Running Head: EFFECTS OF SOCIAL MEDIA ON CONSUMER BUYING BEHAVIOR

EFFECTS OF SOCIAL MEDIA ON CONSUMER BUYING BEHAVIOR

METHODS IN BUSINESS RESEARCH

RESEARCH REPORT

Submitted to
Ma’am Nimra Sharif

Made by:
Nimra Razzaque (21444)
Vinesh Kumar (20990)
Ali Misbah (19045)
Umema Abbas Lakdawala (19613)
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Acknowledgement

We are thankful to almighty ALLAH for granting us this auspicious opportunity to learn
something new and useful for us. This interesting piece of work is the outcome of the
continuous efforts and the complete devotion of all the group personnel. We got a chance to
learn something different and new while making this report. We are very much thankful to our
instructor, Ma’am Nimra for being a constant support throughout the research work. It was due
to her guidance we are able to learn how to do research and what are the key points necessary
for conducting research in a better way. However, we acknowledge full responsibility for any
lacks in this report.

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Letter of Transmittal

Dated: 13th august 2019

Ma’am Nimra Sharif
Course: Methods of Business Research

Respected Ma’am,

We would like to express our honest gracefulness to you for providing your invaluable
guidance, and the pool of advises for the course of the report.

This research report has educated us more in knowledge about consumer behavior in the buying
decision and the appropriate results that how differently social media impacts on consumer
buying behavior, and it was a great learning experience as well as a great opportunity to spread
out our horizon.

Sincerely,
Nimra Razzaque (21444)

Vinesh Kumar (20990)

Umaima (19613)

Ali Misbah (19045)

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Table of Contents

Acknowledgement ................................................................................................................................. ii
Letter of Transmittal ........................................................................................................................... iii
Chapter 1: Introduction ....................................................................................................................... 1
1.1 Background.................................................................................................................................. 1
1.2 Objective of the Study ................................................................................................................ 2
1.3 Scope of Study ............................................................................................................................. 2
1.4 Problem statement ...................................................................................................................... 2
1.5 Research Questions ..................................................................................................................... 2
1.6 Hypothesis.................................................................................................................................... 3
Chapter 2: Literature Review ............................................................................................................. 4
2.1 Review of the literature .............................................................................................................. 4
2.2 Conceptual framework ............................................................................................................. 10
Chapter 3: Methodology..................................................................................................................... 11
3.1 Data ............................................................................................................................................ 11
3.2 Variables .................................................................................................................................... 11
3.3 Inclusion criteria ....................................................................................................................... 11
3.4 Sample and Sampling Technique ............................................................................................ 11
3.5 Model and Statistical technique ............................................................................................... 11
Chapter 5: Conclusion, Limitation and Recommendation ............................................................. 13
5.1 Conclusion ................................................................................................................................. 13
5.2 Limitations ................................................................................................................................. 13
5.3 Recommendations ..................................................................................................................... 13
References ............................................................................................................................................ 15

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List of Figures

Figure 1: Conceptual Framework ............................................................................................ 10

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Chapter 1: Introduction

1.1 Background

Social media is a platform through which we can communicate with our targeted audience.
Communication through this platform can be done through different modes as Instagram,
Facebook, Twitter, WhatsApp and Snapchat. We can either pay the particular application for
the advertising of our product or we can make our own page and share it to the people we have
to reach. Social media is used by various organizations so that they can acknowledge targeted
audience through the most used platform by them. Social media does not only help to retain
our existing customers but also helps to make new ones through different attractive advertising
techniques.
It is essential to know the attitude of customers while buying a product. The buying behavior
of consumers do not only help an organization to design their marketing strategy but also fulfill
the demand of final consumers.
The process of buying behavior starts with consumer identifying the need that what product
does he require. It is then followed by the search made by consumer for the product he needs.
The consumer would be able to get information about his required product through the most
used social media platforms. Once he will have different choices available for his need-product,
he would now analyze which brand to purchase. He would assess the price, quality and other
factors and then would finally decide the brand from which he has to purchase. Then, the
customer will buy the product and give reviews about it.
Social Media plays a vital role in buying behavior because the consumer gets awareness
about the product from there only.
It is very important to create awareness among targeted audience related to your product. In
order to create awareness further, social media has an important role because it persuades the
buying behavior of consumer and creates loyalty in the minds of consumer.
Social Media has made it easy for organizations to reach their its targeted audience and it is
very easy to promote products and services through platform of social media.
Social Media is the most powerful tool of advertising these days. A customer can easily get
to know about the specifications and detailed information of the product or service. Whenever
the individual opens up any application such as Facebook, the first thing which pop up on
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screen is the suggestion for the products he is searching for. This happens because our most
searched thing is already caught and saved by social media applications.
Social media is powerful tool in affecting customer buying behavior because people mostly
spend the time on social media.

