CW1C_Written Project Report

PSB3001MK: Advanced Marketing Project CW1C: Written Project Report Topic: Analysis of Social Media Marketing Impact on Customer Behaviour Student’s Name: Student ID:

Table of Contents 1. Introduction ................................................................................................................................ 1 1.1 Background of the Research Study .................................................................................... 2 1.2 Research Objectives ............................................................................................................. 3 2. Literature Review ...................................................................................................................... 5 2.1 Theoretical Analysis ............................................................................................................. 5 2.1.1 The Social Feedback Loop .............................................................................................. 5 2.1.2 McLuhan’s Media Theory ............................................................................................... 5 2.1.3 The Concept of Psychological Ownership ...................................................................... 6 2.2 Conceptual Analysis ............................................................................................................. 8 2.2.1 Social Media .................................................................................................................... 8 2.2.2 Social Media Marketing .................................................................................................. 8 2.2.3 Social Media and the Shortened Customer Journey ........................................................ 9 2.2.4 Past and Contemporary Trends in Social Media ........................................................... 10 2.2.5 The Influence of Social Proof ....................................................................................... 11 2.2.6 The Power of Influencers .............................................................................................. 12 2.2.7 Social Media Marketing Influence on Consumer Attitudes .......................................... 13 2.2.8 Social Media Marketing Influence on Customer Purchase Choices ............................. 14 2.2.9 Social Media Marketing Influence on Customer Repurchasing Choices ...................... 15 2.3 Research Framework ......................................................................................................... 15 2.3.1 Assessing the Consumer Attitudes ................................................................................ 16 2.3.2 Evaluating Purchase Intentions ..................................................................................... 17 2.3.3. Assessing the Repurchasing Decision .......................................................................... 17 3. Methodology ............................................................................................................................. 18 3.1 Research Approach and Design ........................................................................................ 18 3.1.1 Research Philosophy ..................................................................................................... 18 3.2 Sampling and Study Participants ..................................................................................... 19 3.3 Data Collection ................................................................................................................... 19 4. Research Schedule ................................................................................................................... 21 References ..................................................................................................................................... 22

2 1.1 Background of the Research Study Prior to the emergence of social media, products, and services were sold in physical/offline stores. But the rapid advancement of technology led to a heightened adjustment in the market, requiring individuals to adopt new marketing techniques (Dwivedi et al., 2015). From the late 1960s, marketing required participation and communication with consumers to deal with the ever-rising competition. The early 1990s was marked by the emergence of modern marketing techniques, where companies relied on conveying information about their products and services, which in turn affected consumers by influencing their purchasing decisions (Gebauer et al., 2013). This period was also marked by the initiation of internet marketing, which ushered in the modern era of digitization today in the marketing context. Based on Edosomwan et al.’s (2011) supposition, digital marketing is the use of online channels or avenues to promote or market products and services to consumers across the world. The advancement of digitization brought along some benefits, including the potential to reach more consumers within a short period and increase their market share (Bakshy et al., 2012). Additionally, the surplus growth of components such as search engines led to the smooth flow of information on different social media platforms like Twitter, Instagram, and Facebook. This meant that users could access information using their phones, laptops, and other digital devices. Organizations started noticing the channels for promoting their products, which birthed social media marketing. Smith (2011) describes social media marketing as a strategy of passing information digitally from one point to another through the internet. It is a strategy of online marketing that uses the power of social media platforms to achieve the branding and marketing objectives of products and services. Social media has undeniably become an everyday staple in the lives of consumers.

3 Consumers today work, eat, and live online (Kowalewicz, 2022). The target audience for most brands is now online and while some persons simply create accounts to connect with their loved ones or friends, social media is contemporarily intertwined with business more than ever. Renowned social media sites have now incorporated a broad range of options for consumers to conjugate with firms and brands alike, to an extent of providing them with the ability to purchase products and services directly via apps. For instance, Facebook has the buy-call-to-action button on page posts and ads. Such a feature allows users to buy products without interfering with their scrolling. A manifold of other mediums has followed suit including Instagram which has become popular more than ever. Most contemporary consumers carry with them their purchasing power in their pockets, when they are not purchasing an item, they are busy using social media for reviews about certain commodities and where to get them from (Kowalewicz, 2022). Nonetheless, with more than 80 percent of consumers making their purchase decisions based on posts from friends on social media, the era of recommendations based on virtual word of mouth is in full effect. Today, a huge portion of purchases are being done virtually and in the year 2020 this figure went up thanks to the lockdown. Research by GlobalWebIndex shows that around 54 percent of users on social media often use these platforms to research products and another 71 percent are more likely to buy items based on social media referrals (Barysevich, 2020). With this said, many people are making purchase decisions based on a convincing feed they saw at least once including an ad or a post from a friend. 1.2 Research Objectives The onset of digital marketing has led to heightened globalization and a significant increase in business operations on the internet. Lipiäinen (2014) stresses that consumers now

