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MBA Thesis
Amsterdam Business School, University of Amsterdam.
Social media influences on the need recognition phase of consumer
smartphone purchase decisions’’
Student: Kema Nlemibe (ID 10297464)
knlemibe@hotmail.com
September, 2013
Thesis Supervisor: Prof. John Cullen
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Abstract
Social media has radically changed how marketing strategies are designed and executed. As
more consumers turn away from traditional media sources to social platforms and networks for
product related news and information, an increasingly larger percentage of marketing budgets
are now being devoted to social media marketing. Marketers hope that this new platform with
its potential to reach mass audiences in real time would also be a means of inducing need
recognition and ultimately influencing purchase decision. This thesis surveys a sample of urban
professionals in the Amsterdam area to understand the influence of social media in inducing
need recognition in regard to smartphone purchases. The study finds that while an increasing
number of urban dwellers are indeed turning to social platforms for product information, the
ability of these platforms to induce need recognition and ultimately influence product purchase
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Abstract _________________________________________________________________ 2 Chapter 1 Introduction ______________________________________________________ 6
1.1 The growing influence of social media ___________________________________________ 6 1.2 Social Media Statistics: _______________________________________________________ 7 1.3 Consumer decision making ____________________________________________________ 9 1.4 Research objectives, questions and scope ________________________________________ 9
Chapter 2 Literature Review ________________________________________________ 10
2.1 Consumer Behaviour ________________________________________________________ 10 2.2 Consumer Decision making models and theories _________________________________ 11 2.3 Consumer Decision Making Process ____________________________________________ 13
Purchase Decision: ____________________________________________________________________ 15
2.3.1 Need Recognition _________________________________________________________ 15
- Dissatisfaction _____________________________________________________________________ 17 - New Needs/Wants _________________________________________________________________ 18 - Related Products/Purchases. _________________________________________________________ 18 - Marketer-Induced Need Recognition ___________________________________________________ 18
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- The Introduction of innovative new products ____________________________________________ 19
2.4 Need Recognition and Consumer Motivation ____________________________________ 19 2.5 Social Media _______________________________________________________________ 21 2.6 The new communication paradigm ____________________________________________ 22
Chapter 3 Research Methodology ____________________________________________ 24
3.1 Research Question __________________________________________________________ 24 3.2 Research Methodology ______________________________________________________ 24 3.3 Population and Sample Selection ______________________________________________ 25
Geographical location: _________________________________________________________________ 26 Education: ___________________________________________________________________________ 26 Age _________________________________________________________________________________ 26 Gender ______________________________________________________________________________ 26 Ownership of smartphones _____________________________________________________________ 27 3.4 Data Collection _____________________________________________________________ 27
Chapter 4 Data Analysis ____________________________________________________ 28
4.1 Introduction _______________________________________________________________ 28 4.2 Sample and response analysis _________________________________________________ 28
4.2.1 Sample description: age and gender __________________________________________________ 29 4.2.2 Social Media Usage _______________________________________________________________ 29 4.2.3 Social Media and consumer purchase decision – Analysis of responses ______________________ 32 ____________________________________________________________________________________ 32 4.2.4 Social Media and need recognition – Analysis of responses _______________________________ 34
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4.2.4 Smartphone Purchase need recognition and social media ________________________________ 36
Chapter 5 Discussion and Conclusion _________________________________________ 40
5.1 Why People Use Social Media _________________________________________________ 41 5.2 Social media and need recognition _____________________________________________ 42 5.3: Social media and need recognition in smartphone purchases ______________________ 43 5.4: 18-30 Year Olds ____________________________________________________________ 44 5.5: Limitations of this study and suggestions for future research _______________________ 44
Sample limitations ____________________________________________________________________ 44 Research methodology: ________________________________________________________________ 45 Time limitations: ______________________________________________________________________ 46
5.6: Conclusions ______________________________________________________________ 46
Bibliography _____________________________________________________________ 48 Appendix I (Analysis of answers related to social media usage) ____________________ 52 Appendix II (Analysis of answers related to social media, need recognition and purchase decision making in general) ____________________________________________________ 53
Appendix III (Analysis of answers related to social media and need recognition and
purchase decision related to smartphones) _______________________________________ 57 Appendix IV (Survey Questions) ______________________________________________ 61
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Chapter 1 Introduction
1.1 The growing influence of social media
"Like Us on Facebook" and ‘Follow us on twitter’’ have become standard texts in online
adverts and campaigns. Today in response to the pervasiveness and perceived influence of
social media, most businesses from the small ‘mom and pop’ shop around the corner to
medium sized organizations as well as large multinational corporations maintain a very active
presence on social media, from Facebook pages to YouTube channels and twitter accounts.
Hundreds of other similar pages are maintained by customers who are ‘fans’ of these
organizations or consumer advocates or activists who see social media as a means of holding
corporate organizations accountable.