1.2 Objective of the Study

• The objective of this research is to know the impact of social media on consumer buying
behavior.
• This study will help us to know the most effective mode of social media that influence
consumer’s behavior while purchasing a product or service.
• Different organizations use different social media platforms to promote their product
whereas this study would tell them which platform is most effective to attract their final
consumer.
• This research is helpful to find out role of social media in daily lives of people.

1.3 Scope of Study

This research highlights different platforms of social media including Facebook, Twitter,
WhatsApp, Instagram and Snapchat through which products and services are promoted and
their impact on consumer buying behavior.
The research is based on the insufficient data and is limited to the specified location.

1.4 Problem statement

There are different ways to which a brand markets its product. Social media is playing an
important role which comprises of applications such as snapchat, WhatsApp, Facebook,
Twitter and Instagram.
The purpose of research is to know how social media is an important tool of marketing and
influencing consumer behavior while purchasing.

1.5 Research Questions

Q. Does social media has an impact on consumer buying behavior?
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1.6 Hypothesis
H0: Social media has no significant impact on the consumer buying behavior
H1: Social media has a significant impact on the consumer purchase decision
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Chapter 2: Literature Review

2.1 Review of the literature

Social Media has brought significant changes to both consumers and businesses.
Investigations told that there is a need for social marketing and a need to shift business approach
of advertising through social media. Moreover, not only on business but social media plays an
important role on consumer buying behavior too. Consumers view online advertisements
through different platforms of social media and keep themselves updated and aware about
information of products. Social Media is also used to provide feedback for the products used
by customers. It is agreed that social media is more informative, interactive and reliable mode.
Consumer checks the past performance of product and reviews by reading them on pages.
Consumers have an opinion that social media is used by organizations because this is an
innovative tool of spreading awareness among targeted audience and keep them loyal to their
products by reminding them about its existence. Social media has changed every sphere of life
so its impact on consumer buying behavior cannot be nullified.(Nufaizil, 2014)
Social media is defined as group of internet based applications which are built on ideological
and technological foundations of world wide web to allow to create, transfer, discuss,
communicate and exchange of user generated content. There are many types of medium being
used for express on opinion or convey content. Blogs are independent personal web pages that
are used to describe the details of any person, product, service or event. It is very common that
people use blogs to register their protest or express their opinion about any product or service.
Generally, companies now a days are hiring bloggers for marketing the products or service.
Moreover, people also write blogs for informative purposes like guiding people about usage of
any product or service or comparing two substitute products or service. Review and rating sites
are also one of the important social media platform which the people use to express opinion
about any product or service. People also use reviews and rating sites to make decision to
purchase any product or service. Forums and discussion sites like Yahoo Group and Google
Group also provide their users a platform to express their opinion or to gather information to
make purchase decision. Content communities like YouTube and slideshare are also used to
describe the product or service specifications, customer experience and any training for
utilization. Facebook, Twitter and Instagram are used as micro blogging tools to deliver short
messages and contents. Social media apps are being used for specialized services like LinkedIn
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which is used for hiring and job seeking purposes. All the above mentioned social media tools
are used as e WOM (electronic word of mouth), these tools play important role in opinion
building of consumer regarding purchase decisions.
This research indicates that social media tools are effectively used during stages of consumer
buying behavior specifically when a consumer collects information about the product, evaluate
the alternatives available and decide which one to choose. It also influences post-purchase
behavior when the consumers give their opinions about the products they have used. These
opinions become important in influencing the purchasing behavior of other consumers such as
friends family or any other person who gets access to the review given about that certain
product. This research also investigates that social factors such as family or friends also play
an important role while purchasing a product.(Ozer, 2012)
Most effective marketing tool is WOM ‘word of mouth’, which is person to person
communication between the receiver and communicator about any product, service or brand.
WOM has been the source of shaping customers’ opinion, taste, attitude, expectations and
perceptions since the known human history. WOM is more prominent now due to the expansion
of span of sharing information via social media channels; It is termed as electronic WOM.
Evolution of social media paved new ways of gaining the information relating to products and
service present in the market. It has enabled users to discuss about the brands in a more
convenient way than ever earlier. Social media has given the platform to the customers to
express their opinion who used to be dormant previously. It has shifted the opinion building
power to the consumers from the marketers. Social media has also influence on all the variables
of EBM model including customers’ need recognition, searching the information about the
product and services, evaluation of alternatives, decision about purchase, and post-purchase
evaluation. There are four types of consumers’ behavior complex buying, dissonance reducing,
habitual buying and variety seeking buying. Social media impacts the five variable of EBM
model and three stages of decision making.(Voramontri & Kleib, 2018)
Social Media plays an imperial role in generating attitude of consumers towards buying
behavior. When a consumer consecutively experiences a particular brand on the platform which
is mostly used by him, he remembers the brand name and sets it as priority. Furthermore, the
