Group Influences on Consumer Behavior

Group Influences on Consumer Behavior

• Group: Two or more individuals sharing values, norms, or beliefs with interdependent behaviors.
• Reference Group: A group whose attitudes or values are used by an individual as the basis for his/her current behavior

Classifying Groups: Four Criteria

• Membership
• Strength of social tie
• Type of contact
• Attraction

Consumption Subcultures

• Identifiable group with a hierarchy
• Shared beliefs and values
• Unique jargon and rituals.

Brand Communities

• Non-geographically bound community
• Based on social relationships among brand owners
• Psychological connection with the brand, product, and firm.
• Brand communities add value to product ownership and increase loyalty.
• Consumer's continued ownership and use intensifies brand loyalty.

Online Communities and Social Networks

• Communities interact on the Internet around a shared interest
• Online Social Network Sites: Facebook, Instagram, YouTube, Vimeo, and Twitter.
• When using social media in marketing:
  • Be transparent
  • Be active in the community
  • Take advantage of unique venue capabilities

Types of Reference Group Influence

• Informational Influence: Using group members' behaviors/opinions as information.
• Normative Influence (Utilitarian Influence): Fulfilling expectations to gain reward or avoid punishment
• Identification Influence (Value Expressive): Internalizing group values and norms.

Situational Factors Impacting Reference Groups

• Visible usage
• High product relevance to the group
• Low individual purchase confidence
• Strong commitment to the group
• Item is not a necessity

Brand vs. Product Class Influence

• Public necessities = Shoes, cars (weak product, strong brand importance)
• Public luxuries = Jewelry, club membership (strong product and brand importance)
• Private necessities = Refrigerator, insurance (weak product and brand importance)
• Private luxuries = Hot tub, home theater (strong product, weak brand importance)

Word of Mouth (WOM)

• Generally more effective than advertising when selling movies and clothes

Opinion Leaders

• People considered "go-to's" for specific information
• They filter, interpret, and pass information
• They possess deep product involvement and expertise
• Opinion leadership is category-specific
• Opinion leaders may be opinion seekers in other categories

Mass Communication Information Flows

• Direct flow goes from marketer to relevant market segment
• Multi-step flow first goes from marketer to opinion leader then to market segment

Situations that Encourage WOM and Opinion Leadership

• Individual seeks info from another
• Individual volunteers info

Likelihood of Seeking an Opinion Leader

• Likelihood is high with high product knowledge and purchase involvement
• Likelihood is moderate with low product knowledge and purchase involvement
• Likelihood is low with low product knowledge and high purchase involvement.

Market Maven

• Generalized market influencer
• Provides lots of information about products and shopping.
• The Internet and tech help shape market mavens

Strategies to Encourage WOM and Opinion Leadership

• Advertising, product sampling, retailing/personal selling, and creating buzz.

Online Buzz and WOM Tactics

• Viral Marketing: "Pass-it-along" strategy via electronic communication.
• Blogs: Journals used by people and organizations for running dialogues.
• Twitter: Micro-blogging tool.

Innovation

• An idea, practice, or product perceived as new by a person or group.

Categories of Innovation:

• Continuous Innovation: Minor behavior changes that are unimportant.
• Dynamically Continuous Innovation: Moderate change to important behavior(s) or major change to unimportant one(s)
• Discontinuous Innovation: Major changes in important behavior(s).

Adoption Process

• Awareness, interest, evaluation, trial and adoption.

Extended Decision-Making

• Problem recognition, information search, alternative evaluation, purchase, and post-purchase evaluation.

Factors Affecting Innovation Spread

• Type of group, type of decision, marketing effort, fulfillment of felt need, compatibility, relative advantage, complexity, observability, trialability, perceived risk.

Adopter Categories

• Innovators
• Early adopters
• Early majority
• Late majority
• Laggards

Perception

• A process that includes exposure, attention, and interpretation

Types of Exposure

• Selective Exposure: Marketers risk losing sales and communications because consumer exposure is highly selective. Strategies to Adapt in a DVR and Streaming World:
  • Ad compression
  • Hybrid ads
  • Dynamic ad placement
  • Automatic content recognition (ACR)
  • "Forced" ad exposure
• Voluntary Exposure: Consumers actively seek out marketing for purchase goals, entertainment, and information

Attention

• Influenced by stimulus factors (physical characteristics) and individual factors.
• Stimulus Factors: include size, intensity, attractive visuals.
• Individual Factors: Characteristics which distinguish 1 individual from another.

