Group Influence Chapter 12 Group Influence Are going to focus on the concept of reference groups

The meaning of groups Two or more individuals who Share a set of norms, values or beliefs Have certain role relationships Experience interdependent behavior A social system in which members Have regular contact Act cooperatively Share common goals What is a group? Examples? Family; suite or house mates; friends from home; people you work with (informal) Members of your fraternity/sorority; service club you belong to; church/synagogue/mosque you belong to

Importance of groups Play an important role in consumer socialization The process by which we acquire the skills, knowledge and attitudes necessary to function as consumers As consumers we learn to think and behave according to society’s expectations as modeled by the groups we interact with Why are groups important, in a consumer behavior context? What is consumer socialization? How do groups affect consumer socialization? Examples? As children, we model our consumption behavior on…? our parents and siblings As high school students we model….? our peers (e.g., the clothes we buy)

Types of social groups Primary groups: small and intimate groups we come together with frequently and face-to-face Secondary groups: less intimacy and personal interaction Key difference is the extent of influence over one’s attitudes, beliefs, behavior, etc. There are a number of different types of groups This is covered well in your reading so I won’t go into a lot of detail, but… Example of a primary group? Family, teammates, close friends Example of a secondary group? Professional organizations, neighborhood group, community group What’s the key difference between the two?

Formal groups: organized, hierarchical groups where structure is defined, roles delineated, etc. Informal groups: often emerge from formal groups, but may also emerge between neighbors, friends, etc. Another distinction is between… Example? Corporation; government office; University committee Employees of a corporation

Roles Patterns of behavior expected of individuals within a given social context May develop in one of three ways Formal role definitions prescribed by the group Informal rules of the group History of prior experiences An important aspect of group behavior is… What do we mean by “roles”? How do such patterns develop? Examples? A fraternity/sorority may elect a president A family may by consensus agree on what responsibilities each member will undertake A husband and wife may over time start sharing work, but over time woman may take over more responsibilities

Roles influence consumption behavior A role-related product cluster is a set of goods necessary to play a given role Why are roles important in the consumer behavior context? Examples? If the wife does all the shopping, she’s the target audience for the grocery store’s ads Another important aspect of roles is the concept of the… Example? A woman who decided to stay home with her kids and then goes back into the workforce is going to need all kinds of things: briefcase, new wardrobe, palm pilot, laptop, cell phone, etc. Her role has changed and now she needs products related to that role

Status The relative position of a person in a group’s social spectrum Consumers often purchase goods and services appropriate to their status within a group Another group-related concept that affects consumption behavior How does it affect consumption? Examples? Buying a bigger car or house to go with the promotion; joining the country club

Reference groups Any person or group that serves as a point of comparison (reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior Reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions What is it? For young children, who is their reference group? Parents and older siblings For teenagers? Certainly clothes, hair styles, etc. come from peers From a consumer behavior perspective, what does this mean? Reference groups thus play a major role in shaping consumers’ purchasing behavior

Types of reference groups Normative: groups that influence general or broadly defined values or behavior Comparative: groups that benchmark specific or narrowly defined attitudes or behaviors Indirect: individuals or groups with whom a person does not have direct contact, such as movie stars, sports heroes, celebrities, political leaders, etc. There are a number of different types of reference groups: These first three are not in your book Example 1? For a child, the immediate family Example 2? A neighboring family whose lifestyle (their house, car, clothing, vacations, etc.) you admire and would like to emulate Other examples for 3? Rappers seem to influence buying and other behaviors of adolescent males (in particular)

Membership reference groups Aspirational reference groups Dissociative reference groups These are in your book, and defined there, so won’t repeat

Factors that affect reference group influence Degree of influence a reference group exerts on a consumer’s actions depend on several factors: Nature and extent of consumer’s information and experience Credibility, attractiveness, and power of the group Conspicuousness of the product Reference group influence does not affect all consumers in the same way

1. Consumer’s information and experience Greater the consumer’s access to information about or experience with a product, the less likely it is that he or she will be influenced by the advice or examples of others What would you guess the relationship is? Conversely? Example? Buying a car: access to information in Consumer Reports, previous driving experience, means less likely to be influenced by, e.g., parent or family member (as opposed to first car) When you buy your first computer…

2. Credibility, power and attractiveness of the reference group Direct relationship between these factors and the influence the group wields Consumers are more likely to be persuaded by those whom they consider trustworthy and knowledgeable—i.e., high credibility Can you guess the relationship here?

