Editorial Board

A Refereed Monthly International Journal of Management

 

 

Role of Persuasion: Investigating the Impact of Social Media on Buying Decision Process of Digital Natives

 

 

 

                                                                                                         Ramandeep Saini,

                                                                                                                 Professor

Department of Management,

Faculty of Management,

Chandigarh Group of Colleges,

Landran, Mohali, India

 

Lovedeep Singh Sidhu

Research Scholar,

Department of Management,

I.K. Gujral Punjab Technical University, Kapurthala, India

&

Assistant Professor

Department of Management

Chandigarh Group of Colleges,

Landran, Mohali, India.

 

 

                                                                           Abstract

Social media is that one digital platform which has evolved into major player for digital marketing. The study examines the influence of social media on buying decision process of digital natives and checked whether this influence varies at the all stages of this process. A quantitative research method is adopted by choosing stratified proportionate sampling technique for collecting data of 350 digital natives that use social media in Chandigarh, India. For this purpose, a structured questionnaire is framed. The results have clearly indicated the existence of association between buying decision process of digital natives and social media, where social media affects the consumer purchase behavior positively. Information Stage of this process is mostly affected by social media, pursued by purchase decision. Furthermore, we found that E-word of mouth and social media content are the prominent factors of social media which impact buying decision process.

Keywords: Social media, digital marketing, Consumer buying decision process, E-word of mouth, digital natives.

 

 

Introduction

 

By 2021, the count of users on social media is likely to reach one third of the total world population. This escalating count of user accounts is because of rapid growth in user immersion, as per day 135 minutes on social networks is the average time spent by internet users. (M. Gómez, et al., 2019). The immense usage of social media has led to formation of Social Media Big Data (S. Stieglitz et al., 2018). Use of social media is not only changing people’s lifestyles, their learning behavior and way of communication with one another; rather elementary shifts are also occurring within businesses. Social media is a digital tool used by brands and retailers to elevate customer’s involvement, thus make a way to alter their customer’s buying intentions. Social media offers a display place for business houses to have interaction with prospects where it encourages intimacy with consumers, thus build associations with them. (McClure, C., & Seock, K. 2020). Social media let consumers create information and share experiences with their pals, businesses, and online communities through shares, posts, likes, tweets, retweets, rating and reviews. In this era of digital competition, companies engage consumers first, then continually introduces the same product, intensify appeal of product to make consumers rethink. (K.-Y. Kwahk, B. Kim,2017).  Distribution of information about products and services like launch of new product lines, spreading brand awareness, and strategies to alter consumer behavior has become very convenient on social media. (Pütter, M., 2017).

The structure of paper is planned in several sections. Section 2 presents theoretical foundation; Section 3 presents the literature review as the basis of the proposed research model. Section 4 states research hypotheses. Section 5 explicates the research methodology, section 6 elucidates empirical findings and hypothesis testing, section 7 describes conclusion, section 8 specifies research implications, and section 9 enlightens limitations and future research opportunities of the survey.

 

 

Theoretical Foundation

 

Social Media

Social media is a set of applications mainly based on web that construct on the technological and ideological fundamentals of Web 2.0. It lets users to generate and trade content material (Prodanova & Looy, 2019). They are considered as social channels that use the web and mobile technologies for developing communication. Web 2.0 helps social media users to develop their own content and raise their voice on digital world. Social media has a feature of being interactive and participative. (Kaplan & Haenlein, 2010). Social media has entirely altered the way people used to interact with each other’s in centuries ago. It has lent services for online user interaction, user engagement and undeniably altered company–consumer relationship. Social media has developed into new field of digital profit-making opportunity for companies to build their brand image, convey brand story and strengthening overall brand management. (M. Gómez, et al., 2019). It develops direct connection between companies and consumers (Kaplan & Haenlein, 2010). Now, consumers are recipient of content as well as active creators of brand value and brand information. Power over control of content is shifted from brands owners to consumers.  This surprising switch has opened gateway for companies to new challenges and opportunities in digital world. Social media is divided into several categories including Twitter, Instagram, Snapchat, You Tube, WhatsApp, Wine, Tik Tok, pin interest, (Kaplan, A. M., Haenlein, M., 2010, Kizgin, H., et al., 2017, Prodanova, J., Looy, A.V., 2019). In this modern era, Social media is now an inseparable part of people’s life, distinctively among adolescents and teenagers. Adolescents and teenagers are referred as Generation Z (also called as digital natives, i Generation and Generation next) and have actively follow online integrated communication platform (Duffett, R. G. 2018).

