Consumer Behaviour Lecture 8 Group Influences PDF

Consumer Behaviour Buying, Having and Being Lecture 8 Group Influences  Learning Outcomes By the end of the lecture, you will be able to understand that: 1. Other people and groups, especially those that possess social power, influence our decisions. 2. Marketers...

Consumer Behaviour Buying, Having and Being Lecture 8 Group Influences  Learning Outcomes By the end of the lecture, you will be able to understand that: 1. Other people and groups, especially those that possess social power, influence our decisions. 2. Marketers often need to understand consumers’ behavior rather than a consumer’s behavior. 3. The decision-making process differs when people choose what to buy on behalf of an organization rather than for personal use. 4. Members of a family unit play different roles and have different amounts of influence when the family makes purchase decisions. Reference Group A reference group is an actual or imaginary individual or group conceived of as having significant relevance upon an individual’s evaluations, aspirations, or behavior. What Are Sources of Power? Social power is the capacity to alter the actions of others. Referent power Information power Legitimate power Expert power Reward power Coercive power Reference Power If a person admires the qualities of a person or a group, he tries to copy the referent’s behaviors (e.g. choice of clothing, cars, leisure activities) Consumers voluntarily modify what they do and buy in order to identify with a referent. Information Power A person possesses information power simply because he/she knows something others would like to know People with information power are able to influence consumer opinion by their access to the knowledge Legitimate Power The power granted by social agreements, such as the authority of police officers or professionals Marketers “borrow” this form of power to influence consumers Expert Power Derived from the knowledge he possesses about a content area Such as professional critics of restaurants, books, movies and cars Reward Power Possessed by a person or group with the means to provide positive reinforcement The reward may be the tangible kind, such as the contestants on Master Chef, or it can be more intangible, such as the approval by the judges of American got talent Coercive Power Influence someone through social or physical intimidation Marketers seldom use this type of power, However, we can see elements of this power based on fear appeal Membership Versus Aspirational Reference Groups Membership reference groups People the consumer actually knows Advertisers use “ordinary people” Aspirational reference groups People the consumer doesn’t know but admire Advertisers use celebrity spokespeople Membership Versus Aspirational Reference Groups Positive Versus Negative Reference Groups Avoidance groups: motivation to distance oneself from other people/groups Antibrand communities: coalesce around a celebrity, store, or brand—but in this case they’re united by their disdain for it Example of Starbucks: https://www.youtube.com/watch?v=QziR7Kt3pg0 Conformity Why do we conform, i.e to behave according to a group's usual standards and expectations? Cultural pressure: different cultures encourage conformity Fear of deviance: group will apply sanctions to punish nonconforming behaviour. Commitment Group unanimity: complete agreement or consensus within a group Interpersonal influence Environmental cues Brand Communities and Consumer Tribes A group of consumers who share a set of social relationships based upon usage or interest in a product Consumer tribes share emotions, moral beliefs, styles of life, and affiliated product Brandfests celebrated by community Ferrari 40th Anniversary Event Hong Kong in 2023 Roles in Collective Decision Making Depending on the decision in question, the choice may include some or all group members and different group members may play different roles. Initiator: bring up the idea or identifies the need Gatekeeper: conduct the information search and controls the flow of information available to the group Influencer: sway the outcome of the decision Buyer: make the purchase User: use the product Organizational Decision Making Organizational buyers purchase goods and services on behalf of companies for use in the process of manufacturing, distribution, or resale. Business-to-business (B2B) marketers: specialize in meeting needs of organizations such as corporations, government agencies, hospitals, and retailers. Organizational Decision Making Involves many people Requires precise, technical specifications Is based on past experience and careful weighing of alternatives May require risky decisions Involves substantial dollar volume Places more emphasis on personal selling What Influences Organizational Buyers? The buyclass theory of purchasing divides organizational buying decisions into 3 types: Level of information required Seriousness of decision Familiarity with purchase Organisational Buying Decisions Buying Extent of Risk Buyer’s Situation Effort Involvement Straight rebuy Habitual Low Automatic reorder decision-making Modified rebuy Limited Low to One or a few problem solving moderate New task Extensive High Many problem solving Household Decisions Families make two types of decisions: Consensual Purchase Decisions: members agree on the desired purchase, differing only in terms of how it will be achieved. E.g. when a family decides to get a dog, and parents are concerned about who will take care of it or what kind of dog they should purchase Accommodative Purchase Decisions: members have different preferences or priorities, and they cannot agree on a purchase to satisfy the minimum expectations of all involved. E.g. Household spending and budgeting Resolving Decision Conflicts in Families Interpersonal need Product involvement and utility Responsibility Power Who Makes Key Decisions in the Family? Autonomic decision: one family member chooses a product Syncretic decision: involve both partners Used for cars, vacations, homes, appliances, furniture, home electronics, interior design, phone service As education increases, so does syncretic decision making The Family Unit Family structure Extended family Nuclear family Voluntarily childless D I N K S (Double income, no kids) Boomerang kids Sandwich generation Family Life Cycle Factors that determine how couples spend money: Whether they have children Whether both spouses work Family life cycle (F L C) concept combines trends in income and family composition with change in demands placed on income. Variables Affecting FLC Age Marital Status Children in the Home Ages of Children in the Home Characteristics of Opinion Leaders Experts Unbiased evaluation Socially active Similar to the consumer Among the first to buy The Market Maven Market mavens are actively involved in transmitting marketplace information of all types They are into shopping and aware of what’s happening in the marketplace They have overall knowledge of how and where to get products The Surrogate Consumer Surrogate consumer: a marketing intermediary hired to provide input into purchase decisions. Interior decorators, stockbrokers, professional shoppers, college consultants Consumer relinquishes control over decision-making functions Marketers should not overlook influence of surrogates! How Do We Find Opinion Leaders? The self-designating method Simply ask individuals whether they consider themselves to be opinion leaders Easy to apply to large group of potential opinion leaders Inflation or unawareness of own importance/influence Key informant method Key informants identify opinion leaders Sociometric Methods Sociometric methods: trace communication patterns among group members Systematic map of group interactions Most precise method of identifying product-information sources, but is very difficult/expensive to implement Network analysis Referral behavior/network, tie strength Bridging function, strength of weak ties Social Networks and Communities Social media changes the way we learn about and select products. Standards of behavior 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 types of social power source of influence, share an example of a time you experienced that form of influence.