1. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–1 Chapter 14Group Influence and Communication Group function and classification of groups Impact of reference groups on consumption Marketing strategies based on group influence Roles of group members and marketing strategies Group communication Importance of opinion leaders Diffusion of innovations Adopter groups and their characteristics

2. 12–2 Group Influences

3. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–3 Groups and their Definitions Group: – ‘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: – ‘A group whose presumed perspectives or values are being used by an individual as the basis for his or her current behaviour’

4. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–4 Types of Groups Membership – either yes or no Degree of contact – larger groups generally have less contact – primary groups generally have frequent interpersonal contact – secondary groups generally have limited interpersonal contact Attraction – desirability of being member – either positive or negative

5. 12–5 Changes in Reference Groups as the Situation Changes

6. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–6 Types of Groups (cont.) Aspirational reference groups – non-membership groups – positive attraction – exert a strong influence on some products

7. 12–7 Types of Groups (cont.)

8. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–8 Reference Group Influences on the Consumption Process Conformity: – …makes groups influential – …is the tendency to want to be like ‘relevant and significant others’ – …generally makes life more pleasant Norms: – are general expectations about behaviours that are deemed appropriate for all persons in a social context, regardless of the position they hold – are often communicated non-verbally

9. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–9 The Nature of Reference-Group Influence Conformity is not a uni-dimensional concept Information influence – behaviours and opinions of reference groups are used as potentially useful pieces of information Normative influence (utilitarian influence) – when an individual fulfils group expectations to gain a direct reward or avoid a punishment Identification influence (value-expressive influence) – when an individual uses perceived-group norms and values as a guide for their own attitudes or values

10. 12–10 Consumption Situations and Reference-Group Influence

11. 12–11 Consumption Situations and Reference-Group Influence (cont.)

12. 12–12 Consumption Situations and Reference- Group Influence (cont.)

13. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–13 Determinants of the Degree of Reference-Group Influence R-Group influence is strongest when use of the product or brand is visible and relevant – e.g. product category, product type and brand are all visible R-group influence increases as necessity of an item decreases The more commitment an individual feels to a group, the higher the level of conformity to group norms Individual’s confidence with purchase: low confidence, then higher influence

14. 12–14 Product Characteristics and Type of Reference-Group Influence

15. 12–15 Influence of Two Consumption Situation Characteristics on Product/Brand Choices

16. 12–16 Consumption-Situation Determinants of Reference-Group Influence

17. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–17 Marketing Strategies Based on Reference-Group Influences Personal sales strategies – Asch phenomenon Advertising strategies – all three types of reference groups are used by advertisers:  informational (use of information)  normative(to avoid/gain)  identification(aspire to join)

18. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–18 Consumption Subcultures A consumption subculture is a distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand or consumption activity Examples: Product: Harley-Davidson Activities: Body building, golf

19. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–19 Roles A role is: – a prescribed pattern of behaviour expected of a person in a given situation by virtue of the person’s position in that situation Role parameter: – range of behaviour acceptable within a given role Role overload: – occurs when an individual attempts to fill more roles than the available time, energy or money allows Role conflict: – incompatible role demands

20. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–20 Applying Role Theory to Marketing Practice Role-related product cluster e.g. new mother Evolving roles e.g. career females Role conflict and role overload e.g. working mother, working student Role acquisition and transition e.g. student to employee

21. 12–21 Role Set for a Student

22. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–22 Communication Within Groups The power of word-of-mouth communication People learn about new products from friends and reference groups by: – observing or participating with them as they use the product, or – by seeking and receiving advice or information from them

23. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–23 Opinion Leadership Opinion leaders filter, interpret or provide information for individuals within groups Situations in which opinion leadership occurs: – one individual exchanges information with another – one individual volunteers information – as a by-product of normal group interaction

24. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–24 Characteristics of Opinion Leaders Opinion leaders have enduring involvement with product category Function primarily through interpersonal communications and observation Similar demographic characteristics to the group Public individuation – attention seeking High level of exposure to media The market maven – expert on all products! Motivation of dissatisfied customers to tell others of their negative message

25. 12–25 Likelihood of Seeking an Opinion Leader

26. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–26 Marketing Strategy and Opinion Leadership Identifying opinion leaders Targeting for marketing research Product sampling Retailing/personal selling Advertising attempts to encourage and simulate opinion leadership

27. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–27 Diffusion of Innovations Nature of the innovation – ‘new’ as perceived by individuals or group Categories of innovations – continuous innovation: small changes needed – dynamically continuous innovation: modest changes – discontinuous innovation: large changes

28. 12–28 Categories of Innovations

29. 12–29 The Adoption Process and Extended Decision Making

30. 12–30 Adoption of Innovation Curve

31. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–31 Marketing Strategies and the Diffusion Process Market segmentation Diffusion-enhancement strategies

32. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–32 Factors Affecting Innovation Uptake Type of group Type of decision Marketing effort Fulfillment of felt need Compatibility Relative advantage Complexity Observability Trialability Perceived risk

33. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Consumer Behaviour 4e by Neal, Quester, Hawkins 14–33 Next Lecture… Chapter 15: Social Class