5 2. Literature Review 2.1 Theoretical Analysis This section looks into the theoretical literature that scholars and sociologists used to examine, evaluate, analyse, and explain the impact of social media marketing on consumer behaviour. 2.1.1 The Social Feedback Loop According to this theory, consumers’ choices are connected to the content on social media through a funnel. Colicev et al. (2019) argue that the traditional funnel comprises three stages. The first is awareness, where consumers get informed about certain products and services. The second is a consideration, where consumers make choices on whether to subscribe to the products and services advertised. The last level is actual purchasing where consumers make a deliberate choice to purchase the products and services. The traditional funnel differs from the modern one in that the former assumes that consumers have no predetermined notions (Colicev et al., 2019). As such, the consumer can purchase a product or service and use it even without awareness. However, the responses will be put on social media platforms, which loops back into their purchasing decisions. This cycle of reaction is enhanced through the word of mouth and is ascertained by the trial and acknowledgment by other consumers. This theory was relevant to this study as it revealed how online information influences the purchasing decisions of consumers. 2.1.2 McLuhan’s Media Theory According to this model, for social media to exist as a medium of influence on its own, McLuhan’s maxim of “the message is the medium” should stand (Baudrillard, 1967). It is important to comprehend this maxim as not only a validation for the author’s intended need to

6 create a realistic technology but as a way of studying the influence of messages and the fundamental concepts that highlight the significance of media in communication. If McLuhan’s concept stands as a description of how media helps us to understand society, the medium exists as a technical support or a visible aspect where the message is passed on. Therefore, the McLuhanian concept, as described late in his work, is a context that influences, defines, and creates rigidity within its significance. In arguing that “the message is the medium,” the author intends to reveal that the medium, in its technical aspect, can create repercussions that are significant in the media platform (Baudrillard, 1967). In this case, online users are more likely to be influenced because of the unique characteristics of the medium itself. From this outlook, the concept of medium holds, in itself, a natural trepidation that tends to overlook McLuhan’s concept with a deterministic view. Today, media logistics have become a renowned aspect in every area of social interaction. Media is propagated as more and more autonomous in its existence because it is now part of people’s lives, part of their decisions, social practices, and behaviours. Therefore, according to McLuhan, social media marketing has a significant impact on defining how individuals interact and respond in the online context. 2.1.3 The Concept of Psychological Ownership The Psychological Ownership Concept is explained in the realm of technological advancements. The supposition reveals how innovation has led to the growth of products and services in various sectors (Jussila et al., 2015). For instance, in contemporary society, consumption has evolved from a concept legally acknowledged by everyone to private material that only a few can manage to access. This is true, especially since most people in urban areas have replaced their material ownership with other online services that are more convenient and reliable.

8 helps to demonstrate how the purchasing decisions of consumers are influenced by others on social media. 2.2 Conceptual Analysis 2.2.1 Social Media Social media is a term used to indicate a modern way of unlimited participation, engagement, and connections. The term can also be used to describe a digital aspect that permits users to devise and share their content with others publicly (Powers et al., 2012). Thus, social media is a defining concept that changes individuals’ attention about what they know, read, discover, and share online. Appel et al. (2020) further acknowledge that social media connects technology and people, creating a context where experiences and information are shared to develop seamless networks. Examples include Facebook, Instagram, Twitter, Snapchat, TikTok, etc. Today, these media platforms are not for personal use only. Organizations have leveraged the significance of social media to advertise their brands and invite more customers to purchase specific goods and services. The continued use of social media by organizations to market their products and services has led to social media marketing. 2.2.2 Social Media Marketing Social media marketing is considered the use of social media platforms to promote goods and services online (Dwivedi et al., 2015). As such, social media marketing integrates remote interaction of people in terms of views and responses to create a cohesive relationship that enhances their future satisfaction. Assaad & Gómez (2011) defines social media marketing as an essential concept that allows interaction and connections among users. The primary objective of social media marketing, as stipulated by Assaad & Gómez (2011) is to allow business operations by enhancing purchase intentions and consumer satisfaction. It is argued that the idea of social

