Customer preferences for social media in different phases of the shopping process

Customer preferences for social media

in different phases of the shopping process

_______________________________________________________________________

Author: Yousra Lahkim Student number: 10675809 Supervisor: Dr. Umut Konus Second reader: Dr. Frederik Situmeang

Date: 30-6-2014 (Final)

MSc. In Business Studies- Marketing Track Faculty of Economics and Business

1

Abstract

The main goal of this study is to examine whether and how customers use social media in different online shopping phases. This paper contributes to prior research in providing a better understanding in how consumers use social media in specific online shopping phases. This study can give managers and researchers insight in variations between different social media and specific shopping phases. For managers this study could be read as an

encouragement. Managers will know which specific social media platform to target for specific phases of the shopping process. This is useful for allocating marketing instruments in the right place and making strategic decisions. In this way they can adapt their online

presence to these findings and get a better understanding of the potential of social media. They will also get insight in the effectiveness of specific social media platforms. In this way managers can consider to use a specific social media platform or use another one in a specific shopping phase. In this way managers can learn how to use specific social media. Not only by promoting their company or brand, but also responding more effectively to their customers and building relationships. An online questionnaire measured the use of Facebook, Twitter and Pinterest in three different shopping phases, the information- ,purchase- and a service phase. Results show that social media is more used for the information search by customers. Secondly, the service phase. Social media is rarely used in the purchase phase. Results also show that Facebook seems more appropriate as a social networking site for shopping purposes in the information phase. Twitter seems more appropriate in the service phase. A comparison between Twitter and Facebook in the service phase, showed that Facebook was found more appropriate in this phase. However, Pinterest seemed less popular in all three phases.

Keywords: Social media, shopping phases, social networking sites, information search,

2

Preface

This study is the end result of my research in finalizing my master’s degree in business studies. I would like to thank my supervisor Dr. Umut Konus for his guidance and advice in writing my thesis. His friendly collaboration and support helped me along this process. I would also like to thank my second reader, Dr. Frederik Situmeang for his time. Furthermore I would like to thank all those who took the time to fill out the questionnaire. Without them these results would not exist.

Amsterdam, June 30th 2014

3

Table of contents

1. Introduction……….………5

1.1 Purpose and contribution……….6

1.1.2 Contribution………..…….…..7

1.2 Structure thesis….……….…...8

. 2. Literature review……….………..8

2.1 Online shopping process………8

2.2 Social media……….……….10

2.2.1. Social media marketing..……….………13

2.2.2. Importance Social media marketing ………….………..………14

2.3. Related work………...15

2.3.1 Information seeking………...16

2.3.1 Purchase decisions……….17

2.3.1 Aftersales-service.………..17

3. Data and method……….………..19

3.1 Research goal………...20

3.2 Conceptual framework………21

3.2.1. Hypotheses……….21

3.3 Data collection and method……….25

3.3.1 Survey……….………25 3.3.2 Sample……….27 3.4 Data preparation………..28 4. Results……….…….………..29 4.1 General results……….29 4.2 Hypotheses testing………..31

5: Conclusion and discussion……….………..……….……37

5.1 Discussion of results………..……….…37

4

5.3 Limitations and future research……….………43

6.References……….……..……45

7 Appendices. .……….. .……….…..50

Appendix A Questionnaire………..………....50

Appendix B Result tables………..………..54

List of tables and figures Figure 2.1: Shopping process……….…..10

Table 2.2 : Classification of Social Media………...11

Table 2.4.3 :Summary social media in different phases………..19

Figure 3.2: Conceptual framework……….……21

Table 3.2.1: Factors that could impact social media usage for shopping purposes……...25

Figure 4.2: General results of respondents………...29

Table 4.2.1: shopping phases and social media………...30

Table 4.3: Regression analysis.. ………....…36

5

1. Introduction

Social media usage has grown and it is gaining more and more users every day. Social Media gives companies and organizations the opportunity to give information about their services and products, but also promoting their brand in the same time. Social media gives companies a wider environment to search for information from the competition and follow other

competitors’ products on the internet (Mangold & Faulds, 2009). In this way social media can collect information from customers that can be useful for companies to improve their products and services. Social media such as Facebook and Twitter can provide opportunities. It allows companies and customers to interact with one another and give feedback. In this way they can build relationships with each other (Breslauer & Smith, 2009). With the rise of social media, companies have the chance to reach a wider audience and more consumers. This supports brand value and awareness of the brand (Michaelidou et al., 2011).

On the other hand, online shopping is also becoming increasingly popular. It allows consumers to directly buy products and services from a seller over the internet.Online buying has grown through the years and more companies and retailers are using the web to sell their products and services. Interactions between customers and an organization’s website can create positive opportunities and experiences. This interaction can lead to long-term

relationship building between seller and buyer (Rose et al., 2011). The variety of (potential) interactions between a consumer and an organization is now quite diverse. These interactions are divers on several areas, like product information search, transaction and service delivery (Rose et al., 2011). When consumers buy online, they go through different shopping stages before they buy a product or service. The shopping processes are the decision making processes undertaken by consumers when they want to buy a product. This is also the main focus of this research. A consumer goes through three phases: the pre-purchase (information phase), the purchase (transaction phase) and the post-purchase phase (After-sales/service phase). Although there is a rapid growth in the online shopping environment and number of social media users, very little is known about how customers make purchase decisions in such settings. This gap will drive this research.

The main focus of this research is set on the use of social media in different shopping phases. We want to examine if consumers use different social media sites in specific shopping phases. We also want to know what could influence potential differentiations. Investigating this could gain us more specific knowledge in the use of social media for shopping purposes.

6 The different phases show how the consumer makes decisions based on available information in the first phase. That phase will determine if the consumer will go to the next phase and make a decision whether that information was enough or positive to make an actual

transaction (second phase). The third phase will capture how the consumer is satisfied with the product or service and the way the consumers will use their experiences in a post-purchase phase. The different phases are important, because one phase can determine if a consumer will make a decision to go to the next phase. This decision can be based on different

information. Consumers may use various types of sources to make decisions in the different phases. They can use advertisements, online word-of-mouth, reviews of other consumers, but also social media. This study investigates whether and how customers vary in terms of their use of various social media for shopping purposes in different shopping phases. This research question is investigated by using an online questionnaire (121 respondents). This

questionnaire measured the use of Facebook, Twitter and Pinterest in three different shopping phases, the information- , purchase/transaction and after-sales/service phase.

