This is a blog which will be assesed as a part of my coursework for my Degree and focuses on Understading the customer and the Theories and Stereotyping that come with this.
The final lecture had us look at and understand the differences of B2B marketing over B2C marketing. I think this gave us a good contrast and a chance to understand how the marketing strategies are similar between the both. The first thing to understand is that there is definitely many more products and money in the B2B market and this is down to the fact that the business market also includes consumer products as larger companies much first sell consumer products to wholesalers or retailers before they can be sold to the consumer.
You also find that within B2B markets the time it takes and the importance of the purchase is allot higher, this is mainly due to the amount of money involved in the purchase and that the market contains fewer but larger buyers. As the risk is increased in these sorts of purchases companies will employ a team of people to decide whether to buy a product or not. The growth of the business market also has a tendency to grow from derived demand by where the demand on one company by the consumers drives the demand of that company one the company that they buy products off. It's because of this derived demand that some business marketers will play on because if a company wants to increase its sales it can make itself known to consumers which will then drive demand on the company the they want to sell to. It is all very well thought and planned and allot more exciting than B2C marketing sometimes.
The way marketing budgets are spent in B2B markets also differ from B2C because in consumer markets Sales Promotion and Advertising take a large chunk of the budget but in business markets Personal Selling and Sales Promotion take the forefront; this is simply down to the fact that there is no real need for business to spend masses of money advertising to other businesses, businesses will come to you if they want your product so it is then down to the skills of the personal seller to final close a deal. On the back of the Personal Selling head comes the fact that there is increased focused on CRM(Customer Relationship Management) because there are far fewer buyers that you cannot afford to loose so a trustful relationship is often built between seller and buyer in B2B markets.
The geographical location of the buyers in B2B markets is also very concentrated and very often most customers will know each other. This will be because they are all based in the same area.
The Business Buying Behaviour
When compared with consumer buying behaviour, business buying behaviour is allot more professional and you will never find a company buying a product on impulse. This is because as I mentioned briefly above there will be a team dedicated to making the purchase who will follow a strict set of guidelines that the company will have in place to make sure that a purchase is well thought first. To better understand how the purchase is made you need to understand the different types of roles that are taken within the purchasing team; already covered in the blog talking about the family the purchasing team takes on some of these roles, they are:
Influencers- These people are the ones that make sure all the specifications are defined and provide any information on alternatives. The views of the influencers generally tend to carry weight on the final decision, hence the name.
Buyers- The buyer as the name suggests is the appointed person to make the actual purchase so they are the ones involved with selecting a seller and negotiating a deal.
Deciders- Will generally have informal/formal power to select or approve sellers but in most cases the final decision is still made buy the buyer.
Gatekeepers- Control the overall flow of information to others.
Another thing to consider is that there is a deference between the major factors that influence the business buyer and the regular consumer market buyer. Below is the tables for both factors.
The final model to consider is Kotler's Buying Process as again they differ between B2B and B2C.
For this lecture we focused on Culture and the hidden importance of culture in everything we do; after all it is a way of life for a group of people in which the behaviours, beliefs, values, symbols and objects that they accept are passed along by communication and imitation from one generation to the next. This is the way I understand it to be and more for me is I think that Culture oversees everything; that is the economy, the Government, Education Systems, Institutions, ideas and products but at the same time is affected by these factors. I did find to my surprise that Solomon also agrees with this theory on the power of culture as he mentions that "the effects of culture on consumers behaviour are so powerful and far-reaching that this importance is sometimes difficult to grasp or appreciate." Solomon et al. (2006).
I think the main thing to think about is that Culture is created through groups; yes individuals will make decisions and choose certain paths based on their cultural background, but the Culture was created from a mix of family and society's values systems, the groups perceptions about right and wrong and finally the collective learning and experience of the group. This however does not mean that Culture is fixed... it evolves, it learns and reflects. For example how has the face of Western Culture changed since the 9/11 tragedy or the recent Global Recession; Culture is prone to change, to look and old and new experiences and syncing them together.
To make more sense of Culture we need to think of it as a Cultural System. From this it can be broken down to 3 functional areas, these are:
Ecology: How it is adapted to it's habitat and is controlled by the types of technology used to obtain and distribute resources. For example Highly Developed Countries vs. Low Developed Countries.
Social Structure: The way in which social life is ordered and maintained, including domestic and political groups. For example UK households may contain 3-4 children but a Chinese home wont because of their social system.
Ideology: This is where the mentallity of the individual relates to that of the environment and the social groups within that environment. Thinking that people will hold the same world view, morals etc.
Now this looks at Culture from a purely systematic view but there is another way to look at culture and that is from it's essential make-up; again with 3 parts:
Beliefs: This is the way in which our Mental and Verbal processes reflect our knowledge and assessment of products and/or services. For example if a car salesman yes a car is green, our belief is that it will be environmentally friendly.
Values: Serve as a set of guidelines that consumers use to determine what is, and more importantly what is not appropriate behaviour. They tent to be very stable and long term and are often shared and accepted by members of a particular market.
