Reference groups (Changing consumer)

Define reference groups

• Any person or group that serves as a point of comparison for values, attitudes, or behaviour.

Describe the 4 factors that affect reference group influence

• Information and experience

• Credibility, attractiveness and power of the reference group

• Conspicuousness of the product

• Reference groups and consumer conformity

Explain “Information and experience”

• Individuals with first hand experience on a product or service are more likely to obtain full information about it themselves, rather than relying on others advice.

e.g. → A person who has never done online shopping is more likely to seek advice from others who have, as they have no experience in that sector.

Explain “Credibility, attractiveness and power of the reference group” (3)

• Credibility

→ Consumers are more likely to trust the judgement of individuals the see as reliable and adopt their recommendations

e.g. = A fitness enthusiast buying supplements recommended by health professionals

• Attractiveness

→ People that want to be accepted by a group they admire, will often imitate group’s choices to gain status and acceptance

e.g. = A teenager buying popular clothing brands hoping to fit in.

• Power

→ A person follows a groups or individual’s norms to avoid judgement or punishment, even if their attitudes don’t change

e.g. = An employee dressing formally at work because manager enforces a strict dress code, even if they prefer casual attire

“Conspicuousness of the product” (3)

Consists of

• Visually conspicuous products - that standout and are easily noticed

• Verbally conspicuous products - that are interesting or easy to describe (e.g. → Samsung’s foldable smartphone)

• Status-revealing conspicuous products - that signal prestige or social standing, most likely purchased with other’s reaction in mind. (e.g. → A large diamond engagement ring)

Explain “Reference groups and consumer conformity” (5)

Their aim is to

• Inform or makes individuals aware of a specific product or brand → (e.g. = A student hears redbull’s new “fuji apple & ginger” flavoured energy drink because their peers talked about it)

• Allow individuals to compare their own thinking with the attitudes and behaviours with others → (e.g. someone considering eco-friendly norms notices their friend recycle their waste and feels motivated to do the same)

• Encourage individuals to adopt behaviours that are consistent to the group’s norms → (e.g. A heath conscious group influencing its members to get a gym membership like them)

• Validate consumer decisions the use the same product as the group → (e.g. Buying a Stanley cup because everyone has it)

• Marketers encouraging consumers to reject group norms and be unique, but this requires a shift in attitudes or behaviour → (e.g. A brank slogan like “Think differently” appeals to those wanting to break from conformity

What are the 5 main consumer reference groups

• Friendship groups

• Shopping groups

• Work groups

• Virtual communities

• Consumer-action groups

Friendship groups are classified as _____________________

Informal groups

Why are friendship groups classified as informal groups

Because they are usually unstructured and lack specific authority levels

Why are friendship groups influential?

Because the opinions and preferences of friends strongly affect brand or product choices an individual makes

What is a shopping group?

Group of 2 or more people shopping together, motivated by social interaction or risk reduction

Explain the bandwagon effect in shopping groups?

Undecided buyers purchase after seeing friends buy.

How do work groups influence consumption?

Both formal teams and informal / work colleagues affect brand choices during work or social interactions.

When can informal work groups influence each other’s consumption behaviour ? (3)

• During coffee

• Lunch breaks, or

• After-hours meetings

Define virtual communities?

Are online groups that provide information, fellowship, and anonymity to interact and express oneself.

e.g. → Looking into online reviews before booking a hotel room for the holidays

Define brand communities

A group formed around shared ownership or interest in a brand

→ (e.g. Harley Davidson clubs).

Explain "Consumer action groups” + it’s categories (2)

Groups that emerged in response to the consumerist movement

They are divided into 2 broad categories:

• 1st category = organised to correct specific consumer abuse practices

• 2nd category = Address broader problem areas and operate over an extended or indefinite period of time.

What are the 5 reference group appeals that marketers may use in advertising?

• Celebrities

• The expert

• The “common man”

• The executive and employee spokesperson

• Trade or spokes - characters

Why are celebrities effective in advertising?

They provide credibility, admiration, and recognition.

Give an example of a brand that used celebrity endorsement

Tyla’s collaboration with Stanley

What is the most important factor in celebrity endorsement?

Credibility (expertise + trustworthiness).

Why is credibility important in celebrity endorsements + give an example of what might happen if it got broken

• Credibility it’s important because para-social relationships are built on trust

• Broken credibility can damaged consumer trust in both brands and celebrities

Example:

→ (FYRE Festival + Kendall Jenner, Bella Hadid and others…)

The glamourised promises made by celebrity endorsement turned false.

Explain the “Expert appeal” use in advertising campaigns + example

Happens when brands uses professionals or professional language to build trust

→ (e.g. Oral B using phrases like “dentist recommended” in ad campaigns)

Explain the “Common man” approach in marketing campaigns + example

Happens when brands use a regular person with relatable problems who uses their product to fix the problem

→ (e.g. Flash - Cleaner spray)

Explain the “Executive and employee spokesperson” approach in marketing campaigns. + example

Happens when brands uses its executive’s or employee’s profession status, to appear more transparent and credible

(e.g. Steve Jobs launching the first touch screen iPhone)

Explain the “Trade or spokes-characters” approach in marketing campaigns + example

Happens when a brand creates a cartoon or fictional character as the company’s celebrity endorsement for specific products

(e.g. Kevin the carrot in Aldi) or (M&M chocolate characters)