Chapter 12Group, Dyadic and Diffusion Processes

Consumer Behavior: A Framework

John C. MowenMichael S. Minor

Key Concepts Groups and types of

groups Role Social comparison

processes Group polarization Trends in household

demographics

Child influence on family decisions

How business to business and consumer buying differ

Service encounters as theater

Market mavens Diffusion

Group Processes

A group is a set of individuals which interacts with one another over some period of

time, and shares some common need or goal.

Groups Influence Buying in Two Ways:

They affect the purchases made by individual consumers

Group members sometimes make decisions as a group

Types of Groups

“Reference group” encompasses a number of more specific types of groups. Aspiration group Dissociative group Primary group Formal group Informal group

How Do Groups Influence Consumers?

Group influence processes The creation of roles within the group The development of conformity pressures The social-comparison process The development of group polarization

Group Influence Processes Groups influence people by

providing norms providing information encouraging them to express certain types of

values. Group influence is greater for “public” goods,

not as great for “private” goods.

Normative, Informational, and Value-Expressive Influences Normative influence - occurs when group

norms act to influence individual behavior. Informational influence - operates when the

group provides highly credible information that influences the consumer’s purchase decision.

Value-expressive influence - consumers sense that a reference group has certain values and attitudes pertaining to the consumption process.

A Role . . .

. . . consists of the specific behaviors expected of a person in a certain position

Role-related product cluster - a set of products necessary for playing a particular role.

Conformity is . . .

. . . a change in behavior or belief toward a group as a result of real or imagined group pressure.

There are two types of conformity: Compliance Private Acceptance

Factors Leading to Conformity Group factors:

Cohesiveness Expertise Size of group

Individual Factors: Amount of information the individual possesses Attractiveness of group/Individual’s need to be

liked Type of Decision

Social-Comparison Processes

The process by which people evaluate the “correctness” of their opinions, extent of their abilities, and appropriateness of their possessions.

Group Polarization Groups tend to select more extreme positions

than that of the average group member. Conservative as well as risky shifts are

possible.

Families and Households

Households are composed of all those people who occupy a living unit The Nuclear Family The Extended Family The Detached

Nuclear Family

The Demographics of Households

Two general types of households:

Families (70.6%)

Nonfamilies (29.4%)

e

Family Households:

Married couples Married with children at home Married with no children at home Single fathers Single mothers Other families

Nonfamily Households:

Men Living Alone

Women Living Alone

Other Nonfamilies

Some Household Trends

Childless couples 45-64 have the most buying power. Single parents/childless singles over 45 have the

least. Size has shrunk from 3.14 to 2.67 persons.

Increase in divorce: children leave home prior to marriage: older people maintain own homes.

Later marriage. 2-career families.

Family Decision Making

As in organizational buying units, the decision maker may not be the user or maintainer of the product.

Families come in many different configurations so it is difficult to identify average family decision making.

Relative Influence Of Decision Makers

Wife-Dominated Decisions

Husband-Dominated Decisions

Autonomic Decisions

Syncratic Decisions

Family Influence - Children

Children have more influence on: Food, vacations, eating out .

Adept at forming alliances with 1 parent to constitute a majority.

Child influence increases with age and earnings.

Childhood Consumer Socialization

. . . refers to the processes by which young people acquire skills, knowledge and attitudes relevant to their functioning as consumers in the marketplace.

Model of Consumer SocializationBackgroundFactors

SocializationAgents

LearningMechanisms

Outcomes

TheSocializedCustomer

SESSexAgeClassReligion

MediaFamilyPeersTeachers

ModelingReinforce-mentCognitivedevelop-ment

Organizational Buying Behavior

An organizational buying center is made up of those people in an organization who participate in the buying decision and who share the risks and goals of the decision.

Building Relationships in Organizational Buying

Relationship marketing refers to the overt attempt of exchange partners to build a long-term association characterized by purposeful cooperation and mutual dependence and development of social, as well as structural bonds.

Webster’s Marketing Relationships Continuum

Pure Transaction

Full Integration

1. Transaction

2. Repeated Transactions

3. Long-Term Relationship

4. Buyer-Seller Relationship

5. Strategic Alliance

6. Network Organization

7. Vertical IntegrationSource: Frederick E.Webster, “The ChangingRole of Marketing in the Corporation,” Journal of Marketing 56 (October 1992), pp. 1-17.

Dyadic Exchange . . .

. . . takes place when two individuals transfer resources between each other

Word-of-Mouth Communication

. . . refers to an exchange of comments, thoughts, or ideas between two or more consumers, none of whom is a marketing source.

Word-of-Mouth Communication May account for 3

times as many sales as advertising.

Is twice as effective as radio ads, 4 times as effective as personal selling, 7 times as effective as newspapers or magazines.

Opinion Leaders... Lead in a specific product category and

situation. Are usually involved with the product

category. May have higher social status than followers. May be more innovative in purchases than

followers. Are a bit similar to product innovators.

Types of Opinion Leaders Opinion Leader

Always involved in product category.

High status, socially active.

Product Innovator Purchases

innovative products Less integrated into

social groups.

Market Maven General market

knowledge Expertise not product

specific. Surrogate

Consumer Often professional:

tax consultant, wine steward, stock broker.

Service Encounters . . .

. . a personal interaction between a consumer and a marketer.

Service Encounters as Theater

Firm’s Backstage

Firm’s Front Region

Customer’s FrontRegion

Customer’s Backstage

Management Functions, Rehearsal

Management Functions, Rehearsal

Personal Front, etc.

Performance

Personal Front, etc.

Symmetrical Customer/ Employee Service Themes

Autonomy Mutual cooperation Total dependence

Indifference Cooperation Dominance

Diffusion . . .

. . . refers to the idea that substances and ideas can gradually spread through a medium of some type and reach a state of equilibrium.

. . . in the consumer behavior setting, refers to the process by which innovative ideas, products, and services spread through the consumer population.

Transmission Processes

Trickle-Down Theory

Multi-Step Flow Model

Multistep Flow Model...

Mass Media

Gatekeeper

Opinion Leaders

Follow-ers

MassMedia

MassMedia

G

O

O

F

F

F

Implications of Multistep Model

Mass communications can directly reach nearly everyone.

For some products, opinion leader/follower roles are reversed.

Gatekeepers can choose whether opinion leaders/followers get information.

Communication flows back and forth between all 3 groups.

The Diffusion of Innovations

A product innovation is a product that has been recently introduced and is perceived by consumers to be new in relation to existing products or services

Managerial Implications Positioning. New products should be

positioned to appeal to opinion leaders, then possibly repositioned to appeal to followers.

Environmental Scanning. Scanning can identify what present customers are saying to other customers or potential customers about the company or its products.

Market Research. Research can provide insight into the shape of the diffusion curve for a new product.

Implications continued... Marketing Mix. Promotions can be positioned

to appeal to children and thus utilize their influence in family decision makings.

Segmentation. Naturally existing groups of customers make outstanding target markets.