UNIT II EXTERNAL FACTORS IN CONSUMER BEHAVIOR PDF

UNIT II EXTERNAL FACTORS IN CONSUMER BEHAVIOR Topics Covered: A. Culture B. Subcultures C. Income and Social Class D. Groups and Social Media Learning Outcomes: By the end of the unit, the students must have: 1. discussed the diversity of culture; 2. described the emergi...

UNIT II EXTERNAL FACTORS IN CONSUMER BEHAVIOR Topics Covered: A. Culture B. Subcultures C. Income and Social Class D. Groups and Social Media Learning Outcomes: By the end of the unit, the students must have: 1. discussed the diversity of culture; 2. described the emerging subcultures; 3. discussed factors of income and social class ; and 4. explained the concept of groups and social media. Introduction This unit provides a comprehensive understanding of the various external elements that influence consumer decisions in today's diverse marketplace. It examines the influence of cultural differences on consumer preferences and behaviors. Additionally, the unit examines the role of subcultures in shaping consumer identities, revealing the potential for unique marketing opportunities. Economic and social class factors are also analyzed to assess how socioeconomic conditions impact purchasing power and consumer choices, aiding in the identification of target markets. Finally, the unit explores the influence of groups and social media, emphasizing how social dynamics, including reference groups and online communities, shape consumer behavior and decision-making processes. A. CULTURE Marketing across cultural boundaries is a difficult and challenging task. Cultures may differ in demographics, language, nonverbal communication, and values. The success of global marketers depends on how well they understand and adapt to these differences. Example is the celebrations of Valentine’s day which is spreading throughout the world but in counties such as India, they are being met with protest. Hindu and Indian belief generally restrict public display of affection. 1 Page 1. The Concept of culture Culture is the complex whole that includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by humans as members of society. Aspects of culture culture is a comprehensive concept. It includes almost everything that influences an individual’s thought processes. Thought processes according to macmilladictionary.com, is the way in which your mind works, or the process of thinking about something. culture is acquired. It does not include inherited responses and predispositions, behaviors, responses or traits that are passed down genetically. However, since much of human behavior is learned rather than innate, culture does affect a wide array of behaviors. the complexity of modern societies is such that culture seldom provides detailed prescriptions for appropriate behavior. Instead, in most industrial societies, culture supplies boundaries within which most individuals think and act. the nature of cultural influences is such that we are seldom aware of them. One behaves, thinks, and feels in a manner consistent with that of other members of the same culture because it seems “natural” or “right” to do so. 2 Page  The boundaries that culture sets on behavior are called norms, which are simply rules that specify or prohibit certain behaviors in specific situations. Norms are derived from cultural values, or widely held beliefs that affirm what is desirable. Violation of cultural norms results in sanctions, or penalties ranging from mild social disapproval to banishment from the group. Thus, the above figure indicates, cultural values give rise to norms and associated sanctions, which in turn influence consumption patterns. The preceding discussion may leave the impression that people are aware of cultural values and norms and that violating any given norm carries a precise and known sanction. This is seldom the case. We tend to “obey” cultural norms without thinking because to do otherwise would seem unnatural. For example, in the Philippines, children are taught how to be respectful by using these simple catchphrases—po and opo, words that end sentences when addressing elders. Although cultures are not static. They typically evolve and change slowly over time. Marketing managers must understand both the existing cultural values and the emerging cultural values of the societies they serve. 2. Variations in cultural values A useful approach to understanding cultural variations in behavior is to understand the values embraced by different cultures. The numerous values that differ across cultures and affect consumption include: 3 Page a. Other-Oriented Values. This shows the relationship between individuals and the society. The relationship influences marketing practices. If the society values collective activity decisions will be taken in a group. It gives rise to following questions which affect consumer behavior: 1. Individual/Collective. Does the culture emphasize and reward individual initiative, or are cooperation with and conformity to a group more highly valued? Eating alone is more prevalent in individualistic cultures such as the United States and Hungary than in collectivist cultures such as Russia and Romania. In services such as health care and hair styling, consumers in Thailand place greater importance on personal relationships with the service provider than do U.S. consumers. These relationships drive loyalty more for consumers in Thailand. Consumers from more collectivist countries tend to be more imitative and less innovative in their purchases than those from individualistic cultures. Thus, ad themes such as “be yourself” and “stand out” are often effective in the United States but generally are not in Japan, Korea, or China. Advertising in collectivist countries such as Korea contains more celebrity appeals than does advertising in individualistic countries such as the United States 2. Youth/Age. To what extent do the primary family activities focus on the needs of the children instead of those of the adults? What role, if any, do children play in family decisions? What role do they play in decisions that primarily affect the child? Are prestige, rank, and important social roles assigned to younger or older members of society? Examples: While American society is clearly youth oriented, many Asian cultures have traditionally valued the wisdom that comes with age. Thus, mature spokespersons would tend to be more successful in these cultures than would younger ones. However, some Asian cultures are becoming increasingly youth oriented with increases in youth-oriented ads designed to target them. Taiwan is very, very youth-oriented, and it is a very hip culture 3. Extended/Limited Family. To what extent does one have a lifelong obligation to numerous family members? The family unit is the basis for virtually all societies. Nonetheless, the definition of the family and the rights and obligations of family members 4 vary widely across cultures. Page  Our families have a lifelong impact on us, both genetically and through our early socialization, no matter what culture we come from. However, cultures differ widely in the obligations one owes to other family members at various stages of life as well as who is considered to be a member of the family. In Mexico, compared with the United States, adolescents are much more likely to seek parental advice or to respond positively to ads with parental figures in the purchase of items ranging from candy to movies to fashion clothing. Young adults living on their own in Thailand, compared with those in the United States, are more likely to continue to be influenced by their parents and family in terms of consumption values and purchases. Because Indian consumers tend to shop in groups and with their families, Biyani (a large discounter similar to Wal-Mart) has U- and C-shaped aisles to provide private corners where families can discuss their purchase decision 4. Masculine/Feminine. Are rank, prestige and important social roles assigned primarily to men? Can a female’s life pattern be predicted at birth with a high degree of accuracy? Does the husband, wife, or both, make important family decisions? Masculine oriented cultures: Japan and Latin America Feminine oriented cultures: Switzerland, New Zealand The roles of women are changing and expanding throughout much of the world. This is creating new opportunities as well as challenges for marketers. For example, the increasing percentage of Japanese women who continue to work after marriage has led to increased demand for time-saving products as well as other products targeted at the working woman. For instance, long-lasting, no-smear lipstick didn’t exist in Japan over a decade ago, but now is a huge market. Targeted at working women, Shiseido’s brand, Reciente Perfect Rouge, featured a popular model racing through her busy day wearing the no-smear lipstick. Masculinity and femininity refers to how a culture ranks on traditionally perceived “masculine” values: assertiveness, materialism, and less concern for others. In masculine-oriented cultures, gender roles are usually crisply defined. Men tend to be more focused on performance, ambition, and material success. They cut tough and independent personas, while women cultivate modesty and quality of life. Cultures in Japan and Latin American are examples of masculine-oriented cultures. In contrast, feminine cultures are thought to emphasize “feminine” values: concern for all, an emphasis on the quality of life, and an emphasis on 5 relationships. In feminine-oriented cultures, both genders swap roles, with Page the focus on quality of life, service, and independence. The Scandinavian  cultures rank as feminine cultures, as do cultures in Switzerland and New Zealand. The United States is actually more moderate, and its score is ranked in the middle between masculine and feminine classifications. For all these factors, it’s important to remember that cultures don’t necessarily fall neatly into one camp or the other. 