REFERENCE GROUPS AND ITS IMPLICATIONS ON CONSUMER BEHAVIOUR

submitted to:
Ms. Meenakshi Gujral

submitted by:
SimranPreet Singh IMBA 37 Manisha Sharma IMBA 05 Surbhi Sharma IMBA 20

TABLE OF CONTENTS
S no
1. 2. 3. 4. 5.

Particulars
Introduction Types Group influences Factors that influence reference groups Bibliography

Page no
1 7 9 11 14

2

ACKNOWLEDGEMENT
I hereby wish to acknowledge Ms.Meenakshi Gujral for her valuable guidance, mellow criticism and above all unflinching moral support throughout the work. I must also thank the library and other technical staff for their assistance during the project. I must also not forget to thank my family and friends for their constant support during the work.

3

RESEARCH METHODOLOGY
The data collected in this entire report contains secondary data and exploratory research has been conducted to collect the data for the given topic. Following are the various sources of informationo Internet o Newspapers o Consumer behavior books

4

INTRODUCTION

The study of consumer behavior is the most important factor for marketing of any goods and services. The consumer behavior suggests how individuals, groups and organization select,buy,use and dispose of goods,services,ideas or experience to satisfy their needs and wants.

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
5

general or specific values, attitudes or a specific guide for behavior. This basic concept provides a valuable perspective for understanding the impact of other people on an individual’s consumption beliefs, attitudes and behavior.

Reference groups are used in order to evaluate and determine the nature of a given individual or other group's characteristics and sociological attributes. It is the group to which the individual relates or aspires to relate himself or herself psychologically. It becomes the individual's frame of reference and source for ordering his or her experiences, perceptions, cognition, and ideas of self. It is important for determining a person's self-identity, attitudes, and social ties. It becomes the basis of reference in making comparisons or contrasts and in evaluating one's appearance and performance.

6

TYPES
Reference groups provide the benchmarks and contrast needed for comparison and evaluation of group and personal characteristics.

Types of reference groups

normativ e
7

comparati ve

indirect

1.

Normative reference groups:-A groups in which individuals are motivated to gain or maintain acceptance. To promote this acceptance, individuals hold their attitudes in conformity with what they perceive to be the consensus of opinion among group members. Normative reference groups influence the development of a basic code of behavior.

2.

Comparative reference group:-A group that serves as benchmarks for specific or narrowly defined attitude or behavior is called comparative reference groups. A comparative reference group might be a neighboring family whose lifestyle appears to be admirable and worthy of imitation.Compartive reference groups influence the expression of specific consumer attitudes and behavior.

3.

Indirect reference group:- It consists of those individuals or groups with whom a person not have direct face-to-face contact, such as movie stars, sports heroes, political
8

leaders, TV personalities, or even well – dressed and interesting – looking people on the street.

GROUP INFLUENCES

Humans are inherently social animals, and individuals greatly influence each other. A useful framework of analysis of group influence on the individual is the so called reference group— the term comes about because an individual uses a relevant group as a standard of reference against which oneself is compared. Reference groups come in several different forms.

9

The aspirational reference group refers to those others against whom one would like to compare oneself. For example, many firms use athletes as spokespeople, and these represent what many people would ideally like to be.

Associative reference groups include people who more realistically represent the individuals’ current equals or near-equals— e.g., coworkers, neighbors, or members of churches, clubs, and organizations. Paco Underhill, a former anthropologist turned retail consultant and author of the book Why We Buy has performed research suggesting that among many teenagers, the process of clothes buying is a two stage process.

In the first stage, the teenagers go on a "reconnaissance" mission with their friends to find out what is available and what is "cool." This is often a lengthy process. In the later phase, parents—who will need to pay for the

10

purchases—are brought. This stage is typically much briefer. Finally, the dissociative reference group includes people that the individual would not like to be like. For example, the store literally named The Gap came about because many younger people wanted to actively dissociate from parents and other older and "uncool" people. The Quality Paperback Book Club specifically suggests in its advertising that its members are "a breed apart" from conventional readers of popular books.

Reference groups come with various degrees of influence. Primary reference groups come with a great deal of influence—e.g., members of a fraternity/sorority. Secondary reference groups tend to have somewhat less influence—e.g., members of a boating club that one encounters only during week-ends are likely to have their influence limited to consumption during that time period.

11

FACTORS THAT INFLUENCE REFERENCE GROUPS
1.

Information

and

experience:-An

individual who has firsthand experience with a product or service, or can easily obtain full information about it, is less likely to be influenced by the advice or examples of others.

On the other hand,a person who has little or no experience with a product or service and does not expect to have access to objective information about it is more likely to seek out the advice or examples of others.

2.

Credibility, attractiveness, and power of the reference group:-A reference group that is perceived as credible, attractive, or

12

powerful can induce consumer attitude and behavior change.

For

example, with

when

consumers

are

concerned

obtaining

accurate

information about the performance or quality of a product or service they are likely to be persuaded by those whom they consider trustworthy and knowledgeable. That is they are more likely to be persuaded by sources with high credibility.
3.

Conspicuousness of the product:-The potential influence of a reference group on a purchase decision varies accordingly to how visually or verbally conspicuous the product is to others. A visually conspicuous product is one that will stand out and be noticed , a verbally conspicuous product may be highly interesting or it may be easily described to others.

Product that are especially conspicuous and status revealing are most likely to be purchased with an eye to the reaction of relevant others. Privately consumed products that are less conspicuous are less
13

likely to be purchased with reference groups in mind.

4.

Reference conformity

groups

and

consumer may have

:-Marketers

divergent goals with respect to consumer conformity. Some marketers, especially market leaders,are interested in the ability of reference groups to change consumer attitudes and behavior by encouraging conformity. To be capable of such influence, a reference group must accomplish the following:

Inform or make the individual aware of a specific product or brand.

Provides the individual with the opportunity to compare his or her own thinking with the attitude and behavior of the group.

Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group.

14

Legitimize the decision to use the same products as the group.

SELECTED CONSUMER-RELATED REFERENCE GROUPS

1. 2. 3. 4. 5. 6.

Friendship groups Shopping groups Work groups Virtual groups or communities Brand communities Consumer action groups

Are some of the important reference group appeals used by marketers to influence consumer decisions.

15

BIBLIOGRAPHY
Sites Google.com Wikipedia.org Netmba.com

Books Consumer Behaviour 9th edition by Leon G. Schiffman and Leslie Lazar Kanuk