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Impact of Social Media Marketing on Purchase Intention: Electronic Word of Mouth

Info: 8693 words (35 pages) Dissertation
Published: 10th Dec 2019

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Tagged: MarketingSocial MediaConsumer Decisions

Abstract

The impact of social media marketing (SMM) on customers’ purchase intentions has been studied by different researchers at different level. Though, Electronic word of mouth (eWOM) has created a new aspect of study with the advent of social media. Before this new aspect of eWOM on social media, individuals used to share their views anonymously on different forum of internet. Social media platforms provide a facility to its user to interact with their friends and relatives by using internet. By the emerging trends of eWOM on social media, it might be more persuasive in term of creating customer purchase intention. Mainly this study focus’ on examining the impact of social media marketing on purchase intention with the intervening role of electronic word of mouth. The research is based on survey through questionnaire that will be conducted to determine the effect of social media marketing on purchase intent. This study will benefit to future researchers.

Keywords: electronic word of mouth, social media, consumer purchase intention

 

  1. Introduction

In this technological era, the trends of advertising and marketing have been changed remarkably. Few years’ back most of the firms were not indulging into internet marketing or digital marketing, they were only following few sources to convey the message to their customers like Television, Newspaper and Radio etc. and all of these sources were traditional advertising. But as the technology is changing rapidly it also changes the advertising and marketing industry remarkably due to which emergence of social media marketing is becoming one of the easiest and fastest medium of advertising for firms to convey their message to thousands of customer.

This study will benefit the restaurants and café businesses and marketers for understanding that how people interact online with brand or firms and how social networking websites such as Facebook, Twitter, and Instagram etc. create E-WOM or awareness among the customers and how effectively it create customer’s intent to purchase the product . Every firm wants to increase positive E-WOM in the initial stage of their businesses so that they can create positive brand image for the maximum number of customers, after all firms have to maximize their profits by gaining potential customer and retaining their existing customers.

This study is undertaken to know about the influence of social media marketing on consumer’s buying intent with the mediating role of Electronic Word of Mouth. This study will revolve around the content of social media marketing, its customization, how company interact with customer through social media and how Electronic Word of Mouth empower social media campaign. To start this study, journal article will be studied and consulted in order to formalize and structure literature review. After that hypothesis will be developed according to the problem statement and research question; this will facilitate in defining the methodology of the research and collecting the data .This research is based on primary and secondary data, primary data will be gathered via questionnaire on which further analysis will be created and the secondary data will be based on journals, research papers and internet. After collecting the data the next step of research will be to test that data with the help of statistical tool SPSS, this will give the insights of the data in the form of correlation, validity, reliability and the significance of the data. At the end implications will be drawn from the data and conclusion will be stated and recommendation will be given on the basis of findings.

Social media marketing has a brought a dramatic change in marketing tools as the social media user is not only an observer but also act as an active participant because he gives input, reviews and opinion on the open platform. Because of this new marketing approach, firms and users are with each other with no time restrictions, no location boundaries and moreover they can easy indulge themselves in dialogue (two-way communication)

One of the main reason of having a social media presence is that it has a direct influence on customer purchase intention and their buying attitude. Social media is growing day by day, especially for the small businesses because it allows small firms to create a marketing campaign that can actually stand out from the crowd through which firms can easily connect themselves with the customers (Block, 2011).  Leibovitz (2012, p.1) explain in the study that social media has a great impact on customer buying decision process.

Having a social media presence also effect the businesses indirectly as it is not necessary that it will give an immediate response in the form of customer purchase decision but it facilitate businesses to gain a long term relationship with their customers. Most of the businesses focus on attracting the potential customers to their social networking sites, which they can easily do by segmenting their target marketing properly with the help of paid promotions on social networking sites. The presence on social media platform also help businesses to improvise their brand recognition and by the help Search Engine Optimization (SEO) they can also increase the search ranking on search engines like Google, Bing etc. (Wood, 2009)

Electronic word of mouth (eWOM) is always taken as a persuasive advertising tool (Bickart & Schindler, 2001; Kumar & Benbasat, 2006; Zhang, Craciun, & Shin, 2010). Customers find some details about the product that are reviewed by previous consumers, which facilitates them in purchase decision. Consumers can easily search these information over internet, as internet has various platform for electronic Word of Mouth like blogs, threads, video reviews, discussion forums, websites and last but not least social media sites. (Cheung & Thadani, 2012).

