21MBA1991 SARGAM SRIVASTAVA

Discuss the influence of reference group on consumer behavior

Reference groups are groups that consumers compare themselves to or associate
with. Reference groups are similar to opinion leaders in that they can have a
profound influence on consumer behavior. Reference groups are considered a
social influence in consumer purchasing. They are often groups that consumers
will look to to make purchasing decisions. So if a reference group endorses a
product, either through use or statements about the product, those that look to
the group will often purchase that product. On the other hand, if a reference
group disapproves of a product, those that associate with that group will
probably not purchase the product.
Reference groups are of two types −
 Primary Groups
 Secondary Groups
Primary Groups
Primary reference groups are basically the set of people whom you meet every
day. They can be from your family, your close friends, your roommates, etc.
These people from primary groups may have a direct and strong impact on your
lives and your buying decisions since they are very significant to you. Primary
groups make you comfortable and give you a feeling that they are with you
when you are confused about a purchase. These people give you very honest
and clear advice as they are so close to you, due to which you could be more
confident about the purchase. Research shows that the bond between people
leads people to be effective social and as satisfied consumers.
Secondary Groups
Secondary reference groups are usually formal and they speak less frequently.
They might be professionals, your collogues, your seniors at work or your
acquaintance at the club, etc.
In secondary reference groups, the power to influence people is quite less as
compared to primary reference groups as people in these groups are not that
comfortable in sharing their thoughts or views on the purchase.

Influence of Reference Groups

Reference groups can and do have a tremendous influence on purchasing

decisions. This is evident in a number of ways, such as through roles. Everyone
is expected to behave in a certain way based on the reference group we belong
to. Students act like students. In keeping with this idea, people will often modify
their own behavior to coincide with group norms (even those that profess non-
conformity are in some ways conforming with other people who want the same
21MBA1991 SARGAM SRIVASTAVA

thing). Reference groups communicate through opinion leaders, who influence

what others do, act, and buy. In the consumer world, this means that if a
reference group purchases a product, those that associate with the group likely
will as well.