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Consumer Related Reference Group

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A group may be defined as two or more people who interact to accomplish either individual or mutual goals. It types are as follows:
1) Intimate Group: Two or more persons who do any task or work together whether they are interested or not. 2) Formal Group: A group of large no. of people who are learning or performing a same task because of their own interest. 3) One-Sided Grouping: It is a type of group in which an individual consumer observes the appearance or actions of others, who unknowingly serve as consumption-related role models. 4) Membership Group: It is a type of group which is classified by a membership status. It is a group to which a person either belongs or would qualify for membership. 5) Symbolic Group: It is type of group in which an individual is not likely to receive membership, despite acting like a member by adopting the group’s values, attitudes, and behavior.

▪ REFERENCE GROUPS: 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. It provides a valuable perspective for understanding the impact of other people on an individual’s consumption beliefs, attitudes, and behavior. It also provides insight into the methods marketers sometimes use to effect desired changes in consumer behavior.

▪ Marketers’ View:
Reference groups are groups that serve as frames (If reference for individuals in their purchase or consumption decisions. The usefulness of this concept is enhanced by the fact that it places no restrictions on group size or membership, nor does it require that consumers identify with a tangible group (i.e., the group can be symbolic such as owners of successful small businesses, leading corporate chief executive officers, rock stars, or golf celebrities).

Reference groups that influence general or broadly defined values or behaviors are called normative reference groups. For example, a child’s reference group is his family which plays a vital role in molding of child’s consumer behaviors and values. (Such as Food, Dress and Shop). Normative Reference groups influence the development of basic code of behavior.

Reference groups that serve as benchmarks for specific or narrowly defined attitudes or behavior are called comparative reference groups. A comparative reference group might be a neighboring family whose lifestyle appears to be admirable and worthy of imitation (the way they maintain their home, their choice of home furnishings and cars, their taste in clothing, or the number and types of vacations they take). Comparative reference groups .influence the expression of specific consumer attitudes and behavior. It is likely that the specific influences of comparative reference groups to some measure depend on the basic values and behavior patterns established early in a person’s development by normative reference groups.

It is a group with whom a person interacted on a direct basis (such as family and close friends). It is a group which influence or refer a person on direct one-to-one basis. So, the credibility of that group could be higher than other group.

Indirect reference groups consist of those individuals or groups with whom a person does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, TV personalities, or even well -dressed and interesting-looking people on the street.

Referents a person might use in evaluating his or her own general or specific attitudes or behavior vary from one individual to several family members, to a broader kinship or from a voluntary association to a social class, a profession, an ethnic group, a community, an age category or even a nation or culture.

The degree of influence that a reference group exerts on an individual’s behavior usually depends on the nature of the individual and the product and on specific social factors.

▪ 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 example 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 (e.g., a person who believes that advertising may be misleading or deceptive) is more likely to seek out the advice or example of others.

▪ 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. 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. When consumers are primarily concerned with the acceptance or approval of others they like, with whom they identify, or who offer them status or other benefits, they are likely to adopt their product, brand, or other behavioral characteristics. When consumers are primarily concerned with the power that a person or group can exert over them, they might choose products or services that conform to the norms of that person or group in order to avoid ridicule or punishment.

▪ Conspicuousness of the Product:
The potential influence of a reference group on a purchase decision varies according to how visually or verbally conspicuous the product is to others. A visually conspicuous product is one that wills standout and is noticed (such as, a luxury item or novelty product); a verbally conspicuous product may be highly interesting, or it maybe easily described to others. Products that are especially conspicuous and status revealing are most likely to be purchased with an eye to the reactions of relevant others.

▪ Reference Groups and Consumer Conformity:
Marketers may have divergent goals with regard 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: 1. Inform or make the individual aware of a specific product or brand. 2. Provide the individual with the opportunity to compare his or her own thinking with the attitudes and behavior of the group. 3. Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group. 4. Legitimize the decision to use the same products as the group. Marketers, who are responsible for a new brand or a brand that is not tj1emarket leader, may wish to elect a strategy that asks consumers to strike out and be different and not just follow the crowd when making a purchase decision.

