Consumer Behavior

Spring Semester 2022

Dr. Fahad Mansoor Pasha

Week 8: Reference Groups

Week # 9: Reference Groups

Readings

Michael R. Solomon. Consumer Behavior – Buying, Having, and Being. 12th Edition. Prentice Hall:
Chapter 11

Optional

Leon G Schiffman and Joseph Wisenblit (2019). Consumer Behavior, Twelfth edition. Pearson:
Chapter 9
 Social Identity Theory

Social Identity Theory

• Each of us has several “selves” that relate to groups.

• These linkages are so important that we think of
ourselves not just as “I,” but also as “we.”
• We favor others that we feel share the same identity
—even if that identity is superficial and virtually
meaningless.

Conformity
• A change in beliefs or actions as a reaction to real or
imagined group pressure.
• For a society to function, its members develop norms or
informal rules that govern behavior.
• Without these rules, we would have chaos e.g. nobody
follow the norm “always stop for a red traffic light”
 Types of Influence
Referent power
• If a person admires the qualities of a person or a group, he tries to voluntarily copy the referent’s behaviors and identify
with the referant (e.g., choice of clothing, cars, leisure activities).

Information power
• A person possesses information power simply because he or she knows something others would like to know.

Legitimate power
• Power by virtue of social agreements, such as the authority we give to police officers, soldiers, and even professors (??).
• Marketers “borrow” this form of power to influence consumers. e.g., a model wearing a doctor ad.

Expert power
• Knowledgeable experts in one field lend credibility to a product, such as a doctor endorsing a toothpaste

Reward power
• A person or group with the means to provide positive reinforcement has reward power e.g., corporate gifts or judge
feedback to contestants.

Coercive power
• Influence someone because of social or physical intimidation.
• Mostly useful for short-term e.g., fines for not wearing masks or fear appeals in ads.
 Reference Groups
Serve as sources of comparison, influence, and norms for people’s opinions, values, and behaviors.
Source credibility
• Reference groups have a high degree of source credibility. Membership groups
• A group to which a person belongs to, or realistically
• Source credibility is a source’s persuasive impact, based on
• Perceived expertise, can join
• e.g., cricket group at a university.
• Trustworthiness,
• Believability.
Symbolic group (aspirational reference group)
Types of sources
• A group to which an individual is unlikely to belong,
but whose values and behaviors that person adopts
1. Formal source
• e.g., national music bands are a symbolic group
• Either a person or medium providing consumption-related
for university music brand groups.
information and paid by an organization.
2. Informal source
• Person whom the message receiver knows personally, such as a Word-of-mouth (WOM) represents communications
parent or friend who gives product information or advice. where satisfied customers tell others about a product,
service, or event (information transmitted can also be
Avoidance Groups negative).

• Don’t want to be similar to them (e.g., “nerds,” “druggies,” WOM is one of the most credible forms of buying-related
or “preppies”). information because consumers view others who don’t
• Avoid buying what they buy. How to use in marketing? stand to gain personally by promoting something as
• Important for social identity marketing. How? highly credible.
Celebrities

• A symbolic
reference group
because they are
liked, admired, and
often have a high
degree of perceived
credibility.
 Reference Groups
Experiment from hotels
• Many hotel rooms feature formal and impersonal
requests that read, “Please reuse the towels in order
to help us save the environment,” which had little
impact on guests’ behavior.
1. Incorporating a social norm into message persuaded
about 25% of the guest to reuse towels.
• “Most of your fellow guests had reused their towels.
Please help us save the environment and reuse
yours,”
Types of reference group influence:
1. Normative influence
• Learning and adopting a group’s norms, values, and behaviors.
Comes from groups to which people naturally belong (e.g. family
and peers).
2. Comparative influence
• People compare themselves to others whom they respect and
admire, and then adopt some of those people’s values or imitate
their behaviors.
• E.g. copying lifestyle of celebrities one aspires to be like.

2. Incorporating a personal appeal further increased

number of people complying.
• “Most of the guests who had stayed in this room
reused their towels”

• The social norm messages are more persuasive than

the formal and impersonal messages
• Merely asking to reuse towels without giving a
reason shows hotel’s cost-cutting.
 Reference Groups
Factors Affecting Reference Group Influence
Conformity
• For existing brands, portraying reference group
influences in promotions.
• For new brands or brands that are not market
leaders, can try to convince consumers to be
different and not follow the crowd.
• To influence its members, a reference group must:
1. Inform or make members aware that the brand or
product exists
2. Provide the individual with the opportunity to
compare his or her own thinking with the attitudes
and behavior of the group
3. Influence the individual to adopt attitudes and
behavior that are consistent with the group’s norms
4. Legitimize the member’s decision to use the same
products as other members
Group Power
• Consumers who are primarily concerned with approval from
others usually adopt the same products and brands as those
group members who have status.
Product Expertise
• Individuals who have experience with a product or can easily
obtain detailed information, are less likely to be influenced by
the advice of others.
• Persons who have little experience with an item, and who do not
trust advertising messages, are more likely to seek out the
advice of others.
Product Conspicuousness
• A conspicuous product stands out and is noticed by others,
such as an expensive watch.
• Conspicuous and status revealing products are most likely to
be purchased with an eye to the reactions of relevant
others.
 Source Credibility
• The believability of the endorser, spokesperson, or individual in an advertisement.
• Important dimensions in measuring source credibility: expertise, trustworthiness, attractiveness, and likeability.

