A of specific consumer attitudes and behavior.

A of specific consumer attitudes and behavior.

A reference group is any person or group that serves as a point of comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior. They help us understand the impact of other people on an individual’s consumption beliefs, attitudes, and behavior. It helps marketers choose their methodology to affect desired changes in consumer behavior. From a marketing perspective, reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions.

Reference groups that influence general or broadly defined values or behavior are called normative reference groups. Reference groups that serve as benchmarks for specific or narrowly defined attitudes or behavior are called comparative reference groups. A comparative reference group might be a neighboring family whose lifestyle appears to be admirable and worthy of imitation.

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Normative reference groups influence the development of a basic code of behavior. Comparative reference groups influence the expression of specific consumer attitudes and behavior. The meaning of “reference group” has changed over the years.Originally, reference groups were narrowly defined to include only those groups with which a person interacted on a direct basis. The concept gradually has broadened to include both direct and indirect individual and group influences. Indirect reference groups consist of those individuals or groups with whom a person does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, TV personalities, or even a well-dressed and interesting looking person on a street corner.

References a person might use in evaluating his or her own general or specific attitudes or behavior vary.THE INFLUENCE OF REFERENCE GROUPS Reference groups influence consumer behavior in two ways: 1) They set levels of aspiration for the individual, i. e. they offer clues as to what Lifestyle should be led.

2) They define items appropriate for a member of the group to lead that lifestyle. Consumers also look to reference groups for guidance and advice. Reference groups are usually small groups, and are not as broad as an entire social class. The reference group concept was, in fact, originally developed in connection with small groups.

These include the family, close friends, eighbors, religious groups, work groups and also, athletic groups. The family is recognized as an important reference group. In addition, various family members may play different roles in the purchase consumption process.

Like the family, there are several other social groups that have an enormous influence on our lives. They regulate our lives through establishing standards of dress and conduct, and the accomplishment of tasks on a face-to-face basis. Issues of importance to marketing concerning reference group influence include: • What influence do reference groups exert on individuals? How does reference group influence vary across products and brands? How Reference Groups Influence Consumption Reference groups affect consumers through a variety of means: through norms, through information, and through influencing the value expressive needs of consumers. They influence consumers through bringing about attitude changes by encouraging the expression of certain values and attitudes expressed through the group. Because an individual wants t be a part of a group, he or she will be influenced by the values and attitudes of the group.Furthermore, groups whose members exhibit similar social characteristics are more susceptible to attitude change than groups whose members are less homogeneous. Thus people frequently buy products that others in their group buy.

You must remember, of course, that individuals who feel a strong sense of identification with a group do so because they derive strong psychological or material benefit from being associated with the group. Reference groups also influence consumption through norms and conformity pressures. All members of a group must adhere to the norms established for that group.To enforce normative systems, groups tend to exert conformity pressure, direct or indirect, on their members. For example, teenager peer groups exert pressure on members’ choice of clothing. Conformity pressure is common in everyone’s personal experience. Of course, it is possible that the pressure to conform can produce the opposite effect.

Levels of Group Involvement: In addition, there are three processes or levels of group involvement. These have been termed as compliance, identification and internalization. Compliance involves only overt behavior on the part of the individual and makes no demands on personal beliefs and attitudes.Identification represents a closer, more dependent relationship than that implied by compliance. In identification, the individual complies to maintain a social relationship. Identification also reinforces the self-perceptions of individuals.

Internalizing the values of the group occurs at the third stage. In internalization, consumers enforce the values of the group even in its absence. TYPES OF REFERENCE GROUPS There are many different types of reference groups, and they do not need to be in physical contact in order to be effective. Often, individuals called referent others will serve in a reference group role. The groups are: ) Membership or Non-membership groups: Membership groups are those to which an individual belongs.

In contrast, non-membership groups are those that an individual may aspire to belong to. 2) Formal or Informal Groups: This depends on whether reference group tend to take on a formal or informal structure. 3) Primary or Secondary Groups: A group may be primary or secondary Depending on the frequency of contact. Primary groups can be either formal or informal groups.

If a person is in regular contact with certain individuals such as families, friends, peers and business associates, then these can be referred to as primary informal groups.Secondary formal groups meet infrequently; are well structured and not so closely knit. Thus, shopping groups and club membership groups constitute secondary groups because of their less frequent contact. 4) Aspiration groups are classified into two types: Anticipatory aspiration groups, or those that a person anticipates joining at some future time. The appeal of the group is in the anticipation of eventually arriving at the top. Symbolic aspiration groups are those that an individual is not likely to belong to, such as professional sports groups, even though the person may be attracted to them.

