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A group may be defined as

Group & Family

Two or more people who interact to accomplish either individual or mutual goals.

Number of persons belonging or classed together

Persons come together to represent or for a common cause

Persons working together

Persons who function collectively

Number of persons who are able to interact with one another, are psychologically aware of each other & who perceive & are perceived as being members of one unit

The broad scope of this definition includes

  • 1. MEMBERSHIP GROUPS

  • 2. INFORMAL GROUPS

  • 3. FORMAL GROUPS

  • 4. SYMBOLIC GROUPS

  • 5. ONE-SIDED GROUPING

  • 6. REFERENCE GROUP

MEMBERSHIP GROUPS - A group to which a person either belongs or would qualify for membership in e.g. the group of women with whom a young girl plays tennis weekly would be considered, for her, a membership group

INFORMAL GROUPS - Groups that emerge or randomly get formed due to formal group members’ interaction with each other e.g. intimate group of two co-workers who each week attend a Weight Watchers class together

FORMAL GROUPS – Groups formed for the achievement of common goals e.g. a local scuba diving club, whose members are mutually interested in scuba equipment, scuba training, and scuba diving trips and vacations.

SYMBOLIC GROUPS - Groups in which an individual is not likely to receive membership, despite acting like a member by adopting the group's values, attitudes, and behavior e.g. professional golfers may constitute a symbolic group for an amateur golfer who identifies with certain players by imitating their behavior whenever possible (e.g., by purchasing a specific brand of golf balls or golf clubs). However, the amateur golfer does not (and probably never will) qualify for membership as a professional golfer because he has neither the skills nor the opportunity to compete professionally

ONE-SIDED GROUPING - An individual consumer observes the appearance or actions of others, who unknowingly serve as consumption-related role models.

REFERENCE GROUP

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.

Reference groups are groups that serve as frames of reference for individuals in their purchase or consumption decisions.

There is no restrictions on group size or membership, nor does it require that consumers identify with a tangible group (i.e., the group can be symbolic such as owners of successful small businesses, leading corporate chief executive officers, rock stars, or golf celebrities).

There is no restrictions on group size or membership, nor does it require that consumers identify with a tangible group (i.e., the group can be symbolic such as owners of successful small businesses, leading corporate chief executive officers, rock stars, or golf celebrities).

Normative reference groups

Reference groups that influence general or broadly defined values or behavior are called normative reference groups.

An example of a child's normative reference group is the immediate family, which is likely to play an important role in molding the child's general consumer values and behavior (such as which foods to select for good nutrition, appropriate ways to dress for specific occasions, how and where to shop, or what constitutes "good" value)

comparative 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 (the way they maintain their home, their choice of home furnishings and cars, their taste in clothing, or the number and types of vacations they take)

Both normative and comparative reference groups are important 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

However, the concept gradually has broadened to include both direct and indirect individual or group influences

Indirect reference groups

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 well-dressed and interesting-looking people on the street

It is the power of the indirect reference group that helps sell the Nike clothing, golf balls, and golf equipment used by Tiger Woods (www.nike.com

Major Consumer Reference group

Factors That Affect Reference Group Influence

The degree of influence that a reference group exerts on an individual's behavior usually depends on the nature of the individual

1.Information and Experience

An individual who has firsthand experience with a product or service either has full information about it or less likely to be influenced by others

While on the other hand a person with or has little knowledge or information about the product or services will seek out advice from others or example of the product

For e.g when a young corporate sales rep wants to impress his client, he may take her to a restaurant that he knows from experience to be good or to one that has been highly recommended by the local newspaper's Dining Out Guide

2. Credibility, Attractiveness, and Power of the Reference Group

A reference group that is perceived as credible, attractive, or powerful can induce consumer attitude and behavior change They consider trustworthy and knowledgeable That is, they are more likely to be persuaded by sources with high credibility. Different reference groups may influence the beliefs, attitudes, and behavior of an individual at different points in time or under different circumstances.

For example, the dress habits of a young male executive may vary, depending on his

place and

role.

.E.g Business suit and Friday casual dressing

  • 3. Conspicuousness of the Product

The potential influence of a reference group on a purchase decision varies according to how visually or verbally conspicuous the product is to others

For e.g such as a luxury item or novelty product); a verbally conspicuous product may be highly interesting or it may be easily described to others

  • 4. Selected Consumer-Related Reference Groups

Consumers are potentially influenced by a diverse range of people that they come in contact with or observe

the following specific reference groups because they give us a kind of cross section of the types of groups that influence consumers' attitudes and behavior

The types of groups

  • 1. The Family

  • 2. Friendship Groups

  • 3. Shopping Groups

  • 4. Work Groups

  • 5. Virtual Groups Or Communities

  • 6. Consumer-Action Groups

1.The Family

It is seen, that from childhood, an individuals needs and consumption decisions are influenced by his/her family.

Importance of the family in various decisions is based on the frequency of contact that individual has with other family members.

