The Impact of Reference Group on the new product adoption

Abstract

Abstract The purpose of this study is to determine what specifically the reference groups are, and what the new product adoption is and what the social factors that can affect it are. And to figure out whether there’s a direct relationship between formal and informal reference groups and the new product adoption. Then, the two major types of reference groups, formal and informal, will be identified. Finally, the theoretical framework will make its way toward investigating the variant reference groups sub-types’, and how they can influence the new product adoption. A survey-based research strategy has been adopted a survey of 411 respondent. The sample’s majority aged less than 40 years with post-graduates’ education and worked in private organizations. The findings of this study supported the hypotheses if there is a relationship between opinion leaders, celebrities (formal reference groups) and family members and friends (informal reference groups)on the new product adoption. Finally, it was concluded that opinion leaders had the highest significant influence when it comes to product adoption. Celebrities as well as friends had also a significant impact on product adoption. Family on the other hand had an insignificant impact on product adoption.. This study was done to understand the impact of reference groups influence on the product adoption. It observed the effect of reference group influence improve the adoption of new products.