Introduction
Social networking tools have played a pivotal role in helping to revolutionarise online marketing. They allow marketers to examine consumers’ purchasing behaviour. Consequently, marketers are in a better position their products/service according to the needs of the consumers. This not only increases their sales revenue, but it also increases consumer loyalty.
The research paper shall examine social networking and online market. To start with, the research paper shall attempts to explore the process of consumer buying behaviour and the various stages that a consumer undergoes while making a purchase decision.
The research paper has also document the results of an interviewed conducted between an Experiential and a Goal- Oriented Online Buyer according to the steps of purchase behaviour. The growth of e-commerce industry in Scandinavia has also been explored, as well as the impact that the various social media applications (for example, Twitter, Facebook, Foursquare and Goodzer, among others) on the online market.
Consumer Behaviour & the Buying Process
Before a consumer makes the decision to purchase a product or service, he/she goes through several steps of the purchasing process. A lot psychological construct is involved in such a decision-making process.
In other words, what this means is that in as far as we may not be in a position to physically “see” a decision, nonetheless, we are still able to deduce observable behaviours that acts as a proof to us that indeed a decision has been arrived at. The process of consumer buying behaviour is therefore a fundamental component of any purchase decision and as such, there is need to appreciate the various steps of this process. They include:
- Identification of the problem.
- Search for information.
- Evaluation of the alternatives.
- Purchasing decision
- Post purchase stage (Bettman, 1979; Dibb et. Al, 2001; Jobber, 2001; Kotler, 2003).
The evident difference between on the one hand, low involvement purchasing and on the other hand, high involvement purchasing is a clear indication that the present model shares certain characteristics with this model. However, the perceived purchasing risk of the buyer is a determining factor.
Low or high degree involvement is also impacted on by the buyer’s experience. On the other hand, frequently purchased products may not warrant more involvement in comparison with rarely purchased products or those being purchased for the very first time (Boyd et al, 2002).
The purchase process also requires an identification of the decision and choices made during the actual purchasing of a product or service. In addition, it is also important to observe the reaction of consumers to innovation, in addition to forecasting the outcome of an interaction between the vendor and the customer.
A majority of the practitioners and academicians are in agreement that social demographics, psychological and cultural factors impact greatly on the purchasing decisions and consumer behaviour.
Various marketing tools find use in the buying process and the most prominent among these is the marketing mix (consisting of the 4Ps that is product, price, place and promotion. The marketing mix not only influence consumer behaviour, but also affects the final outcome of the seller-buyer interaction (Kotler & Armstrong, 2001; Kotler, 2003; Brassington & Pettitt, 2003).
Online marketers impacts greatly on the consumer behaviour of their virtual consumers who still relies on the conventional, physical marketing tools and ensure that such consumers gets a unique and quality experience. This is the web experience that integrates information with functionality, stimulation, emotions web experience and the products/services. What this appears to suggest is that in comparison with the conventional marketing mix, the web experience is complex but more effective (Constantinidis, 2004).
There are certain marketing tools that an e-marketer controls and these have the potential to shape how consumers behave in their online virtual interactions. Kotler (2003) views the web experience as an additional input for the conventional framework of buying behaviour. It is important to classify the various components of the web experience in order to gain a clear picture of the various actors who are more likely to determine or affect the outcome of any virtual interaction.
Another importance of such a classification is that it allows marketers to not only recognise, but also better comprehend the potential and nature of the various marketing tools at their disposal. Moreover, such a classification is important because it helps to summarise the existing research ideas, not to mention the recognition of issues that requires further research.
There is a lot of competition in the global e-commerce business and this has resulted in the increased expansion of such businesses. As such, it is important for business dealing in this market to fully understand the behaviour of and online consumers so that they can position their products/services accordingly.
