Groups importantly influence consumer behavior. Almost everyone belongs to groups of some kind, large or small, informal or formal, temporary or permanent. As group influences on consumer behavior are so pervasive, researchers have tried to determine how and when these influences operate. A group “refers to two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another such that their behavior is interdependent.”
A group may also be defined as a collection of individuals having a sense of relatedness, which arises out of interaction among them. In other words, a group is defined as two or more people with related status and roles who interact based on shared expectations about each other’s behavior. You should recognize that almost all consumer behaviors take place within a group setting.
Moreover, groups serve as one of the primary agents of consumer socialization. Many reference groups have an enormous effect on our lives and choices. For, between infancy and death, much of our behavior is devoted to becoming identified with various groups.
For example, an individual may choose a particular dress style because they like to become or be considered a member of a certain professional group. Groups basically affect consumer behavior through the development and enforcement of norms.
Marketers are particularly interested in groups because they help managers understand how consumer behavior develops and taking appropriate marketing actions. An understanding of how groups function is, therefore, essential to an understanding of consumer behavior.
What is a Reference Group? – Meaning of Reference Group
You look to others for guidance on dressing, speaking, working, and spending your leisure time. You look to others to guide or reinforce your basic beliefs and attitudes about ethics, morality, politics, and general behavior. These others, the groups you use to measure the acceptability of what you do, can be termed as ‘reference group.’
It may mean a group with which one compares him in making a self-judgment. It is a source of an individual’s values and perspectives. An individual uses such groups as a point of reference in determining his own judgments, beliefs, and behavior.
A housewife’s reference groups, for example, include her family, circle friends, neighbors, and clubs. It may be a group to which they aspire; by adopting its dress, habits, and attitudes.
Gaedeke and Tootelian defined it as a group of people with whom the individual looks for the association, information, and behavior standards. They can be formed on many bases, including family, work, professional, religion, civic, educational, and recreational. T. Shibutani has defined it as that group whose presumed perspectives or values are being used by an individual based on their current behavior.
Berkman and Gilson defined it as the group whose perspective assumes in forming attitudes and visible behavior. Therefore, it is a group that an individual uses to guide behavior in a specific situation. Individuals belong to several different groups and perhaps would like to belong to several others.
When you are actively involved with a particular group, it is probably functioning as a reference group. With the change in the situation, you may base your behavior on an entirely different group, which would then be your reference group.
Bourne identified two influences that reference groups have on an individual consumer.
First, reference groups determine the level of aspiration for an individual. This is done by offering stimuli regarding the lifestyle he should follow and indicating a particular buying pattern.
Second, reference groups tell the individual the items he should buy for his behavior to be considered acceptable to the groups.
The type of house where he should live, clothing he should buy and wear, automobile he should drive all are, in fact, influenced by his reference groups. An individual may remain comfortable with his reference groups by displaying their reference groups’ lifestyles and related purchases.
Types of Reference Groups
Reference groups may be classified according to several types. But all of them may be brought under two broad types:
- Primary Reference Groups and
- Secondary Reference Groups.
Let us now discuss them in turn:
Primary Reference Groups
It is a group with which the person has regular face-to-face association and contact and whose values, attitudes, and standards of behavior he follows. Berkman and Gilson defined it as a group that contains relationships somewhat like those within the family.
It may include family, playmates, friendship groups in the neighborhood, peer groups, and closely tied workgroups. Such a group consists of a small number of individuals who have intimate relationships and communicate with each other directly and regularly.
Intimate and direct associations characterize them over a long period of time. Such groups tend to develop norms about what the group members should do and are expected to do under given circumstances. These norms are like shared attitudes and opinions, and as such, they influence group members’ behavior.
An individual actively participates with such a group of close associates. Most of the interpersonal relations an individual has been with this group.
They are also characterized by frequent interpersonal contact. A primary group exerts the greatest and most widespread impact on consumer buying behavior.
Characteristics of Primary Reference Groups
Primary reference groups give us standards of comparison to measure our own values, attitudes, and actions. Such groups influence all of us. Primary reference groups have many characteristics, which we shall mention below:
- These groups are small in size, and individuals have informal relationships with other members of the groups.
- These groups tend to have more influence on us than do larger organizations to which we belong.
- These groups were held together not by formal rules but by the members’ informal understandings.
- Such groups include a variety of roles and interests for each individual in the relationship. Husband and wife, for example, have a primary relationship between them. Each of them plays different roles with each other while interacting. What role one of them will play with others in a situation depends on the context. Husband, while agreeing to spend Tk.10,000/- to buy an ornament set by his wife, will play the role of a financial controller. Again he will play a different role while interacting with his wife as he expects a sacrifice from his wife. The reason for such variation in roles is relating to interest. Since the husband’s interests vary in two situations, he is likely to play different roles.
