Group Influence and Family Decision Making

1. Group Influence and Family Decision Making

2. Group and Situational Influence • A group is two or more individuals who share a set of norms, have role relationships, and experience interdependent behaviors. • Groups influence the socialization process--i.e., they influence what we learn and how we behave.

3. Classification of Groups • Content or function • Membership group • Symbolic group • Degree of personal involvement • Primary • Secondary • Degree of organization • Formal • Informal

4. Reference Groups • A group to which a consumer looks for guidance for values and behavior. Serves as a frame of reference for individuals in their purchase or consumption decisions. • Broad categories of reference groups: • Normative • Comparative

5. How Do Reference Groups Influence Consumers? • Social power theory • Information and experience • Product conspicuousness and exclusivity

6. Social Power Theory • Groups have potential power over members through 5 different types of social powers. • Three processes that impact the likelihood that social power will influence an individual member: • Compliance • Internalization • Identification

7. Social Powers • Legitimate • Expert • Referent • Coercive • Reward

8. Information and Experience • Members of reference groups share experiences and information about products. • Family, friends • Expert power

9. Product Conspicuousness and Exclusivity • How much a reference group influences depends on two characteristics of a product: • Conspicuousness • How visible the product is to people • Public vs. private • Exclusivity • How exclusively the product is owned • Necessity vs. luxury

10. Low exclusivity High exclusivity “Private necessities” Reference group influence: Weak for product ownership and weak for brand choice. Examples: Mattress Floor lamp refrigerator “Private luxuries” Reference group influence: Strong for product ownership but weak for brand choice. Examples: Theater sound system Pool table Trash compactor Low visibility “Public necessities” Reference group influence: Weak for product ownership But strong for brand choice. Examples: Car Computer Clothes “Public Luxuries” Reference group influence: Strong for product ownership and strong for brand choice. Examples: Golf clubs Sail boat Snowboard High visibility

11. Reference Group Appeals • Appeals that consumers identify with in some way: • Admiration • Aspiration • Empathy • Recognition

12. Types of Appeals • Celebrity appeals • Testimonial • Endorsement • Actor • Spokesperson

13. Appeals, continued... • Expert appeals • “Common man” appeals • Executive spokesperson appeals • Trade or spokes-characters

14. Benefits of Reference Group Appeals • Increase brand awareness • Decrease perceived risk

15. Family • A family is the most important reference group. • What is a family? • Family vs. household

16. Functions of the Family • Economic function • Emotional support • Establish lifestyle • Socialization

17. Consumer Socialization • The process by which children acquire skills, knowledge, and attitudes necessary to function as consumers. • Primary socialization agent • Parents • Secondary socialization agent • Peers • Media

18. Family Decision Roles • Related to sex • Instrumental vs. expressive • Traditional vs. egalitarian • Related to purchase and consumption • Influencer • Gatekeeper • Decider • Buyer • User

19. Family Decision Making Models • Husband-wife decisions • Wife dominant • Husband dominant • Autonomic • Syncratic (joint) • Classification based on degree of role specialization and relative influence.

21. Models, continued... • Purchase decision strategies • Consensual decisions • Goal consensus • Requires problem solving strategy or rule strategy • Accommodative decisions • Conflicting goals • Requires conflict resolution, persuasion strategies, bargaining strategies

22. Models, continued... • Husband-wife influence strategies • Expert influence • Legitimate influence • Bargaining • Reward/referent influence • Emotional influence • Impression management • Partners use a combination of strategies

23. Influence Strategy Mixes

24. Involvement of Children in Family Decision Making • Children are significant market segment: • As influencers of family purchases • As individual consumers • Primary influence on family purchases: • Personal involvement • Initiation stage of purchase process • Sub-decisions

25. Children…. • Direct vs. indirect influence • Influence strategies

26. Family Life Cycle (FLC) • A classification scheme based on the assumption that families pass through an orderly progression of stages, each having unique characteristics, financial situations, and purchasing patterns. • A useful tool for predicting certain household purchases.

27. FLC, continued • FLC models • Base categorization on either husband’s or wife’s age and on age of youngest child in family. • Spending patterns generally follow an inverted U pattern over the life cycle.

28. Traditional FLC • Stage 1--Bachelorhood • Stage 2--Honeymooners • Stage 3--Parenthood • Full nest I-III • Stage 4--Postparenthood • Empty nest I-II • Stage 5--Dissolution

29. Updated FLC • Address societal changes • Never married • Divorce • Childless couples • Single parents • Delayed marriage • Delayed children