GROUP INFLUENCES ON CONSUMER BEHAVIOR 7 CHAPTER GROUP INFLUENCES ON CONSUMER BEHAVIOR 7-1

Consumer Behavior In The News… Now that’s fanatical! Goodyear is beginning to offer “collegiate tires” which have the college name in white letters on the tire’s sidewalls. Goodyear claims these tires are only for “the ultimate fan.” What would “drive” a fan to put his/her team’s name on their tires? How big do you think this market is? Source: J. Halliday, “Tire maker eyes college sports fans,” Advertising Age, November 8, 2004, p. 8. 7-2

Consumer Behavior In The News… Now that’s fanatical! What would “drive” a fan to put his/her team’s name on their tires? Major feelings of loyalty and connection to their school and team. Desire to express loyalty openly on auto. How big do you think this market is? Goodyear sells some 50 million tires a quarter. Specialty tires are a niche market. Source: J. Halliday, “Tire maker eyes college sports fans,” Advertising Age, November 8, 2004, p. 8. 7-3

Reference Group Influence A group is defined as two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behaviors are interdependent. A reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his/her current behavior. 7-4

Reference Group Influence Four criteria that are particularly useful in classifying groups: Membership Strength of Social Tie Type of Contact Attraction 7-5

Types of Groups Consumption Subcultures Brand Communities Virtual Communities Leaders Participants Lurkers 7-6

Types of Groups Marketing and Brand Communities Brand communities can add value to the ownership of the product and build intense loyalty. When a consumer becomes part of a brand community, remaining generally requires continuing to own and use the brand. This can create intense brand loyalty! Jeep has a longstanding loyal brand community Click the online button to link to the Jeep Jamboree Web site 7-7

Types of Groups Marketing and Virtual Communities Marketing in virtual communities is both possible and potentially beneficial. The approach taken must be tailored to the type of virtual community. Many online groups are sensitive to “commercial” interference and companies have to be careful not to overstep. Click the online button to link to an example of Virtual Community 7-8

Reference Group Influences on the Consumption Process Types of Reference Group Influence Situational determinants of Reference Group Influence Brand vs. Product Class Influence Marketing Strategy and Reference Groups 7-9

Reference Group Influences on the Consumption Process Types of Reference Group Influence Reference group influence can take three forms: Informational Influence Normative Influence (a.k.a. utilitarian influence) Identification Influence (a.k.a. value expressive) 7-10

Reference Group Influences on the Consumption Process Consumption Situation Determinants of Reference Group Influence 7-11

Reference Group Influences on the Consumption Process Differential Reference Group Influence on Product Versus Brand Choice 7-12

Communications within Groups and Opinion Leadership WOM Opinion Leaders Market Mavens, Influentials, and e-fluentials Marketing and Online Strategies 7-13

Communications within Groups and Opinion Leadership WOM Versus Advertising (% who put people vs. advertising as best source) 7-14

Communications within Groups and Opinion Leadership An opinion leader is the “go to person” for specific types of information. This person filters, interprets, and passes along information. Opinion leaders possess enduring involvement for specific product categories. This leads to greater knowledge and expertise. Opinion leadership is category specific – an opinion leader in one product category is often an opinion seeker in others. 7-15

Communications within Groups and Opinion Leadership Mass Communication Information Flows 7-16

Communications within Groups and Opinion Leadership Situations in Which WOM and Opinion Leadership Occur The exchange of advice and information between group members can occur directly via WOM in the following situations: Likelihood of Seeking an Opinion Leader Individual seeks information from another or Individual volunteers information 7-17

Communications within Groups and Opinion Leadership Mavens, Influentials, and e-fluentials A market maven is a generalized market influencer who provides significant amounts of information about various products, places to shop, and so on. Roper Starch identifies a group similar to market mavens called influentials. Influentials are 10% of population but use broad social networks to influence the other 90%! Roper Starch identifies a group similar to internet market mavens called e-fluentials. They wield significant online and offline influence. 7-18

Communications within Groups and Opinion Leadership Marketing Strategy, WOM, and Opinion Leadership Marketers are increasingly relying on WOM and influential consumers as part of their marketing strategies. Strategies designed to generate WOM and encourage opinion leadership include: Advertising Product Sampling Retailing/Personal Selling Creating Buzz 7-19

Communications within Groups and Opinion Leadership Online Strategies to Leverage Buzz and WOM Viral marketing is an online “pass-it-along” strategy, utilizing electronic communication to trigger brand messages (often via email) throughout a widespread network of buyers.” Online Guides are online opinion leaders, who are often highly knowledgeable and passionate experts, providing consumer information and advice. Blogs are personalized journals where people and organizations can keep a running dialogue. 7-20

Diffusion of Innovations An innovation is an idea, practice, or product perceived to be new by the relevant individual or group. The manner by which a new product spreads through a market is basically a group phenomenon. New products can be placed on a continuum from no change to radical change, depending on the market’s perception. 7-21

Diffusion of Innovations Categories of Innovation Adoption Process Diffusion Rate Adopter Categories Marketing Strategies and the Diffusion Process 7-22

Diffusion of Innovations Categories of Innovations Continuous Innovation Adoption of this type of innovation requires relatively minor changes in behavior(s) that are unimportant to the consumer. Dynamically continuous Innovation Adoption of this type of innovation requires a moderate change in an important behavior or a major change in a behavior of low or moderate importance to the individual. Discontinuous Innovation Adoption of this type of innovation requires major changes in behavior of significant importance to the individual or group. 7-23

Diffusion of Innovations Adoption Process and Extended Decision Making 7-24

Diffusion of Innovations Diffusion Rates for Popular Consumer Electronics (Cumulative) 7-25

Diffusion of Innovations Factors Affecting the Spread of Innovations 7-26

Diffusion of Innovations Adopter Categories Innovators Early Adopters Late Majority Laggards 7-27