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 Internet
o Newspapers
o 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

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general or specific values, attitudes or a specific
guide for behavior. This basic concept provides a
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

normativ comparati
indirect
e ve

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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

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 leaders, TV 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

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 purchases—are brought. This stage is
typically much briefer.

• 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

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 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.

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

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 likely to be purchased with reference
groups in mind.

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.

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 • Legitimize the decision to use the
same products as the group.

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