Consumer Reference group

01/06/2020 1 By indiafreenotes

Groups exist in every formal and informal type of organisations. Such groups are created by the members for its satisfaction. Very often groups get formed automatically because of the operation of various socio psychological factors. Such groups affect the behaviour of its members.

Group dynamics is related to determining the interactions and forces between group members in a social situation. The term dynamics originated from the Greek word meaning force. Thus if this term can be extended to group dynamics, it refers to the study of forces operating within a group. Here it would be proper to mention the difference between aggregates and groups. Aggregation of individuals refers to where individuals are not aware of each other, or if aware, do not interact with each other in a meaningful way. A group will comprise of:

  1. Two or more people who are interdependent on each other, with group members and
  2. The group share a set of beliefs, valves and norms, which regulates their mutual conduct.

Meaning of Group:

Marvin E. Shaw has defined groups as “two or more persons who are interacting with one another in a such a manner that each person influences and influenced by each other”

People generally tend to define a group differently, mainly because it is difficult to define a group independent of some specific reference or purpose. As per the above definition when two or more people interact together such that each member is influence as well as be influenced by other group members, it is referred to as a group

Clouis R. Shepherd defines groups as “A group may be defined as the aggregation of small number of persons who work for common goals, develop a shared attitudes and are aware that they are part of a group and perceive themselves as such”.

Characteristics of Groups:

  1. Two or more persons: To form a group there should be atleast two persons, because a single individual cannot interact. Though no maximum limits have been set, the size of the group should be such so as to allow meaningful interaction among the members of group.
  2. Collective identity: Each member of the group must believe that he is member of the group and also be aware of his participation in the group activity. For instance a group of boys are room-mates staying together in the hostel. Though they may not be studying in the same class but because of their identity of room-mates they would prefer to go out together for shopping.
  3. Interaction: Members of the group will interact with each other. Though it is not necessary for all members of the group to interact simultaneously but each member must atleast occasionally interact with the members of the group.
  4. Shared goal interest: Members of the group should concur to the attainment of objectives each one must atleast share one of the groups concerns

Reasons for formation of groups:

The reasons for the formation of groups are as follows

  1. Solution for mindedness: Though the group members bring with them expertise in the form of knowledge and experience sometimes due to want of time the group members may pressurise all concerned with the group to arrive at solution to the problem quickly. In such cases the decisions arrived at may be improper/ hasty/ premature one and need not be the correct one.
  2. Compromised results: In case of problems the group members though interactions and discussions will understand the problem hold discussions and try to arrive at a consensus. However sometimes when consensus is arrived at, the group may perceive group harmony as more important than any given task decision. This results in a compromise on the solution arrived at. Under the circumstances this may not be the best solution but rather a compromised one.
  3. Untimely decisions: One of the characteristic features of a group is that decisions can be taken very fast. But at a times leader of the group will as a rule of the thumb take a decision and then communicate it group. In such cases the very purpose for formation of a group is defeated. By following the thumb rule the group leader will be taking a unilateral decisions and not the united one. Moreover since the decision taken is single handedly and also arrived at quickly it may be an untimely decision.
  4. Conflicts: Since the informal group exist to meet and satisfy the social needs of its members, there are chances of occurrences of role conflict. This problem arises when the individual group member becomes more committed to his/her own goal and seem to undermine their group members problems. In case of imbalance between the two and if the group as such is not constituted properly conflict may arise.
  5. Dominance: Groups are useful for transmitting and sharing information. In case of a problem all members can discuss it together and decisions can be arrived at with opportunities for clarification. However there is is always a fear of a single person a dominant personality assuming unofficial authority.

Types of Groups:

  1. Family life cycle:

Even though it is the family unit which purchases home appliances, toys, furniture etc, it is cannot be implied that all the families are in the market at the same time or for that matter at any time. This means that along with family decision making the family life cycle also plays a role in influencing consumer behaviour and also helps in gaining insight into consumption related behaviour.

People’s consumptions patterns of goods and services they buy and consume changes over their lifetime. As babies they consume baby food in the earlier years, most food items in their growing and mature years and specific diets in the later years. Individuals taste and preference related to cloths, automobiles, idea of re-creation etc. is also related to stage of the family life cycle and age.