• Consumers believe that firms want to
generate profits and so provide less
credible information.
• Consumers believe product information
from unpaid sources more than when
compared to paid advertisements.
• Companies can convey credibility
through solid past performance, good
reputation, product quality, and good
service.
Relationship between the effectiveness of the messages and the
spokespersons
1. The greater the fit between the celebrity and the product endorsed, the
higher the persuasiveness of the message.
• e.g., cricketers to create favorable attitudes for sports drinks.
2. Endorsers whose demographic characteristics (e.g., age and ethnicity) are
similar to those of the target audiences are viewed as more credible and
persuasive.

Salespeople credibility
• Deemed credible when show
confidence, honesty, dresses well,
and drive expensive cars (outward
signs of success).
 Opinion Leadership

• The process by which one person informally influences others.

• No person represents a commercial seller or would gain directly from providing advice or information.

• Opinion leaders are highly knowledgeable about specific products

• Seen as the “go-to person” for specific types of information,
• Stimulate word-of-mouth.
 Measuring Opinion Leadership
Several methods to measure consumers’ degree of influence on others and identify opinion leaders:

1. The Sociometric Method

• Traces person-to-person communications where most people know each other by name (e.g., a college dormitory).
• Ask respondents to identify name of individuals to whom advice for a product was provided.
• Ask respondents to identify name of individuals who provided product advice to the respondents.
• Afterwards, both the information providers and receivers are interviewed to confirm that information was received or
provided.
• Respondents get “opinion leadership points,” or “opinion receivership points.”
• Designate a person as an opinion leader or opinion receiver.
• Sociometric questioning provides the most valid results for designating opinion leaders and receivers.

2. The Self-Designating
Method
• Ask respondent to
evaluate the extent to
which they had
provided others with
information about
products and
influenced purchases.
 Measuring Opinion Leadership

3. The Key Informant Method

• Identifying experts/key informants

• Persons who are keenly
knowledgeable about the
nature of social communications
among members of a specific
group.

4. Klout Scores

• Measures people’s influence online

based on ability to generate
engagement and feedback to what they
post (such as likes, shares, and
retweets).
• e.g., person gets Klout points if
people visit a restaurant after a
picture is posted of the restaurant
online.
 Strategic Applications of WOM

Online Reference Groups Brand Community

• Social networks are virtual communities where • A specialized, nongeographically bound community formed on the
people share information about themselves with basis of attachment to a product or brand.
others, generally with similar interests. • Customers can have nostalgic associations with a brand.
• e.g., Harley-Davidson motorcycles.
• Because consumption and the products people
buy are integral parts of lives, online profiles and
discussions include a tremendous amount of
purchase information.

Three dimensions for engagement in word-of-mouth

online:
1. Tie Strength: The degree of intimacy and
frequency of contacts between the information
seeker and the source.
2. Similarity: Similarity among the group’s members
in terms of demographics and lifestyles.
3. Source Credibility: The information seeker’s
perceptions of the source’s expertise.
Innovations’ Adopters as Reference Groups
 Innovations’ Adopters as Reference Groups
The First Buyers
• Innovators are the earliest to buy new products.
• Prepared to take risks in consuming products.
• Willing to pay higher prices for newly introduced
products because they enjoy being the first to own
gadgets and show them off.
• When targeting innovators, ads should show them
using new products conspicuously and being
noticed and even asked questions by others e.g.,
“Where did you get that?”
The Somewhat Risk-averse
• Early majority consists of consumers who buy
innovations after the early adopters.
• Can wait for prices to decline and, for others to buy.
• Do not like ambiguous situations and are risk-averse.
• Ads should assure that the product is successful and
provide with purchase incentives.
The Followers
• Early adopters are consumers who buy new products
within a relatively short period following introduction, but
not as early as the innovators.
• Venturesome, likely to engage in WOM, and also likely to
assist others who are considering adopting the new
products.
• Ads should show early adopters praising the new
products.
The Highly Risk-averse
• Risk averse and slow to adopt innovations.
• Wait until most other consumers have adopted the new
product.
• Likely to buy older models and look for guarantees.
 Innovations’ Adopters as Reference Groups

The Last To Purchase

• Laggards are the very last consumers to adopt innovations.

• When buy a product, the innovators and early adopters have
already switched to the most advanced models.
• High-risk perceivers and least likely to recognize the value of
innovative products.
Journal article: Coleman, N.V., Williams, P. and Morales, A.C., 2019. Identity threats, compensatory consumption, and working
memory capacity: How feeling threatened leads to heightened evaluations of identity-relevant products. Journal of Consumer
Research.

Self-discrepancy
• Threat to important personal identity of a person
• e.g. a person thinks he is powerful, attractive or
intelligent.

• When threats to identity increase, self discrepancy

increases.
• As self-discrepancy increases, cognitive resource
decrease since person is spending cognitive resources on
monitoring ongoing behavior and coping with
discrepancy.
• As cognitive resources decrease, working memory
capacity (WMC) also decreases.

• When WMC decreases, people find it easy to process

identity consistent-stimuli and engage in identity –
relevant compensatory consumption.
As WMC decreases, compensatory consumption increases.