 

Generation cohort

Generation is defined as the year’s term that the individuals live or a cohort of specific year. There are different generation cohorts and each generation cohort show a different set of behavioral characteristics that are contributed and influenced by the era of their birth. Digital natives are born between years 1995 – 2012, and also known as Me Generation, plurals, Generation N. (Rahmat, N.H. et al., 2018). Generation Z is the first generation to which immense information and extensively various social networking sites are directly available on the internet (Mat Salleh, M. S., et al., 2017).

 

Buying Decision Process

Buying decision process is known as consumer decision making process or consumer buying process (Kotler and Keller 2016, p. 181-182), It is referred as process of consumption, in which consumers go through multiple stages that construct their thought of buying a product and service.

The first Stage of this process is problem recognition. The process starts with the buyer. Buyers identify a need generated by stimuli may be internal or external (D. Voramontri and L. Klieb, 2018). In case of internal stimulus, normal needs of any person– food, thirst, shelter sex get higher to a threshold level and turn out to be a drive. Few needs can be generated by an external stimulus. A person may like a new mobile of his friend or explore Instagram advertisements for a Dubai vacation, which may arise a thought of making a purchase. After this, consumers reach to Information search stage. The drive to get new product makes consumers to make searches for the particular product. Generally, consumers search for limited information. There are multiple sources of information collection and all these sources vary consumer to consumer (Kotler and Keller, 2016). Major information sources are categorized into 4 groups.

Personnel: Family, neighbors, friends, Acquaintances. Commercials: Websites, Advertising, Emails, Dealers, Sales Persons, Packing, Public: Social Media, Mass media, consumer rating organization, Experiential: Managing, investigating, and utilizing product. All sources perform a different function in changing the buying decision. Many consumers switch between going offline and online to get information about different products and all the stage of the consumer buying decision process is impacted through social media in the Sri Lanka, but the major impacts are on information stage, evaluation stage and post- purchase stage. Openness, Participation, Connectedness, Conversation and Communality are features of Social Media. Then the consumers go to third stage of evaluation of alternatives. Final value judgment depends on how the consumers evaluates the collected information. In all buying situations, consumers go for multiple stage of evaluation. Then, consumers make judgment mostly on rational and conscious basis. Consumer evaluation processes follows three main stages. First, the consumers make effort to satisfy new needs. Next, the consumers expect some benefits from the product. Then, the consumers try to look at each product as bundle of attribute with varying abilities. On the basis of this, consumer makes preferences among their likings. Then finally, stage of purchase decision comes where consumer is mostly confused what to buy. Purchase decision completely depends on purchase intention of consumers. Here, two factors play an important role, attitude of others and unanticipated situational elements.  Purchase decision is the most crucial step in the whole process as it comes with some risk. Consumers trust a product and buy it to satisfy their needs. In case, the product does not live up to their expectation, and then they do not prefer buying same product. The last stage is Post purchase behavior. Here, consumers express their satisfaction and dissatisfaction towards purchased product. They express their feelings through numerous modes like, reviews, ratings, opinions, feedback.

