ISL460U-CONSUMER BEHAVIOR
Chapter 7: Social Aspects of Consumption
Introduction
Understanding consumer behavior has been essential for designing effective and efficient marketing strategies for all companies in every sector all over the world. However, examining customers is not easy in todays’ uncertain and complex environment. Every individual has a different thought process and for every buying incident this process changes for everyone. Besides, other, the impact of social factors was subject to considerable scrutiny for marketing academicians and professionals. Consumers no longer act independently of one another but are increasingly connected to each other. Today, post-modern consumer can easily develop close connections with others from diverse groups through electronic and other media. Thus, social aspects of consumer behavior deserve much attention than ever from managers and researchers nowadays.
Social Class
Consumers all around the world make many buying decisions every day. These varied consumption patterns are highly influenced by consumer’s social class because consumption is not only an act of buying goods and services; they are symbols of people’s socioeconomic status. Social class is one of the most important concepts that play a significant role in determining what and how we consume. In general, social class is defined as a position that an individual occupies in a society. According to many sociologists, this position or ranking is determined with an individual’s income, education, and possessions. In other words, social class is defined as a ranking system in a society into a hierarchy of distinct status groups such as upper, middle, and lower. Social class consists of a group of individuals who occupy a similar position in the economic system of production. The occupation within the system is very important as it offers financial incentives and benefits.
Social Groups
People belong or at least associate themselves with different groups in their daily lives and they find the opportunity to learn and socialize because of their memberships to groups. Marketing managers need to utilize the knowledge of consumer group dynamics when designing market strategies. The most primary group is family. Besides family there are other groups that people associate with or the groups that they meet and interact. People seek to feel a sense of belonging to groups beyond their family; close friends, graduates from the same school, religious or cause-related affiliations; sports team fan group, brand communities; groups sharing the same passion or hobby like running, cooking, believers in astrology etc. To sum up, every other day people find a reason and come together to connect around a shared cause, interest, or challenge. Not only the groups that one belongs to, sometimes the groups that are avoided can also influence individual’s preferences and lifestyles.
Defining Groups
Social group memberships are not permanent and social groups are dynamic in nature which can change form and expand activities in time. Since groups provide opportunities to individuals to learn and socialise, people typically belong to many different social groups for many different reasons. For example, one could be a member of a sports team, camping group, college class, workplace, and more. Social identity is described as a part of the individual’s self-concept which derives from their knowledge of their membership of a social group or groups together with the value and emotional significance of that membership. It is increasingly common that groups use consumption to signal to others that they somehow belong together. This is done by individuals using brands, products and services to differentiate themselves from others by using them to demonstrate their commonality with the groups to which they belong. However, this internal identification process must be recognized by non- group members in order for a collective group identity to become apparent, meaning that the product needs to have clear symbolic value.
Characteristics of a Social Group
Consumers connect to several social groups in their lives. A teenager’s gamer group can be a very important part of his identity and can be very influential in his buying decisions along with his family and schoolmates. In general, the groups people choose to belong to are significant to understand how those people view themselves and live their lives. From the marketing perspective, it is very important to understand which groups consumers belong to and how their buying decisions are affected by those groups to position their brands and develop effective engagement strategies to build long term profitable relationships.
Reference Groups
People are strongly influenced by how others think and behave. It is very important to understand who others are since people may be involved in numerous different groups throughout their lives. A group, consisting of people who share common norms, beliefs, values and having a defined interdependent relationship, may have a say as regard what a member buy. In literature, groups are categorized according to different criteria such as, frequency and regularity of communication in the group, group structure, hierarchy in the group, membership status or group size.
Types of Reference Groups
Reference groups and their influences change for different consumption activities and product categories. For low involvement products or for products that are consumed privately, the influence of reference groups is less than it is for high involvement or specialty products. There are several categorizations for reference groups. Having said that in families mothers and fathers can play the role of a
socialization agent, traditionally, mothers are believed to be stronger consumer socialization agents than fathers, since they have more contact with their children. However, the structure and dynamics of the family is changing through time and place. Marketing managers need to take into consideration the cultural factors when designing strategies since the family structures and the role of family members as socialization agents are not universal. Families’ influence on individuals is a typical example of normative influence which consists of learning and adopting a group’s norms, values and behaviors. Another typology divides reference groups in three different forms; aspirational groups, associative reference groups and dissociative reference groups. In membership reference groups, members know each other personally. However, people’s behavior is not only influenced by the groups of people they know, but also by the groups of people they wish to belong to. Aspirational group is a reference group that one admires and wishes to be like but is not currently a member of. In general, successful people, sports people, or celebrities with whom an individual wants to associate his or her identity forms aspirational groups. Brand managers have been using celebrities in their marketing communication strategies for decades since choosing the right celebrity to endorse the brand can enhance brand awareness, brand trial, and loyalty. Unlike aspirational groups, associative reference groups include people who are viewed as equals like coworkers, classmates, club members, and even neighbors. Finally, the dissociative reference group includes people that the individual would not like to associate with. People sometimes may prefer to avoid some groups or distance themselves from some groups. Since the motivation of individuals to distance themselves from a dissociative group may be more powerful than the desire to associate with a group, marketing managers need to take both into consideration.
