Generally, a reference group exerts influence on an individual’s behaviour. This depends upon the nature of the individual and the product and on specific social factors. 3 most important factors that influence consumer behavior are
- Information and Experience
- Credibility and power of the reference group
- Conspicuousness of the product
They are briefly explained as follows.
1. Information and experience
Consumers who are capable of obtaining full information about a product or service are less likely to be influenced by others. On the contrary, there are persons who have little experience with a product or service. They may think that advertisements are deceptive. As a result, they have no access to objective information about the product. They are of the opinion that the most reliable source of information will be the person who has actually used the product or service. They, therefore, seek out the advice of others. They give more weightage to their personal source of information.
2. Credibility and power of the reference group
Individuals are more likely to be persuaded by source with high credibility. Persons who are trustworthy and knowledgeable are perceived as credible. They are able to give accurate information about the performance or quality of a product or service.
The concept of reference group is a powerful idea. It serves as point of reference for an individual’s consumption behaviour. Persons choose products or services that conform to the norms of that group in order to avoid, reduce or punish.
3. Conspicuousness of the product
The influence of a reference group depends on the conspicuousness of the product. “conspicuous” means clearly visible and attracting notice. The conspicuousness of the product could be a visually conspicuous one or a verbally conspicuous one.
A visually conspicuous product is one which stands out and easily noticed by others. It appeals to others without any barriers of communication. Luxury items and novelty products are visually conspicuous.
Verbally conspicuous products are those which are capable of being described to others. Products of status revealing such as a new automobile, fashion clothing, sleek laptop computer or home furniture are verbally conspicuous. Privately consumed products (hair dyes, laundry soaps) are less conspicuous.