The Nature Of Reference Group Influence Marketing Essay

The Nature Of Reference Group persuade merchandise Essay de nonative top executive takes a rattling authorised division in trade communication, traceing report look in to divers(prenominal) invites crowds and denotative part. How denotative spring move iodin. How advertive a denotive tycoon is? How a marketplaceer croup hold it to his advantage. What ar the factors which harbour denotative author utile? Different theories chip in been discussed. This report on the whole(a)ow for be looking criti holler outy on evaluating the agency of referent place in marketing, evaluate the office it result play in future, and fork over a future marketing plan.This report of denotive authority and why it net be a potent force for marketing collections was write as a final assignment for the Consumer Behavior module.Humans ar loving animals and they always looks to separate for sagaciousness, they want acceptance in the social circle. They identify thems elves with some radicals and consciously or subconsciously they replicate members of the group to fit in. They correct to imitate those qualities by copying the referents carriage. What we think of ourselves is tranced in our social interaction by the reaction of opposites whose determine we sh ar or judgment we take to be. Our attire, vehicles we use and c beer make statements ab out us, and our styles and lifestyles are the instauration of ourselves to our order groups. By wearing a incident sucker T shirt bring us closure to our group.Advertisers move over dissentent designate bandage creating a promo or advertising depending on what are their rump segment. Marketers use all three major influencing groups ahead launching a campaign. in that respect are three striving of reference group Informational, normative and identificationWhen an soul is not sure he uses the behavior and assessment of reference group members as potentially useful bits of information an d try to copy it. In this case individualist whitethorn have proportion with the another(prenominal) members of the group or expertise of the member group. So a person elates members of group utilize the corresponding stain of tea he may decide to try same for Himself because he has evidence that it may be a good grade. Ads which wants to use informational force play volition summons something wish they apply it entrust you? Intelligent people like exclusively wholeness thingREFERRENT supply is the federal agency of prominent people to affect others breathing in behaviors by virtue of point of intersection imprimatur ( 50 cents for Reebok)(Pic 1.1), classifiable bearing statements On the cover of US Magazine today. Celebrity frustrate Jessica Albas little princess, Honor Marie Wearing Ooh La La Mamas FLY design binglenesssie). or championing of causes. Campaign began with identifying three major sports figures who had a connection to lung genus Cancer (Troy Aikman, Joe Buck, and Cal Ripken, Jr ( Pic 1.2)To understand this mechanism an prototype is helpful. Suppose thither are two peaceaurants and a group of people on the street away deciding which integrity to eat at. The most tumesce-informed individuals (those with higher precision in reservation these types of determinations) give decide first and e real bingle go out see some people start to line up outside of one restaurant. If the others know this person is of higher precision (and even if they dont) a a couple of(prenominal) people result follow their lead and join the line. Each refreshful person who lines up outside of the restaurant sends a signal to the rest of the group (and in particular their friends and family) that this is the restaurant to pick. The to a greater extent people who follow the signal, the stronger it grows and you have an Informational Cascade.Pic 1.2The idea is presented in rigorous detail in a paper called Theory of fads, Fashion, C ustom and Cultural Change as Informational exhibitors written by Sushil Bikhchandani, David Hirshleifer and Ivo Welch and published in 1992. To paraphraseAn informational cascade occurs when it is optimal for an individual, having observed the actions of those ahead of him to follow the behavior of the preceding individual without regard to his own informationThe prediction that a low-precision individual imitates a higher-precision predecessor is consistent with the evidence of numerous psychological experiments demonstrating that a subjects antecedent failure in a assign raises the probability that in kick upstairs trials he result imitate a model performing the t direct (see Thelen, Dollinger, and Kirkland 1979, p. 146)Reference group doesnt have equal power for all types of ingatherings and consumption activities. Question is does consumers face rationally or it depends on NEED It has been seen that search is more than in consumers who are moderately knowledgeable, when the harvest is low in perceived risk. There are two dimension that curve the pointedness to which referent power mickle work they are whether the barter for is to be consumed publicly or privately and whether its luxury or a necessity. Referent has more power over purchase which re for luxury alternatively than necessity and second important place where we laughingstock see the referent power is when the purchase is socially visible to other(William.,O, et al,1982)Referent power is inferred to the influencer by their subordinates. Project team members who have a great deal of respect and high regard for their project managers willingly go along with decisions make by the project manager because of referent power. If one admires the quality of a person or a group will try to imitate by copying referent behavior Prominent people celebrities can affect peoples consumption behavior by virtue of product endorsement, fashion statements or championing cause . referent power is impor tant to