Brand Communities
Sense of belonging is an important need and vital to human well-being. These days, brands play a major role in helping to fulfil this emotional need by connecting like- minded people through experiences that relate to the lives and interests of consumers preferring similar brands. Many marketing managers recognized the benefits of providing alternative platforms both online and offline for customers to share their experiences and connect with each other. One of the most important benefits for companies having a brand community is the opportunity to gather marketplace and consumer information. Brand communities provide opportunities for marketing managers to engage more with their target markets, especially through social media. Moreover, user generated content, increased brand loyalty, and product innovation are other important advantages for nurturing brand communities. The rise of the internet and social media have greatly advanced the ways people can get involved and gain information about a brand. People can share
information about their interests and communicate with people with the same mind-sets. The virtual world is full of opportunities for brand managers who want to attract consumer interest, humanize their brands, attain long-term loyalty, and make consumers feel valued. In today’s competitive and congested marketing world, the brand community is a very important source of competitive advantage since it is known that community members buy more, develop deeper brand engagement, and advocate more strongly on behalf of the brand. Not only do community members support the company with their purchases and loyalty, they also engage in the process of the development of new products. Members of a brand community can participate in the creation of new products or services and demonstrate an example of collective value creation participants as prosumers of the brand.
Word-of-Mouth (WOM) Communication and Opinion Leadership
According to Westbrook, word of mouth “consists of informal communications directed at other consumers about the ownership, usage or characteristics of particular goods and services and/or their sellers”. In other words, all actions taken by a marketing manager to motivate others to spontaneously talk about their products, services, or brands can be named as word of mouth marketing. In a noisy and cluttered world that is becoming increasingly tired of traditional forms of marketing, the recommendation of a friend or customer can be far more effective than a TV commercial or any mass media. Word of mouth marketing has been more popular than ever in the last 20 years due to many important advantages such as cost effectiveness. While costs for traditional marketing campaigns may run-up to thousands or millions, word of mouth marketing is a comparatively inexpensive strategy. Secondly word of mouth marketing creates trust. Since companies and commercial messages are found less reliable by consumers every other day, facilitating word- of-mouth marketing can help them break down trust barriers by relying on other people they know personally. Marketing managers create WOM marketing campaigns that rely on one person promoting a brand by talking to another person about it. One of the most challenging decisions for marketing managers is to choose the most appropriate person to speak on behalf of the company. It is known that consumers get information from personal sources and legitimize their final decision according to other people’s ideas, but who are these “other people”? Opinion leaders are the persons providing both information and recommendation to others. Besides providing information, opinion leaders share their experiences about a product category and give advice to other people about buying or even not buying a product. The person one will prefer to take advice from will be different according to the product category in question. Opinion leaders are not generic in nature; they are specific to product or service categories.
How to Identify Opinion Leaders?
To identify opinion leaders in virtual world, observation or investigation methods can be used. Observation method helps to find out people who are active and have lots of followers for certain topics in a community. Alternatively, a research can be conducted on followers about the research subject and ask them whom they take as their opinion leaders.
Influencers on Social Media
The growth in the number of people who use social media platforms (Facebook, Instagram, Twitter, and Snapchat etc.) and the time spent on them has garnered interest and concern among policymakers, scientists, and marketing managers about social media’s impacts on peoples’ lives and psychological states. The rise of social media has significantly changed the communication environment for businesses. New marketing practices like influencer marketing emerged due to the reality that electronic word of mouth is the one of the most trusted sources of information for consumers. In general, an influencer aims to affect to buy or not to buy a product or service mentioned or promoted. The effect of influencers depends on their attractiveness, reliability, sincerity, and quality of information offered.