Group Influences


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Slides on the Influence of Groups on Consumer Buying Behaviour

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Group Influences

  1. 1. Group Influences Dr. Rohit Vishal Kumar Reader, Department of Marketing Xavier Institute of Social Service P.O. Box. No: 7, Purulia Road Ranchi – 834001, Jharkhand, India Email: [email_address] / [email_address]
  2. 2. A Video for the Class
  3. 3. What is a Group? <ul><li>Group: </li></ul><ul><ul><li>Is defined as two or more persons who share a set of norms, values or beliefs and have certain implicit or explicit defined relationships to one another such that their behaviour are interdependent </li></ul></ul><ul><li>Reference Group: </li></ul><ul><ul><li>Is a Group whose presumed perspective or values are being used by an individual as the basis for his current behaviour </li></ul></ul>
  4. 4. Types of Groups <ul><li>Classification of Groups: </li></ul><ul><ul><li>Regularity of Contact </li></ul></ul><ul><ul><ul><li>Primary Group: Interaction on a regular basis </li></ul></ul></ul><ul><ul><ul><li>Secondary Group: Occasional Contact </li></ul></ul></ul><ul><ul><li>Extent of Formality: </li></ul></ul><ul><ul><ul><li>Formal Group: Well defined structure, roles and authority levels </li></ul></ul></ul><ul><ul><ul><li>Informal Group: Loosely defined structure </li></ul></ul></ul><ul><ul><li>Membership Status: </li></ul></ul><ul><ul><ul><li>Membership Group: Qualifies certain norms / standards to be a member </li></ul></ul></ul><ul><ul><ul><li>Symbolic Group: Aspires to be a member of the group </li></ul></ul></ul><ul><li>Influence of Group </li></ul>Individual Family Friends Social Class Subculture Culture Degree of Influence (More to Less)
  5. 5. Types of Reference Groups <ul><li>Contactual / Membership Reference Group: </li></ul><ul><ul><li>Individual holds membership of this group </li></ul></ul><ul><ul><li>Regular face-to-face contact with the members of the group </li></ul></ul><ul><ul><li>Approves of the values, attitudes and standards </li></ul></ul><ul><li>Aspirational Reference Group: </li></ul><ul><ul><li>Individual does not hold membership </li></ul></ul><ul><ul><li>No face-to-face contact with the members of the group </li></ul></ul><ul><ul><li>Provide positive influence on attitudes, values and behaviours </li></ul></ul><ul><li>Disclaimant Reference Group: </li></ul><ul><ul><li>Individual holds membership of this group </li></ul></ul><ul><ul><li>Regular face-to-face contact with the members of the group </li></ul></ul><ul><ul><li>Does not approves of the values, attitudes and standards </li></ul></ul><ul><li>Avoidance / Dissociative Reference Group </li></ul><ul><ul><li>Individual does not hold membership </li></ul></ul><ul><ul><li>No face-to-face contact with the members of the group </li></ul></ul><ul><ul><li>Individual avoids / has opposite attitudes and values </li></ul></ul>
  6. 6. Types of Reference Groups Membership No Membership Positive Influence Negative Influence Contactual RG Disclaimant RG Aspirational RG Avoidance RG Membership to the Reference Group is Dynamic and Changes with Time and External Influences
  7. 7. Reference Group Influence <ul><li>Nature of Reference Group Influence: </li></ul><ul><ul><li>Informational Influence </li></ul></ul><ul><ul><ul><li>Occurs when an Individual uses the behaviours and opinions of the reference group members as potentially useful information </li></ul></ul></ul><ul><ul><ul><li>Influence is based on similarity to group members / expertise of the influencing member </li></ul></ul></ul><ul><ul><ul><li>E.g.: Purchasing a NOKIA cell phone because my friends have one </li></ul></ul></ul><ul><ul><li>Normative Influence </li></ul></ul><ul><ul><ul><li>Occurs when an individual fulfills group expectation to gain a direct reward or to avoid a sanction </li></ul></ul></ul><ul><ul><ul><li>Influence is based on strong ties to the group and the product involved is socially conspicuous </li></ul></ul></ul><ul><ul><ul><li>E.g.: Purchasing Close-Up toothpaste to avoid bad breath </li></ul></ul></ul><ul><ul><li>Identification Influence: </li></ul></ul><ul><ul><ul><li>Occurs when the individual has internalized the groups values and norms </li></ul></ul></ul><ul><ul><ul><li>E.g.: Purchase of health foods because I belong to a fitness group </li></ul></ul></ul>
