Chapter 11 Groups and Social Media

Reference Groups Reference group: an actual or imaginary individual/group that influences an individual’s evaluations, aspirations, or behavior

Reference Group Influences Reference group influences stronger for purchases that are: Luxuries rather than necessities Socially conspicuous/visible to others

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

Types of Reference Groups Any external influence that provides social cues Friends / Peers Cultural figure (Barack Obama) Parents or Family Large, formal organization Small and informal groups Can exert a more powerful influence on individual consumers than larger groups A part of our day-to-day lives: normative influence

Factors Predicting Reference Group Membership Propinquity Mere exposure Several factors make it more likely that we will be a member of a reference group. First as physical distance between people decreases and opportunities for interaction increase, they are more likely to form relationships. This physical nearness is called propinquity. We come to like persons or things if we see them more often. This is known as mere exposure phenomenon. Cohesiveness refers to the degree to which members of a group are attracted to each other and how much each values their membership in the group. Group cohesiveness

Membership & Aspirational Reference Groups Membership reference groups: people the consumer actually knows and admires Advertisers use “ordinary people” Aspirational reference groups: people the consumer doesn’t personally know but admires Advertisers use celebrity spokespeople

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 or Productfests enhance brand loyalty Consumer tribes share emotions, moral beliefs, styles of life and affiliated products Tribal marketing: linking a product to the needs of a group as a whole

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 (a.k.a. “Dissociative Groups”) First class vs. coach on airplanes Marketers show ads with undesirable people using competitor’s product Antibrand communities: coalesce around a celebrity, store, or brand—but are united by their disdain for it rachelraysucks.com ihatewalmart.com

Consumers in Groups Deindividuation: individual identities become submerged within a group Example: binge drinking at college parties Example: Army training boot camp Social loafing: people devote less effort to a task when they’re in groups Example: we tip less when eating in groups Example: Kitty Genovese case in NYC Risky shift: group show a greater willingness to consider riskier alternatives than if members made their own decisions individually (Why?)

Consumers in Groups (cont.) Decision polarization: after group discussion of an issue, opinions become more extremely in favor of original position taken. Home shopping parties (Tupperware, Pampered Chef, Mary Kay, Botox) capitalize on group pressure to boost sales Social Shopping – More $ spent

Conformity Most people tend to follow society’s expectations regarding how to look, act and even feel Factors influencing conformity: Cultural pressures Fear of deviance and being ostracized Commitment to and benefits of group membership Group influence, power and size Susceptibility to interpersonal influence

Word-of-Mouth Communication WOM: product information transmitted by individuals directly to individuals Most reliable / efficacious form of marketing Cheapest form of marketing * Uses social pressure to facilitate conformity Influences two-thirds of all sales We rely upon WOM more in later stages of product adoption / mature products Especially powerful when we are unfamiliar with product category

Negative WOM and Power of Rumors We weigh negative WOM more heavily than positive WOM. NWOM is easy to spread, especially online Any one can start an NWOM thread Information/rumor distortion Larger companies sustain larger damages from NWOM, but can cope better than smaller companies

The Transmission of Misinformation

Negative WOM and the Power of Rumors Three basic themes found in Web-based “protest” communities: Injustice: consumers talk about their repeated attempts to contact the company and seek help only to be ignored. Identity: characterize the violator as evil, rather than simply wrong. (e.g. Starbucks, P&G) Agency: individual Web site creators try to create a collective identity for those who share their anger with a company. (is this just social bonding?)

Virtual Communities Which type of Social Media user are you?

Social Media and Crowd Power Wisdom of crowds perspective: under the right circumstances, groups are smarter than the smartest people in them (“40,000 Frenchmen”) Some crowd-sourcing Web sites: Quirky.com Threadless.com Yelp.com

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 and popular Are similar to the consumer Are usually among the first to buy (i.e. “adopters” or “innovators”) Have hands-on product experience (absorb risk) Companies spend lots to court opinion leaders

Opinion Leadership (cont.) Monomorphic vs. Polymorphic Opinion Leaders Expertise tends to overlap across similar categories (i.e. cosmetics and fashion or appliances and computers) It is rare to find a “general” opinion leader, but they do exist Opinion seekers More likely to talk about products with others and solicit others’ opinions Typically at lower rungs of the social hierarchy May lack self-esteem

The Market Maven Market Maven: actively involved in accumulating and disseminating marketplace information of all types Makes efforts to be continuously aware of what’s happening in the marketplace Know how and where to get stuff May not actually buy products!

Surrogate Consumers 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 the influence of surrogates! Post-Purchase Evaluation: Better or worse?