1. Chapter 11 Groups and Social Media

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

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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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?)

11. 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

12. 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

13. 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

14. 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

15. The Transmission of Misinformation

16. 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?)

17. Virtual Communities
Which type of Social Media user are you?

18. 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

19. 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

20. 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

21. 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!

22. 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?