Week 4.3 Personal and Family Influence, and Subcultures

Consumers' purchase decisions are influenced by the behaviour of others around them. We would like to learn more about personal influence in order to understand how purchase decisions are shaped. Especially, two aspects of personal influence are important to marketing:

1. opinion leadership, and
2. word-of-mouth activity.

Let us start with opinion leadership. 

Opinion Leadership

Individuals who exert direct or indirect social influence over others are called opinion leaders. About 10% of adults are considered opinion leaders. They are known as influencers due to their knowledge about particular products or services. Since their choices matter for many people, firms try to identify and reach out to the opinion leaders in their industries. Influencing opinion leaders is a major challenge for companies. Opinion leaders include many different groups of people such as sports figures, celebrities, and political figures. Companies approach opinion leaders and propose working with them as spokespersons to represent their products. One way of approaching opinion leaders is by providing them products and services for free. If opinion leaders like and use the product/service they will influence others to purchase.

Second, we consider word of mouth.

Word of Mouth

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The influencing of people during conversations is called word of mouth. Word of mouth is:

• mostly transferred by family and friends,
• the most powerful and authentic information source, and
• even more important for services. For example, 70% of Canadians used word of mouth when selecting a bank. 95% relied on word of mouth in selecting a physician.

Because of how powerful word of mouth is, marketers pay a lot of attention to creating positive consumer word of mouth. This is how we define buzz marketing. 

Buzz marketing is the popularity created by consumer word of mouth.

Word of mouth can be applied to the online environment as well. 

The online version of word of mouth is called viral marketing. 

Viral marketing refers to the use of messages "infectious" enough that consumers wish to pass them along in the online environment. The infectious messages can be published on online forums, social networks, chat rooms, bulletin boards, blogs, message board threads, instant messages, and e-mails. 

Word of mouth can have a big impact on the consumers. Marketers are trying to generate positive word of mouth but they are also concerned with negative forms of word of mouth. 

Examples: 

• Rumours about Kmart: snake eggs in clothing
• McDonald's: worms in hamburgers
• Corona Extra beer: contaminated beer
• Snickers candy bars in Russia: a cause of diabetes

Retrieved from https://www.snickers.com/nutritional-info

None of these examples were based on facts. However many people talked about them on social media and they went viral. Marketers put in a lot of effort to neutralize negative word of mouth. It is not easy and it is costly since these messages travel very fast as internet-based word of mouth.

A part of socio-cultural influences on consumer behaviour comes from reference groups. 

Reference Groups

A reference group consists of people to whom an individual looks as a basis for self-appraisal or as a source of personal standards. 

Reference groups influence consumers' attitudes and aspiration levels which are very effective in many purchase decisions. For example, when you are invited to a formal dinner party, one of the first thoughts that comes to mind is about what to wear. Individuals look up to reference groups to make decisions on their outfits for many special events. Reference groups have an important influence on the purchase of especially luxury products - the use of which is visible to others - but not of necessities.

There are three reference groups that have clear marketing implications:

• a membership group,
• an aspiration group, and
• a dissociative group.  

Family Influence

Another socio-cultural influence source is the family influence.  Family influence on consumer behaviour results from 3 sources:

1. consumer socialization, 
2. passage through the family life cycle, and 
3. decision making within the family or household.

Let us discuss each one in detail. 

1. Consumer Socialization

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Consumer socialization is the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers. For example, children first learn how to purchase by interacting with adults in purchases. Second, they learn through their own purchasing and product usage experiences. Marketers target children at a very young age so that they will develop customers for life.

2. Family Life Cycle

Family life cycle describes the distinct phases that a family progresses through from formation to retirement, each phase bringing its own identifiable purchasing behaviours. Throughout their lifetime, consumers purchase different types of goods and services.

We can consider different life cycle stages such as young singles, young married couples without and with children, and middle-aged married couples with children.

Young singles are mostly interested in purchasing non-durable items including prepared foods, clothing, personal care products, and entertainment. They are also in the target market of recreational travel, automobile, and consumer electronics firms. 

Young married couples without children often shop for furniture, housewares, and gift items for each other. On the other hand, young marrieds with children are focused on the needs of their children. They are targeted by life insurance companies, various children's products, and home furnishings. 

Middle-aged married couples with children have the financial advantage that they are usually wealthier than their younger counterparts. They are interested in leisure products and home improvement items. 