Moreover, it is in the family an individual establishes a wide range of values, attitudes and behaviors

2.Friendship Groups

Friendship groups are typically classified as informal groups.

The opinions and preferences of friends are an important influence in determining the products or brands a consumer ultimately selects

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.

3.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 pals

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

Tupperware, for example, generates 90 percent of its $1 billion in annual sales from such consumer parties.

4.Work Groups

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

Both the formal work group and the informal friendship-work group can influence consumer behavior

Recognizing that work groups influence consumers’ brand choices and that many women now work outside of their homes, firms that in the past sold their products exclusively through direct calls on women in their homes now are redirecting their sales efforts to offices and plants during lunch-hour visits

For instance, Avon and Tupperware, two leading direct-to-home marketers, encourage their sales representatives to reach working women at their places of employment

5. Virtual Groups Or Communities

Today due to computers and the Internet, we are witnessing the emergence of a new type of group - virtual groups or communities

Twitter, Linkedin, Facebook

6.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 very large number of such groups that are dedicated to providing consumers with assistance in their effort to make the right purchase decisions, consume products and services in a healthy and responsible manner, and to generally add to the overall quality of their live

For e.g wildlife concerns, , public health,

Family

Family is defined as two or more persons related by blood, marriage, or adoption who reside together and interact to satisfy their personal and mutual needs.

Although families sometimes are referred to as households, not all households are families For example, a household might include individuals who are not related by blood, marriage, or adoption, such as unmarried couples, family friends, roommates, or boarders However, within the context of consumer behavior, households and families usually are treated as synonymous.

The three types of families dominate

The married couple - The simplest type of family, in is the married couple - a husband and a wife As a household unit, the married couple generally is representative of either newly married who have not yet started a family and older couples who have already raised their children

The nuclear family - A husband and wife and one or more children constitute a nuclear family.

The extended family –is the nuclear family, plus other relatives, such as grand parents, uncles and aunts, cousins, and parents-in law.

Stages

  • 1. Bachelor

  • 2. Young Singles

  • 3. Newly Married

  • 4. . Full Nest I

  • 5. Full Nest II

  • 6. Full Nest III

  • 7. . Married Couple without children

  • 8. Unmarried Couples

  • 9. Empty Nest I

    • 10. . Empty Nest II

    • 11. Solitary Survivor

    • 12. . Young Single Parents

    • 13. Middle Aged Single Parents

. Young Singles

These are persons in the age group of 18 to 35 but not married. These persons have their entire income at their disposal and discretion.

men and women differ in consumer behaviour

women more housing-related items and furniture

men more on restaurants and cars

buy: basic kitchen equipment,

basic furniture, cars, holidays

Newly Married

Persons who have been newly married and have no children.They have plenty of income specially if both are employed and they believe in enjoyment and can spend everything on themselves.

Buy: cars, fringes, cookers, life assurance, durable furniture, holidays

Full Nest I

Married couple with youngest children under 6 years. During this family cycle there are increased expenses in the upkeep of children.

Buy necessities - washers, dryers, baby food and clothes, health ,foods vitamins, toys, books etc.

Full Nest II

Married couple with children in the age group of 6 to 12 years; during this period both income and expenses go up.

Buy necessities - foods, cleaning material, clothes, bicycles, sports gear, music lessons, pianos, junk foods, holidays

Full Nest III

Married couple with teenage children living at home. Those children who are studying in colleges in other towns or working cannot be considered part of family, which is contrary to Indian situation.

Expenditure to support children's further/higher education,

Buy: new, more tasteful furniture, non-necessary appliances, holidays, etc

Full Nest III

Married couple with teenage children living at home. Those children who are studying in colleges in other towns or working cannot be considered part of family, which is contrary to Indian situation.

Expenditure to support children's further/higher education,

Buy: new, more tasteful furniture, non-necessary appliances, holidays, etc

Married Couple without children ( Double Income no KID )

Those married couples that remain childless fall in this group and they have entire income to be spent on themselves.

. Unmarried Couples

It includes both heterosexual and gay couples normally both of them earn but have no child and they live together without marriage. This concept is not acceptable in Indian society and such couples are not at all visible in India.

Empty Nest I

It relates to parents whose children do not live with them and couple has none to support except themselves. Usually they are still employed and their level of income is quite high due to long service or progress in business.

. Empty Nest II

This is the stage of life when one retires from service or profession and normally income level falls. But some percentage of these people get themselves re-employed. There are cases where people earn more after retirement. In India in last few years many young persons have got voluntary retirement. Some of them get re-employed; their pension and salary is often more than their earlier salary. But this is the stage where generally children have not settled, some are still studying. Many persons fall in this group by choice but not by age.

Solitary Survivor

When one of the spouse dies due to old age, illness or other reason; one is left alone. In this stage one generally has lower income and needs greater medical care, the person normally lives alone in the west but in India in the old aged parents live with their son's and it is their duty to look after them.

