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Chapter 8 Group and Interpersonal Influence What Do You Think Polling Question The groups I belong to have a great impact on how I see myself. _____ Strongly Disagree _____ Disagree _____ Somewhat Disagree _____ Neither Agree nor Disagree _____ Somewhat Agree _____ Agree _____ Strongly Agree Have students access Course Mate at www.cengagebrain.com to answer the polling questions for each chapter of CB. Ask them to take the online poll to see how their answers compare with other students taking a consumer behavior course across the country. Then turn to the last page of the chapter to find the “What Others Have Thought” box feature. This graph is a snapshot of how other consumer behavior students have answered this polling question so far. Learning Objectives After studying this chapter, the student should be able to: 8-1 Understand the different types of reference groups that influence consumers and how reference groups influence value perceptions. 8-2 Describe the various types of social power that reference groups exert on members. 8-3 Comprehend the difference between informational, utilitarian, and value-expressive reference group influence. 8-4 Understand social media’s role in consumer behavior. 8-5 Understand the importance of word-of-mouth in influencing consumer behavior. 8-6 Comprehend the role of household influence in consumer behavior. Lecture Example Put simply, word-of-mouth (WOM) communication is friendly banter. Its power to shape public opinion can hardly be overstated. In WOM communication, it is the customers who do the marketing, i.e., talk about products and services on behalf of the marketers. These customers are mostly loyalists and enthusiasts who help provide compelling reasons to other potential buyers to buy a particular product or avail themselves of a specific service. If a customer is happy with a product or service, positive WOM is more likely. However, marketers must be wary of negative WOM, as it can prove to be substantially damaging to both reputation and future prospects. Source: “Word of Mouth Marketing—Powerful Messaging via an Affordable Medium,” Huff Post, August 18, 2010. http://www.huffingtonpost.com/april-rudin/marketing-via-word-of-mou_b_641002.html Lecture Outline with PowerPoint® Slides LO: 8-1: Understand the different types of reference groups that influence consumers and how reference groups influence value perceptions. I. Reference Groups A reference group is a group of individuals who have significant relevance for a consumer and who have an impact on the consumer’s evaluations, aspirations, and behavior. This influence affects the ways that consumers seek and receive value from consumption. Social media has greatly impacted interpersonal influence. Q: Students could be asked if they have any reference groups. How important are these reference groups to them? A: A lot of the students would belong to reference groups. The opinions and views of such groups are very important to many students. A. Group Influence Group influence refers to the ways in which group members influence the attitudes, opinions, and behaviors of the others within the group. Consider the following aspects of group life: Group members share common goals and interests. Group members communicate with and influence one another. Group members share a set of expectations, rules, and roles. Group members view themselves as members of a common social unit. Q: Are you a member of a formal group? What are the goals, interests, and rules of that group? As a member, what does the group expect from you? A: Students’ answers could include various clubs and organizations on campus, in their society, religious institutions, and so on. Goals, interests, and rules vary from group to group. [Instructor PPT Slide 4] In sociological terms, consumers think in terms of ingroups and outgroups. From a social identity perspective, an ingroup is a group that a person identifies with as a member. An outgroup is a group which a person does not identify. Members of an ingroup are generally viewed as having cohesion and exhibiting similar attitudes and behavior. Primary/Secondary Groups A primary group is a group that includes members who have frequent, direct contact with one another. Primary reference groups generally have the most influence on their members, and social ties for these groups are very strong. An example of a primary reference group is the family unit. In a secondary group, interaction within the group is much less frequent than in a primary group. Professional organizations and social clubs are examples of secondary groups. One special type of secondary group is a brand community. Brand communities are groups of consumers who develop relationships based on shared interests or product usage. A popular example of a brand community is the KISS Army. [Instructor PPT Slide 5] Formal/Informal Groups A formal group is a group in which a consumer formally becomes a member. For example, a consumer becomes a formal member of a church congregation. Formal groups generally have a set of stated rules, accepted values, and codes of conduct that members are expected to adhere to. An informal group is a group that has no membership or application requirements, and codes of conduct may not be nonexistent. Examples of informal groups include groups that meet regularly to exercise, have coffee, or go to sporting events. [Instructor PPT Slide 6] Aspirational/Dissociative Groups An aspirational group is a group in which a consumer desires to become a member. Aspirational group membership often appeals to the consumer’s ideal self. Aspirational group membership often appeals to the consumer’s ideal self. The ideal self is an important part of the customer’s self-concept, and consumers often visualize themselves as belonging to certain groups. A dissociative group is a group to which a consumer does not want to belong. For