Business Studies

In your own words, define the term reference groups. Think about your purchase decisions and list at least two groups that influence what you buy. For each group, identify whether the influence is comparative, normative, or both, and explain why. In replies to peers, discuss the similarities and differences you see between your reference groups and those of your peers. Explain what you think accounts for these differences.

ANSWER

Reference groups are consumer segments that potential purchasers compare or associate themselves with in the market. They play a crucial role in determining consumer purchasing decisions. These groups provide essential information, experience and portray relevant attitudes relating to a particular product or service (Ding, Lin & Zhang, 2020). This information gives potential consumers the chance to make informed purchase decisions.

Friends influence my purchase decisions because I interact directly with them. For instance, if a friend purchases a new phone, they will immediately reach out to me to provide relevant details about the product. If the product is excellent, I will be attracted to purchasing it. Since we spend time together, I will also be largely attracted to purchasing it as a way of fitting in. This type of influence is both normative and comparative. By directly interacting with peers, they shape my values, attitudes, and behavior based on the similarity in opinions and perspectives. The other primary influence group is celebrities.

Celebrities act as a vital reference group as they are often used by companies that market and sell products. These individuals have tested these products and verified their quality before publicizing them into the public domain. For instance, a celebrity is reached out by a firm to try its skincare products and then assist it to market the item. After using it, they engage the public to create awareness about it. Whenever I see a celebrity marketing a product, I am attracted to purchasing it because I know that it is authentic and of high standards. This form of influence is deemed comparative because these individuals offer means by which users compare beliefs and attitudes. For example, a celebrity will show the status of their face before and after consuming the skincare product. This will enable me to relate its suitability in changing my skin as well.

References

Ding, S., Lin, J., & Zhang, Z. (2020). Influences of Reference Group on Users’ Purchase Intentions in Network Communities: From the Perspective of Trial Purchase and Upgrade Purchase. Sustainability, 12(24), 10619.