Mpact Of Facebook On Consumer Buying Marketing Essay

Mpact Of Facebook On Consumer Buying Marketing Essay There has been a noticeable change in the technological developments and innovation in the last few years. Undoubtedly, technology plays an important part in our lives. Most of people depend on the internet in most of their daily lives such as sending emails, searching for information; communicate with their family and friends, reading the latest news and so on. That development in technology reaches different sectors like business organizations, academic sectors, and governmental fields. In time where technology plays a great role in peoples lives, marketers are doing their best to take any chance that could bring consumers to their products and services. At the end of the 19th century and the beginning of the 20th century, researchers predicted that the internet would alter the relationship between consumers and marketing organization (Lord, 2000; Hamel and Sampler,1998). Ward and his colleagues in 1998 predicted that in the first quarter of the twenty first century, the main channel for shopping for most consumers would be the interactive technologies (Ward et al, 1998). De Kare-Silver (2000) discusses the same idea that this technology will go with consumers need to visit shops, as it will make it easy for people to buy their needs any time without going to the actual place for these products. Many business companies that provide services or physical goods believe that using the electronic resources in their marketing is vital to their success. Porter (2001) recom mends that if companies want to remain competitors, they have to rely on technology. Using technology in marketing allows brands and companies to interact with its customers in individual basis as it provides immediate and quick interact without time limitation (Allan and Chudry, 2000). One type of technology that people and marketers depend on is social networking sites. In these social sites, people usually communicate with each other and during these conversations, they send direct messages to each other without noticing that. The number of people who use these sites are increasing day by day. In the United States around 55.6 million people have used these social sited daily in 2009 (Ostrow, 2009). Globally, Facebook, one of the main social sites, accounts for 750.000.000 registrations, Twitter has 200.000.000 followers (Qualman, 2011). In business sector, these social sites play an important role in consumers purchasing behavior. In these sites, people usually share opinion and purplish information about their view on brands they buy and services they use (Jones, 2010). Consumers use to recommend a brand or marketing organization to friends and followers. In some case, fans of a specific brands establish a page in these social sites where they write their opinion about this brand, upload and download photos of the product that the brand sell. Investigating the relation between these social sites and consumer purchasing behavior is a new trend that encourages researcher to search about. That relation affects both sides, marketers and consumers. For marketers, it helps to create a strong relationship with customers, developing a new idea for new product, and answering common daily questions from consumers (Dà ¢Ã¢â€š ¬Ã… ¸Silva et al, 2011). Moreover, in investigating the effect of these sites on consumers purchasing behavior, some studies have been made to find out the relation between these sides. Most of these studies improve that there is a positive relation between social sites and consumer purchasing behavior that the majority of people believe in this statements and support that by some cases where they rely on these social sites in some stages in their purchasing process such as searching for information and evaluating their choices (Constantinides and Fountain, 2008). Social media usage is growing rapidly amongst marketing professionals and organisations and fast becoming a new outlet that can potentially be used to help increase customers interest in a product or service. As it becomes widespread it brings about involving customers and facilitating exchange of information bringing about shift in consumer behaviour. Through social media, information, enticing advertisement are made available to consumers easily watch and read and at the same time allowing consumers to post their own opinions and sharing it with friends. For many brands, social media appears as a way to reach new customers and to reflect their feelings and this explains the reason for which many companies are currently working on developing Social Strategies to outline the degree of interactivity that they want to have with their customers that will help consumers to make a buying decision. Successful firms use consumer attitudes and behaviors to segment markets and design marketing strategies. Today, however, consumer trust in corporations is declining while the influence of online communities on buyer behavior is growing. Social media platforms have completely changed the nature of the interaction between brands and their customers, directly impacting upon the contemporary consumer decision process. Laurens (2010) argued that while