1. Roger D. Blackwell, Paul W. Miniard, and James F. Engel, Consumer Behavior, Ninth Edition Copyright© 2001 by Harcourt, Inc. All rights reserved. Group and Personal Influences CHAPTER 13

2. All rights reserved. Group and Personal Influences on Individuals

3. Types of Influence Transmission Transmission of Influence Personal and Group Influences on Individuals Individual Lifestyles, Behaviors, Purchases, and Consumption Low Degree of Influence High Degree of Influence Personal and Group Influence on Individuals

4. Personal and Group Influences on Individuals Personal and Group Influence on Individuals

5. All rights reserved. Group and Personal Influences on Individuals Reference group: any person or group of people that significantly influences an individual’s behavior May be individuals (celebrities, athletes, or political leaders) or groups of individuals with similarities (musical groups or sports teams)

6. All rights reserved. Types of Reference Groups Primary: a social aggregation that is sufficiently intimate to permit and facilitate unrestricted face-to- face interaction (ex: family) Secondary: groups in which face- to-face interaction occurs, but it is more sporadic, less comprehen- sive, and less influential in shaping thought and behavior (ex: professional associations or community organizations)

7. All rights reserved. Types of Reference Groups Formal: groups characterized by a defined structure (often written) and a known list of members and requirements for membership Informal: have less structure than formal groups and are likely to be based on friendship or interests

8. All rights reserved. Types of Reference Groups Membership: when individuals are recognized as members of a group, they have achieved formal acceptance status in the group Aspirational: groups that exhibit a desire to adopt the norms, values, and behaviors of others with whom the individuals aspire to associate

9. All rights reserved. Types of Reference Groups Dissociative: groups from which an individual tries to avoid association Virtual: groups that are based on sets of social relations among people rather than face-to-face relationships

10. Personal and Group Influences on Individuals Personal and Group Influence on Individuals

11. Types of Influence Personal and Group Influences on Individuals Personal and Group Influence on Individuals

12. All rights reserved. Types of Group Influence Normative: when individuals alter their behaviors or beliefs to meet the expectations of a group

13. All rights reserved. Types of Group Influence Normative: when individuals alter their behaviors or beliefs to meet the expectations of a group Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors

14. All rights reserved. Types of Group Influence Normative: when individuals alter their behaviors or beliefs to meet the expectations of a group Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors Informational: when people have difficulty assessing product or brand characteristics by their own contacts or observations

15. Types of Influence Personal and Group Influences on Individuals Personal and Group Influence on Individuals

16. Types of Influence Transmission Transmission of Influence Personal and Group Influences on Individuals Personal and Group Influence on Individuals

17. Types of Influence Transmission Transmission of Influence Personal and Group Influences on Individuals Individual Lifestyles, Behaviors, Purchases, and Consumption Low Degree of Influence High Degree of Influence Personal and Group Influence on Individuals

18. All rights reserved. How Reference Groups Influence Individuals

19. All rights reserved. How Reference Groups Influence Individuals Socialization: permits an individual to know what behavior is likely to result in stability both for the individual and for the group Manual may tell people how to dress in the workplace Informal groups may tell them what is acceptable and the norm in that particular environment

20. All rights reserved. How Reference Groups Influence Individuals Self-concept: people protect and modify their self-concept in their interactions with group members People can maintain self-concept by conforming to learned roles Testimonial advertising is effective when the self projected in the ad is consistent with the idealized self of the target consumer

21. All rights reserved. How Reference Groups Influence Individuals Social comparison: individuals often assess themselves by comparing themselves to others Consumers often use reference groups as benchmarks to measure their own behaviors, opinions, abilities, and possessions Advertising or television can be sources of social comparison

22. All rights reserved. How Reference Groups Influence Individuals Conformity: a change in beliefs or actions based on real or perceived group pressures Compliance: when an individual conforms to the wishes of the group without accepting all its beliefs or behaviors Acceptance: when an individual actually changes his or her beliefs and values to those of the group

23. All rights reserved. How Reference Groups Influence Individuals Factors affecting how likely people are to conform to group norms:

24. All rights reserved. How Reference Groups Influence Individuals Factors affecting how likely people are to conform to group norms: Cohesiveness of group Size of group Group’s expertise on topic Person’s desire to belong Individual’s need for social acceptance Public versus private use of product

