WEEK

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WEEK
Reference Groups and Family
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Reference Groups

• An actual or imaginary individual/group conceived
  of having significant relevance upon an
  individuals evaluations, aspirations, or
  behavior
• Reference groups influence consumers in three
  ways
• Informational
• Utilitarian
• Value-expressive

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When Reference Groups Are Important

• Social power capacity to alter the actions of
  others
• Referent power
• Information power
• Legitimate power
• Expert power
• Reward power
• Coercive power

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Reference Group Influence on Buying Decisions

• Brand Strong Product StrongConspicuous
  Products Not Owned by Everyone snow skis, golf
  clubs, sailboat
• Brand Weak Product StrongConspicuous
  Products Not Owned by Everyone and for Which Few
  Brands Exist trash compactor, ice maker

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Reference Group Influence on Buying Decisions

• Brand Strong Product WeakVisible Products
  Owned by Most but for Which Many Brands Exist
  mens suits, cars, wristwatches
• Brand Weak Product WeakInconspicuous
  Products by refrigerators, floor lamps,
  mattresses

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Types of Reference Groups

• Any external influence that provides social clues
• Cultural figure
• Parents
• A large, formal organization
• Tend to be more product- or activity-specific
  comparative influence
• 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

• 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 vs. Aspirational Reference Groups

• People the consumer actually knows vs. people the
  consumer doesnt know but admires
• Admirational strategies concentrate on highly
  visible, widely admired figures (athletes or
  performers)
• Membership strategies focus on ordinary
  people whose consumption provides informational
  social influence

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Positive vs. 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
• Marketing ads with undesirable people using
  competitors product
• Discussion Identify a set of avoidance groups
  for your peers. Can you identify any consumption
  decisions that are made with these groups in
  mind?

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Consumers Do It in Groups

• Home shopping parties
• Tupperware and Botox parties
• Informational and normative social influence

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Conformity

• Most people tend to follow societys expectations
  regarding how to look/act
• Change in beliefs/actions toward societal norms
• Appropriate clothing/personal items, gift-giving,
  sex roles, and personal hygiene

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Factors Influencing Conformity

• Cultural pressures
• Fear of deviance
• Sanctions against different behavior
• Commitment to group membership
• Principle of least interest
• Group unanimity, size, expertise
• Susceptibility to interpersonal influence
• Role relaxed

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Social Comparison

• Howm I doing?
• We look to others behavior to inform us about
  reality
• Occurs as way to increase stability of ones
  self-evaluation (sans physical evidence)
• Tastes in music and art
• We tend to choose co-oriented peer when
  performing social comparison

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Resisting Conformity

• Independence vs. anticonformity
• Marching to own drummer vs. being aware of what
  is expected (and not doing it)
• Reactance
• Negative emotional state when we are deprived of
  our freedom of choice
• Censored books, TV shows, music lyrics

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Word-of-Mouth Communication

• WOM product information transmitted by
  individuals to individuals
• More reliable/trustworthy form of marketing
• Backed up by social pressure to conform
• Influences two-thirds of all sales of goods
• We rely upon WOM in later stages of evaluation
  and adoption
• WOM is powerful when we are unfamiliar with
  product category

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WOM Communication (Contd)

• Product-related conversation factors
• High involvement with product (pleasure)
• Knowledgeable about product (impressing others)
• Genuine concern for others (avoid wasting money)

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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
• Determined detractors
• Discussion What is the best way for a company to
  deal with determined detractors?
• Information/rumor distortion
• Assimilation, leveling, and sharpening

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Guerrilla Marketing

• Promotional strategies that use unconventional
  locations and intensive WOM to push products
• Recruiting legions of real consumers for street
  theater
• Hip-hop mix tapes/street teams
• PGs Tremor
• Kayem Foods Great Sausage Fanout
• Brand ambassadors

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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

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Social Networking

• Web sites letting members post information about
  themselves and make contact with similar others
• Share interests, opinions, business contacts

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Opinion Leadership

• We dont usually ask just anyone for advice about
  purchases!
• We most likely seek advice from someone who knows
  a lot about a product
• Opinion leaders frequently influence others
  attitudes/behaviors
• E-fluential advice

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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 (Contd)

• Generalized opinion leader vs. monomorphic/polymor
  phic 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
• Innovative communicators
• Opinion seekers
• More likely to talk about products with others
  and solicit others opinions
• Casual interaction prompted by situation

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The Market Maven

• Actively involved in transmitting marketplace
  information of all types
• Just into shopping and staying on top of whats
  happening in the marketplace
• Solid overall knowledge of how and where to
  procure products
• I like introducing new brands/products to
  friends
• People ask me for information about products,
  places to shop, or sales
• My friends think of me as a good source of
  information when it comes to new products or
  sales

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Lifestages
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Lifestage Analytic Matrix
COHORT EFFECTS
N-Gen Gen-X
Boomer II Boomer I
Post War W W II
Depression
Widowhood
LIFESTAGES
Retirement
Grandparenting
Cataracts
PHYSIOGRAPHICS
Empty-Nesting
EMOTIONAL/ AFFINITIES
Divorce
Children
Marriage
College

