understanding consumer
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BUSMGT752Week7.pptx1
Plenary 7 Learning Outcomes
LO1: Understand what reference groups are and how they’re classified
LO2: Understand how social identity theory underpins group influences on consumers
LO3: Understand that nature of reference group influence on consumption and the types of influences
LO4: Understand how marketers use reference group knowledge
LO5: Understand how brand communities function and are created
LO6: Understand how reference groups foster marketing-relevant communication
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Quantitative
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Readings
Fournier, S., & Lee, L. (2009). Getting Brand Communities Right. Harvard Business Review, April, 105–112.
Shibutani, T. (1955). Reference Groups as Perspectives. American Journal of Sociology, 60(6), 562–569. https://doi.org/10.1086/221630
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What is a reference group?
A reference group is the group whose perspective we consider. Now our reference could be very large or very small including few of our family members or few close friends. Reference groups influence people a lot in their buying decisions. They set the levels of lifestyle, purchasing patterns, etc.
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Reference group
A reference group is an actual or imaginary individual or group that has a significant effect on a person’s evaluations, aspirations, and behaviour. Reference groups guide a person’s behaviour in specific situations.
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Reference group
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Group classification
Membership
Dichotomous: YES, is a member or NO, is not a member
Attraction
Membership desirability: positive OR negative (both can influence behaviour)
If you are a member positive (associative = pride) or negative (dissociative = shame)
If you are not a member positive (aspirational = high desire) or negative (dissociative = avoid)
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Group classification
Degree of contact
Amount of contact the group members have with each other
Inversely proportional to group size (i.e., the larger the group, the lower the degree of contact with all people within the group)
Primary (frequent contact) vs. secondary groups (limited or intermittent contact)
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Types of groups
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Illustrative, fictional examples only
Close friends
Not-so-close friends Younger siblings High school cohort Celebrities Criminals
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Primary vs Secondary Groups
Primary reference groups are basically the set of people whom you meet every day. They can be from your family, your close friends, your roommates, etc.
These people from primary groups may have a direct and strong impact in your lives and your buying decisions since they are very significant to you. Primary groups make you comfortable and give you a feeling that they are with you when you are confused about a purchase. These people give you very honest and clear advices as they are so close to you, due to which you could be more confident about the purchase. Research shows that the bond between people leads people to be effectively social and as satisfied consumers.
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Primary vs Secondary Groups
Secondary reference groups are usually formal and they speak less frequently. They might be professionals, your collogues, your seniors at work or your acquaintance at club, etc.
In secondary reference groups the power to influence people is quite less as compared to primary reference groups as people in these groups are not that comfortable in sharing their thoughts or views on the purchase.
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Types of Reference Groups
Groups fall into 2 categories: – membership groups – aspiration groups
There are also the negative influences – disclaimant group (disgruntled former members) – dissociative group (membership to be avoided)
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Aspirational Group
Aspirational group is the one to which a person may want to become part of. They currently are not part of that group but wish to become and get with that group. For doing the same, they try to dress, talk, act and even think the way the members of that group do.
For example, people who like Madhuri Dixit wish to become like her and meet her and so start purchasing and using all those products that she endorses.
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Aspirational Groups
Anticipatory aspiration groups: one you expect to join – club, profession, social class
Symbolic aspiration groups: “I’d never belong to any club that would have me for a member.” (Woody Allen)
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Dissociative Group
The people in these groups are totally opposite to the people in the aspirational group. Here people deny of becoming or getting connected to a particular group. They just hate being related to that group.
For example, if people don’t like a particular community, they would never like being connected to them. So they would try all the possible ways to avoid the way in which they dress, think or act.
Therefore, marketers need to understand the likes and dislikes of the consumers and also the groups to which they belong. Marketers should recognize the extent to which a reference group influences the consumer and he should also understand out of all the groups which group influences him the most.
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New and Developing Reference Group Points
Increasing emergence of niche subcultures (Overabundant choice, TradeMe?, Second Life, Xbox Live, Burning Man)
Internet increasing connectivity, leading to new reference groups
Speed of impact increased by modern media
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Social identity
Social identity is the portion of an individual's self-concept derived from perceived membership in a relevant social group.
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Social identity theory
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Social identity
An individual’s sense of who they are, based on their group membership(s), i.e., provide a sense of belonging to the social world.
Social categorisation
Us (in-group) vs. Them (out-group)
Social identity theory
Central hypothesis: in-group will discriminate against out-group, seek out negative aspects of out-group, to enhance self-image.
Stereotyping
Natural cognitive process of putting people into
groups/categories
Results in over-exaggeration of similarities (within in-group) and differences (between in- and out-groups)
(Tajfal & Turner, 1979)
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Tajfel and Turner (1979) proposed that there are three mental processes involved in evaluating others as “us” or “them” (i.e. “in-group” and “out-group”. These take place in a particular order.
Social identity theory
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Social identity theory
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Social identity theory
Henri Tajfel's greatest contribution to psychology was social identity theory. Social identity is a person’s sense of who they are based on their group membership(s).
Tajfel (1979) proposed that the groups (e.g. social class, family, football team etc.) which people belonged to were an important source of pride and self-esteem. Groups give us a sense of social identity: a sense of belonging to the social world.
We divided the world into “them” and “us” based through a process of social categorization (i.e. we put people into social groups).