A majority of the e-commerce firms are yet to fully comprehend the consumer behaviour of online shoppers (Lee, 2002), even as a majority of them “continue to struggle with how effectively to markets and sell products online” (Jones et al,. 2003, p. 93). Critics of the online buying behaviour advocates for the inclusion of a new stage to the current online buying process: a step that would enable the online marketers to build confidence or trust with the online shoppers (Lee, 2002; Liebermann & Stashevsky, 2002; Liang & Lai, 2002).
There are four steps involved in online shopping experience. Cho and Park (2001) contend that an online customer is both a user of information technology and a shopper and as such, it is by far more complicated in comparison with the experience of the physical shopping activity.
As such, the web experience refers to the total impression of consumers regarding the online firm in question (Watchfire Whitepaper series, 2000). There are various components that the web experience has endeavoured to embrace and they include finding, browsing, selecting, evaluating information, transaction and interaction with the actual e-commerce site. The actions and total impression of a customer are affected by events, design, the atmosphere, and emotions.
Experiential and Goal- Oriented Online Buyer
At a time when a shopper decides that he/she wants to make a purchase, this acts as the first step of the purchasing process. At this point, the consumer recognises the problem (the need to make a purchase).
Problem recognition involves such questions as what to buy, why to buy and when to buy a given product or service. As a consumption activity, the shopping process entails various possible motivations. In this case, a motive is regarded as a force internal to an individual capable of orienting his/her activities in such a manner as to help them achieve a given goal or satisfy a certain need.
Motivation plays a crucial role of initiating the action of a buyer to recognise the needs and work hard towards ensuring that such a need is satisfied. There are two main shopping motives. They include shopping with an already pre-determined goal (this is what describes a shopper who is goal oriented) and shopping for fun (that is, the experiential shopper).
The current study endeavours to determine the decision making process that characterises both the experiential and goal-oriented online shoppers between the ages of 20 and 25 years. The study hinges on the stages of the consumer decision-making process, along with the associated external and internal factors.
The researcher conducted an interview to assess these issues as they impacts on the consumer behaviour of online shoppers. The interview respondents were a male experiential shopper aged 25 years and a female goal oriented shopper aged 20 years.
Phase 1: Problem identification
During this stage, consumers often find themselves embroiled in various discrepancies regarding their answers on why and when to find specific needs that require being satisfied. In the case of a goal-oriented shopper, he/she only embarks on online shopping as and when the need arises. On the other hand, in the case of an experiential shopper, he/she could be browsing the internet and unexpectedly come across products/services that could arouse his/her desire to make a purchase.
For the goal-oriented shopper, she opts to purchase her products online owing to the available information to help her accomplish the goals that she has in mind. On the other hand, in the case of the experiential shopper, online shopping affords him the leisure and convenience to slowly go through and browse the different shopping items that could be of interest to him.
Phase 2: search for information
According to the experiential shopper interviewed for this study, he revealed that he often undertakes his information search before carrying out the intended purchase. In addition, he also revealed that he regularly takes into account any useful information that he might come across during the actual browsing process.
Exploratory search allows the shopper to obtain valuable information for later use and at the same time, allows the shopper to take a lot of leisure in doing so. Although this vividly describes a typical experiential shopper, nonetheless, the description also fit the goal-oriented shopper interviewed for the current study because of exclusively browsing the internet for a single product, in line with the features of a goal-oriented shopper.
Phase 3: Alternative Evaluation
A goal-oriented shopper only has a limited number of brands to choose from since already, she has identified a single brand and as such, all her purchasing decisions are arrived on the basis of the specific brand in question. In contrast, the experiential shopper is faced with various options owing to the additional information obtained through his internet searching activities.
To the goal-oriented shopper, lexicographic decision rules are important since they allow her to rank her purchase decisions on the basis of their importance, thereby enabling her to evaluate the most ideal purchase decision. On the other hand, the experiential shopper relies on disjunctive decision rules seeing that his selection requirements largely hinges on satisfying a limited number of attributes.