Some writers like Gail Sheehy in his papers ‘predictable crisis in adult life’ and Roger Gould in ‘transformation’ has identified certain psychological life cycle stages that adults experience certain passage or transformation as they go through life. This means that changing consumption interest can also associated with these adult passages.

Thus marketers very often try to identify their target markets in terms of family life cycle and develop appropriate product and marketing plans. Further they also have to pay attention to the changing consumption interests that might be associated with these adult passages and develop marketing programmes accordingly.

  1. Friendship groups:

An individuals for his/her protection self awareness and enhancement needs others around him/her Leon Festinger in his ‘ A theory of social comparison processes’ has claimed that there exists in the human organisms a drive to evaluate his opinions and abilities. If objective non social means are not available of others. In other words human beings prefer the company of other and these people’s opinion also matters to them. Consumers also enjoy the company of their friends when purchasing certain types of goods. Such friendship group influence the consumer especially products like clothing, fine jewellery, cosmetics and personal care items, food items etc.

The influence of the friends is also seen in buyers choice of food habits and drinks. Marketers have realised the important role played by the friends in influencing the consumption pattern of individuals in certain category of products and also involved in designing suitable marketing communication programmes. To mention a few advertisements- coca-cola,(all soft drinks) close up, colgate etc (tooth paste) rin bar , life bouy, life bouy plus,(soaps and detergents) Hero tribe ranger (cycle) Four square, Gold Flake etc. (cigarettes) and so on are based on themes of evolved around friendship.

  1. Formal social clubs:

Human beings are generally considered to be sociable in nature, spend much of his/her time in group situations. They like to be associated with formal social clubs like the Rotary Club, Lions Club etc. The reason for their getting associated with such social groups may be to achieve a specific goal like making new friends, career advancement or pursuing a special interest or promoting a specific cause. Such formal social systems generally comprises of three elements

Activities are the tasks that people perform. Interactions are the behaviour that occurs between people in performing the tasks. And the sentiments are the attitudes that develop between individuals within the group. George C. Homans argues that these concepts through separate and closely related. A change in any of these three elements will produce some change in the other two.

In a formal organisation setup, job (activities) has to be done that require people to work together (interactions). These jobs must be sufficiently satisfying (sentiments) for people to continue doing them. With more and more positive interaction with each other, more and more positive sentiments will be developed by the people towards each other. As, this process continues there is tendency for the group members to become more alike in their activities and their sentiments.                                   

Markets releasing the role played by the formal groups on their individual members can work out a suitable sales promotion and communication programme and deliver the same to its target segment.

  1. Shopping friends/groups:

According to psychology ‘group’ refers to the number of people who interact with one another are psychologically aware of one another and perceive themselves to be a group. In the same way, shopping groups can be assumed to exists because the friends or the group members need to relate to each other mainly because of the physical location of the people same perception of things matching personality, styles ,outlooks etc. These factors are responsible for the increase in the frequency of the interactions between the members of a shopping group.

So depending on the product category and target market segment the marketer should develop a marketing programme keeping in mind the shopping group who are likely to be involved in the decision making process and who will are also likely to influence the individual buyer.

  1. Work Group:

This group can comprises of formal work group and informal work group. The formal work groups are those which are deliberately created by companies in order to fulfil specific tasks or functions clearly related to the total organisational goals and objectives. Based on their duration, the formal work groups can be of two types.

a) Permanent formal work group: Are part of the top management team, work units in various departments of the organisation staff groups proving specialised services to the line people in the organisation, permanent committees and so on.

b) Temporary formal work groups: Are committees or tasks forces created for a particular purpose/mission. They may be created to study and review the salary policies to suggest measures to improve the relationship between the union and management or to think of new products and services and so on. These temporary formal groups may exist till the tasks assigned to them have been completed. Very often the committee /temporary work group will comprise of members, who are already on the permanent payroll of the company. However till the completion of work assigned to the committee there will be close interactions between the members.

Markets must realise that the work group also plays a very important role in promoting their products and work out marketing programmes to communicate information about their product and its usage to the work groups.