social media is not the silver bullet that some pundits claim it to be, it is an extremely important and relatively low cost touch point that has a direct impact on sales and positive word of mouth and supporting this argument Glynn and David (2009) said that Companies not actively engaging the social media are missing a huge opportunity of saying something to consumers intentionally or unintentionally about how willing they are to engage on consumers terms. Therefore, its necessary for retailers to understand how social media is affecting current consumers and how they are going to react. During the economic downturn, more and more companies have reduced their communication budget but they have increased expenses for social media by 30%. It is now a priority for big companies but they need also to change their global marketing strategy. It is also important to reach the right customer at the beginning of a social media strategy because opinion leaders, such as bloggers, are the ultimate key to a brands success (The Conversation Group 2012). As the marketing power of social media grows, it no longer makes sense to treat it as an experiment. According to Tamba (2012) Social media has a big impact on how people shop. A quarter of all purchases of FMCGs are influenced by exposure to one form of social media or another and this proportion is growing. Shoppers are weaving their interaction with social and mobile marketing into their everyday lives: As a result, big brands are increasing their social media investment. Social media can influence both impulse purchases and reg ular shopping habits when it comes to FMCGs. The trick is to understand where, when and how customers want to interact with your brand, and with your products. Social marketing for regular purchases is about strengthening and deepening the customers connection with the brand. Impulse buys are also increasingly mediated by social media especially now that so many consumers can access Facebook, Twitter and Pinterest from their mobile phones. 1.1 Statement of Problem. Most often than never, companies do not benefit from social media in a way they should have benefited from it due to their lack of strategic efforts to managing it and measure it success. Through media hypes that emphasis the ease of achieving success with social media, many companies have the believe that what they need to do to achieve success with Facebook is by just launching Facebook page and such companies get disappointed when they see no activities occurring on the page and thus they abandon the page. Common mistakes companies make is devoting a little time for social media and measuring it success on whether audience is conversing or not about their brands on their social media. Nevertheless, companies make mistakes by believing they are in total control of conversations about their companies, brands products or services on social media and they spend heavily on PR to hype their newest hires and new products whereas they forget that social media platform is all about speakin g with people but not at people and more of a community of audience that discuss about companies, their products, services or brands in a way they feel they benefit them or do not (Evans 2010). 1.2 Purpose of Study This research is carried out with the aim of appraising the impact of Facebook on Consumer buying Behaviour in the UK Grocery Market with Tesco Plc as a case study. This is to determine the effect of social media (Facebook) on the consumer buying behaviour of groceries in the UK. 1.3. Research Question What are the impacts of Facebook on consumer buying behaviour in the UK Grocery Market? 1.4 Research Objectives Following from the above highlighted aim, the following objectives have been set to achieve the above aim and followed by the research questions. To identify Facebook usage patterns among UK consumers in grocery market. Evaluate how Facebook effectively changes consumers attitude towards groceries. Investigating and evaluating the role of Facebook website as influencers on Tesco customers in UK at stages of buying decision-making process. Identify if Facebook is the social medium that has the greatest impact on consumer buying pattern of Tesco in UK. Recommendation on how Tesco should use Facebook to encourage consumers to buy their products. 1.5 The Significance of the Research This research work was undertaken to take a critical look at the impacts of a social media called Facebook on consumer buying behaviour in the UK grocery market where Tesco was used as a case study. This research therefore became imperative to undertake as a result of a noticeably new development in the UK market that aroused the interest on the issue surrounding Facebook impact on consumer buying behaviour in the UK and a well known popular FMCG trading company in UK was chosen as a case study to identify these effects of Facebook on consumer buying pattern in the UK Grocery market. Furthermore, the impact of Facebook on consumer buying pattern in grocery markets has not been looked into by researchers thus leaving a gap to identify whether social media (Facebook) really has a significant impact on consumer buying patterns in the grocery market apart form other commodities. Nevertheless, this research has also been undergone due to the keen interest the researcher has, following up to date on the social media impacts on marketing activities in this 20th century and it ability to completely erode the traditional system of marketing communication. 