Chapter 8

Group Dynamics and Consumer Reference Groups

Shamshul Anaz Kassim

Senior Lecturer

Faculty of Business Management

UiTM Perlis

What is a Group?

Two or more people who interact to accomplish either individual or mutual goals

Reference Group

A person or group that serves as a point of comparison (or reference) for an individual in the formation of either general or specific values, attitudes, or behavior.

Types of Group

A• PRIMARY VS SECONDARY GROUPS

B• FORMAL VS INFORMAL GROUPS

C• MEMBERSHIP VS SYMBOLIC GROUPS

PRIMARY VS SECONDARY GROUPS

• Primary Groups are those in which members usually interact regularly on a face to face basis and on intimate level

e.g: Families

• Secondary Groups are those in which members interact only occasionally with each other in a formalized manner

e.g: DBS Society

FORMAL VS INFORMAL GROUPS

• Formal Groups have highly defined structures and specific goals.

e.g: JPP

• Informal Groups are very loosely structured and lacking clearly defined goals or objectives. They are typically made up of a primary groups.

e.g: Family Gathering

MEMBERSHIP VS SYMBOLIC GROUPS

• A membership group is one to which a person either belongs or would qualify for membership

e.g: Alumni UiTM

• A symbolic group is one in which an individual is not likely to receive membership despite acting like a member

e.g: MU Fan Club

TYPES OF REFERENCE GROUP

Work Groups

Consumer-Action Groups

Shopping Groups

Formal Social Group

Friendship Group

Family

Virtual Groups or

Communities

1. Friendship groups are classified as informal because they are usually unstructured and lack specific authority levels.

2. Shopping groups are two or more people who shop together. The motivations range from primarily social to reducing risk.

3. Work groups - both the formal work group and the informal friendship/work group have potential for influencing consumer behavior.

4. Family – An individual’s family is significantly very influential in his or her consumption decisions.

5. Consumer-Action Groups – It can be divided into two categories: those who are organized to correct a specific consumer abuse and those who are organized to address broader issue and operate over an extended or indefinite period of time.

6. Formal Social Group – An individual may join a formal social group to fulfill specific goals such as making new friends, business networking or pursuing special interests.

7. Virtual Groups or Communities –Communicating over the internet permits people to explore the boundaries of their personalities.

Types of Celebrity Appeals

TYPE DEFINITION

Testimonial Based on personal usage, a celebrity attests to the quality of the product or service

Endorsement Celebrity lends his name and appears on behalf of a product or service with which he/she may not be an expert

Actor Celebrity presents a product or service as part of a character endorsement

Spokesperson Celebrity represents the brand or company over an extended period of time

FACTORS THAT AFFECT REFERENCE GROUP INFLUENCE

Information and Experience

Credibility, Attractiveness and Power of the Reference Group

Conspicuousness of the Product