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REFERENCE GROUP INFLUENCE:

A CROSS CULTURAL COMPARISON OF PUBLIC SERVICES

Francisco Guzmán, EGADE, ITESM-CEM


Jordi Montaña, ESADE
Vicenta Sierra, ESADE

Abstract

Consumer perceptions of reference group influence on product and brand decisions of public
services were examined using 401 undergraduate students in Barcelona and Mexico City. A
classification of public services is presented, as well as an adaptation of the reference group
influence model developed by Bearden and Etzel.

Introduction

Comparative research contrasts attitudes and behaviors of consumers in two or more different
countries or contexts (Craig and Douglas, 2000). It is the systematic detection, identification,
classification, measurement, and interpretation of similarities and differences between two
systems (Boddewyn, 1969). A major point of concern in this kind of research is culture, whether
cultural variation exists, and how it may affect the results (Mavrommatis, 2003). When designing
a comparative study between two countries, incorporating the way that culture may affect the
comparison is a must. Two types of comparative research can be found: cross-national and cross-
cultural (Berry et al., 1992; Brislin, Lonner, and Thorndike, 1973; Frijda and Jahoda, 1966;
Manaster and Havighurst, 1972; Oyen, 1990; Teune, 1990). While cross-national research
assumes that culture has a limited impact on behavior, cross-cultural research argues that culture
is a primary effect (Mavrommatis, 2003). Manaster and Havigurst (1972) maintain that cross-
national studies should focus only on the interpretation of concepts, the instruments used, and the
degree of equivalence between the cultural units, while cross-cultural studies should be used
when cultural differences are evident and the objective is to identify them.

Given the influence of others is a determinant factor in the attitudes, behavior and purchase
decision of individuals (Bachmann, John, and Rao, 1993; Bearden and Etzel, 1982; Bourne,
1957; Burnkrant and Cousineau, 1975; Cocanougher and Bruce, 1971; Escalas and Bettman,
2003; Park and Lessig, 1977), that when a public-private collaboration scheme is established it is
important for companies to better understand the consumers of public services (Guzmán,
Montaña, and Sierra, 2005), and that companies have a growing interest on brand building
towards social values (Barone, Miyazaki, and Taylor, 2000; Guzmán, 2005; Hoeffler and Keller,
2002; Speak, 1998; Till and Nowak, 2000), it is appropriate to analyze reference group influence
in order to determine which kinds of public services are better to associate to company’s brands.

The model developed for measuring reference group influence was applied in Mexico and Spain
given that sufficient developmental and cultural differences exist between them. According to
the World Bank’s classification of economies (July 2004)1 Mexico is classified as an upper
middle-income economy while Spain is classified as a high-income economy. In the World
Bank’s 2003 GNI per capita ranking2, Spain ranks as the 35th economy while Mexico ranks as the
68th economy. If UNDP’s 2002 Human Development Index is considered3, Spain ranks in the
20th position with a score of .922, while Mexico ranks in the 52nd with a score of .802.

The objective of this article is to test whether or not reference group influence is distinct in
different cultural contexts. To do so, an adaptation of the model proposed by Bearden and Etzel
(1982) is used in order to analyze how the influence of reference groups and brands would
determine the consumption of public services provided within a public-private collaboration
environment. First, reference group influence is defined and discussed. Second, the modified
model for measuring reference group influence over the consumption of public services is
presented. Third, the methodology and results are discussed. Finally, the conclusions and
limitations of the research are explained.

Reference Group Influence

A reference group is defined as “an actual or imaginary individual or group conceived of having
significant relevance upon an individual’s evaluations, aspirations, or behavior” (Park and
Lessig, 1977, p. 102). Bearden and Etzel (1982) define a reference group as a person or group of
persons that significantly influence the behavior of an individual, and argue that the Reference
Group concept (Hyman 1942) provides a way to comprehend why many individuals do not
behave like others in their social group. Reference groups are usually conformed by the social
network of an individual: family members, friends and colleagues, and inspirational figures
(Bachmann, John, and Rao, 1993), and can be a source of brand associations that mold the
mental representations a consumer has of himself (Escalas and Bettman, 2003). Given that social
networks are conformed in different manners in different cultural contexts, reference group
influence varies across cultures (Childers and Rao, 1992). Furthermore, reference groups have
been identified as important determinants of public service consumption (Chapman and Cowdell,
1998, Guzmán, 2005, Lovelock and Weinberg, 1984).

