REFEREN CE G RO U P

2
CB&MC UNIT
CONSUMER RELATED REFERENCE GROUPS

• An individual can be a member of a reference group such as the family and would be said to be
part of a membership group.

• Same individual may aspire to belong to a cricket club and would be said to be apart of an
aspiration group.

• A disclaimant group is one to which an individual may belong to or join and then reject the
group's values.

• An individual may also regard the membership in a specific group as something undesirable and
to be avoided. Such a group is a dissociative group
 NATURE OF REFERENCES GROUP

• Reference groups establish certain norms, roles, status, socialisation and power. These characteristics exert
their influence on consumers.

1. Norms are generally defined rules and standards of behaviours that the group establishes.
2. Values are shared beliefs among group members regarding what behaviours are appropriate or
inappropriate.
3. Roles refer to functions that an individual assumes or that the group assigns to her/im to accomplish group
objectives.
4. Status is the achieved or ascribed position that the individual occupies within
the group's hierarchy.

5. Socialisation refers to the process by which new members learn the group's
system of values, norms and expected behaviour patterns.

6. A group's influence on its members' behaviour is closely related to its 'power'.

Power may be of following types:

(A) Reward power refers to the group's ability to reward the individual.
(B) Coercive power relates to the power of the group to use disapproval, withholding
rewards, or even punishing the individual.
(C) Expert power influences the results from the experience, expertise and knowledge of the
individual or group.
(D) Referent power flows from the feeling of identification that the individual has with the
members of the group.
REFERENCE GROUPS
• Reference groups are groups that serve as sources of comparison, influence, and norms for peoples’
opinions, values, and behaviors. Within any setting, including consumer behavior, people are strongly
influenced by what others think and how they behave.

• The most important reference group is the family because it provides children with the skills, knowledge,
attitudes, and experiences necessary to function as consumers, a process called consumer socialization.

• Other important reference groups are a person’s social class, culture and subculture.
 MEMBERSHIP GROUPS

• Positive reference groups are important and classified as primary or secondary and formal and informal.

• If a person maintains regular contact with family members, friends and business associates, all those individuals
constitute a primary group.

• People, who meet less frequently such as those who meet during morning walk or club members.

• From the marketer's point of view, primary groups are more important because they influence consumer's product
beliefs, tastes and preferences and have a more direct effect on buying behaviour
• Research supports the view0 that members of primary groups are more likely to buy the
same brands.

• Groups can also be divided on the basis whether they have a formal structure such as a
president, executive and secretary etc. In a hierarchical order with specific roles.

• The structure of an informal group is loosely defined.

• Example: when three individuals become friends while pursuing a course on computer
applications and on every last saturday of each month meet for dinner, then it would be
considered an informal group.
Types of Formal and Informal Group
Primary Informal Groups
Primary Formal Groups
Secondary Informal Groups
Secondary Formal Groups
Description
The family and peer groups are primary informal groups.
They are by far the most important because of the closeness
and contact frequency between the individual and other
group members.
Primary formal groups are those that have a more formal
structure and with which the consumer comes in contact less
frequently than primary informal groups. Business groups
that come together to work on a daily basis are
examples of primary formal groups.
Such groups have no formal structure and meet once in a
while. Examples are women's kitty parties, or sports groups
that get together infrequently.
Secondary formal groups are not really important to
marketers because they are structured, meet only
infrequently and are not cohesive. The examples are teachers
associations, or retailers association.
 ASPIRATION GROUPS

• Non-membership groups, with a positive attraction, are called aspiration groups and exert a strong
influence. Two types of such groups are anticipatory aspiration groups and symbolic aspiration groups.

• Individuals frequently purchase products that they believe are used by a desired group in order to achieve
actual or symbolic membership in the group.

1. Anticipatory aspiration groups: these are groups that an individual anticipates to join at some future time.
The individual, generally, has some direct contact with such group(s). Example: the individual may wish to
join a group higher in the organizational hierarchy.

2. Symbolic aspiration groups: the individual admires these groups but is unlikely to join them despite
acceptance of the group's beliefs and attitudes. Example: A tennis fan may buy a nike sports jacket and shoes
because many tennis stars wear these.
 REFERENCE GROUP APPEALS:
INFORMATIONAL INFLUENCE

• Reference groups and other influence sources can exert informational influence by offering
information to help make decisions.