example, a Republican might want to avoid being perceived as belonging to a Democratic group (and vice versa). [Instructor PPT Slide 7] B. Conformity and Authority Two important topics in the study of group and interpersonal influence are conformity and authority. Conformity occurs when an individual yields to the attitudes and behaviors of other consumers. Authority refers to the ability of a person or group to enforce the obedience of others. Some groups, such as governments and municipalities, have legal authority over consumers. Peer Pressure Peer pressure, the pressure an individual feels to behave in accordance with group expectations, can greatly influence behavior. In fact, peer pressure is often the strongest type of influence a consumer experiences in daily life. Consumers of all ages feel peer pressure. In fact, very young children often desire to wear the types of clothing and brands that will allow them to feel accepted. With peer pressure, there is usually some type of sanction that is threatened if the consumer does not go along with the group. With conformity, behavioral choices are generally more strongly based on internal desires to belong, even when the threat of sanction is not present. Negative Peer Pressure Consumers sometimes succumb to group pressures that subtly or not so subtly encourage counterproductive or unethical—perhaps illegal—behaviors. The media direct a lot of attention to peer pressure and illegal alcohol or tobacco consumption. Adolescents are particularly susceptible to peer pressure and are often compelled to rebel against their families in favor of behaviors that win acceptance from their peers. Teens commonly go against family expectations and parental rules. Q: Ask students to narrate an occasion when they felt peer pressure. A: Students’ answers will vary. Many students may feel peer pressure to wear apparel from luxury brands, drink, smoke, and use fake IDs. LO: 8-2. Describe the various types of social power that reference groups exert on members. II. Social Power Social power refers to the ability of an individual or a group to alter the actions of others. Consumers often believe that others hold a great deal of power over their own behavior. A. Types of Social Power Social power can be classified into five categories. These categories include referent power, legitimate power, expert power, reward power, and coercive power. These forms of power can be exerted both by referent groups and by other individuals. These power bases are presented in Exhibit 8.1 and then discussed in more detail. [Instructor PPT Slides 8] Referent Power Consumers often imitate the behaviors and attitudes of groups as a means of identifying with the group. For example, a new resident of a city might desire to join the local Rotary club, or perhaps a country club. Belonging to such groups often allows consumers to feel as though they are fitting in. Legitimate Power In many situations, social arrangements dictate that differing levels of power are de-pendent upon one’s position in a group. Legitimate power is used to describe this type of power, and it is associated with authority. For example, bosses have legitimate authority over their employee, including the authority to fire their employees. Expert Power Expert power refers to the ability of a group or individual to influence a consumer due to the group’s or individual’s knowledge of, or experience with, a specific subject matter. For example, consumers often find advice on health issues by consulting groups such as the American Heart Association or American Diabetes Association. Reward Power Groups frequently have the power to reward members for compliance with expectations. For example, at season’s end, sports teams often distribute “most valuable player” awards based on performance. Coercive Power When consumers fail to give in to group expectations or rules, disapproval can be harsh and may even result in loss of membership. For example, college athletes can be kicked off sports teams for using illegal substances like steroids. Social power depends upon a member’s agreement to, or acceptance of, the fact that the power bases do indeed exist. That is, members must: Be aware that the power base exists Desire to maintain or establish membership in the group in order for the power base to be effective In sociological terms, this is where deviance might begin. If someone doesn’t value the rules of society they may begin to act out with defiance or deviance. LO: 8-3. Comprehend the difference between informational, utilitarian, and value-expressive reference group influence. III. Reference Group Influence Reference group influence generally falls into one of three categories: informational influence, utilitarian influence, and value-expressive influence. A. Informational Influence The informational influence of groups refers to the ways in which consumers use the behaviors and attitudes of reference groups as information for making their own decisions. Informational influence can be a result of explicit searching behavior. Informational influence is also present even when the consumer is not explicitly searching for product-related information, but rather observing others’ behaviors. Informational influence helps to explain why word-of-mouth communication is so persuasive. The informational influence of a group is particularly strong if the group is seen as being credible. B. Utilitarian Influence The utilitarian influence occurs when consumers conform to group expectations to receive a reward or avoid punishment (this is sometimes referred to as “normative” influence). Utilitarian influence is related to reward power. C. Value-expressive Influence The value-expressive influence of groups refers to the ways in which consumers internalize a group’s values or join groups to express their own closely held values and beliefs. This influence is related to referent power. Consumers may