"The impact of reference groups on the behavior of a person is subjective in nature; it varies across a) people; b) product and service offerings; as also c) situational factors. Nevertheless there are certain factors that affect the impact that a reference group generates on people. The factors that impact reference group influence on consumption behavior are explained as follows: i) Information and Experience: The amount of knowledge and experience an individual possesses or has the capacity to possess determines the impact that the reference group can generate. A person who has information about a product and service offering, the brand, and the 4 Ps, and also possess some experience, would not look for advice from his reference groups, and it is unlikely that he would be carried away by advice from others. On the other hand, a person who is little or no knowledge and also lacks experience, would look towards primary and secondary reference groups for help and advice. ii) Power, credibility, and trustworthiness: The impact that a reference group can generate also depends upon how powerful, credible and trustworthy the reference group is. When a reference group is powerful, and regarded as credible and trustworthy, there is greater probability of it being able to influence people. A person who looks towards reference groups for information and advice about product and service offerings as also brands, always examines the credibility and trustworthiness of the group. He may also be fearful of the power of the reference group and would go by group-say out of fear or to avoid any undesirable consequences. He may also be looking for social approval and acceptance of others in his reference group. The probability of he being persuaded by such reference groups is high. iii) Conformance with group and social approval: When a consumer is other- directed or socially-directed, and looks towards others for social approval, he generally conforms to the advice given by members of his reference groups. This is because he wants to be identified with people whom he likes or whom he wants to be associated with. Thus he would conform to the product and service and/or brand suggested by members of their reference group. iv) Visibility and Conspicuousness of the Product: The impact of reference groups also depends on the visibility and conspicuousness of a product. When a product offering is visible and conspicuous, such that it relates to esteem and is status revealing (fashion apparel, carpets and upholstery, jewellery and other luxurious items), the consumer tends to be conscious while purchasing it especially because of reaction of others (fear of social disapproval, social embarrassment). Thus he would buy such keeping in mind the advice, likes and dislikes of reference group. When the product is low on public visibility and conspicuousness, one is less likely to be influenced by the reference group. Source:http://in.docsity.com/en-docs/Consumer_Reference_Groups_-_Consumer_Behavior_-_Solved_Quiz_"
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