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Chapter 1
INTRODUCTION
1
CHAPTER 1
INTRODUCTION
Once in every hundred years media changes. The last hundred years have been defined
by the mass media. The way to advertise was to get into the mass media and push out
your content. That was the last hundred years. In the next hundred years information
people have. Advertising will change. You will need to get into these connections
- Mark Zuckerberg, Co-founder of Facebook (Maymann, 2008).
Nowadays consumers are participating in variety of activities, from consuming
content to sharing knowledge, experiences, opinions, and involved in discussion with
other consumers online (Heinonen, 2011). Internet is a social place which created new
forum for consumers. Virtual communities, blog, and online social networking websites
Today, with the growth of Internet, online social networking websites have become
important communication channels and also virtual communities have emerged. Online
world has become a new kind of social communication, connecting people to a variety of
online communities has been growing during past decade. Groups may never meet in the
physical world but nevertheless they are able to affect behavior including purchasing
decisions (Evans, et al., 2009).
Everyday people buy things that are relevant to their needs. At the same time they
are making purchasing decisions. According to Blackwell, et al., (2001), consumer
Blyth (2008) concluded that consumer behavior is
2
influenced by personal and environmental factors. A central part of consumer behavior is
urchase decision which includes several steps. Generally, social network
websites such as groups or individuals who own the power over consumers can affect
, et al., 2010). In the view of Heinrichs, et al.,
(2011) the online social networks provide facilities for consumers to interact with one
another, accessing information, comments, reviews, and rates that can help them for
purchasing decisions in different ways.
The growth of online social network websites has provided many different
additional online activities for consumers such as blogging, chatting, gaming, and
messaging. There are several social network websites available such as Facebook,
LinkedIn, Google Plus, MySpace, Hi5 and bebo. Facebook is one of the most popular
social networking sites. Individuals who are members of Facebook can construct dynamic
profiles about themselves and share information with other individuals within the group
(Boyd and Ellison, 2008). Rogers (2003) found in his research that social interaction with
.
Diverse ranges of people have influenced consumers such as family members, friends,
co-workers, and group or individual that consumers would love to compare themselves
with them (Schiffman, et al., 2008). These ranges of people could be involved in
well. Online social network websites are good platform for consumers to gather
information and advices. Consumers make many product decisions every day and they
would like to receive advice from others (Evans, et al., 2009). These online social
network websites will work only in web 2.0 version. While web 1.0 version was used to
3
communicate only through mail, web 2.0 is useful for two way communication and user
generated content.
1.1 WEB 2.0
Web 2.0 is the term given to describe a second generation of the World Wide
Web that is focused on the ability for people to collaborate and share information online.
Web 2.0 basically refers to the transition from static HTML web pages to a more
dynamic web that is more organized and is based on serving web applications to users.
Other improved functionality of Web 2.0 includes open communication with an emphasis
on Web-based communities of users, and more open sharing of information. Over time
Web 2.0 has been used more as a marketing term than a computer-science-based term.
Blogs, wikis, and web services are all seen as components of Web 2.0.
The Web 2.0 plays an important role in e-commerce. In particular, traditional
retailers and pure-play online retailers continue to leverage Web 2.0 technologies in an
nce. The importance of web 2.0 in
business online presence has been recognized in the both prior academic research and
practical business application. However, the literature lacks a systematic analysis of the
broad characteristics and trends associated with the Web 2.0. In particular, relatively little
is known about what is actually characterized as Web 2.0 experience. One of the first
attempts regarding this aspect was the taxonomy summarizing Web 2.0 factors proposed
by Wirtz, et al., (2010).
Web 2.0 characteristics consist of the following four factors ranked from the most
important:
4
Social networking, by which a large number of participants often create powerful
influence on the assessment of certain products and services.
Interaction orientation, which enables the firm to interact effectively with
customers by leveraging a more intense and authentic communication channel between
firm and customers.
User-added value, by which user-generated content (e.g., customer feedback,
products review) is leveraged fostering online collaboration and active participation
among online consumers.
Customization and personalization, which enhances the online experience by
making it possible for Internet users to reconfigure website (e.g., changing the look and
feel or functionalities) to suit their particular needs and preference.
1.1.1 Web 2.0 Experience
Along with the spectacular growth of the Internet, the developments associated with
Web 2.0 have made an important evolutionary change to the World Wide Web. Its
constituent technologies have created radically new ways for customers to interact with
companies operating on the Internet. Web 2.0 has become one of the hottest buzzwords in
the technology space and there is a growing trend toward using it among many online
companies (Constantinides and Fountain, 2007).
The emergence of Web 2.0 is one of the most formidable developments in the
history of commerce. Social media, another buzzword that came along with, is an
evolution based on the Web 2.0, where not only it encourages user-generated contents,
but also extends the focus to the users by allowing them to exhibit contents to share
among networks. This particular technical revolution during the last decade has
5
drastically revolutionized the traditional marketing approaches and brought marketers to
a new era. In the new marketing era, the social media is likely to revolutionize the
relationships marketers have with retailers, channels of distribution, their ultimate
nformation age , and consumers are inundated with
overwhelming quantities of information every day.
1.2 SOCIAL MEDIA
One way to define social media is to break it down. Media is an instrument of
communication, for example a newspaper or a radio. Social media can therefore be
explained as being a social instrument of communication. In simpler terms, if traditional
media (i.e. television) is a one way communication tool giving messages to consumers,
social media can be viewed as a two way communication tool enabling consumers to
communicate back (Nations, 2001). Social media covers a wide range of online activities
like collaborative projects, blogs, content communities, social networking sites, virtual
game worlds and virtual social worlds.
Social media is the newest form of Web based applications in which content is
created by participatory communication where users create and share information. The
era of social media started more than 20 years ago with the creation of the open diary
which was an early social networking site that brought online diary writers into one
community. The growing accessibility of high-speed Internet advanced the popularity of
the concept leading to the creation of social networking sites such as Facebook in 2004
which popularized the term social media and made it widely recognized (Taylor, et al.,
2011).
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The concept of social media refers to applications where the actions of users play
a key role. Through these applications users can instantly send text, images, audio and
video without any specific technical knowledge as this is achieved with the help of Web
2.0 technology (Akar and Topcu, 2011). Social media includes diverse channels like
blogs and forums, social networking sites like Facebook, content communities like
Youtube, Virtual Social Worlds like Second life, virtual game worlds like World of
Warcraft and Microblogging sites like Twitter (Kaplan and Haenlein, 2010).
As of
2013 there are more than 1.5 billion users on Facebook and about half of them log into
the site on a daily basis. The average number of friends is 130. Twitter has around 280
million users and about 95 million of the users tweet every day. In Iceland, 60.6 percent
of Internet users log onto Facebook on a daily basis and 57.5 percent access YouTube
weekly (MMR, 2011). A study by Exact Target (2011) revealed that 39 percent of
Facebook users who become fans do so to publicly display their brand affiliation for their
friends. Today, social networking sites are even reporting breaking news faster than
official website and a social networking site is that the official website is usually aimed at
providing information without the consumer being able to give feedback while social
networking sites allow for communication between parties.
Tools and strategies for communicating with the consumer have changed with the
emergence of social media. Social media has also been named consumer generated media
or User Generated Content (UGC), as this form of media involves a variety of new
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educate others about products, brands or services (Blackshaw, 2005). One of the roles of
social media is consistent with the use of traditional Integrated Marketing
Communications (IMC) tools as companies can use social media to talk to their
customers through platforms like Facebook and blogs. Another promotion-related role of
social media, and what makes it unique, is that customers can use it to communicate with
one another. To sum it up, social media enables companies to talk to consumers,
consumers to talk with each other as well as enabling consumers to communicate with the
organisations themselves (Mangold and Faulds, 2009). Social media provides platforms
for sharing information, videos, photos and blogging.
