Amity Business School

Module IV
Group Dynamics and Reference Groups, Family
Decision Making, Social Class, Culture,
Subculture

Session = 4

Amity Business School

Group
Two or more people who interact to
accomplish either individual or mutual goals
A membership group is one to which a
person either belongs or would qualify for
membership
A symbolic group is one in which an
individual is not likely to receive membership
despite acting like a member

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Group and Personal Influences on

Individuals
Reference group: any person or group of
people who significantly influences an
individuals behavior
May be individuals (celebrities, athletes, or
political leaders) or groups of individuals
with similarities (musical groups or sports
teams)

Types of Reference Groups

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Primary Groups: A social aggregation that
is sufficiently intimate to permit and
facilitate unrestricted direct interaction
(e.g., family)
Secondary Groups: They have direct
interaction, but it is more sporadic, less
comprehensive, and less influential in
shaping thought and behavior (e.g.,
professional associations or community
organizations)

Amity Business School

Types of Reference Groups

Formal Groups: characterized by a
defined structure (often written) and a
known list of members and
requirements for membership
Informal Groups: have less structure
than formal groups and are likely to be
based on friendship or interests

Amity Business School

Types of Reference Groups

Membership: when individuals are
recognized as members of a group, they
have achieved formal acceptance status in
the group
Aspirational Groups: exhibit a desire to
adopt the norms, values, and behaviors of
others with whom the individuals aspire to
associate

Types of Group Influence

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Normative: when individuals alter their

behaviors or beliefs to meet the
expectations of a particular group
Value-expressive: when a need for
psychological association with a group
causes acceptance of its norms, values,
attitudes, or behaviors

Informational: when people have difficulty

assessing product or brand characteristics
by their own observations or contact

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Selected Consumer-Related
Reference Groups

Friendship groups
Shopping groups
Work groups
Virtual groups or
communities
Consumer-action groups

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Brand Communities
Suzuki Swift owners club
www.swiftowners.co.uk
Sunsilk Gang of Girls
Harley Davidson Owner Groups
Kwality walls Cornetto hojaanede.com

Amity Business School

Impact of Reference Groups Influence

Individuals
Socialization: permits an individual to know
what behavior is likely to result in stability
both for the individual and the group
Company manual may explain the dress
code in the workplace

Informal groups may tell them what styles

are most comfortable and easiest to maintain

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Impact of Reference Groups Influence

Individuals
Self-concept: people protect and modify their
self-concept by their interactions with group
members
People can maintain self-concept by
conforming to learned roles

Testimonial advertising is effective when the

self projected in the ad is consistent with the
idealized self of the target consumer

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Factors affecting how likely people are to

conform to group norms:
Desire for social acceptance

Degree of experience in situation or with

decision
Conspicuousness
Complex product or luxury item

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Profits of conformity
More likely to occur when the
rewards of compliance exceeds its
costs

The degree of influence on final

outcome is determined by an
individuals perception of the profit
inherent in the transaction

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Conspicuousness
Conformity pressures are not sufficient to
induce behavior unless the product or service
is publicly conspicuous in its purchase and
use
Because other will see the product, many
consumers will conform rather than risk
embarrassment or ridicule
Peers send clear signals about product
alternatives

Appealing to NormativeAmity
Influence
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in Marketing Strategy
Normative compliance may be less important in
industrialized nations as many consumers are
putting personal needs ahead of group loyalty
Extended families have less face-to-face
contact and people are more socially isolated
than in the past
Television and mass media expand peoples
horizons beyond social circles

Amity Business School

Appealing to Normative Influence in

Marketing Strategy
A weakened respect for social norms (anomie)
leads some consumers to desire expression of
individuality more than group affiliation

Celebrity and Other Reference

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Group Appeals in Advertising
Testimonials: celebrities tout products
based on personal usage.
Endorsements: celebrities lend their
name or likeness to a product without
necessarily being an expert in the area

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Celebrity and Other Reference

