Consumer Behaviour module 6
- 1. External influences on CB Groups & Reference Groupshttp://www.scribd.com/doc/159491551/Unit-9-Reference-Group-Influence-and-Group-Dynamics#scribd
- 2. Major Consumer Reference Groups -
- 3. Define groups Its define as “two or more persons who are interacting with one another in a such a manner that each person influences and influenced by each other while buying the product or while consumption of product”
- 4. What is a Group? • A Group may be defined as two or more people who interact to accomplish either individual or mutual goals(Goal may be to buy a product or do a work together). • A Reference Group is any person or group that serves as point of comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior. • Reference groups become strong reference points because of their credibility in terms of knowledge and experience, attractiveness and the power they wield. • From a marketing perspective, reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions.
- 5. Primary versus Secondary Groups Primary group ( family, friends, neighbours) If a person interacts on a regular basis with other individuals (with members of his or her family, with neighbours, or with co-workers whose opinions are valued), then these individuals can be considered as a primary group for that person. Secondary group (meet or interact occasionally) On the other hand, if a person interacts only occasionally with such others, or does not consider their opinions to be important, then these others constitute a secondary group for that person. From this definition, it can be seen that the critical distinctions between primary and secondary groups are the frequency with which the individual interacts with them and. the importance of the groups to the individual.
- 6. Formal versus Informal Groups Another useful way to classify groups is by the extent of their formality; that is, the extent to which the group structure, the members' roles, and the group's purpose are clearly defined. If a group has a highly defined structure (e.g., a formal membership list), specific roles and authority levels (a president, treasurer, and secretary), and specific goals. On the other hand, if a group is more loosely defined, if it consists, say, of four women who were in the same college sorority and who meet for dinner once a month, or three co-workers who, with their spouses, see each other frequently then it is considered an informal group.
- 7. Copyright 2007 by Prentice Hall Broad Categories of Reference Groups • Normative Reference Groups • Comparative Reference Groups
- 9. 2 types of reference groups • Normative (These are group whose values, norms and perspective an individual uses in defining a personal social situation ex: child, workplace) • Comparative • Indirect Reference Groups Reference groups that influence general or broadly defined values or behavior are called Normative Reference Groups e.g. A child’s Normative Reference Group is the immediate family) . For example, dress codes indicate theimpact of normative influence on clothing. Similarly, norms influence how much a person eats or drinks at a party • Reference Groups that serve as benchmarks(comparision) for specific or narrowly defined attitudes or behavior are called Comparative Reference Groups (A Comparative Reference Groups might be neighboring family whose lifestyle appears to be admirable and worthy of imitation).
- 10. Indirect Reference Groups Individuals or groups with whom a person identifies but does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, or TV personalities.
- 11. Consumer Socialization The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers.
- 12. Types of Reference Group Influence • Informational Influence – When a member of reference group provides information used to make purchase decisions • Normative Influence – When we conform to group norms in order to belong to that group • Identification Influence – When we identify with, and internalize, a group’s values and behaviours
- 15. TYPES Reference Groups • Friendship groups • Shopping groups • Work groups • Virtual groups or communities(social networks) • Consumer-action groups
- 16. Selected Consumer-Related Reference Groups and appeals • Friendship groups • Shopping groups • Work groups • Virtual groups or communities • Brand communities • Consumer-action groups • Celebrities • The expert • The common man • The executive and employee spokesperson • Spokes characters • Other reference group appeals
- 17. Consumer Related Reference Groups Work Groups: individuals who work together. Structured and formal in interactions. Informal friendship groups Friendship Groups: usually unstructured and not authoritarian Shopping Groups: two or more people who shop together for regular necessities and even window shopping. Off-shoot of friendship groups Virtual groups or communities: members of special interest websites who chat.
