A reference group is a group of individuals who have significant relevance for a consumer and who have an impact on the consumer's evaluations, aspirations, and behaviour. Information obtained from referents impacts consumer expectations. This effects value perceptions and satisfaction.
Reference groups can influence consumers through social power. There are five categories of social power are referent power, legitimate power, expert power, reward power and coercive power.
The way is which reference groups influence consumers falls into three categories: Informational influence, Utilitarian influence and Value-expressive influence.
A number of things affect how much influence reference on product selection. First, the situation in which the product is consumed-public or private; second, whether the product is consider a luxury or a necessity. This table shows how reference group impact product selection.