1.1 Purpose and contribution

The purpose of this study is to outline the use of different social media in different online shopping phases. We specifically want to look whether customers have varying social media behavior and preference in different phases of the shopping process. There is a need to investigate these differences, because managers are using social media more often but they may not how to use it correctly. This research will show how to use social media effectively in different shopping phases. The interesting part of this research area is that both social media and online shopping are becoming very popular and relevant. In this research two of the most trending concepts will be examined together. This paper focuses on the online shopping environment and social networking sites. This focus was set since there is already a huge amount literature about social media in general, but there is a gap in this research area concerning the use of social networking sites in relation to different shopping phases. This research analyzed three big social media sites Facebook, Twitter and Pinterest. There is no research on the use of social media in different (specific) shopping phases. Investigation this could give us a better understanding of this area and identify links between social media and online processes.

7 Investigating the use of social media in specific shopping phases will also gain us more

learning in how often people use social media in specific shopping phases and what influences the differentiations in social media usage for shopping purposes.

1.1.2 Contribution

This paper contributes to the knowledge of this topic and forms a basis for more future research. It adds to understanding of the use of social media in the purchase context and specifically recognizes and discusses the use of social media in different shopping phases. There is a growing amount of users of social media and online shoppers. This study can give a relevant contribution to the existing literature by combining these two topics together and see how they are used together. A study investigating these two topics would have the potential to make a valuable scientific contribution.

Also, this research can help managers and marketers to anticipate on the motivations of customers to use social media for shopping purposes. Managers will know which specific social media platform to target for specific phases of the shopping process. This is very useful for managers in allocating marketing instruments in the right place. By doing this they can make the right strategic decisions. In this way they can adapt their online presence to these findings and get a better understanding of the potential of social media. The will also get insight in the effectiveness of specific social media platforms. In this way managers can consider to use a specific social media platform (or not use it) in a specific shopping phase. In this way managers can learn how to use specific social media effectively. Not only by

promoting their company or brand, but also responding more effectively to their customers. By using the right social media in the right phase, an overall strategic social media plan can be made. In this way a manager will use the right platform in the right phase. By doing this, managers will know how to use social media effectively and respond to customers. Looking further, they can even make differences in their business by tackling this phenomenon in the right way. The expected findings can contribute to their social media marketing strategies.

Since the introduction of social media, the social networking sites attracted millions of users. Sites as Facebook and Twitter are used daily by the average social media user, which makes hem of great importance for managers and marketers. A majority of online retailers are using social media on their websites.

8 Managers and marketers could see what types of social media are used at different shopping phases and how many people use certain sites more for information of for the service phase for example. After this study we will know what types of social media are used at different shopping phases. We will also know if that type of social media could be seen as useful in that shopping phase.An analysis of the use of social media in specific shopping stages gives us more insight into practical implications for companies using social networks, especially Facebook, Twitter and Pinterest, for marketing purposes This research can give them valuable information about the type of people who use social media in different shopping phases. Also, the appropriateness of the social media sites in different phases. Knowing how these sources are used by customers and how they influence consumer purchase intentions, can help to create more and better revenues.

1.2. Structure thesis

First, the literature review will provide an overview what is known in academic literature about online shopping phases and social media, individually as well as their relation to each other. This will indicate the gap on which this research is based. The next section presents the methodology chapter, which provides an argumentation of research design, an explanation of the process and data analysis. Followed by the third chapter, that describes the results of this analysis. Finally, the implications of the findings are discussed and limitations and directions for future research are provided.

2. Literature review

In this paragraph the existing literature on the use of social media for online shopping

purposes is described. By doing this, the research topic will be defined more thoroughly. This paragraph will outline the concepts of this research that will form the basis of the conceptual framework developed in the next paragraph.

2.1 Online shopping process

An advantage of the internet is that it enables organizations to reach a lot of people all around the world. Customers can search, select and buy products and services from different firms around the world in a quick way.

9 Communication among consumers can affect their cognitive, affective, and behavioral

attitudes (Ward, 1974) (Vineran et al., 2013). In this way, consumers can change each other’s opinion. Consumer behavior in traditional shopping contexts has received much attention. A number of models of the (online) buying process (or decision making process) have been developed. The first phase in each of these models is generally identified to be the

information search. This stage is very important. This stage is recognized in the literature to be an important phase, because in this phase information and promotions about products should reach the consumer. According to Chen & Chang (2003) the two most common reasons why consumers shop online are price and convenience. Consumers find it easier to shop online, because it is a rich source of information for product comparisons. Consumers are able to search for products in a quick way and compare them. That is why the information phase can be seen as an important phase to show your products and services to the consumer. After comparing information they can make decisions whether to buy it or go to the

competitor.

On the other hand little work has been conducted on the different ways in which

information search is performed by the consumer (Rowley, 2000). There are different phases that could be distinguished in the literature through which a consumer progresses when they want to buy a product. The three main phases in this paper are: (1) Pre-purchase stage (Information stage) (2) purchase stage (transaction stage) and the (3) post-purchase stage (service stage) (Frambach et al., 2007). The pre-purchase stage is an information gathering stage. In his stage the customers can familiarize themselves with offerings and look for information. After comparing offerings to needs, consumers go to the next stage. The

purchase stage is a decision making stage. In this stage the transaction is completed. The post purchase stage is a service stage. In this stage the decision on continued use of the offering is made. After this phase repeated purchases can take place. After buying the product or service the consumer compares it with expectations. The consumer is either satisfied or dissatisfied after this phase (Frambach et al., 2007). An overview of the different shopping phases is presented in figure 2.1.

10

Figure 2.1: Shopping process

However, this does not always go this way. When there is little information available or the information does not satisfy the needs, the consumer will decide whether they will go to the purchase phase. Due to increasing availability of information, consumers are often unable to evaluate alternatives in great depth (Chen & Chang, 2003).Sometimes they tend to use a two-staged process to reach their decisions. First they look screen a large set of available

information and products. After that they identify the most promising alternatives. Secondly, they evaluate the latter in more depth. Consumers compare across products or attributes and then make a purchase decision (Chen & Chang, 2003). In general, consumers tend to use the information phase to look and compare products. This research will focus on the main three phases mentioned in figure 2.1.

