Shopping Groups | IIMC | Consumer Behaviour

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.


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.


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


(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,


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


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:


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).


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).


a. Because it is a necessity, influence for the product should be weak.


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)


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.


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.


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

http://www.informationr.net/ir/6-3/paper105.html

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