use group membership as a way to project their own self-image. [Instructor PPT Slide 9] D. Value and Reference Groups Reference groups and value are related in various ways. Utilitarian value—from a utilitarian value perspective, joining a campus organization like Students in Free Enterprise, can be quite a valuable experience. In this way, utilitarian value is derived from belonging to the group, and membership becomes a means to a valued end state. Hedonic value—group membership also involves hedonic value perceptions. Value can be derived from simply enjoying group meetings and activities. Here, value is an end in itself. Reference group influences—because consumers learn about products and services from referent others, the information that is obtained from groups directly affects consumer expectations about product benefits such as quality and convenience. E. Reference Group Influence on Product Selection A number of things affect how much influence reference groups have on product selection. First, the situation in which the product is consumed must be considered. “Public” products (for example, a watch) are easily seen by others. “Private” products (for example, socks) usually are not. Second, the extent to which the product is considered to be a necessity or a luxury affects the level of reference group influence. Third, reference group influence differs depending on whether a type of product or a particular brand is being selected. These elements are presented in Exhibit 8.2. LO: 8-4. Understand social media’s role in consumer behavior. IV. Social Media’s Role in Group and Interpersonal Influence Social media and social networking now play big roles in consumer behavior. Consumers get both hedonic and utilitarian value from interacting through social networking websites. Even when the physical proximity of other people is close, many consumers choose to connect through social media rather than face to face. A. Social Media and Consumer Behavior It is important to distinguish among several concepts that pertain to social media and online behavior. Social media refers to media through which communication occurs. Social networks are networks of consumers that are formed based on common interests, associations, or goals. Social networking websites (sometimes referred to as “online social network sites”) are websites that facilitate online social networking. The term apps, or mobile applications, refers to specific types of software that run on various devices like smartphones, tablets, and other computer-based tools. Recent statistics reveal that the majority of social media and internet usage now originates from mobile devices instead of other types of devices. Popularity of Social Networking Websites and Apps Two websites in particular highlight the role that the social media plays in daily life: Facebook and emphasize that the motivation to join social networking groups goes beyond a simple need to communicate. For many consumers, it’s about connection. In this way, social networking helps to fulfill the need to belong. Other sites such as LinkedIn, Classmates, Tagged, Meetup, Friendster, Ning, Bebo, and Ourtime continue to grow in popularity. Value and Social Media Consumers derive both utilitarian and hedonic value from group membership. Here are a few examples: Stylehive.com—Stylehive is a social shopping community where people share fashion ideas and products. Foursquare—Foursquare is a popular social networking application website that centers around geolocation and mobile technologies, not only allows users to inform friends of their location, but also allows users to earn rewards, to leave tips about particular destinations, and to collect coupons for various retailers. Pinterest.com—it is very popular. The site, which allows users to organize and share their interests with others, draws millions of unique visitors each month. Social gaming apps like Bike Race, Ruzzle, and Doodle Jump also allow consumers to enjoy playing games with one another. Social Buying and Couponing Social buying refers to consumer buying behavior that takes place on social networking sites. Social couponing is a closely related topic. Social couponing refers to a type of buying where consumers receive a coupon, or deal, by joining a special social networking website. B. Individual Differences in Susceptibility to Group Influence Although group influence plays an important role in influencing consumer behavior, not all consumers conform to group expectations equally. Individual difference variables play an important role in the extent to which consumers conform to the expectations of others. Three important variables are susceptibility to interpersonal influence, attention to social comparison information, and separateness-connectedness. Susceptibility to Interpersonal Influence One individual difference variable, susceptibility to interpersonal influence, assesses an individual’s need to enhance the image others hold of the individual by acquiring and using products, conforming to the expectations of others, and learning about products by observing others. Attention to Social Comparison Information Another individual difference variable that affects consumer behavior related to group influence is attention to social comparison information (ATSCI). Consumers who score high on this measure are concerned about how other people react to their behavior. Sample items from this scale are presented in Exhibit 8.3. For example, a consumer who has a strong degree of ATSCI might buy an imported beer when he is shopping with others but a less expensive beer when he is shopping alone. Separateness-Connectedness Consumers differ in their feelings of “connectedness” to other consumers. A consumer with a separated self-schema perceives himself as distinct and separate from others, while a consumer with a connected self-schema sees herself as an integral part of a group. Culture plays an