Group Appeals in Advertising
Actor or Spokesperson: someone who
represents a brand or company for an
extended time period

Celebrity and Other Reference

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Group Appeals in Advertising
Expert appeal: appeal from a person
possessing unique information or skills
that can help consumers make better
purchase decisions than other types of
spokespersons
Common-man appeal: testimonials
from regular consumers with whom
most consumers can relate

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Transmission of Influence Through

Dyadic Exchanges
Exchange between two individuals that
influence these individuals behaviors or
beliefs
Dyadic exchange requires the exchange of
resources (opinions and comments)

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Dyadic Exchanges
Word-of-mouth Communication
Service Encounters

Opinion Leadership

Opinion Leadership
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Opinion leadership: the sender of
information is often considered an
opinion leadera person who
influences the decisions of others
Opinion leaders might be experts in
one area but not in others
The greater the perceived knowledge
of a category, the more likely that
persons opinions are to influence
others decisions

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Opinion Leadership

Product innovators: similar to opinion

leaders, these individuals are the first to
try new products

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Overlapping Opinion Leadership

Market mavens: gather much of their
information from shopping experiences,
openness to information and general market
awareness, making them more aware of new
products than other people

Service Encounters
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Service encounters: occurs when
there is personal communication
between a consumer and a marketer
May be a consumption experience
within a storethe various transactions and services that occur
during a retail purchase

May be an experience consuming the

specific service a consumer
purchases

Service Encounters
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Service providers must understand
the needs of different customers and
match the appropriate sales
associate or sales approach to each
individual customer

Which customers desire a great deal

of assistance and which ones prefer
little interaction
Salespeople foster a relationship
between buyer and seller

Service Encounters
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Customer intimacy: detailed understanding
and focus on customers needs lifestyles
and behaviors in an effort to create a deep
cultural connections with the customers
Reverse customer intimacy: how well
marketers facilitate customers knowing the
marketer

Amity Business School

IMPACT OF FAMILY ON
CONSUMER BEHAVIOR

The Importance of Families

and
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Households on Consumer
Behavior
Many products are purchased by a family
unit
Individuals buying decisions may be heavily
influenced by other family members.
How families make purchase decisions
depends on the roles of the various
members in the purchase, consumption, and
influence of products

Amity Business School

Families and Households

Family: a group of two or more persons
related by blood, marriage, or adoption
who reside together
Nuclear family: immediate group of father,
mother, and child(ren) living together

Families and Households

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Extended family: nuclear family, plus other
relatives such as grandparents, uncles and
aunts, cousins, and parents-in-law
Family of orientation: family into which one
is born
Family of procreation: family established by
marriage

Some families are extending these

definitions to include pets

Families and Households

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Household: all persons, both
related and unrelated, who occupy
a housing unit

Families and Households

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Nonfamily households include:

Elderly persons living with

nonfamily members
Persons of the opposite sex
sharing living quarters
Friends living together

Same-sex couples

Families and Households

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Families are the largest single category of
households

Rapid rise in the number of nontraditional

families and non-family households
Any of these types of households may or
may not include children
Buying behavior is best described by the
term consumer unit (CU) or minimal
household unit (MHU)

Families and Households

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Structural variables affecting families
and households:
Age of head of household or family
Marital status
Presence of children
Employment status
Marketers monitor these variables to predict
changes in demand for specific products and
categories

Families and Households

Amity Business School
Sociological variables affecting
families and households:
Cohesion: emotional bonding between family
members

Adaptability: ability of a family to change its

power structure, role relationships, and
relationship rules in response to situational and
developmental stress
Communication: facilitating dimension, critical
to movement on the other two dimensions

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Families Celebrations and

Gift Giving
Marketers frequently refer to resilient
families who emphasize time spent
together through family traditions,
rituals, and celebrations

Families Celebrations
and
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Gift Giving
Gift giving and family holidays are increasing
in importance
Traditional holiday spending and promotions
have shifted to other holidays throughout the
year
Physical movement of large gifts have become
difficult leading to increase sales of gift
certificates, gift cards, and Internet gift
purchases

