Question

Reference groups can influence buying decisions by:

a.encouraging impulse purchasing.
b.entering into a customer's consideration set.
c.focusing on a specific customer.
d.enhancing a consumer's image.
e.promoting lavish spending.

Answer 1

Reference groups influence buying decisions by impacting the consumer's image and social standing. These groups set norms and expectations, and businesses with good reputations are more likely to attract repeat customers due to reduced concerns about product quality.

Step-by-step explanation:

Reference groups can influence buying decisions by enhancing a consumer's image. When individuals consider purchases, they often reflect on how the products or services will align with groups they identify with and how this will affect their social standing. For instance, a reference group such as a cultural center or family gathering can set norms that an individual seeks to follow, impacting their buying habits directly. Positive reference groups promote behaviors and consumption patterns that align with a desired social identity, influencing the types of products a consumer feels will reflect positively on their image.

Additionally, the credibility and reputation of a seller can influence a buyer's decision. If a firm has a good reputation, customers are more likely to make repeat purchases and recommend the business to others. Therefore, businesses strive to maintain positive reputations to reduce consumer concerns about product quality, which can ultimately guide buying decisions and allow businesses to potentially charge higher prices.