Role Of Reference Groups In Consumer Behaviour

2.2.2 Role of Reference Groups

For reliable and authentic information related to products, consumers seek sources that are not owned or sponsored by media such as ‘word of mouth’. Sources of word of mouth includes friends and family, clubs, online forums and neighbours. Online sources such as Facebook, Twitter and Instagram provide a platform for user to discuss, tag people and share their experiences and opinions about products. Such reference groups help marketers to manage feedback and address issues promptly. Though, social media feedback poses a lot of challenges for marketers since they have to be very vigilant and tactful in handling online feedback, if positive, it also has the potential to create a strong brand name. Customer concerns

When reference groups affect behaviour and attitudes through pressures for conformity, it is known as normative influence. A consumer is influenced to conform to the norms and behaviour of a particular reference group if (1) the reference group in subject gives significant rewards for conforming to the practices of the group and provides significant punishment as well for non-compliance and (2) the members of the reference group see the person’s behaviour in conforming to the group norms.

The pressure to conform to group norms increases further if there is both positive and negative motivation. Chance of getting a group identity is a positive motivation while threat of less rewards of punishment is a negative emotion. Even when reference groups do not control the outcome of a person’s behaviour, normative influence can happen because individuals are very concerned with what other people perceive of them.

For example, for products such as mouthwash and mouth freshener, normative influence may occur still occur even if other people do not influence an individual’s

Individuals are recognised as part of the group and have achieved formal status. Membership group are further segregated into (1) primary and secondary and (2) informal or formal. People who are in regular contact with an individual such as family and friends form their primary reference group. On the other hand, when group members contact less frequently with individuals, they become a part of his or her secondary group. For example, for an individual who plays tennis every week in a local sports club, members of the sports club form a part of his or her secondary reference group. Primary reference groups are very important for the marketers since they are critical in defining a consumer’s tastes, beliefs and preferences. Since primary groups directly influence the purchase behaviour of an individual, marketers are interested in studying the nature of their influence. Research has shown that individuals of a group who spend a lot of time together are more likely to buy the same product or brand.

Formal group is characterized by a defined structure and a known list of members and requirements for membership. On the other hand, informal groups have less structure when compared to formal groups and are usually based on friendship or interests. For example, a project team in an office is a formal group in which the members and their specific roles are defined, while, a family is an informal