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REFERENCE GROUP –
MEANING, NATURE,
CATEGORIES, INFLUENCE ON
CONSUMER BEHAVIOUR,
APPLICATION
A Reference group refers to a group of people
you refer to, while making buying decisions. It is a
group that serves as a reference point for an
individual for his/her beliefs, attitude and
behaviour.
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A group consists of two or more individuals who
share a set of norms, values or beliefs and have a
defined relationship such that their behaviour is
interdependent.
Advertising Management (20)
Articles (240)
Banking and Insurance (10)
Blog (35)
Reference Groups are basically small in size and
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Business & Entrepreneurship
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Reference Group - Consumer Behaviour - BBA|mantra
differ from one individual to another. Family
members, Relative, Friends, Colleagues and other
close acquaintance are usually termed as
Reference Group. Common organizations like
Colleges, Schools, Police Academies and
membership firms also fall under Reference Group.
Characteristics of Reference Groups
Reference Group consists of people who share
interests in common
People in reference groups are sought for before
any real purchase decision is made
Opinions or recommendations made by people in
Reference Groups have a huge impact on the
approach and behaviour of a potential consumer
Reference Groups many a times acts as the
factor responsible for creating aspirations in
other members of the group
Reference Group tends to provide ideas
pertaining to products that can be purchased
with reference to specific lifestyles
Reference Groups play an important role in
setting standards pertaining to purchase
decisions made from time to time
Reference Groups become successful when
homogeneity is found in the same
Some Reference Group that are common to
public exert pressures related to conformity to
set rules
All members associated with the group are
expected to certain rules and regulations set
through mutual understanding
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(6)
Business Communication (15)
Business Environment (21)
Business Ethics (2)
Business Law (1)
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Management (18)
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International Business (13)
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Portfolio Management (10)
IT & Technical Skills (5)
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System (4)
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Marketing & Advertising (7)
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Reference Group - Consumer Behaviour - BBA|mantra
Nature of Reference Group
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Public Finance (11)
Research Methodology (9)
Norms – These are unwritten codes or standards
of conduct that are assigned to an individual
within a group.
Roles – These are functions that an individual
assumes or that the group assigns to an
individual to attain group objectives. E.g. The
influencer, the gatekeeper, decision maker,
purchaser, consumer
Status – It is the position of authority that is
designated within a group. High status implies
greater power and influence.
Socialisation – It is the process by which an
individual learns the group norms and role
expectations.
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(1) Aspirational Groups – These are groups in
which people are not members but desires to
become one on a future date. The aspiration may
become true once they are ready to join the group
at the future point of time. The influences exerted
by such group members on consumers make them
join many groups every now and then.
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(2) Primary and Secondary Groups – Primary
Groups are basically ones whose members are
closely knit. Family and relatives fall in this group
Secondary Groups are not as closely knit as
Primary Groups. They may be memberships in
clubs where the meeting may happen only once a
while. The influence exerted by both the Primary
https://bbamantra.com/reference-group-consumer-behaviour/
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Reference Group - Consumer Behaviour - BBA|mantra
and Secondary Group members play a crucial role
in the decision making process pertaining to
purchase of goods and services
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(3) Non-Membership and Membership Groups –
As the very name suggests, Membership Groups
are the ones which insist on people to become
members to avail benefits offered by the same.
Non-Membership group are general groups in
which one associate them for keeping self updated
about certain aspects of their interest. Such groups
do not insist on any type of memberships. The
influence exerted by Membership groups on
consumers and their purchase decisions are many
a times higher than that of the same from nonmembership groups. This is mainly because of the
adherence levels exhibited in Membership groups
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(4) Formal and Informal Groups – While formal
groups are bound by set rules and regulations
Informal groups lack the same. The unstructured
nature of Informal groups tends to exert lesser
influence over consumer preferences than the
Formal Groups which are highly structured. Due to
the structure nature of Formal groups, the
influence on the group members with respect to
various aspects is generally high.
InAuence of reference groups on consumer
behaviour
The influence of reference groups depends upon –
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An individuals information and experience
Credibility of the group
Attitude towards the group
The nature of the product
The involvement of members in a group can range
anywhere between a simple one or one with high
dedication levels. It can be divided into:
Compliant
Identity
Internalization
Compliant – This type of group members remain in
a group paying the set membership fees,
participating in the meetings and other get
together in the instructed manner and adhere to
things like dress code etc. during all occasions.
They do not undergo any change as far as their
attitude and personality is concerned just because
they are the members of the group. In a typical
consumer scenario, being one of the members of
the group, people tend to go in for the brands and
products when the same is suggested by another
group member.
Identity – People of this type tend to mend their
attitudes and ideas to suit the objectives of the
organization they associate themselves with. They
will be more inclined towards attaching themselves
with the group through services and other such
activities. They express their pride in being one of
the group members and show this as their key
identity. In a real life purchase decision making
scenario, any consumer who identifies himself with
the group he is associated with, respects the
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opinion of the group members more than any other
thing
Internalization – The involvement levels of people
who fall in this category are very high. Not only
they act highly dedicated to the group but they pull
in others into the group. They motivate other
members of the group to get involved in a deeper
manner. They become one with the group. Anyone
with such high levels of involvement in groups will
go in for recommendations from other in the group
with respect to their purchase decisions. They try
to influence the purchase decision of others also
basing the same on the recommendations of other
group members.