- The primary relationship involves the whole personality of an individual. In the primary group, we get to know each other fully, and as a result, we know each other’s weaknesses and strengths. Thus, while relating to each other, we consider each other’s personality as a whole-considering, positives and negatives.
- The members of a primary group communicate with each other extensively and without any hesitation. We are least concerned about the word selection and the time we take while communicating with the members of our primary groups, i.e., we communicate very informally among us.
- Relationships among the members of a primary group are personal and involve emotion. Because the relationship is emotion-laden, we continue the relationship with a particular group member even if we do not like him for some reason or another.
- An individual can neither easily cease his relationship with a member of his primary group nor develop a primary relationship with someone easily and quickly. Since the primary relationship requires special treatment, it cannot be transferred or developed easily. For example, even if you are annoyed with your younger brother for some reason or other, you cannot cut your relationship with him permanently or call someone else your younger brother. On the other hand, you may disassociate yourself from your employer if you do not like him.
As primary groups are characterized by the above, they require special treatment. From a marketing perspective, marketers should understand such groups as they heavily influence consumer behavior.
Functions of Primary Groups
Primary reference groups function in several ways. Some of the important functions of such groups are mentioned below:
- They create socialization of individuals. As you know, socialization is how individuals become aware of or learn behavior and lifestyles.
- Primary reference groups help individuals in the development of their personalities to the fullest. It is through the primary groups that the personality of the individual is shaped. As members feel for and committed to each other, they help each other overcome the weaknesses, and as a result, the individual’s total personality develops.
- They help to develop and evaluating one’s self-image. You have been given the idea of self-image or self-concept in the earlier lesson at some length. Through the interaction with the members of primary groups, an individual learns to define himself or herself as a person as he/she sees him/her through others’ eyes, i.e., the sense of self develops through such interactions.
- These groups teach and explain the different values of an individual’s culture. He comes to know of the values that his culture holds from the members of his primary groups. They also teach him norms that govern how he should think or act in specific situations.
- These groups work as devices for obtaining compliance with norms in a society. An individual is ousting from society if he does not conform to the social norms. Primary groups teach him how he should behave for better adaptations with societal norms.
- Personal interaction with primary group members influences individuals in their day-to-day decisions. After the decisions are made, the approval and disapproval of primary group members reinforce certain behavior and discourage others.
Secondary Reference Groups
Individuals may also belong to groups other than the primary groups.
One may belong to secondary groups, in which he may have an only slight or intermittent association. Secondary groups maintain communication among much larger numbers of people, who are often geographically dispersed, and use mainly impersonal communication channels to maintain identification and interaction.
Those groups characterized by limited interaction among members are referred to as secondary groups. Loudon and Bitta defined secondary reference groups as those in which the relationship among members is relatively impersonal and formalized, such as political parties, unions, occasional sports groups, etc.
The members of the secondary groups lack the intimacy of personal involvement. Secondary reference groups have formal membership requirements. Members may be expected to pay dues or even to wear specific uniforms to meetings.
Secondary reference groups may also be defined in another way. If an individual interacts only occasionally with others or does not consider their opinions particularly important, they make up a second group.
The second reference group members’ relationship is less emotional, formal, and structured and standardized, requiring less personal involvement.
Influence of Reference Groups on Consumer Behavior
How reference groups affect, the buying behavior of consumers has been the subject of many studies. These groups have been found to wield enormous influence on buying behavior.
Reference groups greatly impact the products their members buy, although this varies from group to group and from product to product. Reference group influence is particularly potent in an informational vacuum.
When the individual consumer has little or no knowledge about a product’s attributes, group influence is strongest. The influence of reference groups may operate concerning both product and brand. Reference groups, then, influence both the type of product purchased and the brand name selected.
They may also influence the selection of product type only or name only. What product a person buys and what brand he buys is likely to be influenced by what others in the reference groups do—a to be influenced by what others in the reference groups do.
A consumer’s behavior may change to be more in line with reference group members’ actions and beliefs.
For example, a person may stop buying one brand of paracetamol and switch to another on the advice of members of the reference group. An individual may also seek information from the reference group members about one or more factors affecting purchase decisions, such as where, how, and when to buy a particular product.
A reference group’s influence on a person’s purchase decision depends on that person’s susceptibility to reference group influence and the group’s degree of involvement.
Reference groups influence more in the purchase decisions of those products that are visible to the group. Reference groups do not always influence consumers’ decisions for a product or brand usage.
They can influence product categories, the type of product used, and the brand used. Reference groups’ influence on consumer behavior basically depends on the visibility of the usage situations, the person’s commitment to the group, the importance of the product to the group, and the person’s confidence in the purchase situation.
