MKT20025 Consumer Behaviour External Determinants of Consume
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MKT20025 Consumer Behaviour
External Determinants of Consumer
Behaviour:
Lecture 8: Reference Groups and Family
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Learning Objectives
Reference Groups
- To understand groups and reference groups
- To know how reference groups influence consumer behaviour
- To learn how to apply reference group knowledge to Marketing
decisions
Family
- To know the functions of a family
- To understand the socialisation process
- To realise the impact of family life cycles on consumer behaviour
- To understand the dynamics of husband–wife decision making
- To realise the influence of children in consumption decisions
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Influential
others
Decision-
making
Peers
Family
Communities
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1. Reference Groups
The Importance of Groups
A group consists of “two or more people who interact to
accomplish either individual or mutual goals”
(Schiffman et al., 2014: 288).
Behaviour often occurs in a group setting
Home, work, university, social events
Groups function to:
Set norms for behaviour
Set an example: imitating or modelling behaviours
Pass on information: consumption related knowledge
Groups are a collective of social role models
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Types of Groups
Membership Group
e.g., music band
Symbolic Group
e.g., rock star band
Primary Group
e.g., family
Secondary Group
e.g., Swinburne student alumni
Formal Group
e.g., student at Swinburne
Informal Group
e.g., friends at Swinburne
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The Reference Group Concept
“A reference group is any person or group that serves as
a point of comparison (or reference) for an individual in
forming either general or specific values, attitudes, or a
specific guide for behaviour” (Schiffman et al., 2014: 289)
A reference group can influence how we:
- See the world
- Aspire to be
- Evaluate things
- Make decisions
- Behave
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The Importance of Reference Groups
For marketers, reference groups:
• Serve as a frame of reference which guide
consumption decisions and behaviour
• Do not require membership
– No rules
– No restrictions
• May be symbolic
– Consumers do not need to be part of
a tangible group
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Types of Reference Groups
Normative reference groups influence general or
broadly defined values and behaviour:
e.g., for children, the main normative reference
group would be their immediate family
Basic code of behaviour
Comparative reference groups serve as benchmarks
for attitudes and behaviours:
e.g., a family may imitate their next-door
neighbour’s behaviour (pool, recycling, garden)
Specific attitudes and behaviour
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Types of Reference Groups (cont’d)
Reference groups may be:
• Direct – people interact directly with the group
e.g., family, close friends, colleagues
• Indirect – no face-to-face contact
e.g., stars, politicians, TV personalities
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Societal groupings influence
an individual’s consumption
behaviour
The closer to the individual (at
the centre), the greater the
influence they exert
Level of Reference Group Influence
Will discuss over
the next few weeks
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Factors Affecting Reference Group Influence
• Experienced buyers are less likely to be
influenced by others
• A lack of experience often means a lack of info.
Information and
experience
• Reference groups perceived as credible, attractive
or powerful can induce change
Credibility, attractiveness
and power* of reference
group
• Influence of reference group varies according to
how visually or verbally conspicuous the product
is to others
Conspicuousness of the
product
Stands out in the crowd
• Market leaders encourage conformity; new brands
seek to appeal to non-conformity (i.e., shifting to
new product)
Consumer conformity
*Power: reference groups with power are unlikely to influence attitude change
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Reference Groups and
Product / Brand Influence
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Consumer-Related Reference Groups
Friendship groups – most likely to
influence purchase decisions
(after immediate family).
Virtual groups or communities –
share information and social
interaction via social media.
Shopping groups – people who
shop together socially.
Work groups – major influence
due to the large amount of time
spent together.
Consumer action groups –
independent bodies formed to
help consumers make
informed choices.
Brand communities – strong
admirers of a brand.
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Social Networks
Definition :
A network of social interactions
and personal relationships
Occurs in actual and virtual
communities
The largest online social
network site?