Social media sites are expected to reach $29.1 billion worldwide in revenue in
2015, increasing by almost three times revenue of $10.3 billion in 2011. Advertising
revenue is, and will remain, the largest contributor to overall social media revenue. Social
media advertising revenue is found to a total of $8.2 billion in the year 2012. Advertising
revenue includes display advertising and digital video commercials on any device
including PCs (Personal Computers), mobile and media tablets. Besides advertising
social media sites earn revenue from social gaming. With social gaming the sites earn
directly from the users who play the games (Gartner Inc., 2011). Among UGC sites, the
role and growth of social networking sites has been overwhelming as more than 55
percent of teens use online social networks and 48 percent of them visit social networking
sites at least
social networking sites has probably grown considerably since 2007 when Lenhart and
Madden made their study.
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1.2.1 Social Media Timeline
The Figure 1.1 shows social media timeline, by the 1980s, home computers were
becoming more common and social media was becoming more sophisticated. Internet
The
994, followed by ebay.com and
yahoo.com was created in 1995. But these social media site was not recognizable. The
first recognizable social media site Six Degrees was created in 1997. It enabled users to
upload a profile and make friends with other users. In 1999, the first blogging sites
invention of blogging, social media began to explode in popularity. Sites like MySpace
and LinkedIn gained prominence in the early 2000s, Facebook was found in 2004, and
sites like Photobucket and Flickr facilitated online photo sharing. YouTube came out in
2005, creating an entirely new way for people to communicate and share with each other
across great distances.
By 2006, Twitter became available to users throughout the world. These sites
remain some of the most popular social networks on the Internet. Other sites like Tumblr,
Spotify, Foursquare and Pinterest began popping up to fill specific social networking
niches. Today, there is a tremendous variety of social networking sites, and many of them
can be linked to allow cross-posting. This creates an environment where users can reach
the maximum number of people without sacrificing the intimacy of person-to-person
communication. It can only speculate about what the future of social networking may
look in the next decade or even 100 years from now, but it seems clear that it will exist in
some form for as long as humans are alive.
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1.2.2 Types of Social Media
Although this research will be centered on attitudes and consumer behaviour on
social networking sites there exist various forms of social media that consumers and
businesses are taking advantage of. Following Figure shows the various activities covered
under social media as given by Kaplan and Haenlein (2010).
Figure 1.2: Classification of Social Media (Kaplan and Haenlein, 2010).
1.2.2.1 Collaborative Projects
Collaborative projects are projects that enable users to create content by the joint
Social
Media
Collaborative Projects
(e.g. Wikipedia)
Blogs and Microblogs
(e.g. Twitter, WordPress)
Content Communities
(e.g. YouTube, Vimeo)
Virtual Game Worlds
(e.g. World of Warcraft)
Virtual Social Worlds
(e.g. Second Life)
Social Networking Sites
(e.g. Facebook, MySpace)
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manifestation of user-generated- ein, 2010). Collaborative
projects can be divided into two categories namely Wikis and Social Bookmarking
applications. Wikis are websites that allow users to add, remove, and change text-based
content, and social bookmarking applications are sites that enable individuals to add
material into a group based collection and the opportunity to rate Internet links or media
Haenlein, 2010).
Many firms have started to use wikis for their intranet to gather a large amount of
information in the same place. Employees can present their ideas to other employees and
follow what is happening within the company. Wikis are useful for companies in
supplying information and it can lead to increased cooperation within units. Wikis are
also considered useful in product development where employees and consumers can
make suggestions on how a product should be (Kaplan and Haenlein, 2010). Companies
have also created external wikis that allow consumers to share their thoughts on certain
topics initiated by the firm when development of new products might benefit from
consumer insight and input.
Figure 1.3: Shows the example of collaborative projects
The most used open access wiki today is Wikipedia, a free encyclopedia
accessible by everyone, where individuals can contribute their knowledge to the database
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of all topics imaginable. Wikipedia is created for the purpose of creating a large database
enabling individuals to share information to one another. The site is entirely run on
voluntary contributions. Private companies are not allowed to use the site for advertising
purposes. All information on the site is to be objective and based on facts (Wikipedia,
2012).
Social Bookmarking is a way for individuals to create links to websites or web
pages that they like and then share those links with others. The process is facilitated by
websites that are set up to enable such sharing. Typically, these sites allow users to add
brief additional information about the links they post. The concept of social bookmarking
to add links they like, not just their own. Social bookmarking can be used by anyone, but
is generally utilized for business to business information, or business to consumer
information.
1.2.2.2 Blogs and Microblogs
Blogs represent the earliest form of social media. They are types of websites that
display date-stamped entries in reverse chronological order (OECD, 2007). Blogs can
come in a multiple range of variations, from personal diaries that describe events in the
person (Kaplan and Haenlein, 2010). Many compare blogs to newspapers and magazines,
but the main difference between them is that blogs contain personal opinions while
newspaper- and magazine articles focus on providing facts and citing specialists
(Meerman, 2007).
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It is relatively easy to start a blog and can be done for free. Many websites focus
terms of layout. Blogs usually have a feature for comments which allows for
communication from the reader (Meerman, 2007). An increasing trend is that people are
million bloggers in the U.S. and about 1.7 million of them get paid to do so.
Microblogging is a web service that allows the subscriber to broadcast short
messages to other subscribers of the service. Microposts can be made public on a Web
site and/or distributed to a private group of subscribers. Subscribers can read microblog
posts online or request that updates be delivered in real time to their desktop as an instant
message or sent to a mobile device as an SMS text message.
Figure 1.4: Examples of blog and Microblog
1.2.2.3 Content Communities
The main goal of content communities is to share media content between users.
Content communities offer users the opportunity to upload new material and share with
others online. A lot of informational content can be gathered from such communities.
They exist for a wide range of media types like texts (BookCrossing), photos (Flickr),
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videos (YouTube) and powerpoint presentations (SlideShare). The high popularity of
content communities makes them an attractive channel for many firms to enable
consumers to find them (Kaplan and Haenlein, 2010). YouTube for example is one of the
most popular content communities in the world and every minute 72 hours of video
content were uploaded on average to the site in 2013. More than one billion unique
visitors visit the site each month (YouTube, n.d.).
