External influences on CB
Groups & Reference
Groups
What is a Group?
• A Group may be defined as two or more people who interact to
accomplish either individual or mutual goals(Goal may be to buy
a product or do a work together).
• A Reference Group is any person or group that serves as point of
comparison (or reference) for an individual in forming either
general or specific values, attitudes, or a specific guide for behavior.
• Reference groups become strong reference points because of their
credibility in terms of knowledge and experience, attractiveness
and the power they wield.
• From a marketing perspective, reference groups are groups that
serve as frames of reference for individuals in their purchase or
consumption decisions.
Broad Categories of
Reference Groups
• Normative Reference
Groups
• Comparative Reference
Groups
Copyright 2007 by Prentice Hall
2 types of reference groups
• Normative
• Comparative
Reference groups that influence general or broadly defined values or behavior
are called Normative Reference Groups
e.g. A child’s Normative Reference Group is the immediate family) .
• Reference Groups that serve as benchmarks(comparision) for specific or
narrowly defined attitudes or behavior are called Comparative Reference
Groups (A Comparative Reference Groups might be neighboring
family whose lifestyle appears to be admirable and worthy of
imitation).
Types of Reference Group Influence
• Informational Influence
– When a member of reference group provides
information used to make purchase decisions
• Normative Influence
– When we conform to group norms in order to belong
to that group
• Identification Influence
– When we identify with, and internalize, a group’s
values and behaviours
Factors Encouraging Conformity: A Reference
Group Must ...
• 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.
• Legitimise the decision to use the same products as the
group
Selected Consumer-Related
Reference Groups
• Friendship Groups
• Shopping Groups
• Work Groups
• Virtual Groups or Communities
• Brand Communities
• Consumer-action Groups
• Celebrities
Friendship Groups
• 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 or her
friends are most likely to influence the individual’s purchase decisions.
• Seeking and maintaining friendships is a basic drive of most people.
• Friends fill 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.
• Marketers of products such as brand-name clothing, fine jewelry,
snack foods, and alcoholic beverages recognize the power of peer
group influence and frequently depict friendship situations in their
advertisements.
Shopping Groups
• 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 and
therefore, they function as what has been referred to as purchase pal.
• The motivation for shopping with a purchase pal range from a primarily
social motive to helping reduce the risk when making an important
decision.
• A special type of shopping group is the in-home shopping party, which
typically consists of a group that gathers together in the same home of a
friend to attend a “party” devoted to demonstrating and evaluating a
specific line of products.
Work Groups
• The sheer amount of time people spend at their jobs, frequently more than
35 hours per week, provide ample opportunity for work groups to serve as
a major influence on the consumption behavior of the members.
• Formal Work Group: it 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 Work Group: it consists of people who have become friends as
a result of working for the same firm, whether or not they work together as
a team, and they can influence the consumption behavior of other members
during coffee or lunch breaks or at after-work meetings.
Virtual Groups or Communities
• A virtual team (also known as a geographically dispersed
team or distributed team) is a group of individuals who work across time,
space and organizational boundaries with links strengthened by webs
of communication technology.
• Powell, Piccoli and Ives define virtual teams in their literature review
article "as groups of geographically, organizationally and/or time dispersed
workers brought together by information and telecommunication
technologies to accomplish one or more organizational tasks.”
• Ale Ebrahim, N., Ahmed, S. & Taha, Z. in their recent (2009) literature
review paper, added two key issues to definition of a virtual team “as small
temporary groups of geographically, organizationally and/ or time
dispersed knowledge workers who coordinate their work predominantly
with electronic information and communication technologies in order to
accomplish one or more organization tasks”.
Contd…
• Members of virtual teams communicate electronically and may never
meet face-to-face.
• Virtual teams are made possible by a proliferation of fiber
optic technology that has significantly increased the scope of off-
site communication.
• Virtual teams allow companies to procure the best talent without
geographical restrictions.
• According to Hambley, O’Neil, & Kline (2007), "virtual teams require
new ways of working across boundaries through systems, processes,
technology, and people, which requires effective leadership...despite the
widespread increase in virtual teamwork, there has been relatively little
focus on the role of virtual team leaders."