Many factors pertaining to Reference Groups tend
to influence consumers and their purchase related
decisions. Three factors concerned with Reference
Groups are Norms, Status and Roles.
(1) Norms are rules set by Reference Groups in
writing. People who belong to the Group are
expected to adhere to the same at all points of
time. Norms force consumers to go in for certain
options as a part of their adherence process.
(2) Status of members in the reference Groups
matter the most when it comes to decision making
pertaining to purchase. Member who are highly
positioned within a group have the power to take
the final decision of purchase. For instance, in the
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case of a family, the Father holds an upper hand in
decision making pertaining to purchases.
(3) Roles here refer to the part played by every
member of the reference group. In a typical family
environment, each family member plays a different
role like gatekeeper, initiator, decision maker,
influencer and many more.
Categories of Reference Groups
The four categories are Normative Groups,
Comparative Reference Groups, Status Reference
Groups and Dissociative Groups.
(1) Normative Groups Park and Lessig – A
consumer is motivated to conform to the norms
and behaviour of the group if :
The group provides significant rewards for the
compliance
The individual’s behaviour in conforming is visible
to the member
These are the groups that care for set norms and
ensure that the same are held up at all points of
time. Influence exerted on the consumer by such
Normative Groups is many a time subjective. This
type of influence is also termed as Utilitarian
Influence. Any group expectation getting fulfilled by
one of the individuals in the group is referred to as
Utilitarian Influence. For instance, when you
purchase a refrigerator brand suggested by your
family member without choosing the one of your
choice, the influence is called as Utilitarian. Young
students who avoid wearing certain style of clothes
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for the fear of getting mocked by his friends
experiences the type influence common to
Normative groups.
(2) Comparative Reference Groups –These are
groups with whom the individual compares himself
and his attitudes. They provide a basis for
validating beliefs, values and attitudes. Value
expressive influence.
Getting influenced by a likeminded neighbor is a
typical happening that can be witnessed in
Comparative Reference Groups. The main
characteristics of such groups is the validation of
practices and belief systems that happen between
people who belong to the group. The influence
exerted in such type of groups is termed as Value
Expressive Influence. The reason for the term
‘Value expressive’ is the uniformity in thoughts and
belief systems that prevails between the members
of the group. For instance such a group members
may be of the same opinion when it comes to
smoking or drinking habit.
(3) Status Reference Groups –A group in which
one refers to the position or status of the people in
a group before making a purchase decision.
This group is also called as Aspiration Group since
anyone who wants to exert influence being a
member of this group may do so based on his
status. The higher the status in the group, the more
intense the influence exerted on other group
members.
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(4) Dissociative Groups – Some individuals do not
want to be linked to, or identified by a group of
individuals and try to dissociate themselves from
the group.
Many a times, people wish to and dissociate
themselves from a group which they consider as a
‘not suitable one’ for themselves. For instance, in a
typical office scenario, a person may not want
himself to be identified with a group of people who
are considered as dishonest. He tends to
dissociate himself from them. As a consumer, he
keeps away from buying the products and brands
any of the other group members buys.
Application of Reference groups in Marketing of a
product –
Product purchases can be influenced by using the
following to promote products:
Celebrities
Experts and Professionals in the relevant field
Good spokesperson
Opinion leaders
Characteristics of groups influencing Consumer
Behaviour
People who associate themselves with a group
adhere to norms that are common to all in the
group
Their beliefs and value system complement each
others’ thoughts
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They share a relationship that is either direct or
indirect by nature
Their approach towards each other in taking
decisions is mutual and interdependent
Every member of the group learn many crucial
things from others present in the group
The above characteristics enable organizations to
device their marketing mix based on the approach
and behaviour of each individual group.
Stratification is thus leveraged to the marketing
advantage of organizations which focuses on
tapping the right set of customers for selling their
products and services.
Reference Group and Social Power
The influence of reference groups on Consumer
Behaviour is felt through the influence of
Social power. The following powers are used to
influence individuals in a group:
(1) Reward Power – It is the power to restrict or
allocate material resources and rewards to a
person.
Consumers are offered rewards in the form of cash
and kind whenever they yield to the influences of
the group they are associated with.
(2) Coercive Power – It is the power based on
application of fear, pain, restrictions etc. on a
person.
Many a times, consumers are threatened to go in
for certain brands or to avoid a particular brand.
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Here coerciveness acts as the main power and so
is termed as Coercive Power
(3) Legitimate Power – This power is based on
the position of a person in an organization or
social unit.
As the terminology implies, when someone gets
what is legitimately due to them as a consumer, it
is termed as Legitimate Power
(4) Referent Power – A person tries to copy the
behaviour of another person whom he takes as an
idol and wants to be identified as him. The referent
power lies with the person whose personality
characteristics others try to copy and are attracted
towards him.
(5) Expert Power – It is one`s power to withhold
information from others. It is based upon one`s
experience, special skill, or knowledge.
The behaviour of consumers tend to get modified
when a person who is an expert in the product or
area of interest vouches otherwise. The expertise
power rules over purchase decision made by the
consumers to a great extent.
BY: BBAMANTRA / IN: ARTICLES, BUSINESS COMMUNICATION, CONSUMER
BEHAVIOUR / WITH: 0 COMMENTS
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