Consumer groups, relevant groups, Reference

groups & opinion leaders

Dr. Harleen Sahni, NIFT Gandhinagar 1

 MEANING OF CONSUMER GROUPS:
• The term “group”, may be defined as two or more people who interact with
each in order to achieve mutually agreed upon goals.

• Consumer groups mean individuals or group of individuals or the family who

have a need and desire purchasing a good or service so as to fulfill the need
and derive satisfaction.
• Groups may be
– i) small or large;
– ii) formal or informal (based on purpose of formation, legitimacy and structure of
reporting relationships).

• For the study of consumer behavior, major focus lies on small informal
groups. This is because small groups are more cohesive in nature, there is
more of interaction and the members can influence the purchase patterns and
consumption behavior of each other.
Dr. Harleen Sahni, NIFT Gandhinagar 2
 Types of Consumer Groups
Groups may be classified on various bases like i) number and size; ii)
regularity of contact; and iii) structure and hierarchy. The various types of
consumer groups are as follows:

• i) Primary and Secondary Groups: The distinction between primary and

secondary groups is based on the relevance of the group to an individual,
and the frequency of interaction between group members. When people
interact with each other on a regular basis, and regard each others’ opinions
as valuable and significant, they are said to constitute a primary group; an
individual who interacts with others regularly, is said to be a member of
that primary group. For eg, family, neighbours, co-workers and colleagues.
Secondary groups are those, where interaction is infrequent, irregular and
occasional, and not much value is given to other’s judgments and beliefs.
In consumer behavior, the focus lies on primary groups.

Dr. Harleen Sahni, NIFT Gandhinagar 3

 Types Of Consumer Groups
• ii) Formal and Informal Groups: Based on the group structure and membership,
roles, norms, purpose of formation, groups may be classified as formal and
informal groups. When the group structure and membership, roles (various
positions -president, secretary), group norms (do’s, don’ts) and the reason for
existence (goals) are clearly defined, the group is said to be a formal group.
Informal groups have no or ill-defined structure, roles, norms and purpose of
existence. In consumer behavior, informal groups are of greater relevance to a
marketer because there is more interaction between the members, better exchange
of information and greater influence of each other on consumption patterns and
behavior.

• iii) Membership and Symbolic Groups: When a person belongs to a group by virtue
of membership or even if he merely qualifies for a membership to that group, it is
called a membership group. On the other hand, when a person does not form a part
of a group and/or does not qualify to be a member of the group, but nonetheless
adopts the values, norms and patterns of behavior similar to members of the group,
he is said to be a member of a symbolic group. In consumer behavior, the focus lies
on membership groups.

Dr. Harleen Sahni, NIFT Gandhinagar 4

 Stages of Group Development
Performing

• According to
Tuckman (1965) Task
Norming
there are five
stages of group
development.
Storming

Adjourning

Forming

Dr. Harleen Sahni, NIFT Gandhinagar 5

 Group Development stages
1. Forming - orientation, guidance (dependence)
2. Storming - conflict, roles and responsibilities, rules and
procedures, individual recognition (counter-dependence)

3. Norming - issue resolution, develop social agreements,

cohesion, establish group norms (interdependence)
4. Performing - mutual assistance, creativity, understanding
goals and roles (independence)

5. Adjourning - completion, closure, disengagement, both

from the tasks and the group members.
Dr. Harleen Sahni, NIFT Gandhinagar
 Meaning of Consumer Reference Groups:
• It is a natural tendency on the part of an individual to look up to another as with comparison.
The group to which a person looks up as a point of comparison is known as a reference group.

• A reference group may be a person or a group to which an individual looks up as a frame of

reference for his general and specific acts of behavior, values, opinions, attitudes etc.

• Consumer actually look up to reference groups because:

– a) He desires information before the actual purchase. Reference groups are regarded as impartial and
more trustworthy than the salespersons or advertisements.
– b) He wants social approval for the product/services/ brands bought, and he feels that if he has
approval of the reference group, he would not face any kind of social embarrassment .
– c) He feels that he would be much at ease if he does something that others approve of.

• The reference group impact the way a consumer selects, purchases and uses a product or
service offerings and/or brands. Reference group influences the consumer decision making
process, purchase decisions, consumption patterns and resultant behavior. Gradually, the
consumer begins to adopt the standards and norms used by the reference group(s) and behaves
like them. Thus, marketers make effective use of reference groups in bringing about changes
in a consumer’s thinking and purchasing pattern.