preference of consumer would change through different types of advertisement popping up on
the applications he is using and would change his interest towards a particular brand and
product positively. Furthermore, a consumer would be more satisfied while buying the product
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which is there in his mind compared to the one which is not being advertised through the social
media platform. Since a consumer spends most of the free time there, he should be aware and
reminded about the concerned updates of the product. Marketer should keep on looking for
different methods of advertisements on social media platforms which can attract consumers
and bring them towards the organization. Furthermore, this research focused on the connection
of consumer and seller which is built through social media platform. Since a customer contacts
seller through social media, seller gets an opportunity to get all contact details of the consumer
and update him regarding information.(zijhie & Yongh, 2013)
The results of this research suggest that respondents tend to buy online through social media
if the process of delivering and accessing the product is very easy. If social media websites and
applications are complex to use and people get time to understand them so it might lead to
inconvenience and would not augment the number of customers to buy through social media.
So it is vital for business to know that they should keep their functions of usage very clear and
understandable.
Social media is connecting all people and has given death to distance. People are grouped
together according to the similarities they have such as lifestyle and hobbies. Social media is a
good platform to reach targeted audience very easily even if they are living at far-distance and
cannot be accessed physically. Many people can view the advertisements and also give their
feedback which would be further useful to influence other people. So in short, social media is
important for both consumers and companies.(Nor & Al aggaga, 2012)
Social media platforms help the firms to identify the target groups which needs to be reached
out through social networking sites. This study also highlights the way a positive image can be
created in minds of consumers and the way in which negative image can be created too.
Furthermore, it guides businesses and marketers about different tactics of keeping one business
away from creating an adverse effect or image on the minds of consumer. In addition to that,
this research further tells about the time periods such as when the world cup is going on or
other peak entertainment time periods during which consumers are active and can highly and
quickly respond to the advertisements as they are fast in making decisions. (Difley, Kearns,
Benetti, & Kawalek, 2011)
Social media has got a lot of fame because it has provided platform to whole of the global
world to share information, do communication and also engage themselves in business
activities. Facebook enables people to know what is going on in the world and also has some
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different entertainment and communication features. Instagram helps to look each other
through different time periods. YouTube helps to promote videos regarding educational and
entertainment material. Snapchat enables to know where a person is and what he has been up
to. So from the minor things to the major information, it has played a very important role.
While watching some important frequently watching videos, a lot of ads pop up in between
and they further create an awareness among people even if they have zero knowledge about the
background or emergence of the business. (L tuten, 2008)
The companies and business should engage their customers on social networking sites by
providing them new connections. They can offer range of games in which they engage and start
dedicating more time towards using the website. Slowly, when he consumer would be habitual
of the game on that website, he would be using it frequently. The frequent use would give
opportunity to business to advertise their products because consumers would take decisions
very quickly. Since they are already using this website from a long time period and are satisfied
as well, they would prefer to be loyal to the company and website and would definitely realize
to use the product being advertised there. This can be done in applications as well as on
websites. As a result, companies would have a broad figure about their potential customers and
their interests as well which would be more knowledge-based to be used for further marketing
tactics in such a way that those strategies can persuade consumers to buy the product.
(Heinonen, 2011)
This research highlights different social networking sites such as YouTube, Instagram,
Facebook and WhatsApp. Further, it tells about the methodologies to use them for the purpose
of advertisement. It also suggests that these are the most frequent used applications and
websites which can influence the sales of company through marketing and buying behavior of
consumer through watching ads and responding to them. Further it also throws the light on the
growing importance of these social networking sites with the view point of business and
customers as well. Customers spend most of their time on social media so that’s why they are
more concerned about what is new there rather than the old traditional methods of
advertisements and awareness through television or radio.(m.boyd & ellison, 2007)
Social media creates and saves all necessary information related to seller and buyer who is
a frequent user of social media platform. It makes product mix and promotional mix related to
a product being advertised and influenced over consumers to go for. Moreover, consumer to
consumer conversations happen on the social websites in which they have a good
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communication regarding particular product or company too. That conversation is further

conducive in designing different strategies as consumer is sensitive towards type of ad he is
watching. Furthermore, E-media plays an important role on influencing customer purchase
intention because either a customer gets satisfied with the service or ad and prefers to go for
that or he leaves that which influences his decision making negatively.(Rehmani & Khan,
2011)

Decision making process consists of five stages including

1. Problem Recognition
2. Search of Information
3. Evaluation of Alternatives
4. Final Decision
5. Post Purchase Decisions

Problem Recognition:
When a consumer finds significant difference between the desired results and actual
perceived value from any product or service, its phenomenon is called problem recognition.
Social media is one of the tools for the customers to make mind set about the desired results
about the specifications of any product and service.

