REFERENCE GROUPS &WORD OF MOUTH

CONSUMER BEHAVIOR

Astrid.Andrew.Aza.Celine.Feby

REFERENCE GROUPSGroups that serve as sources of comparison, influence and norms for peoples’ opinions, values and behaviors.

Types of Reference Group:

•  Family (the most important) à provides children with the skills, knowledge, attitudes and experiences neccessary to function as consumers (the process called consumer socialization)

•  Social class•  Culture•  Subculture

WORD-OF-MOUTHCommunications where satisfied customers tell other people how much they like a business, product, service or event.

NORMATIVE INFLUENCE COMPARATIVE INFLUENCE

MEMBERSHIP GROUP High level of conformity to the standards of immediate membership groups, such as family and peers.

Conformity to the standards of groups that the influenced aspires to join, and probably will.

SYMBOLIC GROUP No significant influence. High degree of influence

Reference groups have high degree of source credibility.

Group Membership and Type of Influence

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MAP membership, shared experience of waiting in the line

SHOPPING GROUPS

FRIENDSHIP GROUPS

VIRTUAL COMMUNITIES

Foodies à shares opinions online

MADD = Mothers Against Drunk DrivingADVOCACY GROUPS

FACTORSAFFECTINGREFERENCEGROUPINFLUENCE

•  Conformity•  Groups’ Power and

Expertise •  Relevant Information and

ExperiencePersonality characteristics: affect the degree of a reference group’s influence on its members, e.g. People who are compliant have a tendency to be more receptive to group influences

FACTORSAFFECTINGREFERENCEGROUPINFLUENCE

•  Product Conspicuousness

•  Personality Characteristics

Endorsers and Spokesperson

4 Key Findings on the Relationship between the Effectiveness of the Messages and Spokespersons they feature.

Celebrities

Celebrity Testimonial Celebrity Endorsment Celebrity Actor Celebrity Spokesperson

•  Salesperson Credibility (sales insurance) •  Vendor Credibility (AMAZON review on products

they sell)•  Medium Credibilty •  Effects on Time on Source Credibility à message

featuring high-credibility spokesperson must be repeated regularly if they are to mantain high level of persuasiveness.

Word of Mouth

Is when you share your experience to a certain product or service to to others.

Opinion Leader In which a person can influence others, who might be opinion seeker or receipents .

Characteristic:• Highly knowledgeable in a certain area • A person who is confident, out-going and sociable• They have a specialized knowledge tht enable them to give an effective recomendations to thers.• Opinion leaders and its receiver belong to the same socio economic

How to measure opinion leaders?Self-designating method employs a self administered questionare that require respondents to evaluate the extent to which they have provided others with information about specific brand or influence some decision.

Sociometric Method measure person-to-person communications about a product or brand among members of community.

Respondents are asked to identify: • Provide advice / information about the product /brand understudy• Provide advice / information about the same product /brand

Key Informant Method a person who is keenly knowledgeable about the nature of social communications among members of specific groups. e.g: researchers

Klout Scores measure people influence online based on their abilities to generate engagement and feedback of what they post.e.g: blogger, etc

1. Social Network (online) a virtual communities where people share information about themselves with others.

2. Brand Communities is a specialized , non geographically bound community formed on the basis of attachment to a product or brand.

3. Weblogs another medium for a discussion or informational site published on the internet and consisting of dicrete entries or post.

Strategic Application of Word-of-Mouth

How to Stimulate Word-of-Mouth?

•  Giving free samples then ask for opinion (simple example)•  Emphasizing on viral marketing and the use of buzz

agents.

Viral Marketingà Marketing technique that uses pre-exiasting social networks and other technologies to produce increases in brand awareness or other marketing objectives.à  How? Through enncouraging individuals to pass along email messages or other content online.

Buzz Agentsà Consumers who promote products and generally receive free product samples but not monetary payments.à Companies usually select those targeted consumers that likely to be effective word-of-mouth communicatorsà  E.g Samsung Nation : an online loyalty program, offer rewards to consumers who talk up Samsung. They will play games on the website, win virtual points and get others to join. Those who are most active in posting online comments earn “Twitterati” badges.

•  Negative rumour may struck marketplace and undermine products. Resulting in customer avoidance towards the product

•  For Example : non-hygienic Warung Nasi Goreng

Managing Negative Rumour

Diffusion of Innovations: Segmenting by Adopter Categories

InnovationThe earliest consumer to buy new products and they are prepared for any risk.

Early AdopterConsumer who buy new products within a relatively short period following introduction.

Early MajorityConsumer who buy innovation after early adopter have done so.

Late MajorityRisk averse and slow to adopt innovation.

LaggardsVery last consumer to adopt innovations.

Non-AdapterProspective adopter: Potentially become costumer.Persistent adopter: Unlikely become costumer.

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