1. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 1 Group Influence and Communication Chapter 14  Manner of group function; classification of groups  Impact of reference groups on the consumption process  Marketing strategies based on group influence  Importance of roles of group members to marketing strategies  Nature of word-of-mouth communication and its implications  Group communication—an important marketing factor  Importance of opinion leaders in shaping behaviour of others  Market mavens—information disseminators  Diffusion of innovation  Adopter groups and their characteristics

2. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 2 Groups and their Definitions  Group: ô‘Two or more individuals who share a set of norms, values, or beliefs, and have certain implicitly or explicitly defined relationships which make their behaviour interdependent’  Reference group: ô‘A group whose presumed perspectives or values are being used by an individual as the basis for his or her current behaviour’

3. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 3 Types of Groups  Membership ô either yes or no  Degree of contact ôlarger groups generally have less contact ôprimary groups generally have frequent interpersonal contact ôsecondary groups generally have limited interpersonal contact  Attraction ôdesirability of being member ôeither positive or negative

4. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 4 Types of Groups (cont.)  Aspirational reference groups ônon-membership groups ôpositive attraction ôexert a strong influence from some products

5. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 5 Conformity  Conformity is the tendency to want to be like relevant and significant others  Conformity generally makes life more pleasant  Norms: ôgeneral expectations about behaviours that are deemed appropriate for all persons in a social context, regardless of the position they hold ôoften communicated non-verbally

6. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 6 The Nature of Reference- group Influence  Conformity is not a uni-dimensional concept  Information influence ôbehaviours and opinions of reference groups are used as potentially useful pieces of information  Normative influence (utilitarian influence) ôwhen an individual fulfils group expectations to gain a direct reward or avoid a sanction  Identification influence (value-expressive influence) ôwhen an individual uses perceived-group norms and values as a guide for their own attitudes or values

7. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 7 Determinants of the Degree of Reference-group Influence  Group influence is strongest when use of the product or brand is visible to the group ôe.g. product category, product type and brand are all visible  Reference-group influence typically affects aspects of the product that are visible to the group  Reference-group influence increases as the degree of necessity of an item decreases  In general, the more commitment an individual feels to a group, the higher the level of conformity to group norms

8. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 8 Marketing Strategies based on Reference-group Influences  Personal sales strategies ôAsch phenomenon  Advertising strategies ôall three types of reference groups are used by advertisers

9. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 9 Roles  A role is: ôa prescribed pattern of behaviour expected of a person in a given situation by virtue of the person’s position in that situation  Role parameter: ôrange of behaviour acceptable within a given role  Role overload: ôoccurs when an individual attempts to fill more roles than the available time, energy or money allows  Role conflict: ôincompatible role demands

10. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 10 Applications of Role Theory in Marketing Practice  Role-related product cluster  Evolving roles  Role conflict and role overload  Role acquisition and transition

11. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 11 Communication within Groups  The power of word-of-mouth communication  People learn about new products from friends and reference groups by: ôobserving or participating with them as they use the product, or ôby seeking and receiving advice or information from them

12. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 12 Opinion Leadership  Opinion leaders filter, interpret or provide information for individuals within groups.  Situations in which opinion leadership occurs ôone individual exchanges information with another ôone individual volunteers information ôas a by-product of normal group interaction

13. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 13  Opinion leaders have enduring involvement with product category  Function primarily through interpersonal communications and observation  Similar demographic characteristics to the group  Public individuation  High level of exposure to media  Motivation of dissatisfied customers to tell others of their negative message  The market maven Characteristics of Opinion Leaders

14. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 14 Marketing Strategy and Opinion Leaders  Identifying opinion leader  Targeting for marketing research  Product sampling  Retailing/personal selling  Advertising attempts to encourage and simulate opinion leadership

15. Copyright  2002 McGraw-Hill Australia Pty Ltd. PPTs t/a Consumer Behaviour: Implications for Marketing Strategy 3e by Neal, Quester and Hawkins 15 Diffusion of Innovations  Nature of the innovation ô new as perceived by individuals or group  Categories of innovations ôcontinuous innovation ôdynamically continuous innovation ôdiscontinuous innovation