This document discusses reference groups and their influence on consumer product choice decisions. It defines reference groups as groups that people refer to when evaluating themselves, and notes that reference groups can influence behavior through informational, normative, and identification influences. The document then examines different types of reference groups (membership vs non-membership, positive vs negative influence) and how marketers can approach reference groups through advertising, product trials, and point-of-sale strategies to influence consumer shopping groups.

2. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
Researchers have long observed that people’s behavior is influenced by the
social groups they interact with. However, it was observed that the behavior of
individuals was often in contradiction with that of the membership group.
What is a reference group?
“Reference groups are groups that people refer to when evaluating their [own] qualities, circumstances,
attitudes, values and behaviors.”
—William Thompson & Joseph Hickey, Society in Focus, 2005.
Reference groups were used to partially
address this apparent inconsistency. A
reference group recognizes that people
frequently orient themselves to other
than membership groups in shaping their
behavior and evaluations and that
reference groups can perform a diversity
of functions (Merton and Rossi 1949).
From a consumer behavior perspective, it appears that the products and
brands that individuals select are influenced by their reference groups. Marketers
have generally accepted the reference group construct as important in at least some
types of consumer decision making.

3. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
Reference Group Influences
Witt and Bruce (1972) suggested the existence of at least seven different
determinants of influence including perceived risk, expertise of the referent, and the
individual's need for social approval. Moschis (1976) found that consumers use both
reflective and comparative appraisal (Jones and Gerard 1967) in product choices.
That is, they engage in direct, verbal interaction to determine the reference group's
evaluation as well as observing the behavior of reference group members in regard
to the decision under consideration. Park and Lessig (1977) investigated reference
group influence and found students more susceptible than housewives to group
influence for a variety of products. The construct is commonly used by marketing
practitioners. Reference group concepts have been used by advertisers in their
efforts to persuade consumers to purchase products and brands.
Portraying products being consumed in socially pleasant situations, the use of
prominent/attractive people endorsing products, and the use of obvious group
members as spokespersons in advertisements (Kotler 1980) are all evidence that
marketers and advertisers make substantial use of potential reference group
influence on consumer behavior in the development of their communications.
Alluding to reference groups in persuasive attempts to market products and brands
demonstrates the belief that reference groups expose people to behavior and
lifestyles, influence self-concept development, contribute to the formation of values
and attitudes, and generate pressure for conformity to group norms.

4. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
Various reference group influence nature includes:
Informational Influence
It occurs when an Individual uses the behaviours and opinions of the reference group
members as potentially useful information. Influence is based on similarity to group
members / expertise of the influencing member
E.g.: Purchasing a NOKIA cell phone because my friends have one
Normative Influence
It occurs when an individual fulfills group expectation to gain a direct reward or to
avoid a sanction. Influence is based on strong ties to the group and the product
involved is socially conspicuous
E.g.: Purchasing Close-Up toothpaste to avoid bad breath
Identification Influence:
It occurs when the individual has internalized the groups values and norms
E.g.: Purchase of health foods because I belong to a fitness group
Types of reference groups
A reference group is a person or group of people that significantly influences
an individual's behavior. Within this general framework, several types of influence
have been identified. Based on the work of Deutsch and Gerard (19SS) and Kelman

5. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
(1961). Information, utilitarian, and value-expressive influences have been identified
(Park and Lessig 1977).
Informational reference group influence is based on the desire to make
informed decisions. Faced with uncertainty, an individual will seek information. From
the many sources available, the most likely to be accepted are those viewed as
credible. Referents with high credibility include those with presumed expertise or
significant others.
Utilitarian reference group influence is reflected in attempts to comply with
the wishes of others to achieve rewards or avoid punishments. If an individual feels
that certain types of behavior will result in rewards or punishments from others and
these outcomes are viewed as important, he or she will find it useful to meet the
expectations of these significant others.
Value-expressive reference group influence is characterized by the need for
psychological association with a person or group and is reflected in the acceptance
of positions expressed by others. This association can take two forms. One form is an
attempt to resemble or be like the reference group. The second type of value-
expressive influence flows from an attachment or liking for the group. The individual
is responsive to the reference group out of a feeling for it not because of a desire to
be associated with it. The occurrence of all of these forms of influence requires the
opportunity for social interaction or public scrutiny of behavior. Seeking information,

6. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
complying with the preference of others, and adopting values of others all involve
some form of communication or observation of decisions, opinions, or behavior.
Further the reference groups are also classified as:
Membership No Membership
Positive Influence Contactual RG
Individual holds membership of this
group; Regular face-to-face contact with
the members of the group; Approves of
the values, attitudes and standards
Aspirational RG
Individual does not hold membership;
No face-to-face contact with the
members of the group; Provide positive
influence on attitudes, values and
behaviours
Negative Influence Disclaimant RG
Individual holds membership of this
group; Regular face-to-face contact with
the members of the group; Does not
approves of the values, attitudes and
standards
Avoidance RG
Individual does not hold membership
No face-to-face contact with the
members of the group; Individual avoids
/ has opposite attitudes and values
Selected Consumer-Related Reference
groups
Friendship Groups
Shopping Groups
Work Groups
Virtual Groups or Communities
Brand Communities
Consumer-action Groups
Celebrities

7. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
What are 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. It is seen that consumers are more influenced by a recommendation for an
experience product than for search product. For example, Recommendations for wine
are more influential for wine than they are for calculators. It is also found that
recommender systems are more influential than their human counterparts and there
is no difference in influence between a human expert and a consumer review. (Nantel
and Senecal, 2004).
Types of shopping group influences
Publicly consumed luxury (PUL)
A product consumed in public view and not commonly owned or used (e.g.. golf
clubs). In this case, whether or not the product is owned and also what brand is
purchased is likely to be influenced by others (Bourne 1957. p. 219).
Relationships with Shopping group influence:

8. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
a. Because it is a luxury, influence for the product should be strong.
b. Because it will be seen by others, influence for the brand of the product
should be strong.
Privately consumed luxury (PRL)
A product consumed out of public view and not commonly owned or used (e.g..
trash compactor). In many cases, the brand is not conspicuous or socially important
and is a matter of individual choice, but ownership of the product does convey a
message about the owner (Bourne 1957. p. 220).
Relationships with Shopping group influence:
a. Because it is a luxury, influence for the product should be strong.
b. Because it will not be seen by others, influence for the brand of the product
should be weak.
Publicly consumed necessity (PUN)
A product consumed in public view that virtually everyone owns (e.g., wristwatch).
This group is made up of products that essentially all people or a high proportion of
people use, although differing as to type of brand (Bourne 1957. p. 220).
Relationships with Shopping group influence:
a. Because it is a necessity, influence for the product should be weak.

9. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
b. Because it will be seen by others, influence for the brand of the product
should be strong.
Privately consumed necessity (PRN)
A product consumed out of public view that virtually everyone owns (e.g. mattress).
Purchasing behavior is largely governed by product attributes rather than by the
influences of others. In this group, neither products nor brands tend to be socially
conspicuous and are owned by nearly all consumers (Borne 1957. p. 221).
Relationships to Shopping group influence:
a. Because it is a necessity, influence for the product should be weak.
b. Because it will not be seen by others, influence for the brand of the product
should be weak.
Bearden and Etzel (1982)

10. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
Need for reference group
Reference groups perform three basic functions:
(1) They serve a normative function by setting and enforcing standards of
conduct and belief.
T. Newcomb (1953) writes:
“The significant thing about a reference group is, in fact, that its norms provide frames of reference
which actually influence the attitude and behaviour of a person.”
(2) They also perform a comparison function by serving as a standard against
which people can measure themselves and others.
(3) They serve not only as sources of current evaluation but also as sources of
aspiration and goal attainment (as a means of antici-patory socialization). A
person who chooses to become a professor or a lawyer begins to identify with
that group and becomes socialized to have certain goals and expectations.
(4) They also serve a purpose in case of Luxury and High Involvement
purchases (non-necessity), since people are dependent on post-peer review for
the same, forcing them to depend on reference group help. This helps to reduce
the Post-purchase dissonance related with it.

11. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
Approaching reference groups and implications in marketing
Point of Sale
Companies try to lure consumers and shopping groups by packaging products in
combo deals to satisfy most of the reference groups and opinion leaders, such that
most of the products in the combo basket will be preferred products for them, and
the combo deal acts as an icing on the cake, aiding an impulse purchase.
Advertisements
Most advertisememts for household commodities try to include critical opinion
leaders in the storytelling exercise (eg: mother, aunty, teenage-friends, etc), to gain
credibility and attract the shopping group recall at purchase point.
Product trials and Freebies
MNCs often provide free product samples and freebies to product reviewers and
market-mavens, to test and review their own products after realizing that they are a
better credible resource in comparison with a celebrity endorsing the same.
Example: Online Cosmetic reviewers and Video bloggers
Companies like L’Oréal and Schwarzkopf have their own wing of product reviewers
who review their product in detail through websites. Of late they have realized the
growing trend of video-bloggers who have gained immense popularity in the
cosmetic-sphere in short span of time. They have now tried to release the products
to them initially to gain traction and attention, before releasing in public.

12. Consumer Behaviour Group Project | Investigating Shopping groups and influence on product choice decisions
References
Bearde , Willia O. a d Micheal J. Etzel , Refere ce Group I flue ce o Product a d Bra d
Purchase Decisio s, Jour al of Co su er Research, 16(September), 239-267.
Childers, Terry L.; Rao, Akshay R , The I flue ce of Fa ilial a d Peer-based Reference Groups
on Consumer Decisions , Journal of Consumer Research, 19(September), 198-211.
Sirgy, Joseph M. Rahtz, Don R. and Dias, Laura Portolese, Refere ce Group Types a d I flue ces ,
http://catalog.flatworldknowledge.com/bookhub/reader/8111?e=sirgy_1_0-ch11_s01 (Last
accessed: 29/08/2015)
Dawnson, Murell E. and Chatman Elffeda A. Refere ce group theory ith i plicatio s for
i for atio studies: a theoretical essay , http://www.informationr.net/ir/6-3/paper105.html (Last
accessed: 29/08/2015)
Nantela, Jacques and Senecala, “yl ai . The i flue ce of o li e product reco e datio s o
co su ers’ o li e choices , Journal of Retailing 80 (2004) Pg.159–169
Reference Group in Sociology: Definition, Examples & Types ,
http://study.com/academy/lesson/reference-group-in-sociology-definition-examples-types.html,
(Last accessed: 29/08/2015)
Additional Refernces:
Bourne, Francis S. (1957), "Croup Influence in Marketing and Public Relations," in Some Applications
of Behavioral Research, eds. R. Likert and S. P. Hayes, Basil, Switzerland: UNESCO
Merton. Roben K. (1957). "Continuities in the Theory of Reference Groups and Social Structure," in
Social Theory and Social Structure, ed. Robert K. Merton, New York: The Free Press. 281-368.
-----and Alice Kitt Rossi (1949). "Contributions to the Theory of Reference Group Behavior." in Social
Theory and Social Structure, ed. Robert K. Merton. New York: The Free Press. 225-275
Witt, Robert E. (1969), "Informal Social Group Influence on Consumer Brand Choice," Journal of
Marketing Research, 6. 473-^77.
------and Grady D. Bruce (1970), "Purchase Decisions and Group Influence," Journal of Marketing
Research, 7, 533-535.
Moschis, George P. (1976). "Social Comparison and Informal Group Influence," Journal of Marketing
Research, 13, 237-24
Jones, Edward E. and Harold B. Gerard (1967). Social Psychology. New York: John Wiley.
Lessig. V. Parker and C. Whan Park (1978). "Promotional Perspectives of Reference Group Influence:
Advertising Implications." Journal of Advertising. 7. 41-47.
Deutsch, M. and Harold B. Gerard (1955), "A Study of Normative and Informational Social Influences
Upon Individual Judgment," Journal of Abnormal and Social Psychology, 51, 624-636.
Kelman. Herbert C. (1961). "Processes of Opinion Change." Public Opinion Quarterly. 25. 57-78