IMPACT OF THE SOCIAL MEDIA ON CONSUMERS BEHAVIOUR

CHAPTER ONE

INTRODUCTION

1.1. BACKGROUND OF STUDY

Information and technology are the two factors that are not only bringing a change in the world of e-commerce but also revolutionizing the way business are done online (Toomey and Wysocki). The social media has revolutionized the way marketers and the brands promote their products. Traditional marketing is dying a slow death. The social media has lost its perspective of being only a socializing medium; it is now viewed as a medium of reaching to masses, not only by the companies but by other users also anyone on social media can reach to masses and make their opinions heeded. The social media has changed the way the consumer's marketers interact (Hennig-Thurau et al., 2015). The information age has revolutionized how the consumers get informed about the goods/services. The consumers do not have to depend on just the information provided by the marketers in golden words. Through social media, the consumers have developed a new medium to interact with each other which also helps them take decisions more easily and they receive first-hand information from the actual users which are more reliable and helpful as it is not glorified by the marketers (Kozinets, 2011). The process of sharing the experience on social media makes the consumers powerful enough to be able to influence the potential consumers and thus the brands have to take utmost care that the product provides the benefits they claim. The rise of information sharing through social media has given more power to the consumers than the brands in general. Though it is a major influencer but not the only one other factor also plays their relevant roles like income, need, motivation to buy, marketing strategy, ease of availability of products etc. (Lai & Turban 2008). The web 2.0 is a new rage and it is going to become one of the most sought after platforms for the brands to portray their products in good light. Not only are the companies like amazon, zomato and making my trip selling goods/services online but they also provide a forum for their customers to interact with others who are seeking to make a purchase. This makes the companies more reliable as the consumers are more likely to trust the reviews of the ones who have already used the product/service. Social media has taken populous dimensions in interacting with or giving information to those delving for the same. Forums, social networking sites (SNS) (Fue et al. 2009), and nowadays some people are becoming dedicated bloggers who try and test new products and review them for the potential users.  Social media is all about facilitating people to express and share ideas, thoughts, and opinions with others. It is also about enabling people to connect with others, like they were doing for the last thousands of years. However, what is of significance is that social media: (a) removed spatial and time constrains that were inherent in traditional methods of communications; (b) provided online tools that enable one to many sharing of multimedia content; and (c) employ easy to use interfaces that enable even non-specialists to share and connect. During the last years social media are enjoying a phenomenal success: Facebook, a social networking website, claims that its active users reached 1.3 billion worldwide, more than 50% of which log in every day (Facebook 2014); Twitter, a micro-blogging website hosts 225 million users who post on average 500 million tweets per day (Twitter 2014); More than 1 billion unique users visit YouTube each month, watching more than 6 billion hours of video (YouTube 2014), and at the same time it is estimated that there are over 181 million blogs worldwide (Nielsen 2012). The decision process of consumers for complex purchases is influenced by possible use of social media. Complex buying behaviour in this context refers to expensive infrequent purchases with high consumer involvement, significant brand differences, and high risk. Social media is a relatively recent phenomenon. Over the last decade, the World Wide Web has seen a proliferation of user-driven web technologies such as blogs, social networks and media sharing platforms. Collectively called social media, these technologies have enabled the growth of user-generated content, a global community, and the publishing of consumer opinions (Smith, 2009). This movement now dominates the way we use the web and has given rise to popular platforms like Facebook, YouTube, Instagram and Twitter, where people connect, produce and share content. The social media revolution has led to new ways of seeking and obtaining information on the multitude of products and services in the market. It has enabled consumers to connect and discuss brands with each other quickly and easily (Powers et al., 2012). Consumer opinions on products and services are now increasingly dominated by strangers in digital spaces, which in turn influence opinions in the offline space (Smith, 2009). Social media have empowered consumers, as marketers have no power over the content, timing or frequency of online conversations among consumers (Mangold and Faulds, 2009). The use of social media by consumers is anxiously followed by marketers, but not much is known about how it influences the consumers’ behaviour. This study majorly discusses the impact of social media on consumer behavior.

1.2. STATEMENT OF PROBLEM

Consumers and businesses around the globe have been more connected than ever before with the presence of Internet. An average Internet user has 669 social ties (Hampton et al. 2011); Facebook has more than 600 million daily active users, with over 1.5 million business pages (Facebook 2013), and 30 billion pieces of content shared on a monthly basis (McKinsey 2011). Approximately 500 million Tweets sent per day, at about 600 Tweets per second (Tweeter 2012). LinkedIn has more than 225 million professionals worldwide, including all Fortune 500 companies (LinkedIn 2013). The global average time spent per person on social networking sites is 6.9 hours per month (Delaney and Salminen 2012). Changes in consumer behavior due to social media are one of the most intriguing aspects in the contemporary marketing. Acknowledging that consumer behavior is a relatively general and broad topic, which it would be challenging for the researcher to gather, inspect and conclude all the necessary data and findings into one research; thus, the researcher has narrowed down the impact of social media on consumers’ behaviour.

1.3 OBJECTIVES OF THE STUDY

The major aim of the study is to examine the impact of the social media on consumers behavior, other specific objectives of the study include;

1. To examine social media use and types of consumers influenced mostly by social media.
2. To examine the social media as electronic word-of-mouth.
3. To examine the impact of social media on consumer behavior. 
4. To examine the impact of social media on various stages of decision-making process of consumers.
5. To examine the relationship between social media and consumers behavior.
6. To examine the changes social media has brought to consumers in different stages of their decision making.

1.4 RESEARCH QUESTIONS

1. What is social media use and types of consumers influenced mostly by social media?
2. What is the social media as electronic word-of-mouth?
3. What is the impact of social media on consumer behavior?
4. What is the impact of social media on various stages of decision-making process of consumers?
5. What is the relationship between social media and consumer’s behavior?
6. What are the changes social media has brought to consumers in different stages of their decision making?

1.5. RESEARCH HYPOTHESES

Hypothesis 1

H0: There is no significant impact of social media on consumer behavior.

H1: There is a significant impact of social media on consumer behavior

Hypothesis 2

H0: There is no significant relationship between social media and consumer’s behavior

H1: There is a significant relationship between social media and consumer’s behavior

1.6 SIGNIFICANCE OF THE STUDY

This research is important as it may provide adequate information on social media and its impact on consumers’ behavior to marketers in various fields.  The study would also be of immense benefit to students, researchers and scholars who are interested in developing further studies on the subject matter.

1.7. SCOPE AND LIMITATION OF THE STUDY

The study is restricted to the impact of the social media on consumers’ behavior.

1. LIMITATION OF THE STUDY

Financial constraint: Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview)

Time constraint: The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

1. DEFINITION OF TERMS

 Consumer Behavior: is the process whereby individuals decide whether, what, when, where, how, and from whom to purchase goods and services, Consumer behavior includes both the mental and physical activity necessary for making decisions in the marketplace.”

Social media: is referred as "activities, practices, and behaviour among communities of people who gather online to share information, knowledge, and opinions using conversational media Kaplan and Haenlein (2009), social media helps in spreading the information instantly to the vast online audience