GROUP DYNAMICS

&
REFERENCE GROUPS

Classification of groups, types of reference

groups and their Influence on consumers.
 Definition Of Group
 Man is a social animal. He interacts, socializes
with others regularly.
 A group consists of people who are related as
result of the interaction with each other.

 “A group is defined as two or more individuals

who share a set of norms, values or beliefs and
have certain implicitly defined relationship with
one another, which makes their behavior
interdependent”.
Group Properties
 Status: Achieved or ascribed position of a
individual in a group as perceived by other
members.
 Norms: are the rules and standards of conduct
set by a group and are generally unwritten.
 Role: used to designate the behavior patterns
associated with a particular status. It’s the
dynamic aspect of status.
 All of us fulfill different roles any time
 Role overload and Role conflict
 Power
 It is the degree of personal choice or influence over
others. Various social powers are operative in
different social groups.
 Reward Power: perception one has about others ability to
reward him. (social groups have reward power)
 Coercive Power: Power to influence behavior through
punishments (mostly psychological sanction)
 Legitimate Power: stems from perception that group has
legitimate powers to influence them. (Family – fathers role)
 Power
 Expert power: Gained through experience, Skill set etc.
Advt. that rely on expert opinion are examples.
 Expert power comes from logic and reasoning. Ads
showing comparison of products (eg: Indica V2,
 Referent Power: Flows from an individual’s desire to
belong to a certain group.
 He will try for closer association to the group and will have
to confirm to the behavior of the group.
 More this identification will be the higher the referent power
of the group.
Type Of Reference Groups

Types Key Distinctions & Characteristics

Formal / Formal reference groups have a clearly specified structure;
Informal Informal groups do not have this.

Primary / Primary groups have face to face interactions. Secondary

secondary groups do not

Membership People become formal members of membership reference

groups.

Aspirational People aspire to join or emulate aspirational reference groups

Dissociative People seek to avoid or reject dissociative reference groups

(b.k.paul)
Consumer Related Reference Groups
 Work Groups: individuals who work together.
Structured and formal in interactions.
 Informal friendship groups
 Friendship Groups: usually unstructured and not
authoritarian
 Shopping Groups: two or more people who shop
together for regular necessities and even window
shopping. Off-shoot of friendship groups
 Virtual groups or communities: members of special
interest web sites who chat.
 Consumption Subcultures
 Sub group of a society – self selected on the
basis of a shared commitment to a product
class or brand or consumption activity.
 They have an identifiable hierarchical structure, set
of shared values / beliefs and unique jargon, rituals
and modes of symbolic expression.
 Punk Culture (based on style)
 Star Trek, Pokemon (TV Program / movie based)
 Golfing, Karate, scuba diving (activity based)
 Art of living, Art Museum (An organization)
 Brand Communities
 Non geographically bound group… based on a
structured set of social relationships among owners of
a brand and the psychological relationship they have
with the brand itself.
 Jeep and Harley Davidson and Saab, Apple-
Macintosh, Ford Bonco, GM Saturn.
 Consciousness of a kind: Who else drives a Harley. Has to be bike
freak.
 Rituals & traditions: jeep driver flashes light/honks when he passes
another jeep.
 Moral responsibility: you see another Saab on the road you pull down to
help him.
 Brand fest: Jeep jamborees, Camp jeep,
Reference Group Influence
 Informational Influence: occurs when an individual uses
the behaviors and opinions of reference group members as
potentially useful bits of information.

A colleague mentions that Park Needing a new suit, Nitin visits Park
Avenue has best collection of suits. Avenue store.

At several friend’s homes, Lipton Nitin decides to give Lipton Yellow

yellow label coffee is served label a try.

The best tennis player in the group Nitin buys a Donay racquet to start
uses Donay racquets. playing tennis.
 Reference Group Influence
 Normative Influence: (Utilitarian influence) occurs when
an individual fulfils group expectations to gain a direct
reward or to avoid a sanction.
 Social acceptance or approval if one uses a brand

Neighbors joke about Nitin’s car being Nitin washes and waxes his car.
dirty.

Nitin notices that his friend’s serve For parties he buys scotch, but
scotch whisky, though he cannot taste continues to use Mc Dowell no. 1
the difference. for home use.

Fa ad stresses that “Even friends will Nitin buys Fa deodrant.

not tell you that you have bad body
odor”. They will just ignore you.
 Reference Group Influence
 Identification Influence: (value expressive) occurs when
individuals have internalized the group’s values and
norms. They guide individuals behavior without any
thought of rewards or sanctions. Hd bike group

Over time Nitin discovers that Nitin believes that a conservative

most successful bankers image is appropriate for executives
dress conservatively. and starts to build a conservative
wardrobe.

Nitin sees an ad showing

smart young executives shop Nitin starts to shop at West side.
at West side.