Peak Income
Peak Disposable Income
Least Disposable Income
SOCIOECONOMICS
Asset Depletion
20 30 40 50 60
70 80
AGE
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Lifestages

• The roles we take on over our lifetimes
• They define our activities, attitudes, and
  outlooks
• Different cohorts interpret the same lifestage
  differently

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Fidelity Ad
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Lifestage Transitions

• Formerly linear, one-time events now tend to
  be cyclic or recurring
• Women often affected more than men
• Transitions can be periods of high stress

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The Marriage Lifestage

• Never-Marrieds
• Among 20 To 24 Year-Olds
• Since 1970
• Men up from 55 to 81
• Women up from 36 to 69

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The Marriage Lifestage

• Median Age For First Marriage
• Today
• Men 26.8 Women 25.0
• 1970
• Men 22.5 Women 20.6

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The Lifestages of TwentySomethings
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Putting Life on Hold The Pre-Launch Lifestage
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The Pre-Launch Lifestage

• 66 of Persons Aged 18-24 Live With Parents or
  Another Relative
• Men Do So More Than Women 38 vs. 25
• On Average, Young Adults Leave Home Between Ages
  of 22-24

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Coming Back The Boomerang Lifestage
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The Boomerang Lifestage

• 50 Return Home At Least Once
• The Younger the Age of Leaving Home, the Higher
  the Rate of Return to Home
• After Age 25, Men More Likely to Return

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Holiday Inn Ad
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Off To School The College Lifestage
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The College Lifestage

• More Students Combine Work with College And Are
  Not Cash-Strapped
• Major Differences Between Community Colleges and
  Four Year Institutions
• 50 Of Freshmen Dropout

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The College Lifestage

• Of Those Aged 18-24, More Women Than Men Are
  Enrolled In College 47.5 vs. 43.7
• Women Choose Same Fields of Study As Men
• College Now Takes Five Years

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The College Lifestage

• Only 34 of College Freshmen Study Over 6 Hours A
  Week, vs. 44 In 1987
• 75 Eat Out At Least Once A Week

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Getting Closer Together The Cohabitation
Lifestage
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The Cohabitation Lifestage

• Seven-fold Increase Since 1970
• Young Adults Aged 18-24 Most Likely To Cohabitate
• Length of Time Depends On Economic Status

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Bud Light
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Opps! Pre-Marital Pregnancy
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Pre-Marital Pregnancy Lifestage

• 33 Of Births Are To Unwed Mothers
• 33 Of Unwed Mothers Are Aged 20-24
• Negative Impact On Getting Married
• Rise In Disposable Dads

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Goin To The Chapel The Marriage Lifestage
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The Marriage Lifestage

• The Rise Of The Starter Marriage
• Divorces Of Those Aged 19 And Younger Doubled
  Over Last 20 Years
• For Those Aged 20 To 24, Divorce Rates Rose From
  3 To 5 Over Last 20 Years
• Under Age 25, Women More Likely To Remarry

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Giving Up Your Free Time The Parenthood
Lifestage
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The Parenthood Lifestage

• Women Today Aged 15 To 24 Give Birth To 1.5
  Children
• Within One Year, 67 Return To Work
• 30 Of Those With Children Under Age 6 Work Full
  Time, Up From 10 In 1970

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Getting Down To Business The Career Lifestage
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Never Confuse Having A Career With Having A
Life.
--Eddie Bauer Shopping Bag
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Ameritrade
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The Career Lifestage

• Increasing Mobility In Young Adults
• Young Adults Expect Companies To Be Flexible
  About Private- Or Family-Related Needs
• Education Slows Job Transitioning High School
  Grads Hold 7.6 Jobs By Age 29, College Grads, 3.8
• Young Adults Are Lifelong Learners

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The Career Lifestage

• 7 of Those Aged 20 To 24 Hold More Than One Job
• 24 Of Young Families Are Dual-Earners
• Increasingly, Young Women Are Entering Fields
  Traditionally Dominated By Men

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Lifestages A Closer Look
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Lifestage Transitions

• Formerly linear, one-time events now tend to
  be cyclic or recurring
• Women often affected more than men
• Transitions can be periods of high stress

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Cyclic Lifestages
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The 50s Decade of Delight
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Empty NestingA Return to a Couple-Based
Household
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Empty Nesting

• For Older Post-Wars, a time of sadness and
  identity crisis.
• For Leading-Edge Boomers, one of the happiest
  times of their lives, an opening of possibilities.

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Theyre Back The Boomerang Lifestage
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Grandparenting
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Postwar Cohort Lifestages

• Grandparenting
• Changing roles
• Much less mentors
• Much more indulgent towards grandchildren

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Grandparenting Concerns and Anxieties

• Guilt Feelings from Concern
• over
• Parenting Grandchildren
• versus
• Enjoying Own Independence

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Nuveen
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Retirement

• Early Retirement
• Un-Retirement
• Part-Time

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Northwest Airlines Ad