Positive Influences on Conformity:
Group Characteristics:
• Attractiveness
• Expertise
• Credibility
• Past Success
• Clarity of Group Goals
Personal Characteristics:
• Tendency to Conform
• Need for Affiliation
• Need to be Liked
• Desire for Control
• Fear of Negative Evaluation

Factors Encouraging Conformity:
• Inform or make the individual aware of a specific product or brand. • Provide the individual with the opportunity to compare his or her own thinking with the attitudes 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.

Consumers are potentially influenced by a diverse range of people that they come in contact with or observe. The family is possibly the most compelling reference group for consumer behavior. The five types of groups that influence consumer attitudes and behavior are as follows:

1. Friendship Group:
Friendship groups are typically classified as informal groups because they are usually unstructured and lack specific authority levels. In terms of relative influence, after an individual’s family, his of her friends are most likely to influence the individual’s purchase decisions. Friends fulfill a wide range of needs: They provide companionship, security, and opportunities to discuss problems that an individual may be reluctant to discuss with family members. Friendships are also a sign of maturity and independence, for they represent a breaking away from the family and the forming of social ties with the outside world.

2. Shopping Group:
Two or more people who shop together, whether for food, for clothing, or simply to pass the time can be called a shopping group. Such groups are often offshoots of family or friendship groups nod, therefore, they function as want has been referred to as purchase pals. The motivations for shopping with a purchase pal range from a primarily social motive to helping reduce the risk when making an important decision. In instances where none of the members of the shopping group knows, much about the product under consideration a shopping group may form for defensive reasons; members may feel more confident with a collective decision.

3. Work Groups:
The, sheer amount of time that people spend at their jobs, frequently more than 35 hours per week, provides ample opportunity for work groups to serve as a major influence on the consumption behavior of members. Both the formal work group and the informal friendship work group can influence consumer behavior.

Formal Group:
The formal work group consists of individuals who work together as part of a team and, thus, have a sustained opportunity to influence each other’s consumption related attitudes and actions.

Informal Group:
Informal friendship work groups consist of people who have become friends as a result of working for the same firm, whether or not they work together as a team.

4. Virtual Groups or Communities:
This group or community is a community of globalization in which people are binding through social relationships instead of geographical relationships. These communities provide their members an access to extensive amounts promotional, fellowship and social interaction covering an extremely wide range of topics and issues. Virtual communalities provides all opportunity for a marketer to address consumers with a particular common interests can be one of the primary pleasures a consumer has online, and also have the ability to enhance the consumption experience.

5. Brand Communities:
There is a definite feeling among marketers that if you want to build up loyalty to your brand, your product has to have an active social life. A brand community is a specialized, non-geographically bound community, based on a structured social relationships among admires of a brand; it is marked by a shared consciousness, rituals and traditions, and a sense of moral responsibility. The brand community is, therefore, “customer centric” it is the customer experience that provides meaning to the brand community rather than the brand itself.

A particular kind of consumer group-a consumer-action group-has emerged in response to the consumerist movement. Groups that are dedicated to providing consumers with assistance in their effort to make the right purchase decisions, consume products and services in a healthy and responsible manner, and to generally add to the overall quality of their lives. Consumer-action groups can be divided into two broad categories: (1) Those that organize to correct a specific consumer abuse and then disband and (2) Those that .organize to address broader, more pervasive problem areas and operate over an extended or indefinite period of time. The overriding objective of many consumer-action groups is to bring sufficient pressure to bear on selected members of the business community to make them correct perceived consumer abuses.

Appeals by celebrities and other similar reference groups are used very effectively by advertisers to communicate with their markets. Celebrities can be a powerful force in creating interest or actions with regard to purchasing or using selected goods and services. This identification may be based on admiration on aspiration, on empathy, or on recognition. Five major types of reference group appeals in common marketing usage are:

1. Celebrity Appeals:
To their loyal followers and to much of the general public, celebrities represent an idealization of life that most people imagine that they would love to live. Advertisers spend enormous sums of money to have celebrities promote their products, with the expectation that the reading or viewing audience will react positively to the celebrity’s association with their products; celebrity endorsers or famous people hold the viewer’s attention. A firm that decides to employ a celebrity to promote its product or service has the choice of using the celebrity to give a testimonial or an endorsement as an actor in commercials a company’s spokesperson.

Consumer Credibility:
The audience’s perception of both the celebrity’s expertise (how much the celebrity knows about the product area) and trustworthiness (how honest the celebrity is about what he or she says about the product). When a celebrity endorses only one product, consumers are likely to perceive the product in a highly favorable light and indicate a greater intention to purchase it. In contrast, when a celebrity endorses a variety of products, his or her perceived credibility is .reduced because of the apparent economic motivation underlying the celebrity’s efforts.