2.2 Social media

Social media has become an important topic these days. The social media hype has exploded where people create content and share it (Asur & Huberman, 2010). In former times people used the internet to read, watch and eventually buy products and services. Nowadays

consumers are creating and using platforms like websites and blogs where they create, share and discuss internet content and information with other people. With the rise in social media and the growing amount of users, the ’power’ has been taken from those in marketing by the individuals. Consumers share, create, tweet and use Facebook and other platforms

(Kietzmann et al., 2011). According to Kaplan and Haenlein (2010) there are six types of social media: blogs, collaborative projects, social networking sites, content communities, virtual social worlds and virtual game worlds. Kaplan & Haenlein (2010) divided a useful classification of (different) social media sources. This classification is shown in table 2.2.

11 The authors defined different kind of social media sources: blogs, content communities, social networking sites, virtual game worlds and virtual social worlds. They are classified first by the level of self‐presentation. That has to do with the control of the impressions of social interaction. Secondly, they are classified by self-disclosure. That has to do with revelation of personal information (Kaplan & Haenlein, 2010).

Table 2.2 : Classification of Social Media. (Kaplan & Haenlein,2010)

Blogs are (usually) managed my one person, but they also provide the possibility of

interaction with other people trough comments. Blogs are special types of websites that display a sort of personal web page. They are usually date-stamped. Blogs can come in a multitude of different variations. Blogs can be person diaries where the person/author describes relevant information about their life or a specific content area.

Social networking sites are platforms in which users connect with others by creating a

personal profile with their information. On this profile they can invite friends and other people to have access to their personal profile and keep in contact with each other. On this profile they can exchange information and instant messages between each other. These personal profiles can hold different types of information like photo’s, blog’s and videos. A good example of a social networking site is Facebook.

Content communities are platforms where people share media between users. Content

communities can come with a wide range of different types like photos, text and video’s. They are content specific. Examples of content communities are Youtube and Dailymotion.

Collaborative projects allow users or a group of people to work together to create

online content. Collaborative projects are probably the most democratic manifestation of User Generated Content (Kaplan & Hanlein, 2010). An example of a collaborative project is Wikipedia.

12

Virtual game worlds are platforms in which users can appear in the form of

personalized avatars. In these virtual words people can interact with each other as they would do in real life. In these virtual game worlds users behave in an online role-playing game according to strict rules. An example of a virtual game world is World of Warcraft.

Virtual social worlds are also virtual platforms, but VSW’s allow inhabitants to

choose their behavior more freely. The life in a virtual life is similar to their real life. In these virtual socials worlds, there are no strict rules for users. An example is Second Life. (Kaplan & Haenlein, 2010).

For this paper I will mainly focus on social media (social networking sites) as Facebook, Twitter, and Pinterest. This focus is set due to limited time of this research and because these are three big social media sites that are used in daily life by many people and retailers. Online stores use social networking sites more often. That is the reason why the focus of this study is on social networking sites rather than other types of social media. Social

networking sites are defined by Boyd & Ellison(2008, pp. 211) as “web-based services that

allow individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. The nature and

nomenclature of these connections may vary from site to site.’’ Social networking sites are

becoming extremely popular and that is not unnoticed. There are millions of people over the world who are registered on different or multiple social networking sites. Therefore it is not weird or surprising that organizations and brands have entered the social network domain to connect with consumers and build connections and relationships. The business world is beginning to realize the potentials and benefits of social networking sites to enhance their web stores and attract customers. These days more and more companies have a Facebook and Twitter page for example. Social networking sites like Facebook and Twitter give

organizations the opportunity to communicate with the consumers and share information about the organization and/or products. Pinterest allows users to ‘pin’ images that have found on the internet to a ‘pinboard’. These items can be shared and users can follow the creator. According to Vinerean et al (2013, p.66) “social media allows customers to communicate directly to your brand representative or about your brand with their friends”.

13 Online stores use social networking sites more often. That is why the main focus of this study is set on social networking sites rather than other types of social media.

2.2.1 Social media marketing

Despite the emergence of social media, companies are still not sure what to do with it. From a marketing point of view it is important to use social media, because nowadays more and more people and companies are using it for different kinds of reasons. Consumers and organizations use social media to gather and share information about a product or service and eventually for shopping purposes. Consumers tend to be socially active and companies intend to be more active from a marketing point of view. Companies use social media as a tool for advertising, personal selling and branding to produce customer-focused messages. They also try to achieve organizational objectives. Tools for communicating with customers for shopping purposes have changed since the emergence of social media (Mangold & Faulds, 2009). This form of media nowadays describes a variety of new sources of online information about products, brands and personalities for example. The importance of social media marketing was already argued by Kotler & Zalman (1971). One of their conclusions was that it does not matter how good your product is, you always need to specialize your communication. Kietzmann et al. (2011) stated that social media from a business point of view is a very powerful tool. Consumers are now able to create all kind of social groups on the internet, who share the same kind of interests. For example, it has become easier to find support against a company after one or several bad experiences. Unsatisfied consumers can group together share negative opinions about the company, but they can also use it individually on their own social

networking site. By spreading negative communication, they can damage the company’s reputation or their product sales. An example in a positive way is that if people are proud of a particular product. In this way they can also group together and share positive opinions or share their experiences online individually.

Social media deals with a wide and different range of online word-of-mouth forums, blogs, consumer to consumer e-mail and other tools/platforms. On the other hand social media is influencing the consumer’s perception on all kind of subjects. Kim & Ko (2011) concluded that social media marketing activities improve consumer behavior, especially purchase intention and loyalty. Therefore social media can be used as a tool for consumers to make online buying decisions.

14 However, how do consumers differ in the use of social media in the three different shopping phases? For example, a consumer can use social networking sites as a way to gather

information about a product that he or she is willing to buy online. This information can be positive or negative in the mind of the consumer. This information will determine if the consumer is willing to make an actual transaction (second phase). The consumer can also share expectations and experiences on social networking sites (third phase). This can be negative or positive, so it does not necessarily mean that a consumer has to make an actual transaction to go to the third phase. The consumer can also use social media in the third phase (service phase) to share expectations and /or experiences. Therefore it is important to see how consumers use social media in their buying process and how do they differ.