Role BehaviorAmity Business School

Individual roles in family purchases
Initiator/gatekeeper: initiator of family thinking
about buying products and gathering information
to aid decisions
Influencer: individual whose opinions are sought
concerning criteria and which products or brands
most likely to fit those criteria
Decider: person with the financial authority or
power to choose how the familys money will be
spent on which products and brands

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Role Behavior
Buyer: person who acts as the purchasing
agent by visiting the store, calling suppliers,
writing checks, bringing products into the
home and so on
User: person or persons who use the product

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Role Behavior
Family marketing focuses on the
relationships between family members
based on the roles they assume,
including the relationship between
purchaser and family consumer and
between purchaser and purchase
decision maker

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Role Behavior
Family marketing differentiates
scenarios in which some purchases may
have more than one decision maker
from those that have more than one
consumer

Role BehaviorAmity Business School

Identifying different purchaserconsumer relationships:
Whos buying for whom?
Who are the principal characters?
Whats the plot for the purchase?
Who wants what when?
What can we assume?

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Spousal roles in buying decisions

Autonomic: an equal number of decisions is
made by each spouse, but each decision is
individually made by one spouse or the other
Husband dominant: the husband or male headof-household makes a majority of the decisions.
Wife dominant: the wife or female head-ofhousehold makes a majority of the decisions

Joint: most decisions made with equal

involvement by both spouses

Influences on the Decision

Process
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Marketers evaluate which types of products
are typically purchased by wives, husbands,
or jointly
Marketers can determine which attributes of
specific products to advertise to different
household members
Which media will best reach the most
influential family member?
Which ad appeals are most effective?

Influences on the Decision

Process
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Spouses exert different degrees of influence
when passing through the different stages of
the decision process
Movement from information search to final
decision may be minimal for many lowinvolvement goods and more pronounced for
goods that are risky or have high involvement
for the family

Family Life Cycles

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Family life cycle (FLC) : the
process of families passing
through a series of stages that
change them over time
The concept may need to be
changed to household life cycle or
consumer life cycle to reflect
changes in society

Family Life Cycles

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Eleven primary stages have been

identified, but households do not
necessarily go through all stages
Which stages families go through is
based in part on their lifestyle choices

Life Stage
Young Singles
Newly Married Couples
Full Nest I, II, III
Married, No Kids
Older Singles
Empty Nest I, II

Solitary Survivor
Retired Solitary Survivor

Activities and
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Behaviors

Family Life Cycles

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FLC affects demand for many products
Descriptions of life stages can be combined
with additional information about consumer
markets to analyze consumer's needs, identify
niches, and develop consumer-specific
marketing plans

Family Life Cycles

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Individuals may repeat family stages if
their family situations change or they
may be in stages different from most
people their age

Family Life Cycles

Amity Business School

Individuals may repeat family stages if

their family situations change or they
may be in stages different from most
people their age
FLC helps explain how families change
over time and can identify core target
markets when modified with market data

Family Life Cycles

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Family and household spending

The FLC is an important predictor
of family or household spending
In the last decade, consumers
have changed their household
spending from things to
services

Changing Family Amity

and
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Household Structure
What is the structure of contemporary
families?
How is that structure changing?
How does structure affect the various
stages of the consumer decision
process?

Are the changing realities of family

structure a problem or an opportunity for
growth?

Changing Roles of Women

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Marketing to Women
Appealing to the mother category

Different segments exist and they look at

advertising, the Internet, products, time, and
brands differently
Depending on career orientation,
responsibilities in and out of the home, time
pressures, messages, and ads need to be
adapted
Retailers can appeal to women with special
services or extended hours

Changing MasculineAmity
Roles
Business School
Roles of men in families are
changing substantially as well

Men are more involved in family

functions and household activities
Men may buy items traditionally
purchased by women (groceries)
Many men are achieving gender
role transcendence and use
products previously seen as
feminine