Figure 1.5: Examples of Content communities
1.2.2.4 Virtual Game Worlds and Virtual Social Worlds
which users can appear in the form of personalised avatars and interact with each other as
they would in real l ). Users can essentially lead two
lives, one in the real world and one in the virtual world. According to Kaplan and
richness of all social media applications and are probably the ultimate manifestation of
15
Figure 1.6: Examples of Virtual Game Worlds and Virtual Social Worlds
Virtual worlds come in two forms. The first group virtual game worlds require the
users to behave according to strict rules in the context of Massively Multiplayer Online
Role-Playing Game (MMORPG). An example of a virtual world game is World of
Warcraft which counts for 8.5 million subscribers who explore the planet of Azeroth and
take the forms of dwarfs, elves, orcs and humans, to fight monsters or search for treasures
(Kaplan and Haenlein, 2010). The other group of virtual worlds, virtual social worlds,
allows users more freedom in choosing their behaviour and basically live a virtual life
similar to their real life. Like in virtual game worlds, the social world allows the user to
create their own avatar and interact in a three dimensional environment. The difference
between a game world and a social world is that in the territory of the social world there
are no rules restricting the range of possible interactions. It allows a person to present
himself according to his own imagination (Kaplan and Haenlein, 2009a; Kaplan and
Haenlein, 2009b; Kaplan and Haenlein, 2009c). Second Life is the most popular virtual
social game. Users can register for Second Life for free. After registration they make
their own avatar and they have free hands in designing it. Users can also design items and
trade with others. Second Life has its own economy and currency with the Linden Dollar
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which can be traded for real money (Kaplan and Haenlein, 2010). Firms are looking to
enter the virtual game world and already there are some interesting options for them to
partake in. An example of that is the case of Toyota where they opened an online store
enabling users to browse their latest products (Springwise.com, 2006). There are several
advantages in using virtual worlds as a method of advertising and creating brand
awareness. Entering the virtual worlds is a way of accessing a different customer
demographic. With the prospect of commercial success within the virtual world firms can
reduce cost and time constraints as they can keep the development in-house instead of
outsourcing activities to advertising agencies. Also, virtual worlds provides companies
with the opportunity to survey customer reaction and receive feedback. Feedback is very
important to the development of a project as it will inform the creators of what users want
and dislike (Wasko, et al., 2011). Having an insight into customer needs can give
companies a competitive edge.
1.2.2.5 Social Networking Sites
creating personal information profiles, inviting friends and colleagues to have access to
these profiles, and sending e-
and Haenlein, 2010). The profiles can include any type of content, photos, videos, audio
files and blogs (Kaplan and Haenlein, 2010). Boyd and Ellison (2008) define social
networking sites as; web-based services that allow individuals to (1) construct a public or
semi-public profile within a bounded system, (2) articulate a list of other users with
whom they share a connection, and (3) view and traverse their list of connections and
those made by others within the system.
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SNS enable individuals to maintain blogs and encourage group interactions
through chat rooms, instant messaging and e-mails (Gangadharbatla, 2008).
Figure 1.7: Examples of Social Networking Sites in India
Social networking sites are probably the most popular and consumer oriented in
the world of social media. Today there exist many social networking sites, like Facebook,
Linkedin, Google+, MySpace, Dogster and others. Some are targeted to all users while
others focus on certain groups of consumers.
From the descriptions above on options in social media it is clear that it is an
active and fast moving domain. The possibilities are many and what may be up-to-date
today can be obsolete tomorrow. Therefore, it is important to be aware of the options
strategy in online activities and help them accomplish the goals they have.
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1.3. SOCIAL MEDIA AND MARKETING
Social Media Marketing is an umbrella term that can be described as the
utilization of social media platforms as marketing tools. According to Weinberg (2009),
social media marketing is explained as
; in other words, it is a process in empowering
individuals to promote their websites, products, and/or services through online social
channels, to interact with and to tap into a much larger community that may not have
been available via traditional advertising channels.
It is no longer a striking fact that most of the advertisements via mass media are
not as efficient as in the past, because by advertising through the mass, the message is
generally reaching far more people than the potential customer intended to reach (Weber
2009; Weinberg 2009). Social web is where people with a common interest can gather to
share thoughts, comments, and ideas; hence, instead of continuing as broadcasters,
marketers should become aggregators of customer communities; that is, the Web should
not be considered a mere advertising channel, it is a place where marketers can listen and
respond to communities, review contents, as well as promote a particular piece of content
within the vast social sphere (community building) (Weber 2009).
1.3.1. What makes social media marketing special?
Upon the insufficient advertising budget that companies oftentimes encounter via
the traditional channels, Weber (2009) argue that social media marketing might be,
particularly, easier and more effective for small and medium-size companies to take
maximum advantage of it. While social media marketing is an evolving technology with
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the target market,
communicating with prospects, building loyalty, customer engagement and so on.
Weinberg (2009) has proposed few reasons to tap into a solid social media
strategy in addition to (or instead of) the traditional ones, which are facilitation in natural
discovery of new content, boost up in traffic numbers, strong relationship building, as
well as a cheap alternative to traditional marketing. Unlike the traditional advertising,
individuals in the social media era have access to contents that are not necessarily
associated with commercial intent (neutral); consequently. If a person likes content,
he/she is likely to pass it on to their peers, families, and so on via social sites. Then the
content will be spread out quickly without interfering with traditional marketing. Social
media offers opportunities to achieve communities, once company has established its
presence as a community participant worth following, eventually others will be likely
interested in what it shares and pass to the relevant ones (Weber 2009). Besides, in the
phase of the new marketing era, bringing the brand to alive depends solely upon the
engagement within communities (Weber, 2009), as a result if company is genuinely
paying attention to the members of the community, a strong relationship can be built
upon investing time in responding on feedbacks and concerns (Weinberg, 2009)
Mass media audience become more and more difficult to buy
(1996) of WPP (Smith and Zook, 2011). The fortunes of advertising have grown
alongside with the growth of mass media, however this growth has stopped these years
(Smith and Zook, 2011). In fact, there are many sport brands in the marketplace are
taking social media marketing as a vital component in their businesses, in which they
look at effective ways to gain more detailed understanding of their social media fanbase.
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Nike has been putting more marketing muscle behind its digital initiatives, for instance
by taking social media marketing in-house, claiming that online channels are more
valuable to its business strategy than traditional advertising (Joseph, 2013)
1.3.2 Businesses Aspects in Social Media Marketing
Earlier research reveals that companies have an opportunity to use social media to
their advantage and even to create a competitive advantage if used correctly (Alinean
Research, 2010). According to Dutta (2010), the best businesses are creating
comprehensive strategies in the area of social media to support their goals. Social media
is changing consumer behaviour and workplace environment by being global, available to
all, transparent, interactive, and taking place in real time. Social networking sites are
changing advertising in so many ways, not just by defying traditional media but also in
the way it is reaching consumers (Gangadharbatla, 2008). A study by Colliander and
Dahlen (2011) shows that publicity effectiveness is superior in social media as compared
to traditional online media and that there is a similarity between social media marketing
and word of mouth advertising. The use of social media requires marketers to take a step
back from traditional campaign thinking and focus more on relationship building.
Managers cannot directly control the discussions consumers have about their
company but they can use methods to influence and shape the discussions in a manner
Mangold and
Faulds (2009) describe how companies can engage consumers and encourage them to talk
about their brand/product/service by using social media which are given in Table 1.1
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Table 1.1: Options in engaging consumers in conversations in social media
Provide networking
platforms
Consumers like to network with people who have similar interests.
Organisations can influence this need by creating communities of like-
minded individuals. Some networking platforms are intertwined with
well as getting to know the people who use them. The Harley Davidson
club is such an example as the company formed a community for people
using their products to interact, both online and offline.
Use blogs and other
social media tools to
engage customers
Consumers feel more engaged with products and organisations when
they are able to communicate with the company and provide feedback,
especially if something could be done differently.
Use both traditional
and Internet based
promotional tools to
engage customers
People are more likely to communicate through word of mouth and
social media when they are emotionally engaged with the
product/service. The engagement may come naturally for supporters of
causes, political candidates and trendy new technological products. The
Icesave case riddled social media and many battles were fought online
the few weeks before election. Both parties tried to convince others by
using the medium of social networking sites, blogs and discussion
forums. If not for anything else than to encourage people to go and vote.
Provide information
Consumers are more likely to talk about companies and products when
they feel they know a lot about them so it is important to provide as
much information as possible without it being complicated.