The potential of social media to enable businesses reach and possibly influence mass
audiences in real time has led to its integration into marketing departments of organizations as
a platform for driving awareness and it is increasingly taking a larger share of the marketing
budget. 1. Social media marketing has enabled businesses to design and launch marketing
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campaigns utilizing social media, which directly involve consumers in the creative process either
by being content generators or message carriers. Customers can now utilize the scale
capabilities presented by these social platforms to share promotional content with huge
numbers of other potential customers who are part of their social networks, bypassing
traditional ‘one way’ communication channels where businesses simply pushed content out to
consumers. See Thackeray et al, (2008). So either as a tool to better manage a corporate brand
or image or as a driver of business growth, according to Kiron et al (2013), the consensus seems
general that in this era businesses simply can no longer survive without social media.
1.2 Social Media Statistics
2:
There are currently 1.2 billion Facebook users in the world, with each user spending an
average of 15 hours 33 minutes per month on Facebook and 665 users who log in daily. Linked
in has 238 million users globally with over 50 million unique visitors each week. Twitter has
over 500 million registered users as of 2012, generating over 340 million tweets daily and
handling over 1.6 billion search queries per day and YouTube has 1 billion unique visitors every
month. Wikipedia is the fifth most popular website in the world, and is used by 500 million
people each month. Market research companies like Forrester and eMarketer are projecting
that the utilization of social media will continue to rise. According to eMarketer, ‘’the number
of social network users around the world will rise from 1.47 billion in 2012 to 1.73 billion this
year, an 18% increase, and by 2017, the global social network audience will total 2.55 billion’’.
See fig 1 below.
8 Fig 1 (Source ‘’Worldwide Social Network Users: 2013 Forecast and Comparative Estimates’’)3
Given these numbers, it is no surprise that these social platforms are now firmly integrated
into and are now a standard part of the PR / marketing toolbox of most businesses and their
use as brand awareness and business generation tools is seemingly invaluable. A number of
studies have focused on the role that social media plays in the consumer decision making
process and have attempted to understand its impact on the bottom line of businesses. (e.g.
Wang et al, (2012); Xiang and Gretzel, (2010); Pookulangara and Koesler, (2011)). Additionally,
the average age of social media users shows an upward trend as more people in the 55+ age
range are increasingly becoming computer literate, spending more time online and joining
virtual social networks to ensure contact with friends and family. The challenge for businesses is
therefore not just to maintain a presence on the various social platforms, but to also ensure
that the supposed immense earning potential represented on these platforms is realized. To
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this end, it is necessary to fully understand just how social media influences purchase decisions
of all kinds and in all the demographics represented. Do Facebook ‘likes’ ultimately translate
into sales in every type of business?
1.3 Consumer decision making
The Consumer decision making process is an interesting subject for businesses as it gives an
insight into the forces that shape and influence how consumers make buying decisions. A lot of
research effort has been devoted to understanding how consumers make these decisions about
what, when and how to buy, resulting in a number of theories and models as well as ideas
about how businesses can influence those purchase decisions (e.g. Wesley et al, 2006;
Griskevicius and Kenrick (2013)). Additionally, numerous commentators have highlighted the
link between social and peer networks and consumer buying decisions. (E.g. Jimenez and
Mendoza, (2013), Mangold and Faulds, (2009)). It seems clear that the opinions of friends and
family and acquaintances can influence what products and services consumers buy, and even in
some cases how those purchases are made as stated by Kotler and Armstrong (2012).
1.4 Research objectives, questions and scope
Since social media is effectively the major mechanism of staying in touch with and engaging
the widest circle of friends, acquaintances and work colleagues, it seems logical to assume that
social media will naturally influence buying decisions. However that conclusion is by no means
unanimous. According to IBM’s 2012 online retail report4, social media is said to only have
contributed a mere 0.34% of all online sales on Black Friday, 2012. (‘Black Friday’ is the day
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following Thanksgiving Day in the United States and is a very popular shopping day).
Additionally, information is scant on exactly what types of purchases are influenced by social
media. The travel and hospitality sectors seem to be the obvious beneficiaries of the influence
of social networks and media, but do the benefits extend to other products and sectors? And
does social media’s influence extend to high value and or technology purchases? For the
purpose of this thesis, I will be focusing on the influence of social media on need recognition in
the purchase of smartphones and the key research question I intend to answer is ‘’how does
social media influence need recognition in the purchase of smartphones’’?
Chapter 2 Literature Review
2.1 Consumer Behaviour
One of the most comprehensive definitions of consumer behaviour is found in
Vijayalakshmi and Mahalakshmi (2013) and it is defined as ‘’the study of individuals, groups, or
organizations and the processes they use to select, secure, and dispose of products, services,
experiences, or ideas to satisfy needs and the impacts that these processes have on the
consumer and society.’’ In other words, consumer behaviour focuses on and attempts to
capture all of the possible factors that can influence how individual consumers or groups make
decisions on what to buy, when to buy and how to buy and also possibly where to buy.