Nonfocused Attention

• Hemispheric Lateralization explains how different sides of the brain process information (left for rational thought, right for images)
• Subliminal Stimuli: Quick, soft, or masked messages.

Interpretation

• Assigning meaning to stimuli based on cognitive (categorizing) and affective (emotional) processes.
• Aspects of interpretation are relative, subjective, and can be cognitive or affective

Characterizations of Interpretation

• Individual Characteristics: traits, learning, knowledge, and expectations that may lead to expectation bias
• Situational Characteristics: The setting that impacts interpretation
• Stimulus Characteristics: The nature of the stimulus.

Consumer Inferences

• Include quality signals, interpreting images, and being aware of missing information and ethical concerns.

Perception in Marketing Strategy

• Retail strategy
• Brand name development
• Logo development
• Media strategy
• Advertisements
• Package design and labeling

Learning, Memory, and Product Positioning

• Learning: Any change in the content or organization of long-term memory or behavior

Short-Term Memory (STM)

• Working memory
• A small portion of total memory is actively used
• Requires frequent refreshing or elaborate activities to remember

Long-Term Memory (LTM)

• Permanent information storage
• Semantic Memory: General knowledge and feelings of an individual
• Episodic Memory: Memories of a sequence of events
• Schemas: organization of knowledge

Learning Under High and Low Involvement

• Classical Conditioning: Use an established stimulus/response relationship to bring about the learning of a similar response
• Operant Conditioning: Reinforcing the behavior, like a brand purchase, to a positive outcome
• Cognitive Learning: Includes iconic rote learning, vicarious, learning/modeling, analytical reasoning

Forgetting

• Conditioned Learning --> Extinction: desired response decays if not reinforced
• Cognitive Learning --> Retrieval Failure info cannot be retrieved

Increase Learning

• Enhanced importance
• Message involvement
• Mood
• Reinforcement
• Repetition
• Dual coding

Memory Interference

• Difficulty in retrieving specific info due to other related info
• Competitive Advertising makes it harder to recall any given ad/content

How to Decrease Competitive Interference

• Avoid competing advertising, strengthen initial learning, reduce similarity, and provide external retrieval cues

Elements Connected to Brand

• Brand Image refers to an individual's schematic memory of a brand.
• Relates to product attributes, benefits, usage situations, users, and marketer characteristics.

Product Positioning

• A marketer's plan to achieve a defined brand image relative to competitors

Perceptual Mapping

• Provides a technique to measure and develop a products positioning

Product Repositioning

• Deliberately changing the way the market views a product
• May include a change in: performance level, feelings it evokes, situations for use, and the product user.

Brand Equity

• The value consumers assign to a brand, above its functional attributes

Brand Leverage

• (AKA family branding, brand extensions, or umbrella branding) using an existing brand name for new products

Motivation, Personality, and Emotion

• Motivation: the reason for behavior
• Motive: Unobservable inner force stimulating a behavioral response

Motivational Components

• Manifest Motives are known and freely admitted.
• Latent Motives are unknown or reluctantly admitted.

McGuire's Psychological Motives

• Cognitive Preservation Motives: needs for consistency, attribution, categorization, and objectification.
• Cognitive Growth Motives: needs for autonomy, stimulation, teleological need, utilitarian need.
• Affective Preservation Motives: needs for tension reduction, expression, ego defense and reinforcement.
• Affective Growth Motives: needs for assertion, affiliation, identification and modeling.

Maslow's Hierarchy of Needs

• From bottom to top: Physiological --> Safety --> Love/belonging --> Esteem --> Self-actualization.

