We know that the influence of reference groups on consumers’ purchase behaviour

Question

We know that the influence of reference groups on consumers’ purchase behaviour is not equal for all goods. The public-private and luxury-necessity nature of goods are significant moderating variables in the relative strength of the relationship between reference groups and purchase decisions. Explain how brand and product choice are affected based on the private-public and luxury-necessity nature of goods. Provide an example of a particular good that fits each category of the model, and explain how the strength of reference group influence affects the brand/product choice for that good.

Explanation / Answer

Reference group ine genral drives the reach of a product through their opinion, beleif, mouth or social media publicity . They have influence on prospective customers to attract the brand or a product.

There are basically two types of reference groups. One is normative and other is comparitive.Normative influence through direct interaction while comparitive influcence through comparing once product with other.Marketers or Brand management use reference groups to lend credibility to products and other services and help convince potential or prospective customers to purchase the particular product.

It varies from product to prdict and services. Product like Beauty and care has direct impilcation on mouth publicity and belief. Espceially among ladies societies such products can have a gearup on a very drastic way via such direct reference group interactions. But in products like automobiles such kind of normative reference group wont work work for a long run. Their act the presence of havign comapritive reference group. As automobile always have a comparitive performance nature and speceifications.

So all products cannot work with same kind of reference groups. Some products like pharma doesn have such implication on having reference group as the products are very sensitive . Customised services also have the same issues. Especially spa , salon persons have different perspective interms of service. So cannot much with ones requirement with other. So necessity products have bteer reach through refernece group while luxuriosu priducts and services have limited reach as customers are very choosy/selective in taking the services. It can help through referne but 100% assurance in takking the service or purchasing the product cant be ensured.

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