Reference Groups &

Opinion Leadership

What is a Group?

A Group may be defined as two or more people who

interact to accomplish either individual or mutual
goals.

Classification of Groups by membership status

Membership Group: A group to which a person either

belongs or would qualify for membership in.

Symbolic Group: A group in which an individual is not likely

to receive membership, despite acting like a member by
adopting the groups values, attitudes and behavior.

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.
These groups place no restriction on group size or membership nor does it
require that consumers identify with a tangible group.
Reference groups that influence general or broadly defined values or
behavior are called Normative Reference Groups (e.g. A childs
Normative Reference Group is the immediate family) .
Reference Groups that serve as benchmarks for specific or narrowly
defined attitudes or behavior are called Comparative Reference Groups
(A Comparative Reference Groups might be neighboring family whose
lifestyle appears to be admirable and worthy of imitation).

Types of Reference Groups

Classified

by:

Membership
Symbolic

Extent of Interaction
Direct versus Indirect

Nature of Attraction
Aspirational versus Dissociative

Degree of Formality
Formal versus informal

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 groups values and

behaviours

Factors Encouraging Conformity: A Reference

Group Must ...

Inform or make the individual aware of a specific product or

brand.

Provide the individual with the opportunity to compare his

or her own thinking with the attitudes and behavior of the
group.

Influence the individual to adopt attitudes and behavior that

are consistent with the norms of the group.

Legitimize the decision to use the same products as the

group

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 individuals family, his or her friends are
most likely to influence the individuals purchase decisions.

Seeking and maintaining friendships is a basic drive of most people.

Friends fill a wide range of needs: They provide companionship, security, and
opportunities to discuss problems that an individual may be reluctant 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 depict 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.

Such groups are often offshoots of family or friendship groups and

therefore, they function as what has been referred to as purchase pal.

The motivation for shopping with a purchase pal range from a primarily
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 sheer 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 others
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.

Powell, Piccoli and Ives define virtual teams in their literature review article
"as groups of geographically, organizationally and/or time dispersed workers
brought together by information and telecommunication technologies to
accomplish one or more organizational tasks.

Ale Ebrahim, N., Ahmed, S. & Taha, Z. in their recent (2009) literature review
paper, added two key issues to definition of a virtual team as small
temporary groups of geographically, organizationally and/ or time
dispersed knowledge workers who coordinate their work predominantly with
electronic information and communication technologies in order to
accomplish one or more organization tasks.

Contd

Members of virtual teams communicate electronically and may

meet face-to-face.

never

Virtual teams are made possible by a proliferation of fiber optic technology that
has significantly increased the scope of off-site communication.

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

According to Hambley, ONeil, & Kline (2007), "virtual teams require new
ways of working across boundaries through systems, processes, technology,
and people, which requires effective leadership...despite the widespread
increase in virtual teamwork, there has been relatively little focus on the role of
virtual team leaders."

Brand Communities
A brand

community is a community formed on the basis of attachment to

a product or marquee.

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.

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.

Brand

communities are characterized in shared consciousness, rituals and

traditions, and a sense of moral responsibility.

Contd
The

term "brand community" was first presented by Albert Muniz Jr. and Thomas C.
O'Guinn in a 1995 paper for the Association for Consumer Research Annual Conference
in Minneapolis, Minnesota.

In

a 2001 article titled "Brand community", published in the Journal of Consumer

Research (SSCI), they defined the concept as "a specialized, non-geographically bound
community, based on a structured set of social relations among admirers of a brand." This
2001 paper has been acknowledged by Thomson Scientific & Healthcare to be one of the
most cited papers in the field of economics and business.

Many

brands provide examples of brand communities. In computers and

electronics: Apple
Inc. (Macintosh, iPod, iPhone), Holga and LOMO cameras,
and Palm and Pocket PC Ultra-Mobile PCs.
In vehicles: Ford Bronco, Jeep, automobiles, and
Royal Enfield and Harley-Davidson motorcycles.
In toys: Barbie and Lego.

Consumer-action Groups

A particular kind of consumer group-A Consumer Action Group-has emerged in

response to the consumerist movement. 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.

For example, a diverse range of consumer concerns being addressed by private and
public consumer-action groups: neighborhood crime watch, youth development, forest
and wildlife concerns, children and advertising, race and ethnicity, community
volunteerism, legal assistance, public health, disaster relief, energy conservation,
education, smoking, the environment, access to telecommunications, science in the
public interest, credit counseling, privacy issues, and children and internet.

Two broad categories of Consumer Action Groups:

Those that organize to correct a specific consumer abuse and then disband (Agitation
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.

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 childs 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

Other Reference Group

Appeals
A variety of other promotional strategies can function
creatively as frames of reference for consumers.
Respected retailers and the editorial content of selected
special interest magazines can also function as frames
of reference that influence consumer attitudes and
behavior.
e.g. Indian Dental Associations seal of approval for
toothpaste.