important role in how separate or connected consumers feel. Social Presence and Embarrassment In some cases, the presence of others in a specific situation (referred to as social presence) can make one feel uncomfortable. This is especially the case when consumers are buying personal products. [Instructor PPT slides 10–12] Q: Do you shop on social networking sites? If yes, how often do you shop online? Why do you shop online? Do you receive any extra benefits as compared to shopping in stores? A: Students’ answers will vary. They could talk about the advantages of online shopping: convenience, time saved, discounts, ease of making comparisons across brands in terms of price and product features. LO: 8-5. Understand the importance of word-of-mouth in influencing consumer behavior. V. Word-of-Mouth and Consumer Behavior Word-of-mouth (WOM) is information about products, services, and experiences that is transmitted from consumer to consumer. Two types of WOM influences can be distinguished: organic and amplified. According to Word of Mouth Marketing Association (WOMMA), organic WOM occurs naturally when consumers truly enjoy a product or service and they want to share their experiences with others. Amplified WOM occurs when marketers attempt to accelerate WOM in existing customer circles, or when they develop entirely new forums for WOM, like blogs or web pages. A. Positive and Negative WOM The more satisfied consumers are with a company or product, the more likely they are to spread positive WOM. Terms such as brand advocate or brand ambassador describe consumers who believe strongly in a brand and tell others about it. Marketers realize that negative WOM can be extremely damaging. The reason why negative WOM is so damaging to a company is that this form of WOM is especially influential. In general, negative word-of-mouth is more influential than positive word-of-mouth. Q: Do you think negative word-of-mouth can damage a company’s reputation? Ask students to provide examples of companies whose reputation was damaged by negative word-of-mouth. A: Negative word-of-mouth can be extremely damaging to a company’s reputation. Examples may include the failure of Facebook’s Beacon which attempted to transmit news about the user’s purchases to his/her friends. Facebook’s credibility was lost for some time because of the negative word-of-mouth associated with this product. [Instructor PPT Slides 13, 14] Value and Word-of-Mouth Group influence processes are closely related to consumer perceptions of value. Similarly, WOM is affected in large part by the perceived value that consumers receive from products and services. Word-of-Mouth, Social Media, and Social Media Marketing Consumers seek out other online users for advice on all kinds of issues, ranging from what types of products to buy, to input into health, personal, and financial decisions. Consumers also regularly spread WOM through text messaging and tweets. Social media marketing refers to practice of using social media to generate consumer interest in a product, service, or idea. Many companies actively encourage WOM by including discussion boards on their own websites. This also allows companies to assist in the development and maintenance of brand communities. Measuring Online WOM Given the importance of online WOM and how it influences CB, consumer researchers and marketers alike to be able to gather valid information on WOM statistics. Many services offer web traffic analytic and effectiveness services, including Quantcast, Alexa, and Comscore. Some web traffic services allow users to focus on specific topics or trends, as would be the case with WOM. B. Buzz Marketing One marketing tactic that continues to evolve is called buzz marketing. Buzz marketing includes marketing efforts that focus on generating excitement (or buzz) that is spread among market segments. Buzz marketing is one form of what is called guerilla marketing, or the marketing of a product using unconventional means. One buzz marketing tactic that relates directly to WOM is termed viral marketing. Viral marketing uses online technologies to facilitate WOM by having consumers spread marketing messages through their online connections. C. Stealth Marketing Stealth marketing is a guerilla marketing tactic that is similar to buzz marketing; however, a key difference is that with stealth marketing consumers are completely unaware that they are being marketed to (hence the term stealth). The use of stealth marketing techniques, though growing, is considered questionable or unethical by many marketing professional organizations such as WOMMA. The following tactics are generally viewed negatively by many professionals in the industry: Stealth marketing—deceiving consumers about the involvement of marketers in a communication. Shilling—compensating consumers to talk about or promote products without disclosing that they are working for the company. Infiltrating—using fake identities in online discussions to promote a product. Q: Have you ever experienced stealth marketing? Do you consider it ethical? A: Sugging, selling in the guise of research, can be used to explain the concept of stealth marketing. Students’ answers will vary for the second part of the question. D. Opinion Leaders Opinion leaders are consumers who have great influence on the behavior of others relating to product adoption and purchase. Opinion leaders are knowledgeable about specific products or services and have a high level of involvement with those products. Characteristics of opinion leaders depend largely on the type of product under consideration, but in general, opinion leaders are socially active and self-confident. Market Mavens and Surrogate Consumers A market maven is a consumer who spreads information about all types of products and services that are available in the marketplace. The key difference between an opinion leader and a market maven is that the market maven’s