Be outrageous People talk about things they find to be somewhat outrageous. Shocking
things are often the talk of the town.
Provide exclusivity
People like to feel special. Those feelings can be produced by offering
products, information and special deals that are available exclusively.
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Design products
with talking points
an
desired self images
in mind
Products that are fun, intriguing, easy to use and engage emotions are
more likely to stimulate conversation than products that do not meet
these criteria (Dobele, et al., 2005; Dobele, et al., 2007). Organisations
that want to build talking points into their product design should also
remember that simple things are easier to remember and communicate
than complicated things. People are also more likely to talk to others
about products when those products support their desired self-image, or
the way they want others to see them. This suggests that both product
design and promotional efforts should be undertaken with the desired
self-image in mind
Support causes that
are important to
consumers
People tell others about things to which they are emotionally connected
to.
Utilize the power of
stories
Stories can be memorable. The more memorable they are, the more
likely they are to be repeated.
Social media is proving to be an effective way for creating and increasing the
emotional significance of a brand as people derive emotional meaning when they engage
on their own terms (Mangold and Faulds, 2009). It can assist companies in developing a
more effective brand positioning and help to reinforce brand personality. Social media is
a process of learning by doing and is an effective way to keep the brand up to date
(Isakson, 2009). Evans (2008) argued that Social media marketing can be used as a way
for increasing brand loyalty as it permits companies to engage in a conversation and build
relationships with their customers which was also enclosed by Li and Bernoff, 2008. It
generates viral propagation and raises online awareness and provides companies with
innovative mediums for the quick spreading of several messages through their customers
23
(Prendergast and Ko, 2010). It also helps companies to develop themselves and their
service recovery plan. By continuously listening and interacting with their customers,
companies can gather valuable information for resolving problems, before they become a
crisis (Mangold and Faulds, 2009). One of the main initiatives of this online community
become bigger and more difficult to treat.
Although marketing managers do not always have the power to control the
information that is spread by consumers through social media, it is dangerous to ignore
the impact it has on consumer behaviour. Therefore, it is imperative for marketing
managers alike to join the conversations taking place to be able to influence them in the
right direction from time to time (Mangold and Faulds, 2009).
1.4. SOCIAL NETWORKING SITES
Boyd and Ellison (2007) define social networking sites as the web-based services
that allow individuals to construct a public profile and articulate a list of their contacts
with whom they share a social network. Social networking sites provide an effective,
powerful channel for consumers to create a visible personal profile, build a personal
network, and display interpersonal commentaries publicly (Lenhart and Madden, 2007).
Without geographic and time constraints, consumers can easily and quickly exchange
product-related information and opinions with their personal contacts (Graham and
Havlena, 2007) and have the potential to reach global audiences who share common
interests in a product or brand.
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With the new applications on social networking sites, the way consumers make
purchase decisions and interact with members of their social network has fundamentally
changed (Hung and Li, 2007; Niederhoffer, et al., 2007). Social networking sites not only
social and information outcomes). For example, activities occurring in social networking
sites range from socializing with existing friends or making new ones to exchanging
information and experiences regarding products or services. All of these online
communications have potentially led consumers to change their approach to searching for
product information and making purchase decisions.
Due to the potential of social networking sites for brand communications among
consumers and consumer-brand relationships, advertising spending on social networking
sites has undergone tremendous growth (eMarketer, 2007). With the rapid growth in the
patterns, self-presentation strategies, motivations, and social relationships associated with
this relatively new online communication medium and provided an initial understanding
of the phenomenon (Choi, et al., 2008). More important to marketers is the huge potential
of social networking sites to connect a vast number of prospective consumers around the
world. The extensive social interactions among many consumers through their public
personal networks have created an information-intensive environment of social
networking sites where consumers can easily and quickly disseminate their thoughts and
opinions. For this reason, social networking sites can play a significant role in sharing
and distributing product-related information, and can serve as an influential vehicle for
eWOM.
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1.4.1 History of Social Networking Sites
In the last few years many social networking sites have come and gone. As
consumer behaviour changes the social networking sites have to find ways to become
sustainable and keep up with the latest trends. If not, they run the risk of becoming
obsolete and consumers may decide to go elsewhere. It is important to look at the history
of social networking sites as it can provide us with an understanding of why some have
survived and others have not. The history reveals how volatile success can be and how
quickly popularity can fade.
Many features similar to social networking sites features existed in some form
before SixDegrees, the first social networking site, launched in 1997. Profiles existed on
most major dating sites and many community sites. AOL Instant Messenger (AIM) and
ICQ, homophone for the phrase
friends were not visible to others. Classmates.com allowed people to associate with their
high school or college and surf the network for others who were also affiliated. The
option to list friends and create a profile came years later. However, SixDegrees.com was
the first site to combine all these features together. It helped people connect to an
extended network of friends and beyond, and allowed users to create profiles and list
their friends. SixDegrees was promoted as a tool to help people connect with and send
messages to others. Initially, the site attracted millions of users but in the end failed to
become a sustainable business and was closed down in 2000. The founder believes the
site was perhaps ahead of its time and that consumers were not ready for it (Boyd and
Ellison, 2008).
26
Figure 1.8: Time line of Social Networking Sites
From 1997 to 2001, a number of community targeted sites were launched which
supported a range of combinations of profiles. AsianAvenue, BlackPlanet, and MiGente
all allowed users to create personal-, professional-, or dating profiles (Boyd and Ellison,
2008). In 1999 LiveJournal was created. Its function was to create a virtual community
where Internet users could keep a blog, journal or a diary (Hacker, 2003). Later, a
Swedish website, Lunarstorm was launched in 2000 and Cyworld was also argued in
2001 (Boyd and Ellison, 2008).
In 2001 the next wave of SNS began when Ryze.com was launched, aimed to help
people leverage their business networks (Boyd and Ellison, 2008). It is noteworthy that
the people behind Ryze.com, Tribe.net, LinkedIn.com and Friendster.com were
connected both personally and professionally. Their belief was that they could support
each other without competing (Festa, 2003), but in the end, LinkedIn was the most
successful, now a powerful business service. Ryze.com never managed to acquire much
popularity. Tribe.net attracted a passionate niche user base and Friendster became the
most significant, if
(Chafkin, 2007). Friendster was launched in 2002, with the aim of being a social
27
complement to Ryze.com. It was designed to be in competition with a profitable and
popular online dating site, Match.com (Cohen, 2003). Friendster was founded to create a
safer, more effective environment for meeting new people by browsing user profiles and
connecting to friends, friends of friends and so on, allowing members to expand their
network of friends more rapidly than in real life face-to-face scenarios (Rivlin, 2006).
The site grew to 300,000 users through word-of-mouth before traditional press coverage
and databases were not equipped to handle the large amount of traffic on the site, so it
crashed regularly. Frustrated users started replacing Friendster with e-mails (Boyd and
Ellison, 2008). But while popularity faded in the U.S., the site grew in Asia (Goldberg,
2007).
From 2003 many new SNS have been launched. Most have taken the form of
profile-centric sites, trying to capture the early success of Friendster or target specific
groups. MySpace and similar social sites targeted broad audience, professional sites like
LinkedIn, Visible Path and Xing focused on business people, Dogster and similar sites
connected strangers based on similar interests, Care2 helped activists meet, Couchsurfing
connects travellers to people who are willing to let them sleep on the sofa and so on
(Boyd and Ellison, 2008). As the social media and user-generated content phenomena
have grown, websites who focused on media sharing have begun implementing SNS
features and become SNS themselves. Examples include Flickr (photo sharing), Last. FM
(music listening habits), and YouTube (video sharing).