Literature Review

Social media is defined as an evolving interdisciplinary research field which intends to combine, extend, and adapt methods for social media’s data analysis (S. Stieglitz et al., 2018). The study explained that web 2.0, social media, and user generated content, all are interrelated with each other. The various categories of Social Media are content communities, blogs, Collaborative projects, virtual social worlds, social networking sites, virtual game worlds, rating and review sites, video casts and podcasts, micro-blogging sites and multimedia sharing sites.  (Kaplan, A. M., Haenlein, M., 2010). Social Media is providing opportunity to business houses to increase their customer database for more opportunities (Prodanova, J., Looy, A.V., 2019). Social media is most popular activity online among users as it connects millions of consumers with each other’s by sharing their thoughts, views about different products and brands. The social media known entirely by social networking sites are one of the vital fields for the businesses. Social media is a significant tool in supporting consumer engagement. Twitter, YouTube, and Facebook develop bond with consumers by creating interactions of consumers with content of their liked brand. Companies are opening their social media profiles to reach, engage, and maintain a consumer base. User-generated content is getting all the attentions of marketers as it allows consumers to post in response to certain brands, brands requests. Other users check the posted comments and change their buying intention. (Pütter, M.,2018). Consumer immersion with Social media marketing has a constructive effect on consumers brand awareness and their purchase intentions. Social media has significantly affected both businesses and consumers.  A very fewer number of empirical works have been commenced in India in this evolving area but in future it will pay huge contribution to the researchers, marketers, stakeholders and academicians (Asma, G., Misbah, M.,2018). Most of the companies use social media reports for product placement as well in the social web (S. Stieglitz et al., 2018). All the stage of the consumer buying decision process is being impacted by social media in the Sri Lanka, but the major impacts are on information stage, evaluation stage and post- purchase stage. Openness, Participation, Connectedness, Conversation and Communality are features of Social Media. The factors of social media like recommendations, contents, reviews and opinions about performances of companies, have impact on consumer’s buying decisions. (Madhuhansi, W. H. 2019). Content on social media is highly impactful on consumer purchase intention. By like, comment and sharing the content on social media, people gave a sign that they have read it and are agreed on the content written about certain products or services. (Karunanayak, Madubashini, 2019). Social media have power to influence some aspects of consumer behavior like, awareness, information acquisition, opinions, attitudes, and their decision-making process. (Asma, G., Misbah, M.,2018). Review of literature provides roadmap to further investigation so, after reviewing literature, we found that there are six major drivers or factors of social media that affect buying decision process of consumers and these are; Social media influencers, entertainment, social media advertising, reviews and rating , content, and E-word of mouth.           

The first factor is social media influencers. With the passing period, the impression of celebrity has advanced to new dimensions of fame by linking their popularity linked over latest technology applications. The new world of digital market is witnessing the growth of current generation’s idols who became famous over social media and they are better known and popular among public as digital stars or social media influencers. They build up social capital by being third party endorsers. They alter consumer buying attitude through their profiles on social media. Social media influencers are further classified into categories; micro social media influencer, macro social media influencer, and mega social media influencers (Ruiz-Gomez, A., 2019). Another contributing factor is entertainment. One of the essential tools of marketing communication is entertainment. People use social media mostly to get entertained. The entertainment factor is in favour of companies as consumers get engaged with social media and produce content for further involvement of others social media users (Prodanova, J., Looy, A.V., 2019). Another important factor is advertising. The inimitable aspect of social media is its immense and instant popularity to users.  The way social media have reformed marketing practices like, advertising and promotion, it has developed new business model for potential companies. Social media has massive and intense reach to consumers with marketing communications and digital content. (Appel, G., et al 2019). Furthermore, Reviews and rating is an important factor of social media which affects consumer buying process. Nowadays, Users are relying more on online reviewers than any other source thus, brand reviews influence consumer preferences towards brand, hence leads to impact on their purchase intentions. (M. Gómez, et al.,2019). Online reviews play fundamental role in consumer’s decision-making process especially in field of for service industries, mainly film industry and hospitality. (K.-Y. Kwahk, B. Kim, 2017). In addition, content on social media plays important factor which alters consumer’s purchase intention. Content on social media is classified into two parts, Users generated content (UGC) and Firms generated content (FGC). End users can create their content on social media and make it available for others users, is known as users generated content. (Kaplan and Haenlein, 2010). It must be created outside professional routines, without a context to commercial market, usually, the one who create UGC is known as content creator. Content created by users can be for commercial product or service about which the users discuss on social media. (D. Voramontri and L. Klieb, 2018). Social media have a strong influencing power on changing consumers behavior, whereas the intensity of influence differs among positive, negative in existent content (Varkaris, E., Neuhofer, B., 2017). Last but not least is E-Word of Mouth factor. Electronic or Online WOM is a form of Word of mouth where internet users get a chance to express their satisfaction as well as dissatisfaction towards products and services. E-WOM is combination of statements (negative and positive) posted by potential, real customers about any product or brand, available to people and societies at large through the Internet (D. Voramontri and L. Klieb, 2018). E-word of mouth act as driving factor behind consumer’s dissatisfaction towards brands. This may sometimes change their brand loyalty, thus alter their purchase behavior (Prasath & Yoganathen, 2018).

