Consumer Reference Groups - Consumer Behavior - Solved Quiz, Exercises for Consumer Behaviour. Agra University
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Consumer Reference Groups - Consumer Behavior - Solved Quiz, Exercises for Consumer Behaviour. Agra University

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Microsoft Word - module 7

CONSUMER BEHAVIOR

MODULE 7: SOCIOLOGICAL INFLUENCES ON

CONSUMER DECISION MAKING

MODULE 7.1 and 7.2: CONSUMER GROUPS AND CONSUMER REFERENCE GROUPS

LESSON – 32

FAQS (FREQUENTLY ASKED QUESTIONS): Ques 1 What do you mean b y a consumer group? Discuss the various ty pes of consumer groups? Ans 1 The term “group”, may be defined as two or more people who interact with each in order to achieve mutually agreed upon goals; such goals may relate to an individual or

to the many who get together for the achievement of such goals. “Consumer groups”, refer

to individuals or group of individuals or the family who have a need and desire purchasing

a good or service so as to fulfill the need and derive satisfaction.

Groups may be classified on various bases like i) number and size; ii) regularity of contact;

and iii) structure and hierarchy. The various types of consumer groups are as follows:

i) Primary and Secondary Groups: The distinction between primary and secondary

groups is based on the significance/relevance of the group to an individual, and the

frequency of interaction between group members.

Based on the regularity of contact and the importance given to subsequent interaction,

groups may be classified as primary and secondary. When people interact with each other

on a regular basis, and regard each others’ opinions as valuable and significant, they are

said to constitute a primary group; an individual who interacts with others regularly, is said

to be a member of that primary group. For example, family, neighbours, work peers, co-

workers and colleagues. Secondary groups, on the other hand, are those, where the level

of interaction is infrequent, irregular and occasional, and not much of value is given to

other’s judgments and beliefs. When a person interacts with others on an occasional

basis, he is said to be a constituent of a secondary group. So far as consumer behavior is

concerned, the focus lies on primary groups.

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ii) Formal and Informal Groups: Based on the group structure and membership, roles

and norms, as well as purpose of formation, groups may be classified as formal and

informal groups.

When the group structure and membership (membership roll list), roles (various

positions, like president, secretary etc), group norms (do’s and don’t’s) and the reason for

existence (goals of the group) are clearly defined, the group is said to be a formal group.

On the other hand, when the group structure, roles and norms as even the purpose of the

group are ill defined, or not defined at all, they are said to constitute an informal group. So

far as consumer behavior is concerned, informal groups are of greater relevance to a

marketer because with ill defined structures, and lesser of rules and regulations, there is

greater opportunity for interaction between the members, better exchange of information

and greater influence of each other on consumption patterns and behavior.

c) Membership and Symbolic Groups: Groups can also be classified on the basis of membership as membership groups and symbolic groups. When a person belongs to a

group by virtue of membership or even if he merely qualifies for a membership to that

group, it is called a membership group. On the other hand, when a person does not form a

part of a group and/or does not qualify to be a member of the group, but nonetheless

adopts the values, norms and patterns of behavior similar to members of the group, he is

said to be a member of a symbolic group. In consumer behavior, the focus lies on

membership groups.

Ques 2 What is a reference group? Why does a consumer look up to wards a reference group? Ans 2 It is a natural tendency on the part of an individual to look up to another as with

comparison; each one of us looks towards another individual or a group as a point of

comparison. This group to which a person looks up as a point of comparison is known as a

reference group. A reference group may be a person or a group to which an individual looks

up as a frame of reference for his general and specific acts of behavior, values, opinions,

attitudes etc. The reference person or the reference group exercises tremendous influence

on an individual. This is true for consumer behavior as well.

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A consumer always has with him in his conscious and sub-conscious state, a

person or a group that he looks up to as a reference point. Consumer actually look up to

reference groups because:

a) He desires information before he actually decides to go in for the purchase of a product

and service offering. As reference groups are regarded as impartial and have no hidden

agenda like salespersons, consumers trust the former more than the latter.

b) He wants social approval for the product/services purchased or the brands bought, and

he feels that once he has this approval from the reference group, he would not face any

kind of social embarrassment .

c) He feels that he would be much at ease if he does something that others approve of.

The reference group exercises impact on the manner in which a consumer selects,

purchases and uses a product or service offerings and/or brands. He influences the

purchase decision making process as also the purchase decisions, consumption patterns

and resultant behavior. It is noteworthy that consumers have different reference groups; he

may look towards one for guidance and advice of one product, and he may look towards

another for purchase of another product. Gradually, the consumer begins to adopt the

standards and norms used by the reference group(s) and behaves like them. Thus,

marketers make effective use of reference groups in bringing about changes in a

consumer’s thinking and purchasing pattern.

Ques 3 What are the factors that affect the influence of Reference Groups? Ans 3 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

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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.

Ques 4 Does Reference Grou p appeal v ary by product? Discuss in refe rence to Bearden’s and Etzel’s model? Ans 4 The influence of Reference Groups varies according to the nature of the product and/or service. Reference groups have varied influence on consumers depending upon

the type of the product, whether a luxury or a necessity, and whether it used in public and

viewed by others or whether it is used in private.

