Definition of Groups, Social Class and Reference Groups

Introduction

With the exception of those very few people who can be classified as hermits, people tend to be involved with others on a rather constant basis. Like almost all behavior, an individual’s social relationships are often motivated by the expectation that they will help in the satisfaction of specific needs. For example, a person might become a volunteer ambulance driver to satisfy a need for community recognition. Another person might join a computer club in an effort to find compatible friends to satisfy social needs. A third person might join a health food cooperative to obtain the benefits of group buying power. These are just a few of the almost infinite number of reasons why people involve themselves with others.

What Is A Group?

A group may be defined as two or more people who interact to accomplish some goals. Within the broad scope of this definition are both an intimate “group” of two neighbors who informally attend a fashion show together and a larger, more formal group, such as a neighborhood.

Types of Groups

To simplify our discussion, we will consider four different types of group classification: primary versus secondary groups, formal versus informal groups, large versus small groups, and membership versus symbolic groups.

Primary versus Secondary Groups

If a person interacts on a regular basis with other individuals (with members of his or her family, with neighbors, or with co-workers whose opinions are valued), then these individuals can be considered as a primary group for that person. On the other hand, if a person interacts only occasionally with such others, or does not consider their opinions to be important, then these others constitute a secondary group for that person.

From this definition, it can be seen that the critical distinctions between primary and secondary groups are the frequency with which the individual interacts with them and. the importance of the groups to the individual.

Formal versus Informal Groups

Another useful way to classify groups is by the extent of their formality; that is, the extent to which the group structure, the members’ roles, and the group’s purpose are clearly defined. If a group has a highly defined structure (e.g., a formal membership list), specific roles and authority levels (a president, treasurer, and secretary), and specific goals (to support a political candidate, improve their children’s education, increase the knowledge or skills of members), then it would be classified as a formal group.

The local chapter of the American Red Cross, with elected officers and members who meet regularly to discuss topics of civic interest, would be classified as a formal group.

On the other hand, if a group is more loosely defined, if it consists, say, of four women who were in the same college sorority and who meet for dinner once a month, or three co-workers who, with their spouses, see each other frequently then it is considered an informal group.

Large versus Small Groups

It is often desirable to distinguish between groups in terms of their size or complexity. A large group might be thought of as one in which a single member is not likely to know more than a few of the group’s members personally, or be fully aware of the specific roles or activities of more than a limited number of other group members. Examples of large groups include such complex organizations as General Motors, with its numerous subordinate divisions, and the American Bar Association, with its many state, county, and city chapters.

In contrast, members of a small group are likely to know every member personally and to be aware of every member’s specific role or activities in the group. For example, each staff member of a college newspaper is likely to know all the other members and be aware of their duties and interests within the group.

In the realm of consumer behavior, we are principally concerned with the study of small groups, since such groups are more likely to influence the consumption behavior of group members.

Membership versus Symbolic Groups

Another useful way to classify groups is by membership versus symbolic groups. A membership group is a group to which a person either belongs or would qualify for membership. For example, the group of women with whom a young homemaker plays golf weekly or with whom she hopes to play golf when an opening occurs would be considered, for her, a membership group.

In contrast, a group in which an individual is not likely to receive membership, despite acting like a member by adopting the group’s values, attitudes, and behavior, is considered a symbolic group. Clearly, actual membership groups offer a more direct, and thus a more compelling, influence on consumer behavior.

In summary, we can say that small, informal, primary membership groups are of the great interest to marketers because they exert the greatest potential influence on consumer purchase decisions.

Consumer-Relevant Groups

To more fully comprehend the kind of impact that specific groups have on individuals, we will examine six basic consumer-relevant groups: the Family, Friendship groups, Formal social groups, Shopping groups, Consumer action groups and Work groups.

The Family

An individual’s family is the most important group to influence his or her consumer decisions. The family’s importance in this regard is due to the frequency of contact that the individual has with other family members and that the family has a greater extent of influence on the establishment of a wide range of values, attitudes, and behavior.

Friendship Groups

Friendship groups are informal groups because they are, usually unstructured and lack specific authority levels. In terms of relative influence, after an individual’s family, it is friends who are most likely to influence the individual’s purchase decisions.

Seeking and maintaining friendships is a basic drive of most people. Friends fulfill a wide range of needs: they provide companionship, security, and opportunities to discuss problems that an individual may be reluctant to discuss with members of his or her own family. Friendships are also a sign of maturity and independence, for they represent a breaking away from the family and the forming of social ties with the outside world. Consumers are more likely to seek information from those friends they feel have values or outlooks similar to their own.

