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

2. 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

3. 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)

4. 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?

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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)

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

12. 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

13. 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…

14. 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?

15. 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)

16. 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)

17. 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

18. 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

19. 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.

20. 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?

21. 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

22. 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

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

24. 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)

25. 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

26. 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

27. 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

28. 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