2.2.2. Importance social media marketing

The importance of social media for business purposes has already achieved scholarly attention in the early years. Nowadays it is important for companies and marketers to understand social media thoroughly. Kietzmann et al. (2010) argued that social is very important and useful for many managers and companies. Social media and its impact can give managers the

opportunity to develop a good social media strategy based on important issues from their consumers. Also Mangold & Faulds (2009) argued that social media is an important element for companies to encounter in their marketing mix and strategy. In their paper they agreed with Kietzmann et al. (2010) that frequency and timing of social media usage are very

important aspects. Mangold & Faulds (2009) focused more on managing and interrupting the online communication. On social media consumers are more freely in sharing information and interests with other people. Social media also gives consumers the possibility to obtain more information about the potential product or service they want to buy. Afterwards, they can even share information about the product or service. That is why social media according to Mangold & Faulds (2009) is important and also an underestimated part of the marketing of a company.

Exchanging information on social media between companies and consumers can give both parties a platform where they can learn from each other. Companies can learn from specific consumers, but also a whole group of consumers. Kim & Ko (2011) argued that social media in marketing departments is a relatively new area which gives organizations the opportunity to interact directly with a group of consumer or a specific one.

15 However, they argued that there is a much stronger effect between consumers themselves rather than a good marketing strategy. Therefore, social media marketing could be seen as important for marketing purposes. However, companies should also keep in mind what consumers think and what they share about a product or organization, because consumers can influence each other directly and quickly online (Kim & Ko, 2011). Therefore, social media is important for general purposes, but also specific consumers need attention. Consumers can impact other people in the online environment, so a good social marketing strategy is important to reach different types of consumers.

2.3 Related work

There are different studies about social media. There are studies that consider individual social media related approached like customer communities (Karkkainen et al., 2011). There are also studies that consider the marketing potential of social media. For example Hassanein & Head (2006) have done research on the effects of social media in two web stores. They found that social media brings human interaction to the online shopping experience. It also increases the ease of use of the website. The study of Kim & Ko (2012) sets out activities of social media among luxury fashion brands. They found that for purchase intention,

relationship and value equity had significant positive effects, but relationship equity had no significant influence. Results show that the relationship between purchase intention and customer equity was significant. The authors tried to enable luxury brands to predict purchase behavior in the future by managing social media activities.

Chung & Austria (2010) investigated gratifications underlying social media usage. They also examined attitudes toward social media marketing messages and the effectiveness of the messages concerning online shopping value. The results of this study show that attitudes towards social media marketing messages are (strongly) related to information gratifications and social media interaction. They also come to the conclusion that attitudes towards social media marketing messages are not related to entertainments gratification.

However until now no studies were found that study the potential of social media more comprehensively in the different shopping stages. Looking further at more similar studies or other studies that can be related to this study, we see there is a gap in this research area.

16 Most of the studies are focused on the online environment in general (retail websites), rather than social media. In the next paragraphs, related work according to the three phases

mentioned in paragraph 2.1, will be described.

2.3.1 Information seeking

Kim, Tsin &Tsjai, (2014) investigated the use of social media for information seeking. Results of this study show that most social media platforms are used for getting information. Even Social networking sites, whose main focus is networking, are used for information seeking rather than socializing.

Senecal, Kalczyn and Nantel (2005) investigated the relation between online decision-making processes and the influence of the online shopping behavior of a consumer. When consumers have to make a product choice, they are suggested to perform an internal and an external research (if necessary). The authors used an online experiment and asked subjects to perform a shopping task on a website and look for product recommendation. They found that consumers who do not consult a product recommendation during online shopping have a less complex online shopping behavior in relation to consumers who do not consult product recommendation. This is part of the internal research of the decision making process. Consumers use social media in the pre-purchase stage to gather information about a product or service. Watchravesringkan and Shim (2003) investigated information search and shopping intensions for apparel products. They focused on computer users because they are the fundamental users of internet shopping. One of the most significant findings of the study was that (internet) information search intention was the most important variable related to the (internet) shopping intention for apparel products. Certain attitudes also played a big role in the information search for internet shopping, like demographic characteristics. Kim et al., (2014) investigated which social media platforms are used as information sources and for what purposes. This study also examined how user characteristics are related to the use of different platforms. Significant differences in gender and academic disciplines were found. The study also showed that most of the social media platforms are used as information source and the purpose of use varied across platforms. Media sharing and social Q&A sites were mainly used for finding solutions.

17 Social networking sites are used mainly for socialization purposes. Twitter and

media-sharing media-sharing sites such as YouTube are also frequently used as sources for news (Mitchel et al., 2013)(Watchravesringkan & Shim 2003). Bellman (1999) stated that looking for product information influences the online purchase intention and found that this aspect had the most impact on purchase intention.

2.3.2 Purchase decisions

Several studies have been done to examine online shopping behavior and to achieve segmentation of consumers who interact online (Vinerean, 2013). Vellido et al. (1999)

investigated consumers’ opinion on online purchasing and online vendors that seem to consist of the underlying dimensions (trust, affordability, ease of use etc.).

Looking at previous research according to decision making (actual purchase) in the online environment, it has been found that consumers are able to make better decisions with less search effort. Consumers find it easier and better to make decisions in the online environment (Haubl & Trifts, 2000)(Haubl & Murray, 2006). It has also been found that that the ability to control all the information in an interactive online information setting, is also related to decision quality (Ariely, 2000). They found that marketers should not present all the information, but present appropriate information for consumers. In that way they would be able to make better decisions rather than an information overflow. According to Alba (1997) the main conclusions about online purchase intensions are influences by time. Also, because it is easier to shop online. Online platforms for shopping purposes make it possible to find information directly and it saves a lot of time. Research has shown that online high-quality reviews include relevant, comprehensive, and accurate product-related information for consumers (Cheung & Thadani, 2012). Consumers are more likely to use reviews of other people to make decisions. High quality reviews have a greater influence on product evaluation and purchase intention in relation to low quality reviews (Lee et al, 2008).

2.3.3 After-sales service

Geiherhos (2011) stated that customers have a need to share their problems in a social network environment before they go directly to a company. Social networking sites like Facebook and Twitter, are mediums between the customer and company.