Consumer behaviour integrates elements of psychology, sociology, social anthropology and
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the consumer from demographic groups, family, friends, other reference groups, and society in
general. Consumer behaviour therefore is a key focus area for marketing and product
development departments according to Vijayalakshmi and Mahalakshmi, (2013), and marketing
strategy is almost exclusively focused towards understanding those motivators that play a role
in consumer purchase decisions and frequency and how organizations can influence them.
(Sandhusen L Richard, (2008).
The success of marketing strategy therefore depends to a large extent on how managers are
able to understand and predict consumer behaviour.
2.2 Consumer Decision making models and theories
A number of models and theories have been proposed in an attempt to understand and
explain the different influences that play a role in how and why consumers make certain
purchase decisions. In these models, researchers have highlighted the diversity and multiplicity
of factors that could govern consumer behaviour for example ‘’household characteristics,
experience with the product, marketing mix variables, situational factors or word of mouth
communication’’. (E.g. Wagner U and Taudes A, (1987), Latuszyńska et al, (2012), Lejniece,
(2011)).
One of the better known of these models is the stimulus response or ‘black box’ model of
consumer behaviour (Fig 2). The black box model explains that consumers make purchase
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(Product, Price, Place and Promotion) as well as other environmental stimuli that include the
economic, technological, political, cultural as well as demographic influences that the potential
customer is subject. As explained by Kotler and Armstrong, (2011) and Sandhusen L, Richard
(2008), these set of environmental factors interact with the buyer’s unique personal
characteristics, the cultural, social personal and psychological influences and other motivations,
and through a decision process yields a certain type of purchase response. The interaction of all
these factors with the buyer’s characteristics and how this results in a decision process i.e. what
actually goes on inside the buyer’s black box is a continuing area of research that has still not
been fully understood and about which marketers remain curious. This is because of its
potential to enable a much better understanding of consumer behaviour. That said, many
researchers including Thackeray et al (2008), and Sashi (2012) have already highlighted the
growing role of social media in building and adapting the marketing mix to build customer
engagements in both business and consumer markets, utilizing the advantage of new
technologies and tools to reach and influence greater numbers of customers. With the
increasing use of social media consumers are sharing more of their personal and intimate
information on social networks and this information is visible to marketers. It is therefore
expected that marketers will develop a better understanding of what goes on in the ‘black box’
and gain a better understanding of the consumer decision process and what the buyer’s
13 Fig 2: ‘Black box’ model of buyer behaviour – Sourced from Sandhusen L. Richard, (2008), pg. 240.
2.3 Consumer Decision Making Process
The consumer decision process, which is captured in the buyer’s black box (Fig 2), begins
long before the consumer actually makes a purchase and continues even after a purchase is
made. As explained Kotler and Armstrong (2011), Kotler (2001) and Belch and Belch (2003), it
generally consists of five stages or phases through that the buyer passes and not necessarily in
the sequence outlined in fig 3 below. The level of a customer’s involvement in each of the five
phases varies depending on the type of customer and or how invested in the purchase they are.
A high level of investment or involvement is indicative of the importance of the purchase and
the customer would typically require a lot of information to make a decision, and would invest
time in processing and comprehending the relevant information. High involvement customers
would likely go through every phase of the decision process. Pachauri (2002) makes a very
important point, which is that this information aided decision process may not necessarily
result in satisfactory outcomes. By contrast, low involvement customers do not invest a lot of
time or planning in the decision process.
The 21st century is witnessing an explosion of Internet-based messages transmitted
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consumer behavior including awareness, information acquisition, opinions, attitudes, purchase
behavior, and post-purchase communication and evaluation.
Fig 3: Consumer purchase decision process (From Kotler and Armstrong, (Principles of Marketing, Prentice-Hall, 2011, pg. 152)
The five stages of the consumer decision process are:
- Problem / Need recognition: This is the first stage in the consumer decision process and is discussed in greater detail in section 2.3.1.
- Information search: Following the recognition of a need, a consumer begins the
process of searching for information on the product or service that can best fulfill that need.
Consumers look for information from multiple sources and the more involved the consumer is
in the purchase, the more intensive the information search process. See Kotler (2001). The
advent of the internet and the growth of social media have radically changed the consumer
information search process. ‘Traditional’ sources of information like radio, television,
newspapers and magazines have given way to new media sources where the content and
opinion is usually from other consumers and the perception is that it is consequently more
trustworthy, see Mangold and Faulds (2009).
- The evaluation of alternatives is the stage where the consumer evaluates multiple
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(See Mitchell V. W, (1992)). The consumer’s psychology has an impact on this evaluation
process. For instance, Williams, (2002) has found that social class plays a major role in how
consumers evaluate different product choices. As in the information search stage, Mangold and
Faulds (2009) highlight that social media play a major role in the evaluation process of
alternative options in the decision process.
Purchase Decision: This is the stage when a consumer finally stops searching and makes a decision on what product or brand to buy, see Belch and Belch (2003). The consumer forms a
purchase intention based on the factors discussed in section 2.2 above. However, this intention
could still be changed either by the opinions of people close to the customer (friends and
family) or a change in their situational factors, Kotler and Armstrong, (2012). Friends and family
are communicating more and more via social media channels and as Mangold and Faulds,
(2009) have highlighted, Consumers are turning more frequently to various types of social
media to make and finalize their purchasing decisions.