• Example: chat-groups on the internet often provide information on subjects such as internet travel sites.
• Informational influence is important because it can affect how much time and effort consumers devote
to information search and decision-making.

• Consumers who can get reliable information from others may easily be reluctant to engage in time
intensive information search when making purchase decisions.
• Informational influence is based on either the similarity of the group's members to the individual or
the expertise of the influencing group member. Informational influence is likely to be more important
when consumers perceive financial, social, or performance risk in buying A product.

• A consumer who is buying a car will seek information from knowledgeable relatives, friends,
neighbours, or salespeople because of the cost of buying, social visibility and possible mechanical
failures.

• Celebrities also prove to be beneficial in providing information to the consumers. Some people,
especially their fans, follow the celebrities and trust their words.

• Example: aishwarya rai a former beauty queen is the best person to provide information on beauty care
products.

• The second condition under which information influence is likely to be more important is when the
individual is contemplating the purchase of a complex product such as a computer, has little
knowledge or experience about it and seeks expert advice.
COMPARATIVE INFLUENCE

• Consumers tend to constantly compare their attitudes with reference to those of members of
Important groups. They serve as a benchmark and the individual's urge is to seek support to
Her/his attitudes and behaviour.

• To accomplish this, individuals are inclined to associate with Groups with which they agree and
stay away from groups with which they disagree.

• As a result Of this, the process of comparing oneself to other members of the group and
evaluating whether The group would be supportive becomes the basis for comparative influence.
• There are many People who want to live a celebrity's life. They want to use products and services that
the Celebrities use to experience their lifestyle. That is why companies sign celebrities to endorse.

• Their products. Individuals who are influenced by comparative influences should have similar
characteristics to Those whose influence is being accepted. Consumers are likely to seek information
from those Friends that they believe are similar to them and regarded as credible.

• The implication for Advertisers is that they should use spokespersons perceived by consumers as
being similar to them
NORMATIVE INFLUENCE

• Robert J. Fisher and D. Ackerman note that normative influence, also called utilitarian influence,
Refers to social pressure designed to encourage conformity to the expectations of others to gain

• A direct reward or to avoid any sanctions. Consider, for example, the type of clothes or music.
Chances are you and your friends have made similar choices.

• Normative influence can also affect conformity which is the tendency for an individual to Behave
as the group behaves.
REFERENCE GROUP APPEALS

Nature of Objectives Perceived source Type of Behaviour

influence Characteristics power
Informational Knowledge Credibility Expert Acceptance

Comparative Self-maintenance Similarity Referent Identification

and enrichment

Normative Reward Power Reward or Conformity

coercion
 CELEBRITIES
• Celebrities, particularly movie stars, TV personalities, popular entertainers, social media influencers
and sports icons, are a symbolic reference group because they are liked, admired, and often have a
high degree of perceived credibility.
• MARKETERS EMPLOY CELEBRITIES IN PROMOTION IN THE FOLLOWING WAYS:
Celebrity testimonial—Based on personal usage, the celebrity attests to the product’s quality. A TV ad for an
advanced model of the iphone featured Martin Scorsese—a legendary movie director— using the phone’s siri feature
to schedule appointments and check traffic conditions.
Celebrity endorsement—Celebrities appear on behalf of products, with which they may or may not have direct
experience or familiarity. For example, chuck norris—the martial art star—has been featured in social media ads for
era detergent. The campaign’s theme is that era is as toughon stains as chuck norris is on the “bad guys” (in movies).
• Celebrity actor—The celebrity plays a part in a commercial for the product.

• Celebrity spokesperson—The celebrity represents the brand or company over an extended period. For
example, James bond—one of the world’s iconic superheroes—has become a spokesperson for the
Omega watch and the exclusive Aston Martin luxury car.
 OPINION LEADERSHIP
• The most important thing for the marketer is to understand about the role of ‘opinion leadership’
in marketing of goods and services.

• Opinion leadership which is otherwise known as word of mouth communication is an

important personal influence on consumers.

