Reference Group
In our daily lives, we all get influenced by a variety of people while making our purchase decisions. We, as humans do a lot to try to impress others. We make purchases to get compliments and try that other should not think less of us.
A reference group is a group whose perspective we consider. Now our reference could be very large or very small including a few of our family members or few close friends. Reference groups influence people a lot in their buying decisions. They set the levels of lifestyle, purchasing patterns, etc.
Reference groups are of two types −
- Primary Groups
- Secondary Groups
Primary Groups
Primary reference groups are basically the set of people whom you meet every day. They can be from your family, your close friends, your roommates, etc.
These people from primary groups may have a direct and strong impact on your lives and your buying decisions since they are very significant to you. Primary groups make you comfortable and give you a feeling that they are with you when you are confused about a purchase. These people give you very honest and clear advice as they are so close to you, due to which you could be more confident about the purchase. Research shows that the bond between people leads people to be effective social and as satisfied consumers.
Secondary Groups
Secondary reference groups are usually formal and they speak less frequently. They might be professionals, your collogues, your seniors at work or your acquaintance at the club, etc.
In secondary reference groups, the power to influence people is quite less as compared to primary reference groups as people in these groups are not that comfortable in sharing their thoughts or views on the purchase.
Let’s have a look at few more reference groups
Aspirational Group
The aspirational group is the one to which a person may want to become part of. They currently are not part of that group but wish to become and get with that group. For doing the same, they try to dress, talk, act, and even think of the way the members of that group do.
For example, people who like Madhuri Dixit wish to become like her and meet her and so start purchasing and using all those products that she endorses.
Dissociative Group
The people in these groups are totally opposite to the people in the aspirational group. Here people deny becoming or getting connected to a particular group. They just hate being related to that group.
For example, if people don’t like a particular community, they would never like being connected to them. So they would try all the possible ways to avoid the way in which they dress, think, or act.
Thus marketers need to understand the likes and dislikes of the consumers and also the groups to which they belong. Marketers should recognize the extent to which a reference group influences the consumer and he should also understand out of all the groups which group influences him the most.
Family
The family of a consumer plays an important role in the decision-making process. The parents, siblings, relatives all have their own views about a particular purchase.
Following are the roles in the family decision-making process −
- Influencers − Influencers are the ones who give ideas or information about the product or service to the consumer.
- Gate Keepers − Gatekeepers are the family members who usually panel the information. They can be our parents or siblings too who can in any form provide us the information about the product.
- Decision Makers − Family or our parents who usually have the power to take decisions on our behalf are the decision-makers. After the complete the research they may decide to purchase the particular or dispose of it.
- Buyers − Buyer is the one who actually makes the purchase of the product.
- End-Users − The person who finally uses the product or consumes the service is the ultimate consumer also called as End-user as per the context.
A consumer gets influenced by his family members as well as friends. Since childhood the culture which he follows or the rituals which he observes and the moral values and the religious principles he usually receives them from his family. However, the individual learns fashion, attitude, or style from his friends. All these attributes or traits together influence the buyer’s decision making.
Group Dynamics
Group dynamics means how individuals form groups, and how one person purchasing influences the other individual’s actions. Nowadays marketers use the concept of group dynamics or personal influence often as this exceeds the power of the company’s promotional efforts. “A group may be defined as two or more people who interact to accomplish either individual or mutual goals”.
This means that there can be an intimate group like two neighbors going out for shopping especially grocery products and a more formal group like housing association members who are more concerned about schools, parks, taxes, etc., in their vicinity. We can also include, that an individual consumer looks to others for help in deciding which products or services to use.
Types of Groups:
Groups can be classified in a number of ways like by structure, by the regularity of contact, by size, by the membership. Sometimes groups are differentiated in terms of size or complexity but it is very difficult to state which group to be considered as large or small.
It is seen that in some groups a single member knows only a few of the group’s members personally or is fully aware of roles or activities each member has to play whereas in small groups every member knows each other personally and are also aware of the specific roles or activities in the group. For example, each member of the college science club is likely to know others in the club and is also aware of their duties and interests within the group.
A. Primary Group and Secondary Group:
If a person interacts on a regular basis with other individuals, then these individuals can be considered a primary group. Interaction can be with members of the family, with the colleagues, with neighbors, etc., this means whose opinions are valued by that person, on the other hand, if a person interacts only occasionally with others, or whose opinions are not important, then this type of group is called secondary.
Difference:
Primary and secondary groups can be distinguished on the basis of the perceived importance of the group to the individual and the frequency with which the individual interacts with them.
Formal Group and Informal Group:
This is the second useful way to classify groups on the basis of their formal nature. If a group has a highly defined structure, specific roles, and authority levels, and specific goals then this is called a formal group. For example, in an organization – a list of all employees (defined structure), Managing Director, Manager, Assistants, etc., (specific roles and authority levels), this shows a formal group.
Goals may be different for different organizations like to assist the homeless, working for the benefit of old people or marketing goals-Increasing sales, promoting the product, etc. In these kinds of groups, members have a vested interest towards a specific -goal, therefore, they are classified as a formal group.:
On the other hand, if a group is more loosely defined, then it is an informal group. For example, four-five girls who become friends in school and now meet only once a month. For the marketer, informal social groups are more important because of the loosely defined structure a more conducive environment is available for the exchange of information to the members.
B. Membership Group and Symbolic Group:
Membership Group is a group to which a person belongs or would qualify for membership. For example, college alumni association, IMA, an association of doctors, tennis club, etc. Symbolic group is a group in which an individual is not likely to receive membership even if he/ she acts as a member by adopting that group’s values, behavior, and attitude. For example, for youngsters cricketers like Sachin Tendulkar, Sourav Ganguly, etc. may constitute a symbolic group. They try to identify with these players by imitating their behavior like the style or sometimes by purchasing a specific brand of bat, gloves, dress, ball, etc.
Even after this, youngsters probably will never qualify for membership as a professional cricketer. Nowadays marketers are using the celebrity for advertising their products so that people aspire to become like them after owning and using those products. Studying these groups is very important to the marketer as they exert the greatest potential influence on the consumption decisions of an individual.