- 19. Friendship groups • Informal group • Any structure or hierarchy
- 20. Friendship Groups • Friendship groups are typically classified as informal groups because they are usually unstructured and lack specific authority levels. • In terms of relative influence, after an individual’s family, his or her friends are most likely to influence the individual’s purchase decisions. • Seeking and maintaining friendships is a basic drive of most people. • Friends fill a wide range of needs: They provide companionship, security, and opportunities to discuss problems that an individual may be reluctant to discuss with family members. • Marketers of products such as brand-name clothing, fine jewelry, snack foods, and alcoholic beverages recognize the power of peer group influence and frequently depict friendship situations in their advertisements.
- 21. Shopping Groups • Two or more people who shop together, whether for food, for clothing, or simply to pass the time, can be called a shopping group. • Such groups are often offshoots of family or friendship groups and therefore, they function as what has been referred to as purchase pal. • The motivation for shopping with a purchase pal range from a primarily social motive to helping reduce the risk when making an important decision. • A special type of shopping group is the in-home shopping party, which typically consists of a group that gathers together in the same home of a friend to attend a “party” devoted to demonstrating and evaluating a specific line of products.
- 23. Reference Group Appeals • Celebrities • The expert • The “common man” • The executive and employee spokesperson • Trade or spokes-characters • Other reference group appeals
- 32. Define Family • Two or More Persons related by blood or marriage • Reside/LIVE with each other in a single house or single shelter
- 33. Types of Family – Married Couple: • Simplest type of family consisting of husband and wife – Nuclear Family: • Consist of Husband Wife and at least one child – Extended Family: • Consist of a nuclear family with at least one grand parent – Joint Family: • Blood relatives and their spouses with kids staying together
- 35. Functions of a family Economic Emotional Lifestyle Socialization
- 36. Economic well-being Although families primarily for economic security, providing financial means to its dependents unquestionably a basic family function.. No longer are traditional husband as economic provider and wife as home maker and child-rearer still valid. For instance, it is very common for married women with children in the United States and other industrial countries to be employed outside the home for their husbands to share household responsibilities. The economic role of children also has changed. Today, despite the fact that many teenage children work, they rarely assist the family financially. Instead, many teenagers are expected to pay for their own amusements. Emotional support The provision of emotional nourishment (including love, affection, and intimacy) to its members is an important core function of the contemporary family. In fulfilling this function, the family provides support and encouragement and assists its members in coping with decision making and with personal or social problems. To make it easier for working parents to show their love, affection, and support to their children, greeting card companies have been increasingly creating cards for parents to give to their children (vice versa) Suitable family lifestyle • Another important family function in terms of consumer behavior is the establishment of a suitable lifestyle for the family. • Upbringing, experience, and the personal and jointly held goals of the spouses determine the importance placed on education or career, on reading, on television viewing, on the learning of computer skills, on the frequency quality of dining out, and on the selection of other entertainment and recreational activities. • Family lifestyle commitments, including the allocation of time, are generally influencing consumption patterns.
- 37. Purchase Influence Pattern/dynamics of husband wife decision making • Husband Dominant • Wife Dominant • Joint • Autonomic
- 38. Marital roles in products Wife dominant: Women clothing Women jewelry Cosmetics Daily needs products Husband Dominant: Sporting Equipments Men’s business clothing hardware's Autonomic : Toys and games Baby products Luggage or other durables Joint sync: Home appliances Vacations & Financial Products
- 39. Types of Family Decisions • Husband Dominated Decisions – Husband takes the purchase decisions – Traditionally in products like Automobiles, Alcohol, Insurance • Wife Dominated Decisions – Wife takes the purchase decisions – Traditionally in products like household maintenance items, food and kitchen appliances • Joint Decision Making – Both husband and wife make the decision – Traditionally in School choice, living room furniture, vacations • Child Dominated Decision Making – Child makes the “final product” decision – Traditionally on children related items • Unilateral Decision Making – Taken by any member of the family – Traditionally on Personal Care items, low priced goods These Traditional Roles are Changing
- 40. The Family Life Cycle • Traditional Family Life Cycle – Stage I: Bachelorhood – Stage II: Honeymooners – Stage III: Parenthood – Stage IV: Postparenthood – Stage V: Dissolution
- 41. S1 Bachelorhood: young single adult living apart from parents spends their income on rent, home furnishing, purchase and maintenance of automobile, mobile, ravel and entertainment, clothing and accessories like to spend time in meeting, dating and mating, get together, picnic and party This market segment also offers marketers opportunities in terms of single serving packaging for a wide variety of foods. Overall, there is more individuality in purchasing at this stage. S2 Honeymooners young married couple this stage continue until the arrival of the couples first child new home, honeymoon trips and beautiful garden Purchases include durable goods such as refrigerators and other appliances, inexpensive durable furniture, home entertainment items such as TV sets.