5. Competitive/Cooperative. Is the path to success found by outdoing other individuals or groups, or is success achieved by forming alliances with other individuals or groups? Does everyone admire a winner? Variations on this value can be seen in the ways different cultures react to comparative advertisements. For example, the United States encourages them, while their use in other cultures can lead to consumer (and even legal) backlash. As one would expect, the more collectivist Japanese have historically found comparative ads to be distasteful, as do the Chinese, although Pepsi found Japanese youth somewhat more receptive if comparisons are done in a frank and funny way. As a rule, comparative ads should be used with care and only after considerable testing. Example of a comparative ad 6. Diversity/Uniformity. Does the culture embrace variation in religious belief, ethnic background, political views and other important behaviours and attitudes? A culture that values diversity not only will accept a wide array of personal behaviors and attitudes but is also likely to welcome variety in terms of food, dress, and other products and services. (e.g. United Kingdom and United States) In contrast, a society valuing uniformity is unlikely to accept a wide array of tastes and product preferences, though such a society may be subject 6 to fads, fashions, and other changes over time. (China and Japan) Page  Collectivist cultures tend to place a strong value on uniformity and conformity, whereas more individualistic cultures tend to value diversity. For example, “in-group” influence (e.g., wanting to see the same movies as everyone else) tends to be higher in China and Japan than in the United Kingdom and the United States. Obviously, however, economic and social changes associated with the youth movement in many collectivist societies mean relatively more acceptance of diversity than has been traditionally found, even if absolute levels trend lower than in their individualistic counterparts b. Environment-Oriented Values prescribed in society’s relationship to its economic and technical as well as physical environment. 1. Cleanliness. To what extent is cleanliness pursued beyond the minimum needed for health? Is cleanliness next to godliness, or is it a rather minor matter? Are homes, offices, and public spaces expected to be clean beyond reasonable health requirements? In the United States, a high value is placed on cleanliness, in fact, people from many other cultures consider Americans to be paranoid on the subject of personal hygiene. In many poorer countries, cleanliness is not valued at a level sufficient to produce a healthy environment If a culture lays too much stress on cleanliness, there is scope for the sale of beauty creams, soaps, deodorants, insecticides, washing powder, vacuum cleaner, etc. In western countries, a lot of emphasis is placed on this aspect and perfumes and deodorants are widely used. Even in large parts of rapidly developing countries such as China and India, where a lack of basic hygiene still causes significant health problems. 2. Performance/Status. Is the culture’s reward system based on performance or on inherited factors such as family or class? Do all people have an equal opportunity economically, socially, and politically at the start of life, or are certain groups given special privileges? Are products and brands valued for their ability to accomplish a task or for the reputation or status of the brand? A status-oriented society is more likely to prefer “quality” or established and prestigious brand names and high-priced items to functionally equivalent items with unknown brand names or lower prices. As a result, compared with that in the United States, advertising in Japan, China, and India tends to involve more appeals to status or wealth Status: India, China, Brazil, Mexico, France, Hong Kong, and Japan are relatively high in their acceptance of power. Performance: Austria, Denmark, New Zealand, Sweden, and the United 7 States are relatively low. Expert sources in ads have a greater impact in a Page high-power distance country than in a low one 3. Tradition/Change. Is tradition valued simply for the sake of tradition? Is change or “progress” an acceptable reason for altering established patterns? Compared with Americans, Korean and Chinese consumers have traditionally been much less comfortable dealing with new situations or ways of thinking This value is reflected in their advertising where, compared to ads in America, those in Britain and China are more likely to emphasize tradition and history. It is important to note once again that change can and does live alongside traditional values. For example, both the Korean and Chinese cultures are now enthusiastically embracing change. In China, “modernness” (often symbolized by a Western name) is an important product attribute, particularly among younger, urban Chinese. A recent study found that advertisers in China segment their advertising depending on audience. For the mainstream audiences targeted by television, traditional appeals are used more often. In magazines targeted at younger Chinese (e.g., Elle, Cosmopolitan, and Sanlian ), modern appeals focusing on technology, fashion, and leisure are used more often 4. Risk taking/Security. Are those who risk their established positions to overcome obstacles or achieve high goals admired more than those who do not? A society that does not admire risk taking is unlikely to develop enough entrepreneurs to achieve economic change and growth. New-product introductions, new channels of distribution, advertising themes, and reliance on brand name are affected by this value 5. Problem solving/Fatalistic. Are people encouraged to overcome all problems, or do they take a “what will be, will be” attitude? Problem solving is “we can do it” orientation (Western Europe and the United States) In the Caribbean, difficult or unmanageable problems are often dismissed with the expression “no problem.” This actually means: “There is a problem, but we don’t know what to do about it—so don’t worry!” Western Europe and the United States tend to fall toward the problem- solving end of the continuum, whereas Mexico and most Middle Eastern countries fall toward the fatalistic end. Fatalists tend to feel they don’t have control over the outcome of events. This has been shown to reduce consumer expectations of quality and decrease the likelihood that consumers make formal complaints when faced with an unsatisfactory purchase 8 6. Nature. Is nature assigned a positive value, or is it viewed as something to be Page overcome, conquered, or tamed?  Americans historically considered nature as something to be overcome or improved. Most northern European countries place a high value on the environment. Packaging and other environmental regulations are stronger in these countries than in America. In fact, a British company recently developed a zero-emissions motorcycle that runs on hydrogen. They worry, however, because it also makes no sound! Would you want a motorcycle that didn’t growl when you revved it up? c. Self-Oriented Values. reflect the objectives and approaches to life that the individual members of society find desirable. 1. Active/Passive. Is physically active approach to life valued more highly than less active orientation? An active approach leads to taking action all the time and passive is doing nothing. Americans are much more prone to engage in physical activities and to take an action-oriented approach to problems. In many countries, women are also taking an active part in all activities. This makes the society a highly active one, where everybody is involved in work. Participation in active exercise varies widely across countries, especially for women. While this obviously limits the market for exercise equipment in certain countries, it also affects advertising themes and formats. For example, an exercise or sports theme for bottled water would not be appropriate in a country such as Japan, where two-thirds of the men and three-fourths of the women exercise less than twice a year. 2. Sensual gratification/Abstinence. Is it acceptable to pamper oneself, to satisfy one’s desires for food, drink, or sex beyond the minimum requirement? Is one who forgoes such gratification considered virtuous or strange? Muslim cultures are extremely conservative on this value as are many Asian cultures, including Hong Kong and India. A full 37 percent of Saudis indicated modesty is important, compared with 9 percent in the United States. Perhaps not surprisingly, compared with U.S. and Australian ads, ads in Hong Kong and India contain fewer sex appeals. And China has put legal restrictions on the use of sex appeals in ads. Consider the following: In U.S. cigarette advertisements, it is not uncommon to find sensual models, males and females holding hands, and couples in intimate situations. In the eastern culture of India, such open display of intimacy between opposite sexes is not socially acceptable. In Arab countries, advertisements, packaging, and products must carefully 9 conform to Muslim standards. Polaroid’s instant cameras gained rapid Page acceptance because they allowed Arab men to photograph their wives  and daughters without fear that a stranger in a film laboratory would see the women unveiled. In contrast, Brazilian and European advertisements contain nudity and blatant (by U.S. standards) appeals to sensual gratification. 