Role of social networks on consumer buying decision process

Introduction

The main purpose of this study is to examine and understand how social networks can affect consumer behaviour and their purchasing decision within the food retailer industry. Nowadays, social networks offer the opportunity to easily interact with people located across the world and who can share any type of information (Heinrichset al., 2011). This study has been developed due to the belief of its author about the fact that social networks like Facebook and Twitter can heavily affect customers and their purchasing decisions. The main research question is “Through a revisit of traditional 5-stage consumer decision making model is it possible to understand if supermarkets and food retailers benefit from the use of social networks?

Also, there are two sub-questions related to the main one:

  • Which are those steps of consumer buying decision process directly influenced by social networks?
  • What arethe factorsdriving the influence of social networks on consumer buying decision process?

 

To develop this study, the author will use a five-step model elaborated in 1968 by Engel, Blackwell and Kollat (EBK Model in figure 1) related to the consumer buying decision process, which is considered as one of the most useful for modern organisations.

Figure 1. EBK five-step model (Engel et al., 1968)

Relation to previous research (Theoretical Framework)

As stated by Heinrichs et al. (2011) and Cheung & Lee (2010), social networks are virtual places where users have the opportunity to share their personal experiences and knowledge. According to Solomon et al. (2010), social networks are powerful virtual marketing tools to communicate and share knowledge in different ways. Therefore, these tools can easily and quickly allow divulging information related to products and services (Solomon et al., 2010). Modern social networks are considered as a relevant aspect of the whole communication process and they are slowly replacing the traditional verbal word-of-mouth used in the past (Cheung & Lee, 2010). As stated by Silverman (2001), a social group, through interactions in social networks, can heavily affect the customer behaviour and the final purchasing decision, even if an individual has different initial needs and interest. As mentioned above, one of the most powerful models was developed by Engel et al. (1968) and structured in the following steps:

Step Definition
1 Problem Recognition Consumer’s need to purchase and use a product or service.
2 Information Search Consumer needs to have relevant information from previous experience.
3 Evaluation (of alternatives) Consumer has the opportunity to evaluate alternatives.
4 Purchasing Decision Consumer needs to decide among the different options.
5 Post-purchase Behaviour Consumer can evaluate their purchase and express their opinion.

 

According to the EBK five-step model, social networks may influence consumers during the entire consumer purchasing process, from information search to post-purchase behaviour with the comparison between brands and their quality and price (Silverman, 2001). Related to the brand aspect, since all social networks offer the opportunity to share information, feedback and reviews regarding several products and services, there is the opportunity to increase brand loyalty and consequently influence consumer purchasing decisions (Evans et al., 2009).

Among previous studies developed within the food retailer industry that used the EBK five-step model, there is the need to mention the research developed by Gupta et al. (2004), which examines the relationship between purchase decision process and channel-switching intentions of consumers through the use of a theoretical model tested with a sample of 337 consumers. This research found that approximately 52% consumers switch from traditional to electronic channels. Another relevant study was developed by Zhang  et al. (2013) related to the relevance of new media and modern communication tools and how they affect consumers in their decision through the various steps of the decision process within the retail industry. The main aspect of this research is based on the fact that modern organisations have to focus on the use of new communication tools since they can effectively generate competitive advantages. However, from the past studies and literature mentioned above emerges that even if it is detected, the existence of a relationship between decision making process and communication tools, it is not properly explained, the extent of this relationship and the competitive advantages and benefits that a food retailer can obtain, not only in terms of sales, through the use of social media and modern communication tools. The author will aim to fill this gap through semi-structured questionnaires which will focus not only on the immediate and temporary benefits that an organisation can achieve in the short term, but also loyalty and survival in the market in the medium and long term.

 