Research model: 

Research Model is constructed on the basis of effect of independent variables on dependent variables. Here, factors of social media are independent variables and Buying decision process acts as dependent variable (fig. 1)

 

 

 

 

 

 

 

 

 

 

 

Figure 1. Research Model (developed by author (2020) based on literature)

           

Independent variables                                                                                 Dependent variable

Factors of Social Media

Buying decision process

                                                                                                              

 

 

Need recognition

Information search

Evaluation of alternatives

Purchase Decision

Post purchase behavior

                               

Research Objectives and hypotheses

The primary research objective is to study the influence of social media on buying decision process of digital natives. The primary research objective is fulfilled by following secondary objectives along with hypotheses.

1.  To study the impact of factors of social media on need recognition.

    H1: Factors of social media have no substantial impact on need recognition.

 

2.  To determine the impact of factors of social media on information search

     H2: Factors of social media have no substantial impact on search of information.

 

3.  To evaluate the impact of factors of social media on evaluation of alternative.

     H3: Factors of social media have no substantial impact on evaluation of alternatives.

 

4.  To analyze the impact of factors of social media on purchase decision.

  H4: Factors of social media have no substantial impact media on purchase decision.

 

5.  To study the impact of factors of social media on post purchase behavior.

H5: Factors of social media have no substantial impact on post-purchase behaviour.

Research Method

 

Data collection

Quantitative research is carried out to conduct the study. The total population of this study comprised from all social media users in Chandigarh, India. The estimated number of the population of this region is about 1,055,450 persons, as per population census 2011, India. (Source: http://censusindia.gov.in/). Primarily, stratified proportionate sampling research design is chosen for research purpose, whereby population has been divided into categories age wise. People who are born between 1995 – 2012 are chosen as respondents, then snowball sampling is used for finding further prospective respondents. The sample finally consisted of 350 social media users.

 

Procedure

 A Structured questionnaire is distributed among respondents as primary source of data collection. The questionnaire follows three parts: the first part portrays dimensions of social media, second part handles buying decision process, and demographic characteristics at the end. The first part involves questions like, most preferred social media among Instagram, WhatsApp, Twitter, Facebook, You Tube and Snapchat, reasons for making account on social media, major activity perform on social media. The second part involves measurement of 30 variables as factors affecting buying decision process. These 30 variables are measured by using 7- point Likert scale from 1 as strongly disagree to 7 as strongly agree. Cronbach alpha on smartPLS test the validity and reliability of construct.

 

Empirical Analysis             

Table 1: Analysis of Social Media usage and demographic variables

 

Variable		Frequency	Valid Percentage
Gender	Male	172	49
	Female	178	51
Education	Higher School	58	17
	Diploma	40	11
	Bachelor	93	27
	Post Graduate	159	45
Age	Less than 15 years	38	11
	15-20	61	17
	20-25	251	72
Residential Status	Urban	189	54
	Rural	161	46
Do you use social media?	Yes	350	100
	No	0	0
How long have you been using Social Media?	Less than 6 months	0	0
	6 months to 1 year	42	12
	1 to 2 years	148	42
	2 years or more	160	46
On an average, how many hours daily do you spend on Social Media?	Less than an hour	157	45
	1 to 2 hours	16	5
	2 to 5 hours	138	39
	More than 5 hours	39	11