Social media sites are comparatively new platform for electronic Word of Mouth and brought a new aspect of electronic Word of Mouth by allowing consumers to interact with their current networks. Now customers can easily share their views and feelings related to product and services with their social groups and friends on social media (Chu & Kim, 2011; Kozinets, de Valck, Wojnicki, & Wilner, 2010). Whereas it is still a challenging task for consumers to filter out the relevant information that can influence their buying intentions because they go through a large amount of information on social media and every customer has his own experience which is shared on social media platforms.

Word of Mouth is one of the important aspect for marketer as an advertising tool. It can be described as when a current or potential customer generate any negative or positive remarks or opinion about a product and service. The term Word of Mouth first coined by George Silverman during his study in 1970. The aim of the study is to find out the influence of social media marketing through electronic word of mouth on customer purchase intention while buying food from restaurants and cafes. Moreover, this research will also examine the important factors of electronic Word of Mouth that enhance customer purchase intention.

Word of Mouth is actually an informal communication between the customer on a specific product or service and it is known as a vital piece of information when a customer is in the buying situation.

With the emerging trend of internet, electronic word of mouth is considered as one of the valuable ways of spreading information about brands. Mostly customers share and discuss their views, post purchase experience, opinions and feelings about the product within their groups, family, colleagues, relatives and friends by using social media platforms that influence the potential customers and help them in purchase decision or create a buying intent. Electronic Word of Mouth will be stronger if the product is recommended by close friend or relative and the attachment among the individuals are stronger. Social bonds plays a vital role in Electronic Word of Mouth as customers care about those people who are close to them on social networking sites and the behavior is formulate according to it. Source of the information also plays a major role in Electronic word of mouth as if the reviews are posted on the authentic pages or provided by an individual who is closer to the customer creates more influence and persuade a customer.

1.1: Problem statement:

The aim of this research is to gauge the impact of social media marketing on buying intent, bearing in mind the intervening role of electronic word of mouth. This research is mainly focused upon the social media marketing savvy chain of restaurants, situated in Islamabad.

1.2: Significance of the study

This study is helpful for the marketers of restaurants and cafes or the owner of these businesses, moreover it will also help small businesses who tend to advertise their businesses on social media and found social media platform as a most convenient platform for advertise because for them is convenient to use, less time taking and less costly. The concept of online shopping is still at its beginning stages as individuals still hesitate to shop online because of the uncertainty of product and service quality. Electronic word of mouth plays an important role in social media platforms. This research will help in identifying the connection between social media marketing and customer purchase intention.

This study is also helpful for the academic world since the idea of social media marketing is still not clear to mostly people and still people are not doing research in this area mainly in the emerging countries like Pakistan. This research will help other researcher regarding this emerging concept.

1.3: Scope of the study

As the objective of the study is to examine the impact of social media marketing on purchase intent with respect to electronic word of mouth therefore this study only focus the individuals who are social media users. All the respondents of this research are the resident of Islamabad and Rawalpindi. To conduct this study and get the appropriate results, data will be gathered from the relevant audience therefore only those individuals were targeted who use internet and who visit social media web sites frequently. Focusing on the purchasing power of the respondents, those people were selected who lies in middle and upper class of the society.

1.4 Purpose

The purpose of this research is to evaluate the effect of social media marketing on buying intent with respect to electronic word of mouth.

1.5 Limitations

This study will focus only twin cities of Pakistan; Islamabad and Rawalpindi. The main focus of this research would be social media marketing savvy chain of restaurants in Islamabad.

1.6 Research Question:

  1. Does social media marketing have a relationship with customer purchase intention?
  2. Does social media marketing have a relationship with electronic word of mouth?
  3. Does electronic word of mouth have a relationship with customer purchase intention?
  4. Does electronic word of mouth mediate between the social media marketing and customer purchase intention?

 

1.7 Research objectives:

  1. To study the relationship between social media marketing and customer purchase intent.
  2. To study the relationship between social media marketing and electronic word of mouth.
  3. To study the relationship between electronic word of mouth and customer purchase intent.
  4. To study the mediation of online impulse buying intent between the website design and online impulse buying behavior.

1.8 Key concepts & definitions

1.8.1   Social Media Marketing:

According to Weinberg (2009), it is a process which allows one to promote their businesses and to reach their targeted audience.

  1.      Electronic Word of Mouth:

According to Henning-Thurau et al (2004, 39), “Any optimistic or pessimistic speech by future, current and previous customer regarding the product or services or firm, which can be access by different people through internet”

  1.      Customer Purchase Intent:

According to Dodds, Monroe, & Grewal, (1991); Wells, Valacich, & Hess  (2011). Customer purchase intention is considered as an important phase of decision making process in which consumers show willingness to buy or not to buy a product or brand (Dodds, Monroe, & Grewal, 1991; Wells, Valacich, & Hess, 2011).

