Reference Group -1

Formal and informal groups:
A formal group has a highly defined structure, specific roles and authority positions and specific goals. 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.

In contrast, an informal group is loosely defined and may have no specified roles and goals. Meeting your neighbors over lunch once a month for friendly exchange of news is an instance of an informal group.

Membership and symbolic groups:
A membership groups is one to which a person belongs or qualifies for membership. All workers in a factory qualify for membership to the labor union. A symbolic group is one which an individual aspires to belong to, but is not likely to be received as a member. A head clerk in an office may act as if he belongs to the top management group by adopting their attitudes, values and modes of dress. Both membership and symbolic groups influence consumer behavior but membership groups have a more direct influence. Primary, informal and small groups exert the maximum influence on consumers and are great interest for marketers.

Any of these groups can serve as a reference group for a consumer if it serves as a point of reference or comparison in the formation of the values, attitudes and behavior. As a part of one women social reference group, all member women are eligible to have a free medical insurance or maternity coverage. Different kinds of groups, whether small or large, formal or informal or symbolic qualify as a reference group. The concept of reference group is a very wide one and includes both direct and indirect or group influences.

Indirect reference groups comprise those individuals or groups with whom an individual does not have any direct face-to-face contact. Such as film stars, TV stars, sportsmen, politicians.

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.