3. Material/Nonmaterial. Is the accumulation of material wealth a positive good in its own right? Does material wealth bring more status than family ties, knowledge, or other activities? There are two types of materialism. I. Instrumental materialism is the acquisition of things to enable one to do something. Ex cars are used for transportation, computers, washing machines, microwave ovens, etc. II. Terminal materialism is the acquisition of items for the sake of owning the item itself. Ex. Jewelries, paintings, antique collections In many societies, money is given more importance, and a lot of emphasis is on being material minded. While in many societies things like comfort, leisure and relationships get precedence over being materialistic. Cultural differences play an important role in this type of materialism. Instrumental materialism is common in the United States of America, where Japanese advertisements are mostly dominating terminal materialism. 4. Hard work/Leisure. Is a person who works harder than economically necessary admired more than one who does not? Hours worked per week are highest in Hong Kong (48.6 hours) and Mexico (41.6) and lowest in France (34.1) and Canada (34.8). This has marketing implications on labour saving products and instant foods. Some societies value hard work and consider it as a fuller life. Others adopt labour saving devices and instant foods to have more leisure time at their disposal. 5. Postponed gratification/Immediate gratification. Are people encouraged to “save for the rainy day” or “to live for today”? Some countries like The Netherlands and Germany consider buying against credit cards as living beyond one’s means, whereas credit cards are very popular in America and other countries having a different cultural orientation, some prefer cash to debt. Some societies save for a morrow, others enjoy the present and spend lavishly 6. Religious/Secular. To what extent are behaviors and attitudes based on the rules 10 specified by religious doctrine? The United States is relatively secular. Page  Many Islamic cultures as well as some Catholic cultures are much more religiously oriented. Assignment We have examined a number of marketing implications of values and changes in these values. It is critical that all aspects of the firm’s marketing mix be consistent with the value system of its target market. The following are marketing responses to evolving values in this modern period: 1. green marketing 2. cause-related marketing 3. marketing to gay and lesbian consumers 4. gender-based marketing Research about these marketing activities and how the concept is used by companies. Cite examples. Cultural Variations in Nonverbal Communications Differences in verbal communication systems (languages) are immediately obvious to anyone entering a foreign culture. An American traveling in Britain or Australia will be able to communicate, but differences in pronunciation, timing, and meaning will still occur. For example, Dogpile, a US-based meta search engine (www.dogpile.com), changed its name in Europe to WebFetch after realizing that in the United Kingdom “pile” refers to hemorrhoids or the result of a dog relieving itself! Attempts to translate marketing communications from one language to another can result in ineffective communications. The problems of literal translations and slang expressions are compounded by symbolic meanings associated with words, the absence of some words from various languages, and the difficulty of pronouncing certain words: In Japan, a global soft-drink company wanted to introduce a product with the attribute “creaminess.” However, research showed that there was not a corresponding word in Japan for this attribute, so the company had to find something comparable, which turned out to be “milk feel.” Nonetheless, verbal language translations generally do not present major problems as long as we are careful. What many of us fail to recognize, however, is that each culture also has nonverbal communication systems or languages that, like verbal languages, are specific to each culture. 11 Page  Translation Problems in International Marketing Colgate’s Cue toothpaste had problems in France, as cue is a crude term for “butt” in French. Sunbeam attempted to enter the German market with a mist-producing curling iron named the Mist-Stick. Unfortunately, mist translates as “dung” or “manure” in German. Parker Pen mistook embarazar (to impregnate) to mean “to embarrass” and ran an ad in Mexico stating “it won’t leak in your pocket and make you pregnant.” Pet milk encountered difficulties in French-speaking countries where pet means, among other things, “to break wind.” Kellogg’s Bran Buds translates to “burned farmer” in Swedish. 1. Time. The meaning of time varies between cultures in two major ways: Monochronic. View time as inescapable, linear and fixed in nature. Most Americans, Canadians, Western Europeans, and Australians tend to view time as inescapable, linear, and fixed in nature. It is a road reaching into the future with distinct, separate sections (hours, days, weeks, and so on). Time is seen almost as a physical object; we can schedule it, waste it, lose it, and so forth. Believing that a person does one thing at a time, we have a strong orientation toward the present and the short-term future. Polychronic. View time as being less discrete and less subject to scheduling Most Latin Americans, Asians, and Indians tend to view time as being less discrete and less subject to scheduling. They view simultaneous involvement in many activities as natural. People and relationships take priority over schedules, and activities occur at their own pace rather than according to a predetermined timetable. Such cultures have an orientation toward the present and the past. 12 Page Meanings in the use of time Specific uses of time have varying meanings in different culture. Time is money and a symbol of status and responsibility. To be kept waiting is offensive in monochronic cultures, it is not in polychronic cultures. Promptness is considered very important in America and Japan. Furthermore, promptness is defined as being on time for appointments, whether you are the person making the call or the person receiving the caller. 2. Space. Overall use and meanings assigned to space vary widely among different cultures. Office space in corporations generally is allocated according to rank or prestige rather than need. Personal space. It is the nearest that others can come to you in various situations without your feeling uncomfortable. In the United States, normal business conversations occur at distances of 3 to 5 feet and highly personal business from 18 inches to 3 feet. In parts of northern Europe, the distances are slightly longer; in most of Latin America, they are substantially shorter. Thus, the North American considers the Latin American to be pushy and aggressive. The Latin American, in turn, considers the North American to be cold, aloof, and snobbish. 3. Symbols. Colors, animals, shapes, numbers, and music have varying meanings across cultures. Failure to recognize the meaning assigned to a symbol can cause serious problems! When seeing a baby wearing a pink outfit would most likely assume the child to be female. If the outfit were blue, the assumed gender would be male. AT&T had to change its “thumbs-up” ads in Russia and Poland, where showing the palm of the hand in this manner has an offensive meaning. The change 13 was simple. The thumbs-up sign was given showing the back of the hand. Page The Meaning of Numbers, Colors, and Other White Symbol for mourning or death in the Far East; purity in the United States. Purple Associated with death in many Latin American countries. Blue Connotation of femininity in Holland; masculinity in Sweden, United States. Red Unlucky or negative in Chad, Nigeria, Germany; positive in Denmark, Rumania, Argentina. Yellow flowers Sign of death in Mexico; infidelity in France. White lilies Suggestion of death in England. The number 7 Unlucky number in Ghana, Kenya, Singapore; lucky in Morocco, India, the Czech Republic, Nicaragua, United States. Triangle Negative in Hong Kong, Korea, Taiwan; positive in Colombia. Owl Wisdom in the United States; bad luck in India. Deer Speed, grace in United States; homosexuality in Brazil. 