Types of Celebrity Appeals:

2. The Expert:
It is a person who, because of his or her occupation, special training, or experience, is in a unique position to help the prospective consumer evaluate the product or service that the Advertisement promotes. For example, an advertisement for a quality frying pan may feature the endorsement of a chef; an ad for fishing tackle may contain the endorsement of a professional fishing guide.

3. The Common Man:
A reference group appeal that uses the testimonials of satisfied customers is known as the common-man approach. The advantage of the common-man appeal is that it demonstrates to prospective customers that someone just like them uses and is satisfied with the product or service being advertised. The common-man appeal is especially effective in public health announcements (such as antismoking or high blood pressure messages), for most people seem to identify with people like themselves when it comes to such messages.

4. The Executive or Employees Spokesperson:
During the past two decades, an increasing number of firms have used their top executives as spokespersons in consumer ads. The popularity of this type of advertising probably is due to the success and publicity received by a number of executive spokespersons. Like celebrity spokespersons, executive spokespersons seem to be admired by the general population because of their achievements and the status implicitly conferred on business leaders. The appearance of a company’s chief executive in its advertising seems to imply that someone at the top is watching over the consumers’ best interests, and it encourages Consumers to have more confidence in the firm’s products or services.

5. Trade or Spokes Character:
Trade or spokes-characters as well as familiar cartoon characters serve as quasi-celebrity endorsers. These trade spokes-characters present an ideal, idealized and dispense information that can be very important for the product or service that they “work for”. With few exceptions, trade characters serve as exclusive spokes persons for a particular product or service. They sometimes provide a kind of personality for the product or service and, make the product appear friendlier.

6. Other Reference Group Appeals:
A variety of other promotional strategies can function as a frame of reference for consumers. Respected retailers and the editorial content of special interest magazines can also function as frames of reference that influence consumer attitudes and behavior.

“Family is defined as two or more persons related by blood, marriage; or adoption who reside together”. In a more dynamic sense, the individuals who constitute a family might be described as members of the most basic social group who live together and interact to satisfy their personal and mutual needs. The family remains the central or dominant institution in providing for the welfare of its members. ▪ HOUSEHOLD:

Families sometimes are referred to as households, not all households are families. For example, a household might include individuals who are not related by blood, marriage, or adoption, such as unmarried couples, family friends, roommates, or boarders. However, within the context of consumer behavior, house-holds and families usually are treated as synonymous, and we will continue this convention.

▪ Married Couples:
The simplest type of family, in number of members, is the married couple-a husband and a wife. As a household unit, the married couple generally is representative of either new married who have not yet started a family or older couples who have already raised their children.

▪ Nuclear Family:
A husband and wife and one or more children constitute a nuclear family. This type of family is still commonplace but has been on the declined.

▪ Extended Family:
The nuclear family, together with at least one grandparent living within the household, is called an extended family. Within the past 30 years the incidence of the extended family has also declined because of the geographic mobility that splits up families. Moreover, because of divorce, separation, and out-of-wedlock births, there has been a rapid increase in the number of single-parent family households.

▪ Single Parent Family:
Single parent family households are those consisting of one parent and at least one child. It could be as a result of divorce or any other factor.

▪ Unmarried Couples:
These are the couples who live together without any relationship. It could be friends, roommates etc.

▪ Friends/Roommates:
These are the households who consist of no. of friends living together or roommates such as Bachelors in our society.

▪ Boarders:
These are the persons who live in the same room of boarding house or college hostel or in army.

“It is the process by which children acquire the skills, knowledge, and attitudes necessary to function as consumers”. The socialization of family members, ranging from young children to adults is a central family function. In case of young children, this process includes imparting to children the basic values and modes of behavior consistent with the culture. These generally include moral and religious principles, interpersonal skills, dress and grooming standards, appropriate manners and speech, and the selection of suitable educational or career goals.