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Bearden and Etzel have examined the issue from two perspectives, viz., a) the decision

to purchase the type of product; and b) the choice of the brand. They conclude that

reference group influence varied by 1) the type of product; whether it is a luxury or a

necessity; and 2) its visibility; whether it is used in public or private settings or environment

(See Figure). According to Bearden and Etzel, reference group influence is strong both for

the purchase decision as well as for the brand in case of public luxuries, like expensive

carpets, paintings, antiques etc. The consumer does not possess a need for such

products, but requires them for social approval and acceptance, and finds these

purchases as crucial for avoidance of social embarrassment, and ridicule. Because of the

lifestyle and the social class that a consumer belongs to, he is conscious towards the

purchase of such products as well as the brands that he buys. Thus, reference groups

influence both the consumer's need for the product in general as well as the choice of

brand. On the other hand, when in case of products which are public necessities, like a car

or a cell phone, reference group influence is weak with respect to the purchase decision,

but strong with respect to the choice of the brand. The reference group does not affect the

decision to make a purchase as the product is already regarded as one of necessity and

will be purchase regardless of what the members of the reference group have to say; the

only impact that a reference group can make is with respect to the brand.

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BRAND

PRODUCT

Weak reference group influence (-) on product

Strong reference group influence (+) on product

Strong reference group influence (+) on brand

PUBLIC NECESSITIES Influence: Weak for product and strong for brand Eg. Cars, Cell phones

PUBLIC LUXURIES Influence: Strong for product and strong for brand Eg. Carpets, Painitings, Antiques

Weak reference group influence (-) on brand

PRIVATE NECESSITIES Influence: Weak for product and weak for brand Eg. Towels, Soaps and Detergents

PRIVATE LUXURIES Influence: Strong for product and weak for brand Eg. Body massagers, Sauna bath

Figure1: Effects of Reference Groups on product purchases and Brand Choices Adapted from Wells W.D. and Prensky, D., Consumer Behavior, 1996, John Wiley &

sons, Inc.

Further Bearden and Etzel also conclude that reference group influence is weak

both for the purchase decision as well as for the brand in case of private necessities, like

towels, soaps and detergents etc. The consumer is aware of such necessities, and will

purchase them irrespective of what the reference group has to say. Further, he would not

be conscious of social approval and/or embarrassment as these products are not viewed

publicly, and so the influence of reference groups with respect to the brand will also be

low. Finally, in case of products which are private luxuries, like sauna baths, body

massagers etc., reference groups influence is strong with respect to the purchase

decision, but weak with respect to the choice of the brand. This is because the product is

not used publicly and the brand purchased would not cause any social embarrassment.

SELF EVALUATION TESTS/QUIZZES: Section A True/false: 1. Based on the group structure and membership, roles and norms, as well as

purpose of formation, groups may be classified as legitimate and illegitimate.

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2. A group where people hold membership, meet face-to-face and have interaction,

and where people abide by the values, norms, opinions and judgments that the group

entails, is known as a compliant group.

3. The impact of reference groups depends on the visibility and conspicuousness of

a product.

4. According to Bearden and Etzel, reference group influence is strong both for the

purchase decision as well as for the brand in case of public necessities. Section B Fill up the blanks: 1. Based on the regularity of contact and the importance given to subsequent interaction, groups may be classified as ______________ and __________________

2. As consumer behavior is concerned, the focus lies on small ____________ groups.

3. When a person acts out instances of behavior which relate to consumption

patterns and behavior, it is known as _____________________ socialization.

4. A _______________group may be a person or a group to which an individual

looks up as a frame of reference for his general and specific acts of behavior, values,

opinions, attitudes etc.

5. ________________ appeals are the most commonly used kind of appeal.

6. ___________________ appeals are also known as slice-of-life commercials.

Section C Multiple choice questions: 1. This group to which a person looks up as a point of comparison is known as a a) reference group

b) social group

c) formal group

d) None of the above.

2. Which of the following is true about Bearden and Etzel’s Model:

a) Bearden and Etzel have examined the issue from two perspectives, viz., a) the decision

to purchase the type of product; and b) the choice of the brand.

b) Reference group influence varied by the type of product; whether it is a luxury or a

necessity;

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c) ) It is also influenced by the visibility; whether it is used in public or private settings or

environment.

d) All of the above.

Section D Short answers: 1. Define normative reference groups.

2. What do you mean by primary reference groups?

3. Mention commonly used reference group appeals.

4. Mention two basic advantages of using reference group appeals.

KEY

Section A True/false: 1. False 2. False 3. True 4. False

Section B Fill up the blanks: 1. Primary and secondary 2. Informal 3. Consumer

4. Reference 5. Celebrity 6. Common-man

Section C Multiple choice questions: 1. a 2. d

Section D Short Answers: 1. Those groups that influence general or broadly defined values, attitudes and/or behavior are known as normative reference groups. For example, for a child the

family acts as a normative reference group.

2. Such group(s) with which a person has a direct (face-to-face) contact and where a direct influence occurs, is known as a primary reference group(s). For example,

family, friends, neighbours, superiors, peers, colleagues etc. 3. Celebrity appeals; expert appeals; common man appeals; executive appeals, trade or spokes-character appeals. 4. Reference group appeals are useful for a marketer in two ways; firstly they provide information and increase consumer awareness and knowledge; two, they reduce

perceived risk amongst consumers, with respect to market offerings.______________________________________________________________________

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