Proposed methods

  • Research philosophy: according to Saunders et al. (2012), positivism and hermeneutics are the two main different research philosophies adopted in a study. In this study the author will use a hermeneutic approach, which offers a wider understanding of study background and all its phenomena and at the same time a wider use of qualitative data (Maxwell, 2005). This approach is the most suitable for a study which focuses on analysing the relationship between the influence of social networks and consumer purchasing decision background (Patton, 2002).
  • Research approach: to find out the correct answers to this study, the author needs to gather the correct information which can ensure research reliability and validity (Thomas, 2011). In this study the author will use an inductive approach that aims to build from empirical data a model that can help to explain and understand the reasons that lead customers to use social networks and switch from traditional to electronic channels (Creswell & Plano, 2007; Beck, 2009). Also, this approach deeply focuses on human observations and it is more adaptable to the understanding of how respondents are influenced by social networks (Zikmund, 2000).
  • Data Collection: Data can be primary, from direct sources to achieve the research purpose (Merriam, 2009), or secondary, to create a research framework or to verify if some past theories and hypotheses are still relevant (Zikmund, 2000; Saunders et al., 2012). The author will use semi-structured questionnaires with approximately 25 respondents located in the UK between friends and university colleagues. This number is based on the suggestion of Small (2009), Ritchie & Lewis (2003), Guest et al. (2006) and the National Centre for Research Methods Review Paper. Requested features for the respondent aim to eliminate those respondents who are not suitable for this research since they don’t have enough knowledge about online purchases and therefore they can negatively influence the original purpose of this study (Milas, 2005). Also, there is the need to mention that some of these respondents will be also part of the sample pool for this research that will help to understand if the questions of the semi-structured questionnaire are suitable for this research.
  • Design of the semi-structured questions: the semi-structured questions, as suggested by Schiffmanet al. (2008), will be designed to gather relevant information through semi-structured questions related to social networks which can influence potential customers and has been designed to be conducted between 30 minutes and 1 hour (Patton, 2002) and to arouse the interests, ideas and opinions related to the main research topic (Yin, 2009).
  • Sampling:In this study the author will adopt “Homogeneous Sampling” which eliminates the variations present in an analysis, facilitate the understanding of the analysis itself and also to reduce the human bias present in a given research topic (Saunders et al., 2012).
  • Data Analysis: The proposed data analysis method will be the grounded theory related to the inductive approach that contemplates the building of relevant theories derived from empirical data (Creswell & Plano, 2007), and grounded theory uses coding to create break-down and aims to produce new models and theories (Wolcott, 1990).

Reflections

As mentioned previously, this research mainly focuses on social networks like Facebook, Instagram and Twitter with the main aim to understand if in the modern age these virtual tools can effectively influence the behaviour of the consumers / users and their final decision related to the purchase of products and services. Also, what is relevant for this research is fully understanding if social networks can replace the traditional verbal word-of-mouth and its effectiveness to lead people to opt for specific products. One of the limitations is the fact that, even if this research is based on social networks which don’t have borders, the semi-structured questionnaire will be submitted exclusively to consumers / users resident in the UK. Several demographic aspects, such as gender, age and income, will be relevant since they offer the opportunity to understand how organisations need to change their advertising according to their market targets. In fact, this research was developed to better understand the perception of consumers in the UK and to explain the main impact and influence of social media on the five different steps of the model elaborated in 1968 by Engel, Blackwell and Kollat (1968) and related to the consumer final decision making process. Also, this research will also focus on the degree of how modern consumers perceive the various social media tools during the developing of the whole purchasing process. Therefore, this research will offer the opportunity to understand how consumers act and purchase in this country. In fact, in the final section the author will discuss about how information gathered from this research can help to better understandhow and to which extent social networks can affect purchasing behaviour of consumers and lead them to switch from traditional to electronic channels within the modern food retailer industry. Also, it is possible to identify strengths and weaknesses of organisations in the modern food retailer market and suggest future opportunities to increase their visibility and presence through the adoption and development of social media tools which can allow, as attempted to demonstrate in this study, to influence the decision making process at the right time and at the best step. Also, this research is the base for future researches to provide useful information of how modern social media have altered over the last few years the overall communication and decision process used in the traditional mass media such as TV, cinema and newspaper.  In fact, contrary to the traditional social media based on the communication of a product from a company to final users, social media are built in an open communication between all those consumers who are part of a specific social group. To summarise, the core purpose of the author was to understand the degree of influence of social media on consumer decision making process’ stages and consequently if they are a simple and mere communication tool or if they can effectively affect consumers in their decisions.

Timetable

References

Beck, M. (2009). Epistemology – The true nature of knowledge: How do people really “know” what’s true and what’s false in life?

http://www.epistemology.suite101.com/article.cfm/epistemology (last access on26/07/15)

 

Cheung C.M.K. & Lee M.K.O. (2010). A theoretical model of intentional social action in online social networks, Decision support system, 49(1), 24-30.

 

Creswell, J.W. & Plano, C.V.L. (2007). Designing and conducting mixed methods research, Thousand Oaks, CA: Sage Publications.

 

Engel, J.F., Kollat, D.T. & Blackwell, R.D. (1968). Consumer behaviour, NY: Holt, Rinehart & Winston.

 

Evans, M., Jamal, A. &Foxall, G., (2009). Consumer behaviour, 2nd Eds., John Wiley & Sons Ltd.

 

Guest, G., Bunce, A., and Johnson, L. (2006). ‘How Many Interviews are Enough? An Experiment with Data Saturation and Variability’, Field Methods, 18: 59–82.

 

Gupta, A., Su, B. & Walter, Z. (2004). An Empirical Study of Consumer Switching from Traditional to Electronic Channel: A Purchase Decision Process Perspective, International Journal of Electronic Commerce, 8(3), 131-161.

 

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Heinrichs J.H, Jeen-SU Lim &Kee Sook Lim (2011). Influence of social networking site and user access method on social media evaluation, Journal of Consumer Behaviour, 10(1), 347-355.

 

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