Reference Groups Influencing Consumer Behavior

Introduction

For several decades, the dynamics in the marketing environment have shifted from predictable consumer trends to those that are complex and almost unpredictable. In the quest to unearth the factors that determine the trends and complexities surrounding client behavior, there is a need to examine the issue of social associations among individuals. Remarkably, people love associating with others who share similar ideas, social aspects, religious orientations, education, and status. The associations, also known as reference groups, may be formal or informal depending on the strength of the bonds and the setting. The need to belong to a certain group emanates from the social nature of human beings. It is in the groups that individuals base their buying patterns and purchasing decisions. In these groups, members influence their colleagues to buy products that they believe are suitable and in line with their views. The purpose of this essay is to identify two reference groups, assess the factors that determine power-sharing in these groups, and how the groups influence consumer behavior.

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Overview of Reference Groups

Primary and Secondary Groups

Although several reference groups characterize modern individuals, the two major social associations comprise primary and secondary formations. Primary associations are usually those that have close ties and last for long periods. While coining the issue of primary associations, Charles Cooley, who pioneered the concept, noted that families, church groups, childhood friends, intimate lovers, as well as support organizations make up some examples of these groups (Cote & Levine 2014). The closeness evidenced by the social associations in the primary category makes them strive to engage in activities that do not hurt their colleagues. As such, the focus of the individuals who are part of the group is usually in line with the views deemed positive by the others. In the group, the decision-making process aligns itself with the laid down norms and anyone who tries to do the opposite receives some kind of reprimand from the power holders in the group.

On the other hand, a secondary group is a composition of individuals who rarely interact. Besides their minimal interaction, the individuals in the association do not have several similarities. As such, a majority of people grouped in the second category do not base their decisions on the views of the others. According to Hoonsopon and Puriwat (2016), examples of groups classified in the second category include employees, businesspeople, as well as members of a particular society. In workplaces, it is likely to find people practicing different lifestyles and professing diverse religions, a factor that is not common in families, church groups, and intimate lovers. The divergence clear among people in the second group is an indication of the minimal similarities among them. Conversely, although primary and secondary groups do not have similar ties, they both have pronounced power over the decisions and buying behavior of individuals. Therefore, companies cannot underscore the role that reference groups play in determining the buying patterns as well as client perception towards certain brands in the market.

Factors That Determine Power-Sharing in Reference Groups

To understand the influence that reference groups have on individuals and their buying behavior, it is important to identify the factors that dictate how individuals share power in these social formations. The relevance of studying the nature of power-sharing in social associations relates to the pronounced role that reference groups have on marketing enterprises. By understanding the nature of power-sharing, managers can target their opinion leaders and use them to the benefit of their brands. When companies win the minds of the opinion leaders, the likelihood of receiving positive regard from the group members amplifies. Gürhan-Canli, Hayran, and Sarial-Abi (2016) argue that the increasing use of celebrities in adverts is because several clients look at them as role models and are likely to change their minds once they see them advertising certain products. Therefore, understanding the factors that dictate power-sharing in reference groups is vital in unearthing their influence on consumer behavior. These factors include status, position in the group, religion, and level of education.

Status and Position in the Group

Status is one of the factors that determine the power held by an individual in a particular group. The factor is more evident among people in secondary associations as compared to those grouped in primary formations. The pronounced nature of status in the secondary level owes to the fact that primary associations have set positions, which do not align with the status of individuals. In families, for instance, parents are the sole decision-makers. However, in workplaces, churches, businesses, and support organizations, decision-makers comprise the leaders or those who have a high status about the other members. Notably, status in many groups may be an outcome of the earnings that individuals have or the resources at their disposal. Moreover, it is common to witness people in the lower status trying to emulate the behavior of those who occupy higher status. People in lower status view the products purchased by individuals in the higher status to be of exceptional value.

Consequently, the position in the group can be definite or given by individuals in the association. Forsyth (2018) asserts that in primary groups, the position usually goes to older individuals, males, or those who have high income or resources. For instance, in primary groups such as families majority of those who make decisions comprise males. It is worthwhile to note that while several males make decisions in several families especially in developing countries, women are gradually involving themselves in decision-making processes in developed countries. Moreover, in some groups like those composed of intimate lovers and childhood friends, decision-making centers on individuals who have a high income. In these groups, those who have high income decide what to purchase, when to go on holidays, and a range of other issues concerning the social setting.

Religion and Level of Education

Besides status and position in the group, religion is also another factor that determines how individuals in a particular formation share power. Notably, unlike in other scenarios where an individual acquires the power to make decisions, the power associated with religion relates to the provisions that it envisions. In the Islamic religion, for instance, consumers purchase products that are in harmony with the provisions of the Holy Quran. On the other hand, Christians are likely to buy products that do not contravene the laws espoused in the Holy Bible.

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Therefore, people who profess certain religions align their behavior with the contents of their holy books and the teachings from their ministers or prophets. Remarkably, it is unlikely to sell pork in several parts of the United Arab Emirates because several people in the region profess the Islamic religion, which prohibits the consumption of pork (Terzi, Alserhan, & Altunişik 2016). Avoidance of pork in countries such as the United Arab Emirates is a clear indication that the power of religion is evident in various parts of the world. It also compounds the fact that power dictates the type of products purchased in these regions.

Another important factor that dictates how group members share power is the level of education. In several social formations, people who hold higher positions about power and decision-making are those who have high levels of education. Baldus, Voorhees, and Calantone (2015) allude that individuals in the social associations usually give the educated members permission to lead and make decisions owing to the notion that they have a wider understanding of issues that pertain to the changing dynamics of the modern society.

