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Full Project – EFFECT OF SOCIAL MEDIA MARKETING ON ONLINE CONSUMER

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CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The unique aspects of social media and its immense popularity have revolutionized marketing practices such as advertising and promotion (Hanna, Rohn & Crittenden, 2011). Social media has also influenced consumer behavior from information acquisition to post-purchase behavior such as dissatisfaction statements or behaviors about a product or a company (Mangold & Faulds, 2009). In the last few years, it can be noticed that there is great influence of the companies on online networks. Social media websites provide an opportunity for businesses to engage and interact with potential consumers, encourage an increased sense of intimacy with consumers, and build all important relationships with potential consumers (Mersey, Davis, Malthouse & Calder, 2010). Organizations need to differentiate by the company or brand image through which to communicate distinctive advantages and positioning of the product. Many marketers believe that the organizations should aggressively promote only one advantage in the market concerned (Moise, 2011) and social networks in the online environment allows them to appear more attractive to consumers. The much higher level of efficiency of social media compared to other traditional communication channels prompted industry leaders to state that companies must participate in Facebook, Twitter, My space, YouTube, Blogs, Black Berry Messenger (BBM)among others, in order to succeed in online environments (Kaplan & Haenlein, 2010).

The social media tools are used to communicate company brand to consumer, with this feedback is easy to get via using the social media tools by both company and consumers. Communication of brand/company and users help create a favorable or less favorable image of other users who read information posted and consider them in the information or purchase. Interactivity with target brand in social media is perceived differently by consumers depending on the message they convey (Shin, 2008). The perceived risk of purchasing and how much money are willing to pay for a product also determines the user to think more about the quality and the utility of the product( Ioanas, 2012).

Human beings are social and 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).

In the present competitive business world, marketers are now moving from the traditional brick and mortal world to marketing space, the ways in which most marketers interact with their respective customers has brings about quick response from company via their customer’s complaints. Technology advancement has brought about online business where both the buyer and seller meet together to interact for exchange of goods and services and where company’s engaged in other for them to promote their products. In recent years online environment is viewed by users from a new perspective, in a commercial way. Development and the emergence of online stores have turned users into consumers. Also the most important role of social media has changed the way of how consumers and marketers communicate (Hennig-Thurau, Gwinner & Walsh, 2004). Informational society influences affects the consumer decision processes and product evaluations. Social media provides a new channel to acquire product information through peer communication (Kozinets, 1999). Moreover, by using social media, consumers have the power to influence other buyers through reviews of products or services used. Consumers are also influenced by other psychosocial characteristics like: income, purchase motivation, company presentation, company or brand’s presence on social networks, demographic variable (age, sex, disposable income etc.), workplace method of payment, type of stores (online or physical), etc.

1.2 Statement of the research problem

As noted in marketing and consumer behavior literature, information that consumers get from their interpersonal sources invariably influences their decisions towards whether to purchase a particular brand. Even though advertisement commercials and other non-personal messages are also significant in the development of consumer awareness towards brands, products or services, word-of-mouth (WOM)—which is known as an act of exchanging marketing information among different customers—has been seen to play an even more critical role in changing consumer behavior and attitude toward different products and services. This is mainly because interpersonal sources commonly are seen as more credible and reliable than non-personal or commercial sources.

The majority of the online consumers rely on the word-of-mouth when they want to purchase a specific product or a service. Findings from studies (South Africa Social Media Landscape ,2012) found out that 33% of Twitter users share opinions about companies or products at least once per week. These opinions and views affect other consumers with regards to purchasing products or services. The growth of online social networks around the world has created a new place of interaction and communication among people. Individuals can share their knowledge, opinions, and experiences with one other due to the online social networks provided features and may have an impact on people’s behavior in terms of communication and purchasing. In recent years, social networking has received an increased emphasis on business as well as individuals’ lives. Therefore, this research study observe that consumers nowadays rely more on social media to get information about product/brand than advertisements for buying products and services. The purpose of this study will to investigate the effect of social media on online consumers.

1.3 Research Questions

In-order to achieve the objectives of this study, the following research questions will serve as the bases of which the write –up will make an in depth enquiries on effect of social media marketing on online consumers. The following research questions will be raise;

Does social media marketing have impact on online consumers?
Are social media tools is more effective in communicating company product/brand to consumers?
Does interaction on social media have impact on consumer’s perception of brand/ product?

1.4 Research Objectives

The main objective of this study is to examine the effect of social media marketing on online consumers. Other specific objects are:

to examine whether social media marketing have an effect on online consumers
to determine if social media are effective in communicating company product/brand to consumers
to determine if social media have significant impact on consumer’s perception on brands/product.

1.5 Research Hypotheses

The following Null hypotheses will be tested;

H₀₁: Social media marketing have no significant impact on online consumers

H₀₂: Social media do not have significant impact in communicating company product/brand to consumers

H₀₃: Social media have no significant impact on consumer’s perception of brands/products

1.6 Justification of the Study

This study is intended to examine critically the effect of social media marketing on online consumers. Thus, the outcome of this study will serve as additional literature for further study. In addition, it will serve as an essential material of information for marketers as to the potency of using social media marketing tools such as Facebook, twitter, blogs, MySpace, Black Berry Messenger (BBM) among others to communicate to target audience. Finally, the outcome of the study will enhance student’s knowledge on social media marketing and its effect on online consumers’.

1.7 Scope of the study

The scope of the study will centered on effect of social media marketing on online consumers. This study will thus focus on the social media marketing and its effect on online consumer using student of Al-Hikmah University Ilorin, Kwara state who are online consumer as a case study. The purpose of restricting the study to Al-Hikmah University is to enable the ease of data gathering and complete the study within the time frame.

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