4. Relationships. How quickly and easily do cultures form relationships and make friends? Americans tend to form relationships and friends quickly and easily. Chinese relationships are much more complex and characterized by guanxi. GUANXI is literally translated as personal connections/relationships on which an individual can draw to secure resources or advantages when doing business as well as in the course of social life. In many other parts of the world, relationships and friendships are formed slowly and carefully because they imply deep and lasting obligations. To most Asians and Latin Americans, good personal relationships and feelings are all that really matter in a long-term agreement. After all, the written word is less important than personal ties. Once personal trust has been established, cooperation increases. The social contacts developed between the parties are often far more significant than the technical specifications and the price. In many countries the heart of the matter, the major point of the negotiations, is getting to know the people involved. Americans negotiate a contract; the Japanese negotiate a relationship. In many cultures, the written word is used simply to satisfy legalities. In their eyes, emotion and personal relations are more important than cold facts. 5. Agreements. How does a culture ensure business obligations are honored? How are disagreements resolved? Some cultures rely on a legal system; others rely on relationships, friendships, etc. Americans rely on an extensive and, generally, highly efficient legal 14 system for ensuring that business obligations are honored and for resolving disagreements. Many other cultures have not developed such a system and rely Page instead on relationships, friendship, and kinship; local moral principles; or  informal customs to guide business conduct. For example, the Chinese “tend to pay more attention to relationships than contracts.” Under the American system, we would examine a proposed contract closely. Under the Chinese system, we would examine the character of a potential trading partner closely. Relationships are everything in China, more so than in the United States, which is more focused on business. The Chinese want to know and understand you before they buy from you. Americans generally assume that, in almost all instances, prices are uniform for all buyers, related to the service rendered, and reasonably close to the going rate. We order many products such as taxi rides without inquiring in advance about the cost. In many Latin American, Asian, and Middle East countries, the procedure is different. Virtually all prices are negotiated prior to the sale, including those for industrial products. 6. Things. The cultural meaning of things leads to purchase patterns that one would not otherwise predict. The differing meanings that cultures attach to things, including products, make gift-giving a particularly difficult task. The business and social situations that call for a gift, and the items that are appropriate gifts, vary widely. For example, giving a Chinese business customer or distributor a nice desk clock—a common gift in many countries—would be inappropriate. Why? In China, the word for clock is similar to the word for funeral, making clocks inappropriate gifts. When does receipt of a gift “require” a gift in return? In China this depends on the closeness of the relationship between the parties— the closer the relationship, the less a return gift is required The business and social situations that call for a gift, and the items that are appropriate gifts, vary widely. For example, a gift of cutlery is generally inappropriate in Russia, Japan, Taiwan, and Germany. In Japan, small gifts are required in many business situations, yet in China they are less appropriate. In China, gifts should be presented privately, but in Arab countries, they should be given in front of others. 7. Etiquette. The generally accepted ways of behaving in social situations. Behaviors considered rude or obnoxious in one culture may be quite acceptable in another! Normal voice tone, pitch, and speed of speech differ between cultures and languages, as do the use of gestures. Assume that an American is preparing a commercial that shows people eating an evening meal, with one person about to take a bite of food from a fork. The person will have the fork in the right hand, and the left hand will be out of 15 sight under the table. To an American audience this will seem natural. However, in many European cultures, a well-mannered individual would have the fork in Page the left hand and the right hand on the table.  The common and acceptable American habit, for males, of crossing one’s legs while sitting, such that the sole of a shoe shows, is extremely insulting in many Eastern cultures. In these cultures, the sole of the foot or shoe should never be exposed to view. Westerners often mistake the seemingly loud, volatile speech of some Asian cultures as signifying anger or emotional distress (which it would if it were being used by a Westerner) when it is normal speech for the occasion. As American trade with Japan increases, we continue to learn more of the subtle aspects of Japanese business etiquette. For example, a Japanese executive will seldom say “no” directly during negotiations; doing so would be considered impolite. Instead, he might say, “That will be very difficult,” which would mean “no.” A Japanese responding “yes” to a request often means, “Yes, I understand the request,” not “Yes, I agree to the request.” Many Japanese find the American tendency to look straight into another’s eyes when talking to be aggressive and rude. Another aspect of Japanese business etiquette is meishi, epitomized by “A man without a meishi has no identity in Japan.” The exchange of meishi is the most basic of social rituals in a nation where social ritual matters very much. The act of exchanging meishi is weighted with meaning. Once the social minuet is completed, the two know where they stand in relation to each other and their respective statures within the hierarchy of corporate or government bureaucracy. What is “meishi”? It is the exchange of business cards when two people meet! A fairly common, simple activity in America, it is an essential, complex social exchange in Japan. Activity 1 1. What are the marketing implications of the differences in the masculine/feminine orientation across countries? 2. What are the major ethical issues in introducing prepared foods such as fast foods to developing countries like the Philippines? 3. How can developing countries keep their cultures from being overly Westernized or Americanized? The Changing Society This topic describes how changes in values over time influence consumption patterns within cultures. 1. Changing Cultural Values 16 Cultural values are widely held beliefs that affirm what is desirable. Observable shifts in behavior, including consumption behavior, often reflect Page underlying shifts in cultural values.  Therefore, Traditional, Current,itand is necessary EmergingtoFilipino understand Valuesthe underlying value shifts in order to understand current and future to consumer behavior. beliefs of Filipinos that still 1. Irrationalism. This refers a certain superstitious practiced up to now. Filipinos common irrationalism is shown in fatalism or the ‘bahala na’ syndrome. We always looked upon what fortune can make us. 2. Social Belongingness. Filipinos want to be accepted by the group or to the community, so, sometimes Filipinos are doing things just to please somebody. 3. Close family ties. The family is the most important in our life. We are totally dependent with our family. We are doing things for the common good or for the benefits of the family. 4. Sense of debt gratitude. In Filipino term, it is “utang na loob”. We are obliged to do something in return for what others do for us. 5. Emphasis on authority. We give more emphasis to what the person is. The status of the person depends on his wealth and acquisition of land. 6. Personal improvement. Education has played a major role in obtaining success that’s why parents would sacrifice themselves just to send their children to school. In return, older brother and sister would help their younger ones to go to school and would not get married until they help their parents. Filipinos are becoming wiser, but not much economic improvement 1. more Filipinos have become promotion hunters 2. Filipino consumers remained loyal to their favorite brands 3. Filipinos prioritized health and beauty products despite their low incomes 4. Convenience has also become a valued consideration for Filipinos 5. When Filipino women wash clothes, they use detergent bars or powder. Although women today in other countries use liquid detergents, Filipino women continue to use bar or powder soaps. They enjoy washing clothes in basins and making “kuskus” while listening to the radio in the morning, getting informed about the latest news in the country and “whiling” away the time till late in the morning. 