BB Chapter Fourteen : Group Influence And Communication

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BB Chapter Fourteen : Group Influence And Communication

  1. 1. Chapter Fourteen: Group influence and communication 14-1
  2. 2. Chapter 14: Group influence and communication • How groups function and classification of groups • Impact of reference groups on consumption • How social roles influence consumption • Importance of word-of-mouth and group communication as marketing factors • Role of opinion leaders in shaping consumer behavior • The diffusion of innovations and the different adopter groups 14-2
  3. 3. Group influences 14-3
  4. 4. Reference Group Influence 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 to one another such that their behaviors are interdependent. 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. 14-4
  5. 5. Reference Group Influence Reference Groups Change as the Situation Changes 14-5
  6. 6. Reference Group Influence Four criteria that are particularly useful in classifying groups: 1. Membership 2. Strength of Social Tie 3. Type of Contact 4. Attraction 14-6
  7. 7. Types of groups • Membership – Either yes or no • Degree of contact – Larger groups generally have less contact – Primary groups generally have frequent interpersonal contact – Secondary groups generally have limited interpersonal contact • Attraction – Desirability of being member – Either positive or negative 14-7
  8. 8. Types of groups (cont.) • Aspirational reference groups – Non-membership groups – Positive attraction – Exert a strong influence on some products 14-8
  9. 9. Types of groups (cont.) 14-9
  10. 10. Reference group influences on the consumption process • Conformity – Makes groups influential – Is the tendency to want to be like ‘relevant and significant others’ – Generally makes life more pleasant • Norms – Are general expectations about behaviours that are deemed appropriate for all persons in a social context, regardless of the position they hold – Are often communicated non-verbally 14-10
  11. 11. Reference Group Influences on the Consumption Process Types of Reference Group Influence Reference group influence can take three forms: 1. Informational Influence 2. Normative Influence (a.k.a. utilitarian influence) 3. Identification Influence (a.k.a. value expressive) 14-11
  12. 12. The nature of reference-group influence Conformity is not a uni-dimensional concept • Information influence – Behaviours and opinions of reference groups are used as potentially useful pieces of information • Normative influence (utilitarian influence) – When an individual fulfils group expectations to gain a direct reward or avoid a punishment • Identification influence (value-expressive influence) – When an individual uses perceived-group norms and values as a guide for their own attitudes or values 14-12
  13. 13. Consumption situations and reference-group influence 14-13
  14. 14. Consumption situations and reference-group influence (cont.) 14-14
  15. 15. Consumption situations and reference-group influence (cont.) 14-15
  16. 16. Reference Group Influences on the Consumption Process Consumption Situation Determinants of Reference Group Influence 14-16
  17. 17. Determinants of the degree of reference-group influence • R-Group influence is strongest when use of the product or brand is visible and relevant – E.g.. product category, product type and brand are all visible • R-group influence increases as necessity of an item decreases • The more commitment an individual feels to a group, the higher the level of conformity to group norms • Individual’s confidence with purchase: low confidence, then higher influence 14-17
  18. 18. Product characteristics and type of reference-group influence 14-18
  19. 19. Influence of two consumption situation characteristics on product/brand choices 14-19
  20. 20. Consumption-situation determinants of reference-group influence 14-20
  21. 21. Marketing strategies based on reference-group influences • Personal sales strategies – Asch phenomenon • Advertising strategies – All three types of reference groups are used by advertisers: informational (use of information) normative (to avoid/gain) identification (aspire to join) 14-21
  22. 22. Consumption subcultures • A consumption subculture is a distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand or consumption activity • Examples: Product: Harley-Davidson Activities: Body building, golf 14-22
  23. 23. Consumption Subcultures A Consumption subculture is a subgroup that self-selects on the basis of a shared commitment to a particular product, brand, or consumption activity. These groups have: •an identifiable, hierarchical social structure. •a set of shared beliefs or values. •unique jargon, rituals, and modes of symbolic expression. 14-23
  24. 24. Types of Groups Marketing and Consumption Subcultures Consumption subcultures based on activities obviously are markets for the requirements of the activity itself. But these groups develop rituals and modes of symbolic communication that often involve other products or services. The larger market often appropriates their symbols, at least for a time. 14-24
  25. 25. Types of Groups Brand Communities Consumption subcultures focus on the interactions of individuals around an activity, product category, or occasionally a brand. A brand community is a non-geographically bound community, based on a structured set of social relationships among owners of a brand and… the psychological relationship they have with the brand itself, the product in use, and the firm. 14-25
  26. 26. Types of Groups Brand Communities (cont.) The nature of communities (generally) and brand communities (specifically) include: •Consciousness of Kind •Rituals and Traditions •Moral Responsibility 14-26
