Consumer Behaviour

1
Consumer Behaviour

• Class 9 Group Influences and Family Decision
  Making
• Dr. John Nadeau
• November 5, 2009

2
Chapter 11 Outcomes

• Understand the social influences on consumer
  behaviour
• Know who is more likely to have influence
• Appreciate impact of opinion leadership and word
  of mouth

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Reference Groups

• An actual or imaginary individual/group conceived
  of having significant relevance upon an
  individuals evaluations, aspirations, or
  behaviour

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Types of Reference Groups

• Some have greater influence than others
• 1. Formal vs. Informal Groups
• 2. Brand Communities and Tribes
• 3. Membership vs. Aspirational

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Positive vs. Negative Reference Groups

• Reference groups may exert either a positive or
  negative influence on consumption behaviours
• Avoidance groups motivation to distance oneself
  from other people/groups
• Marketing ads with undesirable people using
  competitors product
• Discussion Identify a set of avoidance groups
  for your peers. Can you identify any consumption
  decisions that are made with these groups in
  mind?

6
When Reference Groups Are Important

• Social power capacity to alter the actions of
  others
• Referent power
• Information power
• Legitimate power
• Expert power
• Reward power
• Coercive power

7
Conformity

• Most people tend to follow societys expectations
  regarding how to look/act
• Change in beliefs/actions toward societal norms

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Factors Influencing Conformity

• Cultural pressures
• Fear of deviance
• Commitment to group membership
• Group unanimity, size, expertise
• Susceptibility to interpersonal influence

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Discussion

• Are home shopping parties that put pressure on
  friends and neighbors to buy merchandise ethical?

10
Social Comparison

• the behaviour of others is a yardstick of reality
  (right music, art, clothes, etc.) we like to
  choose who we want to be compared against
• "level the playing field,"
• "birds of a feather"

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Social Comparison

• Group Effects on Individual Behaviour
• Social Loafing
• The Risky Shift
• Decision Polarization

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Word-of-Mouth Communication

• WOM product information transmitted by
  individuals to individuals
• More reliable/trustworthy form of marketing
• Backed up by social pressure to conform
• Influences two-thirds of all sales of goods
• We rely upon WOM in later stages of evaluation
  and adoption
• WOM is powerful when we are unfamiliar with
  product category

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Negative WOM and Power of Rumours

• We weigh negative WOM more heavily than we do
  positive comments!
• Negative WOM is easy to spread, especially online
• Information/rumour distortion

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Cutting-edge WOM Strategies

• 1. Virtual Communities
• 2. Guerrilla Marketing
• 3. Viral Marketing

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Opinion Leadership

• We dont usually ask just anyone for advice about
  purchases!
• We most likely seek advice from someone who knows
  a lot about a product
• Important influence on brand popularity

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The Nature of Opinion Leadership

• are technically competent
• have prescreened, evaluated and synthesized,
  unbiased product information
• are socially active
• are similar to the consumer in values and beliefs
• are often among the first to buy new products

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The Extent of Influence

• 1. The Extent of an Opinion Leader's Influence
• Generalized opinion leader
• Monomorphic
• Polymorphic
• 2. Types of Opinion Leaders
• Innovative Communicators
• Opinion Seekers
• Market Mavens

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The Surrogate Consumer

• A marketing intermediary who is 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!

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CBC Video Case Buzz Marketing

• 1. From the perspective of group influence and
  opinion leadership, how does buzz marketing work?
• 2. How does buzz marketing influence the
  diffusion of innovations?
• 3. What are the criticisms of buzz marketing? How
  do marketers address these criticisms?

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Chapter 12 Outcomes

• Appreciate the role of others in the decision
  making process
• Know that there are many demographic influences
  on the family
• Understand that members play different roles
• Know why children learn over time what and how to
  consume

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Family Decision Making

• More than one person is involved in the
  purchasing process for products or services that
  may be used by multiple consumers.
• As traditional family living arrangements have
  waned, siblings, close friends, other relatives,
  and intentional families continue to provide
  support

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Defining the Modern Family

• Extended family and nuclear family
• Just what is a household?
• Family household contains at least two people,
  regardless of their relationship
• Divorces and separations are accepted in our
  culturemarital breakups are ever-present theme
  in books, music, and movies
• Adult females are staying home with
  family/children more (especially among
  best-educated/highest achieving women)

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Age of the Family

• 35-44 age group greatest number of marriages and
  common-law relationships
• Average age of first marriages is 32 for women
  and 34 for men
• Trend toward giving non-traditional items as
  wedding gifts (home electronics, computers)

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Family Size

• Depends on educational level, availability of
  birth control, and religion
• Marketers keep an eye on fertility rate and birth
  rate
• Worldwide, women want smaller families
  (especially in industrialized countries)

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Nontraditional Family Structures

• Any occupied housing unit is a household
• Same-sex households are increasingly common
  marketers target them as unit
• Rise of single-person households

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Discussion

• Discuss the pros and cons of the voluntarily
  childless movement. Are followers of this
  philosophy selfish?