1.6. Scope and Limitations of the study. In investigating the impact of Facebook on consumer buying pattern in UK grocery markets, this study was only limited to Facebook which is not the only social media that consumers use to purchase groceries. The research is not applicable to other social media platforms. Furthermore, the case study adopted was only limited to one of the FMCG companies in UK and thus do not provide a sufficient information about the impact of Facebook on the consumer buying pattern in UK grocery markets 1.7 Overview The overall structure of this research consist of 5 chapters, each dwelling on a specific aspect of the topic under review This first chapter comprises of the introduction, research problem, purpose of the study, research question and objectives of the study. The rational and overview of the proposal have also been covered in this part. The literature review covers the chapter 2 of this research. This part reviews critically the impacts of social media on the buying pattern of consumers in the UK grocery markets from scholarly perspective. Conceptual framework also featured in this part of the research. Chapter 3 focuses on the methodology used in the entire research processes. The research method adopted both quantitative using closed questionnaire and qualitative method using case study approach will be adopted to collect data (Mixed method). The fourth chapter dealt with the analysis and findings of the research while then fifth chapter focused on summary of conclusion and the implications of this research. CHAPTER 2 LITERATURE REVIEW. 2.0 Introduction The Literature review in chapter 2 will provide discussions from published information and an account of what has been published on the topic of this study. It explains body of text that aims to review the critical points of current knowledge including substantive findings as well as theoretical and methodological contributions to Impact of Facebook on Consumer buying Behaviour in the UK Grocery Market. In this chapter, various textbooks, articles, journals, blogs, dailies and websites were consulted to obtain related information, thoughts and quotes of various writers, authors and scholars. 2.1. Consumer Buying Behaviour In marketing, deep understanding of the behaviour of marketing is a very important tool for business success. Consumer buying behaviour is all about the determination of how consumers make decisions on the product or service they want to buy and the factors that are responsible for this decision. According to studies conducted in UK, 56% out of 11,000 new products that are launched by 77 companies in the UK are present after 5 years of new product launch. Also, studies revealed that only 8% of new products concept from 112 leading companies reached that market where 83% where unable to meet marketing objectives. Consumer buying behaviour tends to study these reasons why companies need to have a deep understanding of why consumers make the purchase they do and the factors that influence their decision to purchase (Hitesh, 2010). Because consumers are the drivers of marketing, the need to formulate well suitable marketing plans that that will critically examine consumer behavioural att ributes and needs, lifestyles and purchase process in order to make a nearly perfect marketing mix decisions. Studying what consumers buy, the reason they buy, the way they buy, time they buy, the location and frequency at which they buy are key things to understand when undertaken the study of consumer behaviour (Hitesh, 2010). Wayne et al., 2008, defined consumer buying behaviour is the reflection of the totality of consumers decisions regarding acquisition, consumption, and disposition of products and services, activities, people, ideas and experiences. Also, Dibb and simkin (2001) defined the buying behaviour of consumers as an act and decision making process of people that are involved purchasing and using products or services for personal or household consumptions. Theoretical approaches have been used by researchers to have an in-depth understanding of consumer behaviour and these approaches have been inherent in 3 psychological orientations; Reinforcement theory, Cognitive theory and Freuds psycho-analytical theory (Fill,2006), with the most popular and current approach to consumer behaviour out of the 3 approaches been the cognitive theory (Berkman and Gilson, 1986), where cognitive theory states that people use and process information they derived from internal and external sources to identify pro blems and make decisions. The major elements outlined by the cognitive theory for problem solving among consumers in their buying behaviour have been perception, learning, attitudes, and personality (Fill, 2006). Consumer behaviour goes beyond the method by which consumers purchase tangible products like groceries, clothing and automobiles but rather, consumer buying behaviour also involve consumers use of services, experiences, activities, and