Module 4 Flashcards
Reference Groups
Reference groups are individuals or groups that significantly impact a person’s evaluations, aspirations, or behavior.
Examples: Parents, friends, celebrities, or classmates.
Reference Groups Influence Types
Informational
• Providing facts or knowledge.
Utilitarian
• Pressure to conform for rewards.
Value-Expressive
• Influence based in admiration or personal values.
Types of Reference Groups
• Formal vs. Informal
~ Formal: Structured, identifiable groups (professional organizations).
~ Informal: Less structured, but can be more influential (close friends).
• Positive vs. Negative
~ Positive Reference Groups: Consumers want to belong and identify with these groups (choosing brands popular with peers).
~ Negative (Dissociative) Reference Groups: Groups consumers avoid identifying with (avoiding feminine brands like Lululemon).
• Membership vs. Aspirational
~ Membership: Groups we belong to (friends, colleagues)
~ Aspirational: Groups we aspire to be part of (celebrities, elite social circles).
• Brand Communities vs. Antibrand Communities
~ Brand Communities: Consumers who support a brand, leading to loyalty and positive word of mouth.
~ Antibrand Communities: Groups formed to oppose a brand, though they can provide insights for improvement if managed correctly.
The Power of Reference Groups
- Referent Power: Influencers or celebrities (Taylor Swift) influence consumer behavior by setting trends.
- Expert Power: Influencers with specialized knowledge (Huda Kattan for beauty).
- Information Power: Those with access to information (fashion magazine editors).
- Legitimate Power: Authority figure (police, doctors) who influence based on position.
- Reward and Coercive Power: Groups that influence by offering rewards or punishments (supervisors, peer pressure).
Conformity vs. Resistance
People may conform due to cultural pressures or fear of deviance, but some actively resist group influence to assert individuality.
Opinion Leadership
Opinion leaders are individuals who influence others’ purchasing decisions due to their knowledge, credibility, or expertise.
Identifying Opinion Leaders
• Self-Designating Method: Asking people if they consider themselves opinion leaders.
• Sociometric Method: Tracing communication patterns among group members (most accurate but costly).
Word-Of-Mouth Communication
WOM is the act of sharing information about products, services, or brands through personal interactions or online.
Income vs. Discretionary Income
• Income determines the total earnings but discretionary income determines how much money is available to spend on non-essential items. For example, someone earning $5,000/month might only have $1,000 discretionary income after essential expenses.
Attitudes Towards Money
• Spendthrifts: Enjoy spending money.
• Tightwads: Hate spending money.
Consumer Confidence
• Optimistic Consumers: Spend more and save less, often taking on more debt.
• Pessimistic Consumers: Tend to save more and spend less.
Social Class
A person’s position in society, influenced by income, education, family background, and occupation.
Social Mobility
• Upward Mobility: Achieving a higher social status (blue collar worker to doctor).
• Horizontal Mobility: Moving within the same social class (switching jobs in a similar profession).
• Downward Mobility: Moving closer to a lower social class due to factors like job loss or economic struggles.
Changing Family Structures
• Nuclear Family: Traditional family structure (father, mother, children).
• Extended Family: Multiple generations living together.
• Trends: Delayed marriages, fewer children, more single-parent families, and stay at home dads.
Subcultures
Groups of consumers who share common beliefs, experiences, and consumption behaviors. Can be based on age, region, ethnicity, and more.
Age Cohorts
Generations grouped by birth years.
The Grey Market
Represents a growing opportunity, especially in industries that cater to aging populations with more disposable income.
Culture
• Influences how people perceive and use products. Consumers from different cultures may have vastly different preferences, behaviors, and values. For example, bikinis are popular globally, but in some countries, religion requires women to wear fully covered swimsuits.
• Culture also influences values, norms, rituals, and symbols which shape consumer behaviors.
Values
• Core values differ by culture, shaping consumer preferences.
• Japan: Emphasizes safety and security.
• USA: Values freedom, youthfulness, achievement, and activity.
Hofstede’s 6 Cultural Dimensions
• Power Distance: Acceptance of unequal power distribution.
