Transcript Special Topics # 1: Group Influences

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Influences
Group Influences
1996
What is a Reference Group?
 Institutions, individuals, or groups, imagined or real, who
serve as points of comparison or reference.
What do they do?
Play a vital role in socializing the consumer and
transmitting society’s norms and values
From a marketer’s point of view why are they important?
Influence a person’s values, beliefs, attitudes and
behaviors.
 about
 products and brands
 What product attributes are important
 What lifestyles are desirable
 purchase/consumption decisions
Types of Reference Groups
Types of Reference Groups

Family
 Peer Groups
 Friendship Groups
 Formal Associations and Organizations
 Ethnic Groups
 Neighbors
Celebrities
 Sales People
Who would you look for for information or advice on skin Care
products?
Friend
30.2%
Doctor (Specialist)
22.1
Hair dresser/beautician)
18.6
Other
14.0
Pharmacist
8.1
Spouse
7.0
Total
100%
Types of Reference Group Influence
Normative: (e.g. families, peer groups)
 influences members to conform to fundamental
norms, values, beliefs.
 This kind of influence affects the product class one
consumes, not so much the specific brand
Comparative:
 members of groups that are important to a
consumer serve as bases for comparison
about product choice, brands, product usage,
activities, lifestyle, and so on
 This influences the specific brands one
purchases rather the broader product class
level decisions.
 Comparative reference groups serve as
benchmarks for specific/narrowly defined
attitudes or behavior
What specific reference persons or groups are likely to be
influential to:
A newlywed couple planning to visit Europe for a month?
A recent home buyer planning to renovate the house with
the latest available materials and fixtures
A student intending to buy a personal computer for the
first time
A graduate about to outfit herself with a wardrobe for
her new job
Features of Reference Groups
•
•
•
•
•
•
Norms
Values
Roles
Status
Socialization
Power
Functions of Reference Groups
 value-expressive (social image):
Gain esteem in the eyes of others
 informational: Recognize and rely on the expertise
of others
 utilitarian Identify with an admired or respected
group or person
Acceptance: Gain or maintain acceptance in a
group by complying with group norms
value-expressive
Function
I can impress my
guests if…
Consumer
Reference group
Dinner Guests
Hostess
…If I set out
this fine china
and silver
service
Product
(symbolic use)
Fine bone
china/silver
service
Guests might
notice this
exclusive dinner
service
Utilitarian function
Christy Turlington has
referent power over admirers
Consumer
Reference
Person
Celebrity
High school
students
Connection is
made between
behaviour and
respected
individual
Idea
Don’t smoke
Idea endorsed
by a celebrity
Acceptance
function
Peer pressure from reference
group to which she belongs
Consumer
Network
computer
game
enthusiast
I better get a
new computer
or I’ll look like
an idiot
Reference group
Game playing
friends
Product
Latest
computer
Peers talk about
their latest
computer toy
Informational function
Consumer Reports has
expert power
Consumer
Reference group
Consumer
Reports
Health Plan
shopper
The experts
have declared
this product the
best buy for my
needs
Product
Health Plan X
Brand evaluated
favorably in
Consumer
Reports
Factors that Affect
Reference Group Influence
 Information and experience (more informed and
experienced individuals in a product category are less
likely to be influenced by groups)
 Individual difference factors, e.g. personality/involvement
 Conspicuousness of the product (e.g. public use of a
product can influence acceptance of group attitudes)
 Credibility, attractiveness, and power of the reference
group
 Degree of perceived risk (economic, social, physical)
After “the Fonz” (Henry
Winkler) the popular
lead actor in Happy
Days took out a library
card in one episode of
the show there was a
500% increase in
library-card
applications by 9-14
year olds. Describe
which specific function
or reference group
theory is operating here.
Reference Group Power
Referent
Power
Coercive
Power
Information
Power
Sources
of
Power
Legitimate
Power
Reward
Power
Expert
Power
Types of Power Which
Reference Groups Have
What does it mean for a Reference group to have Power?
