Professional advice for entrepreneurs and business managers in the context of Europe's recovery from the financial crises. Marketing notes, stories and videos.

Influences – how other people make decisions for you

External influences are the key factors that influence people’s behaviour. The control of those factors, predominantly in the process of consumer decision making, is crucial for the achievement of any possible commercial objectives. The marketers can use the tools available to them to influence the Social Environment (all the behavioural inputs received from other people). Marketers should also understand the culture of their target markets.

Culture is a set of shared beliefs, attitudes and behaviours associated with large and distinct groups of people and this includes: religion, language, food and customs. According to Geert Hofstede culture can be defined and its strength measured by the analysis of the following factors:

  • Individuals vs. Collectivism
  • Level of Uncertainty Avoidance
  • Level of Power Distance
  • Masculinity vs. Femininity

In High Context Cultures where there is usually little room for personal expression or change and societies are more collectivist, conservative and sometimes even totalitarian, special marketing strategies are necessary. Inversely, Low Context Cultures are more individualistic and behaviours or consumption of products outside of well established standards is more likely to be socially accepted. Consumer Societies in Low Context Cultures are encouraged to be competitive rather than cooperative and are more likely to take risks to succeed (due to their general greed the next economic or social crises is likely originate from these cultures – exactly the same as in 2007). Consumer Culture is a creation of capitalism and members of the consumer culture are defined by what they consume rather than in what they believe. Subcultures are the best example of distinctive groups of people that share common cultural meanings and behaviours (UK’s baby boomers).

Using Social Class as a targeting tool is probably the most misleading and confusing technique in marketing (social class and personal wealth should not be confused here). Over the last few decades many people stepped up on the social class ladder without really increasing their personal wealth. Targeting low priced products at lower social classes is a common marketing error. Some marketers assume the lower social classes consider the price of a product as the only purchase decision making factor. The Trickle-Down Theory implies that lower social classes often imitate upper classes by consuming products marketed as products targeted at higher market segments.

UK’s social classes are subdivided into five categories.

  • A – Upper-middle class
  • B – Middle class
  • C – Lower-middle class
  • D – Working class
  • E – Lowest level of subsistence

Peer and Reference Groups – humans are social animals. A reference group is a person or group of people that significantly influence an individual’s behaviour. People often buy products or services not because these are necessary for their existence but as a means of communication to their peers. The choice of product will depend on at which group the intended message is targeted at? Most common reference groups are:

  • Primary Groups are usually friends and family and can be characterised by face-to-face interaction on a regular basis.
  • Secondary groups are people who we see occasionally and with whom we share interest but this group in comparison to family is usually less influential.
  • Aspirational Group are the groups an individual wants to join. Very powerful in influencing behaviour.
  • Dis-associative groups – groups the individual does not want to be associated with.
  • Automatic Group – gender, age etc

The process of learning which behaviours are acceptable within a particular group is called socialisation. As a result of contact between an individual and a group the relationship may either turn into:

  • Conformity – change of beliefs or actions based on group pressures.
  • Compliance – individual goes along with the group without accepting its beliefs.
  • Acceptance – individual accepts behaviours and shares group’s beliefs.
  • Normative Compliance – the pressure on an individual to conform and comply. The source of normative compliance lies in operant conditioning (very powerful).
  • Homophilious Influences – transmission between those of similar age, education, social class etc.

As far as the entire life of an individual is concerned family is the most powerful reference group. Family and individual have face-to-face contact, share consumption, subordinate their individual needs, select family purchasing agents and usually nominate one as a dominant member of the family.

First born babies on average generate more economic impact on families. This is because the first born babies require parents to buy all the necessary care products for the first time. Parents often learn how to care for their children through a system of trial and error by buying and using care products for their first child and use this knowledge to save money when caring for their second child. Children, on the other hand, use their Pester Power to exert pressure on their parents to buy something for them. Young teens in high income economies in particular have more influence on family because they watch more TV. Often they accompany the purchasing agent shopping and their purchase decision making process is heavily influenced by TV and Internet marketing.

Parents can be characterised as:

  • Authoritarian – cold and restrictive
  • Authoritative – warm and restrictive
  • Permissive – warm and non-restrictive
  • Strict Dependent – fosters dependence
  • Indulgent Dependence – giving everything the child wants

Rituals are the occasions when people spend money for irrational reasons, sometimes even more money than for any other reason. Examples of ritual purchasing are:

  • Exchange Ritual – gift giving
  • Possession Ritual – photographs of beautiful cars
  • Grooming Ritual – preparing oneself for public
  • Divestment Ritual – cleaning, redecorating
  • Maciejovsky, B., 2012. External Influences, Consumer Behaviour. Imperial College London, unpublished.

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