Customs: This is essentially ways of behaving in specific situations which are approved by the culture. For example shaking someone's hand in a business meeting, being prompt for an interview etc.
So as you can see Culture is a very large aspect of consumer behaviour and is the largest factor that influences a consumers behaviour. You can see why though with the sheer size and complexity of Culture.
Now because of its huge influence on a consumer's behaviour marketers have to take the culture of where their market is very seriously. A great example from which I learned the importance of this is with another class where we had to come up with an appropriate agency name; eventually we came up with "Jujiccu" and we were all happy etc but the brief applied to a agency that would also be known in Europe; this proved as a problem as in Spain the letter j is silent and pronounced "hu" so our agency would be known as "huhuiccu" .... doesn't have the same ring does it. So as I was saying marketers have to take consideration with culture. This can include brand names, the slogan of the brand, the colours used etc and even the smallest error in any of these could be fatal to any brand and its identity. Here are some examples of 20 terrible product names.
There is also 2 types of culture. High and Popular. High Culture refers to things only reserved for the elite ... Opera's, Expensive Art etc and are valued highly by the upper classes whereas Popular Culture is something that applies to all classes such as television, radio or internet.
I think really that Culture is a very broad subject and I could delve deeper but would just loose sight of its effects within marketing. As I have already put forward I do think that Culture oversees everything else in society but at the same time uses the experiences and knowledge obtained from all these subsections to evolve and move on. With that it is of up most importance for marketers not just to take into account our culture but other cultures as well as this information is invaluable when it comes to launching a brand and getting the message across successfully... after all marketing is all about communication to the masses.
This weeks lecture was all about how 'Social Class' influences the Consumer's purchase behaviour but what exactly is social class; for me I see social class by the wealth of someone. Rich, well off, comfortable, borderline, struggling, really struggling and poor. However someone's social class is not just defined by there income but it is a mix of:
1 - Level of Income 2 - Type of Occupation 3 - Type of Lifestyle 4 - Family Background
(Krech, Crutchfield & Ballachey in Dubois 2000) define social class as:
"a division of society made up of persons possessing certain common social characteristics which are taken to qualify them for intimate, equal status relations with one another, and which restrict their interaction with members of other social classes."
Now I like how they state that it is "a division of society" because people are divided by there social class although in recent decades the lines between the classes have blurred.
If you look at the image above it shows you how the classes used to be ordered. You have you 'Upper Class' at the very top of the triangle because even small in number they are the at the top on society. Then followed in the middle by the 'Middle Class' as you would expect and finally ending with, yep you got it the 'Lower Class'. Then if we look at a more modern look on the spread on social classes you can see that the shape has changed dramatically and each class has split into similar but still different classes.
Now the emphasis is more on the middle classes as this is where the majority of the UK population are and this has allot to do with the fact that the UK government introduced the the Welfare State in 1940's-50's.
This was all aimed to get the population out of poverty by providing homes, education and health services at the expense of the state. This then allowed people to move up a class in some cases as they were on the border anyway. However when compared to some of our other allied countries we see that we could be doing better.
You now may be asking that how do you measure social class; well the answer is by categorising people into different social classes. In the UK our system is A, B, C1, C2, D & E.
A - Upper Middle Class
B - Middle Class
C1 - Lower Middle Class
C2 - Skilled Working Class
D - Working Class
E - Lower Class
It understanding how these different classes differ in buying behaviour is what marketers use to further segment their target market. People of a high social status will want to be associated with objects and people that reflect the same level of status as themselves. This is where marketers tailor make and style adverts to suit the right target group.
This advert for the sun as aimed generally and the young and working class. A sense of sharing a togetherness makes the viewer feel happy. Compare this with the advert for the Harrod's sale below...
... you seen that they use the sense of elegance to promote their sale. They do this by using soft colours and having luxury items displayed, coupled with the background opera music, this ad is definitely tailored to the upper classes.
I think in all social class has changed and because of this change advertisers and marketers have had to change with it. After all it is not as simple as it once was. There are many more factors affecting peoples social class. It is now excepted that people can marry in classes above or below their own and may even socialise with a class that is not their own. Women are almost at equal with men in terms of levels of occupation and with more and more young people going on to higher education the standard occupation level is also set to rise. Watch out in the next decade as the social structure of our company is set to change again.
Taking over from last weeks lecture we moved on to focus about the very lucrative market of the child generation. In 2007 it was estimated in the UK that 4.2bn pounds was spent annually by children, up from 3.9 in 2005. This just makes you dream of the possibilities doesn't it. So the question is, which was raised in class, how do we market effectively to children???
One clue was raised in our lecture and it is "Children ARE growing older younger! and they are the ones who are going to be most affected by the bombardment of over 3000 adverts a day because of the length of time they spend in front of the TV or the computer. Children are also recognising brands at allot earlier age, much more than children in other European countries, as we found out when we watched the video in class which saw some pre-school children being shown brand logos and they recognised Barbie, Lego and Pepsi and they will probably have recognised more.
So If they are the ones that are going to be most affected, how can we use that?? We make the children want a product so much that they will do anything to have it.... it is true marketers are relying on what is known as Pester Power; defined as
"Children's ability to make their parents buy something or do something for them by continual asking until the parents agree to do it.".