Weibo, Twitter, Facebook
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Social Online Networks
Weibo 143.8 million monthly
active users
(http://www.chinainternetwatch.com/tag/sina-weibo/)
Twitter 288 million monthly
active users
(http://www.statista.com/statistics/282087/number-of-
monthly-active-twitter-users/)
Facebook 1.44 billion monthly
active users
(http://www.statista.com/statistics/264810/number-of-
monthly-active-facebook-users-worldwide/)
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https://www.facebook.com/swinburneuniversityoftechnology
Marketing Applications for Social
Online Networks
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Marketing Applications of Reference Groups
• Because of occupation, special training or
experience, an expert is in a unique position to
help the consumer evaluate the product
The expert
• Quasi-celebrity endorsers; present an idealised
image and dispense information on product or
service
Trade characters
• Focus on ordinary people in everyday situations
• e.g., Bunnings Warehouse
Common person appeals
• May include endorsements from an organisation
or editorial comment
• e.g., Heart Tick
Other group appeals
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Celebrity Appeals
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Social Norms
Mitre 10 advertisement
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2. Family
Families and Households
A family is…“two or more
persons related by blood,
marriage or adoption who
reside together in the same
household” (Schiffman et al. 2014:
324)
A household might include
individuals who are not
related by blood, marriage or
adoption, such as unmarried
couples, family friends,
room-mates or boarders
(Schiffman et al. 2014, p. 324).
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Projected Household Structure - Australia
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Changing Demographics of the Family
More women
continue to
work; family
unit becomes
wealthier
Leads to
smaller
families with
fewer
children
People
marrying
later
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Trends and Changes
De facto
relationships
increasing
More lone-person
households
Divorce rate
around 45%
Increased number of
single-parent families
Families now
include same-
sex couples
Growth in non-family
households (i.e.,
single person
households)
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Boomerang Kids
Worldwide more children between
the age of 18 and 34 live at home.
Popular media label this group as:
Adultescents, kidults & rejuveniles
What they want in life is:
Designer clothes; to be famous;
to understand the internet; to
shop in prestigious stores; a
university degree; a million
dollars; to be recognised as
experts. (deposit to buy a home)
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Animals are People too!
Non-Human Family Members
Companion animals are often treated
as “family members”
Many regard pets as full family
members and extensions of
themselves.
Manufacturers recognising that pet
owners regard themselves as ‘pet
parents’ are increasingly turning to
children’s toys for inspiration.
Pet health and well-being products are
also increasing .
http://www.medibank.com.au/pet-insurance/
Marketing Applications
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Functions of the family
Four main
functions
Socialisation of
family members
Economic
wellbeing
Emotional support
Provision of a
family lifestyle
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Socialisation of Family Members
Imparting basic values, attitudes and
modes of behaviour
a. Socialisation skills include manners,
morals, religious beliefs, dress codes,
grooming standards, speech,
interpersonal skills, career goals,
education and general values
passed on through direct instruction
or observation
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Socialisation of Family Members
Direct Instruction Examples
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Socialisation of Family Members
Observation Examples
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A Simple Model of the Socialisation Process
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Socialisation of Family Members
Direct: acquiring skills /
knowledge / attitudes re
budgeting, pricing, brands….
Indirect: underlying motivations
– why people buy
b. Consumer socialisation: the passing on of marketplace
skills, knowledge, attitudes and preferences
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Socialisation of Family Members
Underlying Motivations for Buying
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Socialisation of Family Members
c. Child consumer socialisation: where children learn
about consumption and purchase behaviour from their
family members (young) and friends (teens)
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Socialisation of Family Members
Children and young adults can be influenced by symbolic
reference group members too.
