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In today's day and age, customers are considered to be a highly social animal that belongs to different social classes and groups having distinct qualities and characteristics. However, they have not referred to all their subclass altogether. These social identities are crucial in the marketing world as they help in understanding and directing their behavior at a particular moment. Other than this, there is another factor called ‘Self-referencing’which is all about relating a piece of particular information with past experiences. Both of these factors are crucial from an advertising and marketing perspective. For a better understanding of these two factors, the electric cars manufactured by Tesla has been taken into account. In the following report, a literature review on self-referencing and social identity is done, wherein the findings from numerous research papers and literature are discussed. The literature review talks about the basic understanding, meaning, and importance of both self-referencing and social identity. Furthermore, some models and theories on the aforementioned factors are also elaborated in the report. In addition, impacts of self-referencing and social identity on advertisement and marketing of e-cars are elucidated. At last, the ethnic advertising and social referencing are also linked and supported.
Self-referencing is related to consumer behaviour. The article written by the authorsSui (2016), is related to the concept of self-referencing and its importance in the study of consumerbehaviour. As per the research of the authors, the term self-referencing can be described as the natural or formal language in which an idea or sentence refers to itself. The process of self-referencing needs some kind of media or encoding mean. It is also important to note that self-referencing is an important aspect of consumer behaviour and the buying habits of the consumers. As per the research of the authors, self-referencing in terms of consumer behaviour occurs when the consumers are able to understand and process all the information to their own aspects like their past experiences (Sui, 2016). Past experiences are mostly used self-referencesfrom the customers. There are various customers who purchase the products by recalling their past situations and inferring good and bad experiences from their past.
Importance of self-referencing
Self-referencing is important from marketer’s perspective. The research paper of the authorsZhang, et. al., (2019) explains the importance of self-referencing in the consumer behaviour study. It is explained in the research paper that most of the customers utilize the concept of self-reference while making a purchase. When the consumers but any product, they tend to recall all their past experiences related to the product or with a similar product. This way the buying behaviour of the consumers is impacted by self-referencing. The importance of self-referencing can be analysed by an example of people purchasing cars. As described in the article that there are various car manufacturing companies in the world and people think many times before purchasing a new car. This is because the investment is done in the purchase of cars is huge and this decision needs to be taken effectively. Most of the people purchase their new car by recalling the defects or loopholes in their previous vehicle. This is called self-referencing (Zhang, et. al., 2019). Thus, it can be said that self-referencing has a great impact on the buying behaviour of the customers
Understanding Social identity
Social identity is to provide marketers with an opportunity to assess customer behaviour. As per the research of the authors Zhang and Benyoucef, (2016), social identity can be termed as the self-concept of an individual that is derived from being in a social group. Social identity is the identity of a person and the characteristics of a person that are perceived by a person when the person is in a relevant social group. Social identity can also be related to the consumerbehavior as the buying behaviors of the customers are majorly impacted by the social group to which they belong. Thus, social identity is the identity of people belonging to a social group as man is a social animal. People cannot live in isolation and thus they relate themselves to a social group where they get respect and recognition and the characteristics of that social groupare adopted by the person in his life (Zhang and Benyoucef, 2016).
Importance of Social identity
Social identities are very significant for the marketers. According to Ardelet, et.al, (2015), social identities assist in guiding customers’ behaviour at a particular moment. The authors argue that some behaviours support or bolster the group while a few may betray the group. In addition to this, it was also determined that it is no coincidence that people belonging to a particular profession usually have a tendency to buy cars of same features and model. Usually, at the time of purchase, the group or section determined by the customer while making the transaction is considered to be the significant factor in the decision-making. Barker (2016) mentions that customers usually have an image of themselves which is also termed as self-concept. In addition, social identity is an integral part of the customer's self-concept that borne from perceived membership in a section or social class. The author further explains the concept by breaking it into two components. The first one is that customers consider themselves as a part of a particular group not others. For instance, while people might perceive themselves a part of a high-class society that buys luxury cars. They won't purchase cheaper things. Second is the set of behaviour appropriate for a particular group. People's social identity assists them in understanding how to act in order to increase their status and distinctiveness.
The researchersGodey, et. al., (2016), talk about the importance of social identity in the study of consumerbehaviour. As a man cannot live without society, thus it is crucial for a person to adopt all the characteristics of that social group including the buying behaviours. If a person belongs to a higher class of the society, it is obvious that the buying behaviour of that person will be very different from that of a lower social class person. Purchasing products and services are status symbol when they are discussed in terms of society (Godey, et. al., 2016). To be a part of a specific social group, a person makes efforts so that continuous respect and recognition is given to the person. For that, they tend to keep their buying behaviour alike.