- Post Purchase Evaluation results in either satisfaction or dissatisfaction with the purchase. In either case, a customer is likely to utilize social media channels to communicate
their feelings on their purchase and influence other future consumers who increasingly trust
and value the opinions of other consumers above that of the selling organization. (Mangold and
Faulds, (2009)). Additionally, a purchase that results in dissatisfaction is unlikely to generate
repeat business.
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Also referred to as ‘problem recognition’, this is the first stage of the consumer decision making
process and describes the situation where the customer realizes or recognizes a need or
requirement for the product or service. According to Belch and Belch (2003), this is sometimes
triggered by internal (impulses and motivations) or external stimuli. In either case the customer
realizes a discrepancy exists between what they’d like their ideal state to be and their actual
current state and becomes motivated to address that need through a purchase decision
process. Understanding the different stimuli that have the greatest capacity to influence need
recognition and initiate interest in a particular brand or product is a key area of interest for
marketers, and some theories have been proposed in an effort to further understand the
psychology of human needs and the implications for marketing, see Belch and Belch (2003).
This paper examines the most famous of these, Maslow’s hierarchy of needs theory in section
2.4.Fig 4 captures some of the psychological processes mapped to the various stages of
consumer decision making.
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Need recognition arises from a host of internal and external influences. What is of interest is to
understand how social media influences this process. Belch and Belch, (2003) highlight different
ways that consumers recognize need and these are listed below.
- An Out Of Stock situation occurs when a consumer runs out of their existing stock of a particular product and needs replenishment. Addressing needs arising from situations
like this is fairly easy. The customer simply buys the brand that they are familiar with or
to which they are loyal. The opportunity to switch brands or products is limited, the
consumer is not likely to be influenced to switch brands except there is some
dissatisfaction with the current product, so the assumption is that the ability of social
media to influence consumer opinion in an ‘out of stock’ situation would be fairly
limited.
- Dissatisfaction with a product or service or the customers current state is another way that a customer realizes a purchase need. An example would be the perception of
inefficient battery utilization of I phones. This could create a desire to replace the phone
preferably with another brand. In this situation, the consumer is likely to be influenced
by opinions that could sway them towards another brand or product. Social media is
likely to play a major role in this process if the customer makes enquiries from
individuals in their social networks or seeks information from online forums. According
to Sashi (2012), social media has changed how ‘’sellers and customers connect and
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- New Needs/Wants arise when the consumer experiences changes in their lives,
which result in a new set of needs. For example, a change in a consumer’s employment
state could result in the need for a different and or better wardrobe. A consumer may
begin a new job located far from their house and might realize they now need or want a
car. Fulfilling a new need is likely to be a high involvement purchase on the part of the
consumer because of the lifestyle changes that lead to new need recognition.
- Related Products/Purchases. The purchase or ownership of certain items
automatically leads to the need to make new purchases of other items that complement
the original purchase. For example, buying a new smart phone might make the
consumer realize the need to also buy a phone cover or a host of other mobile phone
accessories. Buying a new laptop might result in the need to buy computer security
software or other applications. It is hard to say what influence social media would have
on the customer in this situation.
- Marketer-Induced Need Recognition is as a result of the actions of marketers’
who utilize the marketing mix in Fig 2 above or other external stimuli to stimulate a
need in consumers. For example, with every version of an I phone, as a result of the
marketing activities and hype that accompanies the release of the new versions, a
significant number of consumers feel a need to ‘upgrade’ their existing still currently
functional phones to the newer versions. Marketers are increasingly utilizing social
media as a platform to influence need in consumers. Again as Mangold and Faulds
(2009) point out, social media is now a key element used in the promotional mix to
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- The Introduction of innovative new products has been identified as another
stimulus of purchase need in customers. As previously highlighted, corporations are
assigning increasingly bigger chunks of promotional budgets to social media5 and
marketers are utilizing social platforms to drive awareness and need for new products.
Mangold and Faulds (2009).
2.4 Need Recognition and Consumer Motivation
A consumer’s perception of their need depends to a large degree on their psychology, in
addition to the other cultural, social and personal factors that collectively make up the buyer’s
characteristics. Rabontu and Boncea (2007). This why consumer psychology continues to be an
area of great interest to marketers and a lot of effort is applied towards understanding the
psychology of human motivation. Again according to Rabontu and Boncea (2007),‘’motivation
is the force that makes the individual take action’’ to address the discrepancy between their
actual and ideal state.
As stated earlier in this paper, Belch and Belch, (2003) contain a number of well-known
theories of human motivation, which have been proposed to help marketers understand the
influence of motivations on buyer behaviour. This paper will briefly examine Maslow’s
hierarchy of needs theory (fig 5) as it is one of the most commonly applied for marketing
purposes. Maslow divides most human needs into a hierarchy of five categories from the most
pressing (physiological needs) at the bottom of the pyramid to the least pressing
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actualization) needs at the top. His theory was that the lower level needs have to be satisfied
before people become motivated to meet the higher level needs.