Dr. Harleen Sahni, NIFT Gandhinagar 7

Consumption related Reference groups
• Primary Groups
• Secondary Groups
• Aspirational Reference
• Official Groups
• Implicit Groups
• Virtual Groups or Communities
• Consumer Action Forums

Dr. Harleen Sahni, NIFT Gandhinagar 8

 Effect of Reference Groups on Consumer
Decision-making
• Celebrity, Experts, Common man etc;

Dr. Harleen Sahni, NIFT Gandhinagar 9

Effect of Reference Groups on Consumer
Decision-making

Dr. Harleen Sahni, NIFT Gandhinagar 10

 Opinion leadership process and
environment
• Opinion leaders are among those people who indulge in informal product related
communication, and provide information about a product or product category, whether it
would useful to buy, how it would be used etc. They offer advice as to which of several
brands is the best and from where it should be bought. This process is known as Opinion
Leadership.

• The people who form the audience and listen to him are called Opinion Receivers.
Individuals who on their own seek information and advice about products and brands are
called Opinion Seekers. There is a two-way exchange of information, and both opinion
leaders and opinion receivers/seekers interact with each other. Opinion leaders provide
the receivers/seekers with product information, advice, and relate to them their
experiences. In return for this, they gather more information, personal opinion and
personal experiences from the receivers/seekers.

• Opinion Leaders are not generic in nature; they are specific to a product category and the
Opinion Leader for a product category would become an Opinion Receiver/Seeker for
another product category.

Dr. Harleen Sahni, NIFT Gandhinagar 11

 Profile of an opinion leader
• i) Opinion leaders possess high levels of involvement and interest in a specific
product or service category. They gather information from various sources
(print, electronic and audio visual, internet and websites etc.) about product
development, and are updated about information.

• ii) They are subject experts and have tremendous knowledge about the specific
product or service category. They are well-informed about product attributes
and features and utility, knowledge about brands, price and availability.

• iii) In most cases, Opinion Leaders are also consumer innovators. Because of
their interest in a product or service category, they have a tendency to purchase
a new product offering as soon as it is launched in the market.

• iv) Opinion Leaders also possess certain personal characteristics; by nature,

they are self-confident and sociable.
Dr. Harleen Sahni, NIFT Gandhinagar 12
 ROLE PLAYED BY OPINION LEADERS:
The major roles played by opinion leaders are, i) authority figure; ii) trend setter; and iii) local
opinion leader.
i) Authority figure: The Opinion Leader gives product news and advice, and also narrates his
personal experiences to consumers. He helps current and potential consumers satisfy their
needs. Opinion leaders are highly involved with a product category. They gather information
about new, technically complex and risky products from newspapers, magazines, product
launch parties, trade fairs and trade shows, conferences etc.

ii) Trend setter: Opinion Leaders act as trend setters. They are inner oriented and do not
bother about what others in the society say or do. They are also innovative and often go in for
purchase of new product and service offerings (of their interest category) and through the
purchase and usage, they set the trend.

iii) Local Opinion Leader: People like to behave like others in their reference groups. They
desire social approval from reference groups. People from such groups directly or indirectly
provide information and advice that helps consumers to make purchase decisions, and buy
such goods / services /brands that the reference groups approve off. Opinion Leaders act as
local opinion leaders when a) they constitute a person’s positive reference group; and b)
provide information about such product and service offerings and/or brands that help satisfy
their need in a manner that is consistent with group values and norms.
Dr. Harleen Sahni, NIFT Gandhinagar 13
 Tanishq

Dr. Harleen Sahni, NIFT Gandhinagar 14

 iphone

Dr. Harleen Sahni, NIFT Gandhinagar 15

Clothing brands

Dr. Harleen Sahni, NIFT Gandhinagar 16

Clothing brands

Dr. Harleen Sahni, NIFT Gandhinagar 17

• http://www.adageindia.in/top-3-ads/top-3-ads-
of-the-week-tanishq-tata-tea-ucb/articleshow/5
7250579.cms

Dr. Harleen Sahni, NIFT Gandhinagar 18

 Discuss in your group and explain
• Advantages of group decision making
• The most relevant groups to you as consumer,
and for what types of purchases / situations –
family, family life cycle, friendship, formal
social, work groups etc.

Dr. Harleen Sahni, NIFT Gandhinagar 19