25. PRIVATE LUXURIES Influence: Strong product & weak brand (icemaker) PRIVATE NECESSITIES Influence: Weak product & weak brand (mattress, refrigerator) PUBLIC LUXURIES Influence: Strong product & strong brand (golf clubs, skis, boat) PUBLIC NECESSITIES Influence: Weak product & strong brand (watch, autos, suits) Strong Reference Group Influences Strong Group Influences (+) Weak Reference Group Influences Weak Group Influences (-) PRODUCT BRAND Source: William O. Bearden and Michael J. Etzel, “Reference Group Influences on Product and Brand Purchase Decisions,” Journal of Consumer Research, 9 (September 1982), 1985. Reference Group Influence on Product and Brand Purchase Decisions

26. All rights reserved. Normative Influence in Marketing Strategy Normative compliance is declining in its impact as many consumers put individual needs ahead of group needs Extended families have less face-to-face contact and people are more socially isolated than in the past Television and mass media expand people’s horizons beyond social circles Some consumers want to express individuality more than group affiliation

27. All rights reserved. Celebrity and Other Reference Group Appeals in Advertising Testimonials: celebrities tout products based on personal usage

28. All rights reserved. Linda Evans, a television star famous for her role as Crystal Karrington on Dynasty (Denver Clan), touts a facial toning mask.

29. All rights reserved. Celebrity and Other Reference Group Appeals in Advertising Testimonials: celebrities tout products based on personal usage Endorsements: celebrities lend their name or likeness to a product without necessarily being an expert in the area

30. Pierce Brosnan endorses Omega watches, as does his film character James Bond.

31. All rights reserved. Celebrity and Other Reference Group Appeals in Advertising Testimonials: celebrities tout products based on personal usage Endorsements: celebrities lend their name or likeness to a product without necessarily being an expert in the area Spokesperson: someone who represents a brand or company for an extended period of time

32. All rights reserved. Celebrity and Other Reference Group Appeals in Advertising Expert appeal: appeal from a person possessing unique information or skills that can help consumers make better purchase decisions than other types of spokespersons Common-man appeal: testimonials from “regular” consumers with whom most consumers can relate

33. All rights reserved. Transmission of Influence Through Dyadic Exchanges

34. All rights reserved. Transmission of Influence Through Dyadic Exchanges Person-to-person exchange in which an individual receives personal communication from someone about behaviors or opinions) and then receives feedback on their own behaviors Dyadic exchange requires the exchange of resources (comments and opinions)

35. All rights reserved. Dyadic Exchanges Word-of-mouth Communication Opinion Leadership Service Encounters

36. All rights reserved. Word-of-mouth Communication Word-of-mouth communication: informal transmission of ideas, comments, opinions, and information between two people, neither one of which is a marketer The receiver gains information about behaviors and choices The sender increases its confidence in its product or behavior choice by persuading others to do the same

37. -potential reciprocity of exchange -increased attention and status -increased number of individuals with similar behaviors -increased cohesion within group -satisfaction of verbal expression -feeling of power and prestige of influencing others’ behaviors -enhanced position within a group -decreased doubt about one’s own behavior -more information about options -more reliable/credible information -less time spent on search -enhanced relationship with another individual -decrease risk of new behavior -increase confidence in choice -decrease cognitive dissonance -increase likelihood of acceptance by a desired group or individual Functional Benefits Hedonic Benefits Benefits of Word-of-Mouth Receiver Sender

38. All rights reserved. Opinion Leadership Opinion leadership: the sender of information is often considered an opinion leader--a person who influences the decisions of others Opinion leaders might be experts in one area but not in others The greater the perceived knowledge of a category, the more likely that person’s opinions are to influence others’ decisions

39. All rights reserved. Opinion Leadership Personal influence in the form of opinion leadership is likely to occur when:

40. All rights reserved. Opinion Leadership Personal influence in the form of opinion leadership is likely to occur when: An individual has limited knowledge A person cannot evaluate options The consumer does not trust advertising or other sources of information Other information sources have low credibility with the consumer The individual has a high need for social approval

41. All rights reserved. Opinion Leadership Strong social ties exist between sender and receiver The product is complex The product is difficult to test against objective criterion The product is highly visible to others

42. All rights reserved. Opinion Leadership Market mavens: individuals who serve as information sources about the marketplace because of their awareness of new products and other marketplace activities

43. All rights reserved. Opinion Leadership Market mavens: individuals who serve as information sources about the marketplace because of their awareness of new products and other marketplace activities Surrogate consumers (shoppers): an individual who acts as an agent to guide, direct, and or conduct activities in the marketplace

44. All rights reserved. Service Encounters Service encounters: occurs when there is personal communication between a consumer and a marketer May be a consumption experience within a store--the various trans- actions and services that occur during a purchase May be an experience with a specific service a consumer purchases

