The Effect Of Social Media On Consumers Buying Behaviour

ABSTRACT

The study examined social media advertising and buying behaviour of Babcock University undergraduate students, a study Babcock University undergraduate students.

The study employed the survey design and the purposive sampling technique to select 450 students across all faculties. A well-constructed questionnaire, which was adjudged valid and reliable, was used for collection of data from the respondents. The data obtained through the administration of the questionnaires was analyzed using the Pearson correlation analysis.

The results showed that there is positive and significant relationship between social media channels and consumption pattern (r=0.772; p<0.05). Social media awareness and referrals  (r=.896; p<0.05).Social media communication and Purchase decision making (r=0.772; p<0.05). The study concluded that social media advertising has a significant effect on buying behaviour of Babcock University undergraduate students.

The study concludes that; Companies should perform  a comprehensive   online market  research  to  study  the  market  for  effective social media  decision  and strategy to later improve  manufacturing  sales by satisfying their consumers; Marketing  and sales managers  should get sufficient  training  on the latest social media used by most consumers which  will help them  set effective  relationship that  would   increase  their  custoomer interest and the sales of companies; Marketing   and  sales  managers   should  employ  well thought  out social media strategies  that would  help them  improve  on sales  and their  competitiveness; Companies to reduce the perceived risk consumers have on them by being more open and fast in terms of providing information, answering queries, solving problems for consumers.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The advancement in the internet in recent years has increased the options available to businesses today; the social media platforms being a good example (Boulianne, 2009). It is no secret that the general availability of the internet has given individuals the opportunity to use online platforms as mediums of communication, from email to Twitter and Facebook, which has led to business interactions without the need for physical meetings (Picard & Robert, 2011). Furthermore, as part of the growth the internet experienced, the social media platform has become a major communication channel. The online world has become a new vehicle for social communication that has connected people to different online communities. Paquette (2013) reckons that the social media community has grown to more than 12.5% of the entire world population. This has presented another communication channel for various businesses and brands today.

The term social media can be defined as a range of tools and services that facilitate direct user interaction online. Social media are web based services which are otherwise called “social networking Sites” (Miller, 2016). Social media refers to a network of connections and communications among various gatherings or people (Kaplan, 2010).  Stelzner (2016) defined social media as a platform that was centered on the concept of a read and write web, where the audience and users are past the passive viewing of web content and move on to actually contributing to the content.  In simple terms, social media covers anything that makes use of the Internet to enable conversations and most often take the form of social networking sites, blogs, and Wikis (Celine, 2012). Furthermore, Chaffey (2016) defined a social network site as an online service that permits users to create and modify a profile, either public or semi-private, accumulate a list of connections, as well as view the list of their connections and others utilizing the services. Social Media (SM) refer to network of relationships and interactions among different users (groups or individuals) (Kempe & Chin, 2003). Social media platforms include popular networking sites like the Facebook and Twitter as well as bookmaking sites like Reddit (Ashley, 2015). Online communities and social networking sites are an effective web technology for social interactions and sharing information (Lu & Hsiao, 2010). Social Media such as Facebook, Instagram and Twitter enable users to maintain great connections among themselves as well with others by achieving more than one task and facilitating the way of communicating and sharing different information (comments, thoughts, videos and images) (Kietzmann, 2011).

One of the important contributions of social media is in the way it has changed the method of communication between consumers and marketers (Hennig-Thurau, Gwinner, Walsh & Gremler, 2004). Informational society has always had a significant influence on consumer buying decision and product evaluation, however, with the advent of social media, a new channel to acquire product information has been provided which allows peer communication (Kozinets, 2009). Today’s consumers have access to many different sources of information and experiences, which have been facilitated by other customers’ information and recommendations (Senecal & Nantel 2004). This is an important point as customer involvement through social media is a key factor in marketing (Do-Hyung, Jumin & Ingoo, 2007).

Furthermore, Social networking sites have taken centre-stage in the development of e-commerce in the current environment where consumers make social connections and participate in cyberspace (Miller, 2010). Similarly, social media offers different values to firms, such as enhanced brand popularity, facilitating word-of-mouth communication, increasing sales, sharing information in a business context and generating social support for consumers (Ali, Ballantine &Stephenson, 2011). In addition, the networking of individuals through social media provides shared values, leading to a positive impact on trust (Wu, Chen &Chung, 2010). Today, with the expansion of social media and social networking sites (SNSs), a study of consumer behaviour on these platforms is a research agenda because social media is likely to develop marketing strategies in firms that will affect the customers’ intention to buy their products and services. Therefore, this research will aim to examine how social media marketing strategies will affect consumer buying behavior.

