Group Influence on Consumer Behavior †Free Samples to Students

Question: Discuss about the Group Influence on Consumer Behavior. Answer: Introduction: The Social circle of any individual plays an important role in shaping his choices. Many other people from various occupations, such as sports teams, corporate achievers and even politicians and celebrities have direct or indirect effects on the choices of an average consumer. These groups of people are the reference group for that person or consumer(Fisher, 2017). The bigger challenge for any product and services company starts after it has developed its product, which is promoting it correctly in order to give it an exposure. Understanding the general reference groups for the consumers and identifying the correct reference group that can be associated with the product plays an important role in developing the marketing strategy for the product(Sirgy, Rahtz, Portolese, 2017). This practice of understanding and associating with the reference group in order to influence a consumers choice is termed as group influence. There are many categories of groups in which a person socializes or relates. The reference group may change with change in geography, age, financial position or educational qualification. In general, reference groups are categorized under two major categories, which are primary and secondary(Tutorials Point, 2017). Primary groups are those groups with which a person has regular interactions and a close relationship. A persons colleagues, family, friends, or his sports teams are few examples of the primary group. These groups have a prominent bearing on a consumers choices, as they are more confident about their peers or their families. It is not necessary for a particular group to remain a primary group in every case. For example, for a person who is sporty and adventure loving, his rugby team or any other sports team holds significant importance compared to his general friends circle. For a socialite who seeks to harbor cordial relations with everyone, his social groups and gatherin gs such as alumni associations become very important to him. Thus, the primary group can become secondary for two different types of consumers. Consumers tend to make similar choices as their primary group in order to be assured about their choices. This also makes them less susceptible to wrong choices. On the other hand, secondary groups are those people with whom a person has less contact. They have less importance and therefore carry lesser weightage while influencing a persons choice. Groups like those at church, or social clubs, or charity groups who congregate less frequently are secondary groups of a person. Reference groups are also categorized as formal or informal groups. Formal groups are groups, which have an official recognition and have a general code of conduct or scope of activities. Informal groups are soft groups like a friendly hangout or a parents group of a school. Another attribute of a reference group is that it is either an aspirational group or a dissociati ve group. Aspirational groups are the ones with which people would like to be associated with. In order to confirm to the lifestyles and choices of these aspirational groups, a person may start wearing the brand most used by them or buy team caps in order to resemble them. Dissociative groups are the ones, which a person does not like to be associated with(Perner, 2017). Advertisers have to use the most relevant groups for their products in order to gain a connect with its consumers(Pittard, 2013). In most of the cases, the secondary group of its target consumers is the best bet to promote its product. This is due to the reason that primary groups differ from person to person and thus it is difficult to achieve mass appeal among so many consumers as their target reference groups are fragmented. However, if their secondary groups are considered, then the outreach is widened many fold(Mondal, 2016). These groups should also have other attributes like they should be an aspirational group like a popular sports team or celebrities. After identifying the aspirational group of its target consumers, the focus shifts to the product in order to match the requirements. A company promoting a soap brand will not use a formula one team to promote its product. Similarly, an auto parts company would rather use a race team than a celebrity. While both of the celebrit y and the race teams are aspirational and appealing reference groups, the final choice is made by use cases of the product(Pittard, Using Reference Groups in Marketing, 2013). Sportswear companies like Nike and Adidas have a target audience of young age group who are involved in sports. Therefore, they have targeted their aspirational groups like sports football teams and prominent tennis players and other athletes in order to generate appeal among youngsters who regard them as their icons. Similarly, toothpaste companies can use the recommendations of dentists and health experts in order to generate trust among its consumers, who are more likely to go by choice of a doctor. The highly competitive nature of business and the emergence of large corporate organizations have led to a wide range of choices in each segment for the individual consumer. In order to compete with their rivals and find preference among their consumers, companies deploy various marketing strategies in order to generate sales. This kind of exposure to marketing has made a difference to the way a consumer chooses his products. A well-publicized and promoted health drink may find favor among the consumers more against an under promoted product, even if there is a significant price difference between the two similar product. This means that the average consumer is influenced by factors like celebrity endorsements and advertisements in order to judge a product(Sokolovska, 2016). The consumers have limited resources to