18 Geiherhos (2011) further stated that social networks will evolve into a general communication channel between consumer and company. Communication is the most important tool between consumer and company. The author stated that social media has to be explored as a good additional communication channel in which consumers and companies can communicate. The author also argued that traditional tools for after-sales service are becoming time-consuming, such as telephone, call-agents and e-mails. This might lead to a loss of clients. Therefore, social media such as Facebook and Twitter, are more likely as a communication tool between consumer and company. The study (Geierhos, 2011) developed technical consumer

interaction management (CIM) tool, to map social networking channels.

Fluss (2011) stated that the use of social media for customer service, enables

consumers to discuss dissatisfactions and positive reviews to a company. The author stated that social media based customer service improves an organization’s brand and reputation. More studies (Hennig-Thurau et al, 2010) suggest that social media such as Facebook and Twitter, should be used in effective after-sales service. The authors introduced a framework of new media’s impact on relationships between companies and customers. They stated it is important to understand consumer behavior, using social media as a successful tool to manage interactions. They also stated that new media is an effective measurement of customer’s outcomes and activities. Social media can be used to maintain customer relationship. According to the literature, Facebook and Twitter are predominantly tools in after-sales service.

Hennig-Thurau (2010) concluded that the rise of new media (social media), made it important to maintain customers in building relationships. The framework that the authors developed suggest a shift in marketing thinking, because consumers are now highly active partners. Consumers feel more engaged with products and organizations when they are able to submit feedback and share experiences and expectations (Mangold & Faulds, 2009). The feedback can be in the form of criticism, positivism and helpful suggestions

Zackariasson & Wilson (2004) also argued about the change in technology. According to the authors one of the most sensitive areas that are sensitive to changes, is the after-sales service sector. More companies are trying to make their distribution channels more flexible and adaptive to changes in technology. In this way they are more innovative and satisfy customers’ needs.

19

Table 2.3.3: Summary social media in different phases

Table 2.3.3 shows a summary table of the main findings of the use of social media in different shopping phases. There is a real gap in the literature in the use of social media in different shopping phases. Research covers more a general view in the use of social media in an online environment. Or it covers more the use of other types of tools, like reviews and blogs (Lee, et al., 2008). Therefore, the next chapter will cover the main data of this research in the use of social media in specific online shopping phases. Also, factors that could impact this

relationship, such as personal characteristics, demographics, online activity, will be described.

3. Data and method

An oversight of the literature was given in the previous chapter. In this chapter the research goal is given, the conceptual framework will be drafted and the hypotheses for this research are described. Finally the data collection method is described.

Phase authors Objectives

Information search * Kim et al., (2014) * Bellman (1999) * Kim et al .,(2014) * Mitchell et al., 2013) *Watchravesringkan(2003)

* Social media mainly used for information seeking * Information seeking influences purchase intention. *Gender and education influence

Twitter is an information source

*Influence of demographic & personal characteristics Purchase * Ariely (2000)

*Haubl & Murray, 2006).

*Decision quality *Information overload

After-sales *Zackariasson & Wilson (2004) * Hennig-Thurau (2010) * Fluss (2011)

* Geiherhos (2011)

*Sensitive to change & satisfy customer needs * Relationship building

* FB & TW should be used in this phase

* Communication tool  Improves brand reputation. Twitter & Facebook medium between company and customer

20

3.1. Research goal

There seems to be an extensive gap in the knowledge about the use of social media in specific shopping phases. This study contributes to the existing knowledge of customer behavior in an (online) shopping environment and the use of social media. Investigation this could give us a better understanding of this area and identify links between social media and the online shopping process. It can also give us a better understanding of the use of different types of social networking sites and their use in an online shopping environment. Managers improve their business by incorporating social media marketing to their organization. In this way they will be able to make strategic decisions and improve marketing instruments. They will be able to use the most appropriate social media in the appropriate phase.

A gap in the literature has been found and it is stated that it is not clear whether and how consumers use social media in different shopping phases. Also what could influence the differentiations are important issues. Research has shown that demographic and personal characteristics can differ in the use of online shopping. Social media is the ultimate tool for self-presentation and communication for companies and retailers. In addition, it brings other considerable benefits. For example Facebook and Twitter have a high Page Rank. This means that these sites carry authority and get good rank in search results (Debono, 2012). Also Pinterest is becoming more popular for managers to share their products and interests. Social Media enables companies to be more easily found by stakeholders and consumers and in the same time create brand awareness. According to Riviere (2012), good engagement on Social Media supports a company’s brand building. However, research in using social media in different phases shows a gap. This research tries to fill that gap.

More specifically, how can Social media contribute to different shopping phases respectively.

How is Social Media used in different phases? Are social networking sites as Facebook,

Twitter and Pinterest appropriate in these different phases? How many people actually use social media in online shopping decision making and what kind of people do that? Are there differences in usage and what could affect this? Are these differences affected by

demographic and/or psychographic characteristics? Do people with a more explorative mind use social media for online shopping or more the innovative and impulsive people?

21 We do not know the answers to these questions, that is why these questions will be answered through a survey. This research will gain us information about whether people use social media for shopping purposes, how they use it and what the differences are in different phases.

3.2 Conceptual framework

In this paragraph the conceptual framework of the research will be drafted. The hypotheses will be given. These hypotheses include different aspects that can have an impact on the use of social media in different shopping phases. In order to give a conceptual illustration, the following framework is developed to make the different concepts of this research more clear (figure 3.2).

Figure 3.2: Conceptual framework

This model shows us the three different shopping phases and underneath the factors that could influence the usage of social media for these three phases; Demographic characteristics, psychographic characteristics and benefits (appropriateness of social media).

3.2.1 Hypotheses

Research has stated that the use of social media for online shopping differs by gender (Kim et al., 2014). The authors found that gender seems to have an effect on social media use.

22 More specific, males used internet sources more frequently than females. However, social networking sites, are used more often by females (Madden & Zickuhr, 2011)(Nadkarni & Hofmann, 2012). Therefore, we want to test whether there are differences in gender in using social media for shopping purposes.

H1: Females are more likely to use social media for shopping purposes in comparison to males

According to Farag et. al (2003), e-shopping is most done by young educated people. Academic background can influence the use of social media (Kim et al., 2014). For this research, we want to test whether there are differences in education in the use of social media for shopping purposes. Bellman et al. (1999) argued that the online population is relatively well educated. They argued that demographics play an important role in determining whether people use the online environment. Secondly, we want to see whether there are differences in comparison to the information search. Based on findings of (Kim et al., 2011) education plays a role in the way people seek for information. Social media seems to be an added value to users as alternative information. This information can be seen as contributing quality, provided by an additional resource. In this research we will try to find whether there is a relationship between the level of education and the use of the information stage. Do higher educated people seek for more information than lower educated people? Therefore, the following hypotheses are tested:

H2a: Higher educated people are more likely to use social media for shopping purposes in comparison to lower educated people.