This is a good definition but it doesn't explain it all; for a start you need to understand that children hold allot of purchasing power as they have influence over their parents/grandparents, becoming a strong power in the family decision making unit, finally becoming future adult consumers themselves. They will then use any way possible to get their parents to buy products which can range from tantrums to being on best behaviour but the end result is the same. The difference however is if the child behaves then they will trick the parent into buying a product as a reward and not to just stop them screaming.
One question which is always being asked when talking about marketing to children is.... is it ethical?? after all you are making the child, pretty much force their parents to buy something. For me I think that it is unethical, but at the end of the day business is business. So we now understand that the most effective of campaigns are the ones which evoke Pester Power.
It's not just at home that kids are marketed to though, marketers will often use other children using the 'order of the playground' ... by this I mean using the cool kids. You will remember back in the days at school, you turn up one morning n Simon has the new footie boots out... now everyone wants them including you, problem is they cost £130... no way that's gunna happen. But you still beg and beg your mom n dad to get you them. Using these sorts of tactics is know as finding the Alph-Pups. The Alph-Pups is the one child within a group of children that has the power to influence the whole group.... you got the Alpha-Pup, you've got the whole group, get the group you have their parent and once you have them .. ££££££ ching ching.
So why do children get affected by advertising so much? Well it has to do with the fact that children use brands as a way to express themselves which really comes out when they become Tweens and Teens but these brand identities are created and cultivated at a very young age. The UK also has the most relaxed of all advertising laws in Europe allowing kids to more easily view advertisements aimed at adult audiences. They also watch more adult sitcoms, dramas and soaps than any other European children. It is because of this more adult viewing that today's children are growing up faster, swapping the classics children's toys for mobile phones, ipods, playstations, xbox's and wii's. So with this over exposure to brands you can see why relationships with brands are developed early.
Looking at how children develop as they grow up also provides information on how they develop these brand relationships. Swiss psychologist Jean Piaget (1896-1990), created a 'cognitive-developmental stage theory' which has 4 stages:
Sensorimotor: From birth to around age 2 this is when the child is learning how to learn including how to use their bodies to move, how to talk and general thinking.
preoperational: In the 2nd stage, typically lasting from 2 to 7 is where the child begins to use symbols to understand and to interact with the world. It is at this stage when marketers can start to put brand images and associations like fun, happy and exciting into the early child's mind.
Concrete Operational: Lasting from 7 to 11 this stage children gain the ability to think logically to solve problems and to organize information they learn. So having already started brand identity and association marketers can then continue to reinforce this upon the child.
Formal Operational: Contiuing from the age of 11 onwards they learn to think more abstractly and symbolically. With the brands already embedded deep in the, now adolescents mind the brands will stay they.
To finish up you just really need to think about how Pester Power resonates into other theories, such as the Family Decision Making Unit and the ethical factors that marketers have to deal with. I will also leave you with a Guardian Article titled "We are comming for your children."
This weeks lecture was aimed at looking how the family structure can effect the consumer's buying behaviour. The family is a group that we are always in contact with and because of this constant contact we generally adopt the same style of living as everyone else in the family. This makes family one of the most influential factors in the consumer's decision making. Now depending on your culture or where you are from there are different definitions of family structure:
Nuclear Family: Seen as the most traditional of all the families it consists of Mother, Father and 1 or more children living under the same roof.
Extended Family: Consists of the Nuclear Family plus other members such as Grandparents, Aunts and Uncles. However the extended family once used to be closely tied and the extra members would be there to help out with taking care of the children etc. The Modern Extended Family is made up of family members that are all spread apart across the country or countries.
Family of Orientation: The Family of Orientation is the family that you are born into.
Family of Procreation: The Family of Procreation is the family that is founded through Marriage.
However you can not go on the above definitions alone, this is because in recent times there has been significant changes in the types of family situations. For example:
- In the 2001 census for the UK there was 16,545,777 families of which 2,342,966 were single mother families. (www.statistics.gov.uk)
- In 1970 around 6% of births were within unmarried couples but in 2002 this grew to around 40% and has continued to increase in the last 7 years. (Solomon et al. (2006) Consumer Behaviour, 3rd ed.)
Changes like this have opened up more markets for marketers and advertisers to venture into as each of the new types of families come with there own styles of living with specific wants and needs.
These wants and needs are all affected by the amount of people within the family, how many people earn within the family and what type of lifestyle they have. To better understand this we can look at Gruber and Wells 1960 Family Life Cycle:
Bachelor: A young and single person with very few commitments which means they have more disposable income.
Newly married: Still young, no children but increased commitments such as a mortgage. Usually 2 incomes.
Full Nest 1: Youngest child is under 6 meaning one has to care an only one income which means there is less disposable income.
Full Nest 2: Youngest child is over 6 meaning there can be 2 incomes again. However childcare and other debts mean that there is still not a lot of disposable income.
Full Nest 3: Older and married with dependant children but do not require child care, reduced debts. More disposable income.
Empty Nest 1: Older and married with no children and still 2 incomes, increased disposable income.
