What are reference groups and how do they influence consumer decision making?
A reference group is the paradigm of an external influence to which an individual feels associated and wants to be identified with. It is a group where an individual tends to form his own attitudes and beliefs. ‘A person or group that significantly influences an individual’s behaviour(Bearden and Etzel,1982). These reference groups are divided into formal and informal groups. Following a formal group is easier for a marketer to trigger, as it is a group that follows an agenda and have regular meetings. Whilst an informal group is associated with other external social factors that are less easy to be triggered, are known to be the most influential ones. These include families, friends and other loose associations at university or at work for example.
Reference groups are influenced by two kinds. Influences can be informational , utilitarian and value-expressive. Firstly, being a normative influence to the individual by means as having decisions on fundamental attitudes. A child’s normative reference group is the immediate family, is an example of a normative influence. Secondly, reference groups that serve as benchmarks for particular defined attitudes are known as the comparative reference group. This group influences the person to create decisions. These decisions can be taken on products, activities and branding. Having a family friend whose lifestyle appears to be admirable and worthy of imitation is an example of a comparative reference group.
This paper will be explaining the concept of reference groups in more detail. Undoubtedly, the most influential driver of one’s behaviour is the reference group that is around the individual. How influential they can be in order to form such attitudes and beliefs of an individual. This paper will also be discussing what effects or influences these groups have on the consumers decision making.
Initially, the notion behind a reference...