handout ch7

1

CHAPTERCHAPTER 77GROUP GROUP

INFLUENCES INFLUENCES ON CONSUMER ON CONSUMER

BEHAVIORBEHAVIOR

7-3

Consumer Behavior In The News…Consumer Behavior In The News…What are the top 5 brands in terms of Word of Mouth What are the top 5 brands in terms of Word of Mouth

(WOM) in the U.S.?(WOM) in the U.S.?

How has the internet aided WOM?How has the internet aided WOM?

Source: M. Fielding, “Talk of the Town,” Marketing News, September 1, 2006, p. 4. 7-4

Consumer Behavior In The News…Consumer Behavior In The News…What are the top 5 brands in terms of Word of Mouth What are the top 5 brands in terms of Word of Mouth

(WOM) in the U.S.?(WOM) in the U.S.?Toyota Toyota WalWal--MartMartHondaHondaiPodiPodChevroletChevrolet

How has the Internet aided WOM?How has the Internet aided WOM?

The Internet allows for easy WOM in the form of eThe Internet allows for easy WOM in the form of e--mail, blogs, etc., that can create buzz.mail, blogs, etc., that can create buzz.

Source: M. Fielding, “Talk of the Town,” Marketing News, September 1, 2006, p. 4. 7-5

2

Reference Group InfluenceReference Group Influence

A group 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 to one another such that their behaviors are interdependent.p

A reference groupreference group is a group whose presumed perspectives or values are being used by an individual as the basis for his/her current behavior.

7-6

Reference Group InfluenceReference Group InfluenceFour criteria that are particularly useful in classifying groupsgroups:

1.1. Membership: Membership: Member vs. nonMember vs. non--membermember

2.2. Strength of Social Tie:Strength of Social Tie:Primary Primary –– Strong ties, frequent interaction (e.g. family Strong ties, frequent interaction (e.g. family yy g , q ( g yg , q ( g yand friend)and friend)Secondary Secondary –– Weaker ties, less frequent interaction (e.g. Weaker ties, less frequent interaction (e.g. neighbors, coworkers)neighbors, coworkers)

3.3. Type of Contact: Type of Contact: Direct vs. indirectDirect vs. indirect

4.4. Attraction: Attraction: negative vs. positivenegative vs. positive

7-7

Attraction of Reference GroupsAttraction of Reference GroupsDissociative reference group: Dissociative reference group:

Negative desirabilityNegative desirability

Influences behavior by defining products to avoid (e.g. Influences behavior by defining products to avoid (e.g. teens and clothes associated with older people)teens and clothes associated with older people)

Aspirational reference group:Aspirational reference group:

Positive desirabilityPositive desirability

Group that one Group that one wantswants to become member ofto become member of

Emulate the behaviors of members of the groupEmulate the behaviors of members of the group

7-8

3

Types of GroupsTypes of GroupsConsumption Subcultures: Consumption Subcultures: Distinctive subgroup of society Distinctive subgroup of society

that selfthat self--selects on shared commitment to a product selects on shared commitment to a product class, brand or consumption activityclass, brand or consumption activity

Traits:Traits:

Identifiable hierarchyIdentifiable hierarchy

Set of shared beliefs and valuesSet of shared beliefs and values

Unique jargon and ritualsUnique jargon and rituals

7-9

Types of Groups

Brand communities Brand communities can add value to the ownership of the product and build intense loyalty.

Brand CommunitiesBrand Communities

y y

When a consumer becomes part of a brand community, remaining generally requires continuing to own and use the brand.

This can create intense brand loyalty!

Jeep has a longstanding loyal brand communityJeep has a longstanding loyal brand community

Click the online button to link to Click the online button to link to the Jeep Jamboree Web sitethe Jeep Jamboree Web site

7-10

Video Application

The following Video Clip demonstrates The following Video Clip demonstrates how MINI Cooper used marketing to how MINI Cooper used marketing to create a brand community and generate create a brand community and generate b !b !buzz!buzz!

7-11

4

7-12

Types of GroupsTypes of GroupsOnline CommunityOnline Community

Community interacts around a topic of interest on the Community interacts around a topic of interest on the InternetInternet

Online Social Network SitesOnline Social Network SitesMySpaceMySpaceTwitterTwitterYouTubeYouTube

7-13

Types of GroupsTypes of GroupsFour Guiding Principles for companies marketing in online Four Guiding Principles for companies marketing in online

communities or social networks:communities or social networks:

Be transparentBe transparent

Be part of the communityBe part of the community

Adapt efforts to fit nature of site Adapt efforts to fit nature of site

Take advantage of the unique capabilities of each Take advantage of the unique capabilities of each venuevenue