          

The result shows that 49 % of respondents are male and 51 % are female. 11% of respondents are less than 15 years, 17 % of respondents are between age of 15-20 years and 72 % of respondents are between   age of 20-25 years. 17 % of the respondents are higher school students, 17% of respondents are diploma holders, 27% of respondents are degree holders, and 45% respondents are post graduate. 54 % of respondents belong to urban area, 46 % of respondents belong to rural area. In case of social media usage, all 350 respondents use social media. Out of this, 46% of respondents are using social media from 2 years or more, 12% of respondents are using social media from 6 months to 1 year. On the other side, social media usage in 45 % respondents is less than an hour in a day, in 5% of respondents is 1 to 2 hours per day, in 39 % of respondents is 2 to 5 hours on daily basis, and in 11 % of respondents is more than 5 hours.

 

Hypotheses Testing:

Data collected from the investigation is analysed in smartPLS. Cronbach alpha for all variables is greater than 0.69. Multiple regression analysis as research sampling tool was used to test proposed hypotheses. The investigation focused on six variables: Content, E-Word of Mouth, advertisements, Rating and Reviews, Social Media Influencers and Entertainment, and validate their affect on buying decision process of digital natives

 

Table 2: Influence of social media dimensions on buying decision process of digital natives

 

 

 

Dependent	Independent	Beta	T	Sig.	R2	F	Sig.
	Social Media Influencers	-0.089	-1.056	0.292
Need Recognition	Entertainment	0.056	0.548	0.582	0.343	25.67	.000a
	Advertisements	0.192	2.034	0.042
	Rating and Reviews	-0.152	-1.467	0.142
	Content	0.286	3.005	0.002
	E-Word of Mouth	0.395	7.467	0
Information search	Social Media Influencers	-0.012	-0.153	0.877	0.58	64.39	.000a
	Entertainment	0.033	0.401	0.687
	Advertisements	-0.015	-0.206	0.835
	Rating and Reviews	0.032	0.387	0.697
	Content	0.581	7.513	0
	E-Word of Mouth	0.252	5.879	0
Evaluation of alternatives	Social Media Influencers	-0.037	-0.486	0.629	0.52	52.12	.000a
	Entertainment	0.088	0.974	0.331
	Advertisements	0.069	0.847	0.399
	Rating and Reviews	0.185	2.051	0.04
	Content	0.312	3.804	0
	E-Word of Mouth	0.243	5.34	0
Purchase Decision	Social Media Influencers	-0.071	-0.987	0.326	0.54	58	.000a
	Entertainment	0.269	3.108	0.003
	Advertisements	0.014	0.164	0.868
	Rating and Reviews	-0.014	-0.152	0.87
	Content	0.445	5.603	0
	E-Word of Mouth	0.242	5.281	0
Post purchase behaviour	Social Media Influencers	-0.07	-0.869	0.39	0.4	34	.000a
	Entertainment	0.114	1.166	0.245
	Advertisements	0.08	0.794	0.429
	Rating and Reviews	0.14	1.324	0.188
	Content	0.324	3.575	0
	E-Word of Mouth	0.19	3.769	0

                            

 

As shown in the table (3) of multiple regression analysis, R-squared for need recognition stage is equal to 0.343, which means that 34.3% of the variance in need recognition as dependent variable is due to social media as independent variable. R-square for information search stage is 0.58, which designates that 58% of the variance in information search as dependent variable is due to social media as independent variable. R-squared for evaluation of alternatives stage is 0.52, which denotes that 52% of the variance in evaluation of alternatives as dependent variable is due to social media as independent variable. R-squared for Purchase decision stage is 0.54, which signifies that 54% of variance in purchase decision as dependent variable is due to social media as independent variable. R-squared for post purchase behaviour stage is 0.40, which indicates that 40% of the variance in post purchase behaviour as dependent variable is due to social media as independent variable. For all models, P-value is 0.000 and it is <0.05, thus the model is significant statistically. Table 2 elaborates that the independent variable (social media) has significant relationship F= (25.67, 64.39, 52.12, 58, 34) with P<.05 with dependent variables; five stages of buying decision process. According to result analysis in Table (2), content, E-word of mouth, and advertisements have substantial impact on need recognition. Entertainment, content, and E-word of mouth substantially impact information search stage. Rating and Reviews, content, and E-word of mouth have strong impact on evaluation of alternatives stage. Entertainment, content, and E-word of mouth purchase have significant impact on purchase decision stage. Rating and Reviews, content, and E-word of mouth substantially impact post purchase stage. Now, it is evident that factors of social media (Content and E-Word of Mouth) have significant impact on all stages of consumer buying process. This means that these factors are considered as decisive factors that have influence on buying decision process.

