Influence of Reference Groups on Purchasing Behavior - Case Study Example

Influence of reference groups on purchasing behavior Introduction Big corporate are spending millions of dollars in order to study the changing consumer behavior trends. Consumer purchasing habits undergoes rapid changes based on the advancement in science and technology and also changing global economic scenario. For example, computers and internet has given the consumers enough freedom in identifying products from different international markets and moreover they can purchase anything they want using a credit card through internet. The globalization has opened the doors for the entry of foreign products in the domestic market which helped the customers to have more choices and freedom in purchasing. Even in this technology driven consumer world, the purchasing decisions can be greatly influenced by so many social factors like family, peers and the society in which the consumer is interacting. These entities which influence the purchasing behavior of a consumer is generally referred as ‘reference groups’ and this paper briefly analyses the influence of different reference groups in the purchasing of consumers in general and female consumers in particular. Reference group “A reference group is an actual or imaginary individual or group having significant similarities in their evaluations, aspirations, or behavior” (Park & Lessig, 1982, p.102) Family, peers and societies are some reference groups which can affect the purchasing behavior of a person. These reference groups can influence the consumer in different ways like informational influence, motivational influence, utilitarian influence and value-expressive influence. A consumer will get information about a product from family, peer group or from the society. For example, consider a child got information about a new toy or video game from his friends (peer group) or from different toy shops (society). Moreover the peer group can motivate the child to purchase that toy or video game by explaining the special features about that product. On the other hand when the child ask his parents (family) to purchase that toy or video game for him, the parents will discuss the utility of that toy with him initially. Moreover they will discuss the price (Value) of the product also before taking the final decision about whether to purchase it or not. Normative and comparative referents “Parents, teachers, and peers are representative of normative referents who provide the individual with norms, attitudes, and values through direct interaction (Childers & Rao, 1992, p.199). Normative referents are the ones with we usually interact directly. The direct interaction will help us to formulate norms, values and attitudes. For example, one of my teachers during my college days has inspired me a lot with his methods of teaching and behavior. He always emphasized the need for the better utilization of the products we purchased. He has warned us against throwing away objects before their value expires. I have derived lot of positives from him and utilized them in developing a sound philosophy in purchasing. Moreover some peculiar characters of my parents and peers also influenced me a lot in developing my attitudes about purchasing. We cannot have a direct contact with the comparative referents, such as sports heroes and entertainment figures (Childers & Rao, 1992, p.199).We can only observe their behaviors. For example, suppose David Beckham is the brand ambassador of Pepsi Cola in England. We can observe only the ads in which Beckham advocating for Pepsi. In real life sometimes Coke may be his favorite soft drink. Thus comparative referents influence us indirectly even if their actual behavior is different from the behavior they were insisting. On the other hand Normative referents influence us directly by showing the particular behavior in their real life. Examples of different group’s influence (peers, family and society) on purchasing behavior Three motivational influences of reference groups are informational, value expressive and utilitarian (Park & Lessig, 1982, p.102). Information is one of the main aspects of every purchasing activity. Without proper information, nobody can purchase a good quality product. I belong to the female community and because of that, definitely females have an important influence in my purchasing decisions. Moreover, my family, peers and the society, in which I am interacting, has also great influence on every purchasing decision, I made so far. Female community is famous for information interchanges because of their peculiar psychological characteristics compared to male community. Peer influence in purchasing “The purchase decision of products such as mobile phone, which are used publicly, is strongly influenced by the consumer’s reference groups. Mobile phone manufacturers have been applying such interpersonal influence in their advertising and marketing practice” (Yang, 2007)I have recently purchased a mobile phone and that purchasing decision was greatly influenced by information I got about that particular brand from news paper ads, television ads, and internet. Moreover, I have seen the same brand mobile phone with one of my friends and I have got enough information from her regarding the features, price and utility of that mobile phone. She told me that she is using that mobile phone for the last 6 months and so far she has not experienced any difficulty with respect to the performance of that phone. It was slim and attractive with some music and mobile internet facility. I have confirmed my decision to purchase the same brand for me also immediately after watching the performance of that phone. I can safely say that my friend (Peer) has influenced me a lot in purchasing that mobile phone. “The pervasive use of spokespeople in product and service endorsements reflects the widely held belief that individual who are admired or who belong to a group to which other individual aspires can exercise an influence on information processing, attitude formation and purchase behavior” (Childers & Rao, 1992, p.198). Family influence in purchasing Family influence on purchasing activities can be of different types like; Husband dominated, wife dominated, children dominated and autonomic. For example, insurance related products/ service will be purchased in a family mostly because of the husband’s influence. Children and wife in a family may not be much interested in such family security related issues same way like the husband. On the other hand Kitchen related