Peer Influence Among Young Adults’ Products Purchase Decisions

Examining the Influence of Peers on Young Adults' Product Choices

by Amit Taneja*,

- Published in Journal of Advances and Scholarly Researches in Allied Education, E-ISSN: 2230-7540

Volume 2, Issue No. 2, Oct 2011, Pages 0 - 0 (0)

Published by: Ignited Minds Journals


ABSTRACT

This paper seeks to contribute tothe existing body of the literature on reference group influence. Specifically,it focuses on peer influence among young adults’ products purchasedecisions.   A convenience sample of 101university students participated in this study. The results of Analysis ofVariance and t-tests indicated that there is more normative influence for apublic luxury (sunglasses) than for a private luxury (cell phone) and privatenecessity (toothpaste). Informational influence was also more for a publicluxury than a private necessity.  Additionally, a public necessity (shoes) had more normative influencethan a private luxury and private necessity as well as a high informationalinfluence than private necessity. Overall, these results demonstrated that theinfluence of peers varies across various product categories.

KEYWORD

peer influence, young adults, products purchase decisions, reference group influence, normative influence, informational influence, public luxury, private luxury, private necessity, public necessity

INTRODUCTION

Determining how various types of reference groups affect the behaviour of individuals has attracted the focus of consumer researchers for some time (Childers and Rao, 1992; Bristol and Mangleburg, 2005). A reference group is a group whose values and attitudes are used by an individual as a basis for his or her current behaviour (Schiffman and Kanuk, 2007; Hawkins et al., 2006). Of particular interest to researchers and marketers are nor- mative reference groups and comparative reference groups. Normative reference groups include parents, co- workers, teachers, and peers who provide the individual with norms, values, and attitudes through direct interaction (Childers and Rao, 1992; Bristol and Mangle burg, 2005; Subramanian and Subramanian, 1995) Comparative reference groups are sports heroes and entertainment figures who provide standards of achievement to which individuals aspire and admire but are relatively further removed from the individual or more socially distant individuals (Martin and Bush, 2000; Subramanian and Subramanian, 1995). From a consumer behaviour perspective, reference groups are important because they inform and make individuals aware of specific products and brands; provide individuals with opportunities to compare their own thin- king with the attitudes and behaviour of the group; and influence individuals to adopt attitudes and behaviour that are consistent with the norms of the group (Lessig and Park, 1978; Schiffman and Kanuk, 2007). Specifically, reference group specify what are desirable and undesira- ble products (Bristol and Mangleburg, 2005; Shim, 1996). They also tend to influence product selection, information processing, attitude formation and shopping behaviour (Bearden et al., 1989; Childers and Rao, 1992; Lachance et al., 2003). Consequently, consumer researchers have carried out investigations on how reference group influ- ence affect innovation adoption behaviour (Subramanian and Subramanian, 1995). How peers, parents and media influence adolescents brand sensitivity in the purchase of clothing (Lachance, et al., 2003). How peers, parents and television influence teenagers’ purchase of athletic shoes (Yoh, 2005); how parents and peers influence various products and brands’ purchase decisions (Bearden and Etzel, 1982; Childers and Rao, 1992); and how peers influence teenagers’ retailing attitudes and purchase deci- sions (Mangleburg et al., 2004). Despite efforts directed at examining the effects of peer influence on various consumer behaviour situations, research has been mostly limited to North American samples. The exception is a study conducted by Childers and Rao (1992) that focussed on United States and Thailand. There is also a lack of research on the topic of peer influence and its effects on products purchase decisions in the consumer behaviour literature (Bachman et al.,1993). To address this gap, this particular study focuses on Botswana. Thus, a crucial question for marketing aca- demics and practitioners is — what impact do peers have in young adults products purchase decisions in Botswa- na? Knowledge of the role that peer influence plays in shaping young adult consumers’ products purchase deci- sions may help marketing practitioners to make effective promotional strategies to appeal to them. Similarly, exa- mining a cultural setting that has not been studied before will not only enrich the understanding of this subject but is more likely to capture such culture’s unique characteristics. Therefore, the purpose of the present study is to investigate how peer influence affects products purchase decisions among young adult consumers. Specifically, this paper examines how two types of peer influence referred as informational and normative influence affect decisions to purchase four types of products based on conspicuousness including public luxury (sunglasses); private luxury (cell phone), public necessity (shoes), and private necessity (toothpaste).