H2b:Higher educated people are more likely to use social media in the information phase in comparison to lower educated people.

Impulsive buying tendency was conceptualized in different studies (Rook & Fisher,

1995)(Young & Faber,2000). Rook and Fisher (1995) argued that this impulsive trait is ‘’ the

degree to which an individual is likely to make unintended, immediate and unreflective purchases’’. These impulsive buyers are more likely to make immediate decisions based on

their impulsive actions. These type of consumers have a more sudden urge to purchase online with no advance planning (Girard et al., 2003).

23 Impulsive purchases are more for inexpensive purchase that customers have seen in a store environment. Therefore, consumers are less likely to buy impulsive on the internet (Girard et al., 2003). Among different motivating influences of buying intentions, the desire to explore is a recurring theme (Sheth et al., 1991). Consumer buying behavior contains exploratory

elements. These kind of consumers are more risk taking and like to explore new things. These consumers are more variety seeking. Girard et al. (2003) tested these type of consumers in an online environment. They tested whether the more explorative consumers are more willing to shop online. These type of consumers are more motivated to explore various things, that is why they prefer to shop online. In the online environment they are more likely to find variety of products (Girard et al., 2003).Also, Li et al (1999) found that frequent online buyers have a more explorative mind and search for information. Therefore, we expect explorative

consumers, to use social media more for shopping purposes.

H3: People who are more explorative use social media more for shopping purposes in comparison to impulsive people.

Social networking sites’ recommendations can influence a consumers’ purchase intention and decision. Extremely positive are Tong and Xuecheng (2011). They concluded that social networking sites as an e-WOM source, can be seen as the most important carrier of messages and advertisements. Facebook is a platform where different types of messages, video’s, and pictures can be shared. Kim et al., (2014) concluded that wiki’s and social networking sites such as Facebook are more used for information seeking and obtaining opinions of others. However, Geiherhos (2011) stated that customers have a need to share their problems in a social network environment, before they go directly to a company. Social networking sites like Facebook, are mediums between the customer and company. Research also suggests that Facebook and online reviews were frequently used for finding information (Kim et al., 2011). That is the reason we want to see whether Facebook has a higher usage rate in the information search in comparison to the service stage.

H4: We expect usage rate of Facebook in information search phase is higher in comparison to the service stage.

24 As stated in the literature review, Twitter seems to be more effective in the after-sales service. However, also literature also suggests to use Facebook as a social networking site for after-sales (Hennig-Thurau et al, 2010)(Geierhos, 2011). We also expect that there are differences between the appropriateness (benefits) of different kinds of social networking sites. Twitter, Facebook and Pinterest are different kinds of social media. Twitter enables people only to use a certain number of characters, while Facebook offers more characters to type information. According to Kwak et al., (2010) Twitter is more than a social media site. It is an information spreading medium. They argued that the use of Twitter enables users to spread information and ‘follow’ other people and/or organizations. For that reasons it is expected to find significant differences different kind of social networking sites. We wanted to test whether there are differences between Twitter in comparison to Facebook and Pinterest. Since after-sales/service is more about giving your opinion and not searching for information, we wanted to see whether there are significant differences in appropriateness. Therefore, the following hypothesis is tested:

H5: Twitter is found more appropriate according to customers as a social media site for shopping purposes in the service phase in comparison to the other two sites.

As an additional analysis we want to test the relationship between social media usage and online activity. The dependent variable is social media usage and the independent variables are hours spend on the internet usage, social media usage and frequency of online buying. Li et al (1999) argued that people with a positive attitude can be expected to buy more

frequently. Cha (2010) investigated factors that can affect the use of social media. More specifically, the use of social networking sites. They focused on frequency and amount (hours) spend on social media. The author found that internet experience explains the time a person spends on social networking sites. The hours a person spends on the internet shows that a person is more likely to use social networking sites. Also Altridge, et al. (1997) found that online buying increases the use of internet. Hofmann (1999) argued that internet usage is positively related to online purchase behavior. Therefore, we want to test the following hypothesis.

H6: Hours spend on social media and internet and buying frequency have a positive influence on social media usage.

25 Table 3.2.1 shows a summary of factors that could impact the relationship between social media usage for shopping purposes. These factors are tested in the next chapter.

Author Factor

(Madden&Zickuhr, 2011)(Nadkarni & Hofmann, 2012) (Farag et al, 2003) (Kim et al, 2014).

Gender and education

(Sheth et al., 1991) studies (Rook & Fisher, 1995)(Young & Faber,2000) (Girard et al., 2003)

Personality, impulsiveness, variety seeking

Altridge,et al.(1997) Hofmann (1999) Cha (2010) Buying behavior, internet usage, online activity

Table 3.2.1: Factors that could impact social media usage for shopping purposes

3.3. Data collection method

In order to gain understanding on the use of social media in different shopping phases, a self-administered survey is distributed. The survey contains the concepts outlined in the

conceptual model in the previous paragraph. A survey is used for descriptive research and makes it possible to gain quantitative data from a big population. Therefore, a survey can provide explanations for relationships between variables (Saunders et al., 2009, p. 144-145). A survey is a frequently used tool to get answers of many questions. The survey (appendix A), was set up in four sections: starting with the use and appropriateness of social media (Facebook, Twitter and Pinterest) in different shopping phases. The second section covered the psychographic characteristics. The third section covered online activity (internet- and social media usage). Finally, some demographic characteristics were asked. The questionnaire is written and administrated in English. All the surveys are conducted in anonymity. The questionnaire was conducted online during a period of ten days. During this period

approximately 1,100 possible people were contacted to fill out the questionnaire.We expected to have a response rate of 10%.

