COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license.


Roger D. Blackwell Paul W. Miniard James F. Engel

Consumer Behavior

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Group and Personal Influence

CHAPTER 13


Group and Personal Influences on Individuals


Group and Personal Influences on IndividualsOther people, whether as individuals or groups, exert enormous influence on consumers

Belonging to groups, trying to “fit in,” and striving to please others affects every stage in the decision process


Group and Personal Influences on IndividualsReference group: any person or group of people who significantly influences an individual’s behavior

May be individuals (celebrities, athletes, or political leaders) or groups of individuals with similarities (musical groups or sports teams)


Types of Types of InfluenceInfluenceNormativeNormative

Value ExpressiveValue ExpressiveInformationalInformational

TransmissionTransmission

Personal Personal Influences: Influences: ••Groups Groups

••IndividualsIndividuals

Lifestyles Behaviors Purchases

Consumption

Low Degree of Influence

High Degree of Influence

Personal and Group Influence on Individuals


Personal Personal Influences: Influences:

••Groups Groups ••IndividualsIndividuals



Types of Reference Groups

Primary Groups: a social aggregation that is sufficiently intimate to permit and facilitate unrestricted direct interaction (e.g., family)



Secondary Groups: also have direct interaction, but it is more sporadic, less comprehensive, and less influential in shaping thought and behavior (e.g., professional associations or community organizations)



Formal Groups: characterized by a defined structure (often written) and a known list of members and requirements for membership

Informal Groups: have less structure than formal groups and are likely to be based on friendship or interests



Membership: when individuals are recognized as members of a group, they have achieved formal acceptance status in the group

Aspirational Groups: exhibit a desire to adopt the norms, values, and behaviors of others with whom the individuals aspire to associate



Dissociative Groups: groups from which an individual tries to avoid association

Virtual Groups: groups that are based on virtual communities rather than geographic ones












Types of Group InfluenceNormative: when individuals alter their behaviors or beliefs to meet the expectations of a particular group



Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors



Value-expressive: when a need for psychological association with a group causes acceptance of its norms, values, attitudes, or behaviors

Informational: when people have difficulty assessing product or brand characteristics by their own observations or contact
















Lifestyles Behaviors Purchases

Consumption

Low Degree of Influence

High Degree of Influence







How Reference Groups Influence Individuals



Socialization: permits an individual to know what behavior is likely to result in stability both for the individual and the group

Company manual may explain the dress code in the workplace

Informal groups may tell them what styles are most comfortable and easiest to maintain



Self-concept: people protect and modify their self-concept by their interactions with group members

People can maintain self-concept by conforming to learned roles

Testimonial advertising is effective when the self projected in the ad is consistent with the idealized self of the target consumer


Reference Groups Help Define Self-Concept



Social comparison: individuals often evaluate themselves by comparing themselves to others

Consumers often use reference groups as benchmarks to measure their own behaviors, opinions, abilities, and possessions

Advertising or television can be sources of social comparison



Conformity: a change in beliefs or actions based on real or perceived group pressures

Compliance: when an individual conforms to the wishes of the group without accepting all its beliefs or behaviors

Acceptance: when an individual actually changes his or her beliefs and values to those of the group



Factors affecting how likely people are to conform to group norms:



When are people more likely to conform to norms?



Factors affecting how likely people are to conform to group norms:

Desire for social acceptance

Degree of experience in situation or with decision

Conspicuousness

Complex product or luxury item


PRIVATE LUXURIESPRIVATE LUXURIES

Influence: Strong Influence: Strong product & weak brandproduct & weak brand

(TV, icemaker)(TV, icemaker)

PRIVATE NECESSITIESPRIVATE NECESSITIES

Influence: Weak Influence: Weak product & weak brandproduct & weak brand

(mattress, refrigerator)(mattress, refrigerator)

PUBLIC LUXURIESPUBLIC LUXURIES

Influence: Strong Influence: Strong product & strong brandproduct & strong brand

(golf clubs, skis, boat)(golf clubs, skis, boat)

