Chapter 11 Group Influence and Opinion Leadership CONSUMER BEHAVIOR, 8e Michael Solomon

Chapter Objectives When you finish this chapter you should understand why: Others, especially those who possess some kind of social power, often influence us. We seek out others who share our interests in products or services. We are motivated to buy or use products in order to be consistent with what other people do. The things that other consumers tell us about products (good and bad) are often more influential than the advertising we see. Prentice-Hall, cr 2009

Chapter Objectives (cont.) Online technologies are accelerating the impact of word-of-mouth communication. Social networking is changing the way companies and consumers interact. Certain people are particularly likely to influence others’ product choices. Prentice-Hall, cr 2009

Reference Groups Reference group: an actual or imaginary individual/group conceived of having significant relevance upon an individual’s evaluations, aspirations, or behavior Influences consumers in three ways: Informational Utilitarian Value-expressive Prentice-Hall, cr 2009

Reference Group Influences Reference group influences stronger for purchases that are: Luxuries rather than necessities Socially conspicuous/visible to others Prentice-Hall, cr 2009 Figure 11.1

When Reference Groups Are Important Social power: capacity to alter the actions of others Types of social power: Referent power Information power Legitimate power Expert power Reward power Coercive power Prentice-Hall, cr 2009

Discussion High schools have all types of reference groups, with members representing all types of social power. Think back to high school and try to identify people who had the following types of power (consider not only peers but also teachers and administrators). Referent power Information power Legitimate power Expert power Reward power Coercive power Prentice-Hall, cr 2009

Types of Reference Groups Any external influence that provides social clues can be a reference group Cultural figure Parents Large, formal organization Small and informal groups Exert a more powerful influence on individual consumers A part of our day-to-day lives: normative influence Prentice-Hall, cr 2009

Brand Communities and Consumer Tribes 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 Prentice-Hall, cr 2009

Membership versus Aspirational Reference Groups Membership reference groups: people the consumer actually knows Advertisers use “ordinary people” Aspirational reference groups: people the consumer doesn’t know but admires Advertisers use celebrity spokespeople Click to view Quicktime video on use of celebrity athletes in advertising Prentice-Hall, cr 2009

Positive versus 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 Marketers show ads with undesirable people using competitor’s product Antibrand communities: coalesce around a celebrity, store, or brand—but in this case they’re united by their disdain for it Prentice-Hall, cr 2009

Consumers Do It in Groups Deindividuation: individual identities become submerged within a group Example: binge drinking at college parties Social loafing: people don’t devote as much to a task when their contribution is part of a larger group Example: we tend to tip less when eating in groups Risky shift: group members show a greater willingness to consider riskier alternatives following group discussion than if members mad their own decisions Prentice-Hall, cr 2009

Discussion Do you agree that deindividuation encourages binge drinking on campus? What can or should a college do to discourage this behavior? Prentice-Hall, cr 2009

Consumers Do It in Groups (cont.) Decision polarization: after group discussion of an issue, opinions become more extreme Home shopping parties capitalize on group pressure to boost sales Informational and normative social influence Prentice-Hall, cr 2009

Discussion Home shopping parties—such as Tupperware, Avon, Pampered Chef, Amway, or Botox—are designed to put pressure on friends and neighbors to buy merchandise. Have you attended these parties? Why or why not? Do you believe putting social pressure is ethical? Why or why not? Why are these parties more common among women? Prentice-Hall, cr 2009

Conformity Most people tend to follow society’s expectations regarding how to look/act Factors influencing conformity: Cultural pressures Fear of deviance Commitment to group membership Group unanimity, size, expertise Susceptibility to interpersonal influence Prentice-Hall, cr 2009

Word-of-Mouth Communication WOM: product information transmitted by individuals to individuals More reliable form of marketing Social pressure to conform Influences two-thirds of all sales We rely upon WOM in later stages of product adoption Powerful when we are unfamiliar with product category Prentice-Hall, cr 2009

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 Information/rumor distortion Click photo for Ihatestarbucks.com Prentice-Hall, cr 2009

The Transmission of Misinformation Prentice-Hall, cr 2009 Figure 11.2

Negative WOM and Power of Rumors (cont.) Three basic themes found in Web-based “protest” communities: Injustice: consumers talk about their repeated attempts to contact the company only to be ignored. Identity: posters characterize the violator as evil, rather than simply wrong. Agency: individual Web site creators try to create a collective identity for those who share their anger with a company. Prentice-Hall, cr 2009

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) Prentice-Hall, cr 2009

Virtual Communities Which type of Web surfer are you? Figure 11.3 Prentice-Hall, cr 2009 Figure 11.3

Guerrilla Marketing Guerilla marketing: promotional strategies that use unconventional locations and intensive WOM to push products Recruits legions of real consumers for street theater Hip-hop “mix tapes”/street teams Brand ambassadors Prentice-Hall, cr 2009

Viral Marketing 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 Example: buzz campaign for Mini Cooper car Click photo for Miniusa.com  Prentice-Hall, cr 2009

Social Networking and Crowd Power Web sites letting members post information about themselves and make contact with similar others Share interests, opinions, business contacts  Click photo for Myspace.com Click photo for Facebook.com Prentice-Hall, cr 2009

Social Networking and Crowd Power (cont.) Wisdom of crowds perspective: under the right circumstances, groups are smarter than the smartest people in them Some crowd-based Web sites: CrowdSpirit.com: participants submit ideas for consumer electronics products and the community votes for the best ones Sermo.com: social network for physicians Eventful.com: fans can demand events and performances in their town and spread the word to make them happen Prentice-Hall, cr 2009

Opinion Leadership Opinion leaders: influence others’ attitudes and behaviors They are good information sources because they: May be experts Provide unbiased evaluation Are socially active Are similar to the consumer Are among the first to buy Prentice-Hall, cr 2009

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) Prentice-Hall, cr 2009

Opinion Leadership (cont.) Generalize opinion leader versus 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 Prentice-Hall, cr 2009

Perspectives on the Communications Process Prentice-Hall, cr 2009 Figure 11.4

The Market Maven Market maven: actively involved in transmitting marketplace information of all types Just into shopping and aware what’s happening in the marketplace Overall knowledge of how and where to get products Prentice-Hall, cr 2009

The Surrogate Consumer Surrogate consumer: a marketing intermediary 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! Prentice-Hall, cr 2009

Finding 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 Prentice-Hall, cr 2009

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 Prentice-Hall, cr 2009

Sociometric Methods Sociometric 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 Prentice-Hall, cr 2009