Lecture

Social Influence on Consumer Behavior

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Agenda
1. Consumer socialization 2. Socialization under influence of
Reference group Family

Consumer Socialization
The process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers.

Reference group
Any person or group that

(Refer Ch.9)

serves as a point of comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior. 1. Normative Reference Groups on value
E.g., good parents, or good students

2. Comparative Reference Groups for benchmarking

E.g., Slim Vs Obesity

Major Consumer Reference Groups

Factors That Affect Reference Group Influence

1. Information & experience of individual 2. Credibility, attractiveness, and power of the reference group

3. Conspicuousness of the product 4. Consumer conformity

Credibility, attractiveness, and Power of the reference group

Power exert over consumer: Choose products conform to the norms to avoid punishment. Power change behavior not attitudes. Depends on: Points in time Circumstances.
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Factors Affecting Reference Group Influence

Conspicuousness of the product

Visually / Verbally conspicuous product Status-revealing products likely to be purchased with an eye to the reactions of relevant others

Factors Affecting Reference Group Influence

Public Vs Private; Luxury Vs Necessity

(Bearden & Etzel 1982)

Reference group influence on product and brand purchase decisions

PRODUCT Weak Reference Strong Reference Group Influence Group Influence PUBLIC NECESSITIES Influence: Weak product & strong brand (watch, autos, suits) PRIVATE NECESSITIES Influence: Weak product & weak brand (mattress, refrigerator) PUBLIC LUXURIES Influence: Strong product & strong brand (golf clubs, yacht) PRIVATE LUXURIES Influence: Strong product & weak brand (Hi Fi Stereo; Jacuzzi)

Factors Affecting Reference Group Influence

Consumer Conformity

Ability of reference groups to: Inform or make aware compare own thinking Vs the group. norms and legitimized decision

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Selected Consumer-related Reference Groups

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 In Promotion Strategies

Slice-of-life

Testimonials
Endorsements

Credibility / trustworthiness of the celebrity is a powerful influence

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Identification to Reference Group in 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 must be relevant to the use of 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 Employee Spokesperson

The Executive Spokesperson achievements and status admired by public / business leaders Front-line Employee who speaks directly to the consuming public

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Trade or spokes-characters
Quasi-celebrity 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. 2. 3. 4. The Married Couple The Nuclear Family. The Extended Family The Single-parent family

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The Family Function

Socialization of children imparting basic values & modes of behavior Marketers target parents for socialization of children to establish experiences continue throughout life.

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

Young Person Family Members
Influence Basic Values/Behavior
Moral/religious principles Interpersonal skills Dress/grooming standards Manners and speech Educational motivation Occupational career goals Consumer behavior norms

Friends
Influence Expressive Attitudes/Behavior
Style Fashion Fads In/Out Acceptable consumer behavior

Preadolescent

Adolescent

Teens

Older
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Theory of Reasoned Action

Beliefs that specific referents think I should or should not perform the behavior

Beliefs that the behavior leads to certain outcomes

Evaluation of the outcomes

Motivation to comply with the specific referents

Attitude toward the behavior

Intention Behavior

Subjective Norm

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Consumer Socialization of Children

Instrumental learning with reinforcement/reward.
Vicarious learning / observation

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Adult Consumer Socialization

Socialization begins in early childhood and extends throughout a person's entire life.
Continuous socialization 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 up and express their individual preference

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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) Make request when parents in a good mood

5. Ingratiating tactics

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

Economic well-being Emotional support The provision of emotional nourishment Love, affection, intimacy, Support and encouragement Decision making and personal or social problems. Suitable family lifestyles

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Key Family Consumption Roles

Family-related duties are constantly changing. 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 segmentation FLC is a composite 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-nest stage) Parents = Rebirth Stage Five Dissolution Rejuvenation? second (or third and even fourth) marriages Nontraditional FLC Stages

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Nontraditional FLC Family Stages

Alternative FLC Stage Childless couples Definition/Commentary Increasingly acceptable with more careeroriented married women and delayed marriages Likely to have fewer or no children Likely to have fewer children. Want the best and live quality lifestyle High divorce rate - about 50% lead to this Child out of wedlock Single person who adopts Adult children return home. Divorced adult returns home. Elderly move in with children. Newlyweds live with in-laws.

Couples who marry later in life Couples with first child in late 30s or later Single parents I Single parents II Single parents III Extended family

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An Extended Family life Cycle

Middle-Aged Divorced without Children Young Divorced without Children

Middle-Aged Married without Children Young Married with Children * MiddleAged Married with Children * MiddleAged Married without Dependen t Children* MiddleAged Divorce d without Children

Young Single*

Young Married without Children *

Older Married *

Older Unmarried *

Young Divorced with Children *

MiddleAged Divorce d with Childre n

Usual Flow Recycled Flow *Traditional Family Flow

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Social Status and Social Class

Status is defined by demographic variables: 1. family income. 2. occupational status. 3. educational attainment. Social class is defined as The division of members of a society into a hierarchy of distinct status classes, 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 relative social standing. Visible or conspicuous possessions indicators of status
Upward social comparison: compare himself to someone who is worse off in order to bolster his self-esteem. Downward social comparison: compare upward with someone who appears to have more purchasing power make the consumer feel somewhat inferior. 34

Status consumption
Status consumption is the process by which consumers endeavor to increase their social standing through conspicuous consumption and possession.
I.e., a consumer may display purchases that will reflect positively on his social status by comparison to those surrounding him.

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The Measurement of Social Class

Social class can be thought of as a continuum range of social positions on which each member of society can be placed. Subjective measures
self-perceptions / class consciousness. Most consider themselves as middle class.

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The Measurement of Social Class

Reputational measures
by selected community informants

Objective 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 in social class from the class position held by their parents. Most people think of upward mobility upper classes become the aspiration reference 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
Attractive target customers The affluent market is not one single market Segmentation 1. Two careers 2. No strings attached 3. Nanny's in charge 4. Well-feathered nests 5. The good life - with no person employed

A&B)

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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 income of the non-affluent group make them an 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 of The "Techno Class"

Techno Class
high degree of literacy, familiarity and competency with technology, especially computers and the Internet. Advertisement featuring technological superstar

Technological Under-classed

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