Theories of Self-Referencing and Ethnic Advertising
Self-referencing the information provided in ads is very important while purchasing luxury cars. This would increase the evaluations and favourableness for customers. Dahl& Hoeffler (2014) outlined that the idea of considering the ethnicity as a part of self that is central to the customers who are ethnic minorities is dependent on distinctiveness theory. According to this theory, when a customer who is planning to buy a car observes a complex stimulus like self, he/she perceives distinctive characteristics and differences that would provide a piece of better information for discriminating them from others. Therefore, in an ethically-mixed society, ethnicity is considered to be more crucial to the self than the uniform ones (Dahl& Hoeffler, 2014). In addition to this,when the self of a customer is salient and opened to information which is reliable with such factors should lead to self-referencing.
There is some sort of relationship between self-referencing and social identity with ethnic advertising. According to Oysermar (2013), ethnic advertising comprises use of ethnic language, race, and cultural symbols. Among various dimensions of different elements of ads that promote self-referencing, ethnic advertising of products like cars plays a significant role in encouraging self-referencing. Furthermore, they also encourage the effects of ethnic advertisement on both non-target and target audience. Sui (2016) outlined that self-referencing also depends on the ethnicity of the ad model. For instance, in an experiment, the impact of the Asian model vs. white model in ads was examined with respect to the attitude, cognitive response, and self-referencing. It was determined that Asian people responded well to the Asian model and produce a better self-referencing level when exposed to an ad featuring an Asian model as compared to the one featuring a White model. Thus, this shows that ethnicity results in more favorable for the ad campaigns and branding and also affects the purchase intentions.
Models of social identity
As per the research of the authorHogg (2016), there are various theories and models that are associated with the social identity of a person and its connection with consumer behavior. One of the models explained by the researcher is Social identity theory. As per the researcher, social identity theory is given by Henri Tajfel. According to the social identity theory, there are three mental processes involved in the social identity of a person. The first process is of social categorization. The second process is relatedto the social identity and the third process is associated with the social comparison. There are in-groups and out-groups in the concept of social identity. A person compares the in-groups and out-groups (Hogg, 2016). It is concluded by the researcher that people in in-groups and out-groups are compared and the social characteristics of a person are also impacted by the behaviours of the in-groups and out-groups.
The researchersHogg, et. al., (2017), explain another model of social identity, which is the integrative model of social identification. According to this model of social identity, there is a psychological construct and bond between the people belonging to the same social group. There are two pathways to differently explain the social identification. The two pathways are self-stereotyping and self-anchoring. The model explains a positive relationship between the concept of self-stereotyping and self-anchoring for social identification. The integrative model of social identification highlights the interrelationship between social-self and personal self (Hogg, et. al., 2017). Sui (2016) talked about the impact of race of the ad model and product stereotypes. It is a general stereotype that Asians usually consider those luxury sedan cars as a domain of retiree. In the experiment, it was determined that Asian people would have a sturdier self-referencing on Asian model featuring in the ad in comparison to the white model branding the car. This self-reference would mediate brand attitude, ad, and purchasing intentions of potential car buyers. Thus, it is a fact that people construct a psychological bond with those belonging to the same social group or ethnicity.
Impact of self-referencing on advertisements
Advertisements and promotions are an important aspect of any company. Sales are increased and market share is expanded when there are effective advertisements and promotions. The researchers,Zhang, and Benyoucef (2016), explain that self-referencing has a great role to play in advertisements and promotions. As it is known by the companies and the marketers that people make purchases by having self-referencing, they create and develop advertisement campaigns such that they can attract the target customers towards their products. In today’s business environment, it is trendy to create advertisements and promotions with the help of real customers (Zhang and Benyoucef, 2016).
When the advertisements are done by real customers of the products, the potential customers relate more to the product and also the customers as they share their experiences after using the product or services. Dahl& Hoeffler (2014) say that there is a positive impact of self-referencing on the advertisements and promotions of a company. When the companies use self-referencing as the base of their promotions and advertisements, they are able to attract more and more target customers towards the products. This concept is mostly adopted in the Asian countries and the companies operating in Asia (Ting‐Toomey, 2015). The cultural cues and ethnicityare taken care of by the companies while promoting their products and services by the application of self-referencing theory. There is a high impact of the concept of self-referencing on the advertisements and brand promotions as a high degree of acculturation leads to increase in the self-referencing. Hence, the experiences are important from the organisation’s perspective as it helps in building customer loyalty and customer base.
