Consumer Behaviour

Group and Reference Group Influence

Group
A collection of people interacting together in an
orderly way on the basis of shared norms,
values and expectations about one anothers
behavior
Time and communication

Characteristics

Frequent Interactions
Shared norms and mutual
interest
Shared values and belief
Joint sense of responsibility
Betterment of the group

Elements affecting group

Behavior

Groups Size
Group leader
Nature and motivation of
members
Norms of the group
The roles assigned to each
individual
The environment
The task

Group Influence
Useful analysis framework of group influence on
individual is the reference group. Basically for
comparison purposes.
Aspirational reference group refers to those others
against whom one would like to compare oneself
Associative reference groups includes people who
realistically represents the consumers current or
near-equals
Dissociative reference group include people that
the individual would not want to be like

Types of Social Groups

Primary Group A small collection f people
who interact in a personal, informal and
intimate way
Secondary Group large groups whose
relationships are institutional and formal. They
may last for years but may scatter after a short
duration. More formal, specific purpose,
conceptually related, rarely emotionally tied.

 In-group and out-group In-group is a social

class where people have a sense of belonging.
In-groups are usually primary groups. An outgroup is one where members do not have the
sense of belonging.
Peer group Basically friends group or a
primary group, same age people somewhat
same status
Reference group Psychologically identified by
people and used as reference while evaluating
themselves

Consumer Relevant Groups and Types

Friendship Groups Informal groups, unstructured.
Seeking and maintaining friendship is a basic drive
for a majority of the people. Influence on the product
item an individual finally selects
Shopping group 2 or more people who shop
together for clothing, food or pass time. Purchase
pals. MGM campaigns
Work Groups People on an average spends 40 hrs
a week in their work place. Informal as well as formal
Virtual Groups or communities
Consumer action groups Temporary action group
and Permanent action group

Reference Groups
People refer to these groups when evaluating their
qualities, attitude, values, behavior and desires

Types of reference groups

Normative reference
groups Face to face
relation, Direct relation
Comparative reference
group less direct
relationship. Consumers
adopts the lifestyle
gradually.

Factors affecting Reference

group Influence
Information and
Experience
Credibility, attractiveness
and power of the
reference group
Conspicuousness of the
product Visible/verbal
eg cars , salt, etc..

Application of Reference group

concept for promotion
Make the consumers aware of specific Brand or
product
Offer the consumers a chance to compare his/her
behavior and attitudes with the behavior and attitude of
the group
Influence the individual to adapt behavior that is in sync
with group
Aspiration, Administration, Empathy and Recognition
If he uses it, it must be good, I will be like him, if I
use it, I have the same problem he had, and what
worked for him should work on me too

3 major types of reference groups

Celebrities
Testimonials Eg;- Sachins MRF bat
Endorsement Eg;- Priyanka Chopras Hero
pleassure
Actor Eg- Salman khan and revital
Spokesperson Eg;- Florida and nuvo

Experts Chef introducing a cooking vessel

The common man Eg;- Fevicol, Vayoodha
hair oil,etc..
Other reference group Executives, Retailers
and editorial contents, Trade characters and
cartoons, Seal of approval and product rating

 Celebrity Credibility
Benefits of reference group appeal
Increased brand awareness
Reduced perceived risk

Family As a Group
The family is a group of persons related by
blood, marriage or adoption. Who resides
together . It is a basic social group
3 types of families
Married Couple Husband, Wife and older
couples who have already raised their children
Nuclear family Husband, wife and children
Extended Family Nuclear family + 1 grand
parent

Functions of family

Economic well-being
Emotional support
Suitable life style
Childhood socialization

Key consumption roles

Initiator
Influencer
Information gatherer
Decider
Purchaser
Users
Maintainers
Disposers

Decision Making of different

family members

Dynamics of Husband/Wife
decision

Patriarchal
Matriarchal
Equalitarian (Synergic)

Product or service variation

Variation by family role
structure orientation
Variation by stage in
decision making process
Variation by product
features

Decision by Children

Effects of Variable on Family

decision

Children influence on their

parents in buying (Yield)
Children viewing T.V
Teenage children

Culture
Social Class
Reference groups
Mobility
Geography location
Stage in family life cycle

Role and Importance of Family Life

Cycle
Traditional Family Life Cycle
Stage 1 Bachelorhood Unmarried adult living away
from parents
Stage 2 Honeymooners Young married couple
Stage 3 Parenthood Married couple with a
child/children living with them
Stage 4 Post-Parenthood Older married couple
living at home with no children
Stage 5 Dissolution Only one spouse alive

Personal Influence and Opinion

Leadership
Individuals power to control or dominance on
others purchasing decisions
External or internal
Opinion leadership happens through WOM
Influence is informal and interpersonal
Opinion leader, Opinion seeker/opinion
receiver
Creates viral or buzz
Roles can change

Opinion Leader

Dynamics of opinion
leadership process

Credibility
Positive and negative
product information
Information and advice
Opinion leadership is 2 way
process
Opinion leadership is
category specific

Role Model
Influence primary group
Actor/celebrity
Knowledge power

Surrogate buyers
V/s Opinion Leader

Diffusion of Innovation
Why, how, and at what rate new
technologies and ideas spread
through cultures
Everett Rogers the process by
which an innovation is
communicated through certain
channels over time among the
members of social system
Elements Innovation, Types of
communication channels, Rate of
Adoption, Social system which
helps frame the process of
innovation decision

Types of Innovation Decisions

Optional Innovation Decision
Collective Innovation Decision
Authority Innovative Decision

Different degrees of
Innovation

Culture and Adoption of

Innovation

Continuous Innovation
Dramatic Continuous
Innovation
Discontinuous
Innovation

Modernity
Homophily
Physical distance
Opinion leadership

Diffusion Process and Adoption Process

KNOWLEDE

PERSUATION

DECISION

IMPLIMENTATION

REJECT

ACCEPT

CONFORMATION

Characteristics of Innovation
An Innovation which is an improvement over an
earlier generation has better chance of adoption
An innovation that an individual feels is more
compatible with his way of life also has better chance
of Adoption
A complex innovation is not adopted easily
Triability determines the comfort and ease off use
of innovation
Observability determines the degree to which a
particular innovations visibility to others

Rate of Adoption

Adopter Categories

Innovators
Early Adopters
Early Majority
Late Majority
Laggards

Opinion leaders and communication channels

Greater degree of exposure to the media

Sophisticated Nature
Higher socioeconomic status
Greater degree of contact with change agent
Lots of social experience
More innovative

Diffusion in Organisation
Collection-innovation decision
Authority-innovation decision
Consequences of adoption
Desirable v/s undesirable
Direct v/s indirect
Anticipated v/s unanticipated