1.9 About Industry:

This research focus on the industry of restaurants and café of twin cities of Pakistan i.e. Rawalpindi and Islamabad. As there are already major players in the market, therefore it is difficult for small businesses to survive in this competitive environment, unless or until they come up with some new or innovative strategies. This industry include, fast food restaurants, Chinese restaurants, Desi restaurants, coffee bars and even the marquees. The major players in the market are as follow:

  1. McDonald’s
  2. KFC
  3. Burger King
  4. Subway
  5. Fat Burger

These companies captures more than 80% of the market share in fast food market in Pakistan (2015). Therefore, there is a large competition in the market and firms are striving to compete in the market as the customers have multiple of options to consider when it comes to decision process as nowadays big mall are having food courts where there are multiple brands at one place. Customers can also compare the prices and food deals on internet or on different online platforms. Nowadays customer preferences changes and varies according to time to time or what is available at that time. There comes the online home delivery option, as most of the companies’ focus on providing the fastest delivery to their customers. Brands can only get the attention of their customers through attractive and engaging marketing or advertising techniques. Therefore, social media marketing is one of the best advertising tool for marketers, as it is cheap and effective because marketers can reach maximum number of customers in a very limited time.

The effectiveness of advertising is based on the content that is used in the advertising and it also depends on the media formats which a brand use to advertise their product. As there are three types of media formats i.e. text, images and videos. According to the research, videos on social media platform such as on Facebook, it has maximum number of reach and it is most effective media format on the social media but the duration of videos should be less than one minute as the customers did not focus on the content if its duration is too long. Therefore, firms need to create precise and concise videos that can explain the whole marketing campaign in a short period of time. Nowadays, brands are focusing on viral marketing that can be successful if the customers tag other customers on their post and for this, brand need to create the post that has a potential to reach number of customers through tagging. It can be possible, if brands focus on product differentiation on innovative marketing techniques.

As the technology is changing, brands are targeting their customers on online platforms, especially on social media websites through paid promotions and effective advertising content. The usage of social media marketing is helping the brands in increasing the productivity and reducing the cost. Through social media platforms, brand can reach multiple customers and can increase their customer base quickly.

Some other key success factors for restaurants and café industry are; convenient location for the customer, if it is not possible for small businesses to open different branches in different areas, they can also have home-delivery service for their customers to provide them convenience. Food quality is one of the major key success factor for brands to retain their customers, as it is easy to gain new customers but it is a challenging task for brands to retain their existing customers and food quality or customer service plays a vital role in retaining the customer. If the customer service is too good then it also help brands to gain positive word of mouth and nowadays, mostly customer rate the restaurants and cafes on online platforms such as social media websites, in which Facebook is one of the most popular sites among the customer. On Facebook, there are number of groups and brand pages where customers can easily share their feelings, experience and reviews about the product as it is an open source for customers which is called electronic word of mouth. Positive electronic word of mouth can result in favorable brand image and can create a good reputation of the brand and vice versa if the electronic word of mouth is negative then it will result in negative brand image and the reputation of the brand will suffer and brand may lose its potential customer.

Some other big brands that are also competing in this competitive market are as follow:

  1. Tayto café
  2. Atrio café
  3. Howdy
  4. OPTP
  5. Chaaye Khana
  6. Gloria Jeans

These brands are using social media platform very efficiently to attract maximum number of customer with their attractive offerings and food deals.

According to socialbakers.com the restaurants and café industry have large amount of audience on Facebook pages, some of the top Facebook pages with respect to likes are as following:

Café Nataliya- Redolence have the highest number of total fans that is 439830

Monal Islamabad have the second highest number of fans that is 351717

KHIVA Restaurant have the third highest number of fans that is 347703

EXPRESSO have 339360 number of fans on Facebook page

Khyber Dodai have 290792 number of fans on Facebook page.

Chaye Khana have 203170 number of fans on Facebook page.

Casa Villa have 167958 number of fans on Facebook page.

