Impact of Social Media has had on the Consumer Buying Behavior Model

In the past few years, there has been substantial growth in technology, providing people with what is commonly referred to as a virtual environment. This enables individuals to come together, thus increasing their interaction levels and creating numerous tools that have greatly exploited web services’ capabilities. According to Mangold, this virtual environment has led to the advent of social media, which is rapidly becoming an essential component in integrating communication in marketing. It allows organizations to build strong relationships with their most promising customers (Mangold and Fauls, 2009).

Kaplan and Haenlein note that the concept of social media is currently heading the agenda in most business management discussions. Most firms are seeking ways to maximize profits through the use of social media platforms such as Facebook, Twitter, LinkedIn, YouTube, and many more (Kaplan and Haenlein, 2010). Kaplan and Haenlein also suggest that different social media applications tend to attract diverse types of people, so it’s advisable for firms to maintain an active presence wherever their customers are (Kaplan and Haenlein, 2010). Social network sites’ presence has introduced new ways for consumers to behave, especially when it comes to purchasing. Currently, social media applications have become so common that they can’t be ignored in the consumers’ buying decision process.

Literature review

The main purpose of the chapter is to provide a review based on the existing literature of consumer behavior (Kotler, 2009). The review is expected to consist of an understanding of consumer behavior as well as their behaviors in the digital environment. Furthermore, it will examine how digital interactivity influences these behaviors. The stimuli-response model by Kotler will serve as a starting point for understanding consumer behavior. The chapter will also initiate discussions on the main factors influencing consumer purchase decisions, briefly explain the stages involved in the buying decision process, and discuss its development (Kotler, 2009). For a deeper understanding of how consumers are changing their behavior through the tools of social interaction enabled by Web 2.0 technology, the chapter will emphasize digital interactivity among consumers and describe the term ‘social media’ along with its different types.

The research will also explore the social dimensions of social network sites and evaluate the ways in which digital interactivity has influenced consumer decisions at the point of purchase. In addition, it will explain the selected model used to gain an insight into digital buying behavior and its common determinants. This model is intended to be used in the research to address all arising research questions.

Consumer behavior

Consumer behavior is defined as a study to gain knowledge on how individuals or groups of people purchase, utilize, and dispose of products, services, and experiences to satisfy their needs, as stated by Simonson (Simonson 2001). However, most researchers in consumer behavior agree that consumer behavior is usually influenced by three things: individual, cultural, and social factors.

Social groups

Research indicates that consumers have a high tendency of interacting, informally and continuously, with their primary groups, which include family, co-workers, and friends. They also prefer to belong to secondary groups, such as religious and professional organizations, which require fewer interactions. According to Kotler, both types of groups usually tend to exert a direct and indirect influence on consumers’ attitudes as well as their behaviors (Kotler, 2009). Kanuk explains that the influence reference groups have on consumers’ decisions and buying intentions cannot be overlooked since it can be remarkably strong. Additionally, opinion leaders offering informal advice and information about specific products or brands may significantly influence consumers. According to Jensen, the family, as a reference group, has the most substantial purchasing influence, as parents have been found to overwhelmingly shape their children’s choices, especially the purchasing decisions (Jensen, 1991).

Individual consumer

Research indicates that the buyer’s decisions are highly influenced by the individual buyer’s personal characteristics. These range from age, occupation, stage in life, self-concept, economic status, personality, values, and lifestyle, according to research conducted by Kotler (2009). In accordance with the ever-improving digital marketing, organizations have taken to setting up their own pages. These pages link their followers, or as they are referred to on the sites, ‘fans’, through social network platforms. It is on these social platforms that a firm can track consumers who are attracted or passionate about their brands and more importantly, attract brand loyalties. Consumers have been found to have a high tendency of sharing their brand choices and their personality on social network sites. This helps organizations gain insight about the personal traits of their customers and how they relate to their brand of choice (Ryan and Jones, 2009).

Culture

According to Peter, culture can be articulated as the main determinant of consumer’s wants. Cultural norms and values usually serve as guidelines for consumer behavior. Individual cultures consist of subcultures which lead to the provision of more socialization and specifications for the members. These cultures can be categorized as geographic regions, religions, and nationalities. Due to cultural diversity in countries, marketing campaigns have had to introduce a new strategy. They’re aiming to define target markets in accordance with cultural diversity (Grier, 2006). Therefore, it is paramount for marketers to thoroughly understand the characteristics of social classes since they portray different brand and product preferences (Kotler, 2009).

