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1

Social Influenceon

Consumer Behavior

Lecture8

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Agenda

1. Consumer socialization

2. Socialization under influence of

Reference group

Family

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5

Major Consumer Reference Groups

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Factors That AffectReference Group Influence

1. Information & experience of individual

2. Credibility, attractiveness, and power

of the reference group

3. Conspicuousnessof the product

4. Consumer conformi ty

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Factors Affecting Reference Group Influence

Credibility, attractiveness, and

Power of the reference group Power exert over consumer:

Choose products con fo rm to the normsto avoid punishment.

Power change behavior not attitudes.

Depends on:

Points in t ime

Circumstances.

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Factors Affecting Reference Group Influence

Conspicuousness of the product

Visually / Verbally conspicuous product

Status-revealingproducts

likely to be purchased with an eye to thereac t ions of relevant others

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Public Vs Private; Luxury Vs Necessity(Bearden & Etzel 1982)

PRIVATE LUXURIES

Influence: Strong

product & weak brand

(Hi Fi Stereo; Jacuzzi)

PRIVATE NECESSITIES

Influence: Weak

product & weak brand

(mattress, refrigerator)

PUBLIC LUXURIES

Influence: Strong

product & strong brand

(golf clubs, yacht)

PUBLIC NECESSITIES

Influence: Weak

product & strong brand

(watch, autos, suits)

Strong Reference

Group Influence

Weak Reference

Group Influence

PRODUCT

Reference group influence on product and brand

purchase decisions

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Factors Affecting Reference Group Influence

Consumer Conformity

Ability of reference groups to:

Inform or make aware

compare own th ink ing Vs the group.

normsand legitimized decision

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Selected Consumer-related ReferenceGroups

Friendship Groups Informal but important

Shopping Groups

social needs / risk reduction (bandwagon effect)

Work Groups formal or informal work groups

Virtual Groups or Communities

multi-personality problem to marketers

Consumer Action Groups/ consumerists

ad hoc / permanent)

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Reference Group Appeals InPromotion Strategies

Slice-of-life

Testimonials

Endorsements

Credibility/ trustworthiness of the celebrity is a

powerful influence

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Identification to Reference Groupin Advertisement

Based on:

1. Admiration

2. Aspiration

3. Empathy

4. Recognition (of a person real or

stereotypical, or of a situation)

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The Expert

The expertise mus t be relevantto the useof product.

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The Common Man

Someone just like the customer Testimonials of satisfied customers.

Families are often depicted in "real-life"

situations in commercials.

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Executive and EmployeeSpokesperson

The Executive Spokesperson

achievements and status

adm ired bypublic / business leaders Front-line Employee who speaks directly to the

consuming public

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Trade or spokes-characters

Quasi-celebri ty endorsers

Exclusive to a specific product

Cartoon character

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The Family Influence to Consumer

Family Vs household

Types of families dominate:

1. The Married Couple2. The Nuclear Family.

3. The Extended Family

4. The Single-parent family

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The Family Function

Socialization of children

imparting basic values& modes of behavior

Marketers target parents for soc ial ization ofchi ldren

to establ ish experiencescontinue

throughout life.

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Influence Basic

Values/Behavior Moral/religious principles Interpersonal skills

Dress/grooming standards

Manners and speech

Educational motivation

Occupational career goals Consumer behavior norms

Influence Expressive

Attitudes/Behavior

Style Fashion

Fads

In/Out

Acceptable consumer

behavior

Family Members Friends

Young Person

Preadolescent Adolescent Teens Older

A Simple Model of the Socialization Process (Fig. 10.4)

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Theory of Reasoned Action

Beliefs that

specific

referents think I

should or

should notperform the

behavior

Motivation

to comply

with the

specificreferents

Subjective

Norm

Behavior

Intention

Beliefs that

the behavior

leads to

certainoutcomes

Evaluation

of the

outcomes

Attitudetoward the

behavior

l

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Consumer Socializationof Children

Ins trumental learningwith

reinforcement/reward .

Vicar ious learning/ observation

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Adult Consumer Socialization

Socialization begins in early childhood and

extends throughout a person's ent i re l ife.

Cont inuoussocialization throughout the life

Different reference groups have different

impact in different stage of life.

Inter generational Socialization

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Parental Influences

Protective parents Parents who stress that children should not

stress their own preferences, but go along with

parents judgment

Consensual parents Parents who encourage children to seek

harmony; open to the childrens viewpoint

Pluralistic parents

Parent who encourage children to speak upand express their individual preference

T f Ch ld fl P

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Tactics of Children to Influence Parents(Table 10.4)

1. Pressure tactics

2. Upward appeal E.g., support of grand parents; teachers.

3. Exchange tactics

4. Coalition tactics

Seek alliance (e.g., sibling)

5. Ingratiating tactics

Make request when parents in a good mood

6. Rational persuasion

7. Inspirational appeals Appeals to the enthusiasm or values of parents

8. Consultation tactics

Seek parents advice on a decision (get parents to endorse

their own ideas)

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Other Functions of The Family

Economicwell-being

Emotional support

The provision of emotional nourishment Love, affection, intimacy,

Support and encouragement

Decision making and personal or social

problems. Suitable family l i festyles

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Key Family Consumption Roles

Family-related duties are con stant ly chang ing.