PUBLIC NECESSITIESPUBLIC NECESSITIES

Influence: Weak Influence: Weak product & strong brandproduct & strong brand

(watch, autos, suits)(watch, autos, suits)

Strong Reference Group Influence

Str

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p

Infl

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s (

+)

Weak Reference Group Influence

We

ak G

rou

p

Infl

ue

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-)

PRODUCTB

RA

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Reference Group Influence on Product and Brand Purchase Decisions



Profits of conformity

More likely to occur when the rewards of compliance exceeds its costs

The degree of influence on final outcome is determined by an individual’s perception of the “profit” inherent in the transaction



Conspicuousness

Conformity pressures are not sufficient to induce behavior unless the product or service is publicly conspicuous in its purchase and use

Because other will see the product, many consumers will conform rather than risk embarrassment or ridicule

Peers send clear signals about product alternatives


Appealing to Normative Influence in Marketing Strategy

Normative compliance may be less important in industrialized nations as many consumers are putting personal needs ahead of group loyalty

Extended families have less face-to-face contact and people are more socially isolated than in the past

Television and mass media expand people’s horizons beyond social circles


A weakened respect for social norms (anomie) leads some consumers to desire expression of individuality more than group affiliation

Appealing to Normative Influence in Marketing Strategy


High Product Visibility Raises Reference Group Influence


Self-Expression Outside of Social Norms


Celebrity and Other Reference Group Appeals in Advertising

Testimonials: celebrities tout products based on personal usage



Testimonials: celebrities tout products based on personal usage

Endorsements: celebrities lend their name or likeness to a product without necessarily being an expert in the area



Actor or Spokesperson: someone who represents a brand or company for an extended time period



Expert appeal: appeal from a person possessing unique information or skills that can help consumers make better purchase decisions than other types of spokespersons

Common-man appeal: testimonials from “regular” consumers with whom most consumers can relate


Transmission of Influence Through Dyadic Exchanges


Transmission of Influence Through Dyadic Exchanges

Exchange between two individuals that influence these individual’s behaviors or beliefs

Dyadic exchange requires the exchange of resources (opinions and comments)


Dyadic Exchanges

Word-of-mouth Communication

Service Encounters

Opinion Leadership


Word-of-Mouth Communication

Word-of-mouth communication: informal transmission of ideas, comments, opinions, and information between two people, neither one of which is a marketer

The receiver gains information about behaviors and choices, which is valuable to the receiver in the decision process


Word-of-Mouth Communication

The sender increases their confidence in the personal product or behavior choice by persuading others to do the same


Benefits of Word-of-Mouth


Opinion Leadership

Opinion leadership: the sender of information is often considered an opinion leader—a person who influences the decisions of others

Opinion leaders might be experts in one area but not in others

The greater the perceived knowledge of a category, the more likely that person’s opinions are to influence others’ decisions


Opinion LeadershipPersonal influence in the form of opinion leadership is likely to occur when:


Opinion LeadershipPersonal influence in the form of opinion leadership is likely to occur when:

An individual has limited knowledge of a product or brand

The person lacks the ability to evaluate the product or service

The consumer does not trust advertising and other sources of information

Other information sources have low credibility with the consumer


Opinion Leadership

The individual has a high need for social approval

Strong social ties exist between sender and receiver

The product is complex

The product is difficult to test against objective criterion

The product is highly visible to others


Characteristics of Opinion Leaders

Opinion leaders and receivers often share similar demographic characteristics and lifestyles, yet they may have greater social status within the same group as followers

The most common characteristic is that opinion leaders are involved with a particular product category


Product innovators: similar to opinion leaders, these individuals are the first to try new products

Opinion Leadership


Overlapping Opinion Leadership

Market mavens: gather much of their information from shopping experiences, openness to information and general market awareness, making them more aware of new products than other people


Overlapping Opinion Leadership

Surrogate consumers (shoppers): an individual who acts as an agent to guide, direct, and conduct activities in the marketplace