 

 

 

 

 

                               2- Literature Review

2.1: Social Media

Dann and Dann (2011) have shown the interconnected components of social media i.e. social interaction, content, and communication media. Social media is converting and integrating into the new media (Solis 2010). Social media has bring a revolution in information sharing (Solis 2007), due to which the mode of communication became more convenient and the audience is increased as well firms can target more customers as well. (Smith and Zook 2011, 10)

Safko and Brake (2009, 6) agreed with the theory of Kaplan and Haenlein (2009), as they consider social media as “one platform for people to perform activities among them to show up and share the photos, videos, files, information, data, knowledge, feedback and opinions with the help of effective two way communication”

Apart from public relation content, marketers share a large number of content on social media to grab the attention of the customers (HeymannReder, 2012). Nowadays marketers are focusing on social media marketing because it enables them to provide quick customer service through which they can resolve the queries of their customers in a personalized way. It has become very easy for marketers to share information and get response immediately as social networking sites are two way communication platforms. Furthermore it also allow marketers to increase customer engagement and enrich interactive communication at low cost which also enhance the significance and usefulness of social media platforms. (Evans, 2012).

Social media is useful for people for different reasons as mostly people use it to stay in touch with relatives or friends which eases the communication (Ahuja and Galvin 2003). Consumer buying intent or consumer behavior may be effected or changed by reviewing online groups. Like social network sites provide an open platform for consumers to post or share their own content and they can also search about the product details that help them in their purchase decisions. (Kozinets et al., 2010)

Social networking sites help customers to communicate with other and when individual talk about online communication mostly strangers talk to each other on these sites. Culture have a major impact on the presence of customer on social media platform and also effect customer purchase intentions (Pookulangaran et al., 2011). Recently online businesses are giving more priority to social media as it facilitates online businesses to convey their message to their future customers and by taking the advantage of this, online businesses are trying to connect them straight to the end users within time and within low budget (Kaplan and Haenlein, 2010) and it has a great impact on consumer purchase intentions (Williams and Cothrell, 2000). Therefore social media is becoming a necessary tool of advertising for most of the firms in this era.

Its depends on marketers, that how they use social media platform for advertising as they have a choice to exploit as much information as they can and fully optimize the resource according to the customer needs and motivation. Social media consumer can have two categories, either they can be contributor or either they can be observer. Contributors are those consumers who frequently update their status or post comments while observers are those who only seek information from others post and observe it (Schlosser, White, & Lloyd, 2006). According to a study in 2009, almost 53 percent of social media users were found as an observer while rest of them were found as an active participator who frequently update content on social media. However nowadays this phenomenon has changed which means that most of the social media users are now becoming active contributor of social networking sites (Ngai et al., 2015).

When it comes to communicate about the brands, consumers can connect them with brands through Facebook.  (de Vries et al., 2012; Jahn and Kunz, 2012; Tsai and Men, 2013; Dessart et al., 2015; Azar et al., 2016). Users can easily connect with the brands through their brand pages and can get updates, promotional offers from the brand they like the most, or the can interact with their brand by direct message and get their queries answered. According to research the effective social media communication can enhance consumer purchase intention, it also increase brand commitment, enhance brand loyalty, improve brand image and promote positive electronic Word of Mouth. Phua and Ahn (2014) also find that the overall number of brand page like or liked by friends also encourage buying intension and increase brand image.

2.2: Benefits of social media

Mostly companies are using social media to advertise their business as the trend of social media marketing is growing very quickly in the era of online marketing. According to Copp 2016 there are 3 billion individuals that are using internet today and out of which 2 billion individuals are using social media, which shows that more than 60% of internet users are active on social media also. As different types of firms, whether they are small firms, medium sized firms or large firms, they are using social media marketing to promote their product and services and through this brands can create brand awareness among their potential customers.

Some of the benefits of social media are mentioned as follow:

2.2.1 Popular among users:

It totally depends on brands that how much active they are in term of social media activities and campaigns so that if they are more active on social media then it is most likely that they can become more popular among the social media users. According to Copp (2016), twitter gets more than 500 million tweets, Instagram gets more than 95 million pictures and videos on their platform and Facebook gets over 4.5 billion likes on their platform daily. According to Caruso (2016), nowadays brands are getting more active on social media platforms and adopting the latest trend in their marketing campaign, for instance mostly brands are using hashtag marketing technique through Facebook and as well as on Twitter to reach more customer is less time and to increase the brand awareness and consumer engagement

2.2.2 Better consumer support:

In the era of internet, nowadays consumer need to connect with the brands as soon as possible as it doesn’t matter to consumer whether the brand have a presence on social media or not. Presence of brands on social media help them to get in touch with their current customers and also help them in gaining new customers as soon as possible which help them in gaining positive image in term of better consumer engagement as soon as possible that will ultimately result in increase in the firms sale.

 

2.2.3 Improving customer service:

Social media helps brands to respond the queries of the customers on time and they also tend to reply to all of the comments which they get on their social media platforms as it doesn’t matter whether it is negative or whether it is a positive comment, they have to remove the confusion of the customer to improvise their customer service on social media to create or build a long term relationship with their customer. According to Caruso (2016), Individuals who follow their brand on social media are found more loyal to their brand. It depends on consumers that how actively they use and search information about their brand on social media.