Young Single Parents

Parents under age of 35 years with one or more children at home. Many of them remarry. With 50% divorce rate in USA this is big class there but exception in India where most of females in Hindus decide not to remarry; and live with their in laws, parents, or singly. Some of the girls who were earlier only house wife take to jobs for livelihood for themselves and minor children. Most of such widows in India generally are at the mercy of others and have no or little discretionary income.

Middle Aged Single Parents

This group includes persons over 35 years of age who have one or more children to support. In India family structure is somewhat different and so the consumer behavior also.In such families head of the family, who often is father of the sons, has a dominant role in decision-making.

Key Family Consumption Roles

There are eight distinct roles in the family decision-making process.

Influencer

Information Seeker

Decision Maker / Decider

Purchaser

Gatekeeper

User

Maintainers

Disposer

Influencers

Family member(s) who provide information to other members about a product or serviceHe persuades others in a purchase decision, can also be thought as an opinion leader.He uses personal influences with respect to purchase situations.

Gatekeeper

Family member(s) who control the flow of information about a product or service into the family.The purchase may be carry out or blocked

Deciders

Family member(s) with the power to determine unilaterally or jointly whether to shop for, purchase, use, consume, or dispose of a specific product or service

Buyers

Family member(s) who make the actual purchase of a particular product or service

Users

Family member(s) who use or consume a particular product or service

Maintainers

Family member(s) who service or repair the product so that it will provide continued satisfaction

Disposers

Family member(s) who initiate or carry out the disposal or discontinuation of a particular product or service

FLC concept can be divided into two sections

Traditional Family Life Cycle

The Nontraditional Family Life Cycle

Traditional Family Life Cycle

Although different researchers have expressed various preferences in terms of the number of FLC stages, the traditional FLC models proposed over the years can be synthesized into just five basic stages, as follows:

Stage I; Bachelorhood—young single adult living apart from parents

Stage II: Honeymooners—young married couple

Stage III: Parenthood—married couple with at least one child living at home

Stage IV: Postparenthood—an older married couple with no children living at home

Stage V: Dissolution—one surviving spouse

Nontraditional FLC Stages

ALTERNATIVE

FLC

DEFINITION / COMMENTARY

 

STAGES

FAMILY HOUSEHOLDS

 

Childless couples

It is increasingly acceptable for married couples to elect not to have children. Contributing forces are more career-oriented married women and delayed marriages

Couples who marry later in life (in their late 30s or later)

More career-oriented men and women and greater occurrence of couples living together Likely to have fewer or even no children

Couples who have first child

Likely to

have

fewer

children

Stress

quality

later in life (in their late 30’s or later

Lifestyle - “Only the best is good enough

Single parents I

High divorce rates (about 50 percent) contribute to a portion of single-parent households

Single parents II

Young man or woman who children out of wedlock

has

one

or more

Single parents III

A single poison who adopts one or more children

Extended family

Young single-adult children who return home to

avoid the expenses of living alone while establishing their careers Divorced daughter or son and grandchild(ren) return home to parents Frail

elderly parents who

move

in

with

children

 

Newlyweds living with in-laws

 

NONFAMILY

   

HOUSEHOLDS

Unmarried Couples

 

Increased

Acceptance

of

heterosexual

and

 

homosexual couples

 

Divorced

poisons

(no

High divorce rate contributes to dissolution of

children)

households before children are born

Single

persons

(most

are

Primarily a result of delaying first marriage; also,

young)

men and women who never marry

Widowed persons (most are elderly)

Longer life expectancy, especially for women, means more over 75 single person households

Board Question bank 2007 to 2015 April 2008

1) What is the importance of reference groups to marketers and advertisers ? What factors affect reference group influence ? 2) Design one advertisement each using the reference group concept ,given the following situations.

  • a) You ( Your client) is the market leader of motor cycles in the country .

  • b) You ( Your client ) is a new entrant in the market for motorcycles.

Oct 2008

Explain the different types of consumer reference groups. Think of a major purchase decision taken by your family and analyse the

consumption roles performed by your family members as :

1) Influencer 2) Gatekeeper 3) Decider 4) Buyer 5) User 6) Maintainer

Oct 2010

Reference groups ( Short note )

Oct 2011

What is the importance of reference groups to marketers and advertisers Suggest brand ambassadors ( with reason) to the following :

1) Gym/ Fitness centre 2) Management course in a foreign university collaborated course.

FLC Questions

Oct 2011

April 2012

  • 1. What is the importance of understanding Family Life Cycle in consumer behavior ?

  • 2. Explain the importance of FLC stages in consumer behavior with the help of any two product advertisements

Nov 13

Mr Sunil sharma is an IT professional in Mumbai. He is working in MNC and getting married with Nisha in the next month.Nisha is also an IT professional. Both of them are planning for their future .They are planning their finances and requirements. 1) What will be their needs at different stages of their married life ? 2) Give two examples of ads for their next two stages of Life .