LITERATURE REVIEW

Peer influence conceptualized

Peer influence is commonly defined as the extent to which peers exert influence on the attitudes, thoughts, and actions of an individual (Bristol and Mangle burg, 2005). However, there exist two schools of thought with respect to the composition of social influence which form the basis for this paper’s conceptualization of peer influence. In one school of thought, social influence is viewed as consisting of three types of influences including informational, value expressive and utilitarian influence (Bear- den and Etzel, 1982; Childers and Rao, 1992; Lessig and Park, 1978; Park and Lessig, 1977). Informational influence is perceived as enhancing one’s knowledge of the environment and/or ability to cope with the aspect of the environment (Childers and Rao, 1992; Park and Lessig, 1977). Informational influence also entails observing the behaviour of others or actively searching for information from others with the appropriate expertise (Brinberg and Plimton, 1986; Park and Lessig, 1977). Informational influence is likely to influence an individual if he or she accepts information from others as evidence about reality and desires to make informed decisions (Mangleburg et al., 2004). Utilitarian influence is when an individual comply with the preferences or expectations of others to avoid punishments or achieve rewards (Bearden and Etzel, 1982; Lessig and Park, 1978; Park and Lessig, 1977). This occurs when the individual perceives that others have the ability to mediate significant rewards or punishments, he or she believes that his or her behaviour will be known to others and is motivated to obtain the reward or to avoid punishment (Brinberg and Plimton, 1986; Park and Lessig, 1977). Value expressive influence is concerned with an individual’s motive to enhance his/her self-concept (Brinberg and Plimton, 1986; Park and Lessig, 1977). Value expressive influence is likely to influence an individual because of the desire to enhance one’s ego (Park and Lessig, 1977). This could also be achieved by associating and disassociating oneself with others (Grimm et al., 1999). Another school of thought recognises two dominant influences namely informational and normative influence (Bearden et al., 1989; Brinberg and Plimpton, 1986; Mangleburg and Bristol, 2004). Informational influence has been defined in the discussion of the first school of thought. The unique feature of this school is that utilita- rian and value expressive influence are not measurably distinct. In other words, although conceptually utilitarian and value expressive influence could be separated, their measures cannot be separated (Bearden et al., 1989; Grimm et al., 1999; Subramanian and Subramanian, 1995). Consequently, they have been combined together into a single concept referred to as normative influence. Normative influence is defined as the tendency to comply with the positive expectations of others (Bachmann, et al., 1993; Bearden et al., 1989; Grimm et al., 1999). Informational and normative influences also differ in their determinants (Grimm et al., 1999). The major determinants of informational influences include message content, source credibility and trustworthiness whereas characteristics of reference groups such as appearance and social status are the major determinants of normative influence (Grimm et al., 1999). In this paper, peer influence is conceptualised as comprising of the informational and normative influence which is consistent with the latter view.

