How Social Media Impacts Consumer Behavior

Hope Jensen Schau

Associate Professor of Marketing Gary M. Munsinger Chair in Entrepreneurship and Innovation

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

What is Social Media?

Internet and web-based technologies used to transform broadcast media monologues (one-to-many) into social media dialogues (many-to-many).

Demystifying Social Media

Social interaction is NOT new, novel or disruptive Social media are technology platforms that enable social interaction When people interact, they talk about common points of interest (interest or topic homophily) Lively discourse reveals preferences, leading to word-ofmouth Social media can lead to collective, collaborative behavior

Social Media and WOM

Person-to-person referrals
Basis of many client-based businesses Basis of many product trials across categories

Word-of-Mouth Marketing
Harnessing and leveraging the power of WOM Australian firm (MLM) believed to have coined term WOMM in 1980s

Why is Social Media Important?

What Do Users Trust

What is Social Media Marketing?

Using social networks, online communities, blogs, wikis or any other collaborative media for marketing, sales, public relations and customer service.

Social Media Tactics

Enhances former marketing strategies Introduces new strategies, e.g., engagement Improves intrafirm resource integration Builds value within the supply chain

How Does Social Media Improve Intrafirm Resource Integration?

Most Tweeted Brands

Social Media is More than WOM

Collective Collaborative Value Creating Value Enhancing Value Realizing

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Collective Consumption
Most theories of consumption are based on psychology and economics which overwhelmingly assume individual actors. Consumption is often collective.
Families Co-workers Communities Friends Neighbors Affinity Orgs

Consumer Collectives
Subcultures of Consumption: Distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity. (Schouten and McAlexander 1995) Brand Community: Specialized, non-geographically bound communities based on a structured set of social relationships among admirers of a brand. (Muniz and OGuinn 2001) Consumer Tribes: Multiple, playful, transient, and entrepreneurial groups where consumers seek social links with people through the shared use of products and services. (Canniford 2011)

TYPOLOGY OF ONLINE CREATIVE CONSUMER COMMUNITIES (Kozinets, Hemetsberger, Schau 2008)

Vigilante Marketing Defined

Unpaid advertising and marketing efforts, including one-to-one, one-to-many, and many-to-many commercially oriented communications, undertaken by brand loyalists on behalf of the brand.
(Muniz &Schau Journal of 2007) Advertising

Consumer-Generated Content (CGC), or UGC Enabled by Social Media

CGC Lego, Indiana Jones

Collective, Collaborative Brand Narratives

Collaborative, multi-authored textual narratives centered on two commercial offering: Vespa and Twilight Iteratively written and revised, then offered for wider acceptance among the collective at large. Longitudinal strategy
from the initial circulated drafts to the collectively agreed upon final form.

Vespa Collaborative Narrative 2011

Endorsed
Eco-friendly Urban/Near-Burb commuting Retro styling Celebrity luxury Futuristic orientation Open class access Social Causes

Silenced
Specific political and policy Nonregulated touring - play Waste personalization Inefficiencies/Imperfections

Twilight Collaborative Narrative 2011

Endorsed
Enduring romantic commitment Self-sacrifice Touchstone feminism Family Honor Desire/Lust

Silenced Questioning the narrator Religion, specifically Mormon Stalking, Pedophilia, Domestic Violence, etc.

Why is this important?

It is outside the dominion of the firm.
The firm cannot control its content or its dissemination.

It is perceived by consumers as more credible than paid marketing communications. It portrays the brand from an emic (inside) perspective. It demonstrates consumer collective and collaborative value creation.

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Connected Families: How Consumption Practices Survive Distance

Amber M. Epp, University of Wisconsin-Madison Hope Jensen Schau, University of Arizona Linda L. Price, University of Arizona Marketing Science Institute Working Paper Series

What are the implications for marketers of doing family through social media technologies?

Trends Toward Long-Distance Families

Commuting for work
3.8 million Americans are in commuter marriages, a 30% increase between 2000 and 2006 (U.S. Census 2006) Characterizes both privileged and lower-income families (Holmes 2009;
Sloan Work and Family Research Network)

High unemployment rates contribute to this trend

Military deployments
44% of active duty military members have children (1.2 million children affected) (Cozza 2011)

Changes in family structure

One third of all children in the U.S. have a non-resident parent (U.S.
Census 2006)

Normative life course changes

Family: A Consumers First Collective

Products, brands, and services become
embedded in our meaningful family practices (Brady
2007; Larson and Wiley 2006; Warde 2005)

caught up in sacred traditions that connect us (Epp and

Price 2008, 2010, 2011; Gibbs 2006; Wallendorf and Arnould 1991).

Other Company Responses

Shifts in Consumption Practices

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Brand Centered Platforms

Read More Previous Feature

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

The Twilight Brand Community

Brand Community: Twilight

The Twilight Saga

Four Novels (+ one unfinished) Teenage vampire romance
Young adult Fantasy Romance

Many metrics indicate the Twilight saga outsold JK Rowlings Harry Potter series in the United States and may surpass HP series globally.

The Author
Stephenie Meyer
a Mormon housewife Brigham Young University BA English Twilight was her FIRST foray into writing Prior work experience as a receptionist Best Selling Author in 2008 and 2009 2008 #49 on Time magazines 100 Most Influential People 2009 #26 on Forbes Celebrity 100 list of most powerful celebrities #5 on Forbes Hollywoods Top Earning Women Broke JK Rowlings record for weeks at #1 NYT Best Seller 2010 #59 on Forbes Celebrity 100 list of most powerful celebrities, despite no book release in 2009 or 2010 2011 #90 on Forbes Celebrity 100 list of most powerful celebrities Her husband is a retired auditor turned stay-at-home dad

Collective Consumption
Collective consumption dominated females engaged in the Twilight brand. Few fans engaged the brand alone.

