Chapter 11

Group Influence and Social Media

Agenda
Reference Groups Opinion Leadership Word-of Mouth Communications Social media and Consumer Behaviour

Introduction
Consumers belong to or admire many different groups and are often influenced in their purchase decisions by a desire to be accepted by others. We conform to the desires of others for one or two basic reasons: We take others behaviour as evidence of the correct way to act or to satisfy the expectations of others and/or to be accepted by the group.
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Reference Groups
A reference group is an actual or imaginary individual or group conceived of having significant relevance upon an individuals evaluations, aspirations, or behaviour. Any external influence that provides social clues. Types of Reference Groups Formal vs. Informal Membership vs. Aspirational Positive vs. Negative As a rule, small informal groups can exert powerful influence on individual consumers Relative influence of reference groups on purchase decisions

Reference Group Power

Referent Power

Coercive Power
Sources of Power Reward Power Expert Power

Information Power

Legitimate Power

Conformity and Norms

Conformity a change in beliefs or actions as a reaction to real or imagined group pressure.

Norms - the informal rules that govern what is right or wrong.

Types of Social Influence

Normative social influence the conformity that occurs when a person alters his behaviour to meet the expectations of a person or a group. Informational social influence the conformity that occurs because the groups behaviour is taken as evidence about reality.
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Reasons for Conformity

Cultural Pressure

Gender Differences

Fear of Deviance Commitment

Group Dynamics

Social Comparison Theory

Social Comparison Theory the perspective that people compare their outcomes with those of others as a way to increase the stability of their own self-evaluation, especially when physical evidence is unavailable. The self-positivity bias Group effects on individual behaviour: deindividuation, risky shift, diffusion of responsibility, social loafing.
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Consumers Do It in Groups
Deindividuation: individual identities become submerged within a group. Example: binge drinking at college parties Social loafing: People dont devote as much to a task when their contribution is part of a larger group. Example: we tend to tip less when eating in groups Risky shift: Group members show a greater willingness to consider riskier alternatives following group discussion than if members decide alone. Marketing implications

Opinion Leadership
Opinion Leaders those people who are knowledgeable about products and who are frequently able to influence others attitudes or behaviours with regard to a product category.

Reduce Risk

Key Characteristics of Opinion Leaders

Technically Competent

Similar Values Legitimate Power

Knowledge Power

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The Market Maven

Market maven: Actively involved in transmitting marketplace information of all types Just into shopping and aware whats happening in the marketplace Overall knowledge of how and where to get products Surrogate consumers: Hired to provide input into purchase decisions

Identifying Opinion Leaders

Many ads intend to reach influencers rather than average consumer Local opinion leaders are harder to find Companies try to identify influencers in order to create WOM ripple effect Exploratory studies identify characteristics of opinion leaders for promotional strategies Most commonly used technique to identify opinion leaders is simply ask individuals whether they consider themselves to be opinion leaders.

Word of Mouth (WOM) Communication

Word of mouth communication the information transmitted by individual consumers on an informal basis. Guerrilla marketing promotional strategies that use unconventional locations and intensive word-of-mouth campaigns to push products. Application to World Wide Web Viral marketing the strategy of getting customers to sell a product on behalf of the company that creates it. Negative WOM Rumours distortion in the word-of-mouth process.
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Social Media and Consumer Behaviour

Social networking, where members post information and make contact with others who share similar interests and opinions, changes the way we think about marketing. As the Internet continues to develop, companies and consumers increasingly interact directly. The wisdom of crowds perspective argues that, under the right circumstances, groups are smarter than the smartest people in them. If this is true, it implies that large number of consumers can predict successful products. 15

Virtual Communities
Emerging marketing strategies try to leverage the potential of web to spread information from consumer to consumer extremely quickly. Viral marketing techniques enlist individuals to recommend products, services, websites, etc., to others on behalf of companies.
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