Consumer Behaviour

Reference Groups:

Consumer behaviour is shaped by personal factors including personal attitudes, motivation and self-concept. The culture in which we live and the social groups to which we belong act as an important influence on the way in which we as consumers behave. Reference groups hold primary & secondary types of influence over our decision making process. The reason for this is that our natural desire for social acceptance influences us to act in a manner in keeping with observed behavioural cues. Reference groups play an integral part in the consumer decision making process. “A reference group is basically any external influence that provides social cues.”

A group is defined as two or more individuals who share a set of norms, values, or beliefs and interact to accomplish individual or mutual goals. A group becomes a reference group when an individual identifies with it so much that he or she takes on many of the value, attitudes or personal standards of group members. The degree of reference group influence varies across product and brands with factors such as (1) the visibility to the group, (2) the necessity/ nonnecessity nature of the product, (3) the level of commitment the individual feels to a group, (4) the relevance of the behavior to the group, and (5) degree of individual’s confidence in his own judgment in the purchase situation.

The theory is often used to describe two major types of relationships between individuals and groups. These two major dimensions are known as “normative” reference group behaviour and “comparative” reference group behaviour. Because some reference groups teach individuals how they should behave, “normative” reference group theory is sometimes referred to as a guide for individuals’ behaviour. Additionally, some social groups, or “comparative” reference groups, give individuals a basis for comparing themselves or their group to other individuals or groups. Comparative reference groups also influence individuals’ feelings and behaviour. Again though by the normative principle.

Primary/Secondary.

Secondary groups, in contrast to primary groups, are large groups involving formal and institutional relationships. Secondary relationships involve weak emotional ties and little personal knowledge of one another. Most secondary groups are short term, beginning and ending without particular significance.They may last for years or may disband after a short time. The formation of primary groups happens within secondary groups.

Normative reference groups:

Humans are inherently social animals, and individuals greatly influence each other. A persons family can be described as a normative reference group. Immediate family exerts a strong influence over our major life decisions. Normative reference groups are source of cues on appropriate behaviour in general. A normative reference group is a group that has influence over the values or behaviour of an individual. Using the three functions of a reference group as mentioned above, they act as a sort of guide to the person by helping them adapt to society to live and survive. Parents and siblings as these are likely to play an important role in shaping the child’s values, view of the world and behaviour. E.g how a child

Affiliation group/dissociative groups

`The affiliation groups are the ones to which the subject wants to belong. These groups can be very powerful in influencing the behavior, since the subject will adopt the group’s behavior in the hope of his affiliation as member. The marketing frequently uses images of the affiliation groups suggesting in this way that usage of a certain product will determine the subject’s advance to the quality of group member. E.G the recent Heineken Rugby ads. If someone wished to play rugby or watch it with a group of lads from work that happened to be into rugby the liklyhood is that the individual would be more likely to drink Heineken then something like Beamish. The dissociative groups are the ones to which the person does not want to belong. This tendency can have a negative effect on the behavior – the individual avoids certain products or behavioral aspects in order to not be assimilated by the dissociative group. Like in the case of the affiliation groups, the defining of the dissociative groups is purely subjective, varying from a group to another.

Reference groups not tribes:

It is important to note that tribes and reference groups are not the same thing. Tribes are a rather specialized form of social influence. A group of consumers who share a set of social relationships based upon usage or interest in a product Brandfests enhance brand loyalty Consumer tribe share emotions, moral beliefs, styles of life, and affiliated product Tribal marketing: linking a product to the needs of a group as a whole

Aspirational reference groups:

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.

Avoidance reference groups:

Also known as dissociative reference group includes people that the individual would notlike 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. Marketers show ads with undesirable people using competitor’s product Like the I’m a pc.

Comparative reference:

Comparative reference groups exert a comparative influence on specific brand choices. Comparative groups or brands serve as a bench mark in order to judge ones own

Informational influence

The reference group is used as an informational source in the different stages of the decisional process. This type of influence appears when an individual uses the behaviors and opinions of the reference group members as reliable informational sources. This influence is based either on the similarity of buyer’s desires and preferences with the ones of the group members or on the recognition of the group recommendations.’

Reward Power :

The perception that you will be rewarded by a group or other environmental influence for certain behavior. The more valuable the reward the greater the power. Rewards can include intangible things such as praise or honors as well as money, goods and services. Advertisers frequently use reward power to influence consumers by implying love, happiness, popularity, and success will be yours for using their product. Rewards are used in direct selling of products by companies such as Amway, Magic Chef and Tupperware. Their sales people hold sales rallies and receive large rewards, swimming pools and motor homes, for promoting their products.

Coercive Power :

This power influences behavior with fear or the withholding of rewards. This is seldom physical punishment, but subtle psychological detriment or loss of reward. Coercion is intended to frighten or scare the consumer by showing the unfortunate results that can occur if the item is not purchased, such as being shunned for bad breath or dandruff. However, if it is demonstrated that buying the product will make the problem go away, it is reward power. Coercion is unpleasant. People don’t like viewing disagreeable things and will turn-off. Coercive ads that do not alienate the consumer are difficult to design, but good ones are very successful. Remember the egg frying in a pan and the caption, “Your Brain On Drugs.”

Legitimate Power :

Group members’ perception that the group has the legitimate right to influence them. Expressions such as “should”, “ought to”, “must”, give legitimacy to expected behavior from a group such as family/parents, teachers, or religious organizations. Advertisers appeal to the consumers moral values such as ads by charities, non-profit organizations, alumni associations, Salvation Army and Save the Children. Advertisers also use the organizations that represent authority and knowledge to validate products such as AMA for medicines, AAA for car service, or ADA for diets.

Expert Power :

People accept the influence of individuals who are known experts recognized for their expertise. Teachers are subject experts and their students accept their instruction. Salespeople frequently demonstrate their knowledge of the products they sell to customers. The power is strongest if the expert is not paid to promote the product, but is unbiased. Fictious experts are effective in spite of being supported by the producer, such as Mr. Clean, Betty Crocker, etc. This is related to Ads that provide evidence of tests and lists of ingredients, and performance data which use “information” as expert power.

Referent Power :

An individual’s identification with a group grows as s/he associates more with that group. The stronger the relationship the greater the influence of the group and certain members of the group on the individual. If the individual maintains the identification with the group, the greater its referent power. Advertisements show ordinary people, like you and me, using the same product brand as popular role models or heroes. Movie and sports stars are frequently used for their referent power. Status symbols are often recommended by celebrities.

Negative Effects of Group influence:

  • Loss of inhibitions
  • Greater willingness to take risks
  • Group shopping results in more (unplanned) purchases
  • Question – is group influence & conformity declining?

Reference group influences stronger for purchases that are:

  • Luxuries rather than necessities
  • Socially conspicuous/visible to others

Deindividuation:

Individual identities become submerged within a group. Example: binge drinking at college parties Social loafing: people don’t devote as much to a task when their contribution is part of a larger group. Example: we tend to tip less when eating in groups

Risky shift:

group members show a greater willingness to consider riskier alternatives following group discussion than if members made their own decisions

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