Maslow’s five categories are:
The Physiological/basic needs e.g., food, water, air, shelter.
The Safety and Security needs e.g. employment, stability.
The Social needs e.g. affection, friendship and family
The Ego needs like prestige, success, self-respect and
The Self-actualization needs e.g. self-fulfillment.
Applying Maslow’s theory helps marketers understand what particular needs drive
consumers at different times and stages in their lives and consequently what purchase
decisions are likely to arise from those customers. Kotler, (2001). It therefore finds application
in how marketers design specific promotion campaigns around products to appeal to certain target market segments based on the needs that those segments are looking to fulfill.
According to Kotler, ‘’Maslow’s theory helps marketers understand how various products fit
into the plans, goals, and lives of consumers’’. Kotler, (2001). For example, young people are
more likely to be concerned with fulfilling the lower level needs, so any marketing promotions
targeted towards this segment of the population would have to take that factor into
21 Fig: 5 Maslow’s Hierarchy Of Needs Theory : From Wikipedia6
2.5 Social Media
Kaplan and Haenlein, (2010)) define social Media as ‘’a group of Internet-based applications
that build on the ideological and technological foundations of Web 2.0, and that allow the
creation and exchange of user generated content.’’ Social media occurs in many forms and
includes applications used for multiple purposes like: Social networking e.g. LinkedIn, Facebook,
Multimedia e.g. YouTube, Flickr, Micro blogging e.g. Twitter, Tumblr, FriendFeed, Wikis e.g.
Wikipedia, Reviews and Opinions e.g. EBay, Amazon and Booking.com and Social bookmarking
e.g. Pinterest, StumbleUpon etc. There are so many different currently active social media
platforms and new ones are continuously being developed to facilitate interaction in different
ways. Figure 6 below is a representation of the current social media landscape in 2013, and
shows the huge number of some of the social media applications currently in existence.
22 Fig 6: Social Media Landscape 2012, Cavazza (2013)7
2.6 The new communication paradigm
Facilitating the exchange of user generated content and often times in real time is social medias
key differentiator from traditional media forms and according to Sachi, (2012), ‘’ Unlike
traditional market exchanges in which the seller largely controlled marketing mix decisions and
developed strategies to meet the needs of customers, social media helps shift control of some
of these decisions to customers. By changing how sellers and customers connect and interact,
social media enables customers to participate in making strategic choices jointly with sellers
and co-create value with them. Social media enables customers to participate in value adding
and marketing mix decisions by connecting and interacting not only with sellers, but also with
other customers as well as non-customers’’.
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Mangold and Faulds (2009) have created a new communication paradigm to reflect this
shift see fig 7 and encourage marketing managers to ‘’recognize the power and critical nature
of the discussions being carried on by consumers using social media.’’ In this new paradigm
social media can no longer be ignored and occupies a significant position in the PR and
advertisement strategy for marketers and organizations.
Fig 7: The new communications paradigm- Mangold and Faulds, (2009)
Social media has clearly changed how consumers make decisions. Membership of social
networks has made it easier for consumers to have access to information that is relevant to
potential purchases and that can change decision outcomes. The social networks that
consumers belong to are likely to be comprised of friends and family who can influence
purchase decision making, see Kotler and Armstrong, (2012). Additionally, reviews and opinions
from strangers on social sites can influence purchase decision as consumers tend to trust the
opinions of other consumers. As Weinberg and Pehlivan (2011) have highlighted by ‘’it appears
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greater than that of organizations for a variety of reasons (e.g., inherent trust of a consumer by
consumers, ‘flatness’/openness of the social space).’’
Chapter 3 Research Methodology
3.1 Research Question
The objective of the research was to understand the influence of social media on the need
recognition step of the decision making process of employed urban professionals in the
purchase of smartphones. The key research question this paper seeks to answer is ‘’How does
social media influence consumer need recognition in smartphone purchases of employed urban
professionals’’? The research methodology and approach including details of the sample
selection criteria are described in the sections below.
3.2 Research Methodology
For the purpose of this study a formal survey research approach was utilized with a
questionnaire of 26 closed ended questions to a carefully selected sample of urban
professionals in the Amsterdam area. (The sample selection criteria are discussed in section
3.3). The questions that were posed to respondents were designed to get an understanding of
how they (respondents) use social media and if this has an influence at the need recognition
stage of their decision making process when they buy smartphones. Please see appendix IV for
the survey questions.
