MKT201 - Week 11

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MKT201 - Week 11

• Group Influence and Opinion Leadership
• (Ch. 11)

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Reference Groups

• Reference Group
• An actual or imaginary individual or group
  conceived of having significant relevance upon an
  individuals evaluations, aspirations/intentions,
  or behavior
• Three ways reference groups influence consumers
• Informational
• Utilitarian
• Value-Expressive
• Some people are more influential than others in
  affecting consumers product preferences.

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Reference Groups
A Reference Group is an Actual or Imaginary
Individual or Group Conceived of Having
Significant Relevance Upon an Individuals
Evaluations, Aspirations, or Behavior. Reference
Groups Influence Consumers in Three Ways/Forms
Value-Expressive
Informational
Utilitarian
Image enhancement, admired or respected by
others Help showing as athlete, successful
person, good parents, etc.
Information, brand-related knowledge, experts
experience
Influenced by other social/family members, etc.
as expected
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When Reference Groups Are Important
e.g. sailboats
Luxuries Rather Than Necessities
A Reference Groups Influence Is More Powerful and
Important for Purchases That Are
Socially Conspicuous or Visible to Others
e.g. living room furniture, clothing
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Relative Reference GroupsInfluence on Purchase
Intention (2 dimensions of the degree of
importance of reference grouppublicly/privately
consumed, luxury/necessity product)
Figure 11.1
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When Reference GroupsAre Important (or so
Persuasive)?

• Social Power
• The capacity to alter the actions of others
• different sources or basis of social power
• 1. Referent Power
• When consumers imitate qualities by copying
  behaviors of a prominent person they admire.
• 2. Information Power
• Able to influence consumer opinion by virtue of
  their (assumed) access to the truth
• 3. Legitimate Power
• Granted to people by virtue of social
  agreements, sometimes conferred by a uniform

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When Reference GroupsAre Important (cont.)

• 4. Expert Power
• Derived from possessing specific knowledge about
  a content area
• 5. Reward Power
• When a person or group has the means to provide
  positive reinforcement
• 6. Coercive Power
• Influencing a person by social or physical
  intimidation

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The Power of Reference Groups
Coercive Power
e.g. social or physical intimidation/threat -
gangsters fear appeals
SOCIAL POWER- Capacity to alter the actions of
others
Referent Power
Reward Power
e.g. reward, social acceptance awards or medals
Types of Reference Group Power
Expert Power
e.g. Michael Jordan admired person
Information Power
Legitimate Power
e.g. a famous scientist, expert in
Robotics
e.g. Editor of a newspaper
e.g. policemen, professors, doctors
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Expert Power

• A physician has expert power, and a white coat
  reinforces this expertise by conferring
  legitimate (legal or high professional quality)
  power.

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Types of Reference Group Influence

• Reference Group
• Any external influence that provides social cues
  (signals)
• (1) Normative Influence
• The reference group helps to set and enforce
  fundamental standards of conduct. (e.g. parents
  influence on marriage attitude a Photo club)
• (2) Comparative Influence
• When decisions about specific brands or
  activities are affected. (e.g. Harley-Davidson
  club)

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Discussion Question

• Marketers often portray products being used in
  groups that represent favorable reference groups
  to the target market.
• What type of message does this ad convey? What
  type of influence is this ad designed to exert on
  its target audience?

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Discussion Question

• What type of message does this ad convey?
• Persuasive message with the use of Reference
  Groups influence
• What type of influence is this ad designed to
  exert on its target audience?
• Comparative influence

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Brand Communities and Tribes

• Brand Community
• A set of consumers who share a set of social
  relationships based upon usage or interest in a
  product. (dont necessary live near each other)
• E.g. Brandfests (e.g. organized events sponsored
  by Nike)
• Consumer Tribe
• A group of people who share a lifestyle and who
  can identify with each other because of a shared
  allegiance (loyalty) to an activity or product
  (such as skateboarding, basketball, car driving)
• Tribal Marketing
• To link ones product to the needs of a group as
  a whole. (e.g. Mini Cooper, Mustang car racing)

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Products as a Way to be Popular

• Many products, especially those targeted to young
  people, are often touted/promoted as a way to
  take the inside track to popularity. This
  Brazilian ad lets us know about people who dont
  like a certain shoe.

Bonehead stupid person
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Membership vs. AspirationalReference Groups

• Aspirational Reference Groups
• Comprise idealized figures such as successful
  business people, athletes, or performers.
• Membership Reference Group
• Ordinary people whose consumption activities
  provide informational social influence.
  Membership are affected by several factors
• Propinquity Physical nearness.
• Mere Exposure Liking persons or things simply as
  a result of seeing them more often (mere exposure
  phenomenon)
• Group Cohesiveness The degree to which members
  of a group are attracted to each other and value
  their group membership.

