LECTURE 7

GROUP INFLUENCES
Dr. Dongmei Li

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THE WHEEL OF CONSUMER BEHA
VIOR

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REFERENCE GROUP
Other people and groups, especially those wh
o possess some kind of social power, often inf
luence our decisions about what to buy.

Reference group is an
actual or imaginary
individual/group
conceived of having
significant relevance
upon an individuals
evaluations, aspirations,
or behavior
 REFERENCE GROUP
Membership can be formal (membership reference
group) or informal (aspirational reference group)

Membership reference groups

People the consumer actuall
y knows
Advertisers use ordinary pe
ople
Aspirational reference groups
People the consumer doesnt
know but admire
Advertisers use celebrity spo
kespeople
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THREE FORMS OF REFERENCE GR
OUP INFLUENCE

Reference Group
?
Informational influence:
E.g., David seeks music information
(e.g., knowledge) from people he
perceived to be music experts.

Utilitarian influence: Influence

E.g., The information allows David to
fulfill his duty to organize an inter-
university music event.
Value-Expressive influence:
E.g., David feels that such knowledge would help
show others what he would like to be (such as an
artist).
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INFLUENCES ON PRODUCT TYPE

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 SIX TYPES OF SOCIAL POWER
Why are we influenced by social groups? Because they have
power! Social power is the capacity to alter the actions of
others.
Referent Power Information Power
When consumers imitate Knows something others
qualities by copying would like to know
behaviors of a prominent
person they admire
Legitimate Power Expert Power
Granted to people by virtue of Derived from possessing
social agreements, specific knowledge about a
sometimes conferred by a content area
uniform
Reward Power Coercive Power
When a person or group has Influencing a person by social
the means to provide positive or physical intimidation
reinforcement
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DISCUSSION
Would consumer spending be affected by thei
r states of power (high power vs. low power)?

DISCUSSION
Fact: Women donate mor
e money than men in EVE
RY income bracket!
Altruistic?
Powerless?
THEORY OF REASONED ACTION (TRA)

TRA is an updated version of the Fishbein model that

considers factors such as social pressure and attitude
toward the act of buying a product, rather than simply
attitude toward the product itself

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THEORY OF REASONED ACTION (TRA)
Attitude (e.g., the Behavioral intention
attitude towards measures a person's
buying Ao) consists relative strength of
of beliefs about the intention to perform a
consequences of behavior, such as,
performing the buying Ao
behavior multiplied
by his or her
valuation of these
consequences
Subjective norm
consists of beliefs
about others
expectations and
the intentions to
comply with these
expectations.
It explains the
influence of others
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AN EXAMPLE
I will waste a
lot of time if I
go see a
movie.

My CB exam is
next week. I Negative in
dont think I seeing
should waste movie.
time.

Most of my I intended
friends are to go also.
going to see.

But do I care Most people

what they are going.
do?
THEORY OF REASONED ACTION (TRA)
David has a positive attitude towards iPhone. ALL
of his friends think iPhone is awesome and David
do not want to upset his friends.

Q1: He does not buy iPhone. Why?

Q2: He does not have any intention towards buying

iPhone. Why?

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CONSUMERS DO IT IN GROUPS
Deindividuation: individual identities beco
me submerged within a group
Social loafing: people dont devote as muc
h to a task when their contribution is part
of a larger group
Risky shift: group members show a greater
willingness to consider riskier alternatives f
ollowing group discussion than if members
made their own decisions
GROUP BEHAVIOR
Factors influencing conformity:
Cultural pressures (Japanese vs. American)
Fear of deviance (sanctions?)
Commitment (higher commitment to the group, hi
gher motivation to conform)
Principle of Least Interest: the person who is least c
ommitted to staying in a relationship has the most po
wer
Group unanimity, size, expertise (mob rules)
Susceptibility to interpersonal influence (trait)
GROUP BEHAVIOR
Diffusion of Responsibility: As more people are
involved in a decision, each individual is less acc
ountable for the outcome
e.g., helping behavior is reduced when
number of strangers increase
(the bystander effect)
The diffusion of responsibility can
explain the risky shift
The diffusion is eliminated when
ones identity is primed
SOCIAL COMPARISON THEORY
Social comparison theory asserts that consumer
s look to the behavior of others to provide a com
parison standard about the reality, especially wh
en physical evidence is unavailable.

Observations

It can
increase
the
You Others
stability of
ones self
evaluation

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SOCIAL COMPARISON THEORY
Upward social comparisonoccurs when individuals compar
e themselves to others who are deemed socially above the
m in some way.
I compare myself with people who are socially above me or wit
h people from groups that are considered as more popular.

Downward social comparison occurs when individuals comp

are themselves to others who are deemed socially below t
hem.
To feel better (i.e. increase my self esteem) I compare myself wi
th groups that are worse off or less popular (e.g. as an average
worker I can compare myself with people who are unemploye
d) increased self esteem

Do you usually compare upward or downward?

SOCIAL COMPARISON

In a group-context this happens when in-

groups and out-groups are compared
o In-group: Group I belong to (e.g. HSMC-
students, Successful Women,)

o Out-group: Other groups I do not belong to

(e.g. CUHK-students,)
THE OPINION LEADER
Q: When you are looking for a good
marketing strategy book, do you
ask your friend? Who will you ask?

Yes! I will usually ask Felix, because

he is:
An experts
Unbiased evaluation
Socially active
Similar to me
Among the first to buy

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THE OPINION LEADER
Opinion leaders are those who are frequently ab
le to influence others attitudes or behaviors.
They are influential because of their social powe
rs.
They tends to be
domain-specific.

Fashion opinion leaders tend to

be knowledgeable about
clothing and highly motivated
to stay on top of fashion
trends.
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IDENTIFYING OPINION LEADERS
Three methods to identify opinion leaders:
1) Self-designating:
Ask Are you an opinion leader?
2) Key informants:
Ask Who is an opinion leader in your group?
3) Sociometric method:
Trace communication patterns among group me
mbers (e.g., network analysis strength of ties)

Marketers are interested in

identifying opinion leaders, why?

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 WORD OF MOUTH COMMUNICATI
ON
Word-of-Mouth (WOM) is product information tra
nsmitted by individuals to individuals. It is the m
ain type of communication within a social group.
WOM is a more reliable form of marketing. It infl
uences two-third of all sales!
It generates social pressure to conform.

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WORD OF MOUTH COMMUNICATI
ON
Which do you think is more powerful negative
or positive WOM?
Why?
Does your answer change if you consider only o
nline WOM?
Example: Viral marketing, Guerrilla marketing
 WORD OF MOUTH COMMUNICATI
ON
Two marketing strategy based on WOM is viral ma
rketing:
Viral marketing: getting visitors to a Web site to
forward information on the site to their friends
(for product awareness)
Guerrilla marketing is a promotional strategies t
hat use unconventional locations and intensive W
OM to push products
Creating online content that is entertaining or w
eird (e.g., commercial on youtube)

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 WORD OF MOUTH COMMUNICATI
ON
Impact of WOM increase when:
We are unfamiliar with the product category
Later stages of product adoption
It is negative

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THE TRANSMISSION OF MISINFO
RMATION