2.2.4 Enhance website visits:

With the enhancement of social media sites it is equally important for brands to enhance the website traffic among their customer to make them aware of current offerings of the brand. Brands could make highly responsive, interactive and easy to use websites with highly effective search options included in it but it doesn’t fulfil the requirement of brands unless or until they promote their site to increase the reach towards their customer. And one of the effective way to promote the website is the social media platforms through which the brands can easily reach a number of customers by sharing attracting content, gathering different comments from different customers and after that guiding them intelligently to enhance the page visits which ultimately enhance the web traffic of the brands. Social media is as effective as Search Engine Optimization (SEO) is for businesses.

2.2.5 Evaluating competitors:

Social media websites also help brands to monitor and track the ongoing activities and promotions of the competitors. These social media websites also help brands to analyze the marketing campaigns and marketing strategies of brands and what these brands are currently offering to their customer. Therefore, after analyzing the marketing campaign of competitors, brands can create their own strategies and offer discounts to their customers according to it.

2.2.6 Creating relationship:

Brands not only use social media website to expand their business and to advertise their business. It is a platform where brands can actually interact with their customers and can create long term relationship with their customers and can turn them into loyal customers by rightly answer their queries on time. As customer relationship already exist before but social media platforms provides a way to strengthen their relationship with their future customers also.

2.3 Drawbacks of social media:

Brands use social media sites such as Facebook, Instagram and Twitter etc. to stay in touch with their customers. As these social media websites are very helpful for different type of brands and help them in increasing their brand awareness among their potential customers, it also have some disadvantages along with these benefits and some of the disadvantages are as follow:

2.3.1 Unrelated Network:

No matter how effective the campaign is, it always depend on the medium through which it is communicated. Therefore, firms need to select suitable network or medium to advertise their product by completely analyzing the market situation and market trends. It is a task of marketers to determine that which social media platforms is more suitable for their business and need to give priority to that social media site according to it. If most of the users are using Facebook more frequently, then Facebook will be better for brand to create maximum productivity. (Brookins, 2017)

2.3.2 Non-professional customer relationship:

The brands which use social media sites for just updating the content on their brand pages, like only posting and sharing photos or videos, and they did not focus on building a better customer relationship. Then these brands may have less expertise in having a good customer relationship through which they may face negative word of mouth and ultimately the sales of firm may decreases. Brands should focus on using the suitable and humble phrases while communicating with their customers and should respond every query of every customer in order to create a better customer relationship.

2.3.3 Time consumption:

Giving proper time to social media is a challenging task, as social media need a lot of time to manage it properly. Marketing managers of brands need to separate a specific amount of time slots for social media marketing and mostly small brands face difficulties in managing their social media account due to less expertise. Having a strong bond with the customers may take a long time, which may be many month or may be many years. Follower could switch to other brands if the brands didn’t give proper time and attention to their social media platforms or if they didn’t give proper response to the queries of their customers. Moreover, brand need to update their social media account on time to show their presence every time.

2.3.4 Negative Reviews:

Social media is one of the important tool for every type of firm. The feedback on social media sites can be the best source for brands to improvise themselves and could meet the customer expectations. By reviewing the feedbacks, brand can create their strategy according to it. As social media platform is the open source for every user, therefore it is not necessary that the firms will always get a positive response on their social media websites but they can also receive negative reviews on their social media websites, which can affect their brand image. It is responsibility of social media manager to respond all the queries effectively by

  1. Catering negative comments by answering them optimistically
  2. Removing inappropriate content from their brand page as quick as possible so that the other user can not view it
  3. Calming down the situation and smartly answer the queries of the customer.
  4. Proposing an excuse, if a brand fails to deliver the promised value or offer some possible compensation to retain that customer Seek Social Media (2017).

 

Traditional marketing and social media marketing:

Emergence of social media marketing has totally changed the technique of marketers that how they advertise their business now s compare to the methods which they were using a few decades ago. As social media marketing has remarkably replaced the traditional methods of marketing campaigns. In past few years traditional method was way too expensive for firms to adopt and to consider it the only source of marketing and at that time it also take so much time of the firms to target their desired market. Therefore, nowadays businesses are adopting new ways that is social media, to advertise their business because it is one of the faster way to reach the potential customer as compared to traditional marketing

Marketing through social media or marketing in traditional ways are totally different techniques which a marketers need to understand to run a successful campaign and according to the requirement of firm, marketers need to adapt most suitable marketing technique for their businesses. These two ways are completely different because in social media marketers use pull strategy i.e. attracting customer towards their brand which can be execute as firstly brands need to find new potential customer through the electronic word of mouth. As Electronic word of mouth plays an important role in social media marketing and can provide dialogue situation for their customers and on the other hand traditional marketing involves only monologue communication that is also called one way communication.

