Week # 6 Groups and their impact on the buy People are social animals, like many of the primates we congregate in groups, seek out the company of others and even use a group for advice and learning

Week # 6 Groups and their impact on the buy People are social animals, like many of the primates we congregate in groups, seek out the company of others and even use a group for advice and learning

Week # 6 Groups and their impact on the buy People are social animals, like many of the primates we congregate in groups, seek out the company of others and even use a group for advice and learning. We are influenced by groups. We use groups to vet our ideas, seek information, expand our understanding and clarify needs. Consider that you belong to a mountain bike riding group. If you are in the market for a new bike would you ask members of the group for a suggestion? If you were not a member of a group of bike riders you might still be interested in their opinion, on-line or in a forum. Groups influence the buy. Let’s look at how and why groups can be an influencing factor when we purchase. Groups have a pecking order in our lives. Some groups are more important than others to us and the order can change. Consider these groups and how, when and why they impact us: Parents Spouses Friends Mates Siblings Neighbors Co-workers How do we use these groups when we buy or even as an impetus to buy? When I was in high school I started to smoke. Why, all the cool kids smoked. I was not very cool. In the old days it was cool to smoke (and yes I was sad when the dinosaurs died out I missed them so). Wanting to be in that group meant smoking, so I smoked. Hey I was 16 and you could smoke on school grounds. When I quit, a few years later, I quit with a group of my teammates from field hockey (another group). OK I just reread this passage and realized how sad I sounded and I thought I was cool. One group influenced me to smoke and another to quit. One of the statements that really struck me was I was asked why did I start smoking and was that still a reason to continue? I started to smoke to be cool and be with the cool kids. Smoking was now a habit that actually separated me from people, so I quit. I no longer associated myself with this group. Groups can change as mine did and the importance of the group can also change. We can change groups and some groups can be short term or for finite reasons. Let’s look at how groups can influence us. Some groups we use for informational purposes- back to my bike riding group we may ask a fellow rider how they like a bike or if they would recommend it. You might ask a fellow student about a course or a professor. You consider asking a professional his advice or seek out an expert. You may seek information on brands especially if you do not have experience in the product or service. So groups influence us when it comes to that second step of the buyer’s journey- information gathering. The more a brand, product or service can influence appropriate groups the better.

Secondly we often buy what our influencers use. Consider my cousin- she never cared about brands until she got married. Her husband was very brand conscious and it rubbed off on her. Over time she became consumed with buying the best brands. Have you ever bought a brand because your parents or someone in your family used it? If you did then you were influenced by a group. We may even pay more because of a group (alpha and omega again). Lastly we may buy based on the perception that those who use the brand or product are chic or superior. Status can come from association with a group itself. What would you think of someone who belongs to Mensa or the PGA (Professional Golf Association)? Would you develop a perception of people in these groups? Consider that we extend our perception to areas beyond the group. We consider Tom Brady to be a great athlete so we extend that and think of him as a great parent or husband. We then go beyond the initial group influence and buy other products he recommends. This is why celebrity endorsements work. Luxury products are certainly more susceptible to this than generics. Take into consideration whether the product, service or brand will be seen publically or consumed privately. Publically seen products have a higher likelihood of influence or status (think conspicuous consumption). Think really hard about why some brands are purchased only for public approval. Do you buy privately consumed brands based on your interest and less on groups or status? Toothpaste- how do you decide? Shampoo do you care about status here or performance? We are social animals after all so when a product is seen publically the influences change. Why do some groups exert power over us and others don’t and how does knowing this help the marketer? Can getting to the group leader allow us to sell to the entire group? Well we talked about expert opinion. Some people use intimidation or fear to exert power. Bullies can be very influential, but the influence is short run. Sometimes we are influenced by a legitimate power- a judge, a lawyer. Then of course there is the BF Skinner influence someone who can give you that positive reinforcement example a hiring manager. He/She exerts influence. Groups can have a strong pull on our lives or a tangential one. What is strong for one person may be light for another. My nephew is very political and his allegiance to his party plays into some of his decisions. My daughter is not at all influenced by her political beliefs. What groups influence your decisions? The book mentions brand community and when I see this I think of gamers. If you have a gamer in your family you get it. Gamer groups can be Xbox, PlayStation, Nintendo or others. These on- line groups can be small and close or broad and global. My son bought a game once because a gamer he knows in France recommended it. His group is a usage group, they use the same system. So how could a marketer use the group influence in their strategy and planning to do more business? Imagine you are a game manufacturer and you could access a group of high user gamers. You give them a beta and get them talking about it so when the game comes out the influencers supports it. Then you use Twitch or a platform or user group like Twitch and get