Henri Tajfel proposed that stereotyping (i.e. putting people into groups and categories) is based on a normal cognitive process: the tendency to group things together. In doing so we tend to exaggerate:
1. the differences between groups
2. the similarities of things in the same group.
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Consumer Reference Groups
A group that forms a reference point for an individual in the formation of judgments, beliefs, and behaviour
May be membership or non-membership or positive or negative
Evoking reference groups is a key tactic for consumer goods marketers
But principles are also very important for business-to-business
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When do groups exert influence?
Three key factors predict whether the group affects behaviour: – individual’s attitude toward the group – nature of the group – nature of the product
Individual’s attitude toward the group: – is it viewed as a credible info source? – do they value views & reactions of members? – do they accept the rewards and punishments of the group?
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Bases of Power
Reward Power: I's perception that G has the ability to mediate rewards for them
Coercive Power: I's perception that G has the ability to mediate punishments for them
Legitimate Power: I's perception that G has the legitimate right to prescribe behaviour for them.
Referent Power: I's identification with G
Expert Power: I's perception that G has special knowledge or expertness
(French & Raven 1959, pp. 155-156).
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Group influences on consumer behaviour
Group influences are those that a group may have over an individual’s consumption
choices (e.g., product, product category, brand, outlet, etc.)
A group consists of two or more individuals who share a set of norms, values, or beliefs, and have a certain type of relationship that makes their behaviours interdependent.
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Group influences on consumer behaviour
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Groups vary in terms of how consumers perceive and relate to them
Groups can provide
different ‘resources’ for decision making
Groups can influence different contexts of consumer behaviour
Important point: Almost all consumer behaviour happens within a group setting.
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Reference Group influences on consumption
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Groups influence consumers and their consumption process due to social norms. We conform to these norms and take on specific roles in society, depending on the situation.
We are more likely to conform if there are cultural pressures (e.g., individualism vs. collectivism), fear deviance, have high commitment, the group has unanimity and expertise, and if we are, personality-wise, more susceptible to interpersonal influence.
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Reference Group influences on consumption
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Expectations about behaviours that are deemed appropriate for all people in a particular social context
Implicit, organic, non-verbal
Violation = social sanctions
(“you can’t sit with us”)
The tendency to want to be like
relevant and significant others
We often subconsciously conform
Emotional contagion and social feedback drive conformity
Prescribed patterns of behaviour expected of a person in a given situation by virtue of a person’s social position in that situation
E.g., student, teacher, mother, friend, boss, employee, etc.
(Quester et al., 2014)
Norms
Conformity
Roles
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Types of reference group influences
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Informational influence
Using behaviours and opinions of other reference group members as information to guide your own behaviour in a given situation. Often used as a heuristic in complex buying situations.
Normative (utilitarian) influence
Fulfilling group expectations to gain a direct reward or avoid punishment/social sanctions.
Norms evolve, even on social media (e.g., #f4f, #l4l) Considered as ‘social etiquette’, are
unwritten and invisible
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Types of reference group influences
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Identification (value-expressive) influence
Using perceived group norms and values as a guide for your own attitudes or values, based on an aspiration to join the group. Using the group as a reference point for your own self-image. Often visible (e.g., clothes, brands)
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Types of reference group influences
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(Quester et al., 2014)
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Determinants of reference group influence
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(Quester et al., 2014)
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Degree of reference group influence based on the consumption situation
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(Adapted from Quester et al., 2014)
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Consumption subcultures and brand communities
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Consumption subculture
A distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity.
Brand community (‘consumer tribes’)
A group of people united in their admiration for a brand, characterised by a shared sense of belonging among members that distinguishes them from those outside the community.
Consumption ritual
A set of interrelated behaviours that occurs in a structured format, has symbolic meaning, is repeated periodically and involves the consumption of goods and services.
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Building a Brand Community
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Well-defined brand image
Avoids confusion among users, offers a clear image to be promoted and embraced within a community
Expressive hedonic culture
Brand communities have been shown to form more readily around brands that are rich in expressiveness and hedonic qualities
Rich and lengthy brand history
Perceived to have more stable quality, authenticity, worth, and reputation
Public consumption
Use of brand in a public setting can attract new members to share ideas about the brand and to collectively build the community
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For marketers creating brand communities
There are both positives and negatives to consider when attempting to create a brand community or an iconic brand.
Advantages
Key customers will actively
promote the brand
Members will provide feedback into the production process (co-creation of value)
Community activities will benefit other mainstream users of the brand
Disadvantages
Loss of control of brand
values and brand image
Brand community members can be the toughest of critics and there will be strong backlash if they are dissatisfied or disappointed
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Groups foster communication
WOM (word-of-mouth)
Informal communication between consumers about goods
and services.
WOM marketing
The intentional influencing of consumer-to-consumer communications using marketing techniques. (Note: this is not the use of fake reviews).
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Groups foster communication
Opinion leader (influential)
An individual who has greater long-term involvement with a product or service category (i.e., ‘enduring involvement’) than others in the group, and who filters and interprets information about products or services for other members.
Market maven
A person who appears to have vast amounts of information about many kinds of products, services, outlets, and brands; they initiate discussions with others about the shopping process and are opinion leaders.
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Groups foster communication
(Quester et al., 2014)
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