Phase 4: Purchasing Decision
The process of choosing a retail outlet is similar to that involved in the selection of a brand. In choosing the most ideal e-retailer that one can purchase the desirable product/service from, such a decision shall be impacted on by the perception of the shoppers regarding the ensuing benefits from the process.
The selection process of an e-retailer is impacted on by two forms of perceived risks. They include the social risk and the financial risk. Since experiential shoppers make frequent online purchases, he tends to emphasizes more on the financial risk.
As such, the experiential shopper ensures that he carefully assesses the website of the various e-retailers he would be interested in to ensure that it has been verified and is trusted, is manoeuvrability, user-friendly, and has a good refund policy. On the other hand, the experiential shopper runs at a higher risk of falling victim to impulsive buying since she lacks a specific product in mind, unlike the goal-oriented shopper.
Phase 5: Post Purchase Process
In the post purchase process, a shopper asks him/herself whether the shopping decision made was the right one. This process is also called cognitive dissonance. The purchase dissonance experienced by a goal-oriented shopper is less in comparison with that experienced by the experiential shopper.
This is because in the case of the experiential shopper, he has gained a lot of experience in online purchase and as such, he has increased his product expectations and familiarity. However, there is the tendency for the goal-oriented shopper to delve deeper into the evaluation of the performance of the product owing to extensive research efforts.
Scandinavia Market
In recent years, the Scandinavian market has continued to realise increased growth of its e-commerce industry. A survey conducted by DIBS, an e-commerce company reveals that consumers in Sweden, Denmark, Finland and Norway have continued to embrace online shopping. A survey that involved the four aforementioned Scandinavian countries revels that the highest recorded percentage of e trading occurs amongst Norwegians within the age bracket of 15 and 75 years.
This group is estimated to spend 4.9 billion pounds. The second position is followed by Sweden with a target of 5.5 billion pounds. Denmark has a target market of 4.4 billion pounds while Finland has 3.2 billion pounds. In Norway, there is a recorded high level of consumption amongst the e-shoppers, each of whom is estimated to spend 770 pounds.
On the other hand, e-shopper in Denmark spend 615 pounds, their counterparts in Sweden spend 472 pounds, while the e-shoppers in Finland are believed to spend 468 pounds. There is an apparent growth of the Nordic e-commerce market and this is indicative of a huge potential. Figures by DIBS show that the Nordic e-commerce market is estimated to be worth 18 billion pounds in 2011 (Clemet, n. d.).
Social Media
The global markets have expereinced tremenodus chanes in recent years. This has largely been the case thnaks to the chnaign mindest of the soncuemr, changes in organiational attitude and demography, oign to advancements in technology. As a result, marketing practices and strategies across the world have assumed a different direction.
This has also prompted many e-commerce and marketers sites to periodcally re-think their styrategies and embrace novel practical and theoretical approaches to deal with specific changes (Constantinides, 2006). Thanks to the changes in internet development, users can now communicate more effectively and efficiently. As a result, many users now rely on the internet to provide them with valuable information.
In addition, this has also enabled consumers use the internet to promote a wide range of products to markets that they may not have reached as fast using the conventional forms of communication. The use of such media tools as Twitter, Facebook, Blogs, FourSquare and YouTube has seen a majority of the businesses embracing them as effective tools for the marketing and promotion of their products.
Social Media: An emerging influence
At the moment, Social Media (Twitter, Facebook, YouTube, Blogs, and FourSquare) have played a big role in transforming the face of media and marketing. The prevailing change has also been embraced by the corporate world in as far as the issue of consumer behaviour is concerned so that they can align their activities so that they can embrace the change.
Now, an increasingly larger number of firms are more intent on financing the growth of online communities so that consumers can be bale to not only initiate conversation, but also ensure that the brand stays alive.
Also, the social network has also enabled e-commerce sites and marketers to enhance communication with target audience, in addition to recognising the ever changing consumer needs, ensure that they counter competitive moves very fast, and forecast trends in the market early enough.