6. Young Filipinos, especially women have a unique product loyalty called “hiyang”. Once they are satisfied with a product, patronage can be assured. Product switching is not often. 7. Filipino women get carried away with advertisements. In their desire to have physically strong, tall and healthy children who are intelligent and gifted, they readily buy milk and margarine brands that make such claims. 8. Eating outside of homes create a certain “status”. Filipino families like going out and being seen dining in fine restaurants. For the middle-income families, eating in fast foods is likewise a status symbol. 9. Filipinos generally love to wear good clothes, spend more money on shoes, and go to salons. They tend to prioritize good looks than the need to eat 17 nutritious meals. Page 10. Filipinos give very great importance on education. Some parents sell their carabaos and loan their jewelry and pieces of land to have money for tuition fees. B. Subcultures Within a culture there exists more homogeneous subgroups. These groups have their own values, customs, traditions and other ways of behaviour that are peculiar to a particular group within a culture. A subculture is a segment of a larger culture whose members share distinguishing values and patterns of behavior. Subcultures exist because the dominant culture does not meet the needs or interests of members of the particular subculture. Therefore, these groups form to engage in lifestyles or activities that meet the needs of their interests or shared experiences related to a particular identity (Lennon, Johnson, & Rudd, 2017, p. 292). Types of Subculture a. Ethnic subcultures are those subcultures whose members’ unique shared behaviors are based on a common racial, language, or nationality background. Philippine Ethnic Subcultures (Tagalog 28.1%, Cebuano 13.1%, Ilocano 9%, Bisaya/Binisaya 7.6%, Hiligaynon Ilonggo 7.5%, Bikol 6%, Waray 3.4%, other 25.3% (2000 census) b. Religious subcultures. There are a number of religious subcultures in the Philippines. Catholic 82.9% (Roman Catholic 80.9%, Aglipayan 2%), Muslim 5%, Evangelical 2.8%, Iglesia ni Kristo 2.3%, other Christian 4.5%, other 1.8%, unspecified 0.6%, none 0.1% (2000 census) Religion is important, and directly influences the behaviors of, many Filipinos. c. Regional subcultures arise as a result of the following: - climate conditions - natural environment and resources - characteristics of the various immigrant groups that - have settled in each region, and - signification social and political events. The Philippines is divided into 17 regions. d. Other Philippine subcultures 18 Page  JEJEMON is described as one of the “new breed of hipsters who have developed not only their own language and written text but also their own sub-culture and fashion. The language of JEJEMONs is called jejenese derived from English, Filipino and their code-switched variant Taglish. Examples: “3ow ph0w, mUsZtAh nA? traslated as “Hello po, kamusta na? aQcKuHh – means me/ako yuHh – means you jAjaja – garbled words conveying lauhther EMO an abbreviation of the word “emotional”. Are the teenagers with black nails projecting with black tees, skeeny jeans along with converse shoes and long stylish diagonal bangs covering the most part of their face and they are often seen in rock concerts. They prefer those products that can make them what we called “astig”. They need dark colors and emotionalize things. HIP HOP. Filipinos are fond of dancing because they can express what they feel. Hip Hoppers usually wear loose blouses or shirts. C. Income and Social Class Income is defined as money received for work or through investment on a regular basis. It is the sum of all wages, salaries, profits, interest payments, rents and other forms of earnings. There is a positive relationship between income and spending. Consumer demand for goods and services depends on both our ability and our willingness to buy. Although demand for necessities tends to be stable over time, we postpone or eliminate other expenditures if we don’t feel that now is a good time to spend money. Discretionary income is the money available to a household over and above what it requires to have a comfortable standard of living. How much money do people need to be “comfortable?” In the Philippines, the amount needed to be considered "comfortable" can vary significantly based on several factors, including location, lifestyle, family size, and personal financial goals. 1. Urban Areas: In major cities like Metro Manila, a comfortable lifestyle typically requires a higher income due to the cost of living. A monthly income of around ₱50,000 to ₱100,000 (approximately 1,000to2,000) is often cited as a threshold for a comfortable 19 lifestyle for a small family. This amount would cover housing, utilities, food, transportation, education, and some discretionary spending. Page  2. Rural Areas: In less urbanized regions, the cost of living is generally lower. A monthly income of around ₱30,000 to ₱60,000 (approximately 600to1,200) may be sufficient for a comfortable lifestyle, allowing for basic needs and some savings. 3. Family Size: The number of dependents also plays a crucial role. Larger families will require more income to maintain a comfortable standard of living, while single individuals or couples may need less. 4. Lifestyle Choices: Personal preferences, such as dining out, entertainment, and travel, can significantly affect the amount needed to feel comfortable. Those who prioritize a more luxurious lifestyle will need a higher income. 5. Savings and Investments: A comfortable lifestyle also includes the ability to save for emergencies, education, and retirement. Financial advisors often recommend saving at least 20% of one’s income. The level of income determines what kind of products someone regularly purchases. A buyer with higher disposable income will spend more on luxury or lifestyle items. People with higher disposable income also spend more on vacations and tours. Customer service and after- sales support also become important factors when it comes to big ticket purchases. Income and social class are intricately connected, as income serves as a primary determinant of an individual's social class, influencing their lifestyle, purchasing power, and consumer behavior. Higher income levels typically afford individuals access to a wider range of goods and services, enabling them to engage in luxury spending and leisure activities that reflect their elevated social status. Conversely, those in lower income brackets often prioritize affordability and practicality in their purchasing decisions, which shapes their consumption patterns and brand preferences. This relationship underscores the importance for marketers to understand the nuances of income and social class, as they significantly impact consumer choices and market segmentation strategies Social rank is one’s position relative to others on one or more dimensions valued by society, also referred to as social class and social standing. A social class system is a hierarchical division of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles. How do we obtain social standing? Social standing is a result of characteristics you possess that others in the society desire, ex. Education, occupation, income, ownership of property, heritage (parents status). Social status is largely derived from demographics; that is, one’s income, education, and occupation go a long way toward determining one's social class or status. 20 Social class significantly influences consumer purchasing decisions. Individuals from Page different social classes have distinct tastes, preferences, and buying behaviors. For example, consumers belonging to the upper class may seek luxury products that showcase their status, while those from the working class may prioritize affordability and functionality. Social class also affects individuals’ lifestyle choices and consumption patterns. Different social classes have unique values, interests, and activities, which translate into their consumption behaviors. For instance, the upper class may engage in high-end leisure activities and luxury travel, while the working class might focus more on practical and cost-effective options. Consumer behavior is heavily influenced by social class when it comes to brand preferences and loyalty. Individuals from specific social classes often align themselves with certain brands that resonate with their values, aspirations, and self-perception. Brand loyalty is fostered when brands successfully cater to the needs and aspirations of a particular social class. Characteristics of Social Classes: 1. Persons within a given social class tend to behave more alike 2. Social class is hierarchical 3. Social class is not measured by a single variable but is measured as a weighted function of one‘s occupation, income, wealth, education, status, prestige, etc. 4. Social class is continuous rather than concrete, with individuals able to move into a higher social class or drop into a lower class. Social Standing is Derived and Influences Behavior 1. Upper Class This class divides into two groups: lower‐upper and upper‐upper. The lower‐upper class includes those with “new money,” or money made from investments, business ventures, and so forth e.g. Manny Villar. The upper‐upper class includes those aristocratic and “high‐society” families with “old money” who have been rich for generations. These extremely wealthy people live off the income from their inherited riches. The upper‐upper class is more prestigious than the lower‐upper class e.g. Coquangco. Wherever their money comes from, both segments of the upper class are exceptionally rich. Both groups have more money than they could possibly spend, which leaves them with much leisure time for cultivating a variety of interests. They live in exclusive neighborhoods, gather at expensive social clubs, and send their children to the finest schools. As might be expected, they also exercise a great deal of influence and power both nationally and globally. 