Formal Social Groups

In contrast to the relative intimacy of friendship groups, formal social groups are more remote and serve a different function for the individual. A person joins a formal social group to fulfill such specific goals as making new friends, meeting “important” people (e.g., for career advancement), or promoting a specific cause. Because members of a formal social group often consume certain products together, such groups are of interest to marketers. For example, the membership list of a men’s club would be of interest to local men, Insurance agents, automobile agents, tax accountants.

Membership in a formal social group may influence a consumer’s behavior in several ways. For example, members of such groups have frequent opportunity to informally discuss products, services, or stores. Some members may copy the, consumption behavior of other members whom they admire.

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. People like to shop with others who they feel have more experience with or knowledge about a desired product or service. Shopping with others also provides an element of social fun to an often boring but necessary task. In addition, it reduces the risk that a purchase decision will be socially unacceptable.

Relatively few marketing or consumer behavior studies have examined the nature of shopping groups. However, one study of the in-store behavior of shoppers revealed some differences between group and individual shopping. The research found that shopping parties of at least three persons deviated more from their original purchase plans (they bought either more or less than originally planned) than did either single shoppers or two-party groups. The study also found that shopping groups tended to cover more territory in the store than individuals shopping alone, and thus had more opportunity to see and examine merchandise and to make unplanned purchases.

A special type of shopping group is the in-home shopping group, which typically consists of a group of women who gather together in the home of a friend, to attend a “party” devoted to the marketing of a specific line of products. The in-home party approach provides marketers with an opportunity to demonstrate the features of their products simultaneously to a group of potential customers. The undecided guests often overcome a reluctance to buy when they see their friends make positive purchase decisions. Furthermore, some of the guests may feel obliged to buy because they are guests in the home of the sponsoring hostess.

Consumer Action Groups

A particular kind of consumer group-a consumer action group- has emerged in response to the consumerist movement. This type of consumer group has become increasingly visible since the 1960s and has been able to influence product design and marketing practices of both manufacturers and retailers.

Consumer action groups can be divided into two broad categories: those that organize to correct a specific consumer abuse and then disband, and those that organize to address broader, more pervasive, problem areas and operate over an extended or indefinite period of time. A group of tenants who band together to dramatize their dissatisfaction with the quality of service provided by their landlord, or a group of irate community members who unite to block the entrance of a fast-food outlet into their middle-class neighborhood, are examples of temporary, cause-specific consumer action groups.

Work Groups

The sheer amount of time that people spend at their jobs, frequently more than thirty-five hours per week, provides ample opportunity for work groups to serve as a major influence on the consumption behavior of members.

Both the formal work group and the informal friendship/work group have the potential for influencing consumer behavior. The formal work group consists of those individuals who work together as a team. Their direct and sustained work relationship offers substantial opportunity for one or more members to influence the consumer-related attitudes and activities of other team members. Members of informal work groups may influence the consumption behavior of other members during coffee or lunch breaks or after-hours meetings.

Social Class

Social class is more of a continuum, i.e., a range of social positions, on which each member of society can be place. But, social researchers have divided this continuum into a small number of specific classes. Thus, we go by this framework, social class is used to assign individuals or families to a social-class category.

Social class can be defined as ‘The division of members of a society into a hierarchy of distinct status classes, so that members of each class have relatively the same status and the members of all other classes have either more or less status.’

Characteristics of Social Classes

The main characteristics of social class

Persons within a given social class tend to behave more alike

Social class is hierarchical

Social class is not measured by a single variable but is measured as a weighted function of one’s occupation, income, wealth, education, status, prestige, etc.

Social class is continuous rather than concrete, with individuals able to move into a higher social class or drop into a lower class.

Factors responsible for Social Stratification

                                                                                                 Factors showing social class differences

Impact of social class

Provides a sense of identity

Imposes a set of ‘normative’ behavior

Classes share values, possessions, customs and activities

Marketing response to customers of different economic means

Marketing to the low-income consumer

Some marketers ambivalent as not perceived as long-term customers constitutes a substantial group

Target with value-oriented strategies

Reference Groups

Reference groups are groups that serve as a frame of reference for individuals in their purchase decisions. This basic concept provides a valuable perspective for understanding the impact of other people on an individual’s consumption beliefs, attitudes, and behavior. It also provides some insight into methods that groups can be used to effect desired changes in consumer behavior.

What is a Reference Group?

