Chapter 11

Groups and Social Media

Reference Groups
• Reference group: an actual or imaginary
individual/group that influences an individual’s
evaluations, aspirations, or behavior

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Reference Group Influences
• Reference group influences stronger for purchases
that are:
• Luxuries rather than necessities
• Socially conspicuous/visible to others

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When Reference Groups Are Important
• Social power: capacity to alter the actions of others
• Types of social power:

Referent power Information power

Legitimate power Expert power

Reward power Coercive power

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Types of Reference Groups
Any external influence that provides social cues
• Friends / Peers
• Cultural figure (Barack Obama)
• Parents or Family
• Large, formal organization
• Small and informal groups
• Can exert a more powerful influence on individual
consumers than larger groups
• A part of our day-to-day lives: normative influence

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Factors Predicting
Reference Group Membership

Propinquity

Mere exposure

Group cohesiveness
Membership & Aspirational Reference
Groups
Membership reference groups: people the consumer
actually knows and admires
• Advertisers use “ordinary people”
Aspirational reference groups: people the consumer
doesn’t personally know but admires
• Advertisers use celebrity spokespeople

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Brand Communities and Consumer Tribes
• A group of consumers who
share a set of social
relationships based upon usage
or interest in a product
• Brandfests or Productfests
enhance brand loyalty
• Consumer tribes share
emotions, moral beliefs, styles
of life and affiliated products
• Tribal marketing: linking a
product to the needs of a
group as a whole
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Positive versus 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 (a.k.a. “Dissociative Groups”)
• First class vs. coach on airplanes
• Marketers show ads with undesirable people using
competitor’s product

• Antibrand communities: coalesce around a celebrity, store, or

brand—but are united by their disdain for it
• rachelraysucks.com
• ihatewalmart.com

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Consumers in Groups
• Deindividuation: individual identities become submerged within
a group
• Example: binge drinking at college parties
• Example: Army training boot camp

• Social loafing: people devote less effort to a task when they’re

in groups
• Example: we tip less when eating in groups
• Example: Kitty Genovese case in NYC

• Risky shift: group show a greater willingness to consider

riskier alternatives than if members made their own decisions
individually (Why?)

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Consumers in Groups (cont.)

Decision polarization: after

group discussion of an issue,
opinions become more
extremely in favor of original
position taken.
Home shopping parties
(Tupperware, Pampered
Chef, Mary Kay, Botox)
capitalize on group pressure
to boost sales
Social Shopping – More $ spent

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Conformity
• Most people tend to follow society’s
expectations regarding how to look,
act and even feel
• Factors influencing conformity:
• Cultural pressures
• Fear of deviance and being
ostracized
• Commitment to and benefits of
group membership
• Group influence, power and size
• Susceptibility to interpersonal
influence
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Word-of-Mouth Communication
WOM: product information transmitted by individuals
directly to individuals
• Most reliable / efficacious form of marketing
• Cheapest form of marketing *
• Uses social pressure to facilitate conformity
• Influences two-thirds of all sales
• We rely upon WOM more in later stages of product
adoption / mature products
• Especially powerful when we are unfamiliar with
product category

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Negative WOM and Power of Rumors
• We weigh negative WOM more heavily than positive
WOM.
• NWOM is easy to spread, especially online
• Any one can start an NWOM thread
• Information/rumor distortion
• Larger companies sustain larger damages from
NWOM, but can cope better than smaller
companies

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The Transmission of Misinformation

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Negative WOM and the Power of Rumors
Three basic themes found in Web-based “protest”
communities:
• Injustice: consumers talk about their repeated
attempts to contact the company and seek help only
to be ignored.
• Identity: characterize the violator as evil, rather than
simply wrong. (e.g. Starbucks, P&G)
• Agency: individual Web site creators try to create a
collective identity for those who share their anger
with a company. (is this just social bonding?)

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Virtual Communities
• Which type of Social Media user are you?

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Social Media and Crowd Power
• Wisdom of crowds perspective: under the right
circumstances, groups are smarter than the
smartest people in them (“40,000 Frenchmen”)
• Some crowd-sourcing Web sites:
• Quirky.com
• Threadless.com
• Yelp.com

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Opinion Leadership
• Opinion leaders: influence others’
attitudes and behaviors
• They are good information sources
because they:
• May be experts
• Provide unbiased evaluation
• Are socially active and popular
• Are similar to the consumer
• Are usually among the first to buy
(i.e. “adopters” or “innovators”)
• Have hands-on product experience
(absorb risk)
• Companies spend lots to court
opinion leaders

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Opinion Leadership (cont.)
• Monomorphic vs. Polymorphic Opinion Leaders
• Expertise tends to overlap across similar categories
(i.e. cosmetics and fashion or appliances and
computers)
• It is rare to find a “general” opinion leader, but
they do exist

• Opinion seekers
• More likely to talk about products with others and
solicit others’ opinions
• Typically at lower rungs of the social hierarchy
• May lack self-esteem

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The Market Maven
Market Maven: actively involved
in accumulating and
disseminating marketplace
information of all types
• Makes efforts to be
continuously aware of what’s
happening in the marketplace
• Know how and where to get
stuff
• May not actually buy products!

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Surrogate Consumers
• Surrogate consumer: a marketing intermediary hired
to provide input into purchase decisions
• Interior decorators, stockbrokers, professional
shoppers, college consultants
• Consumer relinquishes control over decision-
making functions
• Marketers should not overlook the influence of
surrogates!
• Post-Purchase Evaluation: Better or worse?

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