PEER INFLUENCE AND PRODUCTS PURCHASE DECISIONS

A review of the literature has identified two approaches to the study of peer influence and products purchase decisions. First, previous research on the role of peer influence on products purchase decisions has focussed on how it varies across types of products based on conspicuousness (Bachmann et al., 1993; Bearden and Etzel, 1992; Brinberg and Plimpton, 1986; Childers and Rao, 1992; Lessig and Park, 1978). Product conspicuousness is defined as the extent to which a product stands out or is noticeable by consumers (Grimm et al., 1999). It is perceived as a function of two dimensions (Bachmann et al., 1993; Bearden and Etzel, 1992; Brinberg and Plimpton, 1986; Childers and Rao, 1992). The first dimension is concerned with the degree to which a product is a luxury versus a necessity. Luxuries unlike necessities, are not owned by everybody, and thus tend to be relatively more conspicuous (Bear-den and Etzel, 1982; Childers and Rao, 1992). The second dimension refers to the degree to which products usage is performed in public versus in private. Publicly consumed products are easily noticeable by consumers than privately consumed products (Bearden and Etzel, 1982; Childers and Rao, 1992). Hence, four types of products have been identified based on these two dimensions. As summarised in Table 1 they include publicly consumed luxuries, publicly consumed necessities, privately consumed luxuries and privately consumed necessities. Generally, findings of past studies on peer influence and products purchase decisions have demonstrated that the degree of peer influence differs across products (Bachmann et al., 1993; Bearden and Etzel, 1982; Childers and Rao, 1992). Specifically, when comparisons were investigated between products, all the three studies found that the impact of peer influence is strong for publicly consumed luxuries than for privately consumed necessities. Privately consumed luxuries also attracted more peer influence than privately consumed necessities. There are also a number of hypothesised influences that were found in each of the three studies that are worth mentioning, as they enhance the understanding of how peer influence vary between products. For instance, Bearden and Etzel (1982) showed that informational influence was greater for publicly and privately consumed luxuries than for publicly consumed necessities whereas the effects of utilitarian and value expressive influences were not significant. In addition, publicly consumed luxuries attracted more informational, value expressive and utilitarian influence than privately consumed luxuries which was contrary to the hypothesised influence. How- ever, consistent with the hypothesised influence an equal reference group influence was observed between publicly and privately consumed necessities. Childers and Rao (1992) also indicated that there is a strong and equal peer influence for publicly and privately consumed luxuries, which was consistent with the predicted influence. However contrary to the hypothesized influence, publicly and privately consumed luxuries did not attract a strong peer influence than publicly consumed necessities. A strong peer influence was also found to impact the purchase of publicly consumed necessities than privately consumed necessities. Similarly, Bachmann, et al. (1993) found that there is an equal peer influence between publicly consumed luxuries and publicly consumed necessities among older children (12 years to 14 years). This finding contradicted the hypothesis that publicly consumed luxuries will attract more peer influence than publicly consumed necessities. These authors also found that publicly consumed luxuries and privately consumed luxuries did not have an equal peer influence. Instead, publicly consumed luxuries attracted more peer influence than privately consumed luxuries. Likewise, publicly consumed necessities attracted more peer influence than private consumed luxuries and privately consumed necessities. Several reasons could possibly explain why some di- vergent findings were reported across the three studies. (i) Bearden and Etzel (1982) did not separate various types of reference groups although the influence by parents and peers on products purchase decisions might differ. For example, Childers and Rao (1992) argued that peer influence is considerably low for products that are less conspicuous while the family seems to exert greater influence in such products. (ii) Childers and Rao (1992) combined informational, value expressive and utilitarian influence into a single score representing peer influence, yet there is evidence that the various types of peer influence will have varying effects on products purchase decisions. (iii) Bachmann et al., (1993) conceptualised peer influence as comprising of normative influence thus ignoring the significance role of informational influence. (iv) The other two studies (Bearden and Etzel, 1982; Childers and Rao, 1992) focussed on general population samples while Bachmann et al., (1993) used children. The second approach to the study of how peer influence affects products purchase decisions focuses on specific products such as branded clothes, fashion clothes and athletic shoes (Lavanche et al., 2003; Subramanian and Subramanian, 1995; Yoh, 2005). This line of research is largely influenced by the findings that peers influence will impact some products more than others. In particular, in a study by Lachance et al. (2003) it was established that peer influence play an important role than parental influence and television in teenagers’ likely- hood to be sensitive to brands in the purchase of clothes. Similarly, Yoh (2005) found that peers exert the greatest influence than parents and television in teenagers’ athletic shoe purchasing. Subramanian and Subramanian (1995) also found that peers and parents have a stronger influence in young adults’ adoption of fashion clothes, as they make an immediate impact. Table 2. Hypothesised effects of peer influence on product purchase decisions.

