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Types of Reference GroupsAny external influence that provides social clues can be a reference group • Cultural figure • Parents • Large, formal organization • Small and informal groups

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We are motivated to buy or use products in order to

be consistent with what other people do.

The things that other consumers tell us about

products (good and bad) are often more influential than the advertising we see.cuu duong than cong com

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Chapter Objectives (cont.)

Online technologies are accelerating the impact of word-of-mouth communication.

Social networking is changing the way companies and consumers interact.

Certain people are particularly likely to influence others’ product choices.

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Reference Groups

Reference group: an actual or imaginary

individual/group conceived of having significant relevance upon an individual’s evaluations,

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Reference Group Influences

Reference group influences stronger for purchases that are:

Luxuries rather than necessities

Socially conspicuous/visible to others

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When Reference Groups Are Important

Social power: capacity to alter the actions of others

Types of social power:

Reward powercuu duong than cong comCoercive power

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Types of Reference Groups

Any external influence that provides social clues can

be a reference group

Cultural figure

Parents

Large, formal organization

Small and informal groups

Exert a more powerful influence on individual

consumers

A part of our day-to-day lives: normative influence

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Brand Communities and Consumer Tribes

A group of consumers who

share a set of social

relationships based upon usage

or interest in a product

Brandfests enhance brand

loyalty

Consumer tribe share emotions,

moral beliefs, styles of life, and

affiliated product

Tribal marketing: linking a

product to the needs of a

group as a whole

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Membership versus Aspirational

Reference Groups

Membership reference groups: people the

consumer actually knows

Advertisers use “ordinary people”

Aspirational reference groups: people the

consumer doesn’t know but admires

Advertisers use celebrity

spokespeople

 Click to view

Quicktime video on use of celebrity

athletes in advertising

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Positive versus Negative Reference

Groups

Reference groups may exert either a positive or

negative influence on consumption behaviors

Avoidance groups: motivation to distance oneself

from other people/groups

Marketers show ads with undesirable people using competitor’s product

Antibrand communities: coalesce around a celebrity, store, or brand—but in this case they’re united by

their disdain for it

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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 don’t 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 mad their own

decisions

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Consumers Do It in Groups (cont.)

Decision polarization: after group discussion of an issue, opinions become more extreme

Home shopping parties capitalize on group pressure to boost sales

Informational and normative social influence

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Home shopping parties—such as Tupperware, Avon, Pampered Chef, Amway, or Botox—are designed to put pressure on friends and neighbors to buy

merchandise.

Why or why not?

women?

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Most people tend to follow

society’s expectations

regarding how to look/act

Factors influencing conformity:

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Word-of-Mouth Communication

WOM: product information transmitted by individuals

to individuals

More reliable form of marketing

Social pressure to conform

Influences two-thirds of all sales

We rely upon WOM in later stages of product

adoption

Powerful when we are unfamiliar with product

category cuu duong than cong com

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Negative WOM and Power of Rumors

We weigh negative WOM more heavily than we do positive comments!

Negative WOM is easy to spread, especially online

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The Transmission of Misinformation

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Negative WOM and Power of Rumors

(cont.)

Three basic themes found in Web-based “protest”

communities:

Injustice: consumers talk about their repeated

attempts to contact the company only to be ignored.

Identity: posters characterize the violator as evil,

rather than simply wrong.

Agency: individual Web site creators try to create a

collective identity for those who share their anger with a company.

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Virtual Communities

A collection of people who share their love of a

product in online interactions

Multi-user dungeons (MUD)

Rooms (IRC), rings, and lists

Boards

Blogs/blogosphere

Great potential for abuse via untrustworthy members

Amazon.com lawsuit (charging publishers to post positive reviews of Web site)

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Virtual Communities

Which type of Web surfer are you?

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Guerrilla Marketing

Guerilla marketing: promotional strategies that use unconventional locations and intensive WOM to

push products

Recruits legions of real consumers for street theater

Hip-hop “mix tapes”/street teams

Brand ambassadors

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Viral Marketing

Viral marketing: getting visitors to a Web site to

forward information on the site to their friends (for product awareness)

Creating online content that is entertaining or weird

Example: buzz campaign for Mini Cooper car

Click photo for Miniusa.com cuu duong than cong com

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Social Networking and Crowd Power

Web sites letting members post information about themselves and make contact with similar others

Share interests, opinions, business contacts

 Click photo for Myspace.com Click photo for

Facebook.com

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Social Networking and Crowd Power

(cont.)

Wisdom of crowds perspective: under the right

circumstances, groups are smarter than the

smartest people in them

Some crowd-based Web sites:

CrowdSpirit.com: participants submit ideas for consumer electronics products and the

community votes for the best ones

Sermo.com: social network for physicians

Eventful.com: fans can demand events and

performances in their town and spread the word

to make them happen

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Opinion Leadership

Opinion leaders: influence

others’ attitudes and

behaviors

They are good information

sources because they:

May be experts

Provide unbiased

evaluation

Are socially active

Are similar to the

consumer

Are among the first to buy

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Reasons to Seek Advice from Opinion Leaders

Expertise

Unbiased knowledge power

Highly interconnected in communities (social

standing)

Referent power/homophily

Hands-on product experience (absorb risk)

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Opinion Leadership (cont.)

Generalize opinion leader versus

monomorphic/polymorphic experts

Although opinion leaders exist for multiple product categories, expertise tends to overlap across similar categories

It is rare to find a generalized opinion leader

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Perspectives on the Communications Process

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The Market Maven

Market maven: actively involved

in transmitting marketplace information of all types

Just into shopping and aware what’s happening in the

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The Surrogate Consumer

Surrogate consumer: a marketing intermediary hired

to provide input into purchase decisions

Interior decorators, stockbrokers, professional

shoppers, college consultants

Consumer relinquishes control over

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Finding Opinion Leaders

Many ads intend to reach influentials rather than average consumer

Local opinion leaders are harder to find

Companies try to identify influentials in order to create WOM “ripple effect”

Exploratory studies identify characteristics of opinion leaders for promotional strategies

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The Self-Designating Method

Most commonly used technique to identify opinion leaders…

Simply ask individuals whether they consider

themselves to be opinion leaders

Method is easy to apply to large group of potential opinion leaders

View with skepticism—inflation or unawareness

of own importance/influence

Alternative: key informants identify opinion leaders

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Sociometric Methods

Sociometric methods: trace communication patterns among group members

Systematic map of group interactions

Most precise method of identifying

product-information sources, but is very difficult/expensive

to implement

Network analysis

Referral behavior/network, tie strength

Bridging function, strength of weak ties

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