compare the actual productivity of a product and make informed decision after comparing prices of similar products of other brands, which offer more value for money. Organi zations, on the other hand, have to deploy intense scrutiny for their purchases, as the resultant cost of their product is dependent on the way they spend producing it(Bhasin, 2016). This is very important aspect of their business because if their product becomes more costly in comparison to their competitors, this would affect their sales. Rational purchase is also crucial in order to maintain profit margins as they occur in large scale(Bhide, 1996). An individual consumer has the liberty to spend money on expensive product even if it means less value for money. This is because it will not affect his day-to-day activities and his income would remain the same. However, this is not the case for organizations. A consumer may go with his emotions or the urge to try his neighbors preferred brand just to experiment with it. Large organization cannot make lame choices based on emotions or word of mouth information. Thus, large organizations invariably make rational decisions while buying; however, this cannot be said of the average consumer, whose decisions are based on less relevant factors like marketing and endorsements. Marketing technique require constant innovation and fresh ideas in order to make a difference. The constant pressure of producing results in the form of sales, and the goal to rise among competitors often lead to unique concepts of promotions. Impulse buying is one such technique where marketers try to generate instant, albeit short-lived demand for their product(Mendenhall, 2014). Flash sales like those of e-commerce websites that last for two or three days are the best examples where sellers hope that consumers would resort to impulsive buying(Stern, 1962). These events and other techniques that promote impulsive buying often generate mixed results for the companies. For example, if a clothing brand holds sales events in order to draw attraction, it may witness increased sales activity during the period. These kinds of event leads to the consumers make a purchase, where they would have purchased the product after a few days or weeks anyway. Besides, some other individuals who would have bought other brands could instead shift to this brand for the reason that it is discounted. However, these events are followed by a slump in sales activity as the potential purchases are already tapped by the company; hence, it has to wait for the consumers to feel the need to make a purchase. This short-term effect may reduce the earnings made by the sales event and the long-term figures remain constant. In addition, the discounts, which the company offered in order to lure the customers, also make a dent in the profits made from the sales. Impulsive buying is an attractive proposal for marketing firms, but they should be avoided in favor of longer-term benefits of marketing and sustained promotional activities wherever possible. However, there are certain circumstances where impulsive buying is desired. Like in the sporting events and soccer matches, companies can run promotional periods for team jerseys and caps in order to tap the enthusiasm of the fans and viewers. These are short-term demand and will wear off after the event anyway, so the best bet would be to generate as much interest as possible within a short period of time. Promotional activities such as free match passes, meetings with celebrities and the chance to appear on television are the triggers of impulse buying where the viewers at a stadium may get enthusiastic about the offer and buy the product, even if it of no use to them afterwards. References Bhasin, H. (2016, December 1). Organizational Buying. Retrieved from marketing91.com: https://www.marketing91.com/organizational-buying/ Bhide, A. (1996, December). Decision Making. Retrieved from HarvardBusinessReview: https://hbr.org/1996/11/the-questions-every-entrepreneur-must-answer Fisher, C. (2017). Group Influence on Consumer Behavior. Retrieved from SmallBusiness.chron.com: https://smallbusiness.chron.com/group-influence-consumer-behavior-61919.html Mendenhall, C. (2014, December). The Phenomenon of Impulse Buying. Retrieved from University Of Missouri: https://artifactsjournal.missouri.edu/2015/01/the-phenomenon-of-impulse-buying/ Mondal, P. (2016). Difference Between Primary and Secondary group. Retrieved from yourarticlelibrary.com: https://www.yourarticlelibrary.com/sociology/differences-between-primary-and-secondary-group-788-words/6221/ Perner, L. (2017). USC Marshall. Retrieved from www.consumerpsychologist.com: https://www.consumerpsychologist.com/cb_Group_Influences.html Pittard, V. (2013, March 6). Using Reference Groups in Marketing. Retrieved from Business2community.com: https://www.business2community.com/marketing/using-reference-groups-in-marketing-0427866#1pWRVY3BjOwhlDi1.97 Pittard, V. (2013, March). Using Reference Groups in Marketing. Retrieved from business2community.com: https://www.business2community.com/marketing/using-reference-groups-in-marketing-0427866#1iLoEmkF3if5BS0h.97 Sirgy, M. J., Rahtz, D. R., Portolese, L. (2017). Consumer Behavior Today. Retrieved from Flatworldknowledge.com: https://catalog.flatworldknowledge.com/bookhub/reader/8111?e=sirgy_1_0-ch11_s01 Sokolovska, A. (2016, October 4). Impact Of Celebrity Endorsement in Consumer Behaviour. Retrieved from Guidedselling.org: https://www.guided-selling.org/impact-of-celebrity-endorsement-on-consumer-buying-behavior/ Stern, H. (1962, April). The Significance of Impulse Buying Today. Journal of Marketing, 26(2), 59-62. Retrieved from https://www.jstor.org/stable/1248439?seq=1#page_scan_tab_contents Tutorials Point. (2017). Consumer Behaviour - Reference Groups. Retrieved from Tutorials Point: https://www.tutorialspoint.com/consumer_behavior/consumer_behavior_reference_groups.htm