MySpace was launched in 2003 in order to compete against sites like Friendster,
Xanga and AsianAvenue (Boyd and Ellison, 2008), and after Friendster failed, MySpace
28
was able to grow rapidly by capturing Friendster former users. The key factor that
encouraged people to switch sites was that indie-rock bands were expelled from
Friendster for failing to comply with profile regulations and although MySpace was not
created with bands in mind, they were welcomed. The relationship between bands and
fans eventually helped MySpace expand beyond former Friendster users. Furthermore,
MySpace differentiated itself by regularly adding features based on user demand (Boyd,
2006) and by allowing users to personalise their pages (Boyd and Ellison, 2008).
However, MySpace did not manage to sustain their popularity and people started flocking
to a new site that was emerging, called Facebook.
The biggest and most popular social networking site today is Facebook. It was
originally designed to support distinct college networks only. Facebook was founded in
February 2004 as a Harvard-only social networking site (Cassidy, 2006). To join, a user
had to have a harvard.edu e-mail address. As Facebook popularity grew within Harvard a
decision was made to allow other schools to join but the users were also required to have
university e-mail addresses associated with those institutions, a requirement that kept the
as an elite
community. In September 2005 Facebook started expanding by including high school
students, then professionals inside corporate networks, and, finally everyone (Boyd and
Ellison, 2008). Facebook continues to grow and evolve every day and has now over 800
million users.
1.4.2 List of Social Networking Sites
Social networks like Facebook, google+, Bebo, MySpace, Hi5 and LinkedIn
represent some of the most dynamic and promising manifestations of social media. These
29
sites allow for networking on a grand scale, where individuals can connect with others
based on offline friendships, shared interests, common professional objectives, or mutual
acquaintances. Like blogs and review sites, social networks allow users to place
comments, photos, videos and Web links on each other pages, thereby sharing
information and interests with dozens, hundreds, or thousands of people depending on the
Facebook is a social networking service launched in February 2004, owned and
operated by Facebook. It was founded by Mark Zuckerberg with his college roommates
and fellow Harvard University students. Facebook is the largest social networking site in
the world today with 1.5 billion users. The site has been translated to 70 languages to
increase traffic and make it easier in use. Access to Facebook is free and it is easy to
register for an account. Within Facebook users can share content like videos, pictures and
news, and send messages and chat with one another. The age restrictions state that
individuals under the age of 13 are not allowed to sign up for a Facebook account.
Increasingly popular feature on Facebook is groups. Groups allow individuals to
come together around a certain topic. Groups are used for informational purposes and to
keep in contact with certain people. It allows people to communicate without having to
befriend them. Many use groups for sport related activities, school work, family
gatherings and social life, among others. Groups can be open, closed or secret. In open
groups anyone can see the group, who is in it and what members post. In closed groups
anyone can see the group and who is in it but only members can see the messages. In
secret groups only members can see the group, who is in it and posts. An individual
30
always has to be a member to be able to post in a group. Events can also be organised
through the site and invitations sent out. Users can send personal messages or post notes
that take the form of blogs.
Firms have begun to see the benefits of Facebook and are increasingly using the
site in their marketing strategy. Facebook offers companies the ability to register for a fan
page where consumers like their page in the purpose of showing brand affiliation, getting
discounts or for information (Loechner, 2010). With fan pages companies can post
messages to their fans and communicate with them. When users like pages their friends
see it in their newsfeed, thereby increasing awareness about the company.
Facebook has also introduced Social Advertisements which are designed to help
advertisers create new campaigns by allowing users to share their interaction with
different brands throughout their network of friends through the newsfeed and a program
called Beacon (Klaassen, 2007). This is just one of the ways in which SNS can engage
consumers by enabling them to create content and become promoters of different brands
(Gangadharbatla, 2008).
Google Plus
Google+ (Pronounced and sometimes written as Google Plus, sometimes
abbreviated as G+ or GPlus) is a multilingual social networking and identity service
owned and operated by Google. It was launched on June 28, 2011. As of December 2012,
it has a total of 500 million registered users of whom 235 million are active in a given
month. It is currently the second largest social networking site in the world, passing
Twitter in Jan, 2013.
31
Google plus enables the user to separate his contacts according to different groups
commercial front aside from being of immense importance in the social context. A
businessman will be able to group his clients according to their chosen product /service
preference. They would most certainly appreciate not being flooded with information and
promotional news or offers about products and services they have no interest in. Thus,
only relevant information need be shared with each of these contacts apart from the
common message pool. Circles go one step beyond, to Extended Circles. These are like
reach of messages and information relating to products in a geometric progression.
MySpace
MySpace (previously stylized as MySpace and My_____) is a social networking
service with a strong music emphasis owned by Specific Media LLC and pop music
singer and actor Justin Timberlake. MySpace was launched in August 2003 and is
headquartered in Beverly Hills, CaliforniaIn June 2012, MySpace had 25 million unique
U.S. Visitors. It was founded in 2003 and was acquired by News Corporation in July
2005 for $580 millions.
Although the majority of its members use MySpace for communicating or online
people-watching. Thousands of businesses have also created their own pages for
marketing purposes. MySpace was created primarily as a means for bands to promote
their music to fans. It is no surprise that businesses noticed the potential and started
hairdressers to real estate agents, creating and marketing their own profiles on this
32
massive network. In addition to multinational companies such as Adidas and Burger
King, many small businesses have also embraced MySpace marketing generates website
traffic and leads. Converting this tangle of online human relationships into an effective
promotional platform is what MySpace marketing is all about.
As of January 2013, LinkedIn reports more than 200 million acquired users in
more than 200 countries and territories. The site is available in English, French, German,
Italian, Portuguese, Spanish, Dutch, Swedish, Romanian, Russian, Turkish, Japanese,
Czech, Polish, Korean, Indonesian and Malay. Quant cast reports LinkedIn has 21.4
million monthly unique U.S. visitors and 47.6 million globally. [In June 2011, LinkedIn
had 33.9 million unique visitors, up 63 percent from a year earlier and surpassing
MySpace] LinkedIn filed for an initial public offering January 2011.
LinkedIn groups are still going strong and are another component of a
comprehensive strategy that helps position your company as an industry thought leader.
The most successful groups focus on gaining relevant members with common goals, and
they are managed very well. To implement a successful LinkedIn group strategy, assign
the role of primary group manager/moderator to someone who pre-approves discussion
posts, asks great questions and determines which members get accepted into the group.
When the companies launch their LinkedIn group, be sure to get the word out organically
to employees, clients and customers, vendors, partners and influencers in your industry.
Identify top influencers and have them serve as group ambassadors to help recruit
members and to lead interesting discussions to keep your group active.
33
Hi5
It is a social networking site based in San Francisco, California. The company
was founded in 2003 by Ramu Yalamanchi By 2008; ComScore reported that Hi5 had
become the third most popular social networking site in terms of monthly unique visitors.
Bill Gossman was appointed CEO in April 2009, and since that time, Hi5 has refocused
itself as a social gaming platform and opened itself to new game developers.
Hi5 Creative is a full-service engagement strategies firm. Utilizing a thoughtful
mix of public relations, marketing and mobile tools, Hi5 Creative gives consumer -
focused brands the upper hand. Collectively, the Hi5 team brings each client extensive
know-how in persuasive communications, sales strategy, journalism, event promotions
and branding. At Hi5, they work solely to bring their
each new client, they develop a lasting relationship built on trust and accountability.
