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Consumers Buying Behavior And Related Theories
In first phase, an initial literature review will be presented that will enable a wide range of literature to be evaluated in order to achieve a full understanding of the topic under consideration that is the impacts of social media advertising on consumers buying behavior. Moreover, this initial literature will also provide the basis for the second
phase of
research project. In this section, previous done researches will be discussed and a link will be connected between the variables mentioned in topic with special reference of case organization. In this section, the researcher presented a detailed literature regarding the impacts of social media advertising on consumers’ buying behavior. The researcher explained the social media advertising and literature associated with social media advertising, consumers’ buying behaviors and special relationship with social media advertising.
Choi, (2011) stated through his research that social media has become an active source of communication and is considered to a significant platform that is being widely used in recent days for communication purposes. The topmost social networking websites being widely used are Facebook, Twitter, Google+, LinkedIn and many others. Another research conducted by Choi, (2011) revealed that besides communication purposes, social media websites are also used as advertising channels. His research depicts that advertising budget for social media is increasing worldwide. This means that the organizations are focusing more and more on social media for advertising their brands. According to Kaplan and Haenlein (2010), social media is currently being used for international advertising and marketing purposes. Although this channel is not a simple approach, however it is being employed for marketing purposes. Organizations are emphasizing to implement effective and efficient social media advertising
business strategy to enhance their products’ awareness among their customers.
Weinberg (2009) stated that during last few decades, the rapid increase of internet base, the developing technology and the introduction of numerous new tools has provided a great push and easier access to internet sources. According toNair (2011), with the emergence of social media product promotion is no more limited to traditional ways of advertising such as advertising through electronic media, television, bill boards and newspapers. Chaffey, (2003)discovers that various online social media channels are finding their spaces as most rewarding and reliable sources of sales promotion.
In literature study, consumers’ buying behavior has always remained important and a special space was provided by previous researchers and authors with special context of advertising and its impacts on effectiveness (Ajzen and fishbein, 2002). According to Smith et al, (2004) consumers’ buying behavior is mostly prejudiced by liking or disliking of consumers towards the marketing and advertising of advertised products or services. Similarly, it is argued by Allen. Et al., (1992) that consumers’ buying behavior is actually considered to be an emotional reaction that developed after the advertising of products or services advertised by a company. However, Gorn (1982) reported through his research that consumer buying behavior is totally dependent on advertising of a product without any valuation of the quality of the product. Moreover, Goldsmith and Lafferty, (2002) illustrated that in literature, controversies are always observed over the effects of advertising on the consumers’ buying trends and habits. Sometimes it is observed that the advertisers over exaggerate the product’s advantages and benefits in such a considerable manner that customer comes under the pressure of advertising persuasion psychologically and an intention develops to purchase the advertised product (Smith et al., 2004).
Some people stated that the trend of consumers buying behavior has not changed and they avoid to buy advertised products and services because they consider that advertising is misleading and annoying process that mislead them to buy specific product. It is realized by researcher that advertisements has been attacked on sociological, psychological, aesthetic and political grounds. The advertising is criticized by some that it is nothing but prove to be harmful to the collective behaviors of the society. But it is always agued by defenders that advertising is a strong and useful process in its favor that basic objective of advertising is to sell the products, rather its impacts on cultural values of the society.
Social Media
Social Media can be referred as an
business environment that espouses an attitude of giving and getting since the communication between users is based on transformation of content that is free of cost as compared to print and electronic media (Sendberg, 2010). Bucher (2015) considers social Media as an online platform through which emerging sources of online information is provided. The information is being produced and sent to customers with primary objective of creating awareness of brands and their offered products or services. Therefore, in order to understand the importance of social media for a firm’s marketing communication, it is important to understand a well-defined tactical idea of social media advertising. In the planning of every advertising strategy, one of the variouschannels which can be applied for advertising purposes is social media. According to Dou et al, (2010) social media is growing to be successful through its increased fundability. It means the access to social media sites is becoming easy and people can easily access to the organization through search engine optimization. More accessibility can create more added values to the social media websites. Moreover, a strong social networking has also been observed through this important feature of social media.
