Reference Group, Social Influence and Social Power Consumer Behaviour

The influence of reference groups as consumer behaviour is felt through the influence of social power. There are five basis of social power. These are:
Reward Power: It is the ability to give rewards in the form of money, gifts, psychological rewards such as recognition practice. In some cases, products like clothes, durables goods,etc. are also offered.
Coercive Power: It is the ability to give threats or withhold rewards. It is the threatening or coercive power to influence consumer behavioure.g., the purchase of accepted clothing, deodorants, mouthwash and LIC Policies, are sold by using coercive power.
Legitimate Power: It is linked to cultural or group values. The groups influences the consumption pattern to which they belong. It is the power one has, because of his legitimate position in an organisationi.e., a manager.
Referent Power: It is used to by a status-oriented product which identifies the feeling of oneness with the group. The group member is urged to obtain a similar status by purchasing the recommended items.
Expert Power: Buying behaviour is influenced by the expertise of the people in the group. People who are experienced and technically qualified in an area. A person may be attracted to and conform to group norms, either in order to gain praise or recognition, or in response to coercive power.

Factors Affecting Reference Group Influence

Factors Affecting the Influence of Reference Groups
A reference group provides benefits to individuals and that is why people associate with reference groups. It exerts an influence on the individual’s behaviour and the degree of influence is determined by:
Firstly, how informed and experienced the individual is? If the individual is less informed, he relies heavily on the reference group or, if he has little or no experience even then he looks up to the groups for information and guidance.

Secondly, if the group has high credibility, greater influence can be exerted by it on the individual’s behaviour. It can thus change the attitudes and beliefs of the consumers. Consumers will look upon it and refer to it more for information on product quality.
The Nature of Reference Group Influences on Products and Services
When people meet in a social setting they discuss their experiences with the products that they have used and, express their likes and dislikes and preference and, attributes of the product. The individuals also buy products or use services which they see others using or buying.
Reference group influences the product and brands when the product is conspicuous. The conspicuousness can be measured by:
Exclusivity and Visibility Dimensions
Exclusivity refers to few people possessing or using the product, and if many are using the product it is less exclusive. Necessity goods are less conspicuous than luxury goods. Products which are necessary will be used by many consumers whereas,luxury products will be used by few chosen customers only.

Reference-group-influence-on-product and brand purchase decision
Visibility Dimension
If the product can be seen and identified by many, it is more visible. Products consumed in public are more conspicuous than products consumed in private. The figure shows four categories which are public necessities and public luxuries and private necessities and private luxuries. The examples of products used in each category is shown in Figure: Reference group influence on product and brand purchase decision.

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