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Match.com
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Positive Versus NegativeReference Groups

• Avoidance Groups
• Groups that consumers purposely try to distance
  themselves from
• Nerds (stupid, unattractive)
• Druggies (addicted to drugs)
• Preppies (manner and dress like in traditional
  preparatory school)
• The motivation to distance oneself from a
  negative reference group can be as powerful or
  more powerful than the desire to please a
  positive group

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Positive Reference Groups

• This recruiting ad presents a compelling role
  model for young women contemplating a career in
  the armed forces.

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Consumers Do it in Groups

• Some Phenomena
• Deindividuation
• A process in which individual identities become
  submerged within a group.
• Social Loafing
• People do not devote as much to a task when their
  contribution is part of a larger group effort
• Risky Shift
• Group members are willing to consider riskier
  alternatives subsequent to group discussion
• Diffusion of Responsibility
• As more people are involved in a decision, each
  individual is less accountable for the outcome

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Consumers Do it in Groups (cont.)

• Value Hypothesis (to explain the increased
  riskiness/risky shift)
• Riskiness is a culturally valued characteristic
  to which individuals feel pressure to conform to
  attributes valued by society
• Decision Polarization
• Whichever direction the group members were
  leaning toward before discussion becomes more
  extreme subsequent to discussion (risky choice
  Vs conservative choice)
• Home Shopping Parties
• Capitalize on group pressures to increase sales
  (e.g. Tupperware party)

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Deindividuation

• Costumes hide our true identities and encourage
  deindividuation.

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Home Shopping Parties

• Women at a home Tupperware party.

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Group Influences

• Group pressure often influences our clothing
  choices.

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moving toward extreme risky - conservative
e.g. behave wildly at costume parties
devote less effort for group work
more purchase with one other person
greater willingness to take risk following group
discussion
more more group members, more conform
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Conformity

• Conformity
• A change in beliefs or actions as a reaction to
  real or imagined group pressure.
• Norms
• Informal rules that govern behavior (for a
  society to function)
• Factors Influencing the Likelihood of Conformity
• Cultural Pressures
• Fear of Deviance (resulted in punishment or
  sanctions)
• Commitment
• Principle of Least Interest (person/group that is
  least committed to staying in a relationship has
  the most power)
• Group Unanimity (same opinions), Size, and
  Expertise as groups gain in power, compliance
  increases
• Susceptibility to Interpersonal Influence
• Role-relaxed consumers (those are low in
  susceptibility to influence of others)

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Conformity
Types of Social Influence
Conformity Refers to a Change in Beliefs or
Actions as a Reaction to Real or Imagined Group
Pressure.
Informational Conformity That Occurs Because the
Groups Behavior is Taken as Evidence About
Reality.
Normative Person Conforms to Meet the
Expectations of a Person or Group.
Situation is uncertain, ambiguous
e.g. clothing ?? wearing masks in public (SARS)
e.g. mimic others behavior, gift-giving
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Factors Affecting the Likelihood of Conformity
Cultural Pressures
Fear of Deviance
Commitment
China/Japan - collectivism
Group Dynamics
e.g. terrorists willing to die
Sex Differences
As groups gain in power, compliance increases
Interpersonal Influences
susceptibility to be influenced by others
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Social Comparison

• Social Comparison Theory
• Asserts that people look to the behavior of
  others to increase the stability of their
  self-evaluation
• People tend to choose co-oriented peer a person
  of equivalent standing
• Resisting Conformity
• Independence Being oblivious (unaware of) or
  indifferent to the expectations of others
• Anticonformity Defiance (opposing) of the group
  is the actual behavior
• Reactance The negative emotional state that
  results when we are deprived of our freedom to
  choose

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Resistance to Influence
Independence Oblivious to (unaware of) what is
expected by others
Anticomformity Defiance of the Group is the
Object of Behavior
Vs.
Reactance Need to Preserve Freedom of Choice
People try to Overcome a Loss of Freedom
Negative to extremely overbearing promotions.
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Discussion Question

• This ad for a video game says, Conformity
  Bytes!, but then captions (titles), Join the
  Revolution! Why?
• Does this ad encourage independence or
  anticonformity?

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Word-of-Mouth Communication

• Word-of-Mouth (WOM)
• Product information transmitted by individuals to
  individuals.
• Negative WOM and the Power of Rumors
• Negative WOM Consumers weigh negative info from
  other consumers more heavily than they do
  positive comments

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Word-of-Mouth Communication
Much Information About Products and Services is
Actually Conveyed by Individuals on an Informal
Basis called Word-of-Mouth Communication
(WOM) Factors That Encourage WOM Are
Person May be Uncertain About a Recent Purchase
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Word-of-Mouth

• The U.S. Postal Service hopes to create a buzz
  via word of mouth.