Social media components by Dann and Dann, (2011)
Social media users and Satisfaction
In social media channels, various scholars have explained psychological motivations with its uses and satisfaction. Users and satisfaction of social media include content satisfaction and process satisfaction(Quan-Haase and Young, 2010). Content satisfaction is referred with the content conveyed by social media such as entertainment and information. On the other hand, process satisfaction indicates actual use of social media such as browsing content and sharing. It shows that users of social media and their satisfaction are closely connected(Boyd and Ellison, 2010). In this present context of this study, the users and satisfaction is referred to the audience activity of using social video and the motivation of watching social videos.
Social video is considered to be video advertising or content designed so that it can easily be shared on venues such as Twitter, Facebook, Google + and through emails. Social video advertising is a content produced by brands with an objective of getting it seen again and again and to be shared on different social media platforms by those people who want to see it and share it as compared to the production of ads where the purpose is to interrupt people. It is important to understand the motivation of online video content to understand the social video advertising.
According to researchers, most essential appeals are regarded as information and entertainment of watching online video advertising(Muntinga, Moorman and Smit, 2011; Dholakia, Bagozzi and Pearo, 2004). However, some scholars state that watching internet advertisement can also be appealed through motivating customers(Bondad-Brown, Rice and Pearce, 2012). Therefore, in order to make effective the online video advertising, motivation of customers to buy products must be used in relation with incentives such as the information premiums, merchandise premium, the product itself, discounts, price-related incentives and mystery gifts to facilitate the customers for repurchasing.
Social Media roles
Below are the new social media marketing tools and roles commonly used:
Social media is widely used for interconnectivity and networking purposes. The social networking websites such as Facebook and Twitter helps its users to interact with their friends, family relative and colleagues free of cost.Primarily, these websites achieve a higher view of their users because the data (video advertising by brands) used in these websites primarily focus to advertise and centered on vast customers. These social media websites are effectively used in mobile/smart phones and on tablets and pagers by their consumers for day to day networking, data transferring, and reporting purposes (Gaonkar et al, 2008). Email marketing is also an effective tool in marketing that is being widely used and gradually popular (Chittenden &Rettie, 2003). Advertising through emails are proved to be very productive as these can be easily managed and seen by customers.
Blog is defined by Blood (2002) as a shorter word for web log, as a web page that is a public journal and is easily accessible to individuals. Lee et al., (2006) reported that blog is an effective marketing tool that allows the brands to provide their products’ information over the internet in less time. As blogs are less expensive marking tool therefore it can be widely used for a number of tasks. Multimedia sharing is another marketing tool that has increased the growth of sharing content online (Parameswaran and Whinston, 2007). According to a review provided by multimedia share services of Youtube and flicker that millions of individuals now consider this technology for advertising purposes and in sharing and exchanging information.According to Helm (2000) viral marketing is about receiving a huge number of hits on a certain links which creates an image or communicates a message to a wide audience. It is most notably called as word of mouth or word of mouse in the language of internet.
Social media as an advertising tool
Social media marketing or social media advertising is a term that can be explained as the successful utilization of social media platforms for marketing and advertising purposes. Social media marketing is referred by Hans, Shneiderman & Smith, (2011) as a leveraging the ‘social’ through the ‘media’ to ‘market’ business elements. The main objective of social media advertising is to create awareness and global development of a firm’s products or services being delivered by it through social media platforms. With the establishment of communication in social media platform, social media has engendered tremendous transformation. This transformation has led to the development of consumer-focused technologies with social networks, video-allotments and blogs platform. Eventually, social media marketing also enabled organization to understand their customers’ expectations in a better way and to deliver its latest information to their consumers while networking simultaneously.
It is no longer a remarkable fact that most of the advertisement being done through mass media is not as efficient as observed in the past. This was because the advertisement through mass media focus to convey the message far more people that the potential customer (Kujbus and Mirko, 2012). Social media is platform where individuals with common interests can share their thoughts and ideas. It is recognized by Weinber, (2009) that social media is not considered to be a networking tool merely but as an advertising channel as well where the marketers can listen and respond to communities, promote a particular product or service and review contents of their customers which enabled them to better understand their customers.
