Consumer Behaviour Lecture 8: Group Influences

Consumer Behaviour - Lecture 8: Group Influences

• Group influences significantly impact consumer decisions, particularly those with social power.
• Marketers focus on understanding consumer behaviours, rather than just individual consumer behaviour.
• Decision-making processes differ when purchasing for personal use versus organizational use.
• Family members have distinct roles and varying degrees of influence on family purchase decisions.

Reference Group

• A reference group is a real or imaginary individual or group of people that significantly influences a person's evaluations, aspirations, and behaviour.

Sources of Social Power

• Social power is the ability to alter the actions of others.
• Types of social power include:
  • Referent power
  • Information power
  • Legitimate power
  • Expert power
  • Reward power
  • Coercive power

Reference Power

• If a person admires the qualities of a person or group, they'll be inclined to imitate their behaviour, including clothing choices, car preferences, and leisure activities.
• Consumers actively seek to identify with a reference group they admire by modifying their own conduct and purchases.

Information Power

• Individuals with information power influence decisions because they possess knowledge that others desire.
• Consumers are susceptible to guidance from individuals knowledgeable in their area of interest.

Legitimate Power

• Social agreements often grant authority to professionals or officials.
• Marketers sometimes leverage this authority to sway consumer behaviour.

Expert Power

• Knowledge in a specific area grants individuals expert power.
• Consumers frequently trust professionals (critics, etc.) who offer informed opinions on products like restaurants, books, movies, and automobiles.

Reward Power

• Rewards or punishments wield influence.
• This power stems from the ability to bestow positive reinforcement, be that tangible (e.g., prizes) or intangible (e.g. praise).

Coercive Power

• This form of power involves social or physical intimidation to manoeuvre people.
• Marketers rarely utilise threat-based tactics to influence buyers; instead, negative impacts on choices are subtly conveyed.

Membership & Aspirational Reference Groups

• Membership reference groups consist of people the consumer directly interacts with on a regular basis.
• Advertisers typically feature ordinary people as endorsers.
• Aspirational reference groups are made up of individuals admired but not personally known to the consumer.
• Celebrities frequently appear in ads for products they espouse.

Positive vs. Negative Reference Groups

• Avoidance groups: People or groups that individuals wish to distance themselves from.
• Anti-brand communities: Groups unified by a shared dislike of a specific brand or product owing to shared ideals and tastes.

Conformity

• Conformity compels individuals to follow the conduct standards and expectations prevalent within their social group. Conformity drivers include:
  • Cultural pressures
  • Fear of deviance
  • Commitment
  • Group unanimity
  • Interpersonal influence
  • Environmental cues

Brand Communities & Consumer Tribes

• Consumer tribes and brand communities are groups of people who share common interests (e.g., social connections) in products or services, resulting in the creation of common values, beliefs, lifestyles, and affiliations centred around that particular product.

Roles in Collective Decision Making

• Families or groups often involve multiple people, each acting in a different capacity to make purchasing decisions.
  • Initiator: initiates discussion and identifies needs
  • Gatekeeper: controls the flow of information
  • Influencer: affects the decision-making process through inputs
  • Buyer: the person who purchases the product
  • User: person who utilises the product

Organizational Decision Making

• Organisational buyers purchase goods/services on behalf of businesses for internal use (manufacturing, distribution, etc).
• Business-to-business (B2B) marketers target businesses, corporations, government agencies, hospitals and retailers.
• Organisational purchasing decisions are characterized by:
  • Involving large number of people
  • Detailed precise requirements
  • Risk assessment of decision alternatives
  • High dollar volume
  • Emphasis on personal selling

Influences on Organizational Buyers

• The 'buyclass' theory categorizes purchasing decisions based on factors like:
  • Information required
  • Decision seriousness
  • Familiarity with purchase

Organisational Buying Situations

• Straight rebuy: Routine purchases with minimal decision-making effort.
• Modified rebuy: The buyer is familiar with the product but needs to modify or expand the purchase specifications.
• New task: A new product purchase where considerable decision-making effort is usually needed owing to the complexity of the solution, the involvement of multiple parties or teams and financial investment

Household Decisions

• Consensual decisions: A purchase on which all members agree.
• Accommodative decisions: Purchasing choices that satisfy the needs and preferences of various members.

Resolving Decision Conflicts in Families

• Interpersonal needs
• Product involvement
• Responsibility
• Power

Who Makes Key Decisions in the Family?

• Autonomic decisions: One person makes the purchase choice.
• Syncretic decisions: Both partners' participation is actively engaged

The Family Unit - Structures

• Extended family: A group encompassing various relatives beyond immediate family.
• Nuclear family: Traditional family structure of parents and their children.
• Voluntarily childless: Couples choosing to not have children.
• DINKS (Double income, no kids): Dual-income couples without children.
• Boomerang kids: Adult children returning to live at home.
• Sandwich generation: Individuals caring for multiple generations simultaneously.

Family Life Cycle (FLC)

• FLC considers how income, family composition, and demands impact how families spend money.
• Variables include age, marital status, children in the home and age of children.

Characteristics of Opinion Leaders

• Experts
• Unbiased evaluators
• Socially active
• Similar to consumers
• Among the first buyers

The Market Maven

• Market mavens share marketplace information and possess thorough knowledge of product sourcing.

The Surrogate Consumer

• A hired intermediary provides consumer input into purchasing choices.
  • Interior designers
  • Stockbrokers
  • Shopping professionals

How to Find an Opinion Leader?

• The self-designating method: Simply pose the question to prospective opinion leaders
• Key informant method: Key informants identify opinion leaders

Sociometric Methods

• Tracing communication patterns among group members
• Systematic group interaction maps
• Most precise, but difficult to implement
• Network analysis: Tie strength, bridging function & strength of weak ties

Social Networks & Communities

• Social media changes product discovery and selection
  • Standards of behaviour
  • Member contributions
  • Degree of connectedness

Digital Word-of-Mouth

• Viral marketing
• Haul videos
• Unboxing videos
• Megaphone effect
• Disperferred Marker Effect

Digital Opinion Leaders

• Power users
• Influence impressions
• Mass connectors

Discussion

• Based on the kinds of social power sources of influence, offer a personal example of a time you felt influenced.