Their philosophy is that life is about relationships, and they genuinely hope to develop a
positive relationship with them.
Bebo
Bebo is a social networking website launched in 2005. It is owned and operated
by Criterion Capital Partners who took over from AOL in June 2010.Users receive a
personal profile page where they can post blogs, photographs, music, videos and
questionnaires which other users may answer. Additionally, users may add others as
friends and send them messages, and update their personal profiles to notify friends about
themselves. Bebo is very similar to other social networking sites; mainly Facebook.Bebo
was founded by Michael Birch and his wife Xochi Birch in January 2005.
34
The most common and simplest way to market on Bebo is to create a profile page
for a product or brand. One of the biggest mistakes companies make is to hurriedly stick
- respond to
requests. Creating a page on Bebo is the easy part; managing the replies, requests,
enquiries - - spam, is quite another. But by far, the most successful profile
pages on Bebo actually offer something back to the community. Freebies, contests, fun
games or useful widgets are sure to win you more brownie points than simply shoving a
marketing message up on a profile page and expecting Bebo-ers to engage with it.
1.5 ATTITUDES TOWARD SOCIAL NETWORKING SITES
It is important to understand users of social networking sites and their attitudes
towards these sites. Attitude is a disposition that influences behaviour (Allport, 1935), but
the general conclusion in regards to the relationship between attitude and behaviour
attitude
toward a certain action and subjective norms, which as a result influence a person
behaviour (Ajzen and Fishbein, 1980; Ajzen, 1988).
Industry surveys indicate that people join and use social networking sites for
several reasons, such as to stay in touch with friends, make plans with friends, make new
friends or flirt with someone (Lenhart and Madden, 2007). Other reasons may be feelings
of affiliation and belonging, need for information, goal achievement, self-identity, values
and notions of accepted behaviour (Ridings and Gefen, 2004). These factors are all
collective self-esteem (Gangadharbatla, 2008). Also, the successful adoption of
35
technology depends on the perceived ease of use (Davis, et al., 1989), which is often
referred to as Internet self-efficacy (Eastin and LaRose, 2000; Daugherty, et al., 2005).
Existing literature cites four factors that have an influence on the adoption of
technologies like social networking sites. The factors are the aforementioned Internet
self-efficacy, need for cognition, need to belong and collective self-esteem.
Internet Self Efficacy: Self-
organise and execute the cours
(Bandura, 1997). Usage and adoption of Web technologies, like social networking sites,
(Daugherty et al., 2005) which is defined as Internet self-
efficacy.
The more confident persons have in their ability to perform tasks online, the
greater their ability to join and participate in social networking activities and the creation
of user-generated-content. Gangadharbatla (2008) pointed out that Internet self-efficacy
is interesting when considering behaviour and behavioural intentions of consumers, such
as the likelihood of participating in social networking activities. He also
confidence in his ability to use the Internet generates positive influence on the
willingness to use social networking sites, because internal beliefs are connected with
actual behaviour. Eastin (2002) found evidence that people with higher level of self-
efficacy are more likely to adopt and perform technology oriented tasks. These beliefs
(Eastin and LaRose, 2000). In other words, this can be transferred to people going online
and comfortable being there and performing tasks.
36
Need for Cognition:
et al., 1984). This characteristic can
predict how people deal with tasks and social information (Cacioppo and Petty, 1982).
Studies on Need for Cognition (NFC) link it to information-seeking behaviour
willingness to use complicated interface systems and applications (Gangadharbatla,
2008). According to Zang (1996) humorous advertisements seem to generate favourable
attitudes and purchase intentions among people whose NFC is lower compared to higher.
Petty, et al., (1981) found that individuals with a low need for cognition do not
enjoy cognitive effort and rely rather on the opinion of others, preferably experts, when
dealing with complicated issues. Individuals high in the need for cognition have more
cognitive resources available and are more likely to use systematic rules to process
information. These individuals are described as highly intrinsic, motivated, and curious
(Olson, et al., 1984). However, there has been little research on the need for cognition
phenomenon in online consumer behaviour. The effect of NFC on attitudes and
willingness to join and participate in social networking activities therefore requires
further investigation.
Need to Belong:
and socially accepted (Baumeister and Leary, 1995). This need to belong among people
and maintain at least a minimum quantity of lasting, positive, and significant
inter
and information gathering, along with the possibility of gaining social approval,
37
expressing opinions and influencing others, social networking sites offer a place where
people
social networking activities might be connected to their need to belong (Gangadharbatla,
2008). The need to belong varies among people (Baumeister and Leary, 1995).
According to Schutz (1966),
behaviour; Inclusion: The need to belong or include others in a circle of acquaintances.
Affection: The need to love or to be loved by others. Control: The need to exert power
over others or give power over the self of others.
Joining social networking sites can meet all of these needs. People may be joining
user-
need to belong differs it affects their attitudes and willingness to participate. There is a
greater chance that people will join and take part in social networking activities if they
rate high on the need to belong scale (Gangadharbatla, 2008).
Collective Self-Esteem: Collective self-esteem is
-concept which derives from their knowledge of their membership in a
social group together with the value and emotional significance attached to that
). It is referred to as social identity in psychology literature
(Gangadharbatla, 2008). Collective self-esteem is similar to personal self-esteem (Tajfel,
1981). The fundamental difference between personal self-esteem and collective self-
esteem is that collective self-esteem refers to the self-esteem placed within the social
group. It focuses on the person within the group it belongs to while personal self-esteem
focuses on the person outside of the group (Kim and Omizo, 2005).
38
According to the research of Gangadharbatla (2008), the user toward
social networking sites is related to their level of Internet self-efficacy, their need to
belong and their collective self-esteem. The findings of Gangadharbatla (2008) are in line
with Ridings and Gefen (2004) as they find that staying in touch with friends, social
support and friendship are the main motivations for why people join communities,
whether they are online or offline. However, the study of Gangadharbatla (2008) also
reveals that need for cognition has no influence on either the attitude or the behavioural
intentions of people when it comes to social networking sites.
1.6 SNS IN BUSINESS MANAGEMENT
1.6.1. Advertisement
With advances in technology and the growth in digital media usage, advertisers
are seeking new ways to reach consumers. Numerous studies indicate the increasing
usage of social network sites. As social networks services are becoming the main
platform for social activities, more advertisements appear on social network sites. Many
businesses are exploiting the new web based tools in order to achieve fast and efficient
information on consumers need and preferences. Indeed, there is a wide diffusion of
advertising messages mediated by social networks. In order to easily access the profile,
many companies have started to use Facebook with the aim to develop new efficient
marketing strategies, by creating pages or groups devoted to their brand (Hemsley, 2009).
For effective social networking advertising, there are two main requirements, the first
being that links in the social network are relevant to the targeted advertisements. The
second requirement is that social information can be easily incorporated with the existing
targeting methods to predict response rates (Businessweek, 2007). By having a
39
connection with Facebook, businesses can access the millions of eyes, wants, needs and
wallets logging on to the Social Network on a daily basis. Facebook is of course active in
promoting their ad service on the site. Advertising within Facebook can be achieved
through an application on the site, which lets users create their own advertisements to be
posted on the site. Users can create their own advertisement through the use of their own
Facebook account.
