IMPACT OF SOCIAL
MEDIA ON CONSUMER
BEHAVIOR
CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND TO THE STUDY
New technological
inventions can have a great impact in organizations through its contributions
to change the social environment while expediting sharing of knowledge and the
development of new ideas. (Kling et al, 2005). Social Media will come in handy
as a good example of new technological innovation that is making a great impact
in the organizations of today.
In time past, the social media inspired technologies were seen as a chapter.
But time has proven that wrong. We have seen the world being transformed daily
by these new collective technologies, which is giving a new hope to
organizations with impacts which were never considered to exist initially.
Today, most
organizations are mainly interested in incorporating social media into the
business structures of their organization, but do not have a proper know-how of
what social media is all about. They also don’t have a tangible channel to
ascertain the gain that these technologies hold for them. In a survey carried
out in 2009 by McKinsey and Company, it was discovered that with the
appropriate use of the social media a lot of organizations were able to benefit
from each other in ways such as sharing of ideas, communication becoming better
and the workplace environment becoming enhanced. The value that social media
adds in organizations is huge as an increasing number of organizations are
already endorsing and exploiting the various opportunities in social media
technological innovation. This is to enable them find support for their various
organizational and business practices (Starmark, 2008;).
Social media hold a
lot of interesting opportunities, but it is important to understand how to
utilize it with its accompanying impact in an organizational context beside
where it is applicable in real‐life
projects. The present day organizations should ask questions like how can
employees use social media technologies to do their work and what impact these
have on employees. These should be pivotal questions for modern day
organizations. These questions can help organizations to understand how social
media technologies work effectively at workplace. Thus, it affords them the
opportunity to review and understand how to utilize what it offers with its
impact on how people interact and work among them as earlier discussed.
Hill (2009) portrayed
Globalization as the deviation towards a more unified and co-dependent economy
which is historically merging different national markets into one global
enormous marketplace. The Economic Intelligence Unit (2009) announced that, the
global market place was overwhelmed by variations in exchange rates, the
purchasing behavior of consumers and inflation in the course of the recession
that started in 2007. These economic developments have ended up compelling
organizations to redesign their business strategies so they can be able to
communicate their brands more effectively. Davis (2001) writes that brand is
one of an organization’s most prized assets which simply imply that there is a
demand on the present day organization to understand that it is important for
them to capitalize on their brand. This can help them maintain a profitable
growth and achieve sustained profitability objectives.
There are various means of building brands, which can come in form of
advertising, meeting specific needs of customers, attaching a particular image
to a service or product, identifying and meeting a need that competitors are to
identify, combative communication and strategizing price (Burger et al, 2009).
As recessions is towering in recent times of high, it became very imperative
for organizations to maintain honest, clear medium of communication and retain
a good image in a cost effective means (Unit for Economic Intelligence, 2009).
Social media marketing was one of the popular channel organizations used to
communicate their brands during the recession. Some of those mediums are;
online electronic media which helps facilitates participation, responsiveness,
consultation, connectivity and networking amongst online end users (Mayfield,
2008).
Social media channels
like Twitter, Facebook, YouTube, LinkedIn etc are some of the dynamic tools
that have helped facilitate online rapport (Golden, 2011). Relatively, it is a
low cost pattern of marketing which allows organizations to engage direct
end-users through their contacts (Heinlein and Kaplan, 2010).
Brands and consumers
have a changing role to play in the organization’s strategy given the choices
made available to consumers and the prominent role of social media marketing
being that they now have an impact on the economy (Mayfield 2004, Lindeman,
2008). Brands have huge influence on customer choice and customers influence
other customers. Affecting repurchases are these series of events, which goes on
to affect earnings in the future and long term organizational continuity
(Oliveira and Sullivan, 2003).
Thus, consumer’s
buying behavior is often influenced by a leading brand. This value is created
by generating demand (via repurchases) and securing of future earnings for the
organization (Sullivan and Oliveira, 2003). Therefore social media marketing
serves as opportunities for communication and depends upon new and unusual
thought patterns (Heinlein and Kaplan, 2010; Kweskin, 2008). This helps
customer’s product and brand experience.
This new era of digital communication and social engagement is preeminent for
strategizing in business. Therefore as organizations are becoming more
competitive globally, it is pertinent for them to explore marketing strategy in
a more compelling and innovative way so as to attract larger number of
customers (Rockendorf, 2011).
1.2 PROBLEM STATEMENT
The coming of the
Internet and its acceptance by the public, have altered quite a lot in the way
organizations promotetheir services and products as well as the
channels of communication between them and theircustomers. This is seen
in the way they market and communicatetheir brands and products
nowadays which is becoming a challenging project.
Customers are overwhelmed by marketing commercials and promotional events. The
sensitivity of customers to get excited is fading out on promotional events and
consumers are beginning to resist the efforts of some companies at marketing
them.
Basically, the promotional focus of some organizations is on the conventional
mass media advert style which includes commercials on TV, radio jingles and
advertisements in print formats such as newspapers and magazines along with
billboard placements. It is now on record that as the Internet is fast
advancing across the global marketplace, the effectiveness of traditional mass
media is fast on the decline.
1.3 OBJECTIVES OF THE STUDY
The main objective of this study is to examine the impact of social media on
buying behavior of consumers. Specific objectives of the study are:
1. To
examine students’ perception towards shopping online.
2. To
examine factors that motivate student buyers to shop through social media
platforms.
3. To
examine how social media channels have affected buying behavior of Lagos state
university students.
1.4 RESEARCH QUESTIONS
1. What
perception do students’ have towards shopping online?
2. What
factors motivate student buyers to shop through social media platforms?
3. How
have social media channels affected buying behavior of Lagos state university
students?
1.5 RESEARCH HYPOTHESES
1. HO: Students have negative perception towards
online shopping.
Hi: Students have positive perception towards online shopping.
2. Ho: There is no significant relationship between
social media channels and buying behavior of consumers.
Hi: there is a significant relationship between social media channels
and buying behavior of consumers.
1.6 SCOPE OF THE RESEARCH
With regard to the objectives, conducting the research from the perspective of
consumers would be a considerably suitable approach. The researcher realizes
that there are many available reports and studies which rather aims to help
businesses to gain a better understanding in social media marketing but not to
help consumers to identify reasons that social media has changed their decision
making process. Since the purpose of marketing is, in sum, about consumer;
therefore, by having the starting point from the perception of consumer, and by
collecting data from consumers’ point of view, fresh insights can be gathered.
The research also aims to serve as an indicator to potential readers
(companies) of how they can tab into the decision making process via social
media sites. The research focuses on the behavior of end consumers
(individuals) and particularly within the retailing industry, for instance
clothing, food and beverage, consumer electronics, and so on.