Impact of social identity on advertisements
As per the researcher of the researcher Ting‐Toomey (2015), marketers and companies make a lot of efforts to make the advertisements effective but it all depends upon the responses of the target customers.The companies and marketers create personalized and appealing advertisements that attract more and more target customers towards the products and services of the company. The marketers in today’s business environment create an advertisement campaign according to the tastes and preferences of the target customers. This helps in the expansion of the target market and also to have a positive relationship with the target customers. The trust and loyalty of the customers are built when the companies create advertisements that are relatable to the customers. This can be understood by an example of Tesla, a car manufacturing companies, producing cars for the high-class people of the society (Ting‐Toomey, 2015).
It is important to understand that the tastes and preferences of the high-class people in the society are different and their buying behaviors are based on their social characteristics. The features displayed by the car manufacturer for the middle-class people are based on the basic social characteristics of those people and this helps to encourage and induce the people to make a purchase. This is also the case in lavish cars. The manufacturer of cars like Tesla display the features of the cars as per the expectations and social characteristics of the high-class people of the society as the marketers know that this section of the society will be attracted by lavish and esteem features. It has been noticed that customers with a stronger social identity are more engaged with the company. Now the advertisement campaigns of both the cars can be compared as for the middle-class people of the society, price and basic features are important while for the high-class society the high price of the car is a status symbol. Thus it can be said that there is a high influence of the social identity of the target customers on the advertisements developed by the marketers.
In contrast to this, Godey, et.al (2015) talked about the implications of advertisement. The research argues that in some countries, there is a fear of the poor or negative response from the majority social class on using a minority face in the ads. This may result in a shortage of ethnically diverse ads in the market. Despite the fact that ethnic gap is reducing and ethnic minorities are increasing in numbers, the majority of advertisement agencies have this fear of backlash from majority communities. This ethnic model may have an impact on the social identity and purchasing behaviour of the target customers.
Management of Social Identities
The implications of the social identities for the car companies and marketers are many. Proper management is required by the marketers. Korschun (2015) mentioned that if the organisational strategies and decisions are dependent on social identity, then the marketing strategy should promote customers to develop an identity that inspires various behaviours, such as exploring the website, visiting stores, buying products,and providing feedback to design a better product. Zhang, et.al (2016) mentioned that for managing thesocial identity, the first step in this is to shift the focus from the individual's attitude to an individual's social self. Once this is done, it is easier to identify the customer.
Another way of managing the social identity as suggested by Barker (2016) is to assist the customers to tune in effectively and in a better way. The organisational communication channel can provide useful information about whether or not the product will clash with the customer attitude and behaviour belonging to a particular social class or group. Korschun (2015) suggested that an organisation should think of creating new identities. Organisations, especially automobile company should invite potential customers to assist in designing launch initiatives of the products. It has been noticed that customers with a stronger social identity are more engaged with the company. Organisations should go for building a community in order to have a long-term commitment. On the high note, it is easier to persuade customers to switch identities and get a new one. From the discussion above, it is pretty much clear that there are many implications of social identities and if they are properly managed, then this would provide ample opportunities to the car manufacturing firms, especially Tesla and its clean energy cars.
From the complete discussion, it is clear that self-referencing and social identity have a significant impact on the customer as well as organisational behaviour. They have a tendency to mould the strategy of the company like Tesla. However, the arguments are made based on the literature review. None of the authors in the study has provided any factual representation of data that would provide better support to these arguments.
From the complete literature review, a better understanding of self-referencing and social identity was developed. It was determined that the aforementioned factors are perceived as a part of organizational behaviour and can influence customer decision-making. It was revealed that the majority of the decision-making in the organisation is done on the basis of past experiences. Furthermore, it was outlined that social identity can also be related to the consumer behavior as the buying behaviors of the customers are majorly impacted by the social group to which they belong.The integrative model for social identity explains a positive relationship between the concept of self-stereotyping and self-anchoring for the social identification. It was also outlined that the tastes and preferences of people in the society are different and their buying behaviors are based on their social characteristics. The report concluded the fact that that there is a high influence of the social identity of the target customers on the advertisements developed by the marketers.
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