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Consumer Behavior,Ninth Edition

Schiffman & Kanuk

Role of Reference Groups

in shaping Consumer

Behavior

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Index

What is a group..?

Characteristics

Reference group

Types of reference group

Types of reference group influence

Reference Group appeals

Role of family in decision making

Benefits of groups

Bibliography

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What is a Group?

A Group may be defined as two or more people whointeract to accomplish either individual or mutual

goals.

Classification of Groups by membership status

Membership Group: A group to which a person either

belongs or would qualify for membership in.

Symbolic Group: A group in which an individual is not likely

to receive membership, despite acting like a member by

adopting the groups values, attitudes and behavior.

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Characteristics Affecting Consumer Behavior

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Buyer

Psychological

Personal

Social

Culture

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Reference group

CO-WORKERS

AT WEEKEND

JOB

HOMETOWN

FRIENDS

FRIENDS AT

APARTMENT

COMPLEX

CLASSMATES

INSTITUTE

CRICKET TEAM

IMMEDIATE

FAMILY

INDIVIDUAL

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Reference Group

A Reference Group is any person or group that serves as point of

comparison (or reference) for an individual in forming either general orspecific values, attitudes, or a specific guide for behavior.

From a marketing perspective, reference groups are groups that serve as

frames of reference for individuals in their purchase or consumption

decisions.

These groups place no restriction on group size or membership nor does it

require that consumers identify with a tangible group.

Reference groups that influence general or broadly defined values or

behavior are called Normative Reference Groups (e.g. A childs

Normative Reference Group is the immediate family) .

Reference Groups that serve as benchmarks for specific or narrowly

defined attitudes or behavior are called Comparative Reference Groups

(A Comparative Reference Groups might be neighboring family whose

lifestyle appears to be admirable and worthy of imitation).

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Types of Reference Groups

Classified by:

Membership Symbolic

Extent of Interaction Direct versus Indirect

Nature of Attraction Aspirational versus Dissociative

Degree of Formality Formal versus informal

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Types of Reference Group

Influence Informational Influence

When a member of reference group provides information used tomake purchase decisions

Normative Influence

When we conform to group norms in order to belong to that group

Identification Influence

When we identify with, and internalize, a groups values andbehaviours

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Factors Encouraging Conformity: A Reference

Group Must ...

Inform or make the individual aware of a specific product or brand.

Provide the individual with the opportunity to compare his or her ownthinking with the attitudes and behavior of the group.

Influence the individual to adopt attitudes and behavior that are consistentwith the norms of the group.

Legitimize the decision to use the same products as the group

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Types of

Reference Groups Friendship Groups

Shopping Groups

Work Groups

Virtual Groups or Communities

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Friendship Groups

Friendship groups are typically classified as informal groups because theyare usually unstructured and lack specific authority levels.

In terms of relative influence, after an individuals family, his or her friendsare most likely to influence the individuals purchase decisions.

Seeking and maintaining friendships is a basic drive of most people.

Friends fill a wide range of needs: They provide companionship, security,and opportunities to discuss problems that an individual may be reluctant todiscuss with family members.

Marketers of products such as brand-name clothing, fine jewelry,snack foods, and alcoholic beverages recognize the power of peergroup influence and frequently depict friendship situations in theiradvertisements.

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Shopping Groups

Two or more people who shop together, whether for food, for clothing, orsimply to pass the time, can be called a shopping group.

Such groups are often offshoots of family or friendship groups and

therefore, they function as what has been referred to as purchase pal.

The motivation for shopping with a purchase pal range from a primarily

social motive to helping reduce the risk when making an important

decision.

A special type of shopping group is the in-home shopping party, which

typically consists of a group that gathers together in the same home of a

friend to attend a party devoted to demonstrating and evaluating a

specific line of products.

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Work Groups

The sheer amount of time people spend at their jobs, frequently more than

35 hours per week, provide ample opportunity for work groups to serve as

a major influence on the consumption behavior of the members.

Formal Work Group: it consists of individuals who work together as partof a team, and thus have a sustained opportunity to influence each others

consumption related attitudes and actions.

Informal Work Group: it consists of people who have become friends as

a result of working for the same firm, whether or not they work together asa team, and they can influence the consumption behavior of other members

during coffee or lunch breaks or at after-work meetings.

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Virtual Groups or Communities A virtual team (also known as a geographically dispersed

team ordistributed team) is a group of individuals who work across time,space and organizational boundaries with links strengthened by websof communication technology.

Powell, Piccoli and Ives define virtual teams in their literature review

article "as groups of geographically, organizationally and/or time dispersedworkers brought together by information and telecommunicationtechnologies to accomplish one or more organizational tasks.