• With the proliferation of cell phone usage and e-mail, many people are always available to friends,
family and business associates. Message spreads like virus among people. 

• Opinion leaders offer advice or information about a product, service and how a particular
product may be used. Words of mouth takes place through personal or face to face
communication.
 DEFINITION OF OPINION LEADERSHIP

• Opinion leadership is defined as the process in which one person influences the attitudes or actions of other person
informally, who may be identified as opinion leader.

• They offer informal advice about the product or service. Opinion leaders are part of the social groups.

• They have social communication network.

• The communication is informal and interpersonal in nature which happens between those who are not associated with the
commercial selling source directly.
EXAMPLES OF OPINION LEADERSHIP
• The role of opinion leadership could be seen in the following examples.
• During casual talk, a friend talks about the car he recently bought. He recommends buying it.
• A person shows a friend photographs of his recent tour abroad. He suggests that by using a
particular make of camera, better pictures could be shot.

•A family wants to have a swimming pool in their spacious house. The family head asks
neighbors which pool construction company they should call.

• A parent wants admission for his child in a particular school. He contacts other parents
sending their children to the same school.
 CHARACTERISTICS OF OPINION LEADERS

• Credible source :opinion leaders are knowledgeable. Their advice about a product or service is
considered reliable. As opinion leaders are informal sources of information, it is perceived that they
give advice in the best interest of opinion seekers. The first hand information received from
opinion leaders helps in reducing perceived risks. It properly tackles the anxiety in buying new
products as the opinion is based on the first hand experience.

• Provision of both positive and negative product information :Marketers provide information which is
invariably favorable to the products they are marketing. But opinion leaders are not directly
associated with marketers. They provide both favorable and unfavorable information about the
product. So, opinion seekers have faith in opinion leaders. They are confident that they are
receiving both positive and negative information in an accurate way.
• Sources of information and advice :Opinion leaders are the source of both information and
advice. They simply share their experience about a product or service. Their talk is related to
what they know about a product. In their more aggressive talks, they advise others to buy or
avoid a specific product. They base their advice on proper reasons.

• TWO-WAY STREET: Opinion leaders in one product related situation become opinion receivers
in another situation even for the same product. For example, a new homeowner thinking of
buying a lawn mover seeks information and advice from other people about which brand to
select. After purchasing the lawn mover, he may be satisfied with the product (in the post
purchase experience). Now he has a compelling need to talk favorably about the purchase to
other people to confirm the correctness of his choice. In the first instance, he is an opinion
receiver and in the second he is an opinion leader.
• Sometimes, an opinion leader is influenced by an opinion receiver. For example, a person may recommend
a favorite hotel to his friend. In response the opinion receiver gives his own comments on that hotel. Finally,
the opinion leader may come to realize that the hotel is too small, too isolated and offers fewer amenities
than other hotels.

• Specific characteristics: opinion leaders possess distinct personality traits. These include self confidence and
gregariousness. They are socially inclined, outspoken and are knowledgeable.
 FILL IN THE BLANKS:

1. You are a member of economics club of your college. The club can be referred to as …………………….
group.

2. You are the marketing manager of your company but you want to become the marketing head. This is
your …………………………. group.

3. You drink a particular brand of soft drink because your favorite actor endorses it. You belong to a
…………………… group.

4. Your college football team has to compulsorily wear college sports gear while playing. This is a
…………………..Of your college.
5.You took advice of your computer teacher before buying a PC. Your teacher is said to have
……………………..Power.

6. Your seniors can fire you because they have ……………………..Power.

7. Pepsodent ads that show ill effects of using other toothpastes exerts ………………… influence

8. An organisation can be termed as a ………………. group of individuals.

9 ………………….. groups are non-membership groups but still exert a strong positive

Influence.

10. A volkswagen ad shows that their brands like jetta, passat etc. Are ideal for ceos and mds. This ad exerts
……………… influence.
1. SECONDARY INFLUENCE

2. ANTICIPATORY ASPIRATION

3. SYMBOLIC ASPIRATION

4. NORMS

5. EXPERT

6. COERCIVE

7. NORMATIVE

8. FORMAL

9. ASPIRATION

10. COMPARATIVE