Presently, social media enables individuals to share their different views with millions of other individuals globally within a matter of minutes, thereby establishing a significantly trusted word-of-mouth form of marketing. Bazaarvoice argues that online social conversations have greatly impacted on the purchase behaviours of online consumers.
For example, in 2010, Bazaarvoice was able to assess over 2.7 billion customer answers, stories, and opinions within 2 weeks. This was a 44% increase in comparison with 2009 and 128% in comparison with the year before (2008).
There has been a dramatic increase in the growth of the mobile devices market, and this is an indication that it is now possible for everyone to be “digitally social” even when outside their homes.
In addition, the number of consumers who owns SmartPhones/mobile phones is also on a rapid increase and consequently, these consumers’ are able to make use of such social media tools as Twitter, Foursquare, and Facebook to alert others on the bad or good experiences that they have had with a given product or service, instantly.
This has led to the emergence of a new breed of consumers with high expectations because they are highly informed. The various security issues often faced by companies have further been compounded by the emergence of the social media.
For example, there is the possibility of the mobile devices being stolen. In addition, customers could be faced with disruptive consequences owing to rampant breaches and social disruptions, and this could impact on the operations of a company. In order to navigate through such unknown areas, a company could explore the impact that the mobile social media has on the firm.
In addition, the company could decide to tailor responses in such a manner as to suit the specific situations and needs of the consumers. What this means is that there is need for companies to try and locate the venue of the customers’ contacts (through mobile applications/devices and conventional web/devices) in addition to assessing the reasons why customers attach value to the issue of mobility (Jenko, n. d.).
Applications
In recent years, the various applications of social media have gained a lot of popularity mainly as a result of viral sharing. The principle has helped to open wide the accessibility to social networking, in addition to offering a platform for the various firms to expand their growth into social media. The applications of social media have proved quite useful in helping to share messages.
In addition, they also enable the users to provide firms with a chance to personally establish brand trust and relationship with the diverse audiences. The acquisition of any of the several social media applications for purposes of promoting production or brand ensures greater exposure of the business. In addition, it also tends to drive more traffic towards one’s website.
As such, social media applications in fact help to open up business opportunities. A very vital element of the social media application is the fact that they possess user-generated content, and this ensures a perfect platform to help in the promotion of novel ideas and collaboration. Social media applications are also useful in that they create a secure online environment in which the consumers are in a position to not only assemble, but also distribute content (Avenue Social, n. d.).
One of the most commonly use form of general communications in the “sharing breaking news” version, and the aim of its use is to enable the businesses connect with the consumers. The ““extending a personal face to customers” form of Twitter is also common. In the years ahead, there is a higher likelihood for the various e-commerce businesses to shift their expectations.
As such, a common general communication that may be expected to gain popularity is “keeping in immediate touch with the customers.” Another possible “Extended a personal face to the customers”
The various applications of Facebook represent one of the several new ways that the business can interacts with their various global customers, albeit in an indirect manner. The various Facebook applications enable the user to develop and sustain their relationships with the customers.
- Branded Facebook applications enables the business to fully and actively engage their consumers, in addition to helping them increase brand loyalty and awareness
- By using the various Intercalative applications of Facebook, business may seek to engage their consumers and eventually, transform them into their friends.
- Facebook applications may also enable a marketer to easily attain their viral marketing objectively
- Facebook applications enable a business to generate enough traffic by for example using updates and newsfeeds to the non-users by the existing users.
Foursquare
As a ‘location-based’ mobile platform, a user can “check in” Foursquare via SMS or a Smartphone application. This social media application enables user to share their different locations with a multitude of friends and in the process, they also collect virtual badges and points. Through Foursquare users are in a position to bookmark information regarding the various venues that they would be interested in visiting, in addition to the various relevant suggestions regarding the nearby venues (Fousquare para. 4).
Goodzer
This is an online-to-offline mobile and web search service that allows users to search for the various consumer products. Presently, it covers over 15,000 brick-and mortar stores within the city of New York. Pricing of the products can also be displayed, along with the status of the product on the stock market. All this happens in real-time. Use can also be made of Google maps.