• Uncertainty Avoidance: Tolerance for ambiguity.
• Masculinity/Femininity: Preferences for achievement vs. cooperation.
• Individualism/Collectivism: Focus on self vs. group.
• Long-Term/Short-Term Orientation: Planning for the future vs. focusing on the present.
• Indulgence/Restraint: Degree of freedom is satisfying desires.
Norms
Norms are social rules that tell us what is acceptable or unacceptable.
• Steak is a common meal in Canada, but only 15% of Indians eat beef (many are vegetarian)
• In Canada, wedding registries are common whereas in China, money is often given as a gift instead of physical items.
Myths
Cultural myths influence branding and marketing.
• Pamper’s Stork: In western countries, the myth of the stork delivering babies is familiar, but in Japan, babies are brought by a giant peach floating down a river.
Rituals
Repeated behaviors that often have cultural significance.
• In Japan and China, business gifts are often expensive, but in Canada this might be seen as a bribe.
• Symbolism: Flowers
~ Chrysanthemums in France (funerals)
~ Even numbers in Russia (funerals)
Language and Symbols
- Language Barriers: Words or brand names may have different meanings across cultures.
- Translations Issues: Some countries have specific language laws (Canada requires bilingual packaging).
- Gestures: Different cultures interpret gestures differently.
Global vs. Local Marketing
• Standardized Approach: Same strategy across markets, focusing on shared consumption symbols (Apple iPhone ads).
• Localized Approach: Adapting marketing strategies to fit local preferences (Red Bull using gold bottles in Asia and blue in North America).
Cross-Cultural Analysis
Marketers must analyze both similarities and differences between cultures to adapt their strategies accordingly.
Cultural Production System
The process through which cultural values and symbols are created and assigned to consumer goods.
Three Major Subsystems
• Creative: Designers or creators (artists, writers).
• Managerial: Organizations that manage production (publishers, brands).
• Communications: Agencies that promote products (advertising firms, social media influencers).
Cultural Gatekeepers
People or organizations that filter information for consumers (social media influencers, critics, media outlets).
High Culture
Original, subtle, and elite art (Kaw’s art, values at millions). Often seen as a luxury or high-status product.
Low Culture
Accessible, mass market items (Uniqlo’s collaboration with Kaw’s).
Marketing with Culture
Brands often incorporate elements of high culture or popular culture to appeal to consumers.
Product Placement
The practice of featuring products in movies, TV shows, or other media to increase brand recognition.
• Reese’s pieces sales soared 65% after appearing in E.T..
• Too much product placement can feel like advertisement overload (Jurassic World).
Innovation
Any new product, service, or idea perceived as novel.
• EQUA Smart Water Bottle with motion sensor tech.
Adoption of Innovation
People adopt innovations at different rates.
Five Types of Adopters
• Innovators: First to adopt.
• Early Adopters: Quick to adopt after innovators.
• Early Majority: Adopts when it becomes popular.
• Late Majority: Adopts when it’s widely accepted.
• Laggards: Last to adopt.
Factors Influencing Adoption
- Compatibility: Innovation should align with consumers’ norms and lifestyle (compact dishwasher for small Japanese kitchens).
- Trialibilaity: People are more likely to adopt if if they can experiment first (Tesla showrooms in malls).
- Complexity: Simple products are more likely to be adopted (Square’s easy to use payment system).
- Observability: People are more likely to adopt if they see others using it (check out kiosks at grocery stores).
- Relative Advantages: The innovation should be clearly better than alternatives (Square’s product advantages over competitors).
Fashion Diffusion
Fashion spreads from subcultures to the broader society. The process is complex and influenced by various models.
Psychological Models
People adopt trends due to conformity, creativity, uniqueness, or social influence (teenagers wearing trendy chunky sneakers to fit in).
Economic Models
Scarcity increases the appeal of products. Limited availability drives urgency (Zara’s limited inventory strategy).
Sociological Models
Fashion often starts within subcultures (hip-hop, street art) and then diffuses into mainstream culture.