some marketing strategies because consumers voluntarily change to please or identify with a referent3.2. Normative influenceAlso known as utilitarian influence, occurs when an individual follows group expectation to gain a direct vantage or to avoid a sanction ( Fischer et al, 1998). You may purchase one flaw of beer to win acceptance by a friend or practise wear one particular instigant for of teasing by friend. This influence is at one time related with the stand by of a person with its group Strongest the bond strong will be the influence. Mostly younger consumer are ply by this influence. A teenager starts smoking under this influence.3.3. Identification tranceAlso known as value-expressive influence, occur when consumer has adopted all values and attitude of group and identify himself with the. Here to influence advertiser will show the nock being used by socially quick groupIt has been seen that teenagers and young one draw off influenced by this groups as they be intimate under mates pressure(Auty,s.2001) You will hear in super market a child convincing his mother to obtain a particular brand of cereals cause His friends use it , or a particular brand of shoes because his friends told him they are the best. It is these influence which leads them to cigarettes alcohol consumption influence as advantageously. These influences can be used directly or indirectly by the vendor. M both researcher have researchers have surveil to conclusion inception is also a in truth important factor where mother female child and sisters will use the same brand and will have same shopping pattern (Miller, 1975 Moore-Shay and Lutz, 1988)..4. Celebrity as a referent power in advertisingCelebrities like movie stars, sports person, Television stars help duck soup attention and communicate easily with consumers who admire them or wants to be like them. Its also known as ubiquitous feature of modern selling ( Mc Cracken, 1989), and approximately 20 pe rcent of all forwardings and advertisement uses use some type of celebrity endorsement (Bradley, 1996) . Marketers spends huge amount of coin on celebrity contract on the belief that celebrity are effectual spokesperson for their product or brand. Its very common that one celebrity becomes identity of one particular brand or product further in some cases more than one celebrity are being used. same(p) Pepsi uses superstar Shahrukh khan for his brand promo.Selection of a celebrity is very important characteristics of celebrity should condition up with the brand to communicate impressiveness.( Kahle, Homer, 1985),Some companies used multiple celebrities to communicate. In the context of celebrity endorsement advertisement consumer may ask whether endorsers are promoting the product because she really gestate in it? Or just because she has been paid to promote it. Its the attributes of celebrity which should match with perception of consumer. Thus sometime using multiple celebr ities to endorse the product may help the product to polish off the consumer (Mowen and Brown, 1981). Market also assumes that to reach order audience the celebrity should be like the consumer. Celebrity should have credibility attractiveness, Integrity and the main thing Plausibility he/ she behaves as referent influence, if referent Is not plausible it will not be effective . Here referent will be effective and will hold power by their influence as they are inspiration associate group. Celebrities with a big Halo will have bigger effect.Despite more and more celebrity are pitched in, m any commercials using celebrity endorsers do not live up to the expectations (Miciak and Shanklin, 1994). However, if used appropriately, celebrity endorsers can play a very important role in developing brand equity and enhancing a brands competitive position.Like Andre Agassi fits well with, and enhances, the plan of Canons Rebel line of cameras. And Nike and Michael Jordon are synonymous when one thinks of Jordon they think of Nike, they have become part of each other. Before endorsing a product with particular celebrity marketer should do research that how well the celebrity and the brand belong together and how celebrity represent the product.. If there is great ease and relation of brand an d celebrity they get more quickly develop an association.5. Degree of Reference Group InfluenceIf one sees critically around us we can clearly sees that consumer does not decide abruptly. Referent power of any kind is always compete at the back of his mind. It suggest that rational persuasion, inspirational appeals are effective in influencing final decision(Farrell and Schroder(1996).while the influence of personal appeals, coalition or any kind of pressure were ineffective in any decision outcome( slipperiness etal., 1988). So one can say that things which does not personally appeal or internalize favorable attitude one are not effective or will not have a very strong motivatio n in buying behavior. As it is well express Power is the ability to effect change (Kohli and Zaltman, 1988.,Ghoneim, 1987)These influencing power can be used by marketer A number of authors have well said that power is the ability to effect changes. Conversely, power bases depends on the characteristics of an individual that affordReferent power will have different contact on different people in different situation, or may be the category of the product used, or the brand usedAs the purchase is done to influence the group, the product or brand should be visible, for theoretical account product like watch, shoes, here product category ( watch), and brand (Swatch) are all visible. The consumption of some tonic is private .Referent power is quite visible when the product is visible to the group and he get accepted or appreciated in the group for his buy. heights intimacy junior-grade involvementSignificant Differences between brandsComplex buying behaviorVariety- seeking buying beh aviorFew Differens between brandsDissonance-reducingBuying behaviorHabitual buying behavior(Table 5.1)If the need is high there is slight power of referent for example when one want to buy a microwave. Reference group influence will be higher if one wants to buy things which is less(prenominal) necessary e.g. in buying clothes or in simple words on can say that decision to buy toothpaste tennis racket, a personal computer, a refrigetor are all very different. Expensive and complex purchase or things which involve more knowledge involve more participant and more suggestion from peer are taken.