Reference groups have basically two functions (Kelley, 1965): a normative function that sets and
enforces standards for the individual, and a comparative function that serves as a comparison
point against which an individual evaluates himself and others (Cocanougher and Bruce, 1971).
Park and Lessig (1977) elaborate on Kelley’s (1965) model and describe three dimensions of
reference groups: informational, utilitarian, and value-expressive. According to Bearden and
Etzel (1982), informational influence occurs when, facing uncertainty, an individual searches for
information and counts on sources with high credibility or high experience in order to help him
make a decision; utilitarian influence occurs when an individual acts according to the desires of
others that are important to him in order to obtain a reward or to avoid some punishment; and
1
www.worldbank.org/data/databytopic/CLASS.XLS (December 2, 2004)
2
www.worldbank.org/data/databytopic/GNIPC.pdf (December 2, 2004)
3
http://hdr.undp.org/statistics/data/indic/indic_8_1_1.html (December 2, 2004)
value-expressive influence is characterized by the individual’s acceptance of certain external
standpoints given his psychological need to associate with a person or group. To develop this
study, Park and Lessig’s (1977) three-dimensional structure was used, because it provides clarity
around the dimensions that determine reference group influence over public service
consumption.

Model

There are two factors that affect reference group influence over brand and product decisions
(Bourne, 1957):
a degree of exclusivity, and the extent to which it is identifiable
• . The first factor, which affects the product decision, is operationalized by making a
distinction between necessities and luxuries –necessities are objects that everyone owns,
while luxuries are objects that have certain degree of exclusiveness; the second factor,
which affects the brand decision, is operationalized by distinguishing between privately
and publicly consumed goods –when consumed, the first kind of goods are seen by
others, while the latter are not (Bearden and Etzel, 1982). In the case of public services,
the first factor must be modified in order to be operational. Since they are accessible to
everyone and cannot be cataloged as luxuries nor necessities, the distinction is made
between public services that require an additional payment –secondary public services–,
and public services for which no additional payment is necessary for consumption –
primary public services. The operationalization of the second factor remains the same,
given that it is possible to distinguish between a privately and a publicly consumed public
service based on the visibility of consumption.

What is considered to be a primary public service in one cultural and economic context could
differ from what is considered to be a secondary public service in another.
For example, a service that is considered a necessary public service in a well-developed
European country, such as public transportation, may be considered a luxury in another. Or, for
example, while the provision of ‘public food’ is critical to maintain certain levels of welfare in
developing countries, in certain developed countries the concept may not even exist.

In a public-private collaboration environment, in which public services are provided in


association to a corporate brand, the influence between the reference group and the ‘brand’ or
‘product’ can be analyzed by considering the following eight relationships:

1) Primary public service publicly consumed (PUP)


i. Because it is a primary public service, influence for the product should be weak.
ii. Because it will be seen by others, influence for the brand must be strong.
2) Primary public service privately consumed (PRP)
i. Because it is a primary public service, influence for the product should be weak.
ii. Because it will not be seen by others, influence for the brand must be weak.
3) Secondary public service publicly consumed (PUS)
i. Because it is a secondary public service, influence for the product should be strong.
ii. Because it will be seen by others, influence for the brand must be strong.
4) Secondary public service privately consumed (PRS)
i. Because it is a secondary public service, influence for the product should be strong.
ii. Because it will not be seen by others, influence for the brand must be weak.

TABLE 1
Combining Publicly-Privately Consumed and Primary-Secondary Dimensions
with Product and Brand Purchase Decisions
Publicly
Product Weak reference group Strong reference
Brand influence (-) group influence (+)
Publicly-primary Publicly-secondary
(PUP) (PUS)
Strong reference
Influence: Weak Influence: Strong
group influence (+)
product and strong product and brand
brand
Primary Secondary
Privately-primary Privately-secondary
(PRP) (PRS)
Weak reference
Influence: Weak Influence: Strong
group influence (-)
product and brand product and weak
brand
Privately

12 hypotheses stem from the relationships shown in table 1. Six product hypotheses (H1P – H6P)
reflect more influence over the product decisions of publicly or privately consumed secondary
public services than over primary ones, and six brand hypotheses (H1B – H6B) reflect more
influence over the brand decisions of publicly consumed primary and secondary public services
than over privately consumed ones.