26

Measurement elements:

1. Social media usage and benefits: For the first part of the survey we asked how

often (5 point format: Never, rarely, sometimes, never) do you use each SNS for each phase. After that we asked how appropriate 5 point format (1 not appropriate – 5 very appropriate) do you think this Social media site is for his phase. In this way we can measure if people use a SNS for each different phase and IF not, how appropriate do you think this SNS is for this phase. In this way we can also see how appropriate a specific social media site is, even if the respondent does not use it. A reason could be that the benefits of the social are not high or appropriate.

2. Psychographic characteristics: Three different personality traits were measured: Innovative, Impulsive and Explorer. Innovativeness refers to the adoption of new products and technology adoption (Cha, 2010). Impulsiveness refers to the likelihood of making immediate and unintended purchases (Rook & Fisher, 1995).

Explorativeness refers to variety seeking and exploring new things (Girard et al., 2003)(Baumgartner, 1996). Five items per personality were asked, so we have 15 questions about the personality of the respondent ( likert scale 1 (Totally disagree)– 5 (totally agree). In this way we can see if personality plays a role. These items are reliable and they are used several times in prior research to investigate personality statements (Baumgartner,1996)(Rook & fisher, 1995)(Manning, et al., 1995)(Bearden & Netemeyer, 1999).

3. Social media usage and internet usage : We asked questions about the use of social media and internet. Three questions measured online activity (how many hours per day do you spend on the internet, how many hours per day on social media and the last question is about the use of social media for different product categories (1-15 different product categories). We added this variable to see if there is a relation

between internet/social media usage and the use of social media for different shopping phases. Weltevreden (2007) argued that product characteristics influence the extent to which people will use the internet. They argued that it could be influences, because in this way they can substitute or complement for physical shopping. Also Lee (2000) argued that online shopping is popular according to specific product categories. Internet usage can influence the relationship between social media and online shopping. Therefore, we choose to measure social media usage and internet activity.

27

4. Demographic characteristics: In the final part we asked three questions about the

demographics: Age, gender and education level (5 items). In this way we can test if females for example use social media more for shopping purposes than males. Differences in age. Also we want to test whether higher educated people react differently, from those with lower educations.

Some of the variables consist of multiple items combined together from the questionnaire like ‘General social media usage’ variable for shopping purposes, explorativeness, impulsiveness and innovativeness.

3.3.2 Sample

As this research aims to answer the question whether and how customers vary in terms of their use of various social media in different shopping phases, the first step is to identify suitable respondents. This research collected data through the internet, because this research is focused on internet users who participate in internet shopping. The sample for this study is based on social media usage. In order to target this group, the online environment (Facebook and Twitter) are chosen distribute the survey. Using surveys on the internet has also the advantage of being time efficient. Therefore, the data can be collected within the limited time constraints of this research. The respondents who are active on social media are reached and asked to participate by social networks. Personal networks on social media are used to distribute the survey. According to Farag et. al (2003), e-shopping is most done by young educated people. Therefore students are a good and representative part of the group of participants to use for this research. On the other hand, we also want to see different age groups and opinions in this research.

Participants in this research differ from young to old and from students to professionals. Most of the respondents are relatively young and expected to be students. This young

population spends more time online. They are also accessible on social media as sample within the time constraints set for this research. We used this technique to be sure that we target people that actually use social media so the results will not be biased. When using an online questionnaire to measure thoughts and opinions from consumers, a choice is made to not include non-social media users. The predetermined goal was to recruit between 80 and 100 Dutch respondents for this research.

28 In total 154 respondents were gathered in ten days of searching (121 completed surveys). A pilot study has been done with three people to improve the survey and spot potential flaws. These pilots are used in the original data.

3.4 Data preparation

After receiving the answered questionnaire, several steps were taken to prepare the data for analysis. The first step was to exclude respondents who started the questionnaire, but did not finish it. Theses respondents are excluded to make the analysis more reliable. Respondents who did not fill in the first section about social media usage in different shopping phases were also excluded. Not completing this section makes this respondent not suitable for answering the main hypotheses. Some questions were not filled in completely, but the respondent is suitable for this research. Therefore these missing values are replaced in SPSS with mean score of that specific question. Since there were only a couple of statements that were not filled in, it was better to replace those items with the mean score and keep the respondent in the analysis. This variable has a relatively low importance, making the respondents, and their other results, still suitable for participation.

The next step is to spot some potential outliers. Multiple descriptives and frequencies were analyzed and two potential outliers were excluded, both from the variable ‘internet usage’. Two respondents answered 54 and 36 hours per day, so this would be impossible. After these steps all potential outliers and incomplete surveys are excluded. The next step is to recode counter indicative items. The questionnaire has fifteen personal characteristics statements which cover three types of personal characteristics (Innovative, Impulsive and explorer). Six statements needed a reversed coding ( item 5, 10, 11, 12, 14 and 15). For example one of the impulsive statements is ‘I carefully plan most of my purchases’, this is not an impulsive statement so it has to be reversed.

To determine whether it is possible to regroup measurements, a reliability test was carried out. Cronbach’s Alpha was calculated for the different characteristics items. Normal procedures state that each group should have a Cronbach’s Alpha around 0.7 for a reliable combination of these measurements. After reversed coding the items of explorativeness gave us a Cronbach’s alpha of around 0.75 for the personal characteristics items. Also

29 A general ‘Social media usage’ variable is computed including all shopping phases, excluding respondents who ‘never’ use a certain social networking site for shopping purposes. In this way the three different social media networking sites were computed together including the three different phases. A Facebook, Twitter and Pinterest usage variable for shopping purposes are computed. This is done for all the three social media sites. The reliability of combining those items together was also around 0,70. After this all these three different networking sites are summed up into one General social media usage variable.

4. Results

The results of this paper are divided into two sections. First general results will be drafted. These general results will give general results such as population and respondents. The second section will continue in testing the hypotheses that are proposed in the previous chapter.

4.1 General results

The questionnaire was sent out to over 1,100 people, of which 154 became respondents. After applying exclusions mentioned in the previous paragraph 121full questionnaires are used for this analysis. Figure 4.1 gives an overview of the respondents.

30 The general results show that most of the respondents have a higher level of education (87 out of 121) have a university degree. Results also show that on average respondents spend around 5 hours on the internet per day (M=4,90, SD=3,82) and they spend around 2,5 hours per day on social media (M=2,63, SD=2,21). Most of the respondents sometimes buy products online (45%) and 31% buys very often. Most of the respondents are frequent online shoppers. Overall there were more females responding (58% versus 42%). However, this is a good symmetric distribution of gender. Most of the respondents are between 20 and 25 years old. On average the respondents were 26 years old. Probably most of the respondents are students. This can have an effect on the reliability of this research. However, students are frequent and heavy internet users, this population can still be representative.