A reference group is any person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values, attitudes, or behavior. The usefulness of this concept is enhanced by the fact that it places no restrictions on group size or membership, nor does it require that consumers identify with a tangible group (i.e., the group can be symbolic: prosperous business people, rock stars, and sports heroes).

Reference groups that influence general values or behavior are called normative reference groups. An example of a child’s normative reference group is the immediate family, which is likely to play an important role in molding the child’s general consumer values and behavior (e.g., which foods to select for good nutrition, appropriate ways to dress for specific occasions, how and where to shop, what constitutes “good” value).

Reference groups that serve as benchmarks for specific or narrowly defined attitudes or behavior are called comparative reference groups. A comparative reference group might be a neighboring family whose lifestyle appears to be admirable and worthy of imitation (the way they maintain their home, their choice of home furnishings and cars, the number and types of vacations they take).

Both normative and comparative reference groups are important. Normative reference groups influence the development of a basic code of behavior; comparative reference groups influence the expression of specific consumer attitudes and behavior. It is likely that the specific influences of comparative reference groups are to some measure dependent upon the basic values and behavior patterns established early in a person’s development by normative reference groups.

Broadening the Reference Group Concept

Like many other concepts borrowed from the behavioral sciences, the meaning of reference group has changed over the years. As originally employed, reference groups were narrowly defined to include only those groups with which a person interacted on a direct basis (e.g., family and close friends). However, the concept has gradually broadened to include either direct and indirect individual or group influences. Indirect reference groups consist of those individuals or groups with whom a person does not have direct face-to-face contact, such as movie stars, sports heroes, political leaders, or TV personalities. Referents that a person might use in evaluating his or her own general or specific attitudes or behavior vary from an individual to several family members to a broader kinship, from a voluntary association to a social class, a profession, an ethnic group, a community, or even a nation.

Types of Reference Groups

Reference groups can be classified in terms of a person’s membership or degree of involvement with the group and in terms of the positive or negative influences they have on his or her values, attitudes, and behavior. Four types of reference groups that emerge from a cross-classification of these factors:

A contractual group is a group in which a person holds membership or has regular face-to-face contact and of whose values, attitudes, and standards he or she approves. Thus a contactual group has a positive influence on an individual’s attitudes or behavior.

An aspirational group is a group in which a person does not hold membership and does not have face-to-face contact, but wants to be a member. Thus it serves as a positive influence on that person’s attitudes or behavior.

A disclaimant group is a group in which a person holds membership or has face-to-face contact but disapproves of the group’s values, attitudes, and behavior. Thus the person tends to adopt attitudes and behavior that are in opposition to the norms of the group.

An avoidance group is a group in which a person does not hold membership and does not have face-to-face contact and disapproves of the group’s values, attitudes, and behavior. Thus the person tends to adopt attitudes and behavior that are in opposition to those of the group.

Consider Ron a senior majoring in advertising at the state university in the southwestern United States. The school’s Advertising Club, of which he is vice-president, serves as one of Ron’s contractual groups. Ron believes that continuing his education to obtain an MBA will enhance his career opportunities. It is clear that individuals who hold the MBA degree serve as an aspirational group for him. Still further, although he enjoys his position as a reporter on the university’s newspaper, the recent editorials (endorsed by most of the staff) urging students to adopt a more conservative political philosophy run counter to his own views. Thus the newspaper staff is currently a disclaimant group. Finally, Ron personally knows a number of students who have quit college during their final year; these former students serve as an avoidance group.

Factors that Affect Reference Groups Influence

The degree of influence that a reference group exerts on an individual’s behavior usually depends on the nature of the individual and the product and on specific social factors. This section discusses how and why some of these factors operate to influence consumer behavior.

Information and Experience

An individual who has firsthand experience with a product or service, or can easily obtain full information about it, is less likely to be influenced by the advice or example of others. On the other hand, a person who has little or no firsthand experience with a product or service, and does not expect to have access to objective information about it (e.g., a person who believes that relevant, advertising may be misleading or deceptive), is more likely to seek out the advice or example of others. Research on imitative behavior provides some interesting insights on how insufficient experience or information concerning a product makes consumers more susceptible to the influence either positive or negative, of others. For example, if a medical school student wants to impress his new girl-friend, he may take her to a restaurant that he knows from experience to be good or to one that has been highly recommended by the local newspaper’s Dining-Out Guide. If he has neither personal experience nor information he regards as valid, he may seek the advice of friends or imitate the behavior of others by taking her to a restaurant he knows is frequented by physicians whom he admires.