Blackshaw and Nazzaro (2006) consider social media marketing as more easier and more effective for small and medium sized organizations because of the fact that insufficient advertising budget is sometimes encountered by small and medium sized enterprises via advertising through traditional channels. Therefore, marketing through social media involved an evolving technology which has much potential and provides the same benefits as traditional marketing does which includes defining the target market, building loyalty, communication with prospects and customer engagements.
Mangold and Faulds (2009) proposed social media as a new hybrid element of the promotional mix. Much of the elements of promotional mix are controlled by the firm considering traditional marketing channels in context with their frequency, content and timing. On the other hand, firms control over timing, frequency, content and medium through social media advertising has decreased considerably over the time (Kujbus and Mirko, 2012).Sniderman (2012) states thatsocial media is a useful source that become an advertising channel to reach targeted consumers. Social media allows companies to have a wider perspective when trying to communicate with their customers in the attempt to make them more intrigued as well (Mangold and Faulds, 2009).
Research Examples
According to a research study, “Expand your Brand Community Online”social media advertising is becoming important marketing channel for the companies that help them reaching targeted customers and engaging them with companies’ brands (Hanlon et al., 2008). For instance, Dunkin’ Donuts (American consumers’ product company) and Audi (German automobile company) are utilizing social media as a means for direct communications and interactions with customers (Wasserman, 2011). Audi has created business relationships with their customers on Facebook. A New York based organization, Proper Cloth, has created its page on Facebook which is being updated every single minute and is using to post important as well as non-important news of their business. Pictures of clothes are posted on their page in order to keep their customers updated and enhancing their interests for their product. All its Facebook fans receive the updates about the company’s products and activities in seconds on their Facebook pages. These leading brands and many others in today’s competitive markets have collected their customers on a single social media platform that is Facebook in order to avoid advertising costs; hence keep them updated at lower cost.
Benefits of Social Media Advertising
Social media advertising through websites such as Twitter, Facebook and other social websites enables customers to share their experiences, interests and valuable information about products which not only enhances the brand aware but also causes other people to buy that specific advertised product. Social media address easily not only few customers but the masses. The advertising through Facebook is useful in a way that it is interactively helpful in gathering demographic details of targeted consumers and their feedback which proved to be very helpful for the companies.
In current corporate environment, advertising though social media, specifically Facebook is considered to be an effective source to approach targeted customers. It is recognized that social media advertising provides the opportunities for the companies to build up and enhance the brands that to engage there products with customers a large social network.
According to Kaplan and Haenlein (2010)social media is as well known as customer-made media. Social media provides detailed information about the products provided that companies ensure that detailed information has been displayed. Smith et al (2008) also identified the benefits of social media as it provides a combination of that is being created and shared by individuals considering a number of activities done by electronic device.
According to Blackshaw and Nazarro (2004); Safko and Brake (2009), one of teh main benefist fo social media is that it it cerates a community for its users. Social media helps its users to describe the procedures, conducts and attitudes between people. It enables individuals of eth community to make use of an informal form of media by connecting to the internet so that they can present their views and experience.
The unique and exceptional aspects of social media and its massive popularity have revolutionized and developed advertising and promotion practices in a meaningful manner (HannsShneiderman and Smith, 2011). Advertising being done through social media is considered to be more attractive for the customers and interesting (Smith, 2011). Mangold and Faulds (2009) reported that social media has also affected consumers’ buying behavior; the influences are obvious in transforming the information form acquisition to post-purchase behavior.
Consumers’ buying behavior and related theories
The concept consumers’ buying behavior is laid on the perception that customers will decide to purchase a product after attracting towards the advertisement (Adelaar et al., 2003). According to Goldsmith and Lofferty, (2002) advertising is being done with special intention to influence customers’ feelings and attitudes towards brand, with an objective to increase sales and to establish a positive emotional response to advertisement. Therefore, it can be stated that the basic and primary goal of advertisement is to create awareness of product among customers and to encourage their purchase actions.
