Lectures 13,14: Reference Groups

Opinion Leader

" a person who is frequently able influence others attitudes or behaviours." Opinion leaders are: Personality -Innovative -Willing to talk -Self confident -Gregarious Persuasive -Technically competent, expert power -Credible, have knowledge, information power, unbiased -Interconnected and socially active, may have legitimate power -Homophilous with those they influence (age, ed, income) -First to buy, have absorbed risk, present both sides Motivated -By product, self or message and social situation

Reference Group Definition

"An actual or imaginary individual or group conceived of having significant relevance upon an individual's evaluations, aspirations, or behaviour Reference group effects are more robust for purchases that are: Luxuries Socially conspicuous or visible to others.

Consumer Tribe

"a group of people who share a lifestyle and who identify with each other because of a shared allegiance to an activity or product"

Brand Community

"a set of consumers who share a set of social relationships based on usage or interest in a product"

The Transfer of Information

-Assimilation: Distortions tend to follow a pattern from ambiguous to conventional to fit with existing schemas. -Leveling: Details are omitted to simplify structure. -Sharpening: Prominent details are accentuated

Deindividuation

-the idea that individual identities become submerged within a group -Loss of self-awareness and evaluation apprehension; occurs in group situations that foster responsiveness to group norms, good or bad. E.g. Binge Drinking in College, yelling at the referee at a sporting event

Types of Reference groups:

Aspirational -consisting of individuals (not necessarily known personally) with whom a person desires to be associated, but to which she does not belong. Thus person tries to copy the attitudes and behavior of the members of the group. Membership -Groups that a individual not only belongs to but is an agreement to in terms of atitudes norms and behaviours Avoidance - in which a person does not hold membership and does not have face-to-face contact and of whose values, attitudes, and behaviours he or she disapproves. Thus, the person tends to adopt attitudes and behaviour that are in opposition to those of the group. For example, consumers scrupulously avoid buying anything that might identify them with that group. `Normative -influences your norms, attitudes and values through direct interaction. Examples of your normative reference groups include your parents, siblings, teachers, peers, associates and friends. Comparitive -Groups that an individual compares themself to and strives to be like e.g Celebrities and heroes.

Major Reference groups:

Family Friends Social Class Sub-Cultures Ones own Culture Others Cultures

Types of Opinion Leaders

Innovative communicators: -Opinion leaders who also are early purchasers. Opinion seekers: -More involved in a product category and actively search for information. Market maven: -Describes people who are actively involved in transmitting marketplace information of all types. Surrogate Consumer: -A person who is hired to provide input in purchase decisions. -Surrogates are usually compensated for their advice

Negative WOM and the Power of Rumours

Negative WOM: Consumers weigh negative info from other consumers more heavily than they do positive comments.

How influential is an opinion leader

Polymorphic: -Expert in several fields Usually across related categories -Monomorphic Expert in one field

Pros and Cons of Viral Marketing

Pros -Low cost -Naturally targeted Cons -Difficult to achieve success -May be risky for brand reputation -May lose customer trust

When is Word of Mouth Most Powerful?

Unfamiliar with product/ category New Complex Inexperienced with product/ category

Viral Marketing

Viral Marketing: -"Viral marketing refers to the strategy of getting customers to sell a product on behalf of the company that creates it" eg. uber with free ride when you sign someone up -Approach suited to combining WOM and Internet/ new technology (e-WOM)

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. Virtual communities come in different forms: Social media Blogs and message boards Marketers can leverage these communities for promotional purposes

Word-of-Mouth Communication

Word-of-Mouth (WOM): Product information transmitted by individuals to individuals. Tends to perceived as more trustworthy than messages in traditional marketing channels.

Reference Group Influence

informational influence - information will influence an individual if it is accepted and is perceived as enhancing the individual's knowledge of the environment and/or their ability to cope with some aspect of this environment e.g. purchasing a product. Utilitarian influence - In a purchasing decision, an individual will comply with the expectations of a reference group if s/he thinks the group can produce rewards or punishments, if the behavior would be visible or known to the group members, and if the individual is motivated to receive the reward or avoid the punishment. Value-expressive influence - an individual is influenced by the reference group because of a desire to enhance his/her self concept or because of a liking (affect) for the group.