1 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 3 Group and Interpersonal Influence

2 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 2 Learning Outcomes Understand the different types of reference groups that influence consumers and how reference groups influence value perceptions. Describe the various types of social power that reference groups exert on members. Comprehend the difference between informational, utilitarian, and value-expressive reference group influence. Understand social media’s role in consumer behavior. LO 8-1 LO 8-2 LO 8-3 LO 8-4

3 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Learning Outcomes Understand the importance of word-of-mouth communications in consumer behavior. Comprehend the role of household influence in consumer behavior. LO 8-5 LO 8-6

4 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Reference Groups ▮ “Humans are social animals. We all belong to groups, try to please others, and take cues about how to behave by observing the actions of those around us.” ▮ Comment.

5 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Reference Group A group of individuals who has significant relevance for a consumer and who impacts the consumer’s evaluations, aspirations, and behavior Group Influence Refers to the ways in which group members influence the attitudes, opinions, and behaviors of others within the group

6 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Aspects of Group Life ▮ Group members: Share common goals and interests Communicate with, and influence, one another Share a set of expectations, rules, and roles View themselves as members of a common social unit

7 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 Types of Groups ▮ Primary group - Includes members who have frequent, direct contact with one another ▮ Secondary group - Interaction within the group is much less frequent than in a primary group ▮ Brand community

8 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Types of Groups ▮ Formal group - A group in which a consumer formally becomes a member ▮ Informal group - A group that has no membership or application requirements Codes of conduct may be nonexistent

9 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 Types of Groups ▮ Aspirational group - A group in which a consumer desires to become a member ▮ Dissociative group - A group to which a consumer does not want to belong

10 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Conformity ▮ Occurs when an individual yields to the attitudes and behaviors of other consumers Similar in some ways to the concept of persuasion

11 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Peer Pressure ▮ Pressure an individual feels to behave in accordance with group expectations Can greatly influence behavior ▮ Negative peer pressure Consumers sometimes succumb to group pressures that encourage counterproductive or unethical—perhaps illegal—behaviors

12 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Social Power ▮ Refers to the ability of an individual or a group to alter the actions of others Referent power Legitimate power Expert power Reward power Coercive power

13 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 8-2

14 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Categories of Influence Informational Influence Consumers use the behaviors and attitudes of reference groups as information into making their own decisions Utilitarian Influence Consumers conform to group expectations to receive a reward or avoid punishment Value-expressive Influence Consumers internalize a group’s values or join groups to express their own values and beliefs

15 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 Value and Reference Groups ▮ External influences have a direct impact on the value of many activities Utilitarian value - A means to a valued end state Hedonic value - Value is an end in itself ▮ Information obtained from referents impacts consumer expectations This affects value perceptions and satisfaction

16 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Reference Group Influence on Product Selection ▮ Factors that affect how much influence reference groups have on product selection The situation in which the product is consumed The extent to which the product is considered to be a necessity or a luxury A type of product or a particular brand being selected

17 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 8-3

18 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 18 Social Media’s Role in Group and Interpersonal Influence ▮ Social media and the Internet are radically changing consumer behavior and group influence Consumers get hedonic and utilitarian value from interacting through social networking websites

19 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 19 Social Media and Consumer Behavior Social Media Refers to media through which communication occurs Social Networks Networks of consumers that are formed based on common interest, associations, or goals Social Networking Websites Websites that facilitate online social networking

20 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 20 Individual Difference in Susceptibility to Group Influence ▮ Susceptibility to interpersonal influence ▮ Attention to social comparison ­ information ▮ Separateness–connectedness ▮ Social presence and embarrassment

21 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 21 Word-of-Mouth ▮ Information about products, services, and experiences that is transmitted from consumer to consumer ▮ Two types: Organic Amplified

22 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 22 Positive and Negative Word-of- Mouth ▮ Satisfied consumers are more likely to spread positive word-of-mouth ▮ Negative word-of-mouth is very influential

23 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23 Value and Word-of-Mouth ▮ Word-of-mouth is affected largely by the perceived value that consumers receive from products and services ▮ The more value that consumers receive, the more likely they are to tell others about their experiences

24 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 24 Word-of-Mouth in the Digital Age ▮ Consumers seek out other online users for advice on all kinds of issues Texting is a popular method for spreading word-of-mouth ▮ Many companies actively encourage word-of-mouth by including discussion boards on their own websites

25 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 25 Buzz Marketing Includes marketing efforts that focus on generating excitement (buzz) that is spread from consumer to consumer Stealth Marketing Consumers are completely unaware that they are being marketed to

26 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 26 Opinion Leaders Consumers who have great influence on the behavior of others relating to product adoption and purchase Surrogate Consumer Hired by another consumer to provide input into a purchase decision Market Maven A consumer who spreads information about all types of products and services

27 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 27 Household Decision Making ▮ The process by which household units choose between alternative courses of action

28 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 28 Traditional Family Household ▮ At least two people who are related by blood or marriage who occupy a housing unit Nuclear family Extended family

29 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 29 Emerging Trends in Family Structure ▮ Nontraditional household arrangements ▮ Blended families Consist of previously married spouses and their children ▮ Same-sex marriages

30 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. LO 8-6

31 Copyright © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 31 Gender Roles and Household Decision Making ▮ Sex role orientation - A family’s set of beliefs that influences the way household decisions are made Children play a much larger role in influencing household purchases than ever before ▮ Consumer socialization Young consumers develop attitudes Learn skills that help function in the marketplace