Group Dynamics & Consumer Reference Groups

Meaning and Definition:

Group dynamics means how individuals form groups, and how one persons purchasing influences the other individual’s actions. Now-a-days marketers use the concept of group dynamics or personal influence often as this exceeds the power of company’s promotional efforts. “A group may be defined as two or more people who interact to accomplish either individual or mutual goals”.

Types of Groups:

Groups can be classified in a number of ways like by structure, by regularity of contact, by size, by membership. Sometimes groups are differentiated in terms of size or complexity but it is very difficult to state which group to be considered as large or small.

A. Primary Group and Secondary Group:

If a person interacts on regular basis with other individuals, then these individuals can be considered a primary group. Interaction can be with members of the family, with the colleagues, with neighbours etc., this means whose opinions are valued by that person, on the other hand, if a person interacts only occasionally with others, or whose opinions are not important, then this type of group is called secondary.

Difference:

Primary and secondary groups can be distinguished on the basis of perceived importance of the group to the individual and the frequency with which the individual interacts with them.

Formal Group and Informal Group:

This is the second useful way to classify groups on the basis of their formal nature. If a group has a highly defined structure, specific roles and authority levels and specific goals then this is called a formal group. For example, in an organization, a list of all employees (defined structure), Managing Director, Manager, Assistants etc., (specific roles and authority levels), this shows a formal group.

On the other hand, if a group is more loosely defined, then it is an informal group. For example, four five girls who become friends in the school and now meet only once a month. For the marketer, informal social groups are more important because of loosely defined structure a more conducive environment is available for exchange of information to the members.

B. Membership Group and Symbolic Group:

Membership Group is a group to which a person belongs or would qualify for membership. For example, college alumni association, IMA, association of doctors, tennis club etc. Symbolic group is a group in which an individual is not likely to receive membership even if he/ she acts like a member by adopting that group’s values, behaviour and attitude. For example, for youngsters cricketers like Sachin Tendulkar, Sourav Ganguly etc. may constitute a symbolic group. They try to identify with these players by imitating their behaviour like the style or sometimes by purchasing specific brand of bat, gloves, dress, ball etc.

C. Consumer Relevant/Reference Groups:

To understand in detail the kind of impact specific groups has on individuals, let us study six basic consumer relevant groups:

1.      The Family:

It is seen, that from childhood an individual needs and consumption decisions are influenced by his/her family. Importance of the family in various decisions is based on the frequency of contact that individual has with other family members. Moreover, it is in the family an individual establishes a wide range of values, attitudes and behaviors.

2.      Friendship Groups:

The immediate group which an individual forms after he/she moves out from the house is friendship group. Friendships are also sign of maturity and independence as they represent a breaking away from the family and forming of social ties with the outside world. They are classified as informal groups as they are unstructured and usually lack specific authority levels.

After family an individual’s purchase decisions are most likely influenced by friends. Friends fulfill a wide range of needs like they provide companionship, security and opportunity to discuss the matter which they can’t with the family members.

3.      Formal social Groups:

Formal social groups, as the name says, lack intimate relationship and they serve different function for an individual. A person joins this group to fulfill goals like making new friends, pursuing a special interest, meeting important’ people specially for career advancement or also sometimes promoting a specific cause (working for the welfare of orphans).

This type of group interests marketers because members often consume products together, can discuss products or services or stores informally with other members and sometimes can even copy the consumption behaviour of other members whom they admire.

4.      Shopping Groups:

Two or more people who shop together this can be either for food, for clothing or simply to pass the time-can be called a shopping group; people like to shop with others who are pleasant company or who they feel have more experience or knowledge about a desired product or service. Shopping with others reduces the risk that a purchase decision will be socially unacceptable, collective decision is the best in which none of the members knows about the product to be purchased.

5.      Consumer-Action Groups:

Consumer-action groups can be divided into two broad categories: those that organize to correct a specific consumer abuse and then disband, and those that organize to address broader, more pervasive problem areas and operate over an extended or indefinite period of time.

6.      Work Groups:

This type of group also serves as a major influence on the consumption behaviour of members as they spend a sheer amount of time at their jobs (around 48 hours per week). Formal work group consists of those individuals who work together as a team.

Their direct and sustained work relationship offers substantial opportunity for one or more members to influence the consumption related attitudes and activities of other team members. Informal friendship/work groups consists of people who have become friends as a result of working for the same firm, they may/ may not work together as a team. Marketers have recognized that work group’s influences consumers brand choices and sometimes even the store choice, so now they are redirecting their sales efforts to offices and plants during lunch-hour visits.