The decision to utilize the survey approach was informed mostly by difficulties with
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methodology. With a standardized online survey, researchers are able to gather fairly large
amounts of data from hundreds of people in a relatively inexpensive way, compare the
responses from the different respondent groups and draw behavioural conclusions based on
those responses. This ability to reach large numbers of a sample population and make
inferences from the findings to the entire population or the population best represented by the
sample is one of the many advantages of the survey method and a key reason I felt it was the
best option to use for this study. According to Isaac and Michael, (1997) survey research is used
“to answer questions that have been raised, to solve problems that have been posed or
observed, to assess needs and set goals, to determine whether or not specific objectives have
been met, to establish baselines against which future comparisons can be made, to analyze
trends across time, and generally, to describe what exists, in what amount, and in what
context.” This is a very comprehensive definition and highlights the multiple uses of the survey
research method as well as gives an indication of the variety of tools that are available to apply
in a survey research. These range from highly informal methods like interviews and open ended
questions (where respondents are allowed to provide answers in their own words) to very
structured data collection methods like closed ended questionnaires where respondents have
to select an answer from a given set of response options. This was the option that was used in
this study.
All research methods have their limitations, and the approach that I have adopted in this study
is no exception. I discuss the limitations to this method in section 5.5.
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The research focus was on the influence of social media on urban professionals in the need
recognition stage of purchase decision making of smartphones. A purposive sampling strategy
was therefore used for this study as the best option to assist with answering the research
question. The sample was therefore controlled with regard to:
Geographical location: The sample that was surveyed was selected from Amsterdam as
the research focus was on social media influences in how urban dwellers recognize need in
smartphone purchase decisions. People who live in rural areas were therefore out of the scope
of this survey.
Education: Again, the selected sample was limited to employed professionals. The intention of the study was to study social media influences in this group, so at a minimum
respondents all had university degrees and were employed in various ‘white collar’ professions.
Age: While I did not limit the survey respondent group to any specific age, the survey was sent to educated employed individuals, so the assumption was that respondents would be at
least older than 18 years old and younger than 65 years. Respondents were asked to indicate
their age categories, to allow for comparison of responses across age groupings. (See question
26 in appendix IV).
Gender: While the survey was sent to both men and women, gender information was
captured in respondents’ answers to allow for the ability to compare gender specific responses
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Ownership of smartphones: All respondents had to own smartphones or be
considering a smartphone purchase as the influence of social media on the process of
recognizing a need for a smartphone purchase is the specific focus of this thesis, so
respondents would either have had to go through the process of purchasing a smartphone or
be considering purchasing one.
3.4 Data Collection
Questionnaires were sent to 320 potential respondents using the Qualtrics survey tool in
accordance with primary data collection methods. Qualtrics was selected because of the ease
of use and data analysis. The survey questions were loaded into the Qualtrics application and
the link to the survey sent to the primary e-mail addresses of the selected respondents. Each
respondent was carefully selected in accordance with the criteria in the preceding section.
Data collection lasted a month, from 23rd July to 23rd August 2013 and during this time 161
responses were recorded, thus 50% of the initial sample responded to the survey. The survey
itself was divided into two parts; the first part defined and gave examples of what constitute
social media. It also had questions designed to capture information on why respondents use
social media, their usage habits as well as their perspective on how social media influences
their ability to recognize purchase needs in general. The second part of the questionnaire
started with a definition of smartphones, provided examples of commonly used smartphones
and then had specific questions on how respondents realized that they had a need for a
smartphone and what role (if any) social media had played in that need recognition process.
Since the sample group was controlled, respondents were asked not to forward the survey to
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Chapter 4 Data Analysis
4.1 Introduction
At the close of the survey, there were still ten responses in progress that had not been
submitted and consequently were not included in the analysis of responses. Additionally, some
respondents skipped one or two answers and in effect submitted ‘incomplete’ responses, as
the survey was set up to allow respondents skip questions that they were unable / unwilling to
answer and to prevent respondents from abandoning the survey if they were unable to skip. All
answers provided in submitted surveys were included in the analysis. For ease of analysis, the
survey results have been presented under broad categories in the sections below. First I
present the analysis of the respondents in terms of age and gender, and then their social media
usage habits, and then I show the answers relating to how they use social media in regards to
need recognition and purchasing, and finally, in terms of recognizing smartphone purchasing
needs. In this chapter I intend to present the results without trying to draw any conclusions,
which will be done in Chapter five.
4.2 Sample and response analysis
This section highlights the characteristics of the questionnaire respondents: gender, age
groups and social media usage habits as well as the responses to the questions around how
social media influences purchase need recognition and decision making. I review the answers to
the questions in terms of the general audience as well as along gender lines and age categories
and I have highlighted the instances where the answers provided by certain age or gender
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4.2.1 Sample description: age and gender
There was an almost equal split of respondents in terms of gender. 51% of the 161
respondents were male while 49% were female. In terms of age, 14% were between 18 and 30
years, 45% were in the 31 to 40 years category, 34% were between 41 and 50 years while only
7% of respondents were between 51 and 60 years. There were no respondents above 60 years.
See Fig 8 below.
Fig 8: Survey respondents by age and gender.
4.2.2 Social Media Usage
Almost half of respondents (48%) spend only 1 – 5 hours a week on social media.