ideas such as going to see a General Practitioner (GP), signing up for a gym class, donating to charity, voting for politicians, seeing movies featured by certain actors etc. Consumer behaviour was also expressed as activities people get involved in when collecting, utilising and disposing products and services (Blackwell et al.,2001) or environmental factors that are aimed at creating actual behaviour (Jim,2008). Four factors namely; psychological core, process of decision making, consumers culture and consumer behaviour outcomes have been identified to affect the buying behaviour of consumers (Wayne et al., 2008) while Haydon (2009) grouped factors that affect consumer buying behaviour into 3 group namely external influences (firms marketing effort a nd consumers culture), internal processes (psychological processes and decision making) and post decision processes. Choices are been made by consumers daily and buying behaviour is said to be influenced by the characteristics (cultural, social and psychological) and the decision process that buyers make (Khursia, 2012). Furthermore, several research have been undertaken to identify the buying behaviour of consumer through social psychology and personality (Ajzen, 1987), marital status and responsibilities (Goldman and Johansson, 1978), and consumer loyalty (Suen and Wei, 2009). 2.11 Psychology of buyers Psychology of buyers must be determined by manufacturers through identification of buyers need when marketing a product to target group of customers. Buyers most often look for sense of safety and belonging, although other customers want to gain self esteem in the presence of their peers. The perception of a product by buyers must be understood when providing information about the product to buyers as there are possibilities that buyers could interpret information provided by buyers about a product on the basis of their previous beliefs and knowledge, although learning about such product may change behavior of buyers (Jeff 2012). 2.12 Behaviour of consumers Also, buyers could also buy products depending on their personalities and lifestyles. For example individual buyer that seeks to life a healthy lifestyle could go for organic foods while avoiding foods that are sun-tanned. In family situation, buying decisions are often based on what buyers perceived to be best for their family. Deep awareness on who makes decisions for family product must be understood by marketers. Among newly weds with no children, purchasing is the product of decision made by husband and wife, while the stay at home parent makes the decision in a family with young children (Jeff 2012). 2.13 Characteristics of Consumer Social class and culture up to some extent determines types, quality and quantity of products that buyers buy or use. In clothing, social class may determine the type of clothes buyers buy. Culture also greatly impacts on food where deep-fried food may be easier to sell in the south than in California. The buying process begins with a step where consumers recognise a need, or a disparity between what they possess and what they need to buy to change their condition. Also, decision to buy a product can also be based on elements such as packaging, payment methods and the features and of the product (Jeff 2012). Firms Marketing Efforts 1. Product 2. Promotion 3. Price 4. Place The Consumers Culture 1. Religion 2. Ethnicity 3. Reference Groups 4. Social class Psychological Processes 1. Motivation 2. Perception 3. Attitude 4. Knowledge Decision Making 1. Problem recognition 2.Information Search 3. Judgement 4. Decision Post -decision Processes 1. Purchase 2. Post-purchase behaviour Figure 1: Model of Consumer Behaviour 2.2 Social media Social media is a set of applications such as Twitter, LinkedIn, and Facebook etc built to operate on Web 2.0 platform which enables the creation and sharing of information created by users that are known as user-generated content (Kaplan and Haenlin, 2010). Social media has been expressed to be the new millennium medium of communication across the world with the most popular of all been Facebook, twitter and LinkedIn. For example, Facebook as at June, 2012 was said to have a monthly active user of 750 million people and 1 billion active users were estimated to be on Facebook by the end of 2012, thus supporting the believe of many analyst that social media marketing will out rightly replace some forms of traditional marketing such as directing mail (Fuel oil news, 2012). Social network, one of the currently used platforms by social media is said to be a very diverse and big complex concept perceive to which its knowledge require a clear identification of its scope and coverage that f orms it boundaries (George, 2008). Tracy (2008) expressed that social media existence is inherent in the context of communities that are built of people where relations are been developed and nurtured through creation, sharing, engaging and commenting in content. Social media are online tools that provide access to users with identical interest to share information that is referred to as user generated account content while also learning from others, or network in an open process (Stepenson, 2011). According to Smith and Zee (2011), Social media has been opined to be an effective way of running business other than just an ordinary marketing tool, requiring both old and new companies to embed new culture of company wide support, systems and incentives where mindset of thinking relationships and not just sales or transaction marketing must be ensured. Social media has been further explained by Smith and Zee (2011) to look beyond short term sales but should enable the culture of sharin g and listening, channelling information into organisational system that alert companies into negative and positive comments, suggestions, complaints and new ideas that are beneficial for new product development, new advertisements, new discussions and promotions. Business managers are often faced with challenges of exploiting opportunities associated with the increasing availability of social media sites like Facebook, Twitter and LinkedIn that is been dominated by 50% users alone in UK. Despite the fact that social media has become a very popular networks that is frequently used by consumers, while organisations are still struggling to understand and put it to use effectively (Nielsen 2010). However, despite the believe of many about the opportunities inherent in social media, some are still sceptical about its potentials due to an immense uncertainty about how it can be leveraged for a long term profits and returns as well as the ability to identify the fact that return on investment can be attributed to social media marketing efforts (Weinberg and Berger, 2010), Weinberg and David, 2005). Apart from social media exposing consumers to research and purchase considerations, social media has also provided platform through which consumers can a dvocate for the products and stores they so much valued and love (Jay, 2012). To gather information, consumers are now relying on social media to decide on which products to buy (Kozinets 2002) and the usage of social media by consumers for brand recognition, information about products and the opinion about product or service provider are most often influenced by the cultural background of consumers as consumers widely vary in their expectation of product and service quality (Donthu and Yoo 1998).Through social media, companies are offered the opportunities to understand the needs of their consumers and increase their level of satisfaction through proactive and timely response (Jay, 2012). 2.3 Usage pattern of Social media among consumers. No doubt, social media has gone through a significant transformation over years (Mangold and faulds, 2009). This significant transformation of social media and the extent to which consumers rely on social media to make purchasing decision led to the full awareness of the potentials of social media by marketers. Advent of social media has immensely changed the society, influencing consumers behaviour in terms of scanning for information on different social media to read other consumers view concerning products or services they want to purchase (Todaro, 2007). The traditional media has been greatly replaced by social networks and the awareness on social media opportunities seems unlimited as millions of Coca-cola fans on Facebook are declaring their love for the brand, most frequently viewed on YouTube been roller babies of Danones water brand Evian while thousands of consumers that patronise Starbucks work hand in hand with the brand to generate new ideas for their products. According to Trusvo et al., 2009, 1.54 billion dollars was said to have been used to implement and support social media communications in 2008 and as such, social media growths is getting quite unlimited as investment on social media are estimated to increase to 3 billion dollars in the year 2013 (Kozinets et al., 2010). 70% internet users have been discovered to trust judgements and evaluations of their fellow consumers on the social media platforms thus leaving brand generation and awareness at the mercy of social media users (Nielsen 2009). According to a survey conducted by Fishburn Hedges, more than third of UK consumers that constitute 36% are said to have engaged with companies brands through social media and this increase was driven by a common belief among 40% respondents that improving customer service is as a result social media when compared with just 7% of respondents that believed that social media has a negative impact on customer service. Furthermore, 68% of respondents that have engaged with brands through social media have believed that through social media, their concerns and their wishes have been made known to their products and service provider and more than 65% respondent expressed that social media gives them a better chance to communicate with companies(David, 2012). Fishburn_image_1 Figure 2: Usage pattern of social media among UK consumers (David, 2012). In the same vein, research conducted by YouGov Media, UK (2011) explained that the uptake and usage of social media services as a marketing tool remains favourably high among British public where Facebook is the social media site with a highest percentage of active users. 