The ability to change a person’s behavior.
informational power (purveyors of knowledge)
 legitimate power (officers in a formal structure)
 expert power (your friend who is a computer expert)
 reward power (tangible or intangible)
 coercive power (fear)
referent power
The model
informational power
purveyors of
knowledge
legitimate power
officers in a
formal structure
expert power
your friend who is a computer expert
reward power
tangible or intangible
coercive power
fear
Conformity
Changes in beliefs or actions due to group pressure to conform
Conformity
 norms -- informal rules that govern behavior
 govern many aspects of consumption
 eg. about appropriate use of clothing and other personal
items, gift giving, sex roles, personal hygiene
 Normative social influences
people conform to the expectations of the group
Factors that Influence
Conformity to the Group
 Cultural Pressures to conform
 Fear and Consequences of Deviance (sanctions)
 Commitment - motivation
 Group Unanimity, Size and Expertise
 Gender Differences – women conform more?
Individual differences
Implications of Group
Influence for Marketing
 Impact on developing advertising appeals (e.g. informational
influence via use of “experts”)
 Impact on personal selling (salespeople as experts-objective
sources of information or as a referent with similar needs as
consumer)
 Marketing research needed, to assess group membership
(attitudes, psychographics)
 Public versus private consumption of goods and services is an
important issue
WORD OF
MOUTH
You and your partner/friend
have decided to go out to dinner
and want to try some place new,
and a little classier than Taco
Bell. How do you choose which
restaurant to go to?
You went to a restaurant
suggested by a friend but
didn’t enjoy the experience.
What might some of the
reasons be?
Most Important Reasons for Telling
Someone NOT to Visit a Restaurant
WORD OF MOUTH
1. People talk.
2. People talk because they feel.
3. People talk about things that have meaning.
4. People talk about things of mutual interest.
5. Some people get listened to more than others.
6. You can identify the talkers who get listened to in your business.
7. Champion customers who spread your reputation can expand
and exaggerate your virtues or faults when you cannot.
8. When you tell a friend what a great (or terrible) meal you had
at Mitilini’s Pizza Palace, then that's word of mouth.
WORD OF MOUTH COMMUNICATION (WOM)
 informal communications about a business or its
products
 Every business, either knowingly or unknowingly,
generates word of mouth that is either positive - which
helps build their business, or negative - which hurts it.
The most powerful of all marketing methods
Why is word of Mouth so powerful?
recommendations more trustworthy than formal
marketing ones
 often backed by social pressure to conform with
these recommendations: I.e. buy or don’t buy
 especially powerful when the consumer is relatively
unfamiliar with the product category
Motives for engaging in personal
word-of-mouth communication
 Involvement
 Self-enhancement, getting status
 Concern for others
 Dissonance reduction
Negative WOM
 people tend to tell more people about bad
experiences than they do about good ones.
 consumer is more likely to pay attention to
negative information than positive.
 Negative word of mouth is just as useful to
potential customers as positive word of mouth in
that it helps them discriminate on one or more
product/service attributes
“Did you know that
Pop Rocks can
explode in your
stomach, cut holes in
your throat and
little Mikey (of Life
cereal Fame) died
when his stomach
exploded after
drinking a Coke
shortly after eating a
packet of Pop
Rocks.”
13 WOM Truths
1. If you try to stop it, word-of-mouth momentum increases.
2. If you try to force it into motion, you will probably stop it or
prevent it from beginning.
3. Word of mouth increases as the product is more difficult to get.
4. The more secrecy shrouds a product, the more people want to talk
about it.
5. In the perception of the consumer WOM always tells the truth
6. Word of mouth usually goes fast in all directions.
7. Negative WOM travels farther and faster than positive WOM
8. For any given product, word of mouth is time-limited and
eventually will end or shift to focus on another product when the
community is satisfied that it has heard enough
9. WOM moves under its own power and according to its own rules.
10.The following tend to accelerate word of mouth: Controversy,
surprises, the bizarre or unusual, free samples, a human-interest
story, moral dilemmas, irony, curiosity, any core element of culture.