Irrespective of the age category, 1-5 hours appear to be the average number of hours per week
spent by the largest percentage of respondents on social media. (55% of the 51 – 60 year olds,
45% of 41 – 50 year olds, 51% of 31 – 40 year olds and 41% of 18 – 30 year olds). Again, this is
51% 49%
Respondents gender
breakdown
Male Female 0% 14% 45% 34% 7% 0%Respondents age
categories
Younger than 18 years 18 to 30 years 31 to 40 years 41 to 50 years 51 to 60 years Over 60 years30
consistent for genders (41% of women and 56% of men). These numbers are captured in fig 9
below.
Fig 9: Number of hours spent on social media per week
59% of respondents use social media both for work and personal reasons. This is correct for
59% of men and 57% of women, and is consistent with the 18 – 50 year range (59% of 18-30
year olds, 57% of 31-40 year olds, 65% of 41- 50 year olds). However a higher percentage of the
51 – 60 year olds, 64% use social media only for personal reasons. See fig 10.
13% 48% 16% 7% 7% 9%
Average time spent on social media hours/week
Less than 1 hour 1 to 5 hours 5 to 10 hours 10 to 15 hours 15 to 20 hours over 24 hours
31
Fig 10 Capacity in which respondents use social media
As shown in fig 11 an overwhelming majority, 59% use social media to meet new people
and stay in touch with family, friends and acquaintances. This includes 63% of men and 54% of
women. As well as 73% of 51 -60 age category, 55% of 41-50 year olds and 61% and 55% of the
31-40 and 18-30 year olds respectively.
Fig 11: Reasons for use of social media
2%
39% 59%
Social media use - Work Or Personal
For work
For personal use
For both work and personal use 59% 1% 22% 7% 11%
Social media use - Reasons
Meet new people / Engagefriends, acquaintances and family.
Entertainment – to access games, video, music etc To share content and opinion - photos, videos , articles, etc
To find information about products and services Other reasons
32
4.2.3 Social Media and consumer purchase decision – Analysis of responses
The next few graphs capture the responses to the questions that sought to understand how
social media influence respondents purchase decision making.
Almost half of our respondents (49%) are likely or very likely to use social media to get
information on goods, services and brands as are 63% of 18 -30 year olds, 50% of 31-40 year
olds, 48% of the 41-50 year olds and 62% of female respondents. This is in contrast with 40% of
men who are unlikely or very unlikely to use social media for this purpose versus 38% likely or
very likely responses. Additionally, over half (56%) of 51-60 year olds are unlikely or very
unlikely to use social media to get information on goods, services or brands. See fig 12 below.
Fig 12: Likelihood of using social media for information
Over half of the respondents are unlikely or very unlikely to follow products or brands on
social media either in general (56%) or even if members of their social networks were following
those brands (55%). This is more pronounced for men (64%) than women (47%).
12%
20%
19% 35%
14%
Likelihood of using social media to get
information on products and services
Very Unlikely Unlikely Undecided Likely Very Likely
33
Also, 60% of 18-30 year olds are likely or very likely, 55% of 31-40 year olds are unlikely or
very unlikely as are 61% of 41-50 year olds and 63% of 51-60 year olds.
These numbers do not change dramatically if people in the respondent’s social networks
are already following those brands. 55% of 18-30 year olds are still likely or very likely to follow,
59% of 31-40 year olds, 57% of 41-50 year olds are still unlikely or very unlikely to follow.
However there is a slight but significant change in the 51-60 year category where 45% are now
unlikely to follow such brands and 45% are now undecided. These are captured in fig 13 and 14
below.
Fig 13: Likelihood of ‘following’ a product on social media
27%
29% 13%
29% 2%
Likelihood to 'follow' or 'like' a product / service
on social media
Very Unlikely Unlikely Undecided Likely Very Likely34
Fig 14: Likelihood of following a product followed by other members in the social network
4.2.4 Social Media and need recognition – Analysis of responses
42% of respondents think it unlikely or very unlikely that they would realize a purchase
need just based on positive social media commentary about products or brands. 34% think it
likely or very likely, while 25% are undecided, so the responses are fairly spread across all the
options. Please see fig 15 below. This even spread is even more visible in the responses from
women, (39% unlikely, very unlikely and 33% likely, very likely). The men’s responses were
slightly skewed in favour of the unlikely, very unlikely option, 46% to 35% likely, very likely.
Additionally, 53% of 18-30 year old respondents indicated a likelihood of purchase need
recognition based on social media commentary or ‘’buzz’’ about products. 43% of the 31-40
year olds think it unlikely or very unlikely as opposed to 28% likely or very likely responses. It’s
an almost even split in the 41-50 year old category (41% unlikely or very unlikely to 39% likely
or very likely), and a majority (54%) of 51-60 year olds do not think it likely that they will
recognize a need to purchase an item based on social media comments.