Marketers appeal to symbolic aspirations by using celebrities to advertise certain products. Each type of reference group has importance in marketing, depending on the type of influence exerted. The common factor among these various types of reference groups is that, each is used by consumers as a point of reference at different times, to evaluate actions, beliefs and attitudes. Primary groups are more important to the consumer in developing product beliefs, tastes and preferences and have a more direct influence on purchasing behavior.

As a result, advertisers frequently ortray consumption among friends or, within a family context, such as a family eating breakfast or, in some other group setting. 8 Reference Group Functions and Types of Influence Exerted It is possible to further classify reference groups into four types, depending on the function they perform and the kind of influence they exert reference groups operate by establishing certain norms, roles and status within the group for members to follow. As explained earlier, norms are unwritten codes or, standards of conduct that are assigned to individuals within the group.In addition, specific roles have been identified in group purchasing behavior in the attempt to select the best among alternative brands or makes of a product. These are described as those of the influencer, the gatekeeper (i. e.

the individual who has the maximum control over the flow of information), the decision maker, the purchaser and, the final user. Status positions have also been designated within a group. High status of members within a group implies greater power and influence. Products are sometimes purchased to demonstrate status, for example an elegant dress or, an expensive car.

The influence exerted by the group depends on the type of reference group it is. There are four general types of groups namely, normative, comparative, status and dissociative groups. Normative Reference Groups These are group whose values, norms and perspective an individual uses in defining a personal social situation. Norms represent shared value judgments about how things should be done by members of the group.

For example, dress codes indicate the impact of normative influence on clothing. Similarly, norms influence how much a person eats or drinks at a party.Normative influence refers to the influence exerted by a group to conform to its norms and behaviour. A group can exert normative influence in the purchase of clothes, furniture and appliances because these items are visible. Normative influence may also occur for items’ like mouthwash, even though such items are not visible, because of fear of punishment of non-acceptance by the group.

However, normative influence is not likely to occur for products like vegetables, though informational influence could occur in such cases. Since normative influence is based on the desire of an individual to receive the ewards of the group, the influence exerted by the group in such is also termed as utilitarian influence. Comparative Reference Groups Consumers constantly compare their attitudes to those of members of their important groups. In doing this, they seek to support their own attitudes and behavior. As a result, the basis for comparative influence is the process of comparing oneself to other members of the group and judging whether it will be supportive. You will find that new residents in a neighborhood are attracted to neighbors who are similar to themselves because they reinforce existing attitudes and behavior.You will also find this in advertising that uses spokespersons that consumers perceive as being similar to them.

The function of comparative reference groups is to beliefs, values and attitudes. Furthermore, in terms of reference group theory, it is not necessary for consumers to be in direct social contact with a reference group in order to be influenced by it. In the case of comparative reference groups, value-expressive influence occurs when the group is used to express certain values. For example, smoking cigarettes in reference groups where it is okay to smoke is a type of value expressive influence.In fact, expressing the values of the group is a good way to become accepted by the group and form a close association with it.

Dissociative Reference Groups These are negative reference groups. They are negative to the extent that an individual does not wish to be identified with them and, therefore, tries not to behave or dress like members of the dissociative group. Such dissociation from a group may occur when individuals are striving to move into the higher social classes. They may attempt to avoid buying the products and services used by the dissociative group.

Status Reference Groups These are groups in which an individual seeks acceptance. An individual need not be a member of such a group in order to be influenced by it. In fact, when a person is not a member of the group, it is referred to, in such cases as an aspiration group. Reference Groups, Social Influence and Social Power The influence of social class as well as of reference groups on consumer behavior is felt through the influence of social power.

The nature of the social power of these groups on consumer behavior can best be understood by examining the various bases of power.These are five bases of social power. These are: 1) Reward Power This is the ability to give rewards.

Rewards may take several forms: money, gifts, psychological rewards such as recognition and praise. The magnitude of the reward also increased with the amount of power. In some situations, the use of products offers the rewards of group acceptance, for example clothing. 2) Coercive Power This is the ability to give threats, or withhold rewards. An individual can thus be threatened or coerced to behave in a particular manner, for example in purchasing accepted clothing.Deorants, mouthwash, life insurance, are also sold frequently by using coercive power. 3) Legitimate Power Legitimate power is closely linked to cultural or group values and involves the sanction of what ought or should be done, because the group has a legitimate right to influence persons just because they belong to it.

4) Referent Power The basis of referent power is the identification and feeling of oneness of the person with the group. It arisen because a person admires or would like to be associated with the group.Referent power is often used to buy status-oriented products.