Credibility, Attractiveness, and Power of the Reference Group A reference group, which is perceived as credible, attractive, or powerful can induce consumer attitude and behavior change. For example, when consumers are concerned with obtaining accurate information about the performance or quality of a product or service, they are likely to be persuaded by those they consider to be trustworthy and knowledgeable. That is, they are more likely to be persuaded by sources with high credibility. When consumers are primarily concerned with the acceptance or approval of others they like, with whom they identify, or who offer them status or other benefits, they are likely to adopt their product, brand, or other behavioral characteristics.

When consumers are primarily concerned with the power that a person or group can exert over them, they might choose products or services that confirm to the norms of that person or group in order to avoid ridicule or punishment. However, unlike other reference groups that consumers follow either because they are credible or because they are attractive, power groups are not likely to cause attitude change. Individuals may conform to the behavior of a powerful person or group but are not likely to experience a change in their own attitudes.

Different reference groups may influence the beliefs, attitudes, and behavior of an individual at different points in time or under different circum- stances. For example, the dress habits of a young female attorney may vary, depending on her place and role. She may conform to the dress code of her office by wearing conservative business suits by day and drastically alter her mode of dress after work by wearing more conspicuous, flamboyant styles.

Conspicuousness of the Product

The potential influence of a reference group varies according to how visually or verbally conspicuous a product is to others. A visually conspicuous product is one that can be seen and identified by others, and that will stand out and be noticed (e.g., a luxury item or novelty product). Even if a product is not visually conspicuous, it may be verbally conspicuous it may be highly interesting or it may be easily described to others. Products that are especially conspicuous and status-revealing (a new automobile, fashion clothing, home furniture) are most likely to be purchased with an eye to the reactions of relevant others. Products that are less conspicuous (canned fruits, laundry soaps) are less likely to be purchased with a reference group in mind.

The success of a brand of status running shoes like Reebok is aided by the fact that it is relatively easy to spot a person wearing them-given the distinctive flag symbol on the side of each shoe.

Reference Group Impact on Product and Brand Choice

In some cases, and for some products, reference groups may influence both a person’s product category and brand (or type) choices. Such products are called pro- duct-plus, brand-plus items. In other cases, reference groups influence only the product category decision. Such products are called product-plus, brand-minus items. In still other cases, reference groups influence the brand (or type) decision. These products are called product-minus, brand-Plus items. Finally, in some cases, reference groups influence neither the product category nor the brand decision; these products are called product-minus, brand-minus items. The idea of classifying products and brands into four groups in terms of the suitability of a reference group appeal was first suggested in the mid-1950s, along with an initial classification of a small number of product categories.

Reference Groups and Consumer Conformity

Marketers are particularly interested in the ability of reference groups to change consumer attitudes and behavior (i.e., to encourage conformity). To be capable of such influence, 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 an individual’s decision to use the same products as the group.

The ability of reference groups to influence consumer conformity is demonstrated by the results of a classic experiment designed to compare the effects.

Benefits of the Reference Group Appeal

Reference group appeals have two principal benefits for the advertiser: they increase brand awareness and they serve to reduce perceived risk.

Increased Brand Awareness

Reference group appeals provide the advertiser with the opportunity to gain and retain the attention of prospective consumers with greater ease and effectiveness than is possible with many other types of promotional campaigns. This is particularly true of the celebrity form of reference group appeal, where the personality employed is generally well known to the relevant target segment.

Celebrities tend to draw attention to the product through their own popularity.

This gives the advertiser a competitive advantage in gaining audience attention, particularly on television where there are so many brief and similar commercial announcements.

Reduced Perceived Risk

The use of one or more reference group appeals may also serve to lower the consumer’s perceived risk in purchasing a specific product. The example set by the endorser or testimonial-giver may demonstrate to the consumer that uncertainty about the product purchase is unwarranted: Following are examples of how reference group appeals serve to lower the consumer’s perceived risk.

Celebrity: Consumers who admire a particular celebrity often have the following reactions to the celebrity’s endorsement or testimonial. For e.g. “She wouldn’t do a commercial for that product if she didn’t believe it was really good.”

Expert. When consumers are concerned about the technical aspects of a product, they welcome the comments of an acknowledged or apparent expert. For e.g. “If he says it works, then it really must work.”

Common Man. When consumers are worried about how a product will affect them personally, they are likely to be influenced by a common man endorsement or testimonial. For eg. “People just like me are using that product,”