Ale Ebrahim, N., Ahmed, S. & Taha, Z. in their recent (2009) literaturereview paper, added two key issues to definition of a virtual team assmall

temporary groups of geographically, organizationally and/ or timedispersed knowledge workers who coordinate their work predominantlywith electronic information and communication technologies in order toaccomplish one or more organization tasks.

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Brand Communities A brand community is a community formed on the basis of attachment to

a product or marquee.

Recent developments in marketing and in research in consumerbehavior result in stressing the connection between brand,individual identity and culture. Among the concepts developed to explainthe behavior of consumers, the concept of a brand community focuses on theconnections between consumers.

A brand community can be defined as an enduring self-selected group ofactors sharing a system of values, standards and representations (a culture)and recognizing bonds of membership with each other and with the whole.

Brand communities are characterized in shared consciousness, rituals andtraditions, and a sense of moral responsibility.

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Consumer-action Groups A particular kind of consumer group-A Consumer Action Group-

has emerged in response to the consumerist movement. Today there

are a large number of such groups that are dedicated to providingconsumer products in a healthy and responsible manner, and togenerally add to the overall quality.

For example, a diverse range of consumer concerns being addressedby private and public consumer-action groups: neighborhood crimewatch, youth development, forest and wildlife concerns, children

and advertising, race and ethnicity, community volunteerism, legalassistance, public health, disaster relief, energy conservation,education, smoking, the environment, access to telecommunications,science in the public interest, credit counseling, privacy issues, andchildren and internet.

Two broad categories of Consumer Action Groups:

Those that organize to correct a specific consumer abuse and thendisband (Agitation against liquor shop in a community) .

Those that organize to address broader, more persuasive problemareas and operate over an extended or indefinite period of time(Group against drunk driving). 1

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Reference group appeals

Celebrities

The Expert

The Common Man

The Executive and Employee Spokesperson Trade or Spokes-Character

Other Reference Group Appeals

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Celebrities

A celebrity is a person who has a prominent profile and commands a great

degree of public fascination and influence in day-to-day media. The term is

often synonymous with wealth (commonly denoted as a person with fame

and fortune), implied with great popular appeal, prominence in a particular

field, and is easily recognized by the general public.

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The Expert

A second type of reference group appeals used by marketers is

the expert, a person who, because of his or her occupation,

special training, or experience, is in a unique position to help

the prospective consumer evaluate the product that the

advertisement promotes.

e.g. An ad for a quality frying pan may feature the

endorsement of a chef.

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The Common Man

A reference group appeal that uses the testimonials of satisfied

customers is known as the common-man approach.

The advantage is that it demonstrates to prospective customersthat someone just like them uses and is satisfied with the good

or service being advertised.

The common man appeal is especially effective in publichealth announcement (such as antismoking or high B.P.

messages), for most people seem to identify with people like

themselves when it comes to such messages.

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The Executive and Employee Spokesperson

The popularity of this type of advt. probably is due to the

success and publicity received by a number of executive

spokespersons.

Like celebrity spokespersons, executive spokespersons seem

to be admired by the general population because of their

achievements and the status implicitly conferred on business

leaders.

e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.

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Trade or Spokes-Character

These are often employed as attention grabbers, acting as

spokespersons to promote children products.

Trade characters are intended to bond a child to a brand so that

the childs brand awareness might form the basis of brand

preference either immediately or later in life.

e.g. Animated characters used by marketers inadvertisements for children products

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Other Reference Group

Appeals A variety of other promotional strategies can function

creatively as frames of reference for consumers.

Respected retailers and the editorial content of selected special

interest magazines can also function as frames of reference

that influence consumer attitudes and behavior.

e.g. Indian Dental Associations seal of approval for

toothpaste.

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Benefits of groups

Informational Benefits actively search information fromopinion leaders /experts /professionals /friends/neighbours /relatives Observation of behaviour ofother people.

Utilitarian Benefits pressure on ind. to conform to

preferences/expectations of another ind. or group.-visibility control of rewards or punishments motivation satisfy expectations of others.

Value-expressive benefits motive to enhance self-concept, bolster his ego, like the group, establish

maintain relationship

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Cont

Variability Among Products

Conspicuousness, exclusive, identified

Distinction between luxuries & necessities

Publicly consumed luxury

Privately consumed luxury Publicly consumed necessity

Privately consumed necessity

Shifting of product perceptions

Strategies :: not strong brand/pdt- intrinsic qualities,

price, advantage over competing pdts ::: operative-kindsof people,

stereotypes, learning, tailored appeal

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Bibliography

http://www.google.net/search/slideshow?s

earchfrom=header&q=influence+of+refere

nce+group+on+consumer+behavier

www.Google.com

www.Slideshare.net

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