45. All rights reserved. Service Encounters Service providers must understand the needs of different customers and matching the appropriate sales associate or sales approach to a particular type of customer Which customers need a lot of attention and which ones prefer to be left alone Salesperson fosters a relationship between buyer and seller

46. All rights reserved. Transmitting Personal Influences

47. All rights reserved. Transmitting Personal Influences Trickle-down: alleges that lower classes often emulate the behavior their higher-class counterparts Influence is transmitted vertically through social classes, as higher classes express wealth through conspicuous consumption, and lower classes copy their behavior Today, trends are transmitted through mass media and classes do not have direct contact

48. All rights reserved. Transmitting Personal Influences Two-step Flow Opinion Leader Opinion Seekers Mass Media Information and Influence Information

49. All rights reserved. Transmitting Personal Influences Multistep Flow Gatekeepers Opinion Seekers Mass Media Opinion Leader

50. All rights reserved. WOM and Opinion Leaders in Advertising and Marketing Strategy

51. All rights reserved. WOM and Opinion Leaders in Advertising and Marketing Strategy Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM

52. All rights reserved. As more consumers are concerned about their health, this ad provides them with valuable information about the benefits of soy protein, which may be passed on with WOM.

53. All rights reserved. WOM and Opinion Leaders in Advertising and Marketing Strategy Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM Advertising can create WOM among consumers and peer groups

54. All rights reserved. Internet- based firms seek to create WOM with their ads, as hotjobs.com does with this ad written for Hillary Clinton.

55. All rights reserved. WOM and Opinion Leaders in Advertising and Marketing Strategy Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM Advertising can create WOM among consumers and peer groups

56. All rights reserved. The Advertising-WOM Relationship For some firms, WOM is a substitute for advertising

57. All rights reserved. Victoria’s Secret built much of its brand awareness with WOM generated by its catalog, models, and promotions The Advertising-WOM Relationship

58. All rights reserved. The Advertising-WOM Relationship For some firms, WOM is a substitute for advertising Advertising could be targeted to opinion leaders, although it is difficult to identify this segment unless they belong to an identifiable group

59. All rights reserved. The Advertising-WOM Relationship Firms may stimulate WOM by giving away or loaning products to opinion leaders to use or display Organizations may hire opinion leaders to influence consumers (camera stores may hire professional photographers to work in their stores)

60. All rights reserved. The Advertising-WOM Relationship Firms can create opinion leaders by providing incentives for new customers to attract others to the store Companies can activate search through advertising that encourages consumers to “ask a person who knows” or “tell a friend”

61. All rights reserved. Managing Negative WOM Monitoring the content of WOM-- what consumers are saying about the product or company Monitoring rumors which do not always appear in customer complaint reports Creating a strategy to respond to rumors and negative WOM

62. All rights reserved. Diffusion of Innovations

63. All rights reserved. Diffusion of Innovations Innovation: any idea or product perceived by the potential adopter to be new Marketers often use the word “new” to symbolize an innovation Innovations may also be usage- based--using an existing product in a new way

64. All rights reserved. Pringles introduced a fat-free potato chip using the new fat substitute Olean.

65. All rights reserved. Types of Innovations Continuous innovation Dynamically continuous innovation Discontinuous innovation

66. All rights reserved. Continuous Innovation The modification of an existing product rather than the establishment of a new product or product category Modification may be in the taste, appearance, performance, or reliability of the product

67. All rights reserved. Crayola introduced a new crayon which is washable and can be removed from a variety of surfaces.

68. All rights reserved. Dynamically Continuous Innovation May involve the creation of either a new product or a significant alteration of an existing one Does not generally alter established purchase or usage patterns

69. All rights reserved. The Kodak Advantix system allows consumers to take pictures as they have in the past; however, they have three picture formats to choose from and they must use different film.

70. All rights reserved. Discontinuous Innovation Involves the introduction of an entirely new product that significantly alters consumers’ behavior patterns and lifestyles Examples include television, automobiles, and computers

71. All rights reserved. Evaluating Innovation

72. All rights reserved. Evaluating Innovation Relative Advantage Compatibility Complexity Trialability Observability

73. All rights reserved. Relative Advantage The degree to which consumers may perceive the innovation to offer substantially greater benefits than the product currently used

74. All rights reserved. Relative Advantage The degree to which consumers may perceive the innovation to offer substantially greater benefits than the product currently used Relative advantages are often featured in communication pieces, advertising, and packaging of products once in the marketplace Advantages over old technology become touted product features

75. All rights reserved. Compatibility The degree to which a new product is consistent with an individual’s existing practices, values, needs, and past experiences of the potential adopter

76. All rights reserved. Compatibility The degree to which a new product is consistent with an individual’s existing practices, values, needs, and past experiences of the potential adopter How does the innovation blend with products consumers might own? Will it replace other products or will it become a part of an existing system? How does the innovation fit current purchase or consumption behaviors?