Service Encounters

Service encounters: occurs when there is personal communication between a consumer and a marketer

May be a consumption experience within a store—the various trans-actions and services that occur during a retail purchase

May be an experience consuming the specific service a consumer purchases


Service Encounters

Service providers must understand the needs of different customers and match the appropriate sales associate or sales approach to each individual customer

Which customers desire a great deal of assistance and which ones prefer little interaction

Salespeople foster a relationship between buyer and seller


Service Encounters

Customer intimacy: detailed understanding and focus on customers’ needs lifestyles and behaviors in an effort to create a deep cultural connections with the customers

Reverse customer intimacy: how well marketers facilitate customers knowing the marketer


How Personal Influences Are Transmitted


Trickle-down: alleges that lower classes often emulate the behavior of their higher-class counterparts

Influence is transmitted vertically through social classes, when higher classes express wealth through conspicuous consumption, and lower classes copy their behavior



Today, trends are transmitted through mass media and there is very little direct, personal contact between social classes



Two-step Flow

Opinion leaders are the direct receivers of information from advertisements and they interpret and transmit the information to others through word-of-mouth



Two-step Flow

Opinion Opinion LeaderLeader

Opinion Opinion SeekersSeekers

Mass Mass MediaMedia

Information and InfluenceInformation



Multistep Flow

Information can flow directly to different types of consumers, including opinion leaders, gatekeepers, and opinion seekers and receivers



Multistep Flow

Opinion Opinion LeaderLeader

Opinion Opinion SeekersSeekers

Mass Mass MediaMedia


Gatekeepers


WOM and Opinion Leaders in Advertising and Marketing Strategy



WOM and personal communication can have a more decisive role in influencing behavior than advertising and other marketer-dominated sources

Viewed as a more trustworthy and credible source of information than salespeople or paid advertising



Advertising can provide information to consumers about products they might seek from other sources and which may be discussed in WOM

However, consumers don’t always trust that the advertiser has their best interests in mind



Advertising influences the effectiveness of WOM and vice versa

Advertising can provide information about products consumers might not seek from other sources

Advertising can create WOM among consumers and peer groups


For some occasions, companies rely on WOM as a substitute for advertising

Primary Reliance on Word-Of-Mouth


For some occasions, companies rely on WOM as a substitute for advertising

Retailers such as Wal*Mart and Victoria’s Secret have demonstrated that advertising can be sharply reduced when word-of-mouth is strong

Primary Reliance on Word-Of-Mouth


Targeting Opinion Leaders

Firms can market to opinion leaders as a distinct segment (once they can be identified)

Mass media can be used to target leadership roles and responsibilities with other options such as association memberships, direct mail, and trade or special interest magazines


Stimulating Word-Of-Mouth

Firms may stimulate WOM by giving away or loaning products to opinion leaders to display and use

Organizations may induce opinion leaders to influence consumers


Creating Opinion Leaders

Firms can create opinion leaders by providing incentives for new customers to attract others to the store

Companies can activate search through advertising that encourages consumers to “ask a person who owns one” or “share the experience with a friend”


Creating Opinion Leaders


Managing Negative WOM

Just as positive word-of-mouth can be a great asset to marketers, the opposite can be true when the content in negative

Negative WOM is usually given high priority and weighs heavily in decision making

The dissatisfied buyer is more motivated to share information


Monitoring the Content of WOM

Firms can monitor the presence and impact of WOM—what dissatisfied consumers are saying about the product or company

Monitoring rumors which do not always appear in customer complaint reports

Creating a strategy to respond to rumors and negative WOM


Curbing Negative WOM

When something goes terribly wrong, denying the problem is not the answer

The best strategy is immediate acknowledgement by a credible company spokesperson as negative WOM rarely goes away by itself

Make sure you have all your facts straight and tell the truth


Diffusion of Innovations


Diffusion of InnovationsInnovation: any idea or product perceived by the potential adopter to be new