Influence in product decisions Influence in brand decisions


H1P: PUP < PUS H1B: PUP = PUS
H2P: PUP = PRP H2B: PUP > PRP
H3P: PUP < PRS H3B: PUP > PRS
H4P: PUS > PRP H4B: PUS > PRP
H5P: PUS = PRS H5B: PUS > PRS
H6P: PRP < PRS H6B: PRP = PRS

As mentioned earlier, measuring the influence of reference groups in product and brand
decisions over ‘public consumption’, under a collaborative scheme, is important because it
shows the attractiveness of a public service for both the private company and the public sector.
The way the developed model helps recognize the most attractive public services is by, firstly,
identifying which public services are perceived as primary and which are perceived as secondary
–as secondary services require and additional payment for consumption, greater reference group
influence was expected over the consumption of these kind of services. Secondly, the model
identifies which public services are perceived as publicly consumed and which are perceived as
privately consumed –as publicly consumed services are those that people can see others
consume, greater reference group influence was expected over the consumption of these kinds of
services. Thirdly, as greater reference group influence can be the result of a higher degree of
involvement, and involvement in the consumption of a service can increase when the service is
not well-known (Kotler, 2000), a brand can function as a dissonance reducer for the consumption
of a particular service. Finally, since a brand can serve as a dissonance reducer, a public service
with a higher degree of reference group influence will be better accepted than a public service
with a lower degree of reference group influence when provided in association to a private firm’s
brand.

Methodology

To detect the most adequate kinds of public services to be provided under a public-private
collaborative scheme, a 2 (contexts) x 2 (product vs. brand) x 4 (public service categories) three-
factor design was used, where type of influence and category are the within-subjects factors and
context (i.e., city) is the between-subjects factor. The study was developed in two stages: the first
stage served to classify public services, while the second stage served to measure reference
group influence over a selected group of public services.

First Stage

From a preliminary list of 20 public services, and according to the provided definition of each
concept, interviewees had to indicate on a six-point scale if they considered the public services to
be primary or secondary, and if they considered them to be publicly or privately consumed. Two
random samples of adults were used to apply 300 and 400 personal surveys in Barcelona and
Mexico City, respectively. All of the respondents were at least 18 years old and had to be
citizens of the country in which they were surveyed. Following is a brief description of how each
of the 20 public services was classified in each context.

Public Transportation is perceived as a publicly consumed service in both Mexico City and
Barcelona. However, in Mexico City, it is perceived as much less secondary than in Barcelona.
Obesity treatment programs are classified as a privately consumed secondary service in both
contexts. In comparison, results for drug and alcohol treatment programs are also classified as a
privately consumed service, but primary.

Public summer schools are perceived as secondary in both contexts. However, in Mexico City
people perceive them as publicly consumed, while in Barcelona they are perceived as privately
consumed. Likewise, museums are perceived as publicly consumed in both contexts. However,
they are perceived as secondary services in Barcelona, and as primary services in Mexico City.
In both Mexico City and Barcelona retirement plans are perceived as privately consumed
services. Nonetheless, they are seen as primary services in Mexico City while in Barcelona they
are perceived as secondary. Similarly, programs for the elderly are classified as publicly
consumed primary services in Mexico, and as privately consumed primary services in Barcelona.

Toll highways are perceived as publicly consumed secondary services and nursing is perceived
as a privately consumed secondary service, in both contexts. Finally, public nurseries and day
care, public sporting facilities, trash collection, street cleaning, ambulance services, public
parks and beaches, anti-littering campaigns, public hospitals, public libraries, public security,
and sewage collection and treatment are perceived as publicly consumed primary services both
in Mexico City and Barcelona.

Based on the distribution of the resulting mean scores, two public services were selected in each
context (see table 2) to represent each of the public service categories: public-primary (PUP),
public-secondary (PUS), private-primary (PRP), and private-secondary (PRS). The public
services were selected by considering both the most extreme values within each category and
those that had the smallest standard deviation.

TABLE 2
Selected Public Services and Means Scores
Mexico City PR-SE PU-PR Barcelona PR-SE PU-PR
PUP PUP
• Trash Collection 1.93 1.33 • Public Parks and Beaches 1.21 1.14
• Sewage Collection and Treatment 1.82 1.48 • Public Hospitals 1.11 1.14
PRP PRP
• Public Summer Schools 3.36 2.43 • Public Transportation 4.09 1.17
• Toll Highways 3.42 2.63 • Toll Highways 3.87 2.94

PUS PUS
• Retirement Plans 2.58 3.40 • Programs for the elderly 2.69 3.22
• Drug/Alcohol Treatment Programs 2.47 3.39 • Drug/Alcohol Treatment Programs 2.87 3.88

PRS PRS
• Obesity Treatment Programs 3.51 3.70 • Obesity Treatment Programs 3.66 4.28
• Nursing 3.79 3.76 • Nursing 3.40 4.00

Second Stage

The next step was to measure reference group influence for brand and product decisions. Four
different versions of the survey were used: two for Mexico City and two for Barcelona. For each
context, the survey contained both product and brand decisions for one of the two public services
selected from each category. Therefore, each respondent answered questions regarding both
brand and product decisions for four different public services. Groups 1 and 2 are the samples for
Mexico City, while groups 3 and 4 are the samples for Barcelona (see table 3).