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Whos Living at Home?

• Traditional extended family is alive and well
• Sandwich generation
• Boomerang kids

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The Family Life Cycle
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Life-Cycle Effects on Buying

• FLC model categories show marked differences in
  consumption patterns
• Young bachelors and newlyweds are most likely to
  exercise, go to bars/concerts/movies
• Those in early 20s apparel, electronics, gas
• Families with young children health foods
• Single parents/older children junk foods
• Newlyweds appliances (e.g., toaster ovens)
• Older couples/bachelors home maintenance
  services

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Discussion

• For each of the following five product categories
  --groceries, automobiles, vacations, furniture,
  and appliances-- describe the way in which you
  believe a married couples choices would be
  affected if they had children.
• Write your answers on a piece of paper with your
  name on it

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Household Decisions

• In every living situation, group members seem to
  take on different roles similar to those within a
  company
• Consensus purchase decision vs. accommodative
  purchase decision
• Factors determining family decision conflict
• Interpersonal need
• Product involvement and utility
• Responsibility
• Power

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Decision Roles

• In collective decisions, one may play any (or
  all) of the following roles
• Initiator
• Information gatherer
• Gatekeeper
• Influencer
• Decision maker
• Buyer
• Preparer
• User
• Maintainer
• Disposer

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Gender Roles and Decision-making Responsibilities

• Autonomic decision vs. syncratic decisions
• Wives tend to have most say buying groceries,
  toys, clothes, and medicines
• Both make decisions for cars, vacations, homes,
  appliances, furniture, home electronics, interior
  design, and long-distance phone services
• As education increases, so does syncratic
  decision making
• Even after death, spouses seem to still consider
  the one who has died when making household
  decisions

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Identifying the Decision Maker

• Family financial officer (FFO)
• In traditional families, the man makes the money
  and the woman spends it
• If spouses adhere to more modern sex-role norms,
  there is shared participation in family
  maintenance activities
• Women seem to be gaining ground in almost all
  areas of decision making
• Women often struggle with the juggling
  lifestyle

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How Couples Handle their Income
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Identifying the Decision Maker (Contd)

• Household dynamics play a big role in determining
  whether husbands or wives are dominant in the
  family unit
• Crown Diamond targets men who want to take the
  pain out of painting
• Nissan Quest Moms have changed. Shouldnt
  minivans.
• Four factors in joint vs. sole decision making
• Sex-role stereotypes
• Spousal resources
• Experience
• Socioeconomic status

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Children as Decision Makers

• Children make up three distinct markets
• Primary market
• Influence market
• Future market

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Consumer Socialization

• The process by which young people acquire skills,
  knowledge, and attitudes relevant to their
  functioning in the marketplace
• Sources of knowledge include friends, teachers,
  family, and the media

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Influence of Parents

• Direct and indirect parental influences
• Grown-ups as models for observational learning
• Steps involved in turning kids into consumers
• Parental styles that affect socialization
  authoritarian, neglecting, and indulgent

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Gender-Role Socialization

• Children pick up on gender identity at an early
  age
• One function of play is to rehearse for adulthood
• Toy companies perpetuate gender stereotypes
• Children rehearse adulthood roles via toys as
  props
• Toys R Us Girls World Boys World
• Male and female play patterns
• Smartees line of dolls and Working Woman Barbie

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Cognitive Development

• Stage of cognitive development
• Ability to comprehend concepts of increasing
  complexity
• Very young children are thought to be able to
  learn consumption-related information
  surprisingly well
• Piagets stages of cognitive development
• Alternative to Piaget

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Marketing Research and Children

• Relatively little real data on childrens
  preferences/influences on spending patterns is
  available
• Product testing
• Message comprehension
• Discussion Do you think market research should
  be performed with children? Why or why not?

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CBC Video Case Ads Children

• 1. How do children learn to be consumers?
• 2. What exactly are parents concerns about
  advertising aimed at children?
• 3. How effective is the Canadian Toy Testing
  Council and the Broadcast Code for Advertising to
  Children (under 12 years old)?
• 4. Do media literacy programs address parents
  concerns about the effect of advertising on
  children?

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Next Class

• Chapters 14, 16 and 17
• Discuss your research project with me before
  going to the field (i.e. research proposal)
• 3 Weeks left!