Table 3: Impact of social media on buying decision process

 

 

From table (3),the results make it clear  that all assumed study hypotheses are rejected, and making it is apparent that social media as an independent variable impact all stages of buying decision process significantly.  

 

Conclusion

This investigation demonstrated  that social media affects Information Search stage, purchase decision, and evaluation stage in majority. Consumers use social media mostly for obtaining the information about products and services of different brands, followed by making mind to actually buy product. This stage converts consumer purchase intention into purchase decision. Need recognition stage is least affected by social media in influencing consumer behaviour. Out of all social media factors, content and E-word of mouth strongly alter purchase decisions of consumers. Content on social media is preferred by majority of respondents, followed by E-world of Mouth. Results have made it very apparent that consumers in Chandigarh are very active on social media with Facebook being the most accessed platform. All in all, it is needless to say that social media has become an imperative element for consumers that help them in deciding what to buy, from where to buy.

 

Research Implications

 

The results offer imperative implications for practitioners and researchers. For researcher, a new research model has been developed to bridge factors of social media and consumers buying decision process. Social media stands out to be an independent conduit for market communications where consumers have direct link with different brands. People are using wide range of social media platforms like, Instagram, Facebook and is not limited by the nation’s boundaries. Social media has become a new digital market for researchers to study behaviour of domestic as well as international consumers. It gives real insight of various attributes of consumer behaviour like, if one post is being shared by millions of people, it means they are agreed with statement or photo or video. Researchers can further investigate reasons for liking that particular post. So, social media provides ample scope for researchers to explore new dimensions of consumer behaviour especially current generation of digital natives as they are the one who are most exposed to digital world.  The study provides scope for business houses to deal with changing consumer behaviour. With the invention of technology, especially social media, consumers got a voice to speak about their likings and preferences towards various brands.  Users on Social media build relationships with each other’s and companies on various popular social networks. Social interaction ties depict the width of the social network by focusing on user’s relationships on social network. Consumers form a network on social media and develop interaction ties which leads to increase in frequency of communication among members, thus it has a multiplying influence on the final outcomes.  Social interaction ties act as encouraging channel where members freely share their buying experiences including product reviews. This change in consumer behaviour because of social media made social media a prospective field for organisations to discover opportunities to widen their customer base.

 

Limitations and future research opportunities

 

The research has some limitations and can be overcome in future researches.  Large sample size would yield different outcome to the current findings. First and foremost, limitation is related to generation cohort. For this research purposes, only one generation cohort (digital natives) is surveyed. Here, the opportunity would be targeting other generation cohorts like millennials, generation X for future researches. The second limitation and opportunity are related to social media platforms. There are numerous categories of social media, for this study only six type of social media platforms (Instagram, WhatsApp, Twitter, Facebook, You Tube and Snapchat) are considered, other categories (LinkedIn, Tik Tok, pin interest, tumblr, quora, TripAdvisor) are still untapped. The third limitation and opportunity are related to products and services. This buying decision process is studied to get consumer opinions on general products and services. This provides scope for additional research where researcher can study for one particular product and services. Hence, companies and researchers will get more understanding of consumer behaviour. The fourth limitation and opportunity are related to sample area. This research is conducted in Chandigarh in India as sample area with limited sample size, however other cities, States, nations should be inspected to determine if digital natives respond to social media in same manner as they do in Chandigarh.

 

 

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