TABLE 3
Research Design Layout
Primary Secondary
PUP PUS
Public
Group 1 (Trash Collection) (Retirement Plans)
(n=106) PRP PRS
Private
(Summer Schools) (Obesity Treatment)

PUP PUS
Public
Group 2 (Sewage Collection) (Drug / Alcohol P.)
(n=103) PRP PRS
Private
(Toll Highways) (Nursing)

PUP PUS
Public
Group 3 (Parks & Beaches) (Programs for Elderly)
(n=93) PRP PRS
Private
(Public Transportation) (Obesity Treatment)

PUP PUS
Public
Group 4 (Public Hospitals) (Drug / Alcohol P.)
(n=99) PRP PRS
Private
(Toll Highways) (Nursing)

Park and Lessig’s (1977) reference group influence scale was used to build the questionnaires. A
six-point bipolar agree-disagree scale, which includes four utilitarian elements, five informative
and five value-expressive elements, was also used. Each variation of group influence
(informational, utilitarian, and value-expressive) was represented by a summed composite of all
of its corresponding items.

Survey respondents were undergraduate students from two private universities: ITAM in Mexico
City and ESADE in Barcelona. Surveys were distributed in Spanish. Given that currently it is not
common to have public services provided in association with a private brand, examples were
provided and students were asked to imagine how a private brand, associated to each of the
public services they were asked about, would affect their consumption of the public service. An
estimation error of .049 with a confidence level of 95% was achieved from the 401 surveys
collected.

Twelve hypotheses were tested for measuring reference group influence in brand and product
decisions over the consumption of public services. The results are shown in table 4. For the
overall results, the difference between means is significant at a p ≤ .05 level for all of the
hypotheses, therefore confirming all of the hypotheses except H2P, where a difference is
confirmed but in a direction contrary to that hypothesized.

TABLE 4
Paired Comparison Hypotheses and Results for Reference Group Influence
Overall Barcelona Mexico City
Brand
H1B: PUP = PUS 3.528 vs. 3.537c 3.589 vs. 3.384b 3.467 vs. 3.689b
H2B: PUP > PRP 3.528 vs. 3.441b 3.589 vs. 3.446b 3.467 vs. 3.435
H3B: PUP > PRS 3.528 vs. 3.464a 3.589 vs. 3.482a 3.467 vs. 3.446
H4B: PUS > PRP 3.537 vs. 3.441b 3.384 vs. 3.446a 3.689 vs. 3.435b
H5B: PUS > PRS 3.537 vs. 3.464b 3.384 vs. 3.482a 3.689 vs. 3.446b
H6B: PRP = PRS 3.441 vs. 3.464c 3.446 vs. 3.482c 3.435 vs. 3.446c

Product
H1P: PUP < PUS 3.299 vs. 3.449b 3.408 vs. 3.287a 3.190 vs. 3.616b
H2P: PUP = PRP 3.299 vs. 3.387b 3.408 vs. 3.391c 3.190 vs. 3.382b
H3P: PUP < PRS 3.299 vs. 3.535b 3.408 vs. 3.521a 3.190 vs. 3.548b
H4P: PUS > PRP 3.449 vs. 3.387b 3.287 vs. 3.391a 3.616 vs. 3.382b
H5P: PUS = PRS 3.449 vs. 3.535c 3.287 vs. 3.521b 3.616 vs. 3.548a
H6P: PRP < PRS 3.387 vs. 3.535b 3.391 vs. 3.521b 3.382 vs. 3.548b

Italics: not consistent with hypothesized influence.


a. p < .05.
b. p < .01.
c. p > .05 making equality significant.

Almost all results of the second stage were as expected and confirmed the hypotheses. However,
three exceptions must be mentioned.

