Reference Groups

Reference Group

• A Reference Group is any person or group that serves as point of comparison (or reference) for an individual in forming either general or specific values, attitudes, or a specific guide for behavior.

• From a marketing perspective, reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions.

Types of Reference Group Influence• Informational Influence• When a member of reference group provides

information used to make purchase decisions

• Normative Influence• When we conform to group norms in order to

belong to that group

• Identification Influence• When we identify with, and internalize, a group’s

values and behaviours

Selected Consumer-Related Reference Groups• Friendship Groups

• Shopping Groups

• Work Groups

• Virtual Groups or Communities

• Brand Communities

• Consumer-action Groups

• Celebrities

Friendship Groups

• Friendship groups are typically classified as informal groups because they are usually unstructured and lack specific authority levels.

• In terms of relative influence, after an individual’s family, his or her friends are most likely to influence the individual’s purchase decisions.

• Friends fill a wide range of needs: They provide companionship, security, and opportunities to discuss problems that an individual may be unwilling to discuss with family members.

• Marketers of products such as brand-name clothing, fine jewelry, snack foods, and alcoholic beverages recognize the power of peer group influence and frequently show friendship situations in their advertisements.

Shopping Groups

• Two or more people who shop together, whether for food, for clothing, or simply to pass the time, can be called a shopping group.

• The motivation for shopping with a purchase friend range from a mainly social motive to helping reduce the risk when making an important decision.

• A special type of shopping group is the in-home shopping party, which typically consists of a group that gathers together in the same home of a friend to attend a “party” devoted to demonstrating and evaluating a specific line of products

Work Groups

• The absolute amount of time people spend at their jobs, frequently more than 35 hours per week, provide ample opportunity for work groups to serve as a major influence on the consumption behavior of the members.

• Formal Work Group: it consists of individuals who work together as part of a team, and thus have a sustained opportunity to influence each other’s consumption related attitudes and actions.

• Informal Work Group: it consists of people who have become friends as a result of working for the same firm, whether or not they work together as a team, and they can influence the consumption behavior of other members during coffee or lunch breaks or at after-work meetings

Virtual Groups or Communities• A virtual team (also known as a geographically

dispersed team or distributed team) is a group of individuals who work across time, space and organizational boundaries with links strengthened by webs of communication technology.

• It define "as groups of geographically, organizationally and/or time dispersed workers brought together by information and telecommunication technologies to accomplish one or more organizational tasks.”

Cont…

• Members of virtual teams communicate electronically and may never meet face-to-face.

• Virtual teams allow companies to acquire the best talent without geographical restrictions.

Brand Communities

• A brand community is a community formed on the basis of attachment to a product 

• Recent developments in marketing and in research in consumer behavior result in stressing the connection between brand, individual identity and culture. Among the concepts developed to explain the behavior of consumers, the concept of a brand community focuses on the connections between consumers.

• A brand community can be defined as an enduring self-selected group of actors sharing a system of values, standards and representations (a culture) and recognizing bonds of membership with each other and with the whole.

Consumer-action Groups• Today there are a large number of such groups that are

dedicated to providing consumer products in a healthy and responsible manner, and to generally add to the overall quality.

Two broad categories of Consumer Action Groups:

• Those that organize to correct a specific consumer abuse and then disband (demonstration against liquor shop in a community) .

• Those that organize to address broader, more persuasive problem areas and operate over an extended or indefinite period of time (Group against drunk driving).

Celebrities

• A celebrity is a person who has a prominent profile and commands a great degree of public fascination and influence in day-to-day media. The term is often synonymous with wealth (commonly denoted as a person with fame and fortune), implied with great popular appeal, prominence in a particular field, and is easily recognized by the general public.

Cont….

The Expert

• A second type of reference group appeals used by marketers is the expert, a person who, because of his or her occupation, special training, or experience, is in a unique position to help the prospective consumer evaluate the product that the advertisement promotes.

• e.g. An ad for a quality frying pan may feature the endorsement of a chef.

The Common Man

• A reference group appeal that uses the testimonials of satisfied customers is known as the common-man approach.

• The advantage is that it demonstrates to prospective customers that someone just like them uses and is satisfied with the good or service being advertised.

• The common man appeal is especially effective in public health announcement (such as antismoking or high B.P. messages), for most people seem to identify with people like themselves when it comes to such messages.

The Executive and Employee Spokesperson• The popularity of this type of advt. probably is

due to the success and publicity received by a number of executive spokespersons.

• Like celebrity spokespersons, executive spokespersons seem to be admired by the general population because of their achievements and the status implicitly conferred on business leaders.

• e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.

Trade or Spokes-Character• These are often employed as attention grabbers,

acting as spokespersons to promote children’ products.

• Trade characters are intended to bond a child to a brand so that the child’s brand awareness might form the basis of brand preference either immediately or later in life.

• e.g. Animated characters used by marketers in advertisements for children products