Chapter 5

Question 1

Nature of Reference Groups

Answer 1

Individuals may belong to many types of group.

A group consists of two or more people who interact with one another to accomplish the same goal.

• Examples include: families, religious groups, close personal friends, co- workers, members of an organisation, leisure and hobby groups, and neighbours. Any of these groups may become reference groups.

A reference group involves one or more persons that a consumer uses as a basis for comparison or “point of reference” in forming responses and performing behaviours.

Question 2

There are several types of reference group, namely:

Answer 2

• Formal reference groups.
• Informal reference groups.
• Primary reference groups.
• Secondary reference groups.
• Membership and non-membership reference groups.
• Aspirational reference groups.
• Dissociative reference groups.

Question 3

Formal reference groups

Answer 3

A formal reference group could be the people who work with you or the people who you with are in your dance class.

Question 4

Informal reference groups

Answer 4

An informal reference group could be your family and friends.

Question 5

Primary reference groups

Answer 5

A primary reference group could be people in the same class at school or university, and with whom you have contact on a daily basis.

Question 6

Secondary reference groups

Answer 6

A secondary reference group could be a group in another country with whom you do not have face-to-face contact, but which still exerts an influence on your buying behaviour.

Question 7

Membership and non-membership reference groups

Answer 7

An example of membership would be members of a church.

A non- membership reference group would not necessarily be members of a particular church but people who still model their behaviour on that of the members of the church.

Question 8

Aspirational reference groups

Answer 8

These are groups that people aspire to belong to.

• You may, for example, want to belong to the group of graduates from Unisa who are also future professionals.

Question 9

Dissociative reference groups

Answer 9

These are groups that you avoid or reject.

• An example could be smokers if you are a non-smoker

Question 10

Consumers generally associate with certain reference groups for the following three reasons:

Answer 10

• Information (informational influence).
• Reward and punishment (normative and utilitarian influence).
• Identification influence (value-expressive influence).

Question 11

• Information (informational influence).

Answer 11

Consumers often accept the opinions of group members as credible, especially when it is difficult to assess product or brand characteristics by observation.

• A group can, for example, dispense useful information on the use of the Apple iPhone.

Question 12

• Reward and punishment (normative and utilitarian influence).

Answer 12

When the consumer fulfils group expectations, he or she may receive a reward, but if he or she transgresses the rules of the reference group, the particular person can be sanctioned and punished.

Question 13

• Identification influence (value-expressive influence).

Answer 13

The consumer buys something because it helps him or her to be like somebody else (a role model).

Question 14

The determinants of reference group influence.

Answer 14

1. • Group influence is strongest when the use of a product, for example a Nokia cell phone, is clearly visible to the group and the majority of the members use it to for example, communicate or play games.
2. • Reference groups have a strong influence on the ownership of certain products, for example owning designer clothes, such as Gucci or Lacoste, but have much less effect on necessities, such as stoves or washing machines.
3. • The more committed a person is to a group, the more he or she will conform to the group norms by, for example, buying products or using services that are acceptable to the group and which meet its expectations.
4. • The more relevant a particular activity is to the group’s functioning, the stronger the pressure will be to conform to the group norms concerning that particular activity. An example is watching a sports event with the group and wearing similar clothes to the event.

Question 15

Social Class

Answer 15

• Social classes are groups that enjoy more or less the same prestige and status in society.
• Accordingly, individual consumer behaviour is influenced by social class.
• The marketer knows that most consumers aspire to membership of a higher social class.
• His or her marketing message, therefore, implies that by buying a specific product the consumer may attain membership to a higher social class.
• Every country has a different social class structure.
• South Africa represents a social class structure that is more or less triangular shaped (see Figures 5.2 and 5.3 in the prescribed book), with a limited number of people in the upper class, more in the middle class and the majority in the lower-class category.

Question 16

What is Living Standards Measure (LSM) and what can it be used for?

Answer 16

One of the ways that is generally used internationally and in South Africa to describe social class and to segment consumer markets is the Living Standards Measure (LSM).

Take note that LSMs are based on the standard of living of the population and make use of various criteria for this purpose.

The South African population is currently ranked according to 10 LSMs. This ranking is based on the measurement of certain criteria and characteristics of the population and starts with LSM 1, as the lowest category, and ends with LSM 10 as the highest category.

Question 17

The Bureau of Market Research (BMR) on changes in South African Class structure

Answer 17

The Bureau of Market Research (BMR) at Unisa conducted a study of the changes occurring in the South African social environment and reported certain dramatic changes in our social class structure as depicted in Table 5.1 in the prescribed book.

Also work through the changes in the social structure of the South African race groups. After studying this section you should be able to understand the changes in the social structure of South Africa, and the implications of these changes on the marketing of products and services by marketers.