The low score that public parks and beaches received regarding brand decision in Barcelona.
What could be deduced from this result is that the brand decisions of public parks and beaches
for respondents in Barcelona would be influenced to a lesser degree by informational group
reference than their brand decisions for other services. This could be due to the high degree of
knowledge and ‘beach culture’ that respondents have about the beaches and parks that they
normally go to. Comparing this result to Mexico City’s, it could also be deduced that a lower
degree of knowledge and ‘beach culture’ in Mexico, leads to a higher level of informational
reference group influence.
The low score that toll highways received regarding brand decision in Barcelona. Similar to
public parks and beaches in Barcelona, the mean score for this public service is low compared to
the others. But in this case, the low score is consistent across all types of influence. Therefore, it
can be deduced that the brand decisions of toll highways of respondents in Barcelona are
influenced to a lesser degree by informational, utilitarian, and value-expressive group reference
than their brand decisions for other services.

The low score toll highways received regarding product decision in Barcelona. In this case,
while not as drastic as the result for brand decision, the low score is also consistent across all of
the types of influence. Therefore, it can be deduced that the product decisions of toll highways of
respondents in Barcelona are influenced to a lesser degree by informational, utilitarian, and
value-expressive group reference than product decisions of other services.

Taking into consideration both results, it can be concluded that the product and brand decisions
for toll highways in Barcelona, despite their being a publicly consumed secondary service, have
a low degree of reference group influence. This may be explained by the fact that in Barcelona
toll highways are provided monopolistically.

MANOVA

After testing the bi-variant hypotheses, a mixed factorial MANOVA was used to analyze the
data. The mixed factorial MANOVA included the city (Mexico City vs. Barcelona), the type of
influence (product vs. brand), and the category (PUP vs. PUS vs. PRP vs. PRS) as independent
variables; and the informational, utilitarian, and value-expressive measures as dependent
variables. After confirming that the linear model met all of the conditions of MANOVA, all but
one of the between-subjects and within-subjects univariate contrasts resulted significant at a p < .
05 level; with the exception being the interaction between type x city vs. informational (p < .22).
Results of the MANOVA analyses are shown in table 5.

TABLE 5
Overall Results of MANOVA Analyses

Overall Informational Utilitarian Value Expressive


F df p η² F Df P Η² F df p η² F df p η²

City (A) 11.54 9 .00 .08 16.78 3 .00 .11 .77 3 .51 .01 10.58 3 .00 .07
Type (B) 30.43 3 .00 .19 17.79 1 .00 .04 9.30 1 .00 .02 61.49 1 .00 .13
Category (C) 25.40 9 .00 .37 62.24 2.69 .00 .14 14.49 2.96 .00 .04 15.53 3 .00 .04

AXB 3.48 9 .00 .03 1.47 3 .22 .01 7.60 3 .03 .02 2.39 3 .07 .02
AXC 12.78 27 .00 .23 17.23 8.07 .00 .12 17.09 8.87 .00 .11 12.92 9 .00 .09
BXC 11.33 9 .00 .21 5.14 2.95 .00 .01 21.90 2.98 .00 .05 17.07 2.9 .00 .04
6
AXBXC 3.24 27 .00 .07 4.54 8.86 .00 .03 2.66 8.94 .00 .02 2.16 8.8 .02 .02
7

As shown, all of the independent variables in the model have significant effects. This means that
the city, type of decision (product or brand), and category (PUP, PUS, PRP, PRS) have different
effects over each type (informational, utilitarian, and value-expressive) of reference group
influence. In other words, reference group influence is different for product and brand decisions,
different for each kind of public service category, and different depending on the context.

Conclusions and Limitations

After testing and confirming all but one of the hypotheses -H2P-, from the analyses of the
reference group influence model, it can be concluded that, given that product reference group
influence is stronger over secondary services, and brand reference group influence is stronger
over publicly consumed services, in general it will make more sense for private companies to
associate with public services that are both secondary and publicly consumed. Additionally, it
can be concluded that reference group influence is different depending on context, and that
citizens’ perceptions of public services in different contexts can also vary.

Several limitations should be considered. First, despite the economic and development
differences between Mexico and Spain, countries with greater development differences, or
additional countries, could have been included in the study. Second, generalizing the findings of
this study that uses business students as subjects to other population groups may be misleading
(Park and Lessig 1977). Finally, despite the fact that the same specific examples were given to
every respondent, each individual’s imaginary process could lead to certain differences in the
understanding of the collaborative scheme. As it is not common practice for public services to be
offered in collaboration with the private sector, asking people to imagine certain situations may
have created inconsistent results.

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