Consumer Psychology

Consumers’ set of psychological processes is a prime factor, as well as the characteristics of consumers in regard to the buying decision process. Moreover, consumers usually combine their psychological processes with their characteristics in making their buying decisions, according to Loken (Loken, 2006). Loken also illustrated that there are four key psychological processes which influence consumer buying decisions: memory, motivation, learning, and perception.

Motivation

According to Kotler, people’s needs can occur at any given time, and a need elevates to a motive when it moves them towards acquiring a desired target (Kotler, 2009). People need motivation to act, and when consumers share a similar product category, there is a need to enhance their motivation. This ensures that they engage in the development of relationships, as well as in the evaluation of different brand names.

Perception

Upon motivation, people get ready to act. Hence, their way of acting is usually influenced by the way they view a situation, by their perception, and also in terms. Therefore, Kotler described perception as the process of people selecting, organizing, and interpreting input information to ensure the creation of a meaningful world picture, which actually affects the actual behavior of consumers (Kotler, 2009). Upon high motivation of consumers, there is a greater likelihood of perceiving the environmental stimuli which is related to their needs, and more so, receives extra information in regard to their brand of choice. This leads to a favorable evaluation.

Learning

After acting, people learn, which is characterized by behavioral changes which emanate from experience. In accordance with theorists of learning, learning is produced upon the interplay of stimuli, reinforcement, drives, cues, and responses, according to Loken’s research (Loken, 2006). For example, in the event of a consumer purchasing a computer and having a rewarding experience, the response towards the computer and its brand will be positively reinforced. In the case where the same consumer has a desire to purchase a printer, they will experience a high tendency of purchasing a similar brand printer. This is due to the assumption that since the computer was good, there is a high possibility of the printer being good too.

Memory

The long-term memory is the storage of all the information and experiences people have gained in their lifetime. In addition, the majority of widely accepted views of the structure of long-term memory assume that individuals are informed by links and nodes, according to Wyer (Wyer, 1989). However, consumer research indicates that a consumer’s brand knowledge is usually considered a node memory, with a variety of associated links.

Buying decision process

The theory developed by Hoard and Sheth, “Theory of Buyer Behavior,” identifies the elements of a buyer’s decisions and separates the elements into three: a set of motives, several alternative courses of action, and mediators of decisions, by which motives are usually matched with the alternatives. Motives are usually specific to a particular class of products and lead to reflection of the underlying buyers’ needs, as well as the alternatives, which are identified as various brands with the potential of fully satisfying the motives of the buyers (Howard & Sheth 1969). The buying decision is also referred to as the stage model, as illustrated below.

Howard and Sheth, in their research, indicated that post-purchase behavior and pre-purchase behavior are the main stages as far as the decision process is concerned (Howard & Sheth 1969). The three stages, which include pre-purchase behavior, information search and evaluation of alternatives, and problem recognition, have a high likelihood of being changed, formulated, and reformulated until the decision is made (Mitchell & Boustani 1994). Upon making a purchase, the post-purchase behavior stage is initiated. This stage is inclusive of evaluation leading to customer satisfaction, recurrence of purchasing of the product, and developing a tendency to speak highly of the product. However, buyers are usually influenced by the social environment they are in, which often leads to a purchase decision based mainly on word-of-mouth communication. Gilly’s research cemented the idea that word of mouth is very influential towards consumer decision-making and has been highly recognized in advertising literature as well as marketing (Gilly 1998).

Model of consumer behavior

The theory by Howard and Sheth about buyer behavior has provided a very deep insight into the decisions made by buyers. The theory is based on four major components which include response variables, stimulus variables, exogenous variables, and hypothetical constructs. The theory illustrates that consumers are often stimulated by their commercial environment which entails the service of the products, product information, or quality and price of the products provided by the social environment (Howard and Sheth, 1969). The hypothetical constructs include the perception and learning constructs. Learning constructs help buyers gain motives which lead to the provision of action impetus as well as the evoked set of alternatives, ensuring the satisfaction of their motives.