the influencers to influence the group participants. Think Triple A is this a group? What kind of group is it? What is a negative reference group? These are groups we want to avoid or do not want to be associated with- example gangs. In this case you would avoid purchasing anything that might associate you with the negative group-example gang colors. If you are young you may not want to be seen as a “nerd” or a “player”. Our decisions as a member of a group can be conflict with what we might do it we were not part of a group. I clearly remember doing a group project in my MBA program. I wanted to do our presentation in an updated format, not just the same old PowerPoint, but my group voted against it. Had I not been part of a group I would have done it very differently. The group impacted my decision and I conformed to their approach. So why do we conform? We conform for lots of reason. In the case of my MBA group project I was outvoted. You might conform for cultural reasons. In some cultures conformity is expected. As with everything we discuss in this course risk plays a big factor. If you do not want to risk membership in the group you might conform. Your position in the group may be a factor in conformity. If you have yet to establish yourself in a group you might initially conform. So how can a marketer use this information? Knowing who the leader or opinion setter in a group is invaluable, get them on board and the group will likely follow. If nothing else you will get a chance to share your product. Back to my Xbox gamers example- Microsoft seeds the market with beta copies to gamers with connections and usage rates. The hope is these opinion leaders will help Microsoft presell the game. The books calls them surrogate consumers I think opinion leaders is a fine moniker. How can you find these opinion leaders? Cohort marketing is one approach. Find one then analyze their characteristics perhaps age, gender, usage, income and then look for similar traits. Research is a key component to finding the connections, seeing the nexus (market maven) and supporting them. Some opinion leaders are self- designated. As we know in social media we have active and passive users. Active users are the ones who share and are shared, passives are readers. Most opinion leaders are active social users and easily found by Klout and Kred*1 scores. We can further look at what transpires between the opinion leader and the audience. Who do you read? Who do you follow? I belong to a family fantasy football league (another group). It consists of my brother, husband, nephews (they’re tough), my brother in law and then me. Unlike some of my counterparts I only read the football news as the preseason begins. I use the experts as needed. My nephews read the news year. The thought of losing to me inspires them to stay up and ahead using any advice they can before we draft or play. They find these opinion makers on ESPN, Yahoo sports and a wealth of other places. It doesn’t always help. I am happy to state that I have beaten every one of them at least once and the thrill of victory is sweet! What about social as a driver? Does social impact your buy? If you do not know the person or his/her opinions validity do you still use it?

What happens when a rumor is better than reality and a product or company is destroyed in the process? Some rumors are true; others are partially true and Kred and Klout scores rate social presence. Klout measures how active you are, how much you post, while Klout measures how much of what you post is retweeted and shared. Still others are completely erroneous. Have you ever held off on a buy based on rumor or gossip? Not sure how many of you remember the McDonald’s libel case in Europe. McDonalds was accused of adding chemicals to their food and deforestation of the rainforest and any other problem the world faced. McDonalds was cleared of any wrong doing awarded 40,000 pounds. The loss of customers due to the rumor and subsequent suit was not measured. The rumor died slowly. Who can forget the North Carolina women who claimed she got a finger in her chili at Wendy’s? She did not and was arrested, but the rumor was painful to Wendy’s business. It kept showing up in the news and on the internet. Just for fun put “finger in chili” in your browser and the story and rumor still circulate. Marketers need to be aware of these rumors and address them quickly; this is why companies have public relations teams. Do we believe what we hear and see on the internet too much? Knowing how information travels is a key for marketers if they want to stop a rumor from spreading. Remember the game you played as a kid where someone made a statement and passed it along? By the time it reached the 10-12 kid it has changed. We called it “Telephone”. I always found that the less clarity the original statement had the more the repeaters filled in the details. Donna Sullivan always felt the stories needed color and added exaggerations not in the original statement. Bunky left out details to lessen the load to remember. By the end of the game no one knew the original story. Social Media and Power of WOM How much do you know about Crowdsourcing, Crowd Chats or Crowdfunding? Using the masses to develop and engage an audience has taken on a new persona. Lays chips and Doritos have used crowdsourcing very well. The Doritos commercial of the kid riding the Great Dane was crowdsourced. Companies are now using crowd chats instead of tweet chats to drive engagement. Where a tweet chat can be managed including the questions asked a crowd chat comes right from the crowd no change to prepare. The ice bucket challenge engaged the masses, but was a form of grassroots. See the difference? How about guerilla and grassroots marketing, stealth or buzz? The book lumps these in together and I do not. Grassroots is ground Guerilla marketing is using unconventional methods to drive conventional results. Stealth and buzz marketing are forms of guerilla. Look at the pictures and tell me what type of marketing is this?

Viral marketing is not really new if you think about it. Kirby vacuums have been using referrals forever. The difference is that today we have viral referrals. We use embedded code to see who you connect with and use this to extend our client list. Marketers are always looking to capture your attention in an ever noisy world. Recently I saw two ads that piqued my interest. One was at the airport from Samsung (very slick advertiser) it was interactive in you wand the QR (quick response) code it downloaded a free music video. It also captured your information. The second was an interactive billboard by Purina. You entered a little info and it gave you a

dog treat to give to the many homeless dogs on the streets. While I think both use guerilla tactics to me these ads are interactive. Marketers want to get up close and personal with potential clients. In these times of reduced personal connection engagement ads might be the way to go. You decide. Are the behaviors of the general public changing due to the proliferation of the cell phone? Are we still able to garner attention with the right combination of techniques? So why do we conform? We conform in response to group or peer pressure. That pressure can be real or imagined. Yes we imagine pressure all the time. Cultural norms or conformity for the effectiveness of the society are valuable. We don’t kill or steal because we conformed to the norm society sets. So why do we conform beyond the obvious? 1.) Culture- some cultures prize conformity over individualism 2.) Fear-fear of punishment (parents might use this to drive conformity) 3.) Commitment- we have invested in the group and go along 4.) Group Power- the bigger the group the harder to stand against it 5.) Desire to Please- you want to be accepted so you conform if we truly are in the age of the masses conformity is bigger issues than it was in say the 1960’s when “do your own thing” was popular. If this is the case marketers can ill afford to anger groups. In fact they can use these groups to advance their agenda. Groups are a fundamental way to influence the market.

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