Empty Nest 2: Married and retired means reduced income as pension is only income source.
Solitary Survivor 1: In labour force and on there own, little disposable income.
Solitary Survivor 2: Retired and on there own with little disposable income.
So how do these 'stages' effect the Consumer's buying habits??
Well as you would expect and backed up by Solomon the different stages show "marked differences in consumption patterns." (Solomon et al. 2006) because of the different lifestyles each stage posses. For example; Bachelors and Newly Married stages will consist of people that, because they are young, will exercise regularly, go to pubs and clubs (spending more on alcohol than the other stages.), go out to the cinema and restaurants regularly. Compare this with say Full Nest 3 where the dependants are adolescent, this will mean that more junk food is consumed etc.
Below is a flowchart diagram of the Family Life Cycle to make it easier to understand.
Family Decision Making
The Family Decision Making process could be seen as a business-like understanding where, depending on the type of purchase, people put forward there reasons for/against the decision and there is a struggle for the power of making everyone agree with your decision and from this you have 2 types of decisions within the family unit that can be made, they are:
Consensual Purchase Decision: This type of decision is where all the people within the unit agree on the purchase but they all differ on how to make it.... for example, the family is buying a car; they all agree on what car but then differ on how to pay for it.
Accommodative Purchase Decision: This type of decision is the more common of the 2 as you will probably recognise as it is where the unit can not agree on a purchase that will satisfy the basic needs of all the people within the unit. This is where the power struggle is most apparent and contains a lot of compromising and bargaining.
The Accommodative Purchase Decision will always include some kind of conflict because as I have said, the unit cannot agree on a purchase decision. Now the factors below are what determine the degree of conflict within the decision process.
Interpersonal Need - This basically is how the level of involvement within the unit affects the decision. For example a child living at home will be more concerned about the type of wallpaper chosen compared to a child living in halls at uni.
Product Involvement & Utility - This is how/if the product will affect the member of the unit. For example one member is a heavy coffee drinker; they will care more about getting a new coffee machine than say a toaster.
Responsibility - Thinking about how the purchase will need to be maintained, paid for etc. For example the unit gets a dog.Who is going too feed it, walk it etc.
Power - This applies to how much influence on member within the unit has on the rest. Oldest child vs. Youngest or Husband vs. Wife.
Along with both the types of decisions and the factors influencing them each member within the Family Decision Making unit will have their own role. Identified by Field (1969) These roles consist of:
Discernment - This person has the technical know how about the purchase. For example when buying a new computer, the child may be more useful with selecting the appropriate specification to suit the families needs as they have grown up with the technology.
Price - The person who is going to pay for the purchase. For example Mom wont pay £110 for footie boots when you can get some for £29.99.
The User - Who will be the end user.
Below is a diagram of how the different members of the unit influence different types of decisions.
As you can see the Husband will be the influencer in decisions of mechanical and technical purchases where as the wife will look after the finances and all the general purchases (Household products, clothes etc).
The next image below shows a more interesting view as it includes the child as an equal decision maker. This is a very interesting subject and will be covered in a later blog but for now look at this.
Here Taylor Nelson Sofres understands that the child is also a very strong influential power within decisions. A lot of this is because they are more susceptible to advertising as they would watch more TV than their parents so have more knowledge of old, current and new products.
Another thing to understand is the way the roles change within Kotler's Decision Making Process. If marketers understand this they can then decide which person will overall be the most influential. Generally the Problem Recognition stage would be made jointly, then depending on what type of purchase it is the Information Search would then be done by any one of the member of the unit but ultimately the Final Decision stage will be completed jointly; however if you can influence the person who completed the information search and make then think that your product is the only way forward then you have a very good chance of influencing the final decision.
Now moving away from groups and there influences we start to look at how Marketers also have to think about the generation a consumer comes from and how to market to them. Know as Generational Marketing; it is essentially targeting a specific generation to market to. Brands will use generational marketing techniques when they want to shed their old view that consumers have of them. For example the way Jaguar has changed its own image in the last decade is an attempt a marketing to a new generation.
The 2 commercials above see Jaguar as the type of car that has all the class and comfort you need with the power and speed if you want it. This has been the long-term theme that most people still associate with the Jaguar company and is and is allot to do with "the art of performance" slogan they have had. However with potential customers being put off buying one because they are seen as cars for the older generations, retired etc; Jaguar has undergone a transformation of it's brand identity.
I am now going to show you a commercial for the new Jaguar CXF and you will be able to see within the first few seconds that they are appealing to the younger generations. Using more up beat music and flashing lights with the new aggressive styling of the car itself and the new tagline ..."The Future is now!" ENJOY!!
Now that you have seen some examples of how companies think about the different types of generations out there you need to know the actual categories marketers currently use to classify the different generations. You have....
Pre-School: This generation will be targeted by using parents and making then think their "baby" needs this to make then better or safer etc.
Children: Probably one of the most lucrative of all the generations and will be covered in Lecture Eighteen marketers target children making them nag and persuade their parents into buying products.