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Rumors

• Hoaxkill.com is a Web site dedicated to tracking
  hoaxes/tricks and debunking/exposing product
  rumors.

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The Transmission of Misinformation
Figure 11.2
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Cutting-Edge WOM Strategies

• Virtual Communities
• Virtual Community of Consumption A collection of
  people whose online interactions are based upon
  shared enthusiasm for and knowledge of a specific
  consumption activity.
• Multi-user Dungeons (underground chamber) (MUD)
• Rooms, rings and lists (e.g. chat rooms)
• Boards
• Blogs (weblog)

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Multi-User Dungeons
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Four Types of VirtualCommunity Members

• Tourists
• Lack strong social ties to the group
• Minglers (merger, mixer)
• Maintain strong social ties, but are not
  interested in the central consumption activity
• Devotees
• Express strong interest in the activity, but have
  few social attachments to the group
• Insiders
• Exhibit both strong social ties and strong
  interest in the activity

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Virtual Communities
2 factors self-centrality (dominance of
activity towards self-concept) intensity
of social relationship/ties
Figure 11.3
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Guerrilla and Viral Marketing

• Guerrilla Marketing
• Promotional strategies that use unconventional
  locations and intensive word-of-mouth campaigns
  to push products.
• Brand Ambassadors
• Viral Marketing
• Refers to the strategy of getting customers to
  sell a product on behalf of the company that
  creates it. (e.g. a small ad embedded in Hot Mail)

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Guerrilla Marketing Ads

• Ads painted on sidewalks are one form of
  guerrilla marketing.

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Social Networking

• Web sites letting members post information about
  themselves and make contact with similar others
• Share interests, opinions, business contacts

http//www.myspace.com/
http//www.facebook.com/
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Opinion Leadership

• The Nature of Opinion Leadership
• Opinion Leaders People who are knowledgeable
  about products and whose advice is taken
  seriously by others.
• Homophily The degree to which a pair of
  individuals is similar in terms of education,
  social status, and beliefs. (appear to be more
  convincing than heterophily)
• How Influential Is an Opinion Leader?
• Generalized Opinion Leader Somebody whose
  recommendations are sought for all types of
  purchases.
• Monomorphic An expert in a limited field.
• Polymorphic An expert in many fields (in a broad
  domain such as electronics or fashion).

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Reasons to Seek Advice from Opinion Leaders

• Expertise
• Unbiased knowledge power
• Highly interconnected in communities (social
  standing)
• Referent power/homophily
• Hands-on product experience (absorb risk)

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Opinion Leaders Market Shoes

• Opinion leadership is a big factor in the
  marketing of athletic shoes. Many styles first
  become popular in the inner city and then spread
  by word-of-mouth.

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Types of Opinion Leaders

• Innovators
• Early purchasers
• Innovative Communicators
• Opinion leaders who also are early purchasers
• Opinion leaders also are likely to be opinion
  seekers
• The Market Maven (Expert) a consumer category
• Describes people who are actively involved in
  transmitting marketplace information of all
  types. (not necessarily have interests or have
  purchased the products)
• The Surrogate Consumer a class of marketing
  intermediary
• A person who is hired to provide input in
  purchase decisions. (e.g., interior decorators,
  stockbrokers, college consultants)

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Perspectives on theCommunications Process
(tend to be opinion seekers)
Figure 11.4
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Fashion Opinion Leaders

• Fashion opinion leaders tend to be knowledgeable
  about clothing and highly motivated to stay on
  top of fashion trends.

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Identifying Opinion Leaders

• Many ads intend to reach influentials rather than
  average consumer
• Local opinion leaders are harder to find
• Companies try to identify influentials in order
  to create WOM ripple effect
• Exploratory studies identify characteristics of
  opinion leaders for promotional strategies

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Identifying Opinion Leaders

• Self-designated Opinion Leaders
• Sociometric Methods
• Trace Communication patterns among members of a
  group.
• To better understand Referral Behavior
• Network Analysis Focuses on communication in
  social systems
• Referral Network
• Tie Strength The nature of the bond between
  people.
• Bridging Function (weak ties) Allows a consumer
  access between subgroups.
• Cliques Subgroups (friends or associates, etc.
  sharing preferences or brand choices for various
  products)

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Characteristics of Opinion Leaders
Innovators
Are Opinion Seekers
Early Communicators
Own More Clothing With a Broader Range of Styles
Key Characteristics of Opinion Leaders
Socially Active
Like Music and Magazines
Appearance- Conscious and Narcissistic
Self-worship, love of oneself
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Revised Opinion Leadership Scale
Figure 11.5