Effect of Social Media on Consumer Decision Making Processes

Table of Contents

Research question & Title

Introduction

How social media changed the Decision-Making Process (DMP)

The importance of an ethical image and its impact on consumers’ DMP

Paragraph 3

Conclusion

References

 

 

How has social media changed consumer behaviour during decision-making process?

Introduction

In 2000s, thanks to the development of the internet, the concepts of social media and web 2.0 were born. The definition of web 2.0 has been cause of disagreement. Some would see it as a marketing overhyped buzzword. However, it is being increasingly accepted as a word that indicates the progression of the Web from a static content to a dynamic platform that allows anyone to create content and encourages interaction, collaboration and community (O’Reilly 2005). Web 2.0 has different application types such as Blogs, as online journals; Social network, which are personal websites that allow users to exchange personal content; Content Communities, namely websites that organise and share similar content; Forum boards, as websites for exchanging ideas; Content aggregators, which are applications that enable users to customise the web content they want to access. This phenomenon widely changed the way people communicate, make decisions, socialise, learn, make shopping and entertain themselves (Constantinides and Fountain 2008). For this reason, it is important to study how social media changed consumer behaviour in order to better understand web 2.0 (or social media) as a component of modern marketing and consequently adapt business strategies according to it. This essay will take into consideration the decision-making process model and analyse how the social web expanded this model and made it more complex. Subsequently, it will take into consideration two different research questions, in order to understand how much the online businesses and brand ethical image influence the consumers’ DMP, and how consumers buying behaviour is influenced by the influencer marketing, social networks and other users’ profiles. 

 

How Social Media changed the Decision-Making Process (DMP)

Marketers, in order to identify the stages in which consumers go through when they purchase an item, created the buyer decision making process model, which identifies five steps from start to finish: need recognition, information search, evaluation of alternatives, purchase, post purchase evaluation (Arnould and Thompson 2005).  Businesses main goal is to serve and satisfy their customers, and the social media have a big impact on brand awareness, sales and loyalty (Agnihotri, Dingus and Michael 2016). Social media have complicated the buying behaviour process theory as the buyers’ behaviour is not only affected by the traditional channels but only by the new online platforms. Constantinides and Fountain (2008) proposed a Response model based on Kotler’s (2003) framework. As the diagram shows, see Figure 1, within the traditional purchase environment, customers are influenced by the traditional marketing mix (such as advertisements on TV, radio, magazines etc) and by other uncontrollable stimuli like culture, perception, values etc. With web 2.0 and social media though, the scheme extends to online marketing mix controllable factors such as emails, website usability, banners etc) and to social media experiences, that are online uncontrollable marketing factors.

Fig. 1 Stimuli and Response model. (Constantinides and Fountain 2008).

Therefore, consumers are increasingly addressing to different types of social media to conduct their information research and take their purchasing decision (Jing Xu and Wyer 2007). Concerning marketers trying to understand the purchase process with social media, Evans (2008) shows the classic purchase funnel model to indicate how social media changed consumer decision making process in different stages (Hoban and Buklin 2015). Figure 2, illustrates the funnel with the buying stages of awareness, consideration and purchase.

Fig. 2 Classic Purchase Funnel (Evans 2008).

Consideration connects the phases from awareness to purchase and it involves many important factors like brand reputation, performance, applicability etc. In comparison to traditional media, on social media, awareness and consideration are both prompt and validation means, and almost act simultaneously. Web 2.0 has impacted of the purchase funnel by making the available data more accessible and transparent and has introduced the value of a constant feedback loop, as the content online is dynamic and flows in two-way. Evans (2008) also stretches the importance of the social feedback cycle as a tool for purchase evaluation (Figure 3). Consumer may become aware of products or services through traditional media (TV, radio, newspaper) and then verify them on the internet. As shown in Figure 3, social media change the purchase funnel, extending it with the addiction of post-purchase word of mouth and user generated content.

Fig. 3 Purchase validation tool (Evans 2008).

Word of mouth has no cost, it is self-generating and self-contained, and it is showing itself more and more through social media, where the information can spread quickly and at distance (Kozinets, De Valck, Wojinicki and Wilner 2007). Reviews and word-of-mouth are a way to make decisions easier and information less confusing and higher credible. The Social Web made it easier and faster for people to gather information, seek and find products and services within a wide range of alternatives, and also talk with others about personal experiences before and after the purchase. As a result, the main aim of marketers should be to get people to talk positively about their purchase experiences and to speed up the spread of this content among communities.