The real impact of reference group influence on purchasing behavior depends on the buyer’s involvement with the group, how visible the product is, and how conspicuously it is used.
Reference groups, thus, importantly influence consumer behavior.
If your reference group, for example, is your immediate neighbor, your levels of aspiration and buying behavior will be influenced by their furniture, appliances, carpets, etc. This group is not equally determinative of all products.
It can operate in various ways and can be effective on brands, services, and products. The table below is an example of a reference group’s influence on an individual’s products and brand selection. It may not be possible for an individual to ascertain the precise influence of his reference groups.
But he can have some idea of their importance by noticing how many items he has that are also possessed by the members of groups he belongs to, desire to belong, and refer to.
Reference Group Influence on Products and Brands
|Weak (-)||Strong (+)|
Reference Group Norms and Conformity to Group Norms
Norms are rules and guidelines, setting forth proper attitudes and behaviors for specific situations. They are stable expectations, held by a group’s consensus, concerning individual members’ behavior rules.
Every group maintains a normative system, whether small or large. Norms of the informal groups are generally unwritten but are well understood by the members.
Groups expect their members to conform to the norms set by the groups. Conformity basically refers to the seemingly natural human tendency to want to be like relevant and significant others, which brings about some degree of adherence to the group’s norms. Everyone conforms in various ways too numerous groups, and you make your life more pleasant by conforming to group norms.
One may conform to group norms, either voluntarily or compulsively. You, for example, wear cloth when attending class to conform to the basic societal norm. You will not wear, for example, shorts when you go to the mosque to conform to a religious group.
Norms cover all aspects of behavior relevant to the group’s functioning, and violation of norms results in sanctions. Just imagine how much stronger the pressures to conform are among friends, and from this, it is clear that individuals frequently conform to reference group expectations.
A person may find several members of a given group consuming a particular brand of tea. He may then decide to try that brand simply because there is some evidence that it may be a better brand. Here, conformity is the result of information shared by the members of the group.
One may also buy a particular brand to win approval from his neighbor or spouse, thus fulfilling groups’ expectations and avoiding sanctions. One may also conform to group norms to identify him with a particular group. Groups also put conformity pressures on their members. Reference groups are the mechanisms through which norms are developed and enforced.
The question that may come to your mind is: how far an individual will conform to the norms established by his reference groups or determine the degree of an individual’s conformity to group norms? In the following section, we shall discuss the factors that determine the degree of conformity to group norms:
Factors Determining the Degree of Conformity to Group Norms
Quite a few factors determine how much and how long one will conform to the norms established by his reference groups. Following are some of the factors:
Type of group pressure
Pressures by the group may be exerted in direct or indirect ways. In direct and overt pressure, an individual is less likely to conform to group norms than attempt to establish their own freedom. On the contrary, in the group’s indirect pressure, the individual is more likely to conform to group norms.
Social involvement associated with products
Some of the products are frequently used in the presence of others, such as cigarettes. In buying such products, consumers conform more to group norms as they are related to their images.
Similarity in occupation
Consumers are found to conform to those groups’ norms whose members have similarities in terms of occupation. Doctors, for example, will conform more to the norms of their professional associations.
Group decision-making ability
Impact of group cohesiveness
If an individual finds a group more stable and attractive, he will conform readily to that group’s norms than an unstable and unattractive group.
Value of the norm
If a norm is considered valuable and rewarding, the individual will conform more to that norm than others.
Unanimity among group members
If members of a group are found to hold the same opinions on different aspects, they can expect more conformity to its members’ norms.
Ambiguity of stimuli
If an individual is found to be ambiguous on different stimuli, he will, without doubt, conform to group norms regarding those stimuli.
Result of group interaction
Everyone associates with different groups with the hope of gaining something-financial or social/psychological. If it is found that associating with a group is profitable for the individual, he will readily conform to that group’s norms.
Implications of Reference Group Influence for a Marketer
Marketers sometimes try to use reference group influence in advertisements by suggesting that people in a specific group buy a product highly satisfied.
The advertisers hope that many people use the suggested group as a reference group and buy or react more favorably to the product by making such an appeal.
The results of this kind of advertising depend on the advertisement’s effectiveness in communicating the message, on the type of product, and on the individual’s susceptibility to reference group influence.
A product or service compatible with a particular norm is probably best promoted regarding the type of group that transmits the norm since the product might be accepted if it is shown to be appropriate in the transmitting group setting. Communication within reference groups is a major source of information about certain products.
Since good word-of-mouth communication is a valuable marketing asset, marketers attempt to identify or create opinion leaders in reference groups that affect members’ within-group information acquisition.
If a marketer can reach opinion leaders, a multi-step flow of information may be utilized by the firm, which directs marketing communications to opinion leaders and opinion leaders then communicate this information to group members.