Advertising through social media can be one of the cheapest and most targeted
forms of advertising. Businesses have to come to realize that their customers are now to
be found in this domain and this necessitates their becoming comfortable within this
space in order to stay relevant. However, with more and more businesses discovering this
new advertising technique, it will become harder to cut through and many businesses are
fighting to be heard. So although Social Networking provides large scope for marketing,
the ever-increasing competition makes obtaining recognition difficult: nonetheless it can
be achieved via implementation of an intelligent strategy Marketing through SNS is not
only obtained via creating a page; uploading photos links etc., it can be achieved with
banner style marketing. Banner adverts are those ubiquitous interactive posters that run
down the right hand side of your profile. Banner advertisements never disappear, when a
user clicks on it to close it or minimize it, another ad will simply appear. Many people do
not feel that this type of marketing works as individuals log on to social networking sites
to socialize with people. If when doing this, they come across businesses and groups
promoting their products and services through a page similar to theirs, they will be more
inclined to check it out than they would when a blatant advert is there. It is often said that
marketing works better when customers do not know they are being targeted.
40
1.6.2. eWOM (electronic Word-of-Mouth)
eWOM or electronic word-of-mouth is basically the extension of traditional
WOM on the Internet. eWOM activities differ from those in the real world in many
aspects. In the marketing literature WOM communication is "oral, person-to-person
communication between a receiver and a communicator whom the receiver perceives as
noncommercial, regarding a brand, a product, a service or a provider" (Arndt and Johan,
1967). But, eWOM is about a kind of communication on the internet platform, but not by
face to face or by oral.
eWOM is WOM communication in an online context and is defined by
Hennig Thurau, et al., any positive or negative statement made by potential,
actual, or former customers about a product or company, which is made available to a
multitude of people and institutions via the Internet
different ways for consumers to share their views, preferences or experiences with other
consumers and the number of peoples to be reached out have also increased massively.
eWOM communication can take place through various platforms, such as web based
opinion platforms, discussion forums and social networking sites (Trusov et al., 2009).
Communication through the Internet has several distinct characteristics. The
communication can be directed towards multiple individuals at once, it is made available
to others for an indefinite period of time and the user can stay relatively anonymous
(Hennig Thurau et al., 2004). Furthermore, the Internet facilitates for consumers to share
links, pictures and information, making it easier to pass along marketing messages
between consumers. It is therefore more likely for eWOM than traditional WOM to
contain references to advertising (Keller and Fay, 2006). The ease of spreading content
41
between consumers makes WOM especially suited to take place on the Internet and new
opportunities for firms to take advantage of WOM marketing have therefore also arisen
(Trusov et al., 2009). Kaplan and Haenlein (2010) found that companies are for instance
allowed to engage in direct consumer contact for a lower cost and at a higher level of
efficiency compared to when using traditional marketing strategies.
1.6.3. Brand
Marketers are very eager to learn about, organize, and facilitate brand
communities (McAlexander, et al, 2002), which include a series of connections and
relationships among people who admire a brand (Muniz and
reasons behind such interest in brand communities include the advantages of learning
customer perceptions of new product offerings and competitive actions; maximizing
opportunities to attract and collaborate closely with highly loyal consumers of the brand
(McAlexander et al., 2002); in and
Schau, 2005); rapidly disseminating information (Cheung, et al., 2009); and most
other hand, the dramatic popularity and inherent advantages of the vast reach, low cost,
and high communication efficiency of social media are tempting many companies to
participate in such spaces (Kaplan and Haenlein, 2010).
Facebook offers companies several services for contacting and communicating
with their customers. Fan pages are an especially interesting tool for companies to use.
-related page? In general, a fan can be
anything from a devotee to an enthusiast of a particular object. Typical characteristics of
fans are self-identification as fan, emotional engagement, cultural competence, auxiliary
42
consumption, and co-production (Kozinets et al., 2010). The internet has made it possible
to overcome geographical restrictions and to build fan communities world-wide. The new
content of this fan page is automatically posted to their personal Facebook news feed, and
they can post comments on the fan page, get in contact with the company, forward offers
from this page as well as interact with other fans. Especially for the consumer motivation
to use brand fan pages exists to our knowledge till now no empirical study. But regarding
the motivation to use social networking sites and participating in brand communities
empirical results are already published, which is related to the focus of this research.
At Socialbakers, The companies are recognizing the potential for social
advertising on Facebook. And they are getting ready to launch an ad optimization tool
designed to help brands manage, interpret, and engage their campaigns with informed
precision.
Figure 1.9: Social Media Platforms that Brands Prefer to Advertise
43
1.6.4. Shopping
With the change of consumer shopping behaviour and the popularity of social
network website, a new type of e- -
commerce method which combines social networking and shopping can satisfy the needs
for searching information before shopping and sharing personal experiences online after
use (The New York Times, 2006). Unlike many online shops that display products for
sale, a few social shopping sites, such as Facebook and LinkedIn, provide blogs or virtual
communities for users to share shopping ideas, exchange opinions on specific products
and recommend their favourites. For consumers these opinions or recommendations can
help them to find new product information of interest to them and assist them in making
shopping decisions.
A survey commissioned by the American Marketing Association reveals a
positive outlook for likelihood of e-commerce on social networking sites, in that 47% of
consumers said they would visit social networking sites to search for and discuss holiday
gift ideas, and 29% said they would buy products there (Horovitz 2006).
Social shopping websites are emergent by bringing the values of
recommendations from consumers social network in order to facilitate online shopping.
Social shopping website is where people can recommend their favorite products for
others to discover and purchase online. Social shopping websites are bridging the
continents of offline media, brand advertising and e-commerce by building a media
platform that supports the marketing lifecycle awareness, consideration, trial and
consumption. Social shopping blends two powerful elements of real-world shopping
otherwise lost for online consumers: word of mouth recommendations from trusted
44
sources, and the ability to browse products in the way that naturally leads to discovery.
Social networking sites play increasingly important roles as a marketing platform. More
social networking sites are a central venue in that trend (Market Watch, 2008).
The memberships of using SNS are growing sharply every year (Mislove et al.,
2007). In the case of Facebook, there are over 600 million users as of December 2012.
Utilizing the social network communities
demands and shopping behaviors (Flavian and Guinaliu, 2005). Particularly, fashion and
apparel shopping is suggested as one of the most popular discussion topics among social
network community members and apparel retailers could gain direct feedback from
consumers while monitoring the discussions in social network communities (Thomas et
al., 2007). While the importance of social network online communities is remarkable, to
decision making. Noting that many consumers visit a social network online community to
gain shopping information (Thomas et al., 2007) and information seeking behavior
involves in the stages of consumer decision making.
Due to the rise of social shopping, online shops/auction managers are developing
social shopping functions or launching social shopping networks on their websites. Social
Other p
social shopping. Once consumers trust the product recommendations on the social
shopping networks of websites, Gordon (2007) argues that their intention to purchase the
45
socially-recommended product is stimulated and thus they may buy from that website. In
addition it has been found that people are more likely to trust the information provided by
other shoppers like themselves more than that provided by companies (eMarketer, 2007).
Th
shoppers, websites may increase their sales volume.
1.6.5. Impulse Buying
Impulse buying as a marketing tool is a concept that has been explored dating
Over period of time, scholars have looked at what qualifies as
impulse buying and observed it in different contexts. The definition has been looked at
critically and scholars have enumerated additional elements. Rook (1987) explores the
earliest research of impulse buying. He defines
total purchases at the completion of a shopping trip, and those that were listed as intended
purchases prior to entering the store.
With online retail sales steadily increasing, and projected to continue doing so,
companies are trying to capitalize on the convenience of online shopping by
incorporating strategies to encourage impulse purchases. With the continual evolution of
technology and increased experience in Social Networking marketing, websites have
become very innovative in encouraging impulse buying. In fact, some websites rely
solely on impulse purchases, which for the purpose of this study; an impulse purchase is
the purchase of any unplanned item.