Overall, the reviewed literature suggests that peer influence plays an important role in products purchase decisions. In studying this subject, the present study adopts the approach that is similar to the one used in studies conducted by Bearden and Etzel (1982) and Childers and Rao (1992). However, considering that findings of previous studies investigating how peer influence varies across products are based on general population and children samples, this study extends the focus to young adult consumers. Young adults are used in this study instead of the general population or children because it has been noted that the influence of peer group gradually becomes important after high school (Chang and Chuang, 2005). Young adults are also more likely to be susceptible to the influence of peers since they have a limited capacity to cope with risk and uncertainness than more mature individuals (Park and Lessig, 1977). Additionally, this stu- dy attempts to extend previous research on how peer infl- uence affects products purchase decisions by studying a culture context that has not been studied before. This is crucial because it has been found that peer influence is likely to vary across cultures (Childers and Rao, 1992) and ethnic groups (Kim and Kang, 2001). Hypotheses shown in Table 2 are sum-marized consistent with both Bearden and Etzel (1982) and Childers and Rao (1992).

MATERIALS AND METHODS PRODUCT SELECTION

Before the objectives of this study were investigated, a question- naire was constructed to assess the conspicuousness of the products intended for use in this study. Only eight products were used in this investigation to ensure that the questionnaire was not lengthy and to also avoid respondents’ fatigue. The eight products differed from those used in United States context for two reasons. First, Childers and Rao (1992) noted that luxuries versus neces- sities and publicly consumed versus privately consumed products are likely to vary according to the cultural background and personal characteristics of the respondents. Therefore, the products selected represented those available commercially on the Botswana market. Second, the products were selected based on the extent to which they were perceived to be common among university students and the extent to which they can afford them. Thus, eight products inclu- ding cell phones, shoes, sweaters, toothpaste, sunglasses, bath soap, compact discs and home theatre systems were selected. A sample of ten university students were asked to indicate their views as to whether the eight products are luxuries or necessities on a six point scale ranging from 1 = “a luxury for every one” to 6 = “a necessity for everyone”. To assess whether products were view- ed as publicly or privately consumed, a six point scale ranging from 1 = “a public product for every one” to 6 = “a private product for everyone” was used. These scales were adapted from Bearden and Etzel (1982). Based on the mean scores calculated for the eight products, the products were classified into the following product categories. Sunglasses were the only products categorized as public luxuries. Compact discs, home theatre systems and cell phones were put as private luxuries while shoes and sweaters were categorized as pub- lic necessities and tooth paste and bath soap as private neces- sities. However, the number of products was reduced in order to make the final questionnaire more manageable. Childers and Rao (1992)’s approach of selecting the most representative product from each category (that is, public luxury, private luxury, public necessity, and private necessity) was followed. Thus, sun glasses were chosen to represent public luxuries, cell phone to represent private luxuries, shoes to represent public necessities, and tooth paste to represent private necessities.

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SAMPLING

Convenience sampling was used to select participants in order to test the hypotheses specified in this study. In particular, permission was obtained from one of the lecturers teaching a first year mar- keting course which is a course that is taken by all business stud- ents in the University of Botswana. University students were selected for a study into how peer infl- uence affects young adults’ products purchase decisions for several reasons. First, as young adults they spend most of the time away from their home mostly at universities or colleges where they live among their peers. Second, often purchases that university students make are subject to group pressure as they try to buy products that others want them to have, that they think will make others accept, approve or envy them, or buy a product simply because they have seen somebody they admire owning it (Chang and Chuang, 2005). Third, samples of university students are also still widely used in the literature of consumer behaviour in general despite the known limitations because there are relatively similar in terms of age, educational background and income which reduces the potential for random errors which is common when a more heterogeneous sample of the general public is used (Calder et al., 1981). For instance, the age of university students belongs to the late stage of young people and the initial stage of adults (about 17 years to 25 years). Finally, university students come from all over the country (that is, the University of Botswana as the only one in Botswana); which means that the sample unit may have some representation of young adult consumers in Botswana.

DATA COLLECTION

Data for this study was collected using a structured questionnaire from 101 university students. To measure peer based influence 12 items were adapted from Bearden and Etzel (1982) and Bearden et al. (1989) scales. Respondents were asked to indicate the degree of their agreement with the statements on a 5 point likert scale ran- ging from 1 = “strongly agree” to 5 = “strongly disagree” within four product categories. The scale was slightly modified to reflect only the product aspect thus excluding the brand aspect which was also measured in these previous scales of measurements.

