Running head: REFERENCE GROUP ANALYSIS

Reference Group Analysis

MKT510 - Week 3 – Assignment #1

Prof. Wei Song

REFERNECE GROUPS

Reference groups are groups whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior. These groups are used as a guide for behavioral patterns is specific situations. These reference groups are classified according to the number of variables, and are used to identify consumption patterns and assist in marketing efforts.

There are four criteria that have been found particularly useful; the first criteria is membership criterion is dichotomous; either one is a member or their not. Some members are more secure in their membership than others. The second is strength of social ties identifies the closeness and intimacy of the group linkage, the primary groups are considered family and friends which involve strong ties and frequent interaction while professional and neighborhood associations with weaker ties and less frequent interactions are considered secondary groups. The third criterion is the type of contact and weather it is direct group (face-to-face) or indirect group (internet, social networking). The forth and last is the attraction or desirability that memberships in a given group has for the individual. A dissociative reference group is a group with negative desirability and can influence behavior just as those with positive desirability. Non-membership groups with a positive attraction are considered aspiration reference groups and also exert a strong. (Hawkins & Mothersbaugh, 2010)

Research shows that individuals frequently purchase products that are used by a desired group in order to achieve actual or symbolic memberships in the group. There is a direct correlation between the influence of reference groups and consumer spending habits. People tend to conform in a variety of ways to numerous groups that have influences their attraction to a particular product. That attraction is formed by some familiarity or relevance that the consumer shares with the group. A reference group’s influence can take form in three ways; informational influences which occur when an individual uses the behaviors and opinion of reference group members as potentially useful bits of information. Second; normative influence or a utilitarian influence occurs when an individual fulfills groups expectations to gain a direct reward to avoid a sanction. The final influence is identification or value-expressive influence which occurs when individuals have internalized the group’s values and norms, and have accepted them as their own. (Hawkins & Mothersbaugh, 2010)

EXAMPLES

Example #1

Life Way Christian Store

This website uses an Identification reference group, consumers internalize with the groups values and norms. They behave in a manner consistent with the groups and have accepted a similar belief structure. This store has a sound an effective marketing strategy, and they utilize a subscriber mailing list for which each customer is invited to join each visit to a physical or virtual store. Reference groups within the Christian culture are used to help identify and guide the consumption patterns of consumers. Life Way’s strategy has be effective, and allowed to grow their consumer base, and business. They seem to be reaching their target market, while maintain a steady increase of new consumers. www.lifewastore.com

Example #2

Macys

This website uses a normative reference group, consumers tend to follow trends established by popular role models, and celebrities, Macys relies on these reference groups to develop a standard of fashion, and style. Fashion magazines, music videos, movies, live appearances can all be used all opportunities to communicate trends and promote opportunities, these groups are used as reference groups and define the standard in the fashion industry. Macys than used that information to market it products to the various consumers. The hip hop industry has had a great influence over our younger generation, so hip hop icons are considered reference groups for the hip hop culture. The internet has assisted Macy’s with communicating these products to consumers with online catalogs, web shopping, and shipping incentives. Based on the growth, notoriety, and consistent consumer base, I conclude that Macys has an effective reference group, with a strong a well supported marketing strategy. Macys has been a household name for generations, because they have been able to conform their style and approach to adapt to that of their consumers. www.macys.com

REFERENCE

www.macys.com

www.lifewaychristianstore.com

Hawkins.D & Mothersbaugh. D (2010) Consumer Behavior: Building Marketing Strategy.