Very.co.uk
This is an iPad and iPhone application that allows mobile users to browse as well as shop the site’s entire fashion collection. Using the application, visitors are also in a position to zoom in and view very intricate details regarding the product image.
In addition, visitors are also able to watch full screen videos and this is useful in enabling them to arrive at more informed decisions during the purchase process (Clements, 2011). At the moment, one can view over 1,800 product videos on Very.co.uk’s e-commerce website, all of which can easily be accessed using iPad and iPhone .
Future of Social Media
Since 2007, social media has undergone a dramatic evolvement from its humble background made up of a few communities and today, it is a multi-billion dollar sector that embraces mobile devices as well. Today, social media impacts greatly on the consumption habits of consumers. In addition, it also avails a social and identity graph that enables the users to be followed throughout the web.
Social media also allows for the construction of social and identity graphs that can be used to follow users across the web. By 2013, it is anticipated that mobile broadband subscriptions shall surpass the 1 billion mark globally. At the moment, there exists an enormous supply and demand gap that needs to be filled and when this has been accomplished, it will pave way for increased innovation in social media.
M-Commerce
In 2010, M-commerce proved to be a real hit, and is expected to witness high levels of growth in the years ahead. It is also expected that in the coming years, there shall be an exponential growth of mobile internet users. There shall also be a dramatic increase in the use of Smartphone for purposes of shopping.
In the coming year it is projected that there shall be almost 30 % of the customer who shops online using their mobile devices in Europe. Already, 10% of the online shoppers are using their smart/mobile phones for purposes of retail search to compare prices, or to make online purchases. M-commerce has played a significant role in helping to drive consumer choices in the UK regarding the purchase of various brands.
A study that was jointly commissioned by Bazarvoice and RichRelevance reveals that 59% of the shoppers in the UK are yet to decode on the specific brands that they would be interested in purchasing prior to embarking on a research for novel products. Further, the study suggests that shoppers trust three kinds of content during their purchase decision making process: the details of the products, personalised recommendations, and user reviews.
Some 86% of the respondents to the study revealed that they relied on user reviews and ratings for their online purchases. In addition, 84% of the respondents to the study said that they had purchased on researched products via recommendations, while a further 42% of the shoppers in the UK made their purchase decisions as a result of online retailer recommendations (Clements, 2011).
Social Commerce
Social network has had an impact on virtually all the avenues of the society. This may be expected to continue impacting on the consumer conversations in future. It is important therefore to ensure that E-commerce integrates customers’ experiences with social networking in a bid to establish lasting relationship with customer and in the process, increase customer loyalty.
Videos and Streaming Media
In 2011, flash video applications are projected to witness a dramatic increase. As a result, the online experiences of consumers shall be captured better using flash video applications. In addition, it is expected that the general media content and internet TV shall also experience a dramatic growth.
Personalisation
It is projected that in the coming years, personalised services shall still be popular. E-commerce continues to enjoy increased roles and in future, business shall endeavour to focus on ensuring that their customers get personalised services. Shoppers can therefore expect to continue getting personalised user experiences from the various websites.
Conclusion
An increasingly higher number of comapneis are opting to embrace various social media with a view to helping them to market their products and services. In addtion, these tools have proved useful in helping to assess the purchasing behavior of the online consumer.
This enbales markets to position their products and service in line with the needs of their customers. Once a company has acquired any of the several social media applications with the intention of promoting their products, this also helps to increase the brand exposure. Moreover, such social tools as Twitter and Facebook tend to drive more traffic towards one’s website. Social media applications also possess user-generated content.
This is a vital component that acts as a platform for the promotion of new innovative ideas. If at all companies want to remain competitive in this day and age of social networking and online marketing, it is important for the management to embrace those social media tools that will ensure that the firm in question gains a competitive advantage relative to competition.
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