Introduction to Consumer Behavior and Social Influences and Culture and Group Practice

Welcome to Consumer Behavior: The Best Bit

  • Introduction to the Second Half of the Course: This section of the course focuses on culture, social practices, and the fundamental question of where individuals belong.
  • The Social Nature of Behavior: Consumers are not solitary units; behavior is circumstantial and dictated by location and environment.
  • The University Uniform Example: Students dress similarly not because they are told to, but because they instinctively understand the social norms of their group. This includes wearing common student attire rather than business suits or scuba gear.
  • The Apple Phenomenon: In certain university groups, Apple products (iPhones, MacBooks) are ubiquitous. In contrast, in MBA or Global Business classes, Apple products may be entirely absent. This highlights that consumption is about fitting into specific groups and identities.

Course Logistics and Key Contacts

  • Jane Abraham Opportunity: A former student offering opportunities for current students to earn money and enhance their CVs. The link is available in the Week 8 slides on NUCCU.
  • Accessing Materials: Course materials and videos are located in the weekly modules. The recorded lectures are noted to be more engaging than standard voice-over slides.
  • Office Hours and Availability: The lecturer (Mark) does not hold fixed office hours but is available for chats after lectures in the lab (look for the "Mark 202" sign) or in his office at Room 11.4, 11th Floor. He emphasizes an open-door policy for academic or personal issues.
  • Course Principles: Learning is interactive, collaborative, and based on mutual respect. Students are responsible for their own learning.

Final Exam Details and Expectations

  • Date and Time: Thursday, June 18 at 2:30 PM2:30\text{ PM}.
  • Locations: McLaurin 103 and Hugh MacKenzie 205 (HMLT).
  • Duration: 120 Minutes120\text{ Minutes}.
  • Structure: Three applied essay questions.
  • Philosophy: The exam focus is on the application of knowledge to real scenarios rather than "memory dumps" or regurgitation. It is viewed as an opportunity to demonstrate intelligence and professional capability.

The Foundation of Marketing

  • Defining Marketing: Marketing is the mechanism of competition; it determines where and how a business will compete. It is the core of the business strategy.
  • Core Components of Marketing:
    • Outward Focus: Looking toward people and markets rather than just internal processes.
    • Value Provision: Competing by providing greater value, which is subjective and perceived by the customer.
    • Customer Creation: Marketing is fundamentally about creating a customer base.
    • Communication: Communicating the created value to various stakeholders.
  • The Role of Consumer Behavior (MARK 202): This course serves as the foundation for the degree. Understanding how people make decisions and why they behave in certain ways allows marketers to influence those processes and meet consumer needs.

Culture and Social Practices

  • Definition of Culture: A shared and learned understanding. It takes a minimum of two people to form a culture.
  • Cultural Dynamics:
    • Practices: The "sayings and doings" that are shared and learned within a group.
    • Institutions: Fundamental practices that have become bedrock, long-term elements of a culture.
  • The Hierarchy of Culture:
    • Values: "We believe that…"
    • Attitudes: "It is right that…"
    • Behaviors: "We act this way."
  • Endurance: Cultural practices are not short-term; they are routinized and evolve slowly over time.

Norms and Social Compliance

  • Norms: The unspoken rules of social exchange. They dictate how we behave in specific environments (e.g., behaving differently in a supermarket than in a jeweler's shop).
  • Social Correction: When individuals violate norms, they are either "corrected" or "ousted."
    • Example 1: In the London financial center, transactions are based on trust. Violations lead to internal audits or legal consequences.
    • Example 2: In an illegal narcotics market, violating norms might result in being cut off from the supply or physical harm.
  • Types of Norms:
    • Descriptive Norms: Our perceptions of what others are actually doing.
    • Prescriptive Norms: What we think others believe we should be doing.
    • Associative Norms: Beliefs regarding what our desired groups want us to do (leads to conformity).
    • Dissociative Norms: Standards set by groups we do not want to be associated with (often leads to prejudice or extreme separation, such as the Rotterdam vs. Amsterdam soccer rivalry).

Social Practice Theory and Lenses

  • Theory as a Lens: Theories are instruments used to look at problems. Different disciplines (accountants, economists, marketers) use different theoretical lenses.
  • Social Practice Theory: Focuses on individuality as a phenomenon of human life where relationships with others drive behavior. Actions are acceptable if they align with the societal group in which they are practiced.
  • Routinization: Practices are performed the same way repeatedly, which enables social integration.
  • Contextual Necessity: Society provides a physical and social space for practices.
    • Example (Rugby): Tackling someone is acceptable for 80 minutes80\text{ minutes} within a 100 m×50 m100\,m \times 50\,m field during a game. Outside that space and time, it is considered assault.
  • The 200 Camels Example: A student was offered 200 camels for marriage in a foreign country. The transaction could not occur in a New Zealand context because NZ lacks the social practices, market understanding, and routinized behaviors associated with camel trading for brides.