In the old era of marketing, brands only concentrate on the basic principles of marketing that is marketing mix to achieve their goals. According to the literature, marketing mix define 4Ps of marketing and that is Product, Promotion, Price and Placement on the basis of which brands advertise their products and sell their products by considering the price factor, how these product can be promote and how these product can be delivered to the current target market. However, social media marketing is also contributing a lot in marketing theories and come up with a new P that is Participation. According to Tuten & Solomon (2015), Participation allow marketers to improve the level of consumer satisfaction, consumer relationship to enhance their brand image by providing two way communication method.

2.4: Types of Social Media

There are different types of social media, some of these different types of social media platforms are mentioned below 1) Social networking sites, 2) Social news, 3) Media sharing, 4) Blogs, and 5) Micro blogging.

2.4.1 Social Networking Sites

Social Networking Sites (SNSs) are platforms where one can connect with other individuals, like Facebook and Instagram. According to Weinberg (2009) “Social Networking sites connect those users who have same interests”. These sites have some same components– (1) Users can create their own private and personalized profile instead of public profile (2) Create his own friend list (3) They can manage their own friend list and if there is no privacy on other’s profile then they can also see other’s friends list. (Boyd and Ellison 2007, 211).

For most of the consumers, social networking sites are the good source of income as they can create their own brand pages, celebrity pages, fan pages and groups to run a successful business.

In Pakistan, most commonly used social networking sites are Facebook, Instagram and Twitter which gives an opportunity to upload and share different types of content that includes pictures, videos, statuses, stories and live chats.

2.4.2 Social News and Bookmarking Sites

Social News allows user to control their new streams and also vote on the content on web (Zarrella 2010, 103.) on the other side social news sites have transformed the idea of newspaper these days (Weinberg 2009),

2.4.3 Media-Sharing Sites

Media-Sharing sites like YouTube and Daily Motion etc. are the platforms where one can upload, store, and share their photos, videos, and music, with other users. These sites allow users to create their own channels. Tagging plays a vital role in media sharing sites as tag is a word assigned to an uploaded content that describe the relevant content, which help businesses to promote their businesses through search engine optimization (Zarrella 2010, 81).

2.4.4 Blogs

A blog is an online magazine which is also called content management system (CMS), that is created and maintained by individuals or groups (Safko and Brake 2009). Blogs also integrate other social media marketing to share videos and pictures..

2.4.5 Micro blogging

Micro blogging is moreover same to blogging, yet it allow users to fewer the words of each post and enhance the speed of communication through short-texted messages via instant messages, mobile phones, e-mails, or the internet ( Twitter)

2.5: Social Media and Marketing

Social Media Marketing explains as the use of social media platforms as marketing tools. According to Weinberg (2009), it is a process which allows one to promote their businesses and to reach their targeted audience.

Most of the advertisements through traditional marketing are not as effective and efficient as compare to social media. As through traditional way companies cannot reach the potential customer but through social media marketing companies can easily reach to their targeted audience at a low cost. (Weber 2009; Weinberg 2009).

Social media marketing helps brands in number of ways such as increasing the traffic of their website, create customer engagement or conversation to facilitate their customers, it also help brands to increase their brand awareness among the customers to attract and gain new customers, through social media marketing brands creates positive brand association and can easily advertise their brand in a way they want to advertise. As the page audience increases on social media websites of the brands, it became easier for brand to achieve their marketing goals. That’s why most brand focus on increase the size of brand community on social networks.

For a better marketing strategies, brands create their social media campaign and along with strategies. Firstly they consider what they want to achieve through social media i.e. either they want to increase the sale, brand awareness, promote the product etc. Secondly, they determine the target market or target audience as they can easily manage their target audience in paid promotions and run a successful campaign. Last but not least, the message content matter the most. If the message is strong enough then it will attract the potential customer itself.

2.6 Electronic word-of-mouth (eWOM) 

Electronic word of mouth (eWOM) is always taken as a persuasive advertising tool (Bickart & Schindler, 2001; Kumar & Benbasat, 2006; Zhang, Craciun, & Shin, 2010). Consumers can find detailed information about the product that are reviewed by previous consumers, which assists them in purchase decision. Consumers can easily search these information over internet, as internet has various platform for Electronic Word of Mouth like blogs, threads, video reviews, discussion forums, websites and last but not least social media sites. (Cheung & Thadani, 2012).