9 media marketing emerged due to increased marketing offerings. The idea allowed users, especially organizations, to acquire information about their customers’ experiences. Thus, it is evident that social media marketing has offered organizations the opportunity to interact with consumers while necessitating the purchase of goods and services. 2.2.3 Social Media and the Shortened Customer Journey Social media has shortened the typical consumer journey. With the advent of the internet, the manner in which consumers hear about brands, research, as well as purchase products, has changed. There is a manifold of social channels to discover as well as research products (Nevondo, 2022). There are new ways to purchase commodities online as well. Social media provides a new way to discover, research as well as buy products. Traditionally, before consumers knew about a new product, they had to view an ad on TV or newspaper and then spend a couple of days or even weeks consulting with friends and family before they went ahead to shop for the item. Today, this whole process can only take minutes (Barysevich, 2020). Contemporarily, the customer journey has evolved as well as significantly expanded bringing new pathways, advertising, and new channels into the mix.  Social media provides a straightforward and simple path to purchase. When compared to the traditional consumer journey, the contemporary consumer journey is irrefutably less linear. Consumers today are much more likely to find out about new brands during the consideration or research stage. For instance, a consumer who considers buying a Samsung TV might discover a whole new host of alternatives while researching on social media (ChannelSight, 2022). Before the advent of social media, at the consideration stage, consumers would narrow down their options but contemporarily there is a manifold of digital paths to buying a product which correspondingly influences conversion. Further, communications in the digital consumer journey

11 businesses to market themselves, leading to stiff competition in various industries. Organizations realized that by having clear objectives in marketing, social media can maximize their operations in terms of Return on Investment (ROI) (Hoffman & Fodor, 2010). Social networking sites (SNS) like Asia Avenue, BlackPlanet, and SkyRock, among others were initiated in the late 20th century. By the early 21st century, social media advanced due to the emergence of most SNS. Among the launched ones include LunarStorm, Wikipedia, Yahoo, YouTube, and Facebook, which followed rapidly (Edosomwan et al., 2011). The current advancement of SNS has helped organizations advance in terms of sales and marketing. Organizations can set measurable goals and engage in research and development because they understand their consumers well. Indeed, social media marketing has helped increase the capability of organizations to market their products and services and engage with consumers. 2.2.5 The Influence of Social Proof When people feel uncertain and not sure of what they should do in certain situations, they tend to look to others for solutions in terms of how they should think, and behave as well as what they should do. Social proof transpires as a result of people’s natural desire to behave in the right way and fit in. It is easy to presume that everybody else understands the best way what do in a given circumstance. Social proof can be manipulated to guide people into doing what they would otherwise not do on their own. Nobody likes to be confused about what choice to make in a given situation, particularly when people are around to criticize any blunders (Lippmann & Buffett, 2022). The more uncertain people feel the more vulnerable are they to social proof. Nonetheless, when persons relate to others in terms of commonalities or shared interests they tend to mimic what others do. Irrespective of how individual people think they are, everybody has an intrinsic desire to conform when the right time comes. This is called the bandwagon effect

12 where beliefs, ideas, concepts, and trends are spread between persons and the more individuals adopt this, the more they are influenced to do. The psychological concept is germane to social media marketing in terms of how consumer behaviours are influenced. People have been giving each other recommendations for decades now but these recommendations have been taken to another level by the advent of social media and they can be heard by a multitude. When a person posts about a certain product that served him/her well, his/her social media followers will see the post and might make up their minds to try it out. Negative rants and opinions will follow the same suit (Barysevich, 2020). According to Forbes around 81 percent of buying decisions are influenced by social media posts from colleagues, friends, and family members (Amblee & Bui, 2011). On social media, persons proactively ask for recommendations but social proof mostly impacts friends and friends of friends. However, on social media, more and more people do not just follow their friends but influencers as well. 2.2.6 The Power of Influencers  Social Influencers form a social community that enjoys a solid, loyal, and devoted audience that usually shares similar interests. Their thoughts, opinions, and ideas are unsurprisingly viewed by a manifold of persons who trust them (Barysevich, 2020). The Influencer Marketing Hub research shows that around 50 percent of Twitter users have made buying decisions based on an influencer’s tweet. Notably, micro-influencers are particularly very efficient and effective when it comes to convincing their audience because they are normally experts in some specific subjects and niches, a factor that makes them a natural recommendation source for certain product topics (Daniel et al., 2018). Millennials and Gen Z consumers are the more likely group to be influenced with a majority being influenced on how they spend their money by user-generated content from strangers. 