Consumer Engagement
Consumers participation in brand usage, brand discourse and brand-related activities.

Lessons from Twilight

Although reading is solitary, the social component of this brand is important to the fans and members of the Twilight brand community. Fans are attracted to the saga through other evangelical fans and w-o-m on social media. Fans learn about and become part of the brand community through social media. Fans stay engaged with the brand community through social media and face-to-face contact.

Threadless Community is the Brand

A unique feature of Threadless is no community no brand Threadless, once the most innovative small company in America, also hangs by a Thread:
Had trouble replicating this model in other product categories Naked and Angry (housewares)
Inc. Magazine, June 2008

What is Threadless?
Community submits designs Community scores designs Threadless prints high scoring designs on shirts

Threadless : Scoring Designs

Score

Comment & Discuss

Threadless Community
So, your design wins

You receive $2,000 in cash and a $500 Threadless gift certificate

Check out how it was scored and by how many people Tell people about your design

Threadless Community
So, your design wins See pictures of people who bought your design

See what others think about your design

Lessons from Threadless

Threadless is a brand that in essence IS the community. As the founders themselves say no community, no brand Threadless the community exists primarily online in social media formats.

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

How Brand Community Practices Create Value

Hope Jensen Schau (University of Arizona) Albert Muniz (DePaul University) Eric Arnould (University of Wyoming) Journal of Marketing September 2009

Identify and categorize from a consumer-centric perspective, and in a generalizable fashion, co-creative practices, drawing upon a corpus of data across nine brand communities.

Research Engagement
Brand Community Research Engagement 3Com Audrey 20 months of naturalistic observation 8 in-depth interviews with key members 7 years of naturalistic observation 2.5 years of participant observation 82 in-depth member interviews 4 years naturalistic observation I year participant observation 4 in-depth member interviews 4.5 years naturalistic observation 8 in-depth member interviews 5 years naturalistic observation 2 years of naturalistic observation 23 years naturalistic observation 12 years participant observation 67 in-depth interviews 3 years naturalistic observation 6 in-depth member interviews 12 years naturalistic observation 2.5 years of participant observation 28 in-depth interviews

Apple

Garmin

Jones Soda

Lomo and Holga Mini Cooper Tom Petty and the Heartbreakers StriVectin Xena: Warrior Princess

Research Approach
We access participants in brand communities in collaborative co-creation activities specifically, as well as their emic notions of value relating to branded offerings and communal activities. We employ extended ethnography.

TPATH Brand

Managerial Implications
Uncover underlying consumer value. Companies should foster a broad array of practices, moving beyond mere customization. Managers can encourage a broad array of practices via seeding. Focus on practices provides guidance for engagement - scripting Companies can encourage the interaction of practices to foster greater customer engagement with the brand.

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

New Data in Social Media: Discourse Analysis

Semiotic
Iconography and meaning

Sentiment Analysis
Emotional valence

Semantic Analysis
Grammar and structure

Thematic
Content analysis

Sentiment Analysis
Valence of text: positive, negative, neutral Emotional content Find patterns among sentiments Find relationships with other forms of analysis: semiotic, semantic, thematic

Sentiment Analysis

Semantic Analysis
Sentence length Grammar formality Use of pronouns Use of verbs Use of articles Active/passive structure Find relationships among and within semantic categories Find relationships with other forms of analysis: semiotic, sentiment, thematic

Thematic Analysis
Product Development Technical Support

Why not fix the machine so that its more green offered to credit us for the additional waste disposal space was the main reason we went with Leica

Inflection Points and Marketing Strategy

Each inflection point is a messaging opportunity Tipping Points Long Tails

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Social Media and Shopping Behavior

Haul Videos YouTube Sharing Shopping Hauls or Outcomes
Finds Deals

Following
Views Comments

Social Media and Shopping Behavior Share outfits Share make-up tips Share Jewelry ensembles

Retail Responses
Levi has general consumer feedback and your friends feedback.

Retail Responses
Macys combines reality tv with social media to enhance shopping.

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Lucky 13 CGC Facilitation Checklist

Muniz and Schau Business Horizons 2011
My Place or Yours: Create a Gathering Place Share the Brand: Encourage Consumers to Collaboratively Create the Brand Meaning Structure Matters: Provide Parameters that Encourage and Enable Collaboration Set Up the Soapboxes: Create Evangelizing Opportunities Im OK, Youre OK: Provide Justifying Norms Different is Good: Encourage Members to Stake their Domains Making Mountains out of Milestones: Embed Celebratory Occasions Badges? Maybe we ~do~ need stinkin badges For the Record: Document Everything Cleanliness is Next to Godliness: Solicit and Distribute Grooming Tips Brother Can I Make a Dime? Encourage Commoditization Study, study, study!

Concluding Thoughts
Social Media are not disruptive technologies, but rather enable consumers to behave as they are inclined. Social Media formats enable increased social interaction and increased consumer engagement. Social Media provide new data for firms to monitor that precede manifest market behavior (sales volume etc.) and allow for mining deeper knowledge of consumer perceptions and inspirations and create value.

Agenda
Define and Demystify Social Media Link Social Media to Collective Consumption Examine Family and Social Media Consider Social Media Examples Consider Brand Communities Collective and Collaborative Value Review New Data in Social Media Examine Social Media and Shopping Concluding Thoughts

Thank you!