Understanding Consumer Behavior: Reference Groups, Shopping, and Decision Making - Prof. J, Study notes of Marketing

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Chapter 9 Shopping in groups:  Group influence – major factor in consumer decision making process o Women shopping with people: shortest time when with a man, longest time is when with another women  social activity, hedonic *Reference Group  a group of individuals who has significant relevance for a consumer and who impacts the consumer’s evaluations, aspirations, and behavior Group Influence  refers to the way in which group members influence the attitudes, opinions, and behaviors of other within the group  Group members: o Share common goals and interests o Communicate with, and influence, one another o Share a set of expectations, rules, and roles o View themselves as members of a common social unit Types of Groups:  Primary & Secondary o Primary  people who have frequent, direct contact with consumer; family o Secondary  a group to which the consumer belongs but has less contact than a primary; professional clubs and organizations  Formal & Informal o Formal  a consumer formally becomes a member; church member o Informal  group that has no membership and no codes of conduct; groups that meet to have coffee or go to events together  Aspirational & Dissociative o Aspirational  consumer desires to become member o Dissociative  consumer does not want to belong Conformity  a result of group influence in which an individual yields to the attitudes an behavior of others  Peer pressure  the extent to which group members feel pressure to behave in accordance with group expectations o Example: meth video – “not even once” Teens additional information:  Survey of 1800 online teens: ages 13-17 identified a critical target group  Teen influencers – 17% o Popular, style-conscious, strong influence on family and friends, spend 8 hours per week online  Older & wealthier than average teen; keen on spreading word on trends & products *Types of Social Power *Reference Group Influence:  Informational influence  consumers use the behaviors and attitudes of reference groups as information into making their own decisions  Utilitarian influence  consumers conform to group expectations to receive a reward or avoid punishment  Value-expressive influence  consumers internalize a group’s values or join groups to express their own values and beliefs Factions that affect influence  Information and experience o High for consumers – less likely to be influenced by reference groups  Credibility, attractiveness and power of reference group  Conspicuousness of the product o Verbally conspicuous product – easily explained to others – higher influence by reference group Value and Reference Groups:  Utilitarian value  group membership becomes a means to a valued end state  Hedonic value  value is an end in and of itself (you enjoy whatever the group is doing, instant gratification you get from doing it with the group) o Ex. Raft with group for safety, but enjoy being with the group  Information obtained directly impacts consumer expectations, which then affect value perceptions and satisfaction *Word of Mouth (WOM)  information about products, services, and experience that is transmitted form consumer to consumer  Organic  consumer-to-consumer, comes naturally (more credible)  Amplified  encourages organic WOM from company, generates a place to get organic WOM started (ex. Viral video, Dove videos) Amazon (Amplified Example)  First to allow consumer reviews in 1995; more than 5 million consumer posted tens of millions of review, prime example of how much amplified can be good  Their competitive advantage  Becoming leading source of product reviews and now product attribute reviews Viral marketing example – indie horror film “Paranormal Activity”  Relied heavily on internet buzz, Twitter, and WOM’ film started in college markets where it debuted to limited theatres *Personality Traits  Impulsivity  represents how sensitive a consumer is to immediate rewards  Consumer self-regulation  a tendency for consumers to inhibit outside, or situational, influences from interfering with shopping intentions o Action-oriented  high capacity to self-regulate (are not affected by their environment or emotions; less likely to make unnecessary purchases) o State-oriented  low capacity to self-regulate (affected by the environment and feelings, and hedonic shopping value) *Retail Approaches at Encouraging Impulse Purchases  Merchandise complementary products together  Encourage “add-on” purchases  Create an emotionally charged atmosphere  Make things easy to buy  Provide a discount *Questions Distinguishing Low from High Self-Regulatory Capacity Compulsive Consumer Behavior  Harmful (extreme of impulsive behavior)  Uncontrollable  Driven by chronic depression (something in the psyche of a compulsive shopper *Retail & Service Atmospherics  Atmospherics  the emotional nature of an environment or more precisely, the feelings create by the total aura of physical attributes that comprise the physical environment  Servicescape  the physical environment in which consumer services are performed *The Qualities of an Environment *Atmosphere Elements  Two factors help create a competitive advantage: o Fit  appropriateness of the elements for the given environment o Congruity  consistency of the elements with one another  Elements: o Odors o Music o Color o Social settings  Examples: o Harrod’s in London  Nice floors, lighting, clean displays, beautiful ceilings, sells anything a rich person wants, sells rocks/fossils A Retail Personality Perceptual Map Social Settings  The sheer volume of shoppers in downtown Chicago adds to the excitement of this atmosphere The Way Crowding Affects Consumers Antecedent Conditions  situational characteristics that a consumer brings to a particular information processing, purchase, or consumption environment  Economic resources o Buying power o Consumer budgeting  Mood  Security and fearfulness Carnival Cruise Ship Ads  1st Ad: o New ship smell; upgrading a lot of ships wanted customers to know o Cruise line that is fun  image o Catered to families, and young people o Servicescape  hot tub, show girls, room, color  2nd ad: o Waterslide  means fun; this goes with image and servicescape and atmospherics  3rd ad: o Mom caught air; show what they provide and what feeling you get from it Chapter 11 *Basic Consumption Process & Decision Making  Decision making  how it applies and where  Don’t always take every step in process  We are trying to be satisfied and eliminate as much time and money as possible; we want to be efficient Decision Making 101  The “best” schools are not always the best choice for students  Best is determined by where it comes from  Best is relative to each person Question:  What is the relationship among the 3 decision making perspectives? (Include the ABC approach to attitude)