Social Media and Consumer Decision Making

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Social Media Influence In Consumer Decision Making

Abstract

The impact reference groups or social connections have in an online marketing environment, on the product purchase decisions of consumers is analyzed in this article. The influence of social media in the decision making process of consumers is investigated, and the influence of the strength of social ties on the final decision are discussed. The article discusses theories and concepts related to social relations, social media, and consumer purchase decision making process. To understand the impact social media has on consumer purchase decision, interview is conducted with micro and macro business owners using Facebook business pages, and having over 50 fans for their fan page. To analyze the data statistical analysis, and descriptive analysis methods are used. The research concludes that a strong tie in social relations serves to influence the purchase decision making process of consumers positively. To create a successful business by adopting an online marketing strategy, building strong social relations is important.

Research Overview

Social scientists have for a long duration highlighted the importance of group membership when it comes to determining individual or group behavior. The fact that individuals act according to a reference frame produced by groups to which they have widely been accepted has been perceived as a sound premise for some time. Marketers have widely accepted the construct of a reference group as critical in at least some forms of consumer decision-making. With the growth of the internet, and online marketing, social media is becoming an indispensable part in everyday lives of people. People are social beings, and at present, consumers are participating in activities like sharing experiences, knowledge, and opinions online. They also take part in online discussions to share their experiences with a product or a service.

The speed with which information transfers has increased with the electronic word of mouth growing more rapidly. Positive recommendations and discussions online have the potential to bring in increased business volume for firms in a short time. There is also the probability of a negative complaint online that can cause mistrust in a service or a product. A new form of social communication has been made possible by online media. Groups or individuals who might never meet in person are able to influence consumer behavior and their purchase decisions. The increasing use of social media is evident from the growth in online population using social network sites. Facebook the leading social media website has observed 23% growth in its user population during 2013, with 1.1 billion users making use of the site each month.

Social Media Decision Making
Social Media Decision Making

This study investigates the influence of reference groups online brand and product purchase decisions by looking at the interrelations between forms of product use conspicuousness and forms of influence from reference groups in social media. Consumers have a wide access to different types of social media, tools, and platforms. Social media significantly impacts the process of information sharing amongst individuals in the online shopping environment. Through this research, the role played by social media reference groups in forming strong or weak relationships with consumers that can influence the consumer decision making process are investigated.

Problem Statement

The study proposes to investigate the relationship between the social media influence of online users, the behavior intentions of consumers, and the role of social media influence in consumer decision making process. The strategy of information search online is adopted by consumers to reduce the risks involved in a purchase decision. Increasing technological advancements lead to ease of information access. Consumers can easily obtain information about services or products through social media before making a purchase. This research is focused on making both practical and academic contributions. Academically, it serves to bridge the gap between consumer decision making and the influence of social media reference groups in forming weak or strong relationship with consumers. Practically, social media marketers benefit from the research results. They can gain a deeper understanding of an online shopping consumer’s decision making process.

Research Questions

Research questions to be explored to investigate the social media phenomenon in online shopping are;

  1. What are the characteristics of social and online influence groups and references?
  2. Personal and demographic factors like gender, age, education, and profession have an influence on information shared through social media. Their experience and prior knowledge influences their level of social influence.
  3. What are the ways through which information and ideas travel through such a reference group or an online community?
  4. The credibility of the source depends on the reference group and the way in which information is conveyed. An understanding of how information or ideas travel through the reference community helps in identifying factors that have a high level of influence on consumer decision making.
  5. What are some forms of ties or connections do consumers have to other consumers in the communities?
  6. Consumers form ties in the online community, resulting in the establishment of a reference group or community. By investigating in what ways and how such communities are formed, social media marketers can leverage their online advertising campaigns.
  7. How is consumer decision making influenced by social media reference groups and communities.
  8. Social media reference groups, and communities alike, are proposed hypothesized to play a major role in the purchase decision of consumers.