3. Family Decision Making

In making purchase decisions, families follow two decision-making styles: 

1. spouse dominant, or
2. joint decision-making.

In spouse dominant decision-making either the husband or the wife is responsible for the purchase decisions.

In joint decision-making, most decisions are made by both husband and wife. 

Marketers examine the decision-making styles because the decision maker is the one they particularly want to influence. 

Who makes certain decisions in purchases? 

There are studies on which product decisions are made by wives and which ones by husbands. There are general guidelines observed in decision-making. 

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In general, wives tend to have the most say when purchasing groceries, children's toys, clothing, and medicines. 

Husbands
Husbands tend to be more influential in home and car maintenance purchases. 

Joint
Joint decision-making is mostly applied for cars, vacations, houses, home appliances, and medical care. There is positive correlation between the education of the spouses and joint decision-making. As couples' education level increases, joint decision-making increases as well. 

Children
Children play a big role on decision-making in family purchases. Especially children under 12 and teenagers directly influence their parents in making purchase decisions. For that reason companies spend large sums of money annually to reach out to preteens and teens.

Social class influences consumers' purchase decisions.

Social class is the relatively permanent, homogeneous division in a society into which people sharing similar values, interests, and behaviour can be grouped. Social class is determined by occupation, source of income, and education. The level of income does not directly determine the social class. Marketers observe that people within the same social class share common attitudes, lifestyles, and purchase behaviours. There are three major social classes: upper, middle, and lower.

The upper class's consumption interests are more aligned with such items as financial investments, expensive cars, and evening wear. On the other hand, the middle class is targeted by companies including home improvement centres, automobile parts stores, and personal hygiene product manufacturers.

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Subculture

Subculture represents subgroups within the larger, or national, culture with unique values, ideas, and attitudes. There are different variables used in identifying subcultures. For example: 

• age (e.g., baby boomers versus Generation X), 
• geography (e.g., Western Canadian versus Atlantic Canadian), and
• ethnicity.  

We have discussed baby boomers, Generation X, and Generation Y in chapter 3 as a part of social forces. Here we will focus on ethnic subcultures. Common traits, such as customs, language, religion, and values, hold ethnic subcultures together.

French Canadian Subculture

The majority of French Canadians live in Quebec. The differences in purchase decisions stem from socio-demographic, life style, and cultural differences. French Canadians embrace living in the moment and seizing the day. Joyful living and seeking pleasure in every aspect of life are embraced. They like keeping things simple, short, and sweet. To be successful in marketing towards French Canadians living in Quebec, marketers must be sensitive to life styles of Quebecois consumers and appreciate the differences between them and other Canadians. In Quebec there are heavier regulations on advertisements of alcohol and commercial ads to children are prohibited.

Acadian Subculture

Acadian subculture refers to a special group of French-speaking Canadians who live outside of Quebec (e.g., New Brunswick). They have a distinctive heritage. Acadians are very fashion-oriented and tend to dine out more often than their French counterparts in Quebec. Research shows that they are very price-conscious.

South-Asian Canadian and Chinese-Canadian Subcultures

South-Asian Canadians consists of immigrants from India, Pakistan, Bangladesh, Sri Lanka, and Nepal, whereas Chinese-Canadians are immigrants from Hong Kong, mainland China, and Taiwan. These two subcultures represent almost 10 percent of Canada's population. South-Asian Canadians are moderate television watchers, and moderate to heavy Internet users and social networkers. Chinese-Canadian consumers are relatively young, educated, and affluent. They are interested in homes and home furnishings, automobiles, kids' education, investments, high-tech gadgets, travelling, and gifts. Word of mouth is extremely important to them. From a marketing perspective, these emerging markets represent great opportunity. Many Canadian firms are marketing to these subcultures successfully including Rogers Communications, Western Union, and BMW. There are also media representation for these subcultures. For example, Global News' mandarin-language evening newscast in Calgary and Vancouver, and the Vancouver Sun's Chinese-language website. 

Other Ethnic Subcultures

Kitchener-Waterloo has a large German-Canadian population. Many Ukrainian Canadians are located in Winnipeg and Toronto has a large number of Italian Canadians. Different ethnic groups carry distinctive social and cultural behaviours that might affect their purchase decisions. In order to appeal to these groups, marketers perform subcultural research and try to recognize unique behavioural identifiers for each group.