 

The importance of an ethical image and its impact on consumers’ DMP

Lately, ethical consumerism has become an important influence on business. Compared to the past, now people can easily obtain information about a business, not only through traditional media like magazines and newspapers but also online, reading articles, forums, and what people say on social networks (Sohn 2014). Thanks to the internet people can go on the businesses’ websites and look for their policy page, they can look for certifications from third-party organisations that hold companies to high standards of social accountability or even send emails directly to the company. This developing focus on ethical issues had lead brands to portray themselves as green, socially responsible and sustainable. Moreover, as these issues affect consumer behaviour during their purchases, companies are more and more promoting their social responsibility (CSR) as it may impact on their profit or loss account. Many recent academic researches focused on the importance of corporate social responsibility, ethical corporate brand identity and the perceptions these give to consumers (Page and Fearn 2005; Sen and Bhattacharya 2001). The study conducted by Singh and Iglesias (2012) was seeking to understand if investments in CSR and ethics pay off at a corporate level. They concluded that it is always good practice to behave ethically independently of the potential impact it may have on consumers. However, the study suggests that consumer perceived ethicality, positively impacts on the product brand loyalty and can also facilitate customer retention, secure future purchases and encourage recommendation. Also the study made by Creyer (1997) seems to support this idea. The research suggests that consumers care about the ethicality of corporate behaviour and that they believe they can help promote it by being willing to pay higher prices for ethical products and similarly, expressing the desire to pay lower prices the products of unbecoming brands. Another study of Carrigan and Attalla (2001) instead, seems to have a contrasting view. The research focused on whether or not consumers’ purchase behaviour is influenced by marketing ethics and what they concluded is that consumers pay little attention to ethical considerations during their decision-making behaviour. Although there is not any link between the CSR and consumer purchase behaviour, the study still agrees that firms should keep on with their CSR and ethical marketing policies in order to influence stakeholders, government and the wider community to be actively concern with good ethical behaviour.

How social networks changed consumer behaviour

During the last ten years, the diffusion of social media changed buying and selling techniques. Through platforms like Facebook, Youtube, Twitter and Instagram, consumers can become aware of different products and services and share their experiences by making comments online. User-generated content has a remarkable influence on consumers’ brand perceptions, brand choices (Gruen, Osmonbekov and Czaplewski 2006) and new consumer acquisition (Truscov, Bucklin and Pauwels 2009).  The fashion marketing, for example, has grown consistently in the last years thanks to social media. Fashion has an important role in lifestyle and many people spend money to keep their wardrobe refreshed. Social media are closely linked to the constant changing preferences of consumers and make it possible for people to keep updated with the latest fashion trend. In their study, Sudha and Sheena (2017), analysed the impact of influencers in various stages of consumer decision process, and suggested that it all starts from the attractive images consumers see on social networks and fashion blogs. They realise the need for the product by following celebrities on Facebook, Intagram etc., read reviews about it and eventually are led to purchase it. When talking about how the social networks, para-social interaction (PSI) is a concept that has to be considered. PSI explains the relationship between social media users and social media interactions. It represents an interpersonal involvement of the media user with what they consume. The involvement regards seeking for guidance from a media person, seeing media people as friends, imagining being part of a favourite community and desiring to meet media performers. In a marketing context, Labrecque (2014:135) defines PSI as “an illusionary experience, such that consumers interact with personas (i.e., mediated representations of presenters, celebrities, or characters) as if they are present and engaged in a reciprocal relationship”.  Lee and Watkins (2016) agree with the findings of the study of Sudha and Sheena (2017) and used the PSI concept in their study to examine how video blogs on Youtube influence consumer perceptions of luxury brands. The study revealed that the luxury brand perceptions and purchase intentions for the people who watched the video blog reviewing luxury products, were higher than the ones who did not watch the video. The same theory seems to be shared even by other authors like Colliander and Dahlén (2011). Their article analyses and compares the effects of brand publicity on traditional (magazine) and social media (blog). Showing the same brand publicity on the two-different means, the authors found that blogs generated higher brand attitudes and purchase intentions. This is explained by blogs’ higher para-social interaction with its users. Consumers feel the need for transparency and unbiased information, originated from people that “look like them” rather than from a corporate-sponsored online presence. As a result, the use of social media requires marketers to focus more on building a relationship with their users and to step back from the traditional campaign.

Conclusion

The aim of this essay was to research how the appearance of social media affected consumer behaviour, and more specifically, to look at how the internet changed the consumer buying behaviour during the decision-making process.

References

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