Social media created different ways to communicate and allows it’s user to generate or create their own content which they share on social media such as Facebook, Instagram, and Twitter etc. (Daugherty & Hoffman, 2013). According to Bennett (2012 cited in Daugherty & Hoffman, 2013, p82) “every minute social media users upload more than 48 hours of videos, more than 100,000 messages and create over 25000 post by using social media” This shows that most of the users are persuaded by social media and other’s reviews as well and this is known as Electronic Word of Mouth (eWOM)

Word of Mouth is taken as one of the influential aspect of marketing as it meets the marketing need of both customers and firms and has a major impact on customer purchase intention and decision making. However, Word of Mouth is not only known as an essential part of marketing (Brown & Reingen 1987; Buttle 1998), but consumers take it as a reliable and valid source for assessments (Dellarocas 2003; Ha 2006; Keller 2007; Phelps et al. 2004).

According to Henning-Thurau et al (2004, 39), Electronic Word of Mouth is known as “any optimistic or pessimistic speech by future, current and previous customer regarding the product or services or firm, which can be access by number of people through internet”. Depending on the content of WOM, it can be further categorized in two types. One is negative Word of Mouth and other is positive Word of Mouth. If the content have negative information and expression about the product, then it is called negative Word of Mouth (NWOM) and vice versa if the content have positive information and positive feelings about the product, then it is called positive Word of Mouth(PWOM) ) (Buttle, 1998; Carl,  2008). Positive Word of Mouth (PWOM) provide the positive aspects of the product to consumers that persuade them consumers to at least try that product or service (Daugherty & Hoffman, 2013). On the other side, negative word of mouth (NWOM) provides bad reviews against the product or service and that stops customer to buy that product or service (Daugherty & Hoffman, 2013). Negative Word of Mouth have certain negative impact on the performance of the firm as it tend to reduce the sales and affect the customer loyalty as well, but on the bigger perspective it has a greater effect on the brand itself and moreover the overall brand image can be effected.

 

 

 

2.7: Differences between Word of Mouth and Electronic Word of Mouth:

WOM eWOM
Credibility Consumers know the communicator personally and the information is credible  (positive impact on credibility) Consumers doesn’t know the communicator personally and is anonymous to them and the information is not credible (negative impact on credibility)
Privacy The information is shared privately and has a time bound. The information is shared openly on online platforms as it is written therefore can be access anywhere and anytime.
Flow of Information (Speed) Information spread slowly. Consumer should be there when the information is being delivered. Information can be spread more quickly within the consumer through online portal and can be access at any time.
Accessibility Difficult to access Can be accessible effortlessly

Source: Adapted from Yildirim (2011)

 

2.8 Social media and EWOM

According to researcher, it is witnessed that social media platforms have played a major role in increasing interaction between consumers (Popp et al., 2015; VanMeter et al., 2015). Due to this changing trend consumers are actively searching the information related to the product over the internet or online platforms, they also compare different brands and their offerings which also tell them about other customer’s experience about that specific product and find reviews of the specific product (Pentina et al., 2015). On these social media platforms, consumers can also share product related experience with their groups and can ask their friends for product suggestion and can get recommendations also that which brand to choose. Therefore it is difficult for brands to control these type of information on social media because brand perception can be varies consumer to consumer and consumers can change others brand perception too (Ladhari and Michaud, 2015) and can also shape the brand image for the future customers. (Amblee and Bui, 2011).

The existing study shows that electronic word of mouth can be in both forms, either it can be in the form of text or either it can be in the form of image. (Hoffman and Daugherty, 2013). It can be gathered from different online platforms, it may include online customer reviews, blogs, and reviews by different authentic companies on social media websites or by reading comments of consumers on social media sites (Amblee and Bui, 2011; Muralidharan et al., 2014).

Individuals take electronic word of mouth as a credible (Doh and Hwang, 2009) and useful medium to get the knowhow about the brand, because company will not provide these kind of information (Reichelt et al., 2014). According to Charlton, (2015) 61% of customers consult online reviews while doing buying decisions and online customer reviews are considered to be more trusted as compare to the content generated by the company itself (Nielsen, 2012).