Product innovation: any new product recently introduced to the market or perceived to be new when compared to existing products

Consumers can view innovations subjectively or objectively


Diffusion of InnovationsSubjective Innovation: a definition derived from the thought structure of a particular individual or entity

Objective innovation: based on external criteria; innovations are ideas, behaviors, or things that are qualitatively different from existing forms


Innovations and New ProductsMarketers often use the word “new” to call attention to products recently introduced to the marketplace

The use of the word “new” in advertising is limited to products available for less than six months

New products can change the way consumers live and how society is organized


Types of Innovations



Classified based on the impact of the innovation on behavior in the social structure



Classified based on the impact of the innovation on behavior in the social structure

Continuous innovation

Dynamically continuous innovation

Discontinuous innovation


Continuous Innovation

The modification of an existing product rather than the establishment of a totally new product

Modification may be in the taste, appearance, performance, or reliability of the existing product


Continuous Innovation


Dynamically Continuous Innovation

May involve either the creation of a new product or a significant alteration of an existing one

Does not generally alter established purchase or usage patterns


Dynamically Continuous Innovation


Discontinuous Innovation

Involves the introduction of an entirely new product that significantly alters consumers’ behavior patterns and lifestyles

Examples include automobiles, televisions, videocassette recorders, and computers



While innovations are usually considered in terms of new products, they might also be usage based—finding new uses for old products


Why Some Innovations Succeed and Others Don’t

Successful products are those that become culturally anchored—so inextricably a part of a consumer’s life and sociocultural surroundings that the person-product interface is an important part of the individual’s self-concept

Imagine being without personal computers or microwave ovens


Relative Advantage

Compatibility

Complexity

Trialability

Observability

Why Some Innovations Succeed and Others Don’t


Relative AdvantageThe degree to which consumers may perceive the innovation to offer substantially greater benefits than the product they currently use


Relative AdvantageThe degree to which consumers may perceive the innovation to offer substantially greater benefits than the product they currently use

To what degree will the new product be a substitute for existing ones or complement those already in consumers’ inventories?

New products most likely to succeed appeal strongly to felt consumer needs


CompatibilityThe degree to which a new product is consistent with an individual’s existing practices, values, needs, and past experiences of the potential adopters


CompatibilityThe degree to which a new product is consistent with an individual’s existing practices, values, needs, and past experiences of the potential adopters

How does the innovation blend with products consumers might own?Will it replace other products or will it become a part of an existing system?How does the innovation fit current purchase or consumption behaviors?


ComplexityThe degree to which an innovation is perceived as difficult to understand and use

The more complex, the more difficult it will be to gain acceptance

Complexity is a deterrent of trying new technology


ComplexityHow difficult is the innovation to understand?

How easy is it to explain to consumers in written form and oral communication?

How frustrating will it be to consumers when evaluating products or learning how to use new innovation?

How much time will consumers have to devote to learning how to use and care for the product?


TrialabilityNew products are more apt to succeed when consumers can experiment with or try the idea on a limited basis, with limited financial risk

How can a company encourage consumers to try a new product?

Where will consumers be able to try the innovation and how will they receive answers to their questions?


ObservabilityThe degree to which results from using a new product are visible to friends and neighbors

If consumers can see others benefiting from the use of a new product, that innovation is more likely to be successful and diffuse faster


The Diffusion Process


The Diffusion ProcessDiffusion: the process by which an innovation (new idea) is communicated through certain channels over time among the members of a social system


The Diffusion ProcessDiffusion: the process by which an innovation (new idea) is communicated through certain channels over time among the members of a social system

Includes:Diffusion of information and communication

Consumer decision process

Diffusion or demise of innovation


The Diffusion Process

InfluencerInfluencer

CCoonnssuumme e rr

Organi-Organi-zationzation

RejectReject

AcceptAccept

Demise Demise of of

InnovationInnovation

Diffusion Diffusion of of

InnovationInnovation

Consumer decision process

Diffusion of Information and Communication

(X number of people)


