Reference Groups - Influencing Customer Opinions

Published by MBA Skool Team, Published on September 01, 2015

Reference groups are broadly defined as groups that form the basis for influence, comparison and norms for people’s opinions, values and behaviours. People generally have a set of people whom they look up to for similarities and comparison. Those set or group of people form the reference groups for them. The strongest reference group in an individual’s life is generally the family with whom he spends the most time and behaviour or habits are formed as a result of the former influence. Word of mouth is referred to as the piece of information or advice a satisfied/dissatisfied customer tells other customer about his experience and whether to buy or not buy that product. There are various reference groups for an individual to look up to. The most effective reference group is the family of an individual.

It has the maximum impact on an individual’s frame of mind. This comes under the classification of normative reference groups. Other classification of reference groups is comparative reference groups. This is the type of group which individuals use for comparison or evaluation or to set benchmarks to normal practices.

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Overall the different types of reference groups are-:

1. Friendship groups- This consists of the friends from various spheres of life of an individual. They can be from childhood, from educational linkage or other. After the family, they are found to be having most impact. The reason behind this a person is pretty frank with his friends and moreover friends have a certain level of trust factor in them. They can influence an individual in terms of its dressings, possessions and many others.

2. Shopping groups- They are referred to as the bunch of individuals or a group with whom an individual shops with. There may be a certain situation where all persons in a group do not have a clear idea of the purchase. They gather conformity and make the purchase. Such type of group is an example of shopping group. It is a common phenomenon that we usually go with a specific set of people for shopping activities. They may not necessarily be our friends or family. Those type of people comprise part of our shopping groups.

3. Work groups- Set of people who are linked professionally or work together (may be in a professional sense or other manner) comprise work groups. They have a strong influence in an adult’s life as an adult spends most part of his life in the work group so is the impact of that group. For e.g. the faculty, workers in a factory, executives in an office generally form work groups. One factor which really strengthens the work group is the same level of people being part of a work group.

4. Virtual Groups- This is the type which has become quite dominant in recent times. These are the set of people who do not have a physical interaction as such. Their relation is limited to online and once offline their interaction pretty much off track too. Because of the explosion of media and technology, this group has a major chunk of audiences enrolled in it. Examples of this type being- just Facebook friends, Twitter followers, blog loggers etc.

5. Consumer action groups- These are the type of groups specifically created for the consumers. They usually comprise of people who are experts or who have sufficient knowledge in a particular field of expertise. Consumers usually consult them for making purchase related decisions. These type of groups are mostly effective if they are not associated with a specific company or entity so as to give the consumers an impression that they won’t be gaining anyhow by their recommendations of purchase or sell or any transaction (specifically monetary).

Use of Reference groups for influencing consumers

Till now we discussed about the type of reference groups, now let’s analyse in brief of how companies or marketers are using reference group appeals to appeal to customers-:

1. Employing celebrities- A celebrity is defined as an individual who enjoys fame and public attention in the media largely because of the fact of his profession. Examples of celebrities are famous movie actors (Salman Khan, Kareena Kapoor etc.), eminent sports personalities (like Mahendra Singh Dhoni, Sania Mirza etc.). A large amount of individuals generally relate to celebrities for comparisons and aspire to be like them. Marketers just know how to tap it. By employing celebrities though the medium of advertisements or promotions showing him consuming the specific product, they are enrolling large part of the population as their potential customer base. This technique has pretty good chance of success.

2. Use of expert factor-General public has trust in the opinions of experts and it is a tendency not to overlook an advice or a recommendation made by an expert. May be we would take some time in implementing that but that would always remain in our frame of consideration. There have been several examples of use of experts to influence consumers. They unconsciously act as reference points for them. Some common examples of these being use of dental expert in a Colgate ad, presence of auto specialists at an auto dealer etc.

3. Common appeal- For certain complex products it is probably the best tool to achieve success. If a common man is portrayed using a product that requires much of technical expertise and skill to expertise, the consumer gets an impression that he too will be able to do justice with that product. For the general consumer, he refers to that common man doing that and for a moment steps into his shoes and the game altogether changes.

4. Company executive/employee- This is usually not a much used appeal. The fact that the man portrayed is just doing for the financial gain disturbs picture of credibility for that brand in consumer’s frame of mind. For cases of damage control and for cases of new product launches, this can be used. It is because at that point of time, an authentication factor rather than the credibility factor is needed for the company and the product. Examples being Hyundai Santro advertisement with then CEO.

In today’s world there are various methods of advertising or promoting a product- reference group appeals being a significant one of them. Today’s scenario is full of comparisons and aspiration highlights. The one thing to keep in mind is that all this is superficial. May be more than to help us, these appeals are created to exploit us. This does not mean we detach ourselves from any reference group available. This is not possible. As social things we are effected by things happening around us and this is totally right. The only fact to consider is that we choosing the reference groups to follow and look up to rather than the other way around. With this small step, we are taking a big leap into making our lives better as these are reflected in our daily lives of behaviour, actions, reactions and way how people perceive us. If this point is understood, then the purpose of writing this article is achieved.

This article has been authored by Ankit Aggarwal from IIM Kashipur


Research Papers on Consumer Behaviour

Consumer Behaviour (Leon G. Schiffman, Joseph Wisenblit, S. Ramesh Kumar)

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