University of Wales (UK) Consumer Behaviour (KL003) Lesson 11 Group Influence and Opinion Leadership

Reference Groups An actual or imaginary individual/group conceived of having significant relevance upon an individual’s evaluations, aspirations, or behavior Reference groups influence consumers in three ways: Informational Utilitarian Value-expressive

Reference Group Influences Reference group effects are more robust for purchases that are: Luxuries rather than necessities Socially conspicuous/visible to others PRODUCT Weak Reference Group Influence Strong Reference Group Influence BRAND PUBLIC NECESSITIES LUXURIES PRIVATE Figure 11.1

When Reference Groups Are Important Social power: capacity to alter the actions of others Referent power Information power Legitimate power Expert power Reward power Coercive power

Types of Reference Groups Any external influence that provides social clues Cultural figure Parents A large, formal organization Tend to be more product- or activity-specific: comparative influence Small and informal groups Exert a more powerful influence on individual consumers A part of our day-to-day lives: normative influence

Brand Communities A group of consumers who share a set of social relationships based upon usage or interest in a product Brandfests enhance brand loyalty Consumer tribe share emotions, moral beliefs, styles of life, and affiliated product Tribal marketing: linking a product to the needs of a group as a whole

Membership vs. Aspirational Reference Groups People the consumer actually knows vs. people the consumer doesn’t know but admires Admirational strategies concentrate on highly visible, widely admired figures (athletes or performers) Membership strategies focus on “ordinary” people whose consumption provides informational social influence Propinquity, mere exposure, and group cohesiveness WWW.RBK.COM

Positive vsersus Negative Reference Groups Reference groups may exert either a positive or negative influence on consumption behaviors Avoidance groups: motivation to distance oneself from other people/groups Marketing: ads with undesirable people using competitor’s product Discussion: Identify a set of avoidance groups for your peers. Can you identify any consumption decisions that are made with these groups in mind?

Consumers Do It in Groups De-individuation Binge drinking at college parties Social loafing We tend to tip less when eating in groups Risky shift Diffusion of responsibility Value hypothesis Decision polarization

Consumers Do It in Groups Home shopping parties Tupperware and Botox parties Informational and normative social influence De-individuation Risky shift Discussion: Are home shopping parties that put pressure on friends and neighbors to buy merchandise ethical?

Conformity Most people tend to follow society’s expectations regarding how to look/act Change in beliefs/actions toward societal norms Appropriate clothing/personal items, gift-giving, sex roles, and personal hygiene

Factors Influencing Conformity Cultural pressures Fear of deviance Sanctions against “different” behavior Commitment to group membership Principle of least interest Group unanimity, size, expertise Susceptibility to interpersonal influence Role relaxed

Social Comparison “How am I doing?” We look to others’ behavior to inform us about reality Occurs as way to increase stability of one’s self-evaluation (sans physical evidence) Tastes in music and art We tend to choose co-oriented peer when performing social comparison

Resisting Conformity Independence vs. anticonformity Reactance “Marching to own drummer” versus being aware of what is expected (and not doing it) Reactance Negative emotional state when we are deprived of our freedom of choice Censored books, TV shows, music lyrics

Word-of-Mouth Communication WOM: product information transmitted by individuals to individuals More reliable/trustworthy form of marketing Backed up by social pressure to conform Influences two-thirds of all sales of goods We rely upon WOM in later stages of evaluation and adoption WOM is powerful when we are unfamiliar with product category

WOM Communication Product-related conversation factors: High involvement with product (pleasure) Knowledgeable about product (impressing others) Genuine concern for others (avoid wasting money)

Negative WOM and Power of Rumors We weigh negative WOM more heavily than we do positive comments! Negative WOM is easy to spread, especially online Determined detractors Discussion: What is the best way for a company to deal with determined detractors? Information/rumor distortion Assimilation, leveling, and sharpening

Virtual Communities A collection of people who share their love of a product in online interactions Multi-user dungeons (MUD) Rooms (IRC), rings, and lists Boards Blogs/blogosphere Great potential for abuse via untrustworthy members Amazon.com lawsuit (charging publishers to post positive reviews of Web site)

Types of Web Surfers Discussion: Which type of Web surfer are you? Figure 11.3 Discussion: Which type of Web surfer are you?

Guerrilla Marketing Promotional strategies that use unconventional locations and intensive WOM to push products Recruiting legions of real consumers for street theater Hip-hop “mix tapes”/street teams P&G’s Tremor Kayem Foods’ Great Sausage Fanout Brand ambassadors

Viral Marketing Getting visitors to a Web site to forward information on the site to their friends (for product awareness) Creating online content that is entertaining or weird SUBSERVIENTCHICKEN.COM LINCOLNFRY.COM

Social Networking Web sites letting members post information about themselves and make contact with similar others Share interests, opinions, business contacts MYSPACE THEFACEBOOK.COM

Opinion Leadership We don’t usually ask just anyone for advice about purchases! We most likely seek advice from someone who knows a lot about a product Opinion leaders frequently influence other’s attitudes/behaviors E-fluential advice

Reasons to Seek Advice from Opinion Leaders Expertise Unbiased knowledge power Highly interconnected in communities (social standing) Referent power/homophily Hands-on product experience (absorb risk)

Opinion Leadership Generalize opinion leader vs. monomorphic/polymorphic experts Although opinion leaders exist for multiple product categories, expertise tends to overlap across similar categories It is rare to find a generalized opinion leader Innovative communicators Opinion seekers More likely to talk about products with others and solicit others’ opinions Casual interaction prompted by situation

The Market Maven Actively involved in transmitting marketplace information of all types Just into shopping and staying on top of what’s happening in the marketplace Solid overall knowledge of how and where to procure products “I like introducing new brands/products to friends” “People ask me for information about products, places to shop, or sales” “My friends think of me as a good source of information when it comes to new products or sales”

The Surrogate Consumer A marketing intermediary who is hired to provide input into purchase decisions Interior decorators, stockbrokers, professional shoppers, college consultants Consumer relinquishes control over decision-making functions Marketers should not overlook influence of surrogates!

Identifying Opinion Leaders Many ads intend to reach influentials rather than average consumer Local opinion leaders are harder to find Companies try to identify influentials in order to create WOM “ripple effect” Exploratory studies identify characteristics of opinion leaders for promotional strategies

The Self-Designating Method Most commonly used technique to identify opinion leaders… Simply ask individuals whether they consider themselves to be opinion leaders Method is easy to apply to large group of potential opinion leaders View with skepticism…inflation or unawareness of own importance/influence Alternative: key informants identify opinion leaders

Socio-metric Methods Trace communication patterns among group members Systematic map of group interactions Most precise method of identifying product-information sources, but is very difficult/expensive to implement Network analysis Referral behavior/network, tie strength Bridging function, strength of weak ties