65% of online population in UK have Facebook with 95% of 16 to 20 years olds and 74% of 21-24 years old are frequently accessing Facebook social media site. The next social media site with the highest number of active users after Facebook is said to be YouTube that has 50% of all UK internet users while Twitter, Windows Live, LinkedIn, Google and Spotify have been surveyed to have 23%, 14%, 13%, 12% and 10% active online users respectively (YouGov,2012). Furthermore, study conducted among by Hiscox (2012) among entrepreneurs in UK found out that 57% of businesses use social media for marketing where 19% of these entrepreneurs use Facebook as their social media platform while 14% use linkedIn. The use of social media to support marketing efforts in UK is inherent in the fact that 53% of UK adults that use social networks follow a particular brands while 4 out of 5 internet users visit other social platforms as we as blogs. Also, in a study conducted by Jon (2011), 77% of UK 48.6 million adult were discovered to have an active Facebook profile, 15.5 million adult were investigated to be using Twitter account, 7.2 million adult use a photo sharing platform while 7.9 million UK adults use LinkedIn. Facebook was discovered to be the most popular UK social networking site with 77% of all UK users having an active Facebook profile where 80% women constitute the population of active Facebook user compared to 72% of men. How Businesses use Social Media Hiscox Insurance Figure 3: Usage pattern of social media among UK entrepreneurs (Hiscox 2012). Social Media Usage in UK infographic low res 2 Figure 4: Social Media usage pattern depending on age and gender (Jon 2011). Examining the study conducted by Dirk (2011) that proposed that the increase in the number of active user of social media was as a result of the advent of smartphones, investigated that social networks are accessed by more than half of UK users through their phones almost everyday, suggesting that overall, 35% of he UK mobile UK mobile phone population use social networks from their phones where over 44% of mobile phone users in UK are estimated to be smartphone users. uk_mobilesocialsept10-11-1 Figure 5: The Frequency of Social Networking site or Blog in UK (Dirk, 2011) 2.4. Changing consumers attitude through Social media Word of mouth has been found to be an effective means through which consumers buy products and services. Take for example an active user of Facebook with 15,000 followers finds a product valuable to him and thus recommends such product to his 15,000 followers on the social media sites and these followers also recommend the product to their followers and thus create a huge awareness for such brand through these social media medium. With the advent of social media, word of mouth and engagements which are effective means by which products are sold have been facilitated by social media. Years ago companys sale representatives only had the not less than 5 interactions a day but in the social media age, companies have increased their individual customer interactions to 100 or more (Joan et al., 2010). Favoured brands may be promoted by consumers through positive comments on social media like Facebook or twitter pages or could be through uploading the video clips about such brand on YouTube . In the same vein, when consumers are not satisfied with a particular product, consumers could use the brands social media to register their feelings of unsatisfaction about the companys product on the brands social media forum. Findings made by Dellarocas et al., 2007 found out that consumers look out for recommendations concerning products and proceed to buy such product via the traditional channel such as offline stores (Heil et al., 2010). Social media like Facebook, Twitter, LinkedIn, YouTube etc are been used by consumers to serve as an evaluation forums where products quality or service reviewed by other consumers that have experience with such products or services are used as a determinant to determine whether such product or service would be purchased or not, and thus social media reduce uncertainty and improve efficiency of consumers online searches in products consumption process (Dwyer, 2007). Through social media, consumers have greatly influenced one another when maki ng purchasing decisions where consumers ask one another for advice on these social media platform, mimicking and observing one anothers decision and relying on these recommendations from others before purchases are made (Hasan 2008). In a study conducted by IBM in Europe, more than half of Social media users in Britain, France, Italy and even Germany often check social networks before they make decision on purchasing or not purchasing a particular good or service. 35% of active Facebook users are discovered to use Facebook page to consult people for advices about products and services. In 40% of the situation, consumers procure such product they do investigation on through the social media. Furthermore, studies have also proved that 56% of Facebook users that have become the follower of a particular brand are likely to recommend to their social network followers such brand they follow (ConversationGroup, 2012). According to MRY (Mr Young), during holiday sales, exchanges among frien ds, family and brands have a significantly direct influence on purchasing decision. Through Faceb