Based on the theory, consumers tend to match their motives with alternatives and rank them in terms of the capacity for want-satisfying, which is done by decision mediators. Through learning, inhibitors become active which include high brand price, time pressure on the buyer’s financial status, and lack of brand availability (Howard and Sheth, 1969). In addition, consumers can be termed as satisfied or unsatisfied in accordance with the degree of the buyer’s expected and actual consequences. The constructs of perception serve the sensitivity of buyers to information, their search for information, and their biased perception. After considering these constructs, the buyers usually respond to the mentioned variety of input stimuli with a variety of responses which may include intention or attitudes, behaviors, and purchase behavior. Howard and Sheth also indicate that the said exogenous variables, which are the likes of culture, social class, and the buyer’s personality, are also influential pertaining to the buyer’s decision (Howard and Sheth, 1969).

Social media

Research done by Kaplan and Haenlein brings more insights to the meaning of social media since they define it based on two terms which are Web 2.0 and also User generated Content. The two describe social media as a group of internet-based applications that facilitates building on the technological and ideological backgrounds or rather foundations of the Web 2.0 allowing the creation and exchange of User Generated content (Kaplan and Haenlein 2010). Therefore according to the two researchers, social media creates platform on behalf of the users where they can come together and exchange, communicate, discuss and participate in any form of social interaction online encompassing texts, images, audio, video as well as other media which is usually as a combination or rather a group or individually. Kaplan and Haenlein also have brought it to the attention of all firms that they must oblige or rather be conscious of the social media tools which includes customer ratings and reviews, user profiles are the trending factors towards becoming or rather realizing the main source of information for most of the consumers especially during making an important purchase (Kaplan and Haenlein 2010).

Forms of Social media

There are different forms of social media, which includes:

Blogs.

Blogs are social media tools that serve as personal web pages. These pages usually avail themselves in multiple variations, including summarizing the most important information in a specific area, service, or product, or describing the author’s life (Kaplan and Haenlein 2010). Blogs are mostly used to report local news, offer people’s opinions, and share their experiences and visions about any product, service, brand, or purchase.

Review and Rating sites

They are sites that allow people to rate and review products, services, companies, and anything they feel like.

Forum and discussion sites

There are sites such as Yahoo and Google that allow users to have their personal online discussions in regard to a topic of their choice, which may be a particular brand, product, or company.

Content Communities – Media Sharing Sites

These help to share media content between users from a wide range of different types of media, which includes texts, photos, videos – such as those on YouTube – and PowerPoint presentations through SlideShare.

Social Network Sites

These are the most common social media sites. They allow users to connect by facilitating the creation of a profile which includes personal information, inviting friends and colleagues, and granting them permission to access the profiles. They also enable the sending of emails and instant messages among each other (Kaplan and Haenlein, 2010). These sites include Facebook, Twitter, Google+, LinkedIn, and Badoo.

Technology acceptance model

The Technology Acceptance Model focuses on technology aspects perceived by the user, while simultaneously overlooking behavior-related issues that may affect the interaction between the user and technology (Davis, 1986). Davis’s research indicates that the Technology Acceptance Model consists of three constructs: perceived user-friendliness, perceived usage, and usefulness (Davis, 1986). Due to expansions made to the model, it now includes the intention to use technology, variables identified as independent, those that are easy to use, those perceived as useful, and most importantly, the dependent variable, which is the usage of technology (Davis, 1986). According to the model, Perceived Ease of Use is the degree to which a person believes that the use of a particular system would be effort-free. Perceived Usefulness refers to the degree to which a person believes that the use of a certain system would enhance their job performance (Adams, 1992). On the other hand, Impulsive Buying is defined as the tendency for a consumer to spontaneously, immediately, kinetically, and unreflectively make a purchase.

Conclusion?

According to the model by Kotler, when consumers make a purchase, they tend to combine their psychology and characteristics, which include social factors and personality, in their decision-making process (Kotler 1965). Research has discovered that during the buying decision process, social interactive tools are perceived to be among the most trustworthy sources of information. On the other hand, social network sites are considered ideal for seeking opinions from friends. Consumer personality is perceived to play an important role in purchase behavior. It is also highlighted that an increase in price leads to a decrease in the use of social interactive tools (Kotler 1965). Moreover, when making an expensive purchase, family influence takes precedence. It is evident that social platforms are highly influential when it comes to making a buying decision, as they are a means of collecting information about products, post-purchase behavior, and brand evaluation. The importance of social media sites is even more pronounced due to their user-friendliness, making it easy to access the required information from any geographical location.

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