CONSUMER BEHAVIOUR

Reference
Group
“Unlocking Influence: Navigating
Consumer Choices through Reference
Groups”
 Introduction to
REFERENCE GROUP
• Reference groups are groups of people that influence our opinions, values, and behaviours. It is a group of
people that an individual looks to for guidance and comparison when making decisions, especially about what
to buy and how to behave.

• It includes family members, friends, coworkers, and others

• Reference groups affect consumer behaviour by setting standards

and defining acceptable Items

• Reference groups have a high degree of source credibility

• Reference groups influence us in two main ways

i. Normative influence
ii. Comparative influence
 Normative influence and Comparative influence
• Normative influence consists of learning and adopting a group’s norms, values, and behaviors. The most
pertinent normative influence comes from groups to which people naturally belong, such as family,
peers, and members of one’s community. Generally, normative influence occurs among members of the
same socioeconomic group.
For example, families have a large normative influence on children because they mold young children’s
initial consumption-related values. 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 influence arises when people compare themselves to others whom they respect and
admire, and then adopt some of those people’s values or imitate their behaviors.
For example, when a recently-graduated student who holds a “start of the ladder” position in a
corporation admires her boss and aspires to live like the boss and have similar possessions, the boss exerts
comparative influence on the lower-level employee
 Types of Reference groups

01 02 03 04
Consumption-Related
Membership or Symbolic Anticipatory/ Reference Groups:
non-membership Groups aspiration
groups i. Friendship Groups
groups ii. Shopping Groups
iii. Virtual Communities
iv. Advocacy Groups
 Factors Affecting reference
group influence:

✓ Conformity
✓ Group’s power and expertise
✓ Relevant information and experience
✓ Personality
✓ Product conspicuousness
REFERENCE GROUP INFLUENCE ON
PRODUCTS AND BRANDS
Dimensions : Exclusivity & Visibility
 Word-of-Mouth
• Word of mouth in consumer behaviour refers to the spread of information or opinions about a product,
service, or brand through informal communication between individuals.

• It has transformed into E-wom (electronic word-of-mouth), expanding its reach and impact across digital
channels.

 Social networks  Stimulating word of mouth

 Brand communities  Viral marketing
 Weblogs  Managing negative rumors
 Reference Group Applications in
Marketing
 Use of celebrities for product endorsements
 Use of experts and spokespersons for product
endorsements
 Word-of-Mouth Influence
 Brand Image Perception
 Social Validation
 Market Segmentation
 CELEBRITYENDORSEMENTS

Celebrity endorsements involve famous personalities promoting products or services. Their influence,
credibility, and fame help attract attention, enhance product appeal, and influence consumer behaviour
positively.
 Opinion Leadership
Opinion leaders are key individuals within reference groups who informally influence others' actions or
attitudes.

They exert a personal influence on others because they know more about the
product or service either from advertising, or from conversations with people
who have had some experiences, or else, from their own personal
experiences with the product.

Measuring Opinion Leadership

 The self-designating method
 The socio- metric method
 The key informant method.
 Klout scores
Consumer Relevant Group

Consumer relevant group could

be any person or any group that a
consumer may ask for to help
him / her buying a
particular product. They are the
are groups (social groups, work
groups, family, or close friends) a
consumer identifies with and
may want to join. They influence
consumers' attitudes and
behavior.
 Types of Consumer Relevant Group
1.Family
An individual's family influences his behavior as a consumer.
Family's importance is based upon the frequency of contact
that the individual has with other family members and the
extent of influence that the family has on the establishment of
a wide range of values, attitudes and behavior.
2.Friendship group
After family, friends most likely influence an individual’s
purchase decisions. Friends fulfill a wide range of needs like
they provide companionship, security and opportunity to
discuss the matter, which they can’t with the family members.
3.Formal social group
This type of group interest’s marketers because often consume
products together, can discuss products or brand or stores
informally with other members and sometimes can even copy
the consumption behavior of other members whom they
admire.
Types of Consumer Relevant Group
4. Shopping group
Two or more people who shop together, weather for food,
for clothing, or simply to pass the time, constitute a
shopping group. Such groups are often offshoots of family or
friend’s groups.
5. Consumer Action Groups
Consumer action consumer action groups are formed to
seek redress or fight against bad or unearthing practice of
marketers or business-’men
6. Work Groups
Every person who has a job or work in a group is likely to be
influenced by others. The sheer amount of time that people
spend at their jobs provides example opportunity for work
groups to serve as a major influence on the consumption
behaviour of members.
 Reference Groups and Marketing Implications
• Marketers employ informational, comparative and normative group influences to develop
marketing communication strategies. Advertising often makes use of informational influence
through expert spokespersons who communicate information about product features and
performance. One approach employed is to use a character posing as an expert, such as a
doctor for commonly used remedies, or the engineer for technical products. Another
approach is to use a real celebrity who has expertise in the product area. Consumers are likely
to believe a testimonial from Cristiano Ronaldo for the product category like Sports shoes as
credible.
• Advertising applies comparative influence by using either an actual referent in the form of a
"typical consumer" or use a celebrity as a symbolic referent with whom consumers identify
because she/he is likeable or attractive. The ad for ICICI used Amitabh Bachchan as a symbolic
referent.
• Marketers frequently use normative influence approach by showing group approval in ads for
a particular brand. Commercials of Orient PSPO, Coca Cola, etc. are examples of advertising's
simulation of social approval. Typically, the ad shows an individual who is important to the
consumer such as spouse, friend, neighbour, or business associate etc. and expresses
approval or praise of the consumer's choice.