14 of emotional and rational perspectives. Emotional aspects lie in the connection between the customer and the product while the rational aspects revolve around the knowledge gained by a customer about a certain product or service. Since most online users today use the Internet as a sense of acquiring motivation and assurance, organizations tend to use this idea to their advantage by prompting users to visit certain organizational sites. The motivation and intention to purchase occur based on how they perceive the advertised products emotionally and rationally. 2.2.8 Social Media Marketing Influence on Customer Purchase Choices Awareness and familiarity with specific brands can influence how customers make purchasing choices. Wang et al. (2012) explained that social mechanisms surrounding social media marketing create peer communication that motivates consumers to change their preferences. In most cases, customer purchasing choices are influenced by company brands. Prasath & Yoganathen (2018) ascertained that social media creates connection but also help users gain awareness about their preferred purchase options. For instance, a user can access information online that can guide them to deliberate and make informed choices about which product fulfill their needs. Jung et al. (2016) recommended that users share and acquire information through Facebook, Twitter, and Instagram as these are the best networking sites for organizations. Other researchers argue that various theories tend to influence how individuals make informed choices online (Brown et al., 2007). According to Brown et al. (2007), individuals who are part of a social media group interact in an online community that appears to influence how they make decisions. In order to comprehend this behavior, it is important to first understand how social attributes across the group influence them. Most organizations are advised to adopt

15 new technological innovations that heighten competition. Based on this argument, social media is considered to be critical in influencing consumer purchasing intentions. 2.2.9 Social Media Marketing Influence on Customer Repurchasing Choices Customers are influenced by various factors to repurchase some brands, including fulfilment of a brand, quality, and belief, among others. Voorveld & van Noort (2014) provided that with such factors in the customer’s mind, there is a possibility of enhanced trust. Consumers tend to repurchase products based on this attitude as it reveals endless loyalty. With social media allowing consumers to order products and services at their convenience, the factors likely to influence the repurchase decision include situational aspects like mood, timing, and necessity. Yunus et al. (2022) argued that a consistent level of customer service online can trigger a sense of trust in the customers about the company's products and services. The good thing is that social media has enabled word-of-mouth engagement that has improved interaction between consumers, allowing them to engage directly with organizations to help them decide what to repurchase. As Mukherjee & Banerjee (2017) elaborated, studying the behaviours of consumers might be critical in comprehending their past, current, and future desires. The idea comprises understanding the market trends by getting information from social media engagement among customers. This creates a possible avenue for consumers to purchase the company's products and services while projecting the future purchasing trend. Therefore, consumers are likely to be influenced by external aspects to repurchase brands and services, especially because of the online perception. 2.3 Research Framework The figure below is a research framework comprising the dependent variable (DV) and independent variables (IVs). The DV in this research is social media marketing while the IVs are

17 2.3.2 Evaluating Purchase Intentions Consumer purchase intentions are influenced by psychological factors (Tan & Goh, 2018). Tan & Goh’s (2018) study revealed that satisfied customers gained a psychological connection with the brand and were more likely to refer others. On the contrary, dissatisfied customers were unfaithful towards the products and services they receive and less likely to make referrals. In this case, there is a clear indication that psychological influences highly connect to consumers’ purchase intentions. Additionally, the study also revealed that firms were likely to benefit from the information shared by satisfied customers. At some point, customers who received positive information about a brand were willing to pay double the price to purchase it. 2.3.3. Assessing the Repurchasing Decision Hellier et al. (2003) argued that repurchasing decision is a concept acquired from the experience of customers and the price elasticity model. According to this concept, when there is a decreased demand for products or services, the price is at its peak. On the contrary, when the demand is high, the price of products and services is at the lowest level. As such, the repurchase decision of consumers is affected by the inverse connection between demand and product price. Specifically, the focus is entirely on the product price and the prior consumer experience with that specific product. Previous experience and awareness of the product increase the consumers’ repurchasing decision. The repurchasing decision is also evaluated based on the traffic experienced in the social networking sites since the information is gathered from the database analysed in various marketing contexts.

18 3. Methodology This section explores the methodological perspectives and the practical deliberations employed in this study. The section has three parts, including the research approach and design, sampling and study participants, and data collection. This study is founded on Saunders et al.’s (2007) concept of research onion, whereby justification for research is offered at all levels of research to make the research procedure conceivable. Therefore, this concept offers a detailed analysis of every level of study, illustrating why and how the researcher carried out the study while making it possible to follow the procedures and offer validations. 3.1 Research Approach and Design When a research design is employed by a researcher, it is easier to gather data and analyse the degree of variables examined in the study (Caruth, 2013). The study adopted a qualitative exploratory research approach to explore the research questions without necessarily giving conclusive evidence but developing a better understanding of the study problem. Although the course or direction of this research changed accordingly because of the revelation of new insights and research data, the researcher had the opportunity to investigate the research questions in detail. More specifically, with this design, the researcher offered a better comprehension of the problem of how social media marketing influences consumer behaviour. 3.1.1 Research Philosophy The study adopted an interpretive paradigm to answer questions like how, why and what. The interpretive paradigm was deployed to understand consumer motivations, reasoning, and beliefs in a social situation to decode the meaning of data that would be gathered around the research problem (Nickerson, 2022). Because the interpretivism paradigm justified the use of