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Four Family Types
in the Child Socialisation Process
• Seek a high level of control over children and attempt to
shield them from outside influence
• Engage in socially-oriented communication
Authoritarian parents
• Distant from children and do not exert much control over
them
• Minimal effort to encourage their capabilities
Neglecting parents
• Foster balance between rights of parents and rights of
children
• Encourage self-expression, autonomy
• Engage in conceptually oriented communication
Democratic parents
• Remove as many restraints from children as possible
• Believe children have adult rights but few responsibilities
Permissive parents
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Socialisation of Family Members
d. Adult consumer socialisation: socialisation begins in
childhood and continues throughout one’s life
There are many examples of when this might occur:
• Grocery shopping with your partner
• Buying a house together
• Planning a holiday
• Shopping with friends
• Going to the movies
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Family Life Cycle (FLC)
FLC: The progression of stages
through which most families
pass
Purchase and consumption
behaviours change with each
stage of the FLC
Family needs, spending patterns
and lifestyle are affected by:
• Age of members
• Number of people
• Employment status
• Social, emotional, lifestyle
Changes with each FLC stage
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Traditional Family Life-Cycle Stages
• Income spent on rent, cars, travel, entertainment
• Easy to reach through specialist magazines and certain
TV shows
Young singles
• High combined disposable income, but considerable start-
up home expenses
Young marrieds
• Full nest
• Family structure, and needs change over 20-25 year stage
Parenthood
• Empty nest
• Highest disposable income
• Retirement provides travel opportunities
Post-parenthood
• Tend to follow a more frugal lifestyle Dissolution
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Marketing Application of FLC: Mazda
Young
singles
Mazda 3
Young
marrieds
Mazda 6
Parenthood
Mazda CX9
Post-
parenthood
Lexus Ad
Dissolution
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Extended FLC Stages
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Family Decision Making
Families interact and influence
each other when making
purchase decisions.
The family is considered a
decision-making unit.
Individuals will perform different
roles and tasks in the decision-
making process.
Helpful to understand these roles
and influences in the marketing
process.
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Family Decision Making
Household Decisions:
> Consensual purchase decision: members agree on desired
purchase, differing only in how it will be achieved.
> Accommodative purchase decision: members have different
preferences or priorities and cannot agree on a purchase.
> Factors determining the degree of family decision
conflict:
– Interpersonal need
– Product involvement and utility
– Responsibility
– Power
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Family Decision Making
Family Roles
Who will walk the dog, wash the dishes, mow the lawn, do
the shopping, pay the bills, clean the house….?
Family members assume roles for consumption decisions:
• Influencer: provide information
• Gatekeeper: controls the flow of information
• Decider: makes the decision (jointly or individually)
• Buyer: make the actual purchase
• Preparers: transform the product ready for consumption
• Users: use or consume the produce
• Maintainers: service or repair the product
• Disposers: initiate or carry out discontinuation of use
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Family Decision Making
Husband-Wife
Consumption decisions can be made:
• Husband dominated
• Wife dominated
• Joint decision – syncretic (equal)
• Individual - autonomic
Who will decide what depends on the:
• Nature of the product (or task)
• Family role structure
• Stage of the decision-making process
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Family Decision Making
Husband-Wife
The biggest difference lies in the cultural background:
• Western: more likely for syncratic decision making (DM)
• Eastern: more likely for husband dominated DM
• China: one-child can strongly influence parent DM
Influence strategies to resolve husband-wife conflict:
• Expert: use superior knowledge to influence spouse
• Legitimacy: influence based on position in household
• Bargaining: negotiate influence now, for another time
• Reward: influence by offering a reward
• Emotional: respond with an emotion-laden reaction
• Impression: persuasive attempts to influence
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Family Decision Making
Children
“I want a milkshake”….. “I want a Barbie doll”
Children ask for lollies, toys, videos, clothes, food, drinks, etc!
On average, a child shopping with parent/s will make 15
purchasing requests
How many will be granted?
Children under 12 have been found to
influence:
• 31% of holiday destinations
• 30% car models
• 22% stereo brands
Children also know their level of impact is HIGH
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Family Decision Making
Children
Young children have access to significant discretionary income
(see p349 of your text)
Children have a high level of media exposure, with preschool children
having an understanding of TV advertising
Many teenagers work part time,
have significant purchasing power
and have influence over family
purchase decisions.
University-aged dependents
consume a wide range of
necessities and discretionary
items, and exert influence over
purchase decisions of families.
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Lecture 9
Continuing with external influences of
consumer behaviour
Chapter 10: Social Class
Tutorial 8: Discuss of Assignment 2
Tutorial 9: Facebook check-in: A new
form of e-word-of-mouth