1.2 Statement of the Problem

The introduction of the Internet has changed the way organizations promote their products and services as well as the channels of communication between them and their customers (Miller, 2010). Therefore, the promotional focus of some organizations is shifting from the conventional mass media advert style to a more digital approach online. Social media is one of the digital platforms available to businesses to market their products. However, despite the fact that social media marketing is fast advancing across the global marketplace, there have been studies that have questioned its effectiveness as a marketing tool in influencing consumer behavior (DiStaso, McCorkindale, & Wright, 2011).

Furthermore, there have been studies that show that regular mass media channels are beginning to lose viewership. According to Hutton and Fosdick (2017), every year, the percentage of viewership of younger audiences drops by 13%. Furthermore, Boulianne (2015) noted that viewing by 4 to 15-year-olds has tumbled by 22% and viewing among 16 to 34-year-olds is down 15%. This shift is taking place because of the rise of online media content and social media channels such as Facebook, Twitter, YouTube, Instagram e.t.c. Therefore many scholars (Bond, Farriss & Jones, 2009; Kramer, Marlow, Settle, & Fowler, 2012; Picard, 2011) have suggested that using mass media channels is not an effective platform for marketing products and services. However, the dilemma remain are social media channels more effective and if they are do they significantly shape consumption patterns.

Also, the use of social media channels by companies has given them a platform to spread the awareness of new and existing products or services among consumers. According to Furlow (2016), 95% online adults aged 18-34 are most likely follow a brand via social networking. However, while this is impressive, the problem remains how effective social media awareness can trigger referrals and product trials among the consumers.

Furthermore, one of the advantages that social media gives businesses today is the ability to engage personally with a customer or consumer. The use social media messengers today allow the companies and their customers to interact one on one giving the companies rare personal access to their customers’ lifestyle and perception of their product.  According to Jahn & Kunz (2016) 33% of social media users prefer to contact brands using social media rather than the telephone. This shows social media is fast becoming an effective customer service tool. However, there is a need to understand if this communication strategy is effective in convincing customers and consumers to repeatedly purchase products and services.

It is against this background that this study needs to be carried out in order to determine the rate at which social media affects the buying behavior of students in Babcock University.

1.3 Objectives of the Study

The main objective of this study is to investigate the effects of social media on consumer buying behavior. Other specific objectives are to:

1. To examine the effect of social media channels on the consumption pattern of Babcock University students.
2. To establish the relationship between social media awareness and referrals of Babcock University.
3. To determine the effect of social media communication on Purchase decision making of Babcock University students.

1.4 Research questions

The research will seek to answer the following questions:

1. What is the effect of social media channels on consumption pattern of Babcock University students?
2. To what extent has social media awareness influenced referrals of Babcock University students?
3. How has social media communication affected Purchase decision making of Babcock University students?

1.5       Research Hypotheses

The following hypotheses are formulated for testing:

H₀₍₁₎:    Social media channels do not have any effect on consumption pattern of Babcock University students.

H₀₍₂₎:    Social media awareness does not significantly influence referrals

H₀₍₃₎:    Social Media communication does not significantly affect Purchase decision making of Babcock University students.

1.6 Operationalization of Variables

The variables adopted by this study are: social media and consumers buying behavior. The study will seek to investigate the influence of social media; the independent variable, on the dependent variable; consumers buying behavior.

The variables for this research are consequently operationalized as follows:

Y = f(X)

Y = Consumer Buying Behaviour

X = Influence of Social Media

where Y = Dependent variable

X = Independent variable

y = f (x₁, x₂, x₃…x_n)

x₁ = Social Media Channels

x₂= Social media awareness

x₃= Social media communication

y = (y₁, y₂, y₃)

y₁= Consumption Pattern

y₂ = Referrals

y₃ = Purchase decision making

y= f(x₁) __________________ (1)

y = f(x₂) __________________ (2)

y = f(x₃) __________________ (3)

The study will focus on equation (4) above.

Based on regression, we have

y_{1 =} α0 ₊ β₁x_{1 +} μ…. (1)

y₂ = α0 + β₂x₂ + μ…. (2)

y₃ = α0 + β₃x₃ + μ…. (3)

Where, α is the constant of the equation, β is the coefficient of X the independent variable where μ is the error or stochastic term in the equation.

1.7 Scope of the Study

The study will focus on the impact of social media platform on consumer buying behavior of students in Babcock University. The target population is the 9239 students of Babcock University. The sample size for the study will be 383 students which was arrived at using Yard’s formula. The study will adopt the simple random sampling technique while data will be analysed using the regression analysis.

The geographical location of the study will be Babcock University, Ilishan-Remo, Ogun state. Finally, the study would be carried out between September 2017 and April 2018 (8 months).

1.8    Significance of the Study

The study will be significant to Management of business organizations in showing the importance of a veritable social media presence aimed at convincing consumers about their product quality.