influence is not category specific. A surrogate consumer is a consumer who is hired by another to provide input into a purchase decision. Interior decorators, travel consultants, and stock brokers can all be considered surrogate consumers. E. Diffusion Processes The diffusion process refers to the way in which new products are adopted and spread throughout a marketplace. In all, five categories of consumers have been identified. They include: Innovators Early Adopters Early Majority Late Majority Laggards These groups are presented in Exhibit 8.4. LO: 8-6. Comprehend the role of household influence in consumer behavior. VI. Household Decision Making and Consumer Behavior The family unit is an important primary reference group for consumers. Household decision making is the process by which household units choose between alternative courses of action. A. Traditional Family Structure Traditionally, the family household has been viewed as at least two people who are related by blood or marriage and who occupy a housing unit. Other traditional family definitions include the nuclear family and the extended family. The nuclear family consists of a mother, a father, and a set of siblings. The extended family consists of three or more generations of family members, including grandparents, parents, children, and grandchildren. Emerging Trends in Family Structure According to the most recent estimates, 34% of households are defined as nonfamily households (that is, consumers sharing the same living quarters who are not related by blood or marriage). It is widely quoted that nearly 50% of all marriages in the United States end in divorce, but the exact number is really unknown. Divorces have clearly altered the composition of the American family, and they have led to blended families. Also, more American women are living without a husband than with one. As a result of this trend and the high divorce rate, single-parent households have increased. Finally, the meaning of the term nonfamily is open to debate and interpretation. Same-sex marriages are becoming increasingly common. Despite widespread attention to nontraditional households, census data reveal that the largest portion of American consumers still live in something resembling a “traditional” household, consisting of a married couple who either have yet to have children, have children living under the same roof, or have already raised children who no longer live at home. Also, the data reveal that the majority of American children reside in a traditional household, as is shown in Exhibit 8.5. B. Household Life Cycle An important concept in the study of the family unit is the household life cycle (HLC). The HLC represents a segmentation technique that acknowledges that changes in family composition and income alter household demand for products and services. The traditional HLC segments families into a number of groups based on the number of adults present and the age of the head of household. This conceptualization is presented in Exhibit 8.6. Product expenditures vary greatly by stage in the HLC, and at each stage, consumers often try to obtain the most value that they can from their purchases. Q: Students could be asked to explain how their family has an influence over their attitudes, thoughts and behaviors. A: Students’ answers will vary. Some students might belong to nuclear families and some belong to extended families. The amount of influence over an individual’s attitudes, thoughts and behaviors varies from household to household. Boomerang Kids and the Sandwich Generation Boomerang kids are young adults, aged 18 to 34, who graduate from college and move back home with their parents. Some have suggested the term adultolescence to describe this stage. The sandwich generation consists of those consumers who must take care of both their own children and their aging parents. An estimated 20 million consumers in the United States are members of the sandwich generation. C. Household Purchase Roles Five important roles in the household purchase process can be identified, and each member of a household plays at least one of these roles: Influencer—the person in the household who recognizes a need and provides information about a potential purchase to others Gatekeeper—the person who controls information flow into the household (for example, a mother who blocks unwanted email solicitations from her child’s email account) User—the actual user of the product under consideration Decision maker—the person who makes the final decision regarding product purchases or nonpurchase Purchaser—the person who actually buys the product under consideration Gender Roles and Household Decision Making An important concept in gender roles and family decision is sex role orientation (SRO). A family’s SRO influences the ways in which household decisions are reached. Families that have a traditional SRO believe that it is the responsibility of the male head of household to make large purchase decisions, while families with a “modern” SRO believe in a more democratic approach. [Instructor PPT Slide 15] Kid Power The role of children in household decision making is also evolving. Consumers between the ages of 8 and 12 years spend $30 billion dollars per year of their own money and influence another $700 billion per year in total household spending. Consumer socialization is defined as the process through which young consumers develop attitudes and learn skills that help them function in the marketplace. Sometimes these skills are learned at a surprisingly young age, and children have largely begun to seek products that were once considered “too old” for their age segment. This has led to the development of a common marketing acronym, KGOY (Kids Growing Older, Younger). Video material for this chapter is starting on page 24 of the IM Instructor Manual for CB Consumer Behaviour Barry J. Babin, Eric G. Harris 9781305403222, 9781305577244
