Reference Groups

Definition -- A group or person that serves as a point of comparison for an individual which serves as a guide in formulating values

Broad Categories of Reference Groups

Indirect Reference Groups Direct Reference Groups Primary Reference Groups Secondary Reference Groups Aspirational Reference Groups

Indirect Indirect Reference Reference

GroupsGroups

Individuals or groups with whom a person identifies but does not have direct face-to-face contact, such as

movie stars, sports heroes, political leaders, or TV personalities.

Major Consumer Reference

Groups

Reference Groups

Factors That Affect Reference Group Influence

Information and experience Credibility, attractiveness, and

power of the reference group

Factors Encouraging Conformity:

A Reference Group Must ... Inform or make the individual aware of a

specific product or brand Provide the individual with the opportunity to

compare his or her own thinking with the attitudes and behavior of the group

Influence the individual to adopt attitudes and behavior that are consistent with the norms of the group

Legitimize the decision to use the same products as the group

Selected Consumer-Related Reference Groups

Friendship groups Shopping groups Work groups Virtual groups or

communities

Informal Informal GroupsGroups

A group of people who see

each other frequently on an informal

basis, such as weekly chess

players or social acquaintances.

Shopping Shopping GroupGroup

Two or more

people who shop together.

Reference Group Appeals

Celebrities The expert The “common man” The executive and

employee spokesperson

TestimoniaTestimoniall

A promotional technique in

which a celebrity that has used a

product or service speaks

highly of its benefits in order

to influence consumers to

buy.

EndorsemenEndorsementt

Celebrities who may or may not be

users of a particular product

or service may lend their names

to advertisements for such products or services for a

fee.

SpokespersoSpokespersonn

A celebrity or company

executive who represents a

product, brand, or company over

an extended period of time,

often in print, on television, and in

personal appearances.

Types of Celebrity Appeals

TYPETYPE DEFINITIONDEFINITION

Testimonial Based on personal usage, a celebrity attests to the quality of the product or service

Endorsement Celebrity lends his name and appears on behalf of a product or service with which he/she may not

be an expert

Spokesperson Celebrity represents the brand or company over an extended period of time

Diffusion of Innovations

An innovation is an idea, practice or product that is perceived to be new by the relevant individual or group.

Whether or not a product is an innovation is determined by the

perceptions of the potential market not by an objective measure of

technological change.

Innovations

Continuous Innovation

Categories of InnovationsTheir adoption require minor changes in behaviour of the consumer

Dynamically Continuous Innovation

Discontinuous Innovation

Their adoption requires moderate changes in an important behaviour of the consumer

Their adoption requires major changes in behaviour of significant importance to the individual or group of consumers

The Diffusion Process is the manner in which innovations spread throughout a market

Diffusion Process