Intro to Marketing: Consumer Behavior - Social Factors, Reference Groups Family Social Class Culture Subculture

What This Is

Social factors are a crucial aspect of marketing that influence consumer behavior and purchasing decisions. These factors include reference groups, family, social class, culture, and subculture. Understanding social factors is essential for marketers to develop effective marketing strategies that resonate with their target audience. For instance, Nike's "Dream Crazy" campaign tapped into the aspirational values of its target audience, leveraging the influence of social media and celebrity endorsements to create a sense of belonging and community.

Key Frameworks & Metrics

• STP (Segmentation, Targeting, Positioning): Divides the market, selects the most attractive segment(s), and crafts a unique value proposition.
• NPS (Net Promoter Score): Measures customer loyalty by asking how likely they are to recommend the brand – a key CX metric.
• Customer Journey Map: Visualizes the customer's experience across touchpoints to identify pain points and opportunities for improvement.
• Social Identity Theory: Explains how individuals derive a sense of self from group membership and how marketers can leverage this to create brand loyalty.
• Cultural Intelligence: Measures a brand's ability to understand and adapt to different cultural contexts.
• Subcultural Theory: Analyzes how subcultures within a larger culture influence consumer behavior and preferences.
• Social Norm Theory: Examines how social norms and expectations influence consumer behavior and decision-making.
• Reference Group Theory: Studies how individuals use reference groups to form opinions and make purchasing decisions.
• Social Class Theory: Analyzes how social class influences consumer behavior and preferences.
• Lifestyle Segmentation: Divides the market based on lifestyle characteristics, such as values, interests, and activities.
• Demographic Segmentation: Divides the market based on demographic characteristics, such as age, income, and education.

Step-by-Step Process

1. Conduct market research: Gather data on social factors that influence consumer behavior, such as reference groups, family, social class, culture, and subculture.
2. Analyze the data: Identify patterns and trends in the data to understand how social factors influence consumer behavior.
3. Develop a marketing strategy: Use the insights gained from the analysis to develop a marketing strategy that resonates with the target audience.
4. Create a customer journey map: Visualize the customer's experience across touchpoints to identify pain points and opportunities for improvement.
5. Measure and evaluate: Use metrics such as NPS and customer satisfaction to measure the effectiveness of the marketing strategy.

Common Mistakes

• Mistake: Confusing market segmentation with personas.
• Correction: Market segmentation involves dividing the market based on demographic, lifestyle, or behavioral characteristics, while personas involve creating fictional representations of ideal customers.
• Mistake: Relying only on last-click attribution.
• Correction: Last-click attribution only measures the final touchpoint in a customer's journey, ignoring the influence of earlier touchpoints.
• Mistake: Ignoring LTV when setting CAC.
• Correction: LTV (Lifetime Value) measures the total value of a customer over their lifetime, while CAC (Customer Acquisition Cost) measures the cost of acquiring a new customer; ignoring LTV can lead to over-investment in customer acquisition.

Marketing Strategy Tips

• When positioning a new product, avoid over-segmentation that leads to a niche with insufficient market size.
• Use social media to create a sense of community and belonging among your target audience.
• Leverage influencer marketing to tap into the social influence of reference groups.

Quick Practice Scenario

Scenario: A D2C brand's ROAS dropped from 4x to 2x after scaling Facebook ads. What analysis would you perform to diagnose the issue?

Answer: Analyze the customer journey map to identify pain points and opportunities for improvement, and use metrics such as NPS and customer satisfaction to measure the effectiveness of the marketing strategy.

Explanation: The drop in ROAS suggests that the marketing strategy is not resonating with the target audience, and a deeper analysis of the customer journey map and customer satisfaction metrics is needed to diagnose the issue.

Last-Minute Cram Sheet

• Social identity theory: Individuals derive a sense of self from group membership.
• Cultural intelligence: Measures a brand's ability to understand and adapt to different cultural contexts.
• Subcultural theory: Analyzes how subcultures within a larger culture influence consumer behavior and preferences.
• Social norm theory: Examines how social norms and expectations influence consumer behavior and decision-making.
• Reference group theory: Studies how individuals use reference groups to form opinions and make purchasing decisions.
• Social class theory: Analyzes how social class influences consumer behavior and preferences.
• Lifestyle segmentation: Divides the market based on lifestyle characteristics.
• Demographic segmentation: Divides the market based on demographic characteristics.
• NPS (Net Promoter Score): Measures customer loyalty by asking how likely they are to recommend the brand.
• Customer journey map: Visualizes the customer's experience across touchpoints.
• STP (Segmentation, Targeting, Positioning): Divides the market, selects the most attractive segment(s), and crafts a unique value proposition.
• 'Brand equity' is not just awareness – it includes perceived quality, loyalty, and brand associations.