- 42. S3 Parenthood marriage couple with at least one child living at home it is also called full nest stage The financial resources thus change significantly. Child rearing and educational responsibilities increase. Money is now directed to baby furniture, toys, chest rubs, vitamins, baby foods and baby medicines. this stage can be divided into shorter phases (The pre school phase, The elementary school phase, The high school phase, the college phase ) S4 Post-parenthood An older married couple with no children at living home – “Empty nest stage” They have higher disposable income because of savings and investment an they have fewer experiences Hobbies also become an important source of satisfaction. More is spent on luxury appliances, magazines and health products. They look forward to being involved grandparents for these reason families in the post parenthood stage are an important market for luxury goods, new automobiles, expensive furniture and vacation to faraway places. S5 Dissolution At this one of the couple dies & other is left alone The surviving spouses usually wife often tends to follow a more economical lifestyle. Many surviving spouses seek each other out of companionship others enter into second (3rd or 4th) marriage.
- 43. Family Life Cycle (1/2) • Stage 1 :Bachelorhood • Few Financial Burdens • Fashion and Recreation Oriented • Stage 2: Newly Married Couple • Financially better off • Highest purchase rate of consumables and durables • Romantically inclined • Stage 3 : Parenthood – Elementary school stage • Youngest child < 6 years of age • Low Liquid Assets • High purchase of baby food & baby oriented products – High school stage • Youngest child >= 6 years of age • Financially better off – College Phase • All children still financially dependent • High family influence on purchases • Major expense on higher education
- 44. Family Life Cycle (2/2) • Stage 4: Post Parent Hood • Head of the family in labour force • No Dependent Children • Expenditure in self development • Stage 5 :Dissolution : – Solitary Survivor – II • Single Surviving head of family in labor force • Supported by family and friends • Have high expendable income • Spent on loneliness reducing products and services – Solitary Survivor – II: • Single Surviving wife • Low levels of income and savings • Expenditure on medical products, security, affection
- 45. Stages of the family life cycle 1) Bachelor Stage. (Young single people not living at home): (a) Few financial burdens (b) Fashion/opinion leader led (c) Recreation orientated (d) Experiment with personal financial management (e) men and women differ in consumer behaviour - women more housing-related items and furniture - men more on restaurants and cars (f) buy: basic kitchen equipment, basic furniture, cars, holidays, •A young bachelor would not mind spending on alcohol, attending night parties, casinos but the moment he has a wife at home, he would instead spend on household and necessary items. •No bachelor likes to invest money on mutual funds, insurance policies, mediclaims etc but for someone who is married buying an investment plan becomes his first priority. Women generally are inclined towards buying toiletries, perfumes, dresses, household items, furnishings, food products while men would rather love to spend on gadgets, cars, bikes, alcohol etc.Both have different tastes but when they come together, they mutually decide on what to buy and what not to buy
- 46. 2) Newly married couples (Young, no children) (DINKS) (a) Better off financially than they will be in the near future, (b) High levels of purchase of homes and consumer durable goods, (c) Establish patterns of personal financial management and control; (D) Buy: cars, fringes, cookers, life assurance, durable furniture, holidays
- 47. 8) Solitary survivor I. (dissolution) (a) Income still adequate but likely to sell family home and purchase smaller accommodation, (b) Worries about security and dependence; (c) Concern with level of savings and pension, (d) Buy: hobbies and pastimes,
- 49. BUYING Roles in the Family Decision-Making Process ROLE DESCRIPTION Influencers Family member(s) who provide information to other members about a product or service Gatekeepers Family member(s) who control the flow of information about a product or service into the family Deciders Family member(s) with the power to determine unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a specific product or service Buyers Family member(s) who make the actual purchase of a particular product or service Users Family member(s) who use or consume a particular product or service Disposers Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service
