Welcome to. Chapter No: 04 of MKT 425: Consumer Behavior. Chapter Name: Reference Groups. Modular:

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1 Welcome to Chapter No: 04 of MKT 425: Consumer Behavior Chapter Name: Reference Groups Modular: Mr. Afjal Hossain Lecturer Department of Marketing, PSTU Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

2 Learning Objectives 1. Understand the roles of different types of reference groups. 2. Learn how companies use different types of reference groups appeals. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

3 Definition Group: A group is defined as two or more people who interact to accomplish either individual or mutual goals. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

4 Definition Membership Status: Sometimes groups are classified by membership status. A person is qualified for membership status when he/ she either belongs or would qualify for membership in. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

5 Definition Symbolic Group: There are also group in which an individual is not likely to receive membership. Despite acting like a member by adopting the group s values, attitudes and behavior. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

6 Definition Reference Group: A group in society that influences an individual s purchasing behavior. In another words, A reference group is any person or group that serves as a point of comparison (reference) for an individual in forming either general or specific values, attitudes or specific guide for behavior. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

7 Definition Reference Group: From a marketing perspective, they are the groups that serve as frames of reference for individuals in their purchase or consumption decisions. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

8 Types of Reference Groups 1. Normative Reference Groups: Reference groups that influence general or broadly defined values or behavior are called normative reference groups. Ex: A child normative reference group is immediate family. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

9 Types of Reference Groups 2. Comparative Reference Groups: Reference groups that serve as benchmarks for specific or narrowly defined attitude or behavior are called comparative reference groups. Ex: A Young comparative reference group is friends, teachers etc. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

10 Special Reference Groups 1. Indirect Reference Groups: It consists of those individuals or groups with whom a person does not have direct face-to-face contact. Ex: Movie stars, Sports heroes etc. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

11 Special Reference Groups 2. Societal Reference Groups: It consists family, friends, social class, various subcultures, one s own culture, and even other cultures. They influence an individual s consumer behavior. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

12 Implications of Reference Groups They serve as information sources and influence perceptions They affect an individual s aspiration levels Their norms either constrain or stimulate consumer behavior Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

13 Major Consumer Reference Groups Major Consumer Reference Groups Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

14 Factors affecting Reference Groups 1. Information and Experience: An individual who has firsthand experience with a product or service, he can easily obtain full information about it, is less likely to be influenced by the advice or example of others. On the other hand, a person who has little or no experience with a product or service and does not expect to have access to objective information about it, is more likely to seek out the advice or example of others. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

15 Factors affecting Reference Groups 2. Credibility, Attractiveness and Power: A reference group that is perceived as credible, attractive, or powerful can induce consumer attitude and behavior change. They are more likely to be persuaded by sources with high credibility. Different reference groups may influence the beliefs, attitudes and behavior of an individual at different points in time or under different circumstances. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

16 Factors affecting Reference Groups 3. Conspicuousness of the product: The potential influence of a reference group on a purchase decision varies according to how visually or verbally conspicuous the product is to others. A visually conspicuous product is one that will stand out and be noticed, a verbally conspicuous product may be highly interesting or it may be easily described to others. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

17 Factors affecting Reference Groups 4. Reference groups & consumer conformity: A reference group must accomplish: Aware of a specific product or a brand Opportunity to compare his/ her own thinking Adopt attitudes that consistent with the norms of the group Legitimize the decision to use the same products as the group Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

18 Types of Reference Groups 1. Friendship Groups This type of groups are usually unstructured and lack specific authority levels. In terms of relative influence, after an individual s family, his/ her friends are most likely to influence the individual s purchase decisions. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

19 Types of Reference Groups 2. Shopping Groups Two or more people who shop together are shopping groups. Ex: Shop together whether for food, for clothing or simply to pass the time. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

20 Types of Reference Groups 3. Work Groups The sheer amount of time that people spend at their jobs frequently more than 35 hours per week are work groups. Ex: Work together as a team for the development of the company. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

21 Types of Reference Groups 4. Virtual Groups/ Communities Both adults or children are turning on their computers, logging onto the web and visiting special-interest Web Sites often with chat rooms are virtual groups or communities. Ex: Groups working with computers and internet. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

22 Types of Reference Groups 5. Consumer Action Groups This type of groups are has emerged in response to the consumerist movement. They mainly work to make the right purchase decisions, consume the products and services in a healthy and responsible manner and to generally add to the overall quality of their lives. Ex: CAB. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

23 Types of Reference Groups Appeals 1. Celebrities: Celebrities, particularly movie stars, TV personalities, popular entertainers and sports icons provide a very common type of reference group appeal. They promote the products/ services by giving a testimonial or an endorsement. They act as a company spokesperson. Ex: Shahrukh Khan in Pepsodent, Aamir Khan in Coca-Cola etc, Dr. Yunus in Shakti Dadhi. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

24 Types of Reference Groups Appeals 2. The Expert: Experts are the marketers of the products/ services. A person who because of his/ her occupation, experience, special training is in a unique position to help the prospective consumer evaluate the product or service that theadvertisement promote. Ex: Dentist for Pepsodent, Colgate toothpaste and Doctor for Lifebuoy Handwash etc. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

25 Types of Reference Groups Appeals 3. The Common Man : Here the testimonial or satisfied customers are known as the common man appeal. Ex: Mother and Daughter for Hash Marka Narikel Toil. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

26 Types of Reference Groups Appeals 4. The Executive & Employee Spokesperson: The firms usages their top executives for the ads of their products/ services as a spokesperson. Ex: Different ads for Grameenphone or Banglalink advertisements. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

27 Types of Reference Groups Appeals 5. Trade/ Spokes-character: Trade or spokes-characters are the familiar cartoon characters for creating the appeal of the products/ services advertisement. Ex: Nitai Bhattachargee, Amitav Reza etc. Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall

28 Query?

29 Thank You For staying with me Leon G. Schiffman & Leslie Lazar Kanuk Consumer Behavior 8 th edition, Prentice Hall