products and equipments are normally purchased because of the wife’s influence. Mostly the wife is the person who is in charge of the kitchen and hence they are aware of the requirements of kitchen more than anybody else. On the other hand, toys, entertainment products etc will be purchased mostly under the influence of children. Children will be more fascinated towards such objects compared to all other family members. Cosmetics and home equipments are general items and the purchasing of such items are usually generally discussed and purchased. “From a consumer behavior perspective, it appears that products and brands that individuals select can be influenced by their reference groups” (Childers & Rao, 1992, p.198) Family is a reference group which can influence a person greatly in his/her purchasing activities. Recently I purchased a gold necklace. Usually, I am not much interested in wearing gold ornaments. But my mother has inspired me to purchase that ornament because she has seen another young lady with same kind of ornament in a function. Though it was an expensive one, my mother has given me the money needed for purchasing that ornament. She wanted to make me more beautiful with that ornament in family various functions like weeding ceremonies, baptism ceremonies, etc. I can safely say that I purchased that necklace only because of my mother’s encouragement rather than anything else. “Intergenerational influences are likely to differ across cultural settings that represent different family types, depending on how many family members are available to exercise an influence on the individual and on how strongly the individual identifies with family members” (Childers & Rao, 1992, p.199). The influence of family on purchasing decisions is declining in the current world because of the weak relationships within the family members. Large family concepts have been given way for nuclear families. Moreover, most of the parents at present are more particular about their careers rather than the future of their children. They are getting less time to even interact with the children because of their professional engagements. Thus the current children forced to take advices from the society or peers where they interact more freely to take their purchasing decisions. Social influence in purchasing Society is another reference group which can influence a person in his/her purchasing decisions. Cocanongher and Bruce found that socially distant reference groups can influence consumers if consumers hold favourable attitudes toward the members or activities of that group. (Bearden& Etzel, 1982, p.184) Mahatma Gandhi is a person who has immense influence on the people of India because of the successful freedom struggle he has conducted against the British. He and his party members (Indian National Congress) have used only cheap cotton (Khadi) dresses and inspired many Indians to use such clothes. Even now, after around 52 years of independence, Many Indians are wearing Khadi clothes. The individuals need for social approval is a big factor in taking purchasing decisions (Bearden& Etzel, 1982, p.184). I have recently purchased a car which was greatly influenced by the need for social acceptance. My old car was an outdated one and it was not possible for me to command the respect and recognition from the society with that car. My friends quiet often joked at me with respect to the condition of my old car which forced me to think in terms of purchasing a new one even though I was satisfied with the old one. Most of the people around me have got luxury cars which forced me to purchase a luxury car in order to capture the social recognition. “Products that are neither observable nor exclusive because they are consumed out of public view and are used by everybody (e.g., mattresses) fall into the privately consumed necessities category. Products that are observed when being consumed and are also commonly owned (e.g., wristwatches) fall into the publicly consumed necessities category” (Childers & Rao, 1992, p.201). World Wide Web (www) or Cyberspace is another domain which can socially influence the purchasing behaviour. Internet is an open domain for anybody irrespective of their country, culture, gender, interests or attitude. It can be exploited for sexual flirtation, business, idle gossip, spiritual exploration, psychological support, political action, intellectual discourse on all kinds of subjects – the whole range of human interests and needs’. Internet communities can influence the purchasing decisions of consumers in many ways. Internet can address the individual needs of a person and hence the individuals are greatly influenced by internet in taking their purchasing decisions Conclusions Purchasing decisions of consumers are greatly affected by three main referent groups like family, peer and society. There are and normative comparative referents who can influence the consumers directly and indirectly. Reference groups can influence the consumers in many ways like informational influence, motivational influence, utilitarian influence and value-expressive influence. Family influence on purchasing can be of different types like, husband dominated, wife dominated and children dominated. Peers and society can influence consumers in taking purchasing decisions in many ways. Social recognition is an important requirement for every human being and they will go for purchasing of products in order to sustain or improve their social status. Cyberspace is a virtual community which has influenced the consumers greatly in the current century in their purchasing decisions. References 1. Bearden William O. & Etzel Michael J. (1982), Reference Group Influence on Product and Brand Purchase Decisions, The Journal of Consumer Research, Vol. 9, No. 2 (Sep., 1982), Published by: The University of Chicago Press, Retrieved on 3 July 2009 from http://www.jstor.org/stable/2489127 2. Park Whan C. & Lessig Parker V, (1982) Students and Housewives: Differences in Susceptibility to reference group influence, Journal of consumer research, Vol. 9 September 1982, Retrieved on 3 July 2009 from http://www.jstor.org/pss/2488716 3. Childers Terry L. and Rao Akshay R. (1992), Journal of consumer research, Vol. 19 September 1992, Retrieved on 3 July 2009 from http://www.jstor.org/stable/2489328 4. Yang Jiaqin,(2007), Social reference group influence on mobile phone purchasing behavior: a cross-nation comparative study, Int. J. Mobile Communications Vol. 5, No. 3, 2007 http://hercules.gcsu.edu/~jyang/Publications/IJMC%205305%20-%2007.pdf Read More