Reference Groups: Definition, Types, Importance & Examples

What are Reference Groups?

Reference groups are social groups that are used ‘as the yardstick’ for self-assessment or team comparison and ‘as a standard or reference point’ that can influence others’ tastes, opinions, or behavior.

Reference groups are the individuals or groups of individuals to which another individual or group of individuals is compared. A reference group works as a role model and we use them as a standard for evaluating ourselves.

Reference groups influence our thought processes, attitudes, values, opinions, behaviors, beliefs, etc. Brands, marketers, and advertisers use reference groups for influencing the behavioral inclinations and purchase decisions of target audiences. They form the views of customers for deciding and purchasing certain products or brands.

With a reference group, you will have a benchmark as well as a contrast essential for comparing and evaluating another group, team member, or individual. Hence, when people refer to other groups to evaluate their attitude, behavior, or beliefs, the reference groups come into the picture.

Robert K. Merton, an American sociologist hypothesized-

People (who aspire to have a social role) like to compare themselves with reference groups that are associated with the people who are already positioning at that social role.

Example of a Reference Group

An example of a reference group can clear the concept in a better way. Suppose a man in the US earns $80000 annually and compares himself with a group of people with lower income than him; he might consider himself affluent. However, if his reference group is people who make millions annually, he would look at himself as poorer.

An individual uses a group and sets the bar for standardized behavior. The other individuals see these groups as reference groups and compare themselves to evaluate their sociological attributes and nature.

Importance of Reference Group in Marketing

The set of people who have been interrelated with each other through some reason or the other reason are seen as social groups. These types of groups that socially exist are generally divided into primary and secondary groups.

– And from these social groups, reference groups are those whose opinions, preferences, attitudes, values, and beliefs are used by other groups, people, or individuals as a reference point for making decisions or influencing others’ opinions.

Reference groups become essential in marketing, as it highly influences people’s opinions, attitudes, and decisions. These groups lead to know about the customers’ needs, expectations, and standards about the business and its products or services.

The knowledge of reference groups and comprehending their way of targeting audiences help to refine the industry. The company can deliver the messages effectively through the public’s desired platforms to get to know the reference groups.

Sociologists use a reference group for understanding different ways that can be used to influence one group of society by using another group as a reference point, standard or ideal behavior.

Types of Reference Groups

Reference groups have two primary categories, named normative reference group and comparative reference group-

1. Normative Reference Group

It directly influences a person’s attitude, behavior, and beliefs through family, siblings, etc, and their direct interactions or relationships. Some of the common examples of such groups are teachers, friends, parents, peers, teachers, etc.

2. Comparative Reference Group

It is a group of people to whom individuals compare themselves and strive to be like them. Some of the popular examples of such groups are heroes or celebrities.

3. Aspiration Group

It is the group of individuals who would like to be connected and want to be identified through them. For instance, people might be influenced and aspire to join the elite businesses with membership requirements.

They might want to get their names associated with groups like a country club, yacht club, an expensive community, etc. If the owners know the appropriate reference groups of companies, their brands can be spoken for by reaching for a well-known person in the aspiration groups.

4. Dissociative Group

As the name suggests, the people want themselves to be detached from this group.

These groups influence the behavior, attitude, and values that are not considered consistent in the eyes of the masses. So, getting away from such groups seems better for people.

5. Membership Group

These groups require the individuals to be the members in groups here and now. They include groups like social clubs or groups, fraternities, etc.

Some groups are less public, like religious organizations, families, country clubs, etc. These groups and the aspiration groups can prove to help promote and market luxury products.

Advantages of Reference Groups

The use of reference groups in marketing and advertising helps in having a role model that can influence the purchase decisions of customers.

In addition to this, the kind of information that a customer would need at every phase of purchasing a product or service can be well understood by analyzing reference groups that had already opted for similar kinds of products or services.

• It also helps in delivering the message to the masses in their preferred ways and understanding where the prospects would most likely wish to receive the information and messages.
• If well understood by the company, reference groups can help promote their brand by leading the owners to contact some of the well-known people in aspiration groups.
• Reference groups are essential for the choice of those products and services that are publicly visible. They do not have a say in influencing the customers to take a product or service that does not appear publicly.
• Marketing allows the reference groups to be used by any sector or industry and any business of any size. These groups help deliver the appropriate messages and information to the right people at the right place and time.

Conclusion

The comprehension and the classification of reference groups for the customers require time.

Choosing the right group as a reference for the advertisements can be tricky, but when you determine the right reference group, you get a wealth of information to run a more personalized campaign or influence purchasing behavior of target audiences.

Having essential information via reference groups can help the company people draft an impactful message for the marketing of their products. It would further help in developing a personal connection with the target audience and convert them.

How important do you consider the use of a reference group in marketing or advertising?

Liked this post? Check out the complete series on Consumer Behavior