Research Aims and Objectives

The research aims to investigate the ways in which social media influences consumer decision making during an online purchase. The various ways in which a social media group or community is used as a reference, the ways through which such groups or communities are accessed, and ways in which information is accessed from these groups by consumers are investigated. Main objectives of research are;

  • To identify the ways in which social media has established a source of power and leveled the playing field for consumers?
  • To investigate in what ways leaders of these reference groups or opinion leaders develop in online communities or any other reference group.
  • To analyze what some of the roles of social capital play when it comes to value of the social communities created on social media?
  • To offer recommendations to social media marketers on how reference groups and communities can be leveraged to their firm’s advantage.

Rationale for Research

The results obtained from this research could offer considerable evidence on the influence social media has on online marketing. The overall process of consumer decision making while making an online purchase decision, combined with the influence of social media helps managers reduce risks involved in social media marketing, at the same time offering recommendations on the ways in which they can increase their online credibility. Research on social media marketing is relatively new in marketing research. Negligible research exists on interrelating social media marketing and its influence in the consumer decision making process. This research focuses mainly on online shopping, social media, and reference group influence on consumer decision making. So, the theoretical contribution of this research helps fill in the gap in previous literature.

Research Methodology

Business pages created on Facebook are the central tool and the key research methodology is action research. Action research involves making systematic observations, and collection of data, that can be used to solve problems, and improve professional business practices. Micro and small businesses are focused. Data is gathered through interview and by using questionnaire. Facebook pages created by small entrepreneurs are used to create a fan base for their small enterprises. As the page continuous to grow and increase in size when it comes to the fan base of about 50 to 60 users data is to be conducted, mainly by carrying out semi- structured interviews.

The research design is action, qualitative research oriented with the conviction that reality is virtual created by factors of socio- economy. Primary data is gathered through semi- structured and open interviews. Data regarding the experiences of the entrepreneur while using and adopting social media like Facebook is focused upon. Secondary data is generated by the recording transcripts from the weekly training and interaction with the participants to understand their requirements and experiences. Tertiary collection of data is carried out through virtual ethnography by carrying out internet-based interviews through Google talk, chat, Skype and blogs.

Structure of Article

To ensure research meets its aims and objectives, clear research questions and research focus are developed first. Analysis of theories and concepts is done in the literature review part. Here theories and concepts relevant to social media as a marketing tool, and consumer decision making process are explored. Research methodology is developed based on literature review, and research aims. This gives a detailed outline of the research methodology to be employed for data collection. The research approach, philosophy, choices, ethical issues and methodologies are explained. Analyzed data gathered from semi – structured interview, and research findings are presented in based on which, conclusion discusses the research concisely, using which suitable recommendations are offered.

Conclusion

The way in which consumers make purchase decision has changed with the advent of social media. Rather than waiting for messages or advertisements giving information about a service or a product from companies, consumers are now seeking information on social media directly. Online community has the greatest amount of influence, especially on online shoppers. Research proposes to investigate the characteristics of online communities and reference groups involved in social media. The ways in which such groups influence the consumer decision making process is explored. For data collection, semi – structured interviews are conducted with online micro and small business entrepreneurs making use of social media tools like Facebook and blogs.

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Steve Jones

My name is Steve Jones and I’m the creator and administrator of the dissertation topics blog. I’m a senior writer at study-aids.co.uk and hold a BA (hons) Business degree and MBA, I live in Birmingham (just moved here from London), I’m a keen writer, always glued to a book and have an interest in economics theory.

2 thoughts on “Social Media and Consumer Decision Making”

  1. Is there any scope here to examine newer social media sites as many are starting to consider Facebook “old hat” with many younger users moving away from the now large-scale advertising pushes of Facebook as well as their constantly shifting privacy rules. Sites like Twitter are less restrictive so a user can more easily use the service in a tailored way to only see/read/use and small section of the “Twitterers” also connection is far more immediate. Newer sites like Vine and We Heart It reflect a desire amongst consumers to condense their thoughts/questions/feelings. While a user may not directly contact a Customer Service Account or business page through sites like these they will certainly make their feelings and thoughts about a brand or product known.

    1. Agreed that there are newer social media sites out there but none of them are in the same bracket as Facebook, Twitter, LinkedIn and Google+. You will find that these newer social media sites come and go on a regular basis and they have no real staying power.

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