The study will be significant to Industriesby allowing them understand the importance of marketing through social media sites and building consumer trust therein which instigates their preference before buying products. This in turn would increase brand loyalty as well as increase profitability.

This research will help the Government to take a deeper look at the regulatory bodies whom should continually check the practices of organizations online for unethical behaviors. This research would help the government to address issues of sub-standard, fake and adulterated products in the marketplace consumed by Nigerians.

The study will be beneficial to society as it will educate consumers on the indicators that affect their choices especially the mediums to use and the impact of the clout of online followers on their tastes and preferences when buying products. This research will also help consumers understand the need to consider usefulness and needs in relation to their satisfaction before buying products.

1.9 Definition of Operational Terms

Consumers: Consumers are people who buy products and services provided by the producers. (Business Dictionary, 2017)

Consumer Behaviour

The study of how, where, when and why people buy, use and get rid of products and services. (Business Dictionary, 2017)

Consumer Buying Behavior

The process by which individuals search for, select, purchase, use and dispose of goods and services, in satisfaction of their needs and wants (Hershey & Blanchard, 2017).

Consumer Decision Making

The processes, by which consumers identify their needs, collect information, evaluate alternatives and make the purchase decision (Hershey & Blanchard, 2017)

Social Media

Internet or cellular phone based applications and tools used to share information among people. It involves blogging and forums and any aspect of an interactive presence which allows individuals the ability to engage in conversations with one another often (Hershey & Blanchard, 2017).

Economic Factors

A consideration regarding how a consumer’s disposable income and other financial resources tend to impact their buying activities (Hershey & Blanchard, 2017).

Socio Cultural Factors

A set of beliefs, customs, practices and behavior that exists within a population (Hershey & Blanchard, 2017)

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CHAPTER FIVE

SUMMARY OF FINDINGS, CONCLUSION AND POLICY RECOMMENDATIONS

5.1                                                 SUMMARY OF FINDINGS

The study examined social media advertising and buying behaviour of Babcock University undergraduate students, a study Babcock University undergraduate students. The study employed the survey design and the purposive sampling technique to select 450 students across all faculties. A well-constructed questionnaire, which was adjudged valid and reliable, was used for collection of data from the respondents. The data obtained through the administration of the questionnaires was analyzed using the Pearson correlation analysis.

The results showed that there is positive and significant relationship between social media channels and consumption pattern (r=0.772; p<0.05). Furthermore, a positive and significant relationship between social media awareness and referrals  (r=.896; p<0.05). A positive and significant relationship between social media communication and Purchase decision making (r=0.772; p<0.05). The results were found to be consistent with empirical findings of past studies in literature.

Thus, social media advertising are crucial factors and strong predictors of buying behaviour of Babcock University undergraduate students.

5.2                                                     CONCLUSION

Purchase intention as the most reliable indicator that establishes the link between consumer’s interest and the actual purchase of consumer. This study identifies and incorporates antecedent factors that effects consumer’s purchase intention under the context of social media. Under the social media era, an increasing number of companies in Nigeria are investing in social media to expand their business and generate more profits. In the hope of providing some insights for the company so that companies will be more effective in marketing through social media and gaining returns from investment.

In conclusion, social media advertising has a significant effect on buying behaviour of Babcock University undergraduate students.

5.3                                           POLICY RECOMMENDATIONS

Based on the findings of the study, the following policy recommendations are suggested:

1. Companies should perform a comprehensive online market  research  to  study  the  market  for  effective social media  decision  and strategy to later improve  manufacturing  sales by satisfying their consumers.
2. Marketing and sales managers should get sufficient  training  on the latest social media used by most consumers which  will help them  set effective  relationship that  would   increase  their  custoomer interest and the sales of companies.
3. Marketing and sales  managers   should  employ  well thought  out social media strategies  that would  help them  improve  on sales  and their  competitiveness.
4. Companies to reduce the perceived risk consumers have on them by being more open and fast in terms of providing information, answering queries, solving problems for consumers.
5. Companies should select a social media platform whose user viscosity is high. The viscosity should not simply evaluated by the number of users on a platform, but rather evaluated by the frequency and time length of using a particular platform. Questions such as “How often do you use the platform?”, “How long much time do you spend every day on the platform?”, “Would you use social media to seek information and ask for help?”

If the platform has a high user viscosity, then it is the proper candidate platform for social media marketing. The high user viscosity of the social media platform does not necessarily guarantee that users will highly dependent on and pay attention to all the information. There must be certain features and functions that attract people repeatedly to use the platform.

6. Companies should create groups and communities on social media. Creating groups and communities on social media help companies to attract loyal consumers and build trust among members by engaging and encouraging discussion. This also helps in the long term as more and more trust and perceived value are established by consumers and when consumers have needs, the likelihood of them purchasing from these companies is high.