2. Middle Class The middle class are the “sandwich” class. These white collar workers have more 21 money than those below them on the “social ladder,” but less than those above them. They divide into two levels according to wealth, education, and prestige. The lower Page middle class is often made up of less educated people with lower incomes, such as  managers, small business owners, teachers, and secretaries. The upper middle class is often made up of highly educated business and professional people with high incomes, such as doctors, lawyers, stockbrokers, and CEOs. 3. Working Class The working class are those minimally educated people who engage in “manual labor” with little or no prestige. Unskilled workers in the class—dishwashers, cashiers, maids, and waitresses—usually are underpaid and have no opportunity for career advancement. They are often called the working poor. Skilled workers in this class— carpenters, plumbers, and electricians—are often called blue collar workers. They may make more money than workers in the middle class—secretaries, teachers, and computer technicians; however, their jobs are usually more physically taxing, and in some cases quite dangerous. 4. The lower class The lower class is typified by poverty, homelessness, and unemployment. People of this class, few of whom have finished high school, suffer from lack of medical care, adequate housing and food, decent clothing, safety, and vocational training. The media often stigmatize the lower class as “the underclass,” inaccurately characterizing poor people as welfare mothers who abuse the system by having more and more babies, welfare fathers who are able to work but do not, drug abusers, criminals, and societal “trash.” Types of Social Class in the Philippines 22 Page Activity 2 How should marketers promote products and services to working women? What appeals should they use? Explain D. Groups and Social Media Groups and social media play a pivotal role in shaping consumer behavior in today's interconnected world. As individuals increasingly turn to online platforms for information, inspiration, and social interaction, the influence of reference groups—whether they are friends, family, or online communities—has grown significantly. Social media serves as a dynamic space where these groups can share opinions, experiences, and recommendations, thereby impacting purchasing decisions and brand perceptions. The interdependence of group dynamics and social media creates a unique environment where consumers are not only influenced by their immediate social circles but also by broader online communities that reflect shared values and interests. Understanding this interplay is essential for marketers aiming to effectively engage with their target audiences and leverage the power of social influence in their strategies Groups A group is defined as two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships with one another such that their behaviors are interdependent. When you decided what to wear to the last party you attended, you probably based your decision in part on the anticipated responses of the other individuals at the party. Likewise, your behavior at an anniversary celebration for your grandparents probably would differ from your behavior at a graduation party for a close friend. These behaviors are responses to group influences and expectations. Humans are social animals. We belong to groups, try to please others, and look to others’ behavior for clues about what we should do in public settings. In fact, our desire to “fit in” or to identify with desirable individuals or groups is the primary motivation for many of our consumption behaviors. We may go to great lengths to please the members of a group whose acceptance we desire. Social identity theory argues that each of us has several “selves” that relate to groups. These linkages are so important that we think of ourselves not just as “I,” but also as “we.” In addition, we favor others that we feel share the same identity—even if that 23 identity is superficial and virtually meaningless. Page Social Power Why are groups so persuasive? The answer lies in the potential power they carry over us. Social power describes “the capacity to alter the actions of others.” To the degree to which you are able to make someone else do something, regardless of whether that person does it willingly, you have power over that person. Referent power—Referent power is a form of social influence that stems from an individual's ability to attract others and inspire loyalty or admiration. This type of power is often associated with personal traits such as charisma, likability, and the ability to connect with others on an emotional level. Individuals who possess referent power can influence the attitudes and behaviors of others simply because they are admired or respected. Information power—A person possesses information power simply because he or she knows something others would like to know. People with information power are able to influence consumer opinion by virtue of their access to knowledge that provides some kind of competitive advantage. For instance, a consumer who has researched a product extensively and shared their findings with peers can exert information power by guiding their friends' purchasing decisions based on the insights they provide. Similarly, brands that effectively communicate detailed product information, benefits, and comparisons can leverage information power to influence consumer perceptions and choices. This type of power highlights the importance of credible and relevant information in shaping consumer behavior and decision-making processes Legitimate power—Sometimes we grant power by virtue of social agreements, such as the authority we give to police officers, soldiers, and yes, even professors. The legitimate power a uniform confers has authority in consumer contexts, including teaching hospitals where medical students don white coats to enhance their standing with patients. Marketers “borrow” this form of power to influence consumers. For example, an ad that shows a model who wears a white doctor’s coat adds an aura of legitimacy or authority to the presentation of the product (“I’m not a doctor, but I play one on TV”). Expert power—It is a form of influence that arises from an individual's specialized knowledge, skills, or expertise in a particular area. This type of power is based on the perception that the person possesses valuable information or capabilities that others do not, making them a credible source of guidance or advice. For example, a financial advisor has expert power in matters of investment and financial planning, leading clients to trust their recommendations. In the context of consumer behavior, expert power can significantly impact purchasing decisions, as consumers are more likely to follow the advice of individuals or entities perceived as knowledgeable in a specific field, such as product reviews from industry experts or endorsements from professionals Reward power—A person or group with the means to provide positive reinforcement has reward power. It is a form of influence that is based on the ability of an individual or group to provide positive incentives or rewards to others in order to encourage specific behaviors or actions. This type of power relies on the perception that compliance or 24 conformity will lead to desirable outcomes, such as praise, recognition, financial benefits, Page or other forms of compensation. In the context of consumer behavior, reward power can be seen in various scenarios, such as loyalty programs offered by brands that incentivize  repeat purchases through discounts, points, or exclusive offers. For example, a company may use reward power to influence customer loyalty by providing rewards for frequent purchases, thereby encouraging consumers to choose their brand over competitors. Additionally, within social groups, individuals may exert reward power by offering social approval or acceptance in exchange for conformity to group norms or behaviors. This dynamic underscores the role of incentives in shaping consumer choices and fostering brand loyalty. Coercive power—is a form of influence