1. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-1 Chapter 14: Group influence and communication How groups function and classification of groups Impact of reference groups on consumption How social roles influence consumption Importance of word-of-mouth and group communication as marketing factors Role of opinion leaders in shaping consumer behaviour The diffusion of innovations and the different adopter groups

2. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-2 Group influences

3. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-3 Groups and their definitions Group: – ‘Two or more individuals who share a set of norms, values, or beliefs, and have certain implicitly or explicitly defined relationships which make their behaviour interdependent’ Reference group: – ‘A group whose presumed perspectives or values are being used by an individual as the basis for his or her current behaviour’

4. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-4 Types of groups Membership – Either yes or no Degree of contact – Larger groups generally have less contact – Primary groups generally have frequent interpersonal contact – Secondary groups generally have limited interpersonal contact Attraction – Desirability of being member – Either positive or negative

5. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-5 Changes in reference groups as the situation changes

6. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-6 Types of groups (cont.) Aspirational reference groups – Non-membership groups – Positive attraction – Exert a strong influence on some products

7. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-7 Types of groups (cont.)

8. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-8 Reference group influences on the consumption process Conformity – Makes groups influential – Is the tendency to want to be like ‘relevant and significant others’ – Generally makes life more pleasant Norms – Are general expectations about behaviours that are deemed appropriate for all persons in a social context, regardless of the position they hold – Are often communicated non-verbally

9. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-9 The nature of reference-group influence Conformity is not a uni-dimensional concept Information influence – Behaviours and opinions of reference groups are used as potentially useful pieces of information Normative influence (utilitarian influence) – When an individual fulfils group expectations to gain a direct reward or avoid a punishment Identification influence (value-expressive influence) – When an individual uses perceived-group norms and values as a guide for their own attitudes or values

10. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-10 Consumption situations and reference-group influence

11. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-11 Consumption situations and reference-group influence (cont.)

12. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-12 Consumption situations and reference-group influence (cont.)

13. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-13 Determinants of the degree of reference-group influence R-Group influence is strongest when use of the product or brand is visible and relevant – E.g. product category, product type and brand are all visible R-group influence increases as necessity of an item decreases The more commitment an individual feels to a group, the higher the level of conformity to group norms Individual’s confidence with purchase: low confidence, then higher influence

14. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-14 Product characteristics and type of reference-group influence

15. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-15 Influence of two consumption situation characteristics on product/brand choices

16. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-16 Consumption-situation determinants of reference-group influence

17. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-17 Marketing strategies based on reference- group influences Personal sales strategies – Asch phenomenon Advertising strategies – All three types of reference groups are used by advertisers:  informational (use of information)  normative(to avoid/gain)  identification(aspire to join)

18. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-18 Consumption subcultures A consumption subculture is a distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand or consumption activity Examples: Product: Harley-Davidson Activities: Body building, golf

19. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-19 Roles A role is: – A prescribed pattern of behaviour expected of a person in a given situation by virtue of the person’s position in that situation Role parameter: – Range of behaviour acceptable within a given role Role overload: – Occurs when an individual attempts to fill more roles than the available time, energy or money allows Role conflict: – Incompatible role demands

20. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-20 Applying role theory to marketing practice Role-related product cluster e.g. new mother Evolving roles e.g. career females Role conflict and role overload e.g. working mother, working student Role acquisition and transition e.g. student to employee

21. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-21 Role set possibilities for a student

22. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-22 Communication within groups The power of word-of-mouth communication People learn about new products from friends and reference groups by: – Observing or participating with them as they use the product, or – By seeking and receiving advice or information from them

23. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-23 Opinion leadership Opinion leaders filter, interpret or provide information for individuals within groups Situations in which opinion leadership occurs: – one individual exchanges information with another – one individual volunteers information – as a by-product of normal group interaction

24. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-24 Mass communication information flows

25. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-25 Characteristics of opinion leaders Opinion leaders have enduring involvement with product category Function primarily through interpersonal communications and observation Similar demographic characteristics to the group Public individuation – attention seeking High level of exposure to media The market maven – expert on all products! Motivation of dissatisfied customers to tell others of their negative message

26. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-26 Likelihood of seeking an opinion leader

27. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-27 Marketing strategy and opinion leadership Identifying opinion leaders Targeting for marketing research Product sampling Retailing/personal selling Advertising attempts to encourage and simulate opinion leadership

28. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-28 Ad using celebrity endorsement acknowledging an opinion leader

29. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-29 Ad using celebrity endorsement acknowledging an opinion leader

30. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-30 Diffusion of innovations Nature of the innovation – ‘New’ as perceived by individuals or group Categories of innovations – Continuous innovation: small changes needed – Dynamically continuous innovation: modest changes – Discontinuous innovation: large changes

31. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-31 Categories of innovations

32. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-32 Ad displays a product of continuous innovation, involving minor changes in behaviour

33. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-33 The adoption process and extended decision making

34. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-34 Adoptions of an innovation over time

35. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-35 Factors affecting innovation uptake Type of group Type of decision Marketing effort Fulfillment of felt need Compatibility Relative advantage Complexity Observability Trialability Perceived risk

36. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-36 Demographic characteristics of owners of iPods and MP3 players

37. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-37 Marketing strategies and the diffusion process Market segmentation Diffusion-enhancement strategies

38. Copyright  2007 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 5e by Quester, Neal, Pettigrew, Grimmer, Davis & Hawkins Slides prepared by Dr Wayne Binney 14-38 Next Lecture Chapter 15: Social Class