Consumer Reference group

Consumer Reference group

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

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 roommates 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 decision 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 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.

2. Friendship groups:

An person requires people in his or her environment for safety, self-awareness, and improvement. In his book “A theory of social comparison processes,” Leon Festinger said that humans have a natural need to assess their own talents and views. if others do not have access to objective, non-social methods. In other words, individuals like the company of others and value other people’s opinions. When buying some things, consumers also enjoy the companionship of their friends. Such social groups have an impact on consumers, particularly when it comes to buying goods like apparel, fine jewellery, cosmetics and other personal care products, food, etc.

The impact of friends may also be apparent in consumers’ choices of eating and drinking habits. The importance of friends in influencing people’s purchasing behaviour for a certain category of items has been recognised by marketers, who are also engaged in creating effective marketing communication programmes. To name a few, advertising for Coca-Cola (and all other soft drinks), Colgate, Rin Bar, Life Bouy, Life Bouy Plus, Hero Tribe Ranger (a bicycle), Four Square, Gold Flake, etc. (cigarettes), and others are built around ideas of friendship.

3. Formal social clubs:

Humans are gregarious, spending significant time in groups. They prefer social groups like Rotary, Lions, etc. They may join such clubs to make new acquaintances, better their careers, pursue a hobby, or promote a cause. Formal social systems include three aspects. People perform activities. Interactions are how people work together. Sentiments are group members’ attitudes. George C. Homans says these ideas are independent yet linked. Any of these three will affect the other two.

In a formal organisation, jobs need teamwork (interactions). For individuals to keep performing these professions, they must be enjoyable. People will create more favorable feelings towards each other through pleasant interaction. As this continues, group members’ actions and feelings tend to converge. Markets that release the formal groups’ function on its members might create a sales promotion and communication campaign for their target segment.

4. Shopping friends/groups:

In psychology, a “group” is defined as a collection of individuals who interact with one another, are mentally aware of one another, and believe they constitute a group. Similar to this, it may be believed that shopping groups arise because friends or group members need to connect with one another, mostly due to their shared geographical location and similar worldviews, as well as their shared personalities, styles, and aesthetic preferences. The frequency of encounters between members of a shopping group has increased as a result of these variables.

Therefore, the marketer should create a marketing campaign based on the product category and target market segment, bearing in mind the shopping group that is likely to be part in the decision-making process and who will also are likely to impact the individual buyer.

5. 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 realize 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.