  27. 27. Types of Groups Marketing and Brand Communities Brand communities can add value to the ownership of the product and build intense loyalty. 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! 14-27
  28. 28. Types of Groups Virtual Communities A virtual community is a community that interacts over time around a topic of interest on the Internet via Usenet, blogs, professional sites, and sites for nonprofit groups. Such groups may be viewed as not being “real” communities. However virtual communities do exist for many and there can be a sense of community online. This sense of community moves beyond mere interaction to include affective or emotional attachments to the online group. 14-28
  29. 29. Types of Groups Three types of virtual community members: 1. Leaders A relatively small group who are highly influential and take on the most responsibility for community maintenance. 2. Participants A larger group who are active members but not deemed as leaders. 3. Lurkers The largest group and only passively peruse the group discussions without being active participants. 14-29
  30. 30. Types of Groups Marketing and Virtual Communities Marketing in virtual communities is both possible and potentially beneficial. The approach taken must be tailored to the type of virtual community. community Many online groups are sensitive to “commercial” interference and companies have to be careful not to overstep. 14-30
  31. 31. Roles • A role is: – A prescribed pattern of behaviour expected of a person in a given situation by virtue of the person’s position in that situation • Role parameter: – Range of behaviour acceptable within a given role • Role overload: – Occurs when an individual attempts to fill more roles than the available time, energy or money allows • Role conflict: – Incompatible role demands 14-31
  32. 32. Applying role theory to marketing practice • Role-related product cluster e.g. new mother • Evolving roles e.g. career females • Role conflict and role overload e.g. working mother, working student • Role acquisition and transition e.g. student to employee 14-32
  33. 33. Role set possibilities for a student 14-33
  34. 34. Reference Group Influences on the Consumption Process WOM Opinion Leaders Market Mavens, Influentials, and e- e- fluentials Marketing and Online Strategies 14-34
  35. 35. Communications within Groups and Opinion Leadership We learn about new products, services, brands, as well as retail and information outlets from our friends and other reference groups in two basic ways: 1. By observing or participating with them as they use products and services. 2. Through Word-of-mouth (WOM), Word-of- (WOM) which involves individuals sharing information with other individuals in a verbal form including face-to- face, phone, and the Internet. 14-35
  36. 36. Communications within Groups and Opinion Leadership Word-Of-Mouth Consumers generally trust the opinions of people (family, friends, acquaintances) more than marketing communications because… Unlike marketing communications, these personal sources have no reason not to express their true opinions and feelings. 14-36
  37. 37. Communications within Groups and Opinion Leadership Word-Of-Mouth The importance of WOM is generally high, and its importance relative to advertising varies somewhat across product types. 14-37
  38. 38. Communications within Groups and Opinion Leadership Opinion Leaders An opinion leader is the “go to person” for specific types of information. This person filters, interprets, and passes 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. 14-38
  39. 39. Opinion leadership • Opinion leaders filter, interpret or provide information for individuals within groups • Situations in which opinion leadership occurs: – one individual exchanges information with another – one individual volunteers information – as a by-product of normal group interaction 14-39
  40. 40. Mass communication information flows 14-40
  41. 41. Characteristics of opinion leaders 1. Opinion leaders have enduring involvement with product category 2. Function primarily through interpersonal communications and observation 3. Similar demographic characteristics to the group 4. Public individuation – attention seeking 5. High level of exposure to media 6. The market maven – expert on all products! 7. Motivation of dissatisfied customers to tell others of their negative message 14-41
  42. 42. Communications within Groups and Opinion Leadership Situations in Which WOM and Opinion Leadership Occur The exchange of advice and information between group members can occur directly via WOM in the following situations: Likelihood of Seeking an Opinion Leader 1. Individual seeks information from another or 2. Individual volunteers information 14-42
  43. 43. Communications within Groups and Opinion Leadership 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. Advertising 2. Product Sampling 3. Retailing/Personal Selling 4. Creating Buzz 14-43
  44. 44. Marketing strategy and opinion leadership 1. Identifying opinion leaders 2. Targeting for marketing research 3. Product sampling 4. Retailing/personal selling 5. Advertising attempts to encourage and simulate opinion leadership 14-44
  45. 45. Communications within Groups and Opinion Leadership Marketing Strategy, WOM, and Opinion Leadership Product Sampling is sometimes called “seeding” and involves getting product into the hands of potential consumers. Sampling can be a very potent WOM tool when it involves opinion leaders. Wine tasting events can be a great seeding technique. 14-45
  46. 46. Ad using celebrity endorsement acknowledging an opinion leader 14-46
  47. 47. Ad using celebrity endorsement acknowledging an opinion leader But look what has happened to him!!! 14-47