Consumers are urged to obtain a similar status by purchasing the item recommended. 5) Expert Power Consumers accept information from members within a group whom they perceive to be experts. From these various bases of power, it appears that a person may be attracted to and conform to group norms either, in order to gain praise or recognition or in response to coercive power. Factors Affecting the Influence of Reference Groups Reference groups influence is accepted and sought by individuals because of he perceived benefits that it provides. Thus, the interaction may result in rewards of friendship, information and satisfaction. However, the degree of influence that a reference group exerts on an individual’s behavior depends on several factors.

1) How Informed and Experienced the Individual is: A person who has little or no first-hand experience with a product or service, and also little or no information, will tend to rely on reference groups. Where there is insufficient experience or information, a consumer is more susceptible to the influence of others.Reference Group Credibility: The higher a reference group is rated on credibility, the more powerful it will be perceived to be, and the more it will tend to change the beliefs, attitudes and behaviour of consumers.

Also, the more it will be used for information on product quality. REFERENCE GROUP INFLUENCE ON PRODUCTS AND BRANDS Individual often buy particular brands because they observe others buying them, and not necessarily in order to comply with group behavior. At social gatherings too, people discuss at lengths, products they like and dislike, recounting personal experiences with products they have used.It is necessary to consider carefully, therefore, how much influence reference groups are likely to have for a product or service.

Those products or services that have strong group usage or connotation should then be presented in a group context in advertising situations. It has been suggested that reference group influence on both, product and brand decisions is a function of its conspicuousness. Conspicuousness affects the marketing of goods depending on how products and brands fit into different categories of conspicuousness. There are two dimensions or elements by which conspicuousness is assessed.These are the exclusivity and the visibility of a product. The exclusivity dimension refers to exclusivity in ownership of the product. This means that, if everyone already owns a product, it is less conspicuous than if only a few people own it.

For example, when a maker of designer shirts asserts only 11 men in this world will wear this shirt, he by deliberately restricting his output per pattern in imparting exclusivity to the product. You see, in Figure 3. The exclusivity dimension of conspicuousness is represented in terms of necessity goods to the left versus luxury goods at the right.This means that products that are necessities will be owned by most consumers and will not be very conspicuous. Products that are luxuries will be owned by the fewer consumers and will be more conspicuous. The other is the visibility dimension.

This refers to the product and brand being seen and identified by other people. This has its effect primarily on brand decision. The visibility dimension of conspicuousness is built into the diagram as a public private dimension. This means that products consumed in public are more conspicuous, while products consumed in private are less conspicuous.If you apply both these dimension, you will get four categories of products. For public luxuries, the potential for reference group influence is high.

This occurs because few people own these products in the first place. In addition, since such products have high visibility, the brand or model will also be noticed. For private luxuries, fewer people own these, so that, having the product will by it provide exclusivity benefits.

However, since such products are not easily seen by others, the brand or style will be less influenced by others.For public necessities, reference group influence will not be very strong on the product. However, because of product visibility, reference group influence. On the brand will be strong.

Consider wristwatches, which are labeled public necessities. Because they are owned by most people, there is likely to be little reference group influence on whether to wear a watch. However,-because they are easily visible and everyone can see whether a person is wearing a wristwatch, the brand may be susceptible to reference group influence.

For private necessities, products that are required by almost everyone, reference group influence will be weak on both the product and the brand because such items are not very visible. Reference group influence will therefore vary depending on whether the products and brands are public necessities, private necessities, public luxuries or private luxuries. According to reference group theory, group influence is greatest for luxury goods that are consumed publicly, and least for necessities that are consumed privately.

Using the typology shown in the matrix; the following conclusions about reference group influence can be drawn: 1) Influence on Product and Brand (Public Luxuries) Certain groups are more likely to allow smoking, than others. If smoking is the norm, the group is likely to express a preference for a certain brand. Reference group influence is therefore likely to be strong for both the product and the brand. 2) Influence on Product only (Private Luxuries) Some product categories are so distinctive that owing them is sufficiently representative of group standards, for example, air conditioners, and home computers.Once a family buys a home computer, for instance, friends and neighbors will come into contact with the recentlyacquired product and the pattern of ownership will spread within the group. 3) Influence on Brand only (Public Necessities) There are some products that are used by almost everyone. For example, clothing, furniture, magazines, toilet soaps.

In such cases, the product is not subject to group influence. The brand becomes an important factor subject to group influence. Thus, one group may emphasis designer clothes as a distinguishing feature.Another may emphasize leisure wear. Another group may read high brow magazines as the norm. 4) No Group Influence (Private Necessities) Some products have low social visibility for both the product and the brand. In such cases reference group influence is weak or absent.

Such products are then bought on the basis of product attributes suitable to the consumer. Products low in visibility, complexity and perceived risk such as bread, are not likely to be susceptible to personal influence.

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