Social Identity Theory and Reference Groups

  • Social Identity Theory: Humans possess "several selves" (e.g., parent, student, professional). We act differently depending on which social group we are currently aligned with.
  • I vs. We: Social identity shifts the focus from individual desire ("I") to group behavior ("We").
  • Reference Groups: Any actual or imagined group that impacts an individual's evaluations, aspirations, or behavior.
    • In-groups: Groups we belong to; we enhance our self-image by connecting to them.
    • Out-groups: Groups we avoid or view negatively to bolster our own group's superiority.
  • Specific Reference Group Types:
    • Assertive Reference Groups: Groups to which we immediately belong (e.g., family).
    • Aspirational Reference Groups: Groups we admire or want to emulate (e.g., runners wanting the same 97 g97\,g shoes used by Eliud Kipchoge to run a sub-2-hour marathon).
    • Dissociative Reference Groups: Groups we actively try to be the opposite of (e.g., Goth subcultures or teenagers rebelling against parental habits).

Social Networks and Nodes

  • Social Networks: A system of nodes (individuals) and flows (exchanges of information or materials).
  • Strength of Ties:
    • Individualistic Cultures (NZ/USA): Characterized by many loose, weak links. Influence is often fleeting.
    • Collectivistic Cultures (China): Characterized by "hard links" (Guangxi). Connections are durable and carry long-term obligations.
  • Impact of Opinion Leaders: A few strong ties from a highly respected source (like Warren Buffett, the "Oracle of Omaha") are more powerful than many weak ties from a social media influencer.
    • Case Study (Berkshire Hathaway): Warren Buffett's company has cash reserves of approximately $500×109\$500 \times 10^9 (500 billion500\text{ billion}). A single "A" share costs roughly $708,000\$708,000. People pay this high price for the "referent power" of being in the same room as Buffett at the annual general meeting.

Types of Reference Group Influence

  • Informational Influence: The group provides expertise or enhances marketplace knowledge (e.g., a friend telling you which brand of suit is best).
  • Utilitarian (Normative) Influence: Complying with group preferences to achieve rewards or avoid punishment (e.g., buying a specific mouthwash because of social pressure regarding breath).
  • Value-Expressive Influence: Using a group to enhance or express one's self-concept (e.g., dressing like a student to feel part of the university community).

Opinion Leadership and Power

  • Opinion Leaders: Individuals knowledgeable about products who influence the attitudes and behaviors of others.
  • Monomorphic vs. Polymorphic: Monomorphic leaders are experts in one field; polymorphic leaders are experts in many.
  • Sources of Power:
    • Expert Power: Derived from technical competence.
    • Knowledge Power: Derived from synthesizing information.
    • Legitimate Power: Derived from social standing or office (e.g., a CTO).
    • Referent Power: Derived from the consumer's desire to be like the leader due to shared values.

Case Studies in Influence and Communication

  • The Danish Helmet Advertisement: A Viking-themed ad for bicycle helmets.
    • Insight: The ad focuses on the Viking's wife as the primary influencer. While the "warrior" peers failed to convince him to wear a helmet, the wife succeeded because of her social position in the "clan."
  • The New Zealand Peer Pressure Ad: An ad created by students focusing on young men and peer pressure.
    • Insight: This ad was more successful for a New Zealand audience because it used a recognizable cultural lens, whereas the Danish ad relied on specific historical pride not inherently shared by New Zealanders.
  • Mobile Phone Adoption History: In 19941994, mobile phones were "yuppie phones" used by a small management elite.
    • Strategic Shift: Companies like Vodafone (formerly One) targeted young people with low-cost SMS (texting). This shifted the social practice from elite usage to universal necessity, eventually reaching over 115%115\% market penetration.

Questions & Discussion

  • Interactive Segment: Defining Marketing
    • Student 1: "How you control the business and understand customers and build relationships."
    • Student 2: "Crisis containment."
    • Student 3: "Creating value with your customer."
    • Student 4: "Putting strategies in place to effectively reach our customers."
    • Lecturer's Response: Marketing is the core of business; it is "what you fight with," focusing on where and how to compete through superior value and outward focus.
  • Interactive Segment: Learnings so far
    • Student A: "What stimulates the customer, such as the senses."
    • Student B: "Memory systems."
    • Student C: "Different types of motivation."
    • Student D: "Understanding decision-making processes."

Conclusion for Marketers

  • Group Context: Almost all consumer behavior occurs within a group setting.
  • Actionable Steps: To be successful, marketers must:
    1. Identify the groups that hold influence over the target market.
    2. Identify the nature of that influence (Informational, Utilitarian, or Value-Expressive).
    3. Identify the appropriate communication methods to engage with that network structure.