The force linked to the level of education is gradually taking shape in many religious associations were several ministers are joining universities with the intent of furthering their education. Fundamentally, what drives several religious leaders and ministers to further their education is the need to retain their relevance in society (Antoun 2014; Mercer 2015). While the level of education is among the factors the determine power-sharing among individuals in societies, it needs to be combined with factors such as age, experience, and income. It is not common for a group to grant leadership to a young graduate who has inadequate experience over elders who have little education.

How Reference Groups Influence Consumer Behavior

Utilitarian and Dissociative

As the name depicts, utilitarian influence is one that compels individuals to purchase products, which may not be in line with their preferences. In effect, the type of influence makes people behave in a manner that may be contrasting with their actual character. In some cases, a person may be forced to dress in a way that the society thinks is right but not by their desires. In the perspective of Filieri (2015), normative influence, also known as utilitarian, has predefined rules that guide the behavior of consumers in a particular market. A good example is the individuals in the Asian continent who strive to impress communities in place of their interests (Schütte & Ciarlante 2016). Notably, in several communities in places like China, people engage in activities that lead to communal pleasure in place of their happiness, a clear indication of the power exerted by utilitarian or normative influence. Furthermore, in the utilitarian type of influence, individuals who try to undertake different activities or purchase unique products become subjects of reprimand from the others who may look at them as disobedient.

On the other hand, dissociative influence is different from several other forces exerted by reference groups in modern societies, which dictate some level of similarity among member individuals. Contrastingly, in a dissociative type of influence, individuals move away from certain behaviors or products. Schütte and Ciarlante (2016) elucidate that the behavior of avoidance witnessed from the dissociative type may be a result of the perception that a group has towards certain brands or behaviors. It is important to explain that the behavior is highly reliant on issues such as religion, culture, or level of education. Therefore, in places where the group leaders view the brand as unethical, they will advise the members to stay away from the product or shun the activity.

Comparison

Another way in which reference groups influence the behavior of customers is through comparison. Fundamentally, the comparison is a leading type of influence witnessed across the globe. Unlike the utilitarian type of influence, the comparison does not compel individuals to behave in a certain manner but is democratic. In comparison type of influence, people try to behave like their friends or others in society. Technological advancements witnessed in modern society where people interact via online platforms have played a tremendous role and facilitated the influence exerted through comparison (Rowles 2017). Individuals from various parts of the world look at the actions of their peers in other regions and gradually begin behaving like them.

A close look at the dress codes, behavior, buying patterns, and other modern trends reveals the existence of comparison in several parts of the world. When individuals see their peers drinking or smoking, they too may be tempted to engage in the activities so that they fit into the social system. According to Arnett (2014), several adolescents in the United States engage in drug abuse due to the desire to fit into a particular setting. A company that introduces products deemed as exceptional in some parts of the world may be a multinational brand globally when other individuals witness the warm reception from their peers.

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Conclusion

Reference groups play an important role in dictating the behavior of consumers. The products purchased by individuals resonate with the norms and views of particular groups. It is unlikely to find people who make their purchases or consume certain services before seeking the opinion of peers. While some opinions may not be through face-to-face interactions, the individuals may visit the internet and look at the reviews of goods or services before making their purchase. The opinion presented by reference groups where individuals are members can facilitate the purchase or consumption of a service or dissuade them from buying the products. In modern societies where competition is cutthroat, managers can use the opinions from the groups to outsmart their rivals by introducing products that match the religious, cultural, and views of the target consumers.

Reference List

Antoun, R 2014, Muslim preacher in the modern world: a Jordanian case study in comparative perspective, Princeton University Press, New Jersey.

Arnett, J 2014, Adolescence and emerging adulthood, Pearson, Boston.

Baldus, B, Voorhees, C, & Calantone, R 2015, ‘Online brand community engagement: scale development and validation’, Journal of Business Research, vol. 68, no. 5, pp. 978-985.

Cote, J & Levine, C 2014, Identity, formation, agency, and culture: a social psychological synthesis, Psychology Press, London, United Kingdom.

Filieri, R 2015, ‘What makes online reviews helpful? A diagnosticity-adoption framework to explain informational and normative influences in e-WOM’, Journal of Business Research, vol. 68, no. 6, pp. 1261-1270.

Forsyth, D 2018, Group dynamics, Cengage Learning, New York.

Gürhan-Canli, Z, Hayran, C & Sarial-Abi, G 2016, ‘Customer-based brand equity in a technologically fast-paced, connected, and constrained environment’, AMS Review, vol. 6, no. 1, pp. 23-32.

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Hoonsopon, D & Puriwat, W 2016, ‘The effect of reference groups on purchase intention: evidence in distinct types of shoppers and product involvement’, Australasian Marketing Journal (AMJ), vol. 24, no. 2, pp. 157-164.

Mercer, C 2015, ‘Finding freedom abroad: working with conservative Christian students in study abroad programs’, Teaching Theology & Religion, vol. 18, no. 1, pp. 81-87.

Rowles, D 2017, Mobile marketing: how mobile technology is revolutionizing marketing, communications and advertising, Kogan Page Publishers, London, United Kingdom.

Schütte, H & Ciarlante, D 2016, Consumer behaviour in Asia, Springer, New York.

Terzi, H, Alserhan, B & Altunişik, R 2016, ‘The relationship between religiosity and consumer behaviour among Arab, Turkish, and Indonesian students: testing an 8th century AD measure of Islamic religiosity’, International Journal of Teaching and Case Studies, vol. 7, no. 4, pp. 207-222.

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