2.9 EWOM and Social Networking Sites (SNS)

Social networking sites are known as online service which provide a facility to its user to create their own accounts and profile and create a friend list of their own choice, which allow them to communicate with each other. (Boyd and Ellison, 2007).  Social networking sites and social media is moreover the same concept as discussed in the literature. On social media consumer can easily share the information about the product which can affect the purchase decision of potential customers. Kozinets et al. 2010). Consumers can generate their own content and share their own experience which can be share, like and comment. Consumers can also create their own groups on social media in which they can interact with the people, who have same thoughts, ideas and mindset about the specific product. For Example if there is a group of “Restaurants and cafés of Islamabad” on Facebook, then the admin will only approve those posts which contain reviews about the food so that the message should be delivered to the right targeted audience. These groups are administered by the random group of people who have some same interest. Another example of Facebook groups can be “Careem promo codes for Islamabad”, as mostly members in this group are those who use the service of Careem in Islamabad or planning to use this service therefore this group is one of the major source of electronic word of mouth for Careem because mostly customers also share their experience with proper evidence of screenshots of Careem application which increase the credibility of the content and ultimately effect the buying intention.

2.10 EWOM and Purchase Intention

In order to check the marketing tool that either it is strong or not, one of the most important aspect is to know about the effect of word of mouth on buying intention. Most of the researcher discussed this question and these research shows that word of mouth has major impact on consumer buying intentions (Engel, Blackwell and Kegerreis, 1969). With the improvement in technology and online marketing, electronic word of mouth also gained a lot of significance. When friends suggest some product over internet, especially on social networking sites then it add a lot of value for consumer to purchase that product instantly and this is one of the main reason that’s why electronic word of mouth have more importance than traditional word of mouth.

Electronic word of mouth has a major influence on purchase intention. (Tseng, Kuo and Chen, 2011) explained in their study “E-WOM plays a vital role on purchase intentions. Moreover, this study stated that positive electronic word of mouth is positively related to purchase intention as compared to traditional advertisement. These findings recommend that brands should share more about product and spread its information and experience or feelings as compared to only posting ads especially on social media. In fact, low-involvement advertisement have adverse consequences on online consumers, therefore brands should create high-involvement advertisement, such as vlogs, blog or endorsements to appeal the future customers.

Daugherty and Hoffman (2013, p88) created a theoretical outline and explain the following aspects:

  • Consumers will show more concern to negative comments and reviews that is negative electronic Word of Mouth as compare to positive or neutral electronic Word of Mouth while searching information on social media.
  • Consumers will show more concern to electronic Word of Mouth while searching non-luxury brands as compared to luxury brands on social media.

According to another study, result shows that the content or type of the reviews on purchase intention have stronger impact for specialists or experts as compared to novices or beginners while the amount or number of reviews on purchase decision have stronger impact for novices or beginners as compared to specialists or experts (Park & Kim, 2008). Which means that how may reviews a product have will provide more information to the beginners and result in to less (Park & Kim, 2008).

Customer devotion towards electronic Word of Mouth on social media is based on the category or type of the product and services. For instance, it depends on either it is luxury product or non-luxury brand or is it an automobile brands or a service (Daugherty & Hoffman, 2013). Moreover, users will show more concern to negative comments and reviews that is negative electronic Word of Mouth as compare to positive or neutral electronic Word of Mouth while searching information on social media.

2.11 Consumer Purchase Intention

In Marketing, purchase intention is considered as an important phase of decision making process in which consumers show willingness to buy or not to buy a product or brand (Dodds, Monroe, & Grewal, 1991; Wells, Valacich, & Hess, 2011).  Purchase intention is a useful indicator to know about consumer behavior because it indicates the possibility of a consumer to buy that product. If the purchase intention increases positively, it also increases the possibility of a consumer to buy certain product. According to Mirabi, Akbariyeh, and Tahmasebifard (2015), it is stated that some aspects like quality of the product, brand image and advertisement effectiveness can be some main aspects that can affect the consumer’s buying intent. Firms need to invest more on these factors and need to pay attention to their marketing campaigns which include both innovative and traditional marketing approaches because both advertising techniques together can be more effective and can increase their market share.

There are multiple aspects or variables that could affect consumer purchase intention, as it is not possible to know all these variables, therefore this study is limited to examine the effect of social media marketing and electronic word of mouth on consumer buying intention. Emergence of social media sites like Facebook, Instagram and YouTube etc. allow users to share the opinion related to the specific product or service used. Therefore consumers seek information about their concern product or service from these social media sites before doing a purchase decision (Ahmed & Zahid). This shows that social media marketing and electronic Word of Mouth creates customer preferences and purchase intention.

 

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The consumer decision making process involves how consumers identify their needs and gather and process information prior to a purchase. Consumer decisions involve how the emotions and preferences of consumers can impact their buying decisions.

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