Factors Affecting Diffusion

Communication (how consumers learn about new products)

Time (how long it takes for a person to move from product awareness to product purchase or rejection)

Social system (groups or segments to which individuals belong affect adoption or rejection)


Speed of Diffusion

Diffusion will be faster if:


Speed of Diffusion

Diffusion will be faster if:

Supplier is intensely competitive

Supplier’s reputation is good

Standardized technology is used

Vertical coordination among channel members exists

Resource commitments are significant


Consumer Decision Process for Innovations


Knowledge: begins when the consumer receives physical or social stimuli that gives exposure and attention to the new product and how it works

How a person receives and interprets the knowledge is affected by their personal characteristics

Rogers Model of Innovation Decision Process



KnowledgeKnowledge

Characteristics of the Decision Making Unit



Persuasion: refers to the formation of favorable or unfavorable attitudes towards the innovation

Persuasiveness is related to the perceived risks and consequences of adopting and using the new product



KnowledgeKnowledge PersuasionPersuasion

Perceived Characteristics of the Innovation



Decision: involves a choice between adopting and rejecting the innovation

Adoptors are people who have made a decision to use a new product whereas other are nonadoptors

Rejection may be active or passive



DecisionDecisionKnowledgeKnowledge PersuasionPersuasion

Adoption

Rejection

Continued adoption

Later adoption

Discontinuance

Continued Rejection



Implementation: occurs when the consumer puts an innovation to use

The process has been a mental exercise until this point where it requires a behavioral change

The strength of the marketing plan may be the critical determinant in a sale resulting



Implemen-Implemen-tationtation DecisionDecisionKnowledgeKnowledge PersuasionPersuasion



Confirmation: during this stage, consumer seek reinforcement for their innovation decision

Consumer may reverse previous decision due to conflicting messages resulting in dissonance

Discontinuance is a serious concern to marketers who strive for continued acceptance



Implemen-Implemen-tationtation DecisionDecisionKnowledgeKnowledge ConfirmationConfirmation PersuasionPersuasion



Implemen-Implemen-tationtation DecisionDecisionKnowledgeKnowledge ConfirmationConfirmation PersuasionPersuasion

Communication Channels


Consumer Most Likely to Buy New Products


Consumer Most Likely to Buy New Products

Marketers need to determine who is most likely to buy the new product while in the development process

Determinants include individual’s personalities, social status, education level, and aversion to or acceptance of risk

Different adoptor classifications behave differently during the decision process


A B C D E

A= Innovators (2.5%)B= Early Adopters (13.5%)C= Early Majority (34%)D= Late Majority (34%)E= Laggards (16%)

Adopter Classes


Consumers Likely to Buy New Products

Innovators: the first consumer group to adopt products

Early adopters: opinion leaders and role models for others, with good social skills and respect within larger social systems

Early majority: consumers who deliberate extensively before buying new products, yet adopt them just before the average time it takes the target population as a whole



Late majority: tends to be cautious when evaluating innovations, taking more time than average to adopt them, and often at the pressure of peers

Laggards: the last groups that tend to be anchored in the past, are suspicious of the new, and exhibit the lowest level of innovativeness among adopters



Innovativeness: the degree to which an individual adopts an innovation earlier than other members of a social system

Cognitive innovators: have a strong preference for new mental experiences

Sensory innovators: have a strong preference for new sensory experiences

Advertising and other communications can be targeted accordingly


Managerial Perspectives on Adoption and Diffusion of Innovation



New products for the profitability and long-term financial success of firms

While development groups are produc-ing line and brand extensions, breakthroughs are needed to fuel growth and profits

New product development requires the coordination of marketing, engineering, research and other parts of the firm



Consumer insight helps create products that consumers are likely to adopt

Intuition and information (often gained from consumers through research) leads to the formation of an insight

Insights drive the creation of a new or adaptation of an existing product

Research is important to the innovation development process


Positioning New Products on Insight

Documents

COPYRIGHT © 2006 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license