Reference Group

1. Reference Group PPs – MM FE – Manajemen Universitas Muhammadiyah Malang Bamisha

2. Reference Group • Is a group that serves as a reference point for the individual in the information of his or her • beliefs, • attitudes and • behavior Bamisha

3. The influence a group exerts on an individual purchasing behavior • Depend on three factors: • The individual’s attitude toward the group • The nature of the group • The nature of the product Bamisha

4. The Individual’s Attitude Toward the Group (Bearden & Rose) • Views the group as a credible source of information about the product or service • Values the views and reactions of group members regarding purchasing decision • Accepts the rewards and sanctions meted out by groups for appropriate or inappropriate behavior Bamisha

5. The Nature of the Group • Homogenous in that members have similar norms and values • Frequently interacting, thus creating more opportunities to influence members • Distinctive and exclusive in that membership in the group is highly valued Bamisha

6. The Nature of the Product • Visible product • Clothing • Cosmetics • furniture • Exclusive products that might connote status Bamisha

7. Types of reference Group • Positive Attitude • Membership • Positive Membership Groups • Nonmembership • Aspiration Group • Negative Attitude • Membership • Disclaimant Group • Nonmembership • Dissociative group Bamisha

8. Types of Membership Groups • Primary • Informal • Family/ Peer Groups • Formal • School Groups • Business Groups • Secondary • Informal • Shopping Groups • Sports Groups • Formal • Alumni Groups • Tenant Organization Bamisha

9. Types of Aspiration Groups • Contact • anticipatory • No contact • symbolic Bamisha

10. Nature of Reference Groups • Norms • Roles • Status • Socialization • Power Bamisha

11. Norms • Are the rules and standards of conduct the group establishes • The appropriateness of clothes • Eating habits • Makes of cars • Brands of cosmetics Bamisha

12. Roles • Are functions that the individual assumes or that the group assigns to the individual to attain group objectives • Roles have been identified in family decision making: • The influencer, the gatekeeper, the decision maker, the purchasing agent and the consumer Bamisha

13. Status • Refers to the position the individual occupies within the groups • High status implies greater power and influence • Example: • A chairperson • Highest status  within groups • Weakest status  bridge club Bamisha

14. Socialization • The process by which an individual learns the group’s norms and role expectations • The two most important types: • The socialization of children • The socialization of new residents in a community Bamisha

15. Power • Three power are particularly relevant: • Expert power • An individual or group must have experience and knowledge • Referent power • The individual’s identification with members of the group • Reward power • Based on the group’s ability to reward and employee with money and status Bamisha

16. Types of Influence Exerted by Reference Groups Bamisha

17. Informational Influence • There are two conditions: • When there is social, financial or performance risk in buying the product • The individual has limited knowledge or experience regarding the product Bamisha

18. Comparative Influence • Moschis • Consumers likely are likely to seek information from friends viewed as similar to themselves and to regard such sources as credible • The salesperson is effective if: • Customer sees the similarity of tastes, attitudes and even religion Bamisha

19. Normative Influence • Park and Lessig • a consumer is motivated to conform to the norms and behavior of the group if; • The group provides significant rewards for compliance and punishment for lack of compliance • The individual’s behavior in conforming is visible to members of the group Bamisha

20. Conformity • Is the ultimate goal of normative influence as it means that consumers will buy the brands and product categories the group approves • Marketers are interested in such imitative behavior, because • It implies a snowball effect Bamisha

21. Social Multiplier Effect • James Duesenberry: • The demonstration principle states that with the American consumer’s increased mobility and purchasing power, consumers increasingly will come into contact with new products and will have the purchasing power to buy them  Social Multiplier Effect Bamisha

22. Park and Lessig • The type of products to be subject to comparative • Technologically complex • Auto’s, color TVs, air conditioners • Require objective informational criteria for selection • Insurance, physicians, headache remedies • The type of products to be subject to comparative as a means of self expression and identity Bamisha

23. Two ways the group purchases • Conformity to group norms • An assertion of quality (the uniformity of purchasing behavior within the group shows that the brand is in fact highest in quality) Bamisha

24. Rosen’s and Olshavsky’s • Group recommendations supplant brand evaluation in three possibilities: • Go along with the group’s recommendations without evaluating brand alternatives • Evaluate alternatives brands • Rely on group recommendations to narrow the choice to a few brands and then evaluate these brands Bamisha

25. Group Influence by Type of Product • Influence on product and brand • Influence on brand only • Influence on product only • No group influence Bamisha

26. Strategic Applications • Advertising strategies • Use of spokespersons • Using referent spokespersons • Conveying normative influence • Personnel strategies • Sales strategy implications of informational and comparative influence • Sales strategy implications of bargaining power Bamisha