Search of Information:
Once the consumer recognizes the problem relating to desired results and actual
performances, he / she goes for searching the multiple options, identifying the selected options
and finding out the final outcome. Information searching can be of two types namely internal
and external. In internal information searching, customer uses his / her own experience to make
future decision while in external information searching, customer uses external sources to
gather more information to make further decisions. External sources may include marketers,
print & electronic media and the most important social media.

Evaluation of Alternatives:
Once the option is opted during information searching, customer makes an evaluation
regarding the viability of the different alternatives to fulfil the desires results. To verify the
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viability, customer uses direct and indirect experience to make the decision. Experience can
either be positive or negative. Negative experiences are always result in cost ineffectiveness,
time wastage and risky. Once the evaluation completes, customer makes believe about certain
product or service. Social media which is source of indirect experience has immense effects on
consumer’s evaluation of alternatives.

Final Decision:
Once the evaluation is done, customer makes a decision to purchase the product or service.

Post Purchase Decision:

After the consumption of product and service, customer once again makes decision about
the satisfaction or dissatisfaction. If the product or service does not satisfy the customer,
decision making process will start in the same pattern as described above until the desired level
of outcome is not achieved.(Lee, 2013)
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2.2 Conceptual framework

Dependent
Independent Variable: variable:
Social Media Consumer buying
behavior

Figure 1: Conceptual Framework

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Chapter 3: Methodology

3.1 Data
This research was based on impacts of social media on consumer buying behavior.
Quantitative data techniques would be used here. However, questionnaire would be made and
circulated among focus groups. Questions will be close ended and research will be done on
social media users. Finding will help to conclude how the social media impacts the customers’
decision making.

3.2 Variables
Independent Variable:
In this research, we have used social media as an independent variable.

Dependent Variable:
In this research, we have used effects of consumer buying behavior as a dependent variable.

3.3 Inclusion criteria

The targeted criteria is the students and teachers of Institute Of Business Management. The
sample ranges from 20 to 60 years, both male and female.

3.4 Sample and Sampling Technique

The sample size is 250 which includes, students of different universities and few working
people. It includes both male and female.
We will use non-probability and the convenience-sampling technique to gather a sample.

3.5 Model and Statistical technique

The topic of our research is the effect of social media on consumer buying behavior. We
will use correlation and regression test to check relationship between two variables. We will
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use the correlation of parametric test and regression to check the relationship between our
variables.
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Chapter 5: Conclusion, Limitation and Recommendation

5.1 Conclusion

Our research explicates that the different modes of social media (Facebook, Instagram,
Snapchat) has a significant impact on a consumer buying decision. Every mode individually
has a high impact on the buying decision of consumers that means, every social media mode
specifically has an impact. The respondents of our research were the university students and
some of the working people who knew about variables of our research.
Our null hypothesis has been rejected because it was analyzed that there was a statistically
significant impact on consumer buying behavior of social media.

5.2 Limitations

• This research study aims to identify the impact of various types of advertising on consumer
purchase decision. However, it was limited to the Students of IoBM and working staff of
IoBM only.
• As the time was limited, we could not gather information from much sources which can be
more authentic and reliable.
• The sample chosen may fails to represent whole population because the views of people
are contradictory to each other.
• There can be the other factors too which can affect consumer buying behavior other than
social media. Nonetheless, they were not emphasized.

5.3 Recommendations

• The study tells us that there is statistically a significant impact of social media on sales that
means that advertising agencies need to continue make the ads strong to fully reach out the
specified audience with the help of social media.
• Since this is being a common way to be used by all businesses, innovative techniques must
be brought in and the social media advertising techniques should be modified as well.
• Apart from only social media advertising, promotion tools like shows, offers, free trials,
coupons, gifts are also lucrative in a buying behavior of consumers.
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References

Difley, Kearns, Benetti, & Kawalek. (2011). Consumer behavior in social networking sites.
Heinonen. (2011). Consumer's activity in social media.
L tuten. (2008). Social centric and emergence of social media marketing.
Lee. (2013). Impact of social media on consumer behavior decision making process.
m.boyd, & ellison. (2007). Social networking sites.
Nor, S., & Al aggaga. (2012). Factors affecting malaysian young consumers' online purchase
intention in social media websites.
Nufaizil, A. (2014). Impact of socialmedia on consumer's buying decision.
Ozer, S. (2012). Effects of social media on consumer buying decision process.
Rehmani, & Khan. (2011). The impact of E media on customer purchase return.
Voramontri, D., & Kleib, L. (2018). Impacts of social media on consumer behavior.
zijhie, H., & Yongh, g. (2013). Social brand community and consumer behavior: quantifying
relative impact on market.