  8. 8. Reference Group Influence <ul><li>Influence is strongest when the product or brand is visible to the group </li></ul><ul><li>Influence is stronger when the product or brand is a luxury (non-necessity) item </li></ul><ul><li>Influence is directly proportional to the identification with group </li></ul><ul><li>Influence is strong when a particular activity is essential to the group functioning </li></ul><ul><li>Influence is also determined by the individual’s confidence in a buying situation </li></ul>
  9. 9. Influence on Marketing <ul><li>Personal Selling: </li></ul><ul><ul><li>Asch Phenomenon </li></ul></ul><ul><ul><ul><li>Influence of others on individual’s assessment capabilities </li></ul></ul></ul><ul><ul><li>Word of Mouth Influences </li></ul></ul><ul><li>Advertising: </li></ul><ul><ul><li>Using Snob Appeal </li></ul></ul><ul><ul><li>Using Informational Influence </li></ul></ul><ul><ul><li>Using Identification Influences </li></ul></ul><ul><ul><li>Repositioning Group Norms </li></ul></ul><ul><ul><ul><li>E.g.: A guy thinks smoking is cool, but a group of is shown as saying smoking is un-cool </li></ul></ul></ul>Visible Usage High Relevance of product to Group Low Individual Purchase Confidence Strong Individual Commitment to Group Luxury / Non-necessary Item` High Degree of Reference Group Influence Normative Influences not used in advertisement as they are critical of person portrayed
  10. 10. Exercise <ul><li>Groups to Present T and U </li></ul><ul><li>Have a Power-Point presentation ready (4-5 pages) </li></ul><ul><li>The group would be called to present in the class </li></ul><ul><li>Evaluation will be out of 15 marks </li></ul>Exercise T Find two advertisements that use reference group in an attempt to gain patronage. Describe the advertisement, the type of reference group being used and the type of influences being used Exercise U Explain using the “innovation-diffusion process” the sale of mobile phones in the Indian context. You can use secondary data for analysis from internet
  11. 11. Opinion Leaders & WOM
  12. 12. Opinion Leader <ul><li>Opinion leader is a person who actively filters, interprets or provides product and brand related information to their family, friends and colleagues </li></ul><ul><li>Characteristics of Opinion Leader </li></ul><ul><ul><li>They are generally product or activity specific </li></ul></ul><ul><ul><li>They actively help others to acquire goods and services </li></ul></ul><ul><ul><li>They tend to accompany people for shopping </li></ul></ul><ul><li>Influence of Opinion Leader </li></ul>Product Knowledge HIGH Product Knowledge LOW Purchase Involvement HIGH Purchase Involvement LOW High Moderate Moderate Low
  13. 13. <ul><li>Innovation: </li></ul><ul><ul><li>Is an idea, practice or a product perceived to be new by the relevant individual or a group </li></ul></ul><ul><li>Types of Innovation: </li></ul><ul><ul><li>Continuous </li></ul></ul><ul><ul><ul><li>Minor change in product, continuously over a period of time </li></ul></ul></ul><ul><ul><ul><li>Individuals may fail to identify the innovation </li></ul></ul></ul><ul><ul><ul><li>May require least persuasion to adopt </li></ul></ul></ul><ul><ul><li>Dynamic Continuous </li></ul></ul><ul><ul><ul><li>Continuous innovation but change in product may be noticeable </li></ul></ul></ul><ul><ul><ul><li>People may require moderate persuasion to adopt the product </li></ul></ul></ul><ul><ul><li>Discontinuous: </li></ul></ul><ul><ul><ul><li>Product is modified only after a long period of time </li></ul></ul></ul><ul><ul><ul><li>People may require high persuasion to adopt </li></ul></ul></ul>Innovation Diffusion Process (1/7)
  14. 14. <ul><li>Diffusion Process: </li></ul><ul><ul><li>Is the process through which the innovations spread through out the marketplace </li></ul></ul><ul><li>Factors Affecting Diffusion Process: </li></ul><ul><ul><li>Type of Group </li></ul></ul><ul><ul><li>Type of Decision </li></ul></ul><ul><ul><li>Marketing Effort </li></ul></ul><ul><ul><li>Fulfillment of felt needs </li></ul></ul><ul><ul><li>Compatibility </li></ul></ul><ul><ul><li>Relative Importance </li></ul></ul><ul><ul><li>Complexity </li></ul></ul><ul><ul><li>Observe ability </li></ul></ul><ul><ul><li>Trial </li></ul></ul><ul><ul><li>Perceived risk of adoption </li></ul></ul>Innovation Diffusion Process (2/7)