7-14

5

Reference Group Influences on the Reference Group Influences on the Consumption ProcessConsumption Process

Reference group influence can take three forms:

1.1. Informational InfluenceInformational Influence

22 N ti I flN ti I fl ( k tilit i i fl )( k tilit i i fl )

Types of Reference Group Influence

2.2. Normative InfluenceNormative Influence (a.k.a. utilitarian influence)(a.k.a. utilitarian influence)

3.3. Identification InfluenceIdentification Influence (a.k.a. value expressive)(a.k.a. value expressive)

7-16

Reference Group Influences on the Reference Group Influences on the Consumption ProcessConsumption Process

Consumption Situation Determinants of Reference Group InfluenceConsumption Situation Determinants of Reference Group Influence

7-17

Communications within Groups and Opinion LeadershipWOM Versus Advertising

(% who put people vs. advertising as best source)

7-20

6

Communications within Groups and Opinion Leadership

Opinion Leaders

An opinion leaderopinion leader is the “go to person” for specific types of information. This person filters, interprets, and passes along informationpasses along information.

Opinion leaders possess enduring involvement for specific product categories. This leads to greater knowledge and expertise.

Opinion leadership is category specific – an opinion leader in one product category is often an opinion seeker in others.

7-21


Mass Communication Information FlowsMass Communication Information Flows

7-22


1. Individual seeks

Situations in Which WOM and Opinion Leadership OccurThe exchange of advice and information between group members can occur directly via WOM in the following situations:

Likelihood of Seeking an Opinion LeaderLikelihood of Seeking an Opinion Leader

1. Individual seeks information from another or

2. Individual volunteers information

7-23

7


Mavens, Influentials, and eMavens, Influentials, and e--fluentialsfluentials

1. A market mavenmarket maven is a generalized market influencer who provides significant amounts of information about various products, places to shop, and so on.

2. Roper Starch identifies a group similar to market mavens called influentialsinfluentials. Influentials are 10% of population but use broad social networks to influence the other 90%!

3. Roper Starch identifies a group similar to internet market mavens called ee--fluentials. fluentials. They wield significant online and offline influence.

7-24


Marketing Strategy, WOM, and Opinion Leadership

Marketers are increasingly relying on WOM and influential consumers as part of their marketing strategies. Strategies designed to generate WOM and encourage opinion leadership include:

1.1. AdvertisingAdvertising

2.2. Product SamplingProduct Sampling

3.3. Retailing/Personal SellingRetailing/Personal Selling

4.4. Creating BuzzCreating Buzz

7-25

Applications in Consumer Behavior

Marketing Strategy, WOM, and Opinion LeadershipMarketing Strategy, WOM, and Opinion Leadership

AdvertisingAdvertising canAdvertisingAdvertising can stimulate and simulate WOM and opinion leadership.

This ad would likely stimulate WOM via interest and excitementThis ad would likely stimulate WOM via interest and excitement© Christopher Kerrigan

7-26

8


Online Strategies to Leverage Buzz and WOM

Viral marketingViral marketing is an online “pass-it-along” strategy, utilizing electronic communication to trigger brand messages (often via email) throughout a widespread g ( ) g pnetwork of buyers.”

Consumer review sites Consumer review sites provide consumer product and service reviews in a host of different formats.

BlogsBlogs are personalized journals where people and organizations can keep a running dialogue.

7-27

Diffusion of InnovationsDiffusion of Innovations

An innovationinnovation is an idea, practice, or product perceived to be new by the relevant individual or group.

The manner by which a new product spreads through a p p gmarket is basically a group phenomenon.

New products can be placed on a continuum from no change to radical change, depending on the market’s perception.

7-29


Categories of Innovations

Continuous InnovationContinuous InnovationAdoption of this type of innovation requires relatively minor

changes in behavior(s) that are unimportant to the consumer.Dynamically continuous InnovationDynamically continuous Innovation

Adoption of this type of innovation requires a moderate change in an important behavior or a major change in a behavior of low or moderate importance to the individual.

Discontinuous InnovationDiscontinuous InnovationAdoption of this type of innovation requires major changes in

behavior of significant importance to the individual or group.

7-31

9

Diffusion of Innovations

Adoption Process and Extended Decision MakingAdoption Process and Extended Decision Making

7-32


Diffusion Rates for Popular Consumer Electronics (Cumulative)Diffusion Rates for Popular Consumer Electronics (Cumulative)

7-33


Factors Affecting the Spread of InnovationsFactors Affecting the Spread of Innovations

7-34

10


InnovatorsInnovators

Early AdoptersEarly Adopters

Adopter Categories

Early AdoptersEarly Adopters

Early MajorityEarly Majority

Late MajorityLate Majority

LaggardsLaggards

7-35

handout ch7

Documents