Involvement

• Motivational state caused by consumer perception that a product is relevant/interesting
• Consumer involvement increases attention, analysis, info search, WOM

Types of Motivational Conflict

• Approach-Approach: Choosing between two positives
• Approach-Avoidance: Choice involving a positive and negative
• Avoidance-Avoidance: Choice involving only negatives

Regulatory Focus

• Promotion-Focused Motives: growth and development, related to aspiration
• Prevention-Focused Motives: desire for safety & security, related to obligation

Personality

• An individual's response across situations.
• Guides behavior in goal accomplishment

Multi-trait Approach

• Five-Factor Model: most common, includes Extroversion, Instability, Agreeableness, Openness to Experience, Conscientiousness

Single Trait Approach

• Consumer Ethnocentrism (avoid foreign products), Need for Cognition, and need for uniqueness

Brand

• Brand Image: consumer thoughts and feelings when they hear about a brand
• Brand Personality: human characteristics associated with a brand

Dimensions of Brand Personality

• Sincerity, excitement, competence, sophistication, ruggedness

Communicate a brands personality through

• Celebrity endorsers, user imagery, and executional factors

Emotions

• Identifiable specific feeling
• Strong and relatively uncontrolled feelings
• Affect behavior, relates to needs, motivation, and personality.

Affect Intensity

• Some people are more emotional than others, personality plays a role

Dimensions of Emotion

• Pleasure, Arousal and Dominance

Emotion Contributes to Product

• Emotion Arousal: Consumers seek products with emotions as a benefit.
• Emotion Reduction - Marketers position products to prevent unpleasant emotions.

Coping in product

• Service encounters, emotional intelligence determines coping

Emotion in Advertising

• Emotion can enhance attention and maintenance
• Emotional messages or ads may be processed more thoroughly
• Can operate via high-involvement processing

Regulatory Focus Theory

• Consumers react differently depending on the salient broad set of motives

Attitudes and Influencing Attitudes

• Attitude: Enduring motivational, emotional, perceptual, and cognitive processes re: some aspect of environment

Attitude Components

• Affective: feelings on specific attributes or overall object.
• Cognitive: Beliefs on specific attributes or overall object.
• Behavioral, intentions with respect to specific attributes.

Factors Account for Inconsistencies

• Lack of Need
• Lack of ability
• Failure to consider relative attitudes
• Attitude ambivalence
• Weakly held beliefs
• Failure to consider interpersonal influence.

Attitude Change Strategies

• Cognitive component
• Affective component.
• Behavioral Component

Elaboration Likelihood Model (ELM)

• Central Route: High involvement, strong attention, considerable elaborative.
• Peripheral Route: Low involvement, limited attention.
• Central attitudes more strengthened and predictive of behaviors

Routes to Persuasion

• Peripheral Cues (PCs): influence persuasion under LOW involvement, not high
• Central Cues (CCs): influence persuasion under HIGH involvement, not low

Cue Relevance

• Attractive model is not central to cars, but relevant to shampoo

Competitive Situations

• PCs can influence persuasion under high if central cues are homogenous or produce trade-offs.

Consumer Resistance to Persuasion

• Consumers resist persuasion attempts, are often skeptical

Communication characteristics

• Source, appeal, and message structure.

Communication Source Characteristics

• Source Credibility has easier persuasion when the target market views the message sources as highly credible.
• Celebrity Sources enhance meaning transfer when marketers match with the actual or desired self-concept.

Communication-Appeal Characteristics

• The "how" the message is communicated.
• Fear, humor, and comparative appeals.
• Value or utilitarian appeals

Communication-Message Structure Characteristics

• The "how" the message is presented
• sided and Two-sided messages, positive and negative framing affect persuasion.

Nonverbal Components

• Affect, cognition, or both can influence attitudes

Self-Concept and Lifestyle

• Self-Concept: Thinking and feeling with reference to himself/herself
• Private Self, how I see self and want to be is what
• Social Self: How others see you and want to be.

Self-Concept examples

• Independent Self-Concept relates to being individualistic
• Interdependent Self-Concept, relates to being obedient

Extended Self

• Possessions, people tend to define in by their possessions

Lifestyle

• How a person lives.
• How one enacts his/her self-concept
• Influences consumption behavior

Psychographics

• Develop qualitative measures of lifestyle
• Includes: attitudes, values, activities/interests, media patterns and usage rates

Lifestyle Schemas

• Examples are VALS and Porsche usage

VALS

• Provides a systematic classification of US consumer
• Breaks the population into 8 subgroups
• Driven by ideals, achievement or self-expression

Geoclusters

• Segments consumers by culture, means, or perspective
• They choose to live amongst their peers and neighborhoods, and exhibit similar product, service and media consumption patterns