One well-known advertising theory is known as ‘Attitude-towards-the-ad’. This theory states that the consumer’s feelings and attitude are influenced in such a way that they an intention to purchase the product to be created among customers (Goldsmith & Lafferty, 2002). According to conventional attitude theory, the buying behavior of customers is different than the attitudes of customers. According to Smith and Swinyard (1983), attitude is referred as acquiring behavioral disposition while behavior is considered as the result of emotional response. The behavior is further impacted by three factors that are ‘pleasure’, ‘arousal’ and ‘dominance’. Pleasure is defined as the state where individuals feel good and happy, Arousal is referred as the state of individuals’ emotional states that is different from person to person and “Dominance is known as the state of feeling of people which are in control of them or free to act in specific situations” (Adelaar et al, 2003).
A general view point is presented by many societal members that advertising may have an unintended, negative or intended effect on customers’ buying trends. Actually advertising is considered to be a process that has a strong potential impact on altering customers’ social values, as well as their buying behaviors through influencing their buying attitudes (Adelaar, 2003). According to Golberg and Gom, (1978), advertising particularly by companies may lead their customers to prefer material objects over more socially and morally oriented alternatives.
On the other hand, the common perspective of advertising is taken as to provide something new, creative and useful thing to individuals of the society. Advertising aims at getting longer tem benefits of image building and brand loyalty among customers. Moreover, it provides the benefits to the companies by creating an emotional relationship and persuasion among customers for buying their product. In modern times of tough corporate environment, it is really difficult for the companies to be successful in effecting, molding or persuading the buying behavior of consumer (Robinson, 1997). However, with the rapidly increasing success of advertising field, it is acknowledged as a universal factor that plays an important and a very influencing role in changing customers’ buying behaviors (Beil& Bridgewater, 1990).
Factors affecting Consumer buying behavior
Consumer buying behavior determines how consumers decide to buy a company’s product and what could be the various factors responsible for making this decision. In order to identify the factors or variables that inspires or motivates the customers to buy company’s products, researcher studied a number of factors in literature. According to the research done by Rajagopal, (2009), factors influencing consumers’ buying decision and their behavior are categorized into four categories; Cultural, Social, Personal and Psychological factors.
Culture is considered to be important when it comes to understand the needs and behaviors of an individual. It is recognized by researcher that an individual is highly influenced by his friends, family, cultural environment and society in which he is surviving. Therefore, cultural values and preferences are linked with common behaviors of these individuals. It is important and crucial for a brand to understand and to take into account cultural factors inherent in reach situation or in each market in which it is going to introduce its product as these factors play a crucial role in habits, perceptions, buying behaviors and expectations of customers (Ammi, 2007). Cultural factors may include sub cultures such as religion, age, ethnic groups, nationalities and genders of individuals, social classes such as lower class, middle class and upper class, and cultural trends.
Social factors are among those factors that are considered to influence mostly on consumers’ buying behavior. These factors are divided into three categories; reference groups, social roles and status and family (Rajagopal, 2009). Reference groups are usually related to those individual whom a customer belongs to. The reference group has aspects such as social, age, work, residence and leisure. The understanding of specific features of reference groups such as mindset, values and life style of each group permits brands to target their advertising messages in a better way. Family is the most influential social factor for an individual’s buying decision. Moreover, the social roles or status also have influence on customers’ buying behavior.
Personal factors are the personal characteristics of each individual which highly effects on consumers’ buying decisions and behaviors. Ages and ways of life, purchasing power and revenues, lifestyle, personality and self-concept are personal factors that influence on a person’s buying decision of a brand’s product (Rajagopal, 2009). A consumer will never buy a same product as was purchased or take services that were delivered in 50 years ago. His lifestyle, activities and hobbies are evolved through his life. A person, who earns $500 a month, cannot afford to buy a product costing more than $500. The purchasing power and earning incomes of course influence on an individual’s purchasing decision. If a person feels confidents with an Apple phone in his hand, cannot buy a Samsung phone ever, therefore the personal characteristics such as self-concept and personality also effects on buying decision of a customer.