ANALYSIS AND RESULTS

Dimensionality of peer influence

Consistent with Bearden et al. (1989) that peer influence consists of two dimensions — Normative and informational influences, a two factor solution was constrained using exploratory factor analysis with Varimax rotation method. In order to run this test, data for the four products was pooled, because differences in products were not expected to affect the composition of peer influence. Before the final solution was retained, one item (I like to know what products make good impression on others) was deleted as it loaded highly on both factors. The final solution comprised of two factors contributing 67.84% of the total variance explained. The factors are presented in Table 3. Then Cronbach alpha was used to test the reliability of the peer influence scale. The overall Cronbach alpha using the combined product data was .92 and .85 for normative and informative influence respectively, indicating a high level of reliability Table 3. Addi- tionally, descriptive statistics especially means were used to eval- uate the nature of the peer influence across products. The findings in Table 4 suggest a low level of peer influence on product purcha- se decisions. Specifically, privately consumed luxuries (cell phones) and privately consumed necessities (toothpaste) scored the lowest mean scores for normative influence. However, slightly higher mean scores of informational influence were found for publicly consumed products (that is, sunglasses and shoes) and privately consumed luxury (that is, cell phones).

HYPOTHESIS TESTING

In order to test hypotheses H1 through to H12, first,Analysis of Variance (ANOVA) was used to identifywhether there are significant differences on the level ofpeer influence (normative and informa- tional influence)across products. Results of ANOVA show that thereare significant differences on the level of peer influenceacr- oss products: Normative influence: F (3, 398) = 8.11, p< .001) and Informational influence: F (3, 398) = 4.53, p<.005.

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Then, t –tests were used to examine hypothesized differences between products types. The t-tests results show that informational and normative influences vary between products. The data in Table 5 regarding the peer based influence between product types lead us to support H3, H5, H6, and H11. However, H1, H2, H4, H7, H8, H9, H10 were not supported. The specific relationships between products are reported below: Public luxury > Public necessity: Contrary to the hypothesized relationship that public luxuries would have higher informational and normative influence than public necessities, the results in Table 5 show that the differences in the means of informational and normative influence between publicly consumed products are statistically insignificant. Thus, overall H1 and H2 were not supported. Public luxury = Private luxury: It was hypothesized that informational and normative influence for both publicly and privately consumed luxuries will be the same because their luxury factor makes them exclusive and conspicuous. Overall, H3 was supported while H4 was not. Specifically, the level of informational influence was found to be statistically insignificant between luxuries, whereasnormative influence was marginally higher for publiclyconsumed luxuries than for privately consumed luxuries. Public luxury > Private necessity: Overall, H5 and H6were supported. In particular, publicly consumed Luxuriesdisplayed a high level of informational and normativeinfluence than privately consumed necessities. Public necessity < Private luxury: Adverse to thehypothesized relationship that publicly consumednecessities would display lesser informational andnormative influence than privately consumed luxuries, itturned out that the publicly consumed necessities weremore influential on normative influence than privatelyconsumed luxuries. There was also an insignificantdifference in informational influence between privatelyconsumed luxuries and publicly consumed necessitiesalthough the directions of the means were asexpected. Thus, H7 and H8 were not supported. Public necessity = Private necessity: An equally low levelof informational and normative influence was expected forthese products because both products are necessities.However, a statistically significant difference in means ofinformational and normative influence was unexpectedlyobserved. Specifically, privately consumed necessitiesdisplayed lower informational influence and normativeinfluence than publicly consumed necessities. Thus,overall H9 and H10 were not supported. Private luxury > Private necessity: Hypothesis H11 wassupported while H12 was rejected. As hypothesized,privately consumed luxuries displayed higher informationalinfluence than the privately consumed necessities. Whilethe difference in normative influence between privateluxuries and private necessities is insignificant, the meansare as expected.