Parental Socialization:
Parental socialization responsibility seems to be constantly expanding. Parents are often anxious to see their young children possess adequate computer skills, almost before they are able to talk or walk. Because of parents’ intensive interest in their children learning about using a computer, hardware and software developers are regularly developing their products targeted at parents seeking to buy such items for their children. Parents constant pressure to help their young children to secure an advantage or keep ahead are the demanding daily schedules that rule the lives of many children. Such hectic schedules foster a contrast concentration on competition and results and not having a fun or being created. Marketers frequently target parents looking for assistance in the task of socializing their children. Marketers are sensitive to the fact that the socialization of young children provides an opportunity to establish a foundation on which later experiences continue to build throughout the life. These experiences are reinforced and modified as the child grows into adolescence, the teenage years, and eventually into childhood.

Consumer Socialization of Children:
The aspect of childhood socialization that is particularly relevant to the study of consumer behavior of children. Many preadolescent children acquire their consumer behavior norms through observation of their parents and older siblings, who function as a role model and sources of cues for basic consumption learning. In contrast, adolescents and teenagers are likely to look to their friends for models of acceptable consumption behavior. Younger children react positively to advertisements employing a spokesperson who seems to fulfill a parental role, whereas teenagers often like products for the simple reason that their parent disapprove of them.

Adult Consumer Socialization:
Socialization begins in an early childhood and extends throughout a person’s entire life. e.g., when a newly married couple establishes their own household, their adjustments to living and consuming together in part of this continuing process. Similarly, the adjustments of a retired couple who decide to move somewhere else is a part of ongoing socialization process.

Integrational Socialization:
Certain product loyalties or brand preferences are transferred from one generation to another. This is called Integrational brand transfer. Specific brand preferences for products are frequently passed on from one generation to another generation. A simple model of the socialization process that focuses on the socialization of young children but that can be extended to family members of all ages. The arrows run both ways between the young person and other family members and between young person and his or her friends. These two directional arrows signify that socialization is really a two-way street, in which the young person is both socialized and influences those who are doing the socializing. Parental warmth relates positively to:

1) The extent to which a child’s interest in the internet serves as a catalyst for increased parental internet interest. 2) How much the child teaches a parent about the internet 3) Whether the child acts as the parent’s internet broker (e.g., the child shops for the parent on the internet). As children are often more comfortable than their parents with digital and electronic media, they are often the ones in the family who do the teaching.

Other Functions of the Family:
Three basic functions provided by the family are particularly relevant to a discussion of consumer behavior. These include:

1) Economical Well-Being:
The family who forms their family for economic security, providing financial means to its dependents is unquestionably a basic family function. So, that husband, wife and children work for the financial strength of their family.

2) Emotional Support:
The family which is formed for the emotional nourishment (including love, affection, and intimacy) with its members. In fulfilling this function, the family provides support and encouragement and assists its members in coping with decision making and with personal or social problems.

3) Suitable Family Life Styles:
Upbringing, experience, and the personal and jointly held goals of the spouses determine the importance placed on education or career, on reading, television viewing, on the learning of computer skills etc. a family being together once meant doing things together, today it means in the same household and each person doing his or her own thing. Family lifestyle commitments, including the allocation of time, are greatly influencing consumption patterns.

Family Decision Making & consumption related roles:
Marketers recognize the family as the basic consumer decision making units; they most frequently examine the attitudes and behaviors of the one family member whom they believe to be the person most likely to be the primary user of the product or service.

Key Family Consumption Roles:

Dynamics of Husband-Wife Decision Making:
▪ Husband Dominated:
▪ Wife Dominated:
▪ Joint:
– Equal:
– Syncratic:
▪ Autonomic:
– Solitary:
– Unilateral:

The Family Life Cycle:
It is a useful marketing tool when one keeps in mind that there are family and lifestyles arrangements that are fully accounted for by the traditional representation. Flc analysis enables marketers to segment families in terms of a series of stages spanning the life course of a family unit. The flc is a composite variable by systematically combining such commonly used demographic variables as marital status, size of family, age of family members, and employment status of the head of household.

Traditional Family Life Cycle:
It is a progression of stages through which many families pass, starting with bachelorhood, moving on to marriage (and the creation of basic family unit), then to family growth (with the birth of children), to family contraction, and ending with the dissolution of the basic unit. Different stages of the FLC model are as follows:

1) Bachelorhood: young single adult living apart from parents. 2) Honey Mooners: young married couples.
3) Parenthood: Married couple with at least one child living at home. 4) Postparenthood: an older married couple with no children living at home. 5) Dissolution: one surviving spouse.

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