Consumers who are concerned with the power that a group can exert over them might choose products or services that conform to the norms of that person or group Consumers who are concerned with the acceptance or approval of others they like or identify with are likely to adopt their product, brand, or other behavioral characteristics Examples? Power: your bosses at work; you may bring your behavior into conformity with theirs (e.g. dress) Acceptance: again, clothing (e.g., may dress up for work, but dress differently for other groups)

3. Conspicuousness of the product A purchase that will stand out and be noticed is more likely to be made with the reaction of a reference group in mind Particularly true for luxury and status-revealing purchases Again, what do you think the relationship is here? Examples? See ad in Kanuk p. 267 Of course, as book points out, it might apply to more mundane items—like beer--as well (study found that group influence was important when beer was served to friends but not when consumed privately)

Implications for marketing Marketers who employ reference group influence must understand that consumers have multiple reference groups Different groups may influence consumer purchases in different areas Marketers must first identify the types of groups that consumers are likely to refer to when making a purchase Then they are in a position to select appropriate influencers to deliver the marketing message Examples? Mountain Dew ads, showing a bunch of snowboarder types Lorne Green (“Pa” on Bonanza) pitching life insurance to older folks; Ed McMahon People dressed in Dr.’s coat to influence mainly older folks, because in their generation doctors were revered Include? “Buzz marketing” uses other kids to sell products to kids; nice-looking young women to interest young men in beer, wine, etc. Affinity Marketing (book p. 410)--project

Selected consumer-related reference groups There is a large and diverse range of groups that have the potential to influence consumer behavior; we will look at four: Friendship groups Shopping groups Work groups Consumer action groups Note that families could be put in this group, but we will address families in a different chapter

1. Friendship groups Generally considered informal groups Next to family, considered the most likely to influence individual’s purchase decision Seeking and maintaining friendships is a basic drive of most people Opinions and preferences of friends are an important influence in determining the products and brands a consumer selects Marketers recognize this and often depict friendship situations in their ads, especially for products such as clothing, snack foods and alcoholic beverages Relatively speaking, how likely to influence a consumer’s decision? Why? Think, e.g., of some beer ads you’ve seen—always show groups of people having a good time (“Miller time”) Do they ever depict someone drinking alone? Recent ads for coke, chips, etc.

2. Shopping groups Two or more people who shop together A range of reasons Social--to share time together Risk reduction--to have a second opinion Informational--others in the group may know more about certain products What is it? Why do people shop together?

3. Work groups The workplace actually creates two different types of group: formal and informal Formal work groups involve individuals who work together as a team and thus there is an opportunity for influencing each other’s consumption-related activities Informal work groups are people who have become friends through their work, though they may not work as a team A third category of reference group is… …and thus hold the same influence as other friends In recognition of the importance of workplace groups, some companies that traditionally sold at home (e.g., Avon and Tupperware) now encourage sales reps to reach working women at their places of employment

4. Consumer action groups Today there are many groups whose purpose is to provide information and assistance to consumers Several different types Public vs. private Single-issue vs. broad-based Temporary vs. permanent Public vs. private? FTC vs. BBB Single-issue vs. broad-based: Center for Auto Safety vs. VPIRG Temporary vs. permanent: Group that organizes to boycott a particular company or specific product until change is made

Reference group appeals Four very common and effective reference group appeals used by advertisers include Celebrity appeals Expert appeals Common-man appeals Executive appeals

1. Celebrity appeals Celebrities represent an idealization of life that most people imagine they would love to live Four ways in which celebrities are used to promote products Testimonial: based on personal usage, a celebrity attests to the quality of the product Endorsement: celebrity lends name and appears on behalf of a product (may not be an expert) Actor: celebrity presents a product through his or her character Spokesperson: celebrity represents the brand or company over an extended period of time What’s the theory behind having a movie star or famous jock behind a product? In other words, if it’s good enough for him, it’s good enough for me. Do celebrity appeals work? According to one source, the companies whose products Michael Jordan represents saw their stock value increase by a combined $1 billion the first time he un-retired from basketball Examples of all four? Tiger Woods and golf balls Tiger Woods and Buicks Jason Alexander (George) for KFC; Seinfeld for American Express; others? Bill Cosby and Jello Note that a testimonial implies the celebrity uses the product, so if he or she doesn’t, it would be illegal (see FTC guide)

Celebrity appeals work only if the person is perceived as credible The more products a celebrity is associated with, the more credibility erodes Why? Because motivation appears to have more to do with making money

2. Expert appeals A person who, because of his or her occupation, training or experience is in a unique position to help consumers evaluate a product or service What’s this? Examples? Doctors recommending OTC or prescription medications

3. The common man appeal Uses the experiences of satisfied customers Consumers can easily identify with them Especially effective in public health announcements Commercials that show individuals or families solving problems by using the advertised product are called slice-of-life commercials because they focus on real issues that consumers can identify with Why is it effective? E.g., anti-smoking, anti-alcohol campaigns Other companies successfully using them include Saturn and (very recently) Apple Computer Example of slice-of-life Mom comes home from work and is too tired to cook so they order pizza or pop something healthy into the microwave

4. The executive spokesperson Became popular in last 20 years as CEO’s became better known to the public As with celebrities, success depends on public perception of the spokesperson’s credibility Some, in fact, became celebrities: Lee Iacocca at Chrysler; Frank Perdue of Perdue chicken fame; Dave Thomas of Wendy’s; Bill Gates of Microsoft Ben & Jerry Of course, in the next decade we may see just the opposite, given current climate for CEO’s