- 50. Other Functions of the Family • Economic well-being • Emotional support • Suitable family lifestyles
- 51. Factors Encouraging Conformity: A Reference Group Must ... • Inform or make the individual aware of a specific product or brand. • Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group. • Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group. • Legitimize the decision to use the same products as the group
- 52. Selected Consumer-Related Reference Groups • Friendship Groups • Shopping Groups • Work Groups • Virtual Groups or Communities • Brand Communities • Consumer-action Groups • Celebrities
- 53. Friendship Groups • Friendship groups are typically classified as informal groups because they are usually unstructured and lack specific authority levels. • In terms of relative influence, after an individual’s family, his or her friends are most likely to influence the individual’s purchase decisions. • Seeking and maintaining friendships is a basic drive of most people. • Friends fill a wide range of needs: They provide companionship, security, and opportunities to discuss problems that an individual may be reluctant to discuss with family members. • Marketers of products such as brand-name clothing, fine jewelry, snack foods, and alcoholic beverages recognize the power of peer group influence and frequently depict friendship situations in their advertisements.
- 54. Shopping groups • Like minded persons • Friends or family
- 55. Shopping Groups • Two or more people who shop together, whether for food, for clothing, or simply to pass the time, can be called a shopping group. • Such groups are often offshoots of family or friendship groups and therefore, they function as what has been referred to as purchase pal. • The motivation for shopping with a purchase pal range from a primarily social motive to helping reduce the risk when making an important decision. • A special type of shopping group is the in-home shopping party, which typically consists of a group that gathers together in the same home of a friend to attend a “party” devoted to demonstrating and evaluating a specific line of products.
- 56. Work groups • Peers • Subordinates • superiors
- 57. Work Groups • The sheer amount of time people spend at their jobs, frequently more than 35 hours per week, provide ample opportunity for work groups to serve as a major influence on the consumption behavior of the members. • Formal Work Group: it consists of individuals who work together as part of a team, and thus have a sustained opportunity to influence each other’s consumption related attitudes and actions. • Informal Work Group: it consists of people who have become friends as a result of working for the same firm, whether or not they work together as a team, and they can influence the consumption behavior of other members during coffee or lunch breaks or at after-work meetings.
- 58. Virtual groups or communities • Social networks • E mails • E shopping
- 59. Virtual Groups or Communities • A virtual team (also known as a geographically dispersed team or distributed team) is a group of individuals who work across time, space and organizational boundaries with links strengthened by webs of communication technology. • Powell, Piccoli and Ives define virtual teams in their literature review article "as groups of geographically, organizationally and/or time dispersed workers brought together by information and telecommunication technologies to accomplish one or more organizational tasks.” • Ale Ebrahim, N., Ahmed, S. & Taha, Z. in their recent (2009) literature review paper, added two key issues to definition of a virtual team “as small temporary groups of geographically, organizationally and/ or time dispersed knowledge workers who coordinate their work predominantly with electronic information and communication technologies in order to accomplish one or more organization tasks”.
- 60. Contd… • Members of virtual teams communicate electronically and may never meet face-to-face. • Virtual teams are made possible by a proliferation of fiber optic technology that has significantly increased the scope of off- site communication. • Virtual teams allow companies to procure the best talent without geographical restrictions. • According to Hambley, O’Neil, & Kline (2007), "virtual teams require new ways of working across boundaries through systems, processes, technology, and people, which requires effective leadership...despite the widespread increase in virtual teamwork, there has been relatively little focus on the role of virtual team leaders."
