important marketing strategy for many companies. The flow of socialization is not restricted to parents influencing their young children.

Factors Influencing American Families Changes in female employment Changes in marriage and divorce Changes in childbirth and child rearing practices

Demographic Changes in Household Composition American families are highly diverse. Married-couple family Traditional family Nontraditional family Nonfamily households Cohabiting couples

Family Life Cycle The modern family life cycle captures most types of families in American society, including: Single parents Young singles Older singles Married couples with children

Exhibit 14.5 - A Modern Family Life Cycle

Marketing Analysis Considerations for using the family life cycle: Modern family life cycle does not include nonfamily households. Modern family life cycle does not capture every possible change in family status that can occur. The family segments identified are not entirely homogeneous. Some stages in the family life cycle are more important markets than others. Stages that contain children are quite important.

Marketing Implications The family life cycle can help marketers understand how important cultural trends affect family structures and consumption behavior. Ideas for marketing strategies to help reduce shopping time and stress: Provide information Assist in planning Develop out-of-store selling Automate processes Improve delivery

Summary Reference groups and family are two important aspects of the micro social environment. The three types of reference group influences are informational, utilitarian, and value-expressive. Reference groups can influence purchase decisions about products and brands. Can be used in marketing strategies.

Summary (cont.) Families and households are distinct from one another. Family members take one different decision making roles in family decision making. Conflict can exist in family choices and there several ways family members might try to resolve the decision conflict and influence each other.

Summary (cont.) Consumer socialization focuses on how consumers obtain knowledge about products and consumer skills. Several demographic trends have changed family households. Marketers can use the family life cycle to analyze markets and develop marketing strategies.