  48. 48. Communications within Groups and Opinion Leadership Mavens, Influentials, and e-fluentials e- 1. A market 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 influentials Influentials are 10% of population but influentials. use broad social networks to influence the other 90%! 3. Roper Starch identifies a group similar to internet market mavens called e-fluentials. They wield significant online and offline influence. 14-48
  49. 49. Communications within Groups and Opinion Leadership Marketing Strategy, WOM, and Opinion Leadership Numerous opportunities exist for retailers and sales personnel to use opinion leadership. Retailers and sales personnel can encourage their current customers to pass along information to potential new customers. 14-49
  50. 50. Communications within Groups and Opinion Leadership Marketing Strategy, WOM, and Opinion Leadership Buzz can be defined as the exponential expansion of WOM. It happens when “word spreads like wildfire” with no or limited mass media advertising supporting it. Buzz is generally not supported by large advertising budgets. Creating buzz is a key aspect of guerrilla marketing. 14-50
  51. 51. Communications within Groups and Opinion Leadership Online Strategies to Leverage Buzz and WOM Viral marketing is an online “pass-it-along” strategy, utilizing electronic communication to trigger brand messages (often via email) throughout a widespread network of buyers.” Online Guides are online opinion leaders, who are often highly knowledgeable and passionate experts, providing consumer information and advice. Blogs are personalized journals where people and organizations can keep a running dialogue. 14-51
  52. 52. Diffusion of Innovations Categories of Innovation Adoption Process Diffusion Rate Adopter Categories Marketing Strategies and the Diffusion Process 14-52
  53. 53. Diffusion of Innovations An innovation 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 market 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. 14-53
  54. 54. Diffusion of innovations • Nature of the innovation – ‘New’ as perceived by individuals or group • Categories of innovations – Continuous innovation: small changes needed – Dynamically continuous innovation: modest changes – Discontinuous innovation: large changes 14-54
  55. 55. Diffusion of Innovations Categories of Innovations Continuous Innovation Adoption of this type of innovation requires relatively minor changes in behavior(s) that are unimportant to the consumer. Dynamically 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 Innovation Adoption of this type of innovation requires major changes in behavior of significant importance to the individual or group. 14-55
  56. 56. Categories of innovations 14-56
  57. 57. Ad displays a product of continuous innovation, involving minor changes in behaviour 14-57
  58. 58. The adoption process and extended decision making 14-58
  59. 59. Diffusion of Innovations Diffusion Process The diffusion process is the manner in which innovations spread throughout a market. Form most innovations, the diffusion process appears to follow a similar pattern over time: • a period of relatively slow growth • followed by a period of rapid growth • followed by a final period of slower growth 14-59
  60. 60. Diffusion of Innovations Diffusion Rate of an Innovation Over Time (Cumulative) 14-60
  61. 61. Diffusion of Innovations Adopter Categories Innovators Early Adopters Early Adopters Late Majority Laggards 14-61
  62. 62. Adoptions of an innovation over time 14-62
  63. 63. Diffusion of Innovations Marketing Strategies and the Diffusion Process Market Segmentation Earlier purchasers of an innovation differ from later purchasers. Firms should consider a “moving target market” approach. 1. Focus on target market most likely to be innovators and early adopters. 2. As product acceptance occurs, attention should shift to the early and late majority. 14-63
  64. 64. Diffusion of Innovations Adopter Categories Innovators • Younger, educated, socially mobile, venturesome risk takers • Cosmopolitan view toward innovations • Capacity to adopt an unsuccessful product • Extensive use of commercial media, sales personnel and professional sources Early • Successful, well educated, and younger than peers Adopters • Tend to be opinion leaders in local reference groups • Will to take risk, but concerned with failure of innovation • Use commercial media, professional, and interpersonal information sources • Provides information to others 14-64
  65. 65. Diffusion of Innovations Adopter Categories Early • Somewhat older, less educated, less socially mobile Majority • Cautious about innovations • Adopts sooner than most of their social group, but after innovation is proven successful • Socially active but seldom leaders • Relies heavily on interpersonal sources of information Late • Older with less social status and less mobility Majority • Skeptical about innovations • Adopts out of social pressure, decreased previous product availability, or positive evaluation of innovation Laggards • Dogmatic and oriented toward past • Locally oriented and engage in limited social interaction • Adopts innovations with reluctance. 14-65
  66. 66. Factors affecting innovation uptake • Type of group • Relative advantage • Type of decision • Complexity • Marketing effort • Observability • Fulfillment of felt • Trialability need • Perceived risk • Compatibility 14-66
  67. 67. Diffusion of Innovations Factors Affecting the Spread of Innovations 14-67
  68. 68. Marketing strategies and the diffusion process • Market segmentation • Diffusion-enhancement strategies 14-68
  69. 69. Demographic characteristics of owners of iPods and MP3 players 14-69
  70. 70. Diffusion of Innovations Innovation Analysis and Diffusion Enhancement Strategies 14-70

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