Table 4.1.1 gives an overview of the different social networking sites according and different shopping phases. These items show how often a respondent uses a certain social media site for a different shopping phase with a scale from 1 (never)to 4 (very often).

Table 4.1.1: shopping phases and social media

Results show that the means for all the different phases are quite low. Facebook has a higher mean in the information phase (M=2,35, SD=.910) and service phase (M=2,05, SD=,902). This table also shows that none of the respondents uses Facebook very often for the purchase phase, but Facebook is mostly used for the information phase. Twitter seems to be used more in the after-sales purchase phase (M=1,48, SD=,838).

31 Pinterest seems to have a less usage rate. Most of the respondents never uses Pinterest for the three different phases. Pinterest seems to be less popular and most of the respondents have a neutral opinion or never/rarely uses Pinterest for shopping purposes.

Results show that 59% of the respondents find Twitter not appropriate in the information search. Only 17% finds Twitter appropriate for the information search. Also 70% of the respondents scored a 1 or 2 (inappropriateness) for Twitter in the purchase phase. However, most of the respondents (26%) gave Twitter a score of 4 in the service stage. So most of the respondents find it more appropriate in the service phase. Facebook seemed more appropriate in the information search (34% scored a 4 in the information search). The purchase stage was neutral for Facebook (30% scored a 3 and 30% scored 2). Most of the people (44 out of 121) find Facebook appropriate in the after-sales phase. Pinterest scored low on all of the phases. Most of the respondents (40,5%) finds Pinterest inappropriate in the information search, 52% finds it inappropriate in the purchase phase and 43% finds it inappropriate in the after-sales phase. All these percentages are based on score 1 (totally inappropriate).

4.2 Hypotheses testing

Several statistical analysis were conducted to test the hypotheses that are mentioned in chapter three. In this paragraph the result of each hypothesis is described. Results of all the

SPSS(tables) can be found in Appendix B.

H1: Females are more likely to use social media for shopping purposes in comparison to Males

Respondents were asked to fill out how often they use Facebook, Twitter and Pinterest for different shopping phases ( 4 point scale 1(never) to 4 (very often). For this hypothesis we wanted to compute a general social media usage variable and see if males and females differ in their use of social media for shopping purposes in general. The three different variables of Twitter, Facebook and Pinterest are combined together in one variable. Although not all respondents use a certain social media site for shopping purposes, we conducted a use/no use of social media variable. In this way we get an insight in the people that answered ‘never’ and people who do use social media for shopping purposes.

32 We tested this hypothesis in two ways, using a chi square and an independent t-test.

A chi-square test for independence was used in order to see if there was any association between the different groups. A Chi-square is used for this hypothesis to test two categorical variables, gender and social media usage for shopping purposes. Gender (Male/female) and social media usage (usage/no usage). We compare two categorical responses of two

independent groups. Results show that 83,5% (49,6% female, 33,9% male) of the

respondents uses social media for shopping purposes. Results ( χ2 (1, n = 121) = 0.13, p = .715, phi = 0.033) showed us there is no significant association between gender and usage/no usage of social media for shopping purposes. We can see that the strength of the relationship (Phi=0,03) is very low.

If we look at the social media usage score variable, so depending on how often respondents use social media for shopping purposes, we can also look at social media usage for shopping purposes in comparing ‘scores’ 1 (never) to 4 (very often). We can also test this hypothesis by using an independent t-test and see if men and females differ. An independent t-test is used to compare the mean scores (continuous) for two different groups. Therefore, we want to see if the two groups differ from each other by comparing scores, rather than a general categorical variable.

We hypothesized that females are more likely to use social media for shopping purposes in comparing to men. Looking at the Levene’s test for equality of variances (F=1,067,P=0,303) ,this will determine if the two conditions have about the same or different amounts of

variability between scores. This shows us that the variability in the two conditions is not significantly different. Results of the T-test showed that there was no significant difference (t=1,135,df=119, p=0.259) between males (m=14,06, SD=4,296) and females (M=13,22, SD=3,769).So we have no evidence that the two populations differ. Looking at mean differences in the group statistics we see that males have slight higher mean (M=14) in comparison to females (M=13). This hypothesis is not supported. Males have a slight higher usage score than females, but no significant differences are found in the social media usage for shopping purposes.

33 H2a: Higher educated people are more likely to use social media for shopping purposes in

comparison to lower educated people.

The first general hypothesis will test if higher educated people are more likely to use SM for shopping purposes in general in comparison to lower educated people. A chi-square test for independence was used for hypothesis 2a. We compared two categorical responses of two independent groups using a general usage/no usage of social media variable and education level was recoded into HBO and lower and WO and higher. By doing this, we compare two independent groups. Results show that 62,8% of the respondents are from WO and higher level education who use social media for shopping purposes in comparison to 20,7% from HBO and lower, who use social media for shopping purposes. This means, more WO> use social media for shopping purposes, in comparison to HBO<. However results of the Chi square ( χ2 (1, n = 121) = 0.90, p = .342, phi = 0.086) showed us there is no significant association between high and low educated people and social media usage for shopping purposes. We can see that the strength of the relationship (Phi=0,03) is very low.

H2B: Higher educated people are more likely to use social media in the information phase in comparison to lower educated people

For this hypothesis we looked more in detail if higher educated people differ in the social media usage in the information search in comparison to lower educated people. We tested hypothesis 2b by using an independent t-test to see if there are differences between higher and lower educated people in the usage of the information phase. An independent t-test, will help us in comparing the mean scores (continuous) of the two different groups. We hypothesized that higher educated people are more likely to use social media in the information phase in comparison to lower educated people. Looking at the Levene’s test for equality of variances (F=11,621,P=0,001) ,this will determine if the two conditions have about the same or different amounts of variability between scores. This means that the variability in the two conditions is not the same. So the variability of the two conditions are significantly different. However, the t- test showed that there was no significant difference in mean scores

(t=1,710,df=119, p=0.09 between higher educated people (m=4,71, SD=1,383) and lower educated people (M=5,281, SD=2,174). This hypothesis is not supported, there are no significant differences found.