One of the newest trends in social media is daily deals. The idea is that every day
a new deal or even several deals are offered to people and it comes through various
46
channels. Consumers receive these alerts via email, phone, or social media such as
Twitter and Facebook, and are urged to buy the deal before it is gone (Bond, 2011). Often
it is the first message or communication of the day that people see because of the
numerous media through which they receive them. However, with all of these new
to impulse buying.
There are not many researches which tried to relate the social influence and
impulse buy. There is a research done by Stephan (2010) on how the attitude towards a
product changes within virtual consumer communities. The main aim of his study is to
investigate how these social influences
general attitude towards product, when they share or discuss the details about the product
and how this can influence impulse buying tendency. This could be possible only if we
cognitive process involved in evaluating the attitude towards the product that is being
discussed by the member and how the underlying characteristics of these social network
sites can affect the persuasion process and there by affect the impulsive buying tendency
(Petty (1998)).
Till date, few researchers have provided theoretical frameworks for studying
impulse buying in an online context. LaRose (2001) was among the first researchers to
study online impulse buying and his contribution was to provide an explanation of online
unregulated buying. The next study was by Koufaris and colleagues (2001-2002) who
examined the factors that lead to unplanned purchases online. This was followed by a
study which used the Technology Acceptance Model (TAM) to investigate unplanned
47
purchases on the Internet (Koufaris, 2002). Adelaar, et al., (2003) used the environmental
psychology approach to study the effect of three different media formats of web pages on
impulse buying intent. In addition to them, Dutta, et al., (2003) have examined how the
implementation characteristics of online payment processes affect impulse buying.
1.7 RESEARCH GAP
On careful study of literature, very few research works were being carried out in
the area of social networking sites, particularly in management perspective. Research
work like advertisement-shopping, eWOM-shopping, advertisement-brand, brand-
shopping combinations have been studied. However, only few researches are available in
literature with impulsive buying as a core factor in purchasing through social networking
combinations of all the variables namely, advertisement, eWOM, impulse buying, brand
and shopping, which are core for purchase decision of a product through online mode.
This induced interest on the researcher to probe into this innovative and novel
area. Though some research works have been carried out in SNS worldwide, the focus of
studies in Indian context is very negligible. India occupies one among the top five places
that has more users of Facebook and other social networking sites. There are lot of
potential for doing research in this untapped and new area, which motivated the
researcher to do research.
For some people, checking of social networking account itself becomes part of
their regular activities. Few others go beyond and tend to be addictive towards social
media. This shows their loyalty level on SNS. But, so far no research has been
undertaken on this aspect of social media loyalty. Hence, through this study, the
48
researcher makes an attempt to know the level of social media loyalty among the
customers.
1.8 NEED FOR THE STUDY
In the changing market scenario companies need to adopt different strategies in
order to sustain in the market and also to retain their valuable customer apart from
acquiring new customers. This problem persists not only in India but also across the
globe. To overcome this problem, companies have to align themselves by offering
innovative products at competitive price with persuadable promotion and attractive
advertisements through effective medium or channel. As SNS is one of the fastest
growing medium for sharing a message, companies try to utilize this medium effectively
to reach different consumers with different socio-economic and cultural background.
How effectively companies use this medium is a great question to be answered.
Shopping site is a place where the consumers enter virtually and see the products,
its features, specifications, price, design, availability, etc. Since, companies nowadays use
internet as a medium, to sell their products, they created a shopping site and make the
consumers to view the products as if they enter into a real shop to see the products.
However, how consumers view online shopping through SNS? and what are the forces
drive them to shopping sites are the questions needed to be answered which will help the
companies in creating strategies to induce more people to visit their shopping sites for
purchase.
As advertisement incurs less expense in social networking sites compared to
traditional advertisement in other media like print or television, companies concentrate on
this medium to reach perspective customers. When a company creates a page and send it
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to few members, it will automatically reach more members with the help of electronic
word-of-mouth. In this method the company can reach more people with less effort and
investment. Sometimes, companies need not spend amount except creating page and
passing it to lead customers. How effectively the companies, position their products and
services in the mind of customers with the help of advertisements and eWOM are
question to ponder which needs to be studied.
Reaching perspective customers is difficult nowadays with advertisements
telecasted in TV, radio and published in newspaper or magazine. Though, some
magazines are published exclusively for specific group of people based on profession and
the like, it is difficult to reach more people for the products or services which are
intended to reach more. In this case, advertisement given in Facebook or other SNS can
be seen by more people within short span of time, companies give due importance to SNS
because, companies can reach their intended customers based on their profile given in
SNS. In SNS, while registration itself, the users should give their personal profile and
also preferences which will be used by the companies to reach targeted audience easily.
Another requirement of conducting this research is receiving feedback from the
customer directly. Normally, companies will go for opinion survey about their products
or services provided by them through manually. This process has two major hurdles. First
one, it requires more time and second one, it incurs more expenses. These two hurdles are
overcome by SNS, where consumers give their feedback immediately after using it. It is
advantage both on the part of companies and also consumers. However, there are few
disadvantages of getting feedback from SNS which can be reduced through proper
planning. These feedback or comments will be helpful for the companies in creating
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better products, advertisements, promotions, distribution, price fixing etc. Hence, it is
important for the companies to know about opinion towards SNS and also
their attitude towards business aspect in SNS, like advertisements, branding, eWOM,
shopping and purchase behavior. This study will provide a platform to know about the
above mentioned points.
Several research studies have been conducted in SNS and especially on Facebook
to know the user opinion and their attitude. In general, whether it is advertisement or
eWOM, some people click the advertisement / eWOM just to know what it is, what offer
they give, what categories of products they have, etc. This decision is an emotional one,
which is termed as impulsiveness. When they are satisfied with their expectation, they
will purchase it. Companies want to make their consumers to react impulsively towards
their products for which they give advertisement or send message to customers as
eWOM. Since, research studies show that a considerable percentage of people do
impulsive buying, studies of these kind will be much needed for the companies to know
the impulsive buying behavior of the consumers through social networking sites
particularly Facebook.
1.9 RESEARCH OBJECTIVES
Based on a thorough study of the variables the following objectives are framed.
1. To identify the general opinion of users about social network sites with a view
2. To analyze the impact of socio-economic characteristics of the respondents
on the study variables like advertisement attitude, eWOM, branding, impulse
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buying intention , shopping attitude, post purchase behavior, eWOM intention
and social media loyalty.
3. To find out the influence of various aspect of social networking sites on study
variables like advertisement attitude, eWOM, branding, impulse buying
intention , shopping attitude, post purchase behavior, eWOM intention and
social media loyalty.
4. To develop a model that represents the shopping process through online social
network sites.
1.10 STRUCTURE OF THE THESIS
The present study is described through different chapters:
The first chapter discusses the important concepts related to social media, social
networking sites, social media marketing strategies, research gap, need for the study
and research objectives.
Significant past studies in consumers attitude towards SNS have been reviewed in the
second chapter.
Chapter three consists of research methodology, which includes details of conceptual
frame work, research design, tools for data collection, tool description, reliability test,
sources of data and sample design. In addition to this, a brief overview about the
Facebook is presented which includes the evaluation of Facebook and the growth of
Facebook marketing in India and worldwide.
In the fourth chapter, a discussion of the data analysis is made by employing different
statistical tools.
The last chapter presents a brief summary of findings, suggestions, managerial
implications, limitation of the study, scope for future research and conclusion.