11.Word-of-mouth is the primary means by which your reputation is
spread.
12.Word-of-mouth universally is considered the best method to
signal value to customers.
13.Word-of-mouth is controlled by your customers.
How has the Internet affected WOM
 now relatively easy for a customer to broadcast his/her
opinion of, or experience with, a company to a large
number of people.
 Participants in online discussion forums, mailing lists,
bulletin boards, and newsgroups.
 Many people have popular websites or email newsletters
on which to broadcast their views
 Some people even build whole websites specifically
devoted to criticising or commenting on particular
companies
 numerous websites built specifically to give a voice to
the consumer/customer opinions and reviews. Eg
Epinions.com, and Amazon.com Rip-Off report
What are some of the business opportunities and challenges
This change brings?
Challenges
 added pressure on businesses (particularly online businesses) to
provide good customer service all the time.
 need to be more careful about how employees interact with others
on the Internet.
 Companies need to monitor the Internet proactively and be
prepared to state their case in the face of negative WOM.
Opportunities
easier for a business to find out what customers are saying about
them and their products or services, by browsing or searching
appropriate discussion forums and web sites.
 This information can be used to make targeted improvements in
practices and products, or modify marketing strategies.
tips on generating positive word of mouth advertising
1) Deliver quality products and services and continually improve.
2) Solicit feedback in the form of questions, comments, and even
complaints from customers and prospects. View these as
opportunities to improve your products, services and customer
support.
3) Follow through with what you say you're going to do. Don't make
unreasonable promises you know you can't keep.
4) Don't just try to meet your customer's expectations. Exceed them.
In other words, under-promise and over-deliver.
5) If a customer is not satisfied, take reasonable steps to try to make
them happy. Satisfied, loyal customers will be your best form of
advertising.
OPINION LEADERSHIP
 The central figure in WOM communication is the "opinion
leader".
 are knowledgeable about products and whose advice is taken
seriously by others
 Have various types of power
 Opinion leaders include people such as "market mavens” (people
who have up-to-date information about products, places to shop,
and different markets) "product enthusiasts", and "influentials".
 The stronger the social tie between an opinion leader and an
opinion seeker, the more likely the opinion seeker will act on the
recommendation.
 Opinion seekers depend upon opinion leaders to achieve their
own goals.
Between 20% and 40% of the population are opinion leaders.
SocioMetric Methods
Used to trace communication patterns within defined groups (eg.
Purchasers of a particular product)
Used to discover opinion leaders
A sociometric interview consists in the completion by each member
of a group
Questions asked are similar to: who would you go to information
Then the lines of communication are traced and opinion leaders
are identified by locating those named as providing useful
information
Expensive
The Dept. of health and Welfare has asked you to
design a national promotional campaign that will
encourage the use of condoms by sexually active
teenagers. You know that most teenagers have a
weak sense of identity, are highly susceptible to
influence from peers and idols, and strive to be “in”
and “with it”. Describe the key features of one
advertisement or communication that would be
typical of your overall campaign, which is based on
a specific reference group principle, and explain
how the ad would achieve the desired objective by
exploiting that principle.
Between 1981 and 1987, model David Goerlitz was
the handsome tough-looking “Winston Man” who
lent his macho image to glamorize Winston
cigarettes by scaling cliffs and flying helicopters on
billboards and in magazine ads. Now 48, Goerlitz,
who has butted out his 23-year, 3 ½ pack-a-day
habit after suffering a stroke, holds quit smoking
clinics and seminars on how to resist tobacco
advertising. Evaluate his potential effectiveness as
a reference person for the anti-smoking lobby and
for health agencies that might want to use him as a
spokesperson to downplay the glamour of smoking.
Consider his credibility in your arguments.
Opinion leaders can be powerful reference
persons to consumers. Marketers often seek
out opinion leaders and try to influence them
when a new concept is first introduced ion the
marketplace. Propose some practical and
cost-effective ways of identifying and
communication with opinion leaders for an
organization wishing to use word of mouth
marketing strategies to introduce a new
product or service or concept. Provide
examples.