Session 17

Reference groups

Consumer Behaviour
PGPLSM/PGP 25
Reference Group
• RG are the sources of comparison, influence and norms for people’s
opinions, values and behaviours.

• RGs – families; friends; neighbours; relatives; peer group; influencers;

social class; culture.
Credibility and Persuasive power of Reference Groups

• RGs – have a high degree of source credibility.

• Formal Source – person/medium providing consumption-related

information by being paid.

• Informal Source – is through family or friends

• Formal and Impersonal messages - “Please reuse the towels in order
to help us save the environment”
• Social Norm – “Most of your fellow guests had reused their towels.
Please help us save the environment and reuse yours”.
• Personal Appeal – “Most of the guests who had stayed in this room
reused their towels”.
Two types of Influence (Reference Groups)
• Normative
• Learning and adopting a group’s norms, values and behaviours.
• Influential members - are from same socioeconomic group.

• Comparative
• Occurs when people compare themselves to others whom they respect and
admire, adopt and imitate their behaviour.
Consumption related reference group
Friends
Shoppers
Virtual Communities
Advocacy groups
Factors affecting reference group influence on purchase decisions
Conformity
• Market leaders – enhance consumer conformity
• Marketers of new brands – convince uniqueness of consumers
• A reference group must be able to influence its members by:

• Create awareness of the brand

• Provide opportunity to the member to compare their own thinking with the
groups attitude and behaviour
• Influence the individual to adopt the attitude and behaviour
• Legitimize the member’s decision to use the same products.
Group Power
• Influence by different groups may differ across time and
circumstances.
• Members of a powerful group might influence individual’s behaviour
but neither can change their attitude nor internalize their choices.
Product Expertise
• Individual’s with product knowledge rely less on others and are not
easily influential.
• People with little or no experience – seek out advice from others
Product conspicuousness
• Conspicuous product – stands out and is noticed by others
• Likely to purchase the status revealing products that are found to be
relevant to others.
Endorser and Spokespersons
• Source credibility is the believability of the endorser, spokesperson or
an individual in an advertisement.
• Expertise, Trustworthiness, Attractiveness
• Celebrity – symbolic reference group
Employs celebrities based on -
• Celebrity Testimonial – based on his/her own usage
• Celebrity Endorsement – may/may not have an experience/familiarity
• Celebrity Actor – plays a part in the commercial
• Celebrity Spokesperson – brand ambassador
Innovations’ Adopters as Reference Groups
Factors that affect individuals to adopt the innovation and the ones
who are laggards:

1. Nature of the group involved

2. Type of innovation decision required
3. Extent of marketing effort
4. Complexity of the innovation
5. Ease in observing the usage of the innovation
6. Ease in trying
7. Perceived risk in trying