  15. 15. <ul><li>Everett M. Rogers “Innovation Adoption Model” </li></ul><ul><ul><li>Awareness </li></ul></ul><ul><ul><li>Interest </li></ul></ul><ul><ul><li>Evaluation </li></ul></ul><ul><ul><li>Trial </li></ul></ul><ul><ul><li>Adoption </li></ul></ul><ul><li>R.J. Lavidge & G.A. Steiner “Hierarchy of Effects Model” </li></ul><ul><ul><li>Awareness </li></ul></ul><ul><ul><li>Knowledge </li></ul></ul><ul><ul><li>Liking </li></ul></ul><ul><ul><li>Preference </li></ul></ul><ul><ul><li>Conviction </li></ul></ul><ul><ul><li>Purchase </li></ul></ul>Innovation Diffusion Process (3/7) Cognition stage Affective Stage Behaviour stage
  16. 16. <ul><li>E.K. Strang “AIDA Model” </li></ul><ul><ul><li>Attention </li></ul></ul><ul><ul><li>Interest </li></ul></ul><ul><ul><li>Desire </li></ul></ul><ul><ul><li>Action </li></ul></ul><ul><li>Various Authors “Communication Model” </li></ul><ul><ul><li>Exposure </li></ul></ul><ul><ul><li>Perception </li></ul></ul><ul><ul><li>Cognitive Response </li></ul></ul><ul><ul><li>Attitude </li></ul></ul><ul><ul><li>Intention </li></ul></ul><ul><ul><li>Behaviour </li></ul></ul>Innovation Diffusion Process (4/7) Cognition stage Affective Stage Behaviour stage
  17. 17. Innovation Diffusion Process (5/7) Innovators 2.5% Early Adopters 13.5% Early Majority 34.0% Late Majority 34% Laggards 16.0%
  18. 18. <ul><li>Innovators: </li></ul><ul><ul><li>Are venturesome risk takers </li></ul></ul><ul><ul><li>Capable of absorbing the financial and social cost of adopting an unsuccessful product </li></ul></ul><ul><ul><li>Use innovators as a reference group </li></ul></ul><ul><ul><li>Generally younger, better educated and more socially mobile than others </li></ul></ul><ul><li>Early Adopters: </li></ul><ul><ul><li>Tend to be opinion leaders in local reference groups </li></ul></ul><ul><ul><li>Willing to take a calculated risk on successful innovation but concerned with failure </li></ul></ul><ul><ul><li>Provide information to others </li></ul></ul><ul><ul><li>Generally are successful, well educated and somewhat younger than peers </li></ul></ul><ul><li>Early Majority: </li></ul><ul><ul><li>Tend to be cautious about innovations </li></ul></ul><ul><ul><li>Adopt sooner than most but only after the product has proved successful </li></ul></ul><ul><ul><li>They are socially active </li></ul></ul><ul><ul><li>Somewhat older, well educated but less socially mobile </li></ul></ul>Innovation Diffusion Process (6/7)
  19. 19. <ul><li>Late Majority: </li></ul><ul><ul><li>Are skeptical about innovations </li></ul></ul><ul><ul><li>Adoption is a response to social pressures or decreased availability of previously used products </li></ul></ul><ul><ul><li>Tend to be older and have less social status than others </li></ul></ul><ul><li>Laggards: </li></ul><ul><ul><li>Locally oriented and engaged in limited social activities </li></ul></ul><ul><ul><li>Tend to be dogmatic and oriented towards the past </li></ul></ul><ul><ul><li>Adoption is because of extreme necessarily and with reluctance </li></ul></ul>Innovation Diffusion Process (7/7)
  20. 20. Word of Mouth & Buzz Marketing <ul><li>Word of Mouth (WOM) Communications: </li></ul><ul><ul><li>Occurs when individuals share information with other individuals verbally </li></ul></ul><ul><li>Buzz Marketing: </li></ul><ul><ul><li>Is defined as exponential expansion of Word of Mouth Communication </li></ul></ul><ul><ul><li>It is not supported by large advertising expenses </li></ul></ul><ul><ul><li>Buzz can be created by marketing efforts </li></ul></ul><ul><ul><li>For a buzz to be successful, the product should live up to expectations </li></ul></ul>
  21. 21. Exercise <ul><li>Groups to Present V and W </li></ul><ul><li>Have a Power-Point presentation ready (4-5 pages) </li></ul><ul><li>The group would be called to present in the class </li></ul><ul><li>Evaluation will be out of 15 marks </li></ul>Exercise W Interview two sales person each – of computers and musical CD’s. Determine the role that (i) Opinion Leaders and (ii) Sales person play in influencing the purchase process Exercise V Use the Internet to find data about sales of “Harry Potter” series of books and determine whether Buzz marketing is applicable to the sales of Harry Potter book or not?