Tweens: As children grow up younger again the tween generation is now too old for children focused ads and marketers will advertise products in a way that makes tweens feel grown up as they are not yet old enough to teen ads but want to be just like them. Below I am showing an advert for Mylie Cyrus's (Tween Queen) show 'Hannah Montana' ... You will now probably be very well know to the Hannah Montana/Mylie Cyrus craze but this ad was when the show was first being launched and the reason I chose this ad is the fact they used the very famous cast of HSM - High School Musical to promote the show... another Tween sensation.
Teens: Just like the Tweens, Teens are too old for Hannah Montana and HSM and want to be and act older. It is from the Tween to the Teen stage when all of the major self esteem issues come out, especially in girls as they mature quicker, and marketers/advertisers use these insecurities as hooks to hang new products off that they will buy in the hope they will look something like the girl in the magazine. Solomon et al. (2006) suggests that the needs that teens have consist of:
- Experimentation - Belonging - Independence - Approval from others
No wonder teens are always so hard to please :P. Solomon then goes onto highlight the fact that products are a way for teens to express these needs. With most prducts being purchased as a 'feel good' purchase like make-up and clothes, posters etc; coupled with the fact they have allot of disposable income it makes it a very wealthy market to enter.
Generation Y (Millennials): Seen as my generation which mainly consists of young adults is people born in or above the 1980's, me being born in 1989 I would in the middle of the Generation Y family. Now all I can tell you from my experiences is that as a "Generation Y'er" I am now in the middle of a struggle between growing up and becoming a full adult whilst still wanting to hold onto the freedoms and carefree nature of the Teen generation. I have also included a Times Article which talks about 'How to connect with Generation Y' which I found an interesting read. It also remembers to point out how we are very educated with the fact that a very high percentage of Gen Y people attend University. Another good point Solomon points out is that we are 'Consumers-in-Training' as we adopt many of our brand loyalties at this age, which is true for me. For example I will only ever buy Dolmio pasta sauce and when my mom changed to Tesco I had to make her change back.
Generation X (Baby Busters): This generation is generally mid 60's to end 70's and is the generation allot of our parents are in.... If you cant work it out the first of the "Generation X'ers" would be around 42-43. This was the first generation that was showing an end to the 'Baby Boomer's' after the WWII and were know by marketers as the 'Baby Buster's'.
Baby Boomers: Dubbed the Baby Boomer's they are the generation post WWII and the boom was down to the fact that when the war ended people settled down, got stable jobs and had families which saw a surge in the population. In 2003 there were 74,000,000 baby boomer's compared with 38,000,000 in the 1960's in the EU-25 countries shows that our population is ageing and if you look at the graph bellow from the governments own statistics taken in 2006 you can see this more easily.
It also found out that within the UK resident population of 60,587,000, of which 50,763,000 lived in England, 1 in 5 of them were under 16 and 1 in 6 were over 65 with an average age of 34.
These Boomer's can be split into 2 sub-categories know as Baby Boomer (young) and Baby Boomer (old) which also gives you an idea into just how big this group. They are also one of the most influential generations often affecting the markets with big changes. Most boomer's will be coming to or at their professional working peak, often earning the top income cap in their sector and it is because of this that they hold the power. They also have a built up resistance to advertising and is almost a contrast to how the younger generations react. The younger generation are very savvy and know allot about the product already so they make decisions based of that information but as I said above the Boomer's have built this resistance to advertising over the years, as they have experienced many campaigns. Also coming post was they never bought anything that they didn't really need and as they got older they felt no need to buy into fads etc.
The Grey Generation: Rapidly becoming the soon to be largest generation with the BBC predicting that by 2020:
- The amount of people aged 85+ will increase by a third. - There will be as many 60+ as 20's and 30's - People will progressively live longer
Scary isn't it. Even our own government is worrying how to begin to care for all of the new Grey Generation when they enter retirement. These people are probably hardest to advertise to as they typically experienced rationing etc and don't considers stuff outside of their day to day routine. However this is due to have a massive shift as the Baby Boomer's finish their careers and have paid of all their mortgages etc, they will enter the Grey Generation with more disposable income than never seen before... if you link this with the fact that the life expectancy has risen from 81 in woman and 75 in men to 84 in women and 75 in men marketers are going to have themselves a very large and long running generation to market to. This is only set to increase as well because most elderly people nowadays lead allot more active lives looking after themselves more. Because of the sheer size of this group the Grey Generation is further split into 5 sub-categories:
The over 55's: either at the end of their careers or coming to the end. All commitments like mortgages etc will be paid off soon leaving more disposable income.
Young Olds: Usually under 70, both partners are still alive meaning quite a large sum of disposable income. Difficult to reach though.
Old Olds: Now over 70 and often on there own, mainly elderly women. Not alot of money to spend.
Silver Surfers: Reaching maximum or exceeding life expectancy. More than likely alone and even less money. Silver Surfers say net is vital!
Skiers: For the lucky people who make it to the last category in the Generation Grey age they will most certainly have the successful winnings of their children.
Im finally going to leave you with an ad aimed at..... well who do you think??