that is based on the ability to impose negative consequences or punishments on others to compel compliance or conformity. This type of power relies on the fear of adverse outcomes, such as reprimands, social ostracism, or other forms of penalties, to control behavior. In the context of consumer behavior, coercive power can manifest in various ways. For example, a brand might exert coercive power by threatening to withdraw benefits or rewards from customers who do not adhere to certain behaviors, such as participating in a loyalty program or following specific usage guidelines. Additionally, within social groups, individuals may use coercive power by leveraging social pressure or the threat of exclusion to influence others' choices and behaviors. This type of power highlights the darker side of influence, where compliance is achieved not through positive incentives but rather through the fear of negative repercussions. It is important to note that while coercive power can be effective in the short term, it may lead to resentment and resistance in the long run, potentially damaging relationships and brand loyalty Reference Group A reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his/her current behavior. It is an actual or imaginary individual or group that significantly influences an individual’s evaluations, aspirations, or behavior. A membership reference group consists of people we actually know. It is a group to which an individual belongs or identifies with, and whose norms, values, and behaviors influence the individual's attitudes and actions. Membership reference groups are characterized by direct or indirect interactions among their members, and they can significantly shape an individual's consumer behavior and decision-making processes. There are two main types of membership reference groups: 1. Primary Groups: These are small, close-knit groups such as family and close friends, where members have frequent and intimate interactions. The influence of primary groups is often strong due to the emotional ties and shared experiences among members. 2. Secondary Groups: These groups are larger and more formal, such as professional associations or community organizations. Interactions in secondary groups are less 25 frequent and may not involve the same level of emotional connection as primary groups, but they can still exert considerable influence on individual behavior. Page  In contrast although we don’t know those in an aspirational reference group, we admire them anyway. These people are likely to be successful businesspeople, athletes, performers, or anyone else who rocks our world. Not surprisingly, many marketing communications that specifically adopt a reference group appeal concentrate on highly visible celebrities; they link these people to brands so that the products they use or endorse also take on this aspirational quality. Reference groups impact our buying decisions both positively and negatively. In most cases, we model our behavior to be in line with what we think the group expects us to do. Sometimes, however, we also deliberately do the opposite if we want to distance ourselves from avoidance groups. An avoidance group, also known as a dissociative reference group, is a group that individuals do not want to be associated with or identified as members of. These groups exert influence by serving as a negative reference point, shaping individuals' behaviors and choices through the desire to distance themselves from the group's characteristics, values, or behaviors. You may carefully study the dress or mannerisms of a group you dislike (e.g., “nerds,” “druggies,” or “preppies”) and scrupulously avoid buying anything that might identify you with that group. Rebellious adolescents do the opposite of what their parents desire to make a statement about their independence. Conformity It refers to a change in beliefs or behaviors resulting from real or perceived pressure from a group. Societies rely on norms—informal rules that govern behavior—to maintain order. Without these norms, chaos could ensue. For instance, the norm of stopping at a red traffic light prevents confusion and accidents. People conform in many small ways daily, often without realizing it. Unspoken rules influence various aspects of consumption. Beyond norms regarding appropriate clothing or personal item use, we follow rules for practices such as gift-giving (e.g., expecting birthday presents from loved ones), gender roles (e.g., men often paying the bill on a first date), and personal hygiene (e.g., the expectation to shower regularly). The drive to conform, however, can conflict with an individual's desire for uniqueness. One study suggests that people try to balance these competing motivations by aligning with the group in one way—such as choosing a popular brand—while differentiating themselves in another, like selecting a unique color or feature of the product. While conformity is common, we do not always imitate the behaviors of others. Several factors influence the likelihood of conforming: Cultural pressures: Different cultures place varying levels of importance on conformity. For example, in a study where people were offered pens to complete a survey, 26 individuals of European descent often chose the pen that stood out, while Asians tended to pick the pen that matched the majority. Page  Fear of deviance: People may conform if they believe that nonconformity will result in social punishment or disapproval from the group. Commitment: The more committed individuals are to a group, the more motivated they are to conform. According to the Principle of Least Interest, the person least invested in a relationship holds more power because they are less concerned about rejection. Group unanimity, size, and expertise: Larger groups or groups perceived as more knowledgeable tend to exert greater pressure to conform, especially in cases where a "mob mentality" develops. Susceptibility to interpersonal influence: Some individuals are more likely to conform because they desire approval and want others to think highly of them. Those who are less susceptible, often referred to as role-relaxed, tend to be older, affluent, and possess higher self-confidence. Environmental cues: External factors can also increase conformity. For instance, a study found that people were more likely to conform in warm environments. The warmth made participants feel closer to others, leading them to view their peers' opinions as more valid. A related study on racetrack betting behavior revealed that people were more likely to bet on the favorite horse on warmer days, suggesting that environmental warmth promotes conformity. Brand Community A brand community is a group of consumers connected by shared social relationships centered around their use of or interest in a particular product. Unlike traditional communities, members of brand communities are typically geographically dispersed, coming together mainly for brief periods during organized events or brandfests. These communities offer more than just buzz for the brand; members contribute significant value by sharing insights on how to use and customize products, enhancing their own experiences and those of others within the community. Word-of-Mouth (WOM) Communication Word-of-mouth (WOM) refers to product information exchanged directly between individuals. Since WOM typically comes from trusted sources—friends, family, or acquaintances—it is often perceived as more reliable and credible than traditional marketing channels. Unlike formal advertising, WOM carries a social element, often accompanied by a subtle pressure to conform to the shared recommendations. Despite the substantial investments marketers make in advertisements, WOM remains a far more influential force, driving up to 50% of all consumer goods sales. Discussing a potential purchase with others can help alleviate uncertainty, as it allows consumers to formulate supportive arguments for their decision and seek validation from their 27 peers. Page To create buzz, marketers can stimulate WOM communication, sparking discussions about a product or service and allowing customers to take the lead in spreading awareness and excitement. Negative WOM While WOM is a powerful marketing tool, it is a double-edged sword. Negative WOM can have a devastating effect on a product or brand. Consumers tend to give more weight to negative feedback, particularly when considering new products or services. Negative experiences are more likely to be shared and can influence consumer attitudes toward a brand, undermining the credibility of a company's advertising and reducing purchase intent. Research shows that negative WOM holds significant sway over consumers' perceptions, leading to a stronger impact than positive comments. The information shared can also change over time, as it passes from person to person, similar to the children's game "Telephone." British psychologist Frederic Bartlett studied this phenomenon using a method called serial reproduction, where subjects were asked to reproduce a story or image and pass it on to the next person, with the process repeating several times. Bartlett observed that these messages often undergo distortions that align with the recipients' preexisting beliefs or schemas, a process he termed assimilation. This occurs through leveling, where details are omitted to simplify the story, and sharpening, where prominent details are exaggerated. As a result, the final message often bears little resemblance to the original. 