Among the influencing factors on consumers’ buying decision and behavior, psychological factors are divided into four categories; motivation levels, their perception about the product, learning as well as beliefs and attitudes. Motivation effect on consumers’ buying behavior, as it is that expression of need of a customer that derives him to buy a specific product. Perception is referred as a process that helps an individual to select, organize and interpret the information that is being received by him to do something. Therefore, the perception of a situation or a product at given time influences the individual to act accordingly. Learning is through experiences also influence on customers’ buying behavior (Rajagopal, 2009). An individual having good experience in using iPhone 5 will definitely decide to buy its latest version, iPhone 6. Similarly, it is important for a brand to understand the beliefs and attitudes of customers in terms of their buying behavior.
Social Media Advertising impacts on Consumers’ buying Behavior
Social media is rapidly growing tool which not only empowers social networking but also enhances economic growth for a company because social media is actively used for business purposes. Through different social media websites, millions of individuals meet virtually and share their thoughts, feelings and experiences for the products they use. Companies find this platform as a great communication tool and a perfect tool for dissemination of marketing messages, establishing a wider presentation of their products or services (Goldsmith and Lafferty, 2002).
The replacement and transformation of traditional marketing tools such as magazines, newspapers and others into conventional ways such as social media cannot be ignored. People departure from traditional shopping environment to spending more time on internet is because of the development and more utilization of social media. People spent majority of their time in using social media websites, social media has penetrated itself into the entire society. In this way, it has its impacts on commercial life as well. People have changed their consumption trends and social media plays its important role in this regards.
Organizations offer their products and find opportunities for praising their products through social media. However, they also come to know to what extent their products or services are being criticized. Social Media advertising changes consumers’ decision making choices and buying behavior (Choi, 2011). If the products are widely accepted by customers, this trend can be easily represented through social media. Customer socialization through per communication and networking using social media has becomes a significant marketing issue because of the development and growth of social media. Online customer socialization through the use of social media websites also effects on purchase decisions in two distinctive ways; directly as conformity with peers and indirectly by emphasizing product involvement. Hence social networking websites are playing their important role for oragzniatuons in determining the customers buying behavior followed by satisfaction of dissatisfaction after purchase of relevant products.
The use of social media as an advertising tool provides an opportunity for the companies to enhance their businesses and to engage with potential customers, to interact with them on daily basis and to encourage an increased sense of intimacy with customers. As a result, businesses also get to know about the changing trends and tastes of the customers and build all significant relationships with potential as well as existing customers (Mersey, et al., 2010). According to Kaplan and Haenlein, (2010) the much the higher level of use of social media websites for communication and advertising purpose as compared to traditional communication and marketing channels encouraged industry leaders to represent that companies must participate in Twitter, Facebook, LinkedInnMyspace, and others, in order to develop themselves and succeed in online environments.
According to a research study conducted in year 2009, large majorities of top hundred business firms had a profile in Facebook (69%), Twitter (79%) or both (59%), Internet Retailer. A study of Deloitte Touche´ USA exposed that 62% of US customers read customer generated online reviews and 97% of them realize these reviews reliable; on the other hand, 80% of these customers stated that reading these reviews has influenced their buying intentions (Pookulangaran, et al., 2011) Previous research reported that even a small quantity of negative information from few posting and updating news on social media can have considerable effects on customers’ attitudes (Schlosser, 2005).
Customers use social networking websites in their daily routine for several reasons. The main priority held by them is to maintain relationships with their colleagues and friends. Most of them share their daily routines with others; pictures and videos are uploaded by them. With special context of promoting a product, customers also tell other their experiences regarding the use of specific product via social media. Therefore, it can be stated as maintaining interpersonal connectivity and communication between online users of social networking channels has benefits for not only people using social media but also for companies that use social media specifically for the purpose of advertising their products (Utpalet al., 2004) Moreover, it is also recognized that online users also exert a noticeable and considerable influence on consumers’ buying behavior and then intentions and implicitly on the purchase decision (Kozinetset al., 2010).There is direct link of the individuals’ standard of living and the application of social media in their life. People tend to engage more in the social media, when there are not much fun activities going on (Livingstone and Bovil, 1999).
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Market Investment Co is an investment company. The company has major investments in several Australian public companies, one of which is Santos Limited,an Australian resource company with activities in the gas, oil and resources industry.The accountant of the Market Investment Co has approached you to provide a financial analysis of Santos Ltd.