This weeks lecture was all about different groups that we all belong to and how these groups can influence the people in them and the way they react to marketing. The aims for this lecture were to:
The fact that consumers belong to various groups.
How you categorise those groups?
The fact that each group has its own membership criteria and actions
Marketers can specifically target these groups
Understanding Groups
The basic criteria for a group is for 2 or more people to:
Have the same basic set of cultural norms.
Must have role relationships - The relationships roles/influences to the members of the group.
Experience Interdependent Behaviours - where the choices of the individual are influenced by the people within the group.
"A consumers behaviour is also influenced by social factors, such as the consumer's small groups, family and social roles and status. Because these social factors can strongly affect consumer responses, companies must take them into account when designing their marketing strategies." (Kotler et al. (2008)Principles of marketing, 5th ed.)
This quote just seemed to point out exactly what I wanted to put across about the influence these groups have on the individual consumer. The groups I'm about to list below are probably the most common influential groups to consumers:
Reference Groups
- are groups that have either a direct (face-to-face) influence or an indirect influence on an individual's attitudes or behaviours.
Ascribed Groups
- are groups that someone are born into such as family, gender or social class.
Peer Groups
- are groups when the consumer has regular contact such as home, school or work and where people are of equal standing to the consumer.
Associative Groups
- are groups that the consumer realistically belong to such as groups of friends.
Contrived Groups
- are groups that are formed for a specific purpose such as unions or hobby clubs.
Disassociation Groups
- are groups the consumer does not want to belong to like criminals, chavs or the elderly.
Aspirational Groups
- are groups that the consumer wants to be in such as celebrities, Aston Martin owners club, Millionaires.
AcquiredGroups
- are groups that a consumer may join or moved into such as scouts or brownies.
I would like to expand on this list by talking about Reference Groups because this group seems to have probably the strongest influential potential out of all the groups within the list.
"A Reference Group is 'an actual or imaginary individual or group conceived of having significant relevance upon an individual's evaluations, aspirations, or behaviour'." (Park, C. & Lessig, V. (1977)Students and house wives: differences in susceptibility to refernce group influence, journal of consumer research 4: 102-10.)
A Reference Group will influence a consumer in three main ways:
Informational Influence: This is where an individual will seek information about products or brands from associations or professions who may work with the products or knows the brands well. They will also seek information on the experience of the brand/product, how does one compare to the other etc. They will also be influenced by what professionals buy, what comes with a seal of approval etc.
Utilitarian Influence: This is where the consumer will be influenced by his/her own set of preferences of a brand or product but will also want to satisfy the expectations that other people with the social group have whether that be friends, family or work colleges.
Value-expressive Influence: This is where the consumer will be influenced because they believe that the product or brand will enhance their lives, which enhances what image others have of him/her. It can also be an aspirational aspect - the consumer sees a person on an advertisement and they will buy they product for a hope of being like the person in the advert. They feel that if they buy into that brand it will give off the correct image of what they want to be like or aspire to.
Formal vs. Informal Groups
Formal groups will be large and have recognised structures, regular meeting times and officers. These groups are the type of groups that Marketers can easily get into and influence because they are recognised and easily accessible however this is not the better of the two; Informal groups are better at influencing individual consumers because these consist of people that the consumer comes into contact with in day-to-day life such as friends and family and are more involved. Because of this high involvement with our day-to-day lifestyle they have a high Normative Influence - Helps to set and enforce our fundamental standards. The Formal groups however are more brand, activity or product focused and have a high Comparative Influence - Influence a decision on specific brands or products.
Membership vs. Aspirational Groups
These to groups are the next within the list that are the most interesting because they show how marketers use certain groups to get more coverage. Now Membership groups are likely to contain people that the consumer will know and be able to have this direct (face-to-face) interaction. These types of groups are hard to influence when compared to Aspirational groups. The Aspirationalgroup will most certainly include people or figures that the consumer has no contact with but yet still aspire to be. This is why marketers will use well-known celebrity faces because they will affect a broader audience. You can influence the consumer in Membership groups by making the consumer believe the product or brand will enhance the image that the other members have.
Effects of Reference Groups - When are they important?
Within Reference groups there are 2 deciding factors that determine whether a group is important or not in influencing the consumers decision. This is whether a consumer's purchase is to be consumed publicly such as clothes, cars etc or privately such as a lamp, or a mattress. This can be highlighted by the image below:
From the image above you can begin to see when a Reference group becomes important and influential. The products that are not a necessity and are more of a luxury, especially when they can be seen by others, are when the influences of the Referenceare at their greatest.
Opinion Leaders
Within a Reference group there are certain people with special skills, knowledge, personality or other characteristics that define them as the Opinion Leader. These people hold the most influential power within the group and have the best exertion of this power.
Taking a step back. . .
I just want to take this moment to talk about Reference groups and the way Mazlow's Hierarchy of Need is a key concept.
As you can see from the image above, in the middle of the triangle is the Need to Belong. Humans are social creature and it is in our nature to feel the need to belong to a family or a group. It's a pivot of this Need to Belong that Marketers and Advertisers play on when they advertise their products of brands.