28 Page  The Transmission of Misinformation Opinion Leadership We are all familiar with individuals who possess a deep knowledge of products and whose advice is highly regarded by others. These individuals, known as opinion leaders, have a unique ability to influence the attitudes and behaviors of others. Notably, their recommendations tend to carry more weight than those of the average consumer. Opinion leaders are highly valuable sources of information due to their social power, which is derived from several key factors: They possess expert power due to their technical competence and in-depth understanding of the product. Their ability to prescreen, evaluate, and synthesize product information in an unbiased manner gives them knowledge power. 29 Opinion leaders are socially active and well-connected within their communities, often holding positions of influence in community groups or clubs. This status grants them Page legitimate power based on their social standing.  They share similar values and beliefs with the consumers they influence, giving them referent power. They are more persuasive when they are homophilous—similar in education, social status, and beliefs—rather than heterophilous, which describes greater dissimilarity. Opinion leaders tend to have slightly higher status and education than those they influence, though not to an extent that places them in a different social class. Often among the first to purchase new products, opinion leaders take on risk that reduces uncertainty for others. Unlike company-sponsored communications that emphasize only positive aspects, opinion leaders offer a balanced perspective based on personal experience, providing both positive and negative feedback. This enhances their credibility, as they have no vested interest in promoting the product. Types of Opinion Leaders: Opinion leaders can influence others regardless of whether they are purchasers of the products they recommend. Early purchasers, who are more inclined to take risks and try new things, are often referred to as innovative communicators. These individuals not only adopt new products early but also share their experiences with others. In addition, opinion leaders are typically opinion seekers. Due to their strong involvement in a particular product category, they actively seek out information and are more likely to engage in conversations about products. They also solicit the opinions of others, reinforcing their role in the social exchange of product information. Contrary to the traditional, static view of opinion leadership, most product-related conversations occur in a dialogue format, where participants exchange ideas in casual interactions rather than one person delivering a formal lecture. This informal exchange further highlights the dynamic nature of opinion leadership in everyday consumer discussions. Social Media Revolution Social media is often characterized in terms of hardware (e.g., Samsung smartphones) or software (e.g., Snapchat), but its essence lies in the online community it fosters. At its core, social media revolves around the collective participation of members who collaboratively create and sustain a platform. Many users become deeply engaged with their social networks, to the point where they feel compelled to check them regularly to stay informed about their online friends’ activities. This constant need to remain connected is sometimes referred to as the "fear of missing out" (FOMO). The influence of social media extends beyond mere interaction, significantly impacting users' emotions and daily experiences. Research has shown that on platforms like Twitter, individuals tend to connect with others who share similar moods. For example, users who feel 30 happy are more likely to retweet or engage with other users who express positive emotions, while those experiencing sadness or loneliness are inclined to interact with similarly negative Page posts. This demonstrates the powerful role social media plays in shaping our emotional states and social interactions. Online Social Networks and Brand Communities Online social networks and brand communities, such as Facebook, Pinterest, and Twitter, function as interconnected platforms where socially relevant nodes (i.e., members or entities) are linked through various relationships. These relationships may arise from kinship, friendship, shared experiences, or common interests, forming a web of connections within the network. While nodes typically represent individuals, they may also include organizations, countries, or other definable units. The term "social graph" is sometimes used to describe the visual mapping of these interconnected units. Communication, or "flows," occurs between the nodes, facilitating the exchange of resources, information, and influence. On platforms like Facebook, users share personal updates, opinions, photos, and other content, generating flows that spread throughout the network. These flows, which can traverse multiple platforms and reach many users simultaneously (a phenomenon known as media multiplexity), are of particular interest to marketers, as they serve as conduits for disseminating information, promotional materials, and social influence. Successful online communities exhibit several key characteristics: 1. Standards of behavior: Explicit or implicit rules guide what members can and cannot do on the platform. For instance, certain rules, such as eBay’s contract to pay for purchased items, are formalized, while others, like discouraging the use of all capital letters to express anger (flaming), are unwritten norms. 2. Member contributions: A thriving community requires active participation, with users contributing content regularly. However, the majority of members tend to be passive consumers (or "lurkers") who observe content without contributing. Studies show that only a small percentage of users actively participate, while the majority simply absorb information. Platforms like Facebook address this by offering a variety of participation options, from simple actions like posting status updates to more involved activities such as uploading media and organizing events. 3. Degree of connectedness: Strong online communities foster a high level of cohesion, where members feel a strong sense of belonging and commitment. Online groups may even surpass physical groups in terms of connectedness, with studies showing that users on platforms like Facebook often have only four degrees of separation from one another. This sense of connectedness extends to real-life relationships, as seen in how social networks often reflect or influence interpersonal dynamics. 4. Network effects: As the number of users grows, the platform's value increases. For example, Amazon's book recommendation algorithm becomes more effective as more users input search queries, allowing for more accurate and personalized suggestions. 31 Page  A graphical representation of one person’s network neighborhood on Facebook. Source: Courtesy of Dr. Cameron Marlow, Stanford University Digital Word-of-Mouth Digital word-of-mouth refers to the rapid dissemination of online content through user- driven sharing, often spurred by viral marketing. Viral marketing occurs when a company encourages users to share online content with their social networks, resulting in swift, 32 widespread distribution, much like the transmission of a virus in a communal setting. This Page phenomenon is most effective when the content is engaging, humorous, or unconventional, as demonstrated by the viral success of the "lap giraffes" campaign.  The human tendency to share news and discoveries with others plays a significant role in this process. Whether it's news about new fashion trends, music, or recent purchases, individuals frequently express their opinions through online reviews on platforms like Yelp or TripAdvisor. This desire to share has even led to the emergence of new forms of digital content, such as "haul videos," where individuals showcase their recent shopping acquisitions, and "unboxing videos," which meticulously detail the unpacking and assembly of electronic products. Digital Opinion Leaders In the realm of digital influence, opinion leaders—referred to as "power users" in online settings—play a pivotal role. These individuals possess extensive social networks and hold considerable sway over the purchasing decisions of others, both directly and indirectly. Much like their offline counterparts, power users are highly engaged in their professional and social communities, and they are seen as trustworthy and knowledgeable sources of information on specific topics. Their intellectual curiosity drives them to seek out new information, and they frequently share brand-related content, further amplifying their influence within digital communities. 33 Page