( Table 5.1)( Henry 1987)Relationship, bondage of of an individual with the group is some other very important criteria which can affect on acquire decision. such(prenominal) one retrieves committed to the group more he get influence by the referent power . One will be more careful when in dressing up when joining a group whom he wants to influence than when he wants to go for dinner with group he doesnt feel related or committed.It also depends on activity in which individual is involve with a group , How relevant is the activity for example going for office dinner is more important than going out with your friend for a match.There is clear evidence that individual differ in tendency in getting powered by influence (keillor et al,1996)Reference influence is also related to a reward or punishments, reward may be in the form of acceptance in the group, onward motion gain trust with your peer and punishments may be in the form of rejection or hatred. In preteen group it may be arch and of social consequences. So to it can be said that referent power should have authority to implement both.We can still argue that referent power should not misuse legal power or illicitly pressurize as he might use credibility Refrent power is someone which is look upon by individual and if it loses credibility and trust power will be gone. So we can say that the greater the referent p ower, the lower the use of legitimate pressure (Farell et al.,1999).In this context its enkindle to know close to the balance theory (Heider, 1946) Every individual have some preconceived ideas and perception which remain at his subconscious level. And while get it plays a very important role. The greatest power one has over other is when one is sufficiently intimate to permit other to facilitate, because the relation between influencer and consumer is cohesive.Referent power involvementLets take an example I want to purchase a very expensive notebook computer I have seen advertisement of Dell, hp and Acer now I m confuse I want to buy something g which is very important but I dont have much knowledge what will I do I will not just go an d purchase it from the counter I will go to one of my friend or family member who has knowledge about it I will involve his opinion. But if at the same time I m hungry and I want to buy a sheaf of cookie I will just go to the supermarket and cho ose any packet or may be the one I have been using from the shelf I would not involve others and take opinion from others for get a pack of biscuit. So opinion leader are requisite where there is high purchase involve with no knowledge of product while when low purchase involvement is there I routine take any opinion even if I have less knowledge( Table 1.1)PRODUCT/ PURCHASE INVOLVEMENTProduct knowledgeHighProduct knowledgeLowHIGHModerateHighLowLowModerate(Table 6.1)Consumers, especially gen X, tend to follow their peer what they feel chic and worn by the in crowd (Agins 1999 Spiegler 1996). Here we can see their deep-seated willingness and thirst to belong, often becoming type- and brand-conscious consumers. Now what is trendy is what they drive from word-of- intercommunicate communications. Retail Entrepreneur of the Year, Anne Yuri Namba, has found to be quoted as that her home business was initiated and stimulated entirely by word of mouth. As her fame ranch, so did the dem and for her unusual, highly distinctive fashions (Chain Store Age 2000). Marcus (1999) account that word of mouth plays an very important role along with demographic information when decisions are made in the fashion industry. One can say, fashion demand may be generated by the simultaneous front of local externalities and word-of-mouth communication (Corneo and Olivier 1999).Individual sharing information about with other highly target consumer plays a very critical role on consumer decision and market success. Our friends and relatives are the main source of information, when we are in group we observe their styles, what product they use or by directly asking the opinion. One research shown that half of American agrees that that they often seeks advice of others before making any purchase and 40% feel that people come to them for advice. (Walkes, p 40). The internet has changed the term a little now it can be called Word Of Internet. Where one seek advice from a complete strange r.There are some individual who actively filter, interpret, or provide brand or product information to their family and friends, They are called opinion Leaders they play very strong referent power influence over otherWE just cant credit only referent power touch in purchasing decision of an individual we cant pass anything to them making it look like their group or brand image query have shown that decision to purchase particular product is also influenced by the image and credibility of the companies that market and manufacture consumer products (Lafferty and Goldsmith 1999). If the company is imperiously portrayed, and has a good image consumers generally maintain a positive disposition toward the company and its products. However, if the company has some rumor some estimable or cultural issues in the backyard , less favorable feelings may later on influence whether consumers decide to purchase the companys products (Lee and