Users / Influencers / Buyers

Deciders

unilaterally or joint decision Gatekeepers

Preparers / Maintainers

Disposers- initiate disposal

Changing husband-wife decision making

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The Family Life Cycle (FLC)

FLC analysis enables market segmentat ion

FLC is a compos i te variable combining

marital status,

size / age of family members,

employment status of the head of household.

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Traditional Family Life Cycle

Stage One Bachelorhood

Stage Two Honeymooners

Stage Three - Parenthood (full-nest stage)

Phase by children growth:

Preschool / primary / high school /

university.

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Traditional Family Life Cycle

Stage Four Post-parenthood(empty-neststage)

Parents = Rebirth

Stage Five Dissolution

Rejuvenation? second (or third andeven fourth) marriages

Nontradi t ionalFLC Stages

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Nontraditional FLC Family StagesAlternative FLC Stage Definition/Commentary

Childless couples Increasingly acceptable with more career-

oriented married women and delayed

marriages

Couples who marry later in

life

Likely to have fewer or no children

Couples with first child in

late 30s or later

Likely to have fewer children. Want the

best and live quality lifestyle

Single parents I High divorce rate - about 50% lead to this

Single parents II Child out of wedlock

Single parents III Single person who adopts

Extended family Adult children return home. Divorced adult

returns home. Elderly move in with

children. Newlyweds live with in-laws.

An Extended Family life Cycle

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An Extended Family life Cycle

Middle-Aged

Divorced without

Children

Middle-Aged

Married without

Children

Young

Divorced without

Children

Young

Single*

Young

Married

without

Children

*

Young

Married

with

Children

*

Middle-

Aged

Married

with

Children

*

Middle-Aged

Married

without

Dependen

t

Children*

Older

Married

*

Older

Unmarried

*

Middle-

Aged

Divorce

d with

Childre

n

Middle-

Aged

Divorce

d

without

Children

Young

Divorced

with

Children

*

*Traditional Family FlowRecycled Flow

Usual Flow

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Social Status and Social Class

Statusis defined by demographic variables:

1. family income.

2. occupational status.

3. educational attainment.

Social classis defined as

The division of members of a society into a

hierarchy of dist in ct statusclasses, so that

members of each class have either higher or lower

status than members of other classes members of each class same status

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Social Comparison Theory Social comparison theory: individuals normally compare

their own material possessions with those owned by

others in order to determine their relat ive socia l standing.

Visible or conspicuous possessions indicators of status

Upward socia l compar ison:

compare himself to someone who is worse off in order

to bolster his self-esteem.

Downward soc ial comparison: compare upward with someone who appears to have

more purchasing power make the consumer feel

somewhat inferior.

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Status consumption

Status consumption is the processbywhich consumers endeavor to inc rease

their social standing through consp icuous

consumpt ion and possess ion.

I.e., a consumer may display purchases that

will reflect positively on his social status by

comparison to those surrounding him.

h f

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The Measurement ofSocial Class

Social classcan be thought of as a

cont inuum rangeof social positions on

which each member of society can be

placed.

Subject ivemeasures

self-perceptions / class con sciousness.

Most consider themselves as middle class.

h M f

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The Measurement ofSocial Class

Repu tat ional measures

by selected community informants

Object ive measures

by socio-demographic variables.

Through questionnaires of factual

questions

Socioeconomic Status Score (SES)

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Social Class Mobility

Individuals can move either up or down insocial class from the class position held by

their parents.

Most people think of upward mobility

upper classes become the aspirationreference group for ambitious men and

women.

Higher-class symbols in ad.

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Segmenting the Affluent Market

Approx. 20% of all households in HK (above CPI A&B) Attractive target customers

The affluent market is not one single market

Segmentation1. Two careers

2. No strings attached

3. Nanny's in charge

4. Well-feathered nests

5. The good life - with no person employed

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The Non-affluent Consumer

Majority of the mass market

Working class

approx. 80% of all Hong Kong households (CPI A&B)

The size and incomeof the non-affluent group make theman important target market.

Downscale consumers are more brand loyal than wealthier

consumers since they can less afford to make mistakes in

switching to unfamiliar brands.

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The Arrival ofThe "Techno Class"

Techno Class

high degree of l i teracy, fam il iari tyand competency

with technology, especia lly computersand the

Internet.

Advertisement featuring technolog ical superstar

Technological Under-classed