ch. 9

• Reference groups are individuals, groups, and institutions that serve as points of reference for shaping values, behaviors, and conduct
• People seek guidance from reference groups in establishing their own values, behaviors, and conduct
• A reference group does not have to be a formal “group” and an institution or organization can also be a reference entity
• Institutions as reference groups hold a more permanent and widespread presence in society like schools, religions, and families
• Referent: any individual, group, or institution that serves as a point of reference for a consumer
• Group: two or more individuals sharing a common purpose, values, interdependency, roles, expectations, and evaluations with the ability to reward or punish

Types of Groups

• Primary groups involve frequent interaction and significant influence on opinions or norms, such as family, work organizations, and church groups
• Secondary groups entail less frequent contact and less binding norms, for example distant relatives and occupational groups
• Formal groups grant membership through formal admission and have written rules for conduct.
• Informal groups have few explicit rules regarding member behavior
• A family functions is an informal group
• American Marketing Information is an example of a formal group
• Choice group involves voluntary membership
• Ascribed or assigned group membership is automatic without choice, like family, relatives, and tribes
• Membership groups recognize individuals as members, even informally, like family, YMCA, professional associations
• Symbolic groups do not grant formal membership and operate on a psychological level where consumers consider themselves members and adopt group norms
• Aspirational groups are those a person expects or desires to join
• Associative groups: people want to associate with these, often peers with similar values/lifestyles
• Dissociative groups: people want to distance themselves from these, finding them unappealing

Conditions for Reference Group Influence

• Reference groups most influence the choice of conspicuous products
• Conspicuousness depends on two dimensions: exclusivity and public visibility
• Exclusivity: ownership isn't exclusive if everyone owns the product/service
• Public visibility: products must be visible and identifiable for reference group approval
• Publicly consumed luxuries: reference groups influence ownership and brand
• Privately consumed luxuries: reference groups influence ownership strongly, but not brand
• Publicly consumed necessities: reference groups do not influence ownership as much, but have a strong brand influence
• Privately consumed necessities: reference groups are unlikely to influence brand or ownership

Forms of Reference Group Influence

• Informational Influence: consumers are influenced by product information from someone with expertise
  • Four types of referents include: professional advisors (doctors, car mechanics), product enthusiasts, market mavens, and other experienced consumers
• Normative Influence: consumer decisions align with others' expectations, driven by the power of a referent to reward or punish behavior
  • Parents and family members, friends and peers, regulatory bodies and public institutions, and work organizations are four types of normative referents
• Identificational Influence: consumers emulate others' behavior and are influenced by the referent's attractiveness as a role model or identity definer
  • Role models such as personal acquaintances and public figures define a self-concept and personal identity
  • Personal acquaintances, cultural heroes, and social archetype groups represent three types of role models involved in identificational influence

Susceptibility to Interpersonal Influence (SIPI)

• SIPI refers to a consumer's motivation to follow others' expectations and advice, rooted in the desire to please or emulate
  • High SIPPI’s, are uncomfortable with opinions that might think of their actions or market choices, they avoid disapproval
  • Low SIPI's, are relatively aware and anxious about other's view of their consumption practices
  • Three factors affecting SIPI: autonomy, risk averseness, and consumption as an identity marker
• Autonomy relates to the desire and confidence to be independent, leading to less susceptibility to others' influence
• Risk averseness: consumers who seek to tread cautiously are more susceptible to others' influence
• Consumption as Identity Marker is the degree to which a person defines themselves by what they consume
• Susceptibility varies: some sensitive to only information, others to norms, and still others to identification
• Information-based susceptibles are performance risk averse
• Norm-based susceptibles seek advice to ensure approval
• Identification-based susceptibles aim to emulate others

Opinion Leaders

• Opinion leadership involves providing information and advice that leads to the recipient accepting a position
  • Opinion leaders must hold an opinion on a topic and recommend action
  • Opinion recipients must follow advice and adopt the recommended action
• Opinion leaders possess expertise on a topic or product and are topic-specific
• Trustworthiness of advice from opinion leaders has no vested interest in promoting a personal position
• Opinion leaders adopt new products first and give service to those who have not yet adopted
• Non-adapters can become opinion leaders if their reasoning involves non-adaptation due to being irrelevant to personal needs
• Characteristics of opinion leaders: high product involvement, recognized as leaders, socially well-integrated, exposed to various media, and hold leadership positions
• Opinion leaders can be identified through observation, self-designation, sociometry, and key-informant methods
• Influentials are more optimistic than average and aware of their future
• Influentials: are the leader indicators what consumers will buy
• E-fluentials: Individuals influential online and offline

Diffusion of Innovations

• Diffusion process is when innovations spread across populations. similar to how diseases spread
• Consumers decide if they adopt innovations quickly or later
• Innovators, early adopters, early majority, late majority, and laggards are all different types of consumers
• Innovators adopt independently, are risk takers, variety seekers, have high product interest, less integrated, individualistic/independent, and upper socioeconomic status
• Early adopters are more independent thinking, are quick to assess, but deliberate rather than rush the decision to try something new
• Early majority deliberate and only adopt with low risk
• Late majority is skeptical, risk-averse, and waits for proof before adopting
• Laggards hesitate and resist new behaviors
• The adoption of an innovation is consumer acceptance for ongoing use
• The rate of adoption varies with some innovations being adopted quickly and others slowly
  • Innovations will be carefully reviewed out of caution because new product categories lack evaluation criteria and their benefits have only been established by experience
• The AIDA Model suggests that in adopting an innovation, consumers go through 4 mental states in a hierarchical order

Two Step vs Multi-Step Flow of Communication Theory

• Two-Step Flow that mass communication goes from opinion leaders to masses

Word of Mouth, Buzz, and Viral Marketing

• Buzz is rapid word-of-mouth of brand stories
• Peer-to-peer marketing aims to get the audience to act/react
• Viral marketing is spreading product acceptance in an exponential manner
• Cyber buzz involves consumers voluntarily forwarding interesting online content
• Reviews sites, Email, Chat rooms, weblogs, Public Blog Sites, Consumer Opinion Websites, Social Media are forms of "word of mouse"