21%
34% 16%
26% 3%
LIkelihood to follow a brand followed by other
members of their social network
Very Unlikely Unlikely Undecided Likely Very Likely
35
Fig 15: Likelihood of need recognition from positive commentary
Fig 16 below shows how the results differ when respondents are asked about the frequency
of actually recognizing a purchase need for a product after exposure to social media
commentary about that product. Overwhelmingly (57%) indicated that this had never
happened or rarely happens. This includes 60% men and 56% women. This trend is visible in all
age categories (57% of 31-40, 65% of 41-50 and 70% of the 51-60 age ranges). The number dips
in the 18-30 year olds to 36%. However in all age and gender categories, at least a third of
respondents say that this ‘sometimes’ happens.
10%
32% 24%
30% 4%
Likelihood of need recognition resulting from
positive social media commentary
Very Unlikely Unlikely Undecided Likely Very Likely
36
Fig 16: Frequency of need recognition from positive social commentary
4.2.4 Smartphone Purchase need recognition and social media
This section highlights the key responses regarding social media and need recognition
specifically with regard to smartphone purchases.
49% of our respondents (49% of men and 46% of women) think it unlikely / highly unlikely
that they would use social media to get information about smartphones as opposed to 41%
(42% of men and 41% of women) who think it likely/very likely. See fig 17. This trend continues
in the 31-40 and 41-50 year categories (50% and 49% likely/very likely responses). There is a
departure among the 18-30 year olds where 69% will use social media to get information about
smartphones and among the 51-60 year olds where 82% think it unlikely or extremely unlikely.
25%
32% 37%
4% 2%
Frequency of purchase need recognition
resulting from positive social media
commentary
Never Rarely Sometimes Often Very often37
Fig 17: Likelihood of using social media for information on smartphones
In fig 18, 57% of respondents (60% of men and 54% of women) think it unlikely or very
unlikely that need recognition for a smartphone brand would result from positive social media
commentary about that phone from strangers. It’s more of a mixed story with the 18-30 year
olds, 36% unlikely/very unlikely, 32 % undecided and 32% likely/very likely. A clear trend in
favour of the unlikely/very unlikely option is visible in the other age categories (60% in the
31-40, 61% unlikely in the 41-50 and 63% in the 51-60 year old categories).
18%
31% 10%
30%
11%
Likelihood of using social media to get
information about smartphones
Very Unlikely Unlikely Undecided Likely Very Likely 23% 34% 20% 21% 2%
Likelihood of need recognition from positive
social commentary on smartphones.
Very Unlikely Unlikely Undecided Likely Very Likely
38
Fig 18: Likelihood of need recognition from positive social commentary on smartphones.
There are slight changes in the responses to social media commentary from members of
respondent’s social networks, see fig 19. 46% of respondents (60% of men and 42% of women)
still think it unlikely or very unlikely that positive commentary from their social media contacts
about a smartphone brand would result in need recognition. 40% of women think it likely or
very likely as do 69% of 18-30 and 45% of 51-60 year old responders. In contrast, 51% of 31-40
and 41-50 year olds as well as 54% of 51-60 year olds think it unlikely to very unlikely.
Fig 19: Likelihood of smartphone need recognition from positive social network commentary.
76% of responders (76% of men and women) have never realized a purchase need for a
smartphone based on positive commentary about that smartphone on social media. Neither
have 83% of 31-40, 41-50 and 64% of 51-60 year olds. In contrast, 59% of 18-30 year olds have.
19%
27% 18%
33%
3%
Likelihood of positive comments / photos /
opinions from respondents social network
about a smartphone able to generate a
purchase need realization
Very Unlikely Unlikely Undecided Likely Very Likely
39
Fig 20: Actual need recognition from positive social commentary about smartphones
84% of responders (86% of men and 81% of women) have never bought a smartphone
based on positive social media commentary. Please see fig 21. Neither have 65% of 18-30, 81%
of 31-40, 95 % of 41-50 and 91% of 51-60 year olds.
Fig 21: Actual purchase action from positive social commentary about smartphones
24% 76%
Have you ever realized that you needed a
smartphone after reading / seeing a positive
review on social media?
Yes No
16% 84%
Have you ever bought a smartphone after
reading / seeing a positive review about it on
social media?
Yes No
40
Almost half (48%) of responders do say that negative social media commentary about a
smartphone brand would be likely or very likely to scuttle a purchase intention. See fig 22. This
is more pronounced in women (56% unlikely / very unlikely) to men where the spread across
the options is more even (41% unlikely / very unlikely to 39% likely / very likely). Across the
different age categories, a more nuanced picture emerges. 77% of the 18-30, 44% of the 31-40
and 38% of the 41-50 year age ranges are likely or very likely to be influenced, while 40% of the
31-40 and 31% of the 41-50 age categories are unlikely / very unlikely to be influenced.
Fig 22: Likelihood of negative social commentary dissuading a smartphone purchase
Chapter 5 Discussion and Conclusion
In this chapter, I discuss the results outlined in Chapter 4, and attempt to draw some
conclusions on need recognition and purchase decision making based on the responses. I also
discuss possible implications of these responses to business as well as limitations