Brand Communities
• A brand community is a community formed on the basis of attachment to
a product or marquee.
• Recent developments in marketing and in research in consumer
behavior result in stressing the connection between brand,
individual identity and culture. Among the concepts developed to explain
the behavior of consumers, the concept of a brand community focuses on the
connections between consumers.
• A brand community can be defined as an enduring self-selected group of
actors sharing a system of values, standards and representations (a culture)
and recognizing bonds of membership with each other and with the whole.
• Brand communities are characterized in shared consciousness, rituals and
traditions, and a sense of moral responsibility.
Contd…
• The term "brand community" was first presented by Albert Muniz Jr. and
Thomas C. O'Guinn in a 1995 paper for the Association for Consumer
Research Annual Conference in Minneapolis, Minnesota.
• In a 2001 article titled "Brand community", published in the Journal of
Consumer Research (SSCI), they defined the concept as "a specialized, non-
geographically bound community, based on a structured set of social relations
among admirers of a brand." This 2001 paper has been acknowledged
by Thomson Scientific & Healthcare to be one of the most cited papers in the
field of economics and business.
• Many brands provide examples of brand communities. In computers and
electronics: Apple Inc. (Macintosh, iPod, iPhone), Holga and LOMO cameras,
and Palm and Pocket PC Ultra-Mobile PCs.
• In vehicles: Ford Bronco, Jeep, automobiles, and
• Royal Enfield and Harley-Davidson motorcycles.
• In toys: Barbie and Lego.
Consumer-action Groups
• A particular kind of consumer group-A Consumer Action Group-has emerged in
response to the consumerist movement. Today there are a large number of such
groups that are dedicated to providing consumer products in a healthy and
responsible manner, and to generally add to the overall quality.
• For example, a diverse range of consumer concerns being addressed by private and
public consumer-action groups: neighborhood crime watch, youth development,
forest and wildlife concerns, children and advertising, race and ethnicity,
community volunteerism, legal assistance, public health, disaster relief, energy
conservation, education, smoking, the environment, access to telecommunications,
science in the public interest, credit counseling, privacy issues, and children and
internet.
Two broad categories of Consumer Action Groups:
• Those that organize to correct a specific consumer abuse and then disband
(Agitation against liquor shop in a community) .
• Those that organize to address broader, more persuasive problem areas and operate
over an extended or indefinite period of time (Group against drunk driving).
Celebrities
• A celebrity is a person who has a prominent profile and commands a great
degree of public fascination and influence in day-to-day media. The term is
often synonymous with wealth (commonly denoted as a person with fame and
fortune), implied with great popular appeal, prominence in a particular field,
and is easily recognized by the general public.
The Expert
• A second type of reference group appeals used
by marketers is the expert, 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 that the advertisement promotes.
• e.g. An ad for a quality frying pan may
feature the endorsement of a chef.
The Common Man
• A reference group appeal that uses the testimonials of satisfied
customers is known as the common-man approach.
• The advantage is that it demonstrates to prospective customers
that someone just like them uses and is satisfied with the good
or service being advertised.
• The common man appeal is especially effective in public
health announcement (such as antismoking or high B.P.
messages), for most people seem to identify with people like
themselves when it comes to such messages.
The Executive and Employee Spokesperson
• The popularity of this type of advt. 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.
• e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.
Trade or Spokes-Character
• These are often employed as attention grabbers,
acting as spokespersons to promote children’
products.
• Trade characters are intended to bond a child to a
brand so that the child’s brand awareness might
form the basis of brand preference either
immediately or later in life.
• e.g. Animated characters used by marketers in
advertisements for children products
Other Reference Group Appeals
• A variety of other promotional strategies can
function creatively as frames of reference for
consumers.
• Respected retailers and the editorial content of
selected special interest magazines can also
function as frames of reference that influence
consumer attitudes and behavior.
• e.g. Indian Dental Association’s seal of
approval for toothpaste.