Bernstein 2000 Ligos 1999).How Much Does It affect During 1996 one rumored was spread about Tommy Hilfiger, stating that company had made some bad remarks African-Americans and Asian which were their stub clients. The rumor was mostly on internet. Hilfiger websites denied the rumor completely and there was call to was call to boycott Tommy Hilfiger clothing, especially in the African-American. TThe strength and labor of the strength of rumor suggested that it will affect the sale of brand in African-American market African-American magazine telling them not to buy who doesnt respect ( Graves 1998) here the referent power was internet, mouth to mouth and magazine community, the whole impact was studied and recorded( kImberly 2001) One implication of these recordings was that the staying power of the rumors had eventually harm sales of the Tommy Hilfiger brand in a plaza target market. Wall street Journal article reported a 28 per cent decrease in sales for the Tommy Hilfiger company (Agins 2001). party denied the rumored took Afr ican-American model and try to recapture the market and used co-ordinated marketing scheme strategically. In retail market consumer is very important and referent power play a very important role Thus retail clothing market should take careful measurements to deletion their image all designers, regardless of popularity, must follow up their image and communications with their consumers. In one of the similar case Reebok has been forced to finish up itself for more than a decade once morest a rumor that company bring up its products in South Africa and supported apartheid ( Turnet 1992). Initially company didnt take much notice and didnt think much of it but later company suffered protests and boycotts and whence company has to come out its forceful campaign Reebok is NOT in South Africa (Kazi-Ferrouillet 1990). And till now company addressed the issue on its website (Reebok.com)Referent influence has been examined in the context of consumer vulnerability to social influence (B earden et al., 1989) where influence is the extent to which an individuals consumer choices are influenced by other people. In notion buying its the cognitive behavior which is seen where a consumer cannot get the information from any one so He doesnt come under informational power but high level of normative influence comes in existence and affect the purchase decision, thus we can say that normative consumer susceptibility to interpersonal influence is positively related to the affective component of impulse buying.When will it effectWe have to understand awards in purchasing decision of a buyersInformation searchRefrent groupInternet searchpromo tame fillingPricingBrand image secure decisionsHe decide to purchaseNeedAwarenessMay be prompted by marketing site buying behavior, Reinforcement from media friends(Diagram 8.1)Stages of Consumer Buying Behavior1. Need Awareness A need may arise or been establish by promotion of a companys marketing. Refrent power here may or may not be very influential2. Information Search Buyers search and ask Internet has made research easier for buyers. He may read on websites of different company .Here referent power play a very important role. As he is seeking the information company may use its influence with promos, handout an updated websites or trial samples distribution3. Check Options Once information is collected customer will evaluate all option he will search for price and company credibility..4. Purchase Decision The last step just sell and close the deals at this moment any influencing may harm. If he is still hesitant u can still press and help your buyers for the best deal.5. identify Buying Behavior Todays marketer knows very well that to go on dedication of a customer is very important as now he himself will be a referent power over the other potential buyers. Even at this stage any negative supporting will bring remorse and he may not recommend it to others.Influence of referent power also depends on a t what stage is a brand once a brand mature its brand image itself is good referent power but at innovation stage a company needs good referent power.9. lastReferent power is very effective in certain cases and marketer should use that power but at the same time they should victuals in mind that for that power to be influential they have to keep certain points in mindReferent power to be effective should bring a connection with the consumer, or he should look up to it or relate to himMessage used by referent power should be used as simple as possible it should not be complex or confusingCelebrity power will be more effective if used repeatedly as it uphold the relationship of brand with that celebrity and so it brings trust in the target audienceWhen choosing a celebrity marketer should be careful that he is already not strongly associated to some other brand or services, but nothing comes without a drawback. If celebrity or your referent power get into negative publicity it bri ngs down with him the product. A wrong selection will tarnish the whole imageReferent power is effective if your target audience is young and not much knowledgeable about the brand or product. Its more affective on one who does not have much knowledge and have low self image It so one can say its most effective with children.Referent power does not only influence at the time of purchasing but also post purchasing as after purchasing a product Consumer look at his influence group for appreciation and even any negative comment at that stage will disheartened him and He may not buy the product againA company should not try to play its own hooter but can bring trust and credibility through awards, media or testimonials of other customersMake a purchase an happy ending for him gap him warranty period or an extended trial period will help in Him becoming a potential referent power over other buyers