With respect to consumer behaviour ones friends and relatives could be considered a an

In our daily lives, we all get influenced by a variety of people while making our purchase decisions. We, as humans do a lot to try to impress others. We make purchase to get compliments and try that others should not think less of us.

A reference group is the group whose perspective we consider. Now our reference could be very large or very small including few of our family members or few close friends. Reference groups influence people a lot in their buying decisions. They set the levels of lifestyle, purchasing patterns, etc.

Reference groups are of two types −

• Primary Groups
• Secondary Groups

Primary Groups

Primary reference groups are basically the set of people whom you meet every day. They can be from your family, your close friends, your roommates, etc.

These people from primary groups may have a direct and strong impact in your lives and your buying decisions since they are very significant to you. Primary groups make you comfortable and give you a feeling that they are with you when you are confused about a purchase. These people give you very honest and clear advices as they are so close to you, due to which you could be more confident about the purchase. Research shows that the bond between people leads people to be effectively social and as satisfied consumers.

Secondary Groups

Secondary reference groups are usually formal and they speak less frequently. They might be professionals, your collogues, your seniors at work or your acquaintance at club, etc.

In secondary reference groups the power to influence people is quite less as compared to primary reference groups as people in these groups are not that comfortable in sharing their thoughts or views on the purchase.

Let’s have a look at few more reference groups

Aspirational Group

Aspirational group is the one to which a person may want to become part of. They currently are not part of that group but wish to become and get with that group. For doing the same, they try to dress, talk, act and even think the way the members of that group do.

For example, people who like Madhuri Dixit wish to become like her and meet her and so start purchasing and using all those products that she endorses.

Dissociative Group

The people in these groups are totally opposite to the people in the aspirational group. Here people deny of becoming or getting connected to a particular group. They just hate being related to that group.

For example, if people don’t like a particular community, they would never like being connected to them. So they would try all the possible ways to avoid the way in which they dress, think or act.

Thus marketers need to understand the likes and dislikes of the consumers and also the groups to which they belong. Marketers should recognize the extent to which a reference group influences the consumer and he should also understand out of all the groups which group influences him the most.

Family

Family of a consumer plays an important role in the decision making process. The parents, siblings, relatives all have their own views about a particular purchase.

Following are the roles in the family decision making process −

• Influencers − Influencers are the ones who give ideas or information about the product or service to the consumer.

• Gate Keepers − Gatekeepers are the family members who usually panel the information. They can be our parents or siblings too who can in any form provide us the information about the product.

• Decision Makers − Family or our parents who usually have the power to take decisions on our behalf are the decision makers. After the complete the research they may decide to purchase the particular or dispose it.

• Buyers − Buyer is the one who actually makes the purchase of the product.

• End Users − The person who finally uses the product or consumes the service is the ultimate consumer also called as End user as per the context.

A consumer gets influenced by his family members as well as friends. Since childhood the culture which he follows or the rituals which he observes and the moral values and the religious principles he usually receives them from his family. However, the individual learns fashion, attitude or style from his friends. All these attributes or traits together influence the buyer’s decision making.

The number of American households that were unbanked last year dropped to its lowest level since 2009, a dip due in part to people opening accounts to receive financial assistance during the pandemic, a new report says.  

Roughly 4.5% of U.S. households – or 5.9 million – didn't have a checking or savings account with a bank or credit union in 2021, a record low, according to the Federal Deposit Insurance Corporation's most recent survey of unbanked and underbanked households. 

Roughly 45% of households that received a stimulus payment, jobless benefits or other government assistance after the start of the pandemic in March, 2020 said those funds helped compel them to open an account, according to the biennial report which has been conducted since 2009.

"Safe and affordable bank accounts provide a way to bring more Americans into the banking system and will continue to play an important role in advancing economic inclusion for all Americans,'' FDIC acting chairman Martin J. Gruenberg said in a statement.  

A lack of banking options delayed some households from getting federal payments aimed at helping the country weather the economic fallout from the COVID-19 health crisis.

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The FDIC initiated an educational campaign to get more Americans to open an account to enable the direct deposit of those funds. And banks such as Capital One and Ally Financial ended  overdraft and other fees that have been a key barrier to some Americans accessing the banking system. 

What does it mean to be unbanked?

A household is deemed unbanked when no one in the home has an account with a bank or credit union. That share of households has dropped by nearly half since 2009. And since 2011, when 8% of U.S. households were unbanked, the highest since the start of the survey, and the record low reached in 2021, roughly half of the drop was due to a shift in the financial circumstances of American households the FDIC says.

Who are the underbanked?

Those who have a checking or savings account, but also use financial alternatives like check cashing services are considered underbanked. The underbanked represented 14% of U.S. households, or 18.7 million, last year.   

Why are people unbanked or underbanked?

Many of those who are unbanked say they can't afford to have an account because of the fees for insufficient funds and overdrafts that are tacked on when account balances fall short. Roughly 29% said fees or not having the required minimum balance were the primary reasons they didn't have a checking or savings account, as compared to 38% who cited those obstacles in 2019.

Are some groups more likely to be unbanked? 

The numbers of the unbanked were greater among households that included those who were working age and disabled, lower income, included a single mother, or were Black or Hispanic. Among white households for instance, 2% didn't have a bank account last year as compared to 11% and 9% of their Black and Hispanic counterparts.

Meanwhile, nearly 15% of households with a working age member who had a disability were unbanked compared to almost 4% of other households. And  nearly 16% of households with a single mother were unbanked as compared to about 2% of married couples who lacked an account. 

 "These gaps attest there's still a lot of opportunity to expand participation across the population in the banking system,'' Keith Ernst, Associate Director of Consumer Research and Examination Analytics at the FDIC, said during a media call about the report.            

Will the number of unbanked rise if the U.S. has a recession? 

Perhaps.

"During the last recession unbanked rates did indeed go up,'' Karyen Chu, chief of the Banking Research Section at the Center for Financial Research, said during the call. 

Additionally, last year, homes where the head of household was out of work were nearly five times more likely to not have a bank account as compared to those where the household head was employed.

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"To the extent that income goes down ... that has generally been associated with increases in unbanked rates,’’ Chu said. 

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