REFERENCE GROUPS AND ITS IMPLICATIONS ON CONSUMER

BEHAVIOUR

submitted to: submitted by:

Ms. Meenakshi Gujral SimranPreet Singh IMBA 37

Manisha Sharma IMBA 05

Surbhi Sharma IMBA 20

TABLE OF CONTENTS

S no Particulars Page no

1. Introduction 1

2. Types 7

3. Group influences 9

4. Factors that influence reference groups 11

5. Bibliography 14

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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.

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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 information-

o Interneto Newspaperso Consumer behavior books

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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

general or specific values, attitudes or a specific

guide for behavior. This basic concept provides a

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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.

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TYPES

Reference groups provide the benchmarks and

contrast needed for comparison and evaluation of

group and personal characteristics.

Types of reference

groups

normative comparative indirect

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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 leaders, TV

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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.

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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

purchases—are brought. This stage is typically

much briefer.

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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.

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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

powerful can induce consumer attitude and

behavior change.

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For example, when consumers are

concerned with 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

likely to be purchased with reference

groups in mind.

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4. Reference groups and consumer

conformity :-Marketers may have

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.

Legitimize the decision to use the

same products as the group.

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SELECTED CONSUMER-RELATED

REFERENCE GROUPS

1. Friendship groups

2. Shopping groups

3. Work groups

4. Virtual groups or communities

5. Brand communities

6. Consumer action groups

Are some of the important reference group

appeals used by marketers to influence

consumer decisions.

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BIBLIOGRAPHY

Sites

Google.com

Wikipedia.org

Netmba.com

Books

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