- 61. Brand Communities • A brand community is a community formed on the basis of attachment to a product or marquee. • Recent developments in marketing and in research in consumer behavior result in stressing the connection between brand, individual identity and culture. Among the concepts developed to explain the behavior of consumers, the concept of a brand community focuses on the connections between consumers. • A brand community can be defined as an enduring self-selected group of actors sharing a system of values, standards and representations (a culture) and recognizing bonds of membership with each other and with the whole. • Brand communities are characterized in shared consciousness, rituals and traditions, and a sense of moral responsibility.
- 62. Contd… • The term "brand community" was first presented by Albert Muniz Jr. and Thomas C. O'Guinn in a 1995 paper for the Association for Consumer Research Annual Conference in Minneapolis, Minnesota. • In a 2001 article titled "Brand community", published in the Journal of Consumer Research (SSCI), they defined the concept as "a specialized, non- geographically bound community, based on a structured set of social relations among admirers of a brand." This 2001 paper has been acknowledged by Thomson Scientific & Healthcare to be one of the most cited papers in the field of economics and business. • Many brands provide examples of brand communities. In computers and electronics: Apple Inc. (Macintosh, iPod, iPhone), Holga and LOMO cameras, and Palm and Pocket PC Ultra-Mobile PCs. • In vehicles: Ford Bronco, Jeep, automobiles, and • Royal Enfield and Harley-Davidson motorcycles. • In toys: Barbie and Lego.
- 63. Consumer-action Groups • A particular kind of consumer group-A Consumer Action Group-has emerged in response to the consumerist movement. Today there are a large number of such groups that are dedicated to providing consumer products in a healthy and responsible manner, and to generally add to the overall quality. • For example, a diverse range of consumer concerns being addressed by private and public consumer-action groups: neighborhood crime watch, youth development, forest and wildlife concerns, children and advertising, race and ethnicity, community volunteerism, legal assistance, public health, disaster relief, energy conservation, education, smoking, the environment, access to telecommunications, science in the public interest, credit counseling, privacy issues, and children and internet. Two broad categories of Consumer Action Groups: • Those that organize to correct a specific consumer abuse and then disband (Agitation against liquor shop in a community) . • Those that organize to address broader, more persuasive problem areas and operate over an extended or indefinite period of time (Group against drunk driving).
- 64. Celebrities • A celebrity is a person who has a prominent profile and commands a great degree of public fascination and influence in day-to-day media. The term is often synonymous with wealth (commonly denoted as a person with fame and fortune), implied with great popular appeal, prominence in a particular field, and is easily recognized by the general public.
- 65. The expert • Expert in specific fields
- 66. The Expert • A second type of reference group appeals used by marketers is the expert, a person who, because of his or her occupation, special training, or experience, is in a unique position to help the prospective consumer evaluate the product that the advertisement promotes. • e.g. An ad for a quality frying pan may feature the endorsement of a chef.
- 67. The Common Man • A reference group appeal that uses the testimonials of satisfied customers is known as the common-man approach. • The advantage is that it demonstrates to prospective customers that someone just like them uses and is satisfied with the good or service being advertised. • The common man appeal is especially effective in public health announcement (such as antismoking or high B.P. messages), for most people seem to identify with people like themselves when it comes to such messages.
- 68. The Executive and Employee Spokesperson • The popularity of this type of advt. probably is due to the success and publicity received by a number of executive spokespersons. • Like celebrity spokespersons, executive spokespersons seem to be admired by the general population because of their achievements and the status implicitly conferred on business leaders. • e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.
- 69. Trade or Spokes-Character • These are often employed as attention grabbers, acting as spokespersons to promote children’ products. • Trade characters are intended to bond a child to a brand so that the child’s brand awareness might form the basis of brand preference either immediately or later in life. • e.g. Animated characters used by marketers in advertisements for children products
- 70. Other Reference Group Appeals • A variety of other promotional strategies can function creatively as frames of reference for consumers. • Respected retailers and the editorial content of selected special interest magazines can also function as frames of reference that influence consumer attitudes and behavior. • e.g. Indian Dental Association’s seal of approval for toothpaste.