77. All rights reserved. Complexity The degree to which an innovation is perceived as difficult to understand and use The more complex, the more difficult it may be to be accepted Complexity is a deterrent of trying new technology

78. All rights reserved. Complexity How difficult is the innovation to understand? How easy is it to explain to consumers in written form and oral communication? How frustrating will it be to consumers when evaluating products or learning how to use new innovation? How much time will consumers have to devote to learning how to use and care for the product?

79. All rights reserved. Trialability New products are more likely to be accepted if experimenting or using the product is made easy

80. All rights reserved. Trialability New products are more likely to be accepted if experimenting or using the product is made easy How easy will it be for people to try the new product without buying it? How can a company encourage consumers to try a new product? Where will consumers be able to try the innovation and how will they receive answers to their questions?

81. All rights reserved. Observability The degree to which results from using a new product are visible to friends and neighbors If consumers can see others using a new product, that innovation is likely to diffuse faster than if the product were used privately

82. All rights reserved. The Diffusion Process

83. All rights reserved. The Diffusion Process Diffusion: the process by which an innovation is communicated through certain channels over time among the members of a social system

84. All rights reserved. The Diffusion Process Diffusion: the process by which an innovation is communicated through certain channels over time among the members of a social system Includes: Diffusion of information and communication Consumer decision process Diffusion or demise of innovation

85. The Diffusion Process Influencer ConsumerConsumerConsumerConsumer Organi- zation Reject Accept Demise of Innovation Diffusion of Innovation Consumer decision process Diffusion of Information and Communication (X number of people)

86. All rights reserved. Factors Affecting Diffusion Communication (how consumers learn about innovation) Time (how long it takes for a person to move from product awareness to purchase or rejection) Social system (the groups or segments to which individuals belong)

87. All rights reserved. Speed of Diffusion Diffusion will be faster if:

88. All rights reserved. Speed of Diffusion Diffusion will be faster if: Supplier is intensely competitive Supplier’s reputation is good Standardized technology is used Vertical coordination among channel members exists Resource commitments are significant

89. All rights reserved. Consumer Decision Process for Innovations

90. Rogers Model of Innovation Decision Process Knowledge Characteristics of the Decision Making Unit

91. Rogers Model of Innovation Decision Process KnowledgePersuasion Perceived Characteristics of the Innovation

92. Rogers Model of Innovation Decision Process Decision KnowledgePersuasion Adoption Rejection Continued adoption Later adoption Discontinuance Continued Rejection

93. Rogers Model of Innovation Decision Process Implemen-tationDecision KnowledgePersuasion

94. Implemen-tationDecision Knowledge Confir-mation Persuasion

95. Implemen-tationDecision Knowledge Confir-mation Persuasion Communication Channels Source: Everett M. Rogers, Diffusion of Innovation, 3rd Edition (New York; The Free Press, 1983), 165.

96. All rights reserved. Consumer Most Likely to Buy New Products

97. All rights reserved. AB CD E A= Innovators (2.5%) B= Early Adopters (13.5%) C= Early Majority (34%) D= Late Majority (34%) E= Laggards (16%) Adopter Classes

98. All rights reserved. Consumers Likely to Buy New Products Innovativeness: the degree to which an individual adopts an innovation earlier than other members of a social system Cognitive innovators: have a strong preference for new sensory experiences Sensory innovators: have a strong preference for new sensory experiences Advertising can be targeted to various types of innovators

99. All rights reserved. Managerial Perspectives on Adoption and Diffusion of Innovations

100. All rights reserved. Managerial Perspectives on Adoption and Diffusion of Innovations Most firms develop new products to fuel long-term growth and profitability Consumer insight helps create products that consumers are likely to adopt Intuition and information (often gained from consumers through research) contribute to the formation of an insight Insights drive the creation of a new or adaptation of an existing product

101. All rights reserved. V8 introduces new packaging, which is shelf-stable and comes in individual serving sizes. It appeals to consumers’ desire to drink “on-the- go.”

102. Roger D. Blackwell Paul W. Miniard James F. Engel Consumer Behavior Requests for permission to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc. 6277 Sea Harbor Drive Orlando, Florida 32887-6777 Copyright© 2001 by Harcourt, Inc. All rights reserved.