Reference Groups

We are talking consumer behavior and factors affecting it. We talked personal factors like learning, beliefs and attitudes, family life cycle, education and occupation, income and personality in our previous post. We talked social factor Lift Style and today we are going to talk about reference groups.

Reference Groups
As a consumer, your decision to purchase and use certain products and services, is influenced not only by psychological factors, your personality and life-style, but also by the people around you with whom you interact and the various social groups to which you belong. The groups with whom you interact directly or indirectly influence your purchase decision and thus their study is of great importance to marketers. If your friend is going to buy a cheap life insurance policies from agent a, then we are going to buy from same agent.

A group is defined as two or more people who interact to achieve individual or common goals. The three categories of groups which are important for the marketer to understand are:

• Primary and secondary groups
  
• Formal and informal groups
  
• Membership and symbolic groups

Let’s talk on each group in details.
1) Primary and secondary groups:
A primary group is one with which an individual interacts on a regular basis and whose opinion is of importance to him. Family, neighbors, close friends, colleagues and co-workers are example of primary groups. Secondary groups are those with which an individual interacts only occasionally and does not consider their opinion very important.

2) Formal and informal groups:
Rotaty, Lions, Jaycees are some of the well-known social groups in our society. Labor unions, social clubs and societies are other types of formal groups to which individuals may belong. A formal group has a highly defined structure, specific roles and authority positions and specific goals.