There are several types of reference groups that influence consumer purchase decisions. Reference groups include friendship groups, work groups, virtual groups, brand communities, and celebrities. Friendship groups and work colleagues can have strong influences on buying behaviors. Virtual groups allow geographically dispersed individuals to connect over shared interests. Brand communities are formed around attachment to a particular product or company. Marketers also use reference group appeals such as experts, common customers, executives, and trade characters in advertisements.

1. Reference Groups

2. Reference Group
• A Reference Group is any person or group that
serves as point of comparison (or reference) for an
individual in forming either general or specific
values, attitudes, or a specific guide for behavior.
• From a marketing perspective, reference groups
are groups that serve as frames of reference for
individuals in their purchase or consumption
decisions.

3. Types of Reference Group
Influence
• Informational Influence
• When a member of reference group provides
information used to make purchase decisions
• Normative Influence
• When we conform to group norms in order to
belong to that group
• Identification Influence
• When we identify with, and internalize, a group’s
values and behaviours

4. Selected Consumer-
Related
Reference Groups• Friendship Groups
• Shopping Groups
• Work Groups
• Virtual Groups or Communities
• Brand Communities
• Consumer-action Groups
• Celebrities

5. Friendship Groups
• Friendship groups are typically classified as informal groups because
they are usually unstructured and lack specific authority levels.
• In terms of relative influence, after an individual’s family, his or her
friends are most likely to influence the individual’s purchase decisions.
• Friends fill a wide range of needs: They provide companionship,
security, and opportunities to discuss problems that an individual may be
unwilling to discuss with family members.
• Marketers of products such as brand-name clothing, fine jewelry,
snack foods, and alcoholic beverages recognize the power of peer
group influence and frequently show friendship situations in their
advertisements.

6. 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.
• The motivation for shopping with a purchase friend range
from a mainly 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

7. Work Groups
• The absolute amount of time people spend at their jobs,
frequently more than 35 hours per week, provide ample
opportunity for work groups to serve as a major influence
on the consumption behavior of the members.
• Formal Work Group: it consists of individuals who work
together as part of a team, and thus have a sustained
opportunity to influence each other’s consumption related
attitudes and actions.
• Informal Work Group: it consists of people who have
become friends as a result of working for the same firm,
whether or not they work together as a team, and they can
influence the consumption behavior of other members
during coffee or lunch breaks or at after-work meetings

8. Virtual Groups or
Communities
• A virtual team (also known as a geographically
dispersed team or distributed team) is a group
of individuals who work across time, space and
organizational boundaries with links strengthened
by webs of communication technology.
• It define "as groups of geographically,
organizationally and/or time dispersed workers
brought together by information and
telecommunication technologies to accomplish
one or more organizational tasks.”

9. Cont…
• Members of virtual teams communicate
electronically and may never meet face-to-
face.
• Virtual teams allow companies to acquire the
best talent without geographical restrictions.

10. Brand Communities
• A brand community is a community formed on the basis
of attachment to a product
• Recent developments in marketing and in research
in consumer behavior result in stressing the connection
between brand, individual identity and culture. Among the
concepts developed to explain the behavior of consumers,
the concept of a brand community focuses on the
connections between consumers.
• A brand community can be defined as an enduring self-
selected group of actors sharing a system of values,
standards and representations (a culture) and recognizing
bonds of membership with each other and with the whole.

11. Consumer-action Groups
• Today there are a large number of such groups that are
dedicated to providing consumer products in a healthy and
responsible manner, and to generally add to the overall
quality.
Two broad categories of Consumer Action Groups:
• Those that organize to correct a specific consumer abuse
and then disband (demonstration against liquor shop in a
community) .
• Those that organize to address broader, more persuasive
problem areas and operate over an extended or indefinite
period of time (Group against drunk driving).

12. Celebrities
• A celebrity is a person who has a prominent
profile and commands a great degree of
public fascination and influence in day-to-
day media. The term is often synonymous
with wealth (commonly denoted as a person
with fame and fortune), implied with great
popular appeal, prominence in a particular
field, and is easily recognized by the general
public.

13. Cont….

14. The Expert
• A second type of reference group appeals used
by marketers is the expert, a person who,
because of his or her occupation, special
training, or experience, is in a unique position
to help the prospective consumer evaluate the
product that the advertisement promotes.
• e.g. An ad for a quality frying pan may
feature the endorsement of a chef.

15. The Common Man
• A reference group appeal that uses the testimonials of
satisfied customers is known as the common-man
approach.
• The advantage is that it demonstrates to prospective
customers that someone just like them uses and is
satisfied with the good or service being advertised.
• The common man appeal is especially effective in
public health announcement (such as antismoking or
high B.P. messages), for most people seem to identify
with people like themselves when it comes to such
messages.

16. The Executive and Employee
Spokesperson
• The popularity of this type of advt. probably is
due to the success and publicity received by a
number of executive spokespersons.
• Like celebrity spokespersons, executive
spokespersons seem to be admired by the general
population because of their achievements and the
status implicitly conferred on business leaders.
• e.g. Ratan Tata, K. Birla, Mukesh Ambani etc.

17. Trade or Spokes-Character
• These are often employed as attention grabbers,
acting as spokespersons to promote children’
products.
• Trade characters are intended to bond a child to a
brand so that the child’s brand awareness might
form the basis of brand preference either
immediately or later in life.
• e.g. Animated characters used by marketers in
advertisements for children products