Nitin decides that salads are good

Nitin’s many friends regularly for him and begins to consume them
consume salads. regularly.
Consumption Situation Determinants of Reference
Group Influence
Visible Usage

High relevance of
Product to group

Low individual High Degree of reference

purchase confidence Group influence

Strong Individual
Commitment to group

Non-necessary item
 Degree Of Reference Group Influence
 1. Group influence is strongest when the use of the
product or brand is visible to the group.
 2. Influence is higher if it is less of a necessary
item. (higher for designer clothes, sports gear than
necessities like refrigerator).
 3. The more the individual wants to be in the
group, more will he/she conform.
 4. The more relevant a particular activity is to
group’s functioning, the stronger the pressure to
conform. (style of dressing might be important for a
dining group and not for a football watching group.
Mass Communication Information Flows
 Word-of-mouth communications
 Word-of-mouse communications

Multi Step Flow

Direct Flow
Marketing Other
Marketing activities Activities Information

Opinion Opinion
Leader Leader

Targeted Segment Targeted segment

Opinion Leadership
 Some individuals actively filter, interpret or provide
product or brand related information to their family
or friends.
 Multi-step flow of communication depict opinion
leaders for a particular category who actively seek
information from mass media as well as other
sources and transmits it to others.
 Opinion leaders are sought when purchase /
product involvement is high and also when the
product related knowledge is low. (Product /purchase
involvement vs. product knowledge grid)
Opinion Leader Characteristics
 Enduring Involvement: greater long term
involvement with the product category leading to
more knowledge and experience about the
product.
 Opinion leadership functions primarily through
interpersonal communications and observations.
 Most frequently seen among individuals with
similar demographic characteristics. Hence you
will find opinion leaders in all demographic
segments of population – similar to segment they
influence.
Opinion Leader Characteristics
 Opinion leaders are more gregarious than others.
 They have higher level of exposure to relevant
media than others.
 Situational Characteristic:
 A dissatisfied customer are highly motivated to
spread their dissatisfaction.
 Satisfied customers – specifically those with a
positive affect response to a service/product – will
give positive recommendations.
Market Mavens

 Opinion leaders are generally product specific.

 Market Mavens – individuals who have info
about many kinds of products, places to shop,
and other aspects of market.
 They initiate discussions with others about
products / shopping and respond to requests
for information.
 They are more likely to be females and are
extensive users of media.
 Market Helping Behavior & Purchase
Pals
 Market Helping Behavior: actively helping others to
acquire goods / services .
 They collect information from a variety of sources, visit
stores, buy products for others. They teach others how to
shop.
 Purchase Pal: a person who accompanies another
on a shopping trip primarily to aid in the purchase
process.
 Symbolic or social support – does this look good
on me? Should I buy this?
 Functional or technical help – is this superior
quality? Is this a good price?
 Marketing Strategy & Opinion
Leadership
 Advertising should stimulate & simulate opinion
leadership.
 Stimulation: themes designed to encourage
current owners to tell friend’s about the product/
brand or to make prospective owners ask users
 Ex..painteen
 Simulation: having an acknowledged opinion
leader such as Sania Mirza or Leander Paes –
endorse a brand for Tennis equipment. Or
involve an apparent opinion leader
recommending the product.
Marketing Strategy & Opinion
Leadership
 Negative WOM: Absolutely essential that
marketers meet or exceed customer expectations
concerning their products.
 Firms must respond quickly and fairly to customer
complaint. (Unhappy they tell 9 others).
 Marketing Research: marketing research should
focus on opinion leaders.
 Product-use tests, Ad copy tests and media
preference studies should focus on opinion leaders
as they can bring in maximum effectiveness.
 Marketing Strategy & Opinion
Leadership
 Product sampling: instead of using a random
sample, marketers should attempt to send the
same to opinion leaders.
 Chrysler introduced its LH cars by offering the use of a new
car to 6000 presume O.L for the week end. Research
showed that 32000 people drove or rode in the car and
created huge, favorable WOM.
 Retailing & Personnel Selling: encourage current
customers to talk about the restaurant.
 Provide freebies to people who send in a prospect.
 Identifying Opinion Leaders
 Can be identified using self designating
questionnaire.
 Opinion leaders are heavily involved with media
particularly media that identify
 Nike could assume that subscribers of
“Runners World”, serve as opinion leaders for
jogging.
 Some products have professional opinion
leaders – barbers (hair care products), Pharma-
cists (for Health care), Rock Bands (Garments).
Creating BUZZ
 Buzz is exponential expansion of WOM.
 Word spreads like wildfire with no or limited
mass media advertising – Pokemon, Harry
Potter Books, Ninja Tutles, Lagaan etc.
 Often Buzz is not supported by large
advertising budgets, but its often created by
marketing activities.
 Key aspect of Guerilla marketing.
 Success of internet, yahoo –provide samples
& info to Opinion Leaders/celebrities.