Here are some ads that show the Need to Belong technique that Marketers/Advertisers use:
Carling 'Belong' Ad
Microsoft's I'm a PC Ad
Nike 'Stickman' Basketball Ad
This can be expanded to the Social Comparison Theory which states that we look to the behaviour of others to provide a guideline from which we can behave. It's a way I finding a yardstick about reality. The thing is about Social Comparison is that it will still occur even if there is no right or wrong answer. Take style for instance, there is no real right or wrong answer but we still will look at what others are wearing and go along with it. Another example is take a party for instance and you are nominated to select the play list, this can be a big deal with massive pressure. Now although you have your own, individual taste you are more likely to assume that the tracks in the charts are better than the ones on your ipod.
Social Comparison Theory highlights that "This process occurs as a way of increasing the stability of one's self-evaluation, especially when pysical evidence is unavailable." (Festinger, L. (1954)A theory of social comparison processes, human relations 7: 117-40)
Understand how a person's level of involvement and degree of involvement (High/Low)affects their behaviour.
Understand how a person's values affects their behaviour.
and finally
Consider how Marketers can exploit this??
Consumer Involvement
Involvement is defined as - "A person's perceived relevance of the object based on their inherent needs, values, and interests" Judith Lynne Zaichkowsky. (December 1985) Measuring the involvement construct in marketing, journal of consumer research 12: 341-52.
In the quote above, the word Object is used very loosely because the object can be anything from a product, brand or advertisement. Now from this there are 2 levels of involvement when a consumer purchases something:
High Involvement Purchase
A high involvement purchase is a product like a car or a house where the consumer is going to be really considering all the finer points. For example you wouldn't just go and buy a house for say £500,000 because it has 4 walls, a roof and a floor. You would expect decent sized bedrooms, a couple of bathrooms and something extra that makes it worth while. When a consumer becomes involved at this level they are moving from 'Inertia' to 'Passion' and the consumer will almost become obsessed with the purchase.
This also means that they will take at lot more time to make a decision, so it's a marketers job to really capture the imagination this potential consumer before the consumer even knows that they are going to make a purchase. This can be in the form of a consumer seeing a car ad in his teens and holding that dream until he can afford to buy one. Then when he has the money he will only come to you, by this time you will have a new, maybe more expensive model which he buys instead. Easy. I wish.
Below is Philip Kotler's 'Buyer Decision Process' Model and the reason i have included it here is because it ties in with the high involvement purchase taking a long time. This model is supposed to be relevant to all purchase decisions but I would say that it mainly shows how consumers think during a high involvement purchase. Simply no one is going to go through all the stages when buying a chocolate bar or a tin of beans but they will when buying a house or car.
Low Involvement Purchase
A low involvement purchase comes down to the level that is almost second nature to consumers. This includes most basic needs like food (beans, bread, eggs etc) which will not require the consumer to be very involved. The consumer at this level will simply lack the motivation to consider alternatives even if they may be cheaper one time, they just wont pay attention.
Below is a model which show the level of involvement in different purchase decisions from low to high:
I think this mini-model is a really good way of showing the types of purchases and where they belong in the involvement scale. So what do they mean:
Routine - This is something that you will always buy because you need it, it becomes routine, just do it.
Impulse - This is like a pair of shoes, you see them in the window, go in, buy them and think about it later. Spur of the moment, completely irregular.
Routine - This will involve something that you buy regularly but don't necessarily need, like a newspaper or your morning coffe from Starbucks.
Irregular(small) - This will be be at the higher end of the involvement scale because it takes some thought about the purchase. An engagement ring is a good example because it is a big purchase with high involvement but it's not as big of a purchase as a house.
Irregular(large) - This will be the house, the car, the yacht and will be at the highest end of the scale with the consumer, as i have said before, becoming obsessed.
Measuring Involvement
Measuring involvement is a very useful marketing tool because you gain information about how a consumer reacts to an object. Solomon et al (2006) points out that if a TV viewer is more involved in a program they are more likely to pay attention the the ads in between. The pioneers in measuring involvement are Laurent & Kapferer (1985) who state "A consumer's level of involvement will be affected by four deciding factors." These are:
Importance of Risk(also know as 'Harvard Perceived Risk Model' or 'FTEPS)
Finance (How much does it cost.)
Time (How long of a window do you have to buy.)
Performance (Will the product do what it's supposed to do.)
Ego (How will it make you feel about yourself.)
Physical (How does it look/feel, is it safe.)
Social (How will other people think about you.)
Probability of making a bad purchase
Pleasure value of product category
Sign value of product category(symbolism)
From these four deciding factors Laurent & Kapferer then created a table of random products and scored them. The ones with the higher numbers were the products that the consumer was most involved in. These scores were ordered by Interest, Pleasure, Sign/Status, Imporisk(Importance of perceived risk.) and Proberr (Probability of making an erroneous or wrong choice.). Below is the table mentioned above:
To add to this they came up with 4 levels of involvement and how the consumers brain works, they are:
Low: Think-Do-Feel - Tinned Beans.
Behavioural: Do-Think-Feel - Clothes.
Impuse: Feel-Do-Think - Chocolate.
High: Think-Feel-Do - Car or House.
Values
"Generically speaking, a value can be defined as a belief about some desirable end-state that transcends specific situations and guides selection of behaviour." Shalom H. Schwartz &Warren Bilsky. (1987) Toward a universal psychological structure of human values, journal of personality and social Psychology 53: 550-62.
One of the main things is not to get values and attitudes mixed up because they are not the same; yes they are the basis of how we behave in a situation but generally values are not specific to one situation. This is a very complex area when it comes to understanding the customer because two people may have the same values but for different reasons. For example if 2 men go to the gym for the simple reason to keep fit, so health reasons. However the first man is purely going to look good and he may then stop whereas the second man is there to train for a marathon. This can apply to anything but there is one person - Lynn R. Kahle who came up with 'Kahle's List of Values' which is a smaller, subsidised version of the Rokeach Value Survey (RVS). It includes the values:
Self Respect
Excitement
Being well Respected
Self-Fulfilment
Sense of Acomplishment
Warm Relationship with Others
Security
Fun & Enjoyment
Sense of Belonging
However the List of Values (LOV) is seen as a bit of a cheap, knock off version RVS or (VALS) Values and Lifestyle Survey.
See if you can prioritise these in order of importance to you. I couldn't do it, in fact most people can't; this highlights another problem that the values list is a list of values that most of us use day by day, there is no real distinction between them. This is why the RVS and VALS are more popular. The best you are likely to do with this list is pick the main one or two that you think rule over the others. Mine are Self-Fulfilment, becoming the best I can be and a equal mix of warm relationship with others and fun & excitement.
In our lecture we also talked about time lines to highlight the fact that peoples values will differ on their age because of for example an 80 year old woman is more likely to do everything for her husband because in the 50's etc woman's place was seen to be in the home but a 20 year old has grown up in a world with feminist groups and equal rights for men and woman becoming stronger. I am now going to show you my time line which as of Friday will be 20 years.
This was our last lecture of the year and because of the run up to Christmas, Ruth decided to theme the lecture around gift giving. What we were supposed to take away from this lecture is that gift giving encompasses high-involvement purchasing for the customer. This is something that i will touch on but will be more in depth in later posts.
In the lecture we were asked to make a list of all the people that we intend to buy Christmas presents, or who we would normally buy Christmas presents for. Now I love Christmas because I love being able to give people presents when they are not expecting one like nan and my auntie etc. Next to the list of people we had to put what we felt or thought about buying presents for these people, he's a short version of my list some you can get an idea:
Mom - Easy Sister - Easy and Fun Girlfriend - Very, Very Hard.. Worrying a bit. Nan - Challenging to Fun Auntie - Easy
So you can see from the list above how the involvement levels react to which person I'm buying for, I mean yes they are all high involvement purchases but some are harder than others; for example it's hard to find something for my nan but I enjoy the challenge but when it comes to my girlfriend I panic because in my eyes it has to be perfect. This type of consumer can both be the easiest and the hardest person to market to, Why? well because it's hard because the customer (me) would be very picky when looking for the perfect gift, even something as wrapping could determine the purchase or not. On the other hand it can be easy because as long as I have the money I would pay anything for the perfect gift.
According to Pamela Danzinger "Gift shopping is the ultimate in 'emotional consumerism', since gift giving is all about emotionally connecting giver and recipient." (Admap, (2004) The business of gifts, Issue 450: p43-46)
Now from this quote I love the use of 'emotional consumerism' because the emotion part is where the high involvement comes in, after all if there was no emotion involved in the purchase decision there would not be much involvement. Now below is an image of Kotler's Buyer Decision Process: The reason why I am showing you this is because it is a good way to show how a customer thinks when they are going through a high involvement purchase. I will speak about this more in later posts but the basics is that the customer realises they need something, they shop around, buy the product and then evaluate their purchase decision.
Something else which also interests me about the way customers think when buying gifts is when it comes to what part of the brain deals with what the whole left vs. right brain. Now when it comes to selecting the store to buy the gift from, it is all controlled by the left brain, choosing the best stores, the one you know etc and then as you'd imagine the actually gift choice is decided by the right side which deals in random functions, spontaneity and impulse. There are also a set of almost tick boxes that must all be ticked off in order for us to buy a gift, they are:
Would the Recipient like this gift? - This is probably the hardest out of them because naturally customers will not think that the recipient will like their gift until they actually open it and the customer can see the reaction of the recipient.
What would the Customer like to give? - This comes down the the customers own personality, for instance a impulsive person is more likely to give a gift that is completely random where as say a more practical person would be more likely to give a girt that has a more practical application.
What is the occasion? - This does pretty much explain it self because you may by a gift for a house-warming that you wouldn't buy for a birthday.
What is my budget? - Simple if you haven't got the money you cannot buy the gift. However if you can find it cheaper else where then you can :).
From this you can get a good idea of gift giving and why we do it. In the last couple of decades we have changed from what was know as a cocoon society of consumers when we mainly focused of buying things for ourselves to make us happy but now we have moved away from that and started feeling the benefits from giving to others and im sure it will only continue to grow.