DISCUSSION

The effects of peer influence on product purchasedecisions have been investigated in this study. Contrary tothe views of Chang and Chang (2005) peer influence is notstatistically high among university students. However, thisis not only unique to this study. In the study by Childersand Rao (1992) the mean scores of the 16 products weregenerally higher in the United States than in Thailand. Forinstance, in the United States means ranged from 2.291 to4.10 whereas in Thailand the mean scores ranged from2.92 to 3.92 on a six point scale ranging from 1 = “stronglydisagree” to 6 = “strongly agree”. Kim and Kang (2001)also demonstrated that reference group influence wasalso generally low across the three ethnic groupsalthough Whites scored a slightly higher mean of 2.99 in afive point scale ranging from 1 = “strongly disagree” to 5 =“strongly agree”

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As the primary purpose of this study is to investigate how peer influence vary across product types this was investigated. Overall findings demonstrate that products that are consumed in public such as sunglasses and shoes are likely to attract more peer influence than products that are consumed in private and are a necessity that is, toothpaste. Generally, the results in the current study closely correspond to those obtained in other previous studies (Bearden and Etzel, 1982; Childers and Rao, 1992). However, there are some findings that are contrary to the hypo- theses specified in this study which are worth noting. For instance, in this study the effects of normative and informational influence were insignificant between public products that is, sunglasses and shoes. This could mean that for products that are observed when there are consumed; young adults tend to comply with expectations from their peers and also have a desire to make informed decisions by seeking information from their peers regardless of whether the product is exclusive or commonly owned. Normative influence was also marginally greater for a public luxury (sunglasses) than for a private luxury (cell phone). Since both products are not needed for day to day use, there is a tendency to comply with the positive expectations of peers for a product that is consumed in the eyes of the public than for a product that is consumed in private. Similarly, normative influence is greater for public necessities (shoes) than for private luxuries (cell phones) which is not as hypothesized, suggesting young adults are motivated to comply with the expectations of their peers when making decisions to purchase products that everybody owns and are important than when products are consumed in private and are exclusive. As pointed out by Grimm et al., (1999) normative influence is greater under conditions of high rather than for low visibility. Furthermore, while H9 and H10 were not supported from a statistical point in Childers and Rao (1992), the difference of means between public necessities and private necessities were also contrary to the hypothesis in the present study. This could mean that although both products are considered important to everybody, a public necessity (shoes) is likely to attract more informational and normative influence than a private necessity (toothpaste) among young adults since it is consumed in the eyes of their peers.

CONCLUSIONS

This research adds to our understanding of how the influence of peers might vary across various products consumed by young adults. It is hoped that findings of this study will inspire marketers who focus on designing marketing campaigns or selling products to young adult consumers. This study provides marketers with a frame-work which they could use when manipulating peer group influences in their promotional appeals. Specifically, based on findings of this study it could be inferred thatinformational and normative influence has differentimplications in the selection of products and thus theirrelevance has to be considered. For instance, whenmarketers utilise peer influence in promotions aimed atencouraging product selection among young adults itwould be more effective to emphasize informationalinfluence for publicly consumed luxuries such assunglasses and privately consumed luxuries such as cellphones. Informational influence could be stressed inadvertising campaigns by employing peers as experts inproduct endorsements. On the other hand, normativeinfluence needs to be stressed for both public consumedproducts such as sunglasses and shoes. Normativeinfluence could be emphasised in advertising campaignsby demonstrating how the usage of particular productsprotects young adult consumers from rejection by peers ina social setting. However, it appears it would beimpractical to use any form of peer influence for privatelyconsumed necessities such as tooth paste as peerinfluence has the lowest impact. Additional research is also needed to provide a morecomprehensive perspective of peer influence than theexploratory one offered in the present study. Severalavenues for extensions could be considered. First, futurerese- arch could examine the impact of peer influence onyoung adults’ brand-level decisions in addition to theproduct- level decisions. In pursuing this line of research,researchers need to ensure that they include brands thatyoung adults are familiar with across a wide range ofproducts. Second, future research could involve a morecoverage of young adults as the current study is limited toa convenience sample of university students. Expandingthe coverage of sample units would improve thegeneralization of the results. Third, future research couldaddress the influence of other types of reference groupson the individual consumption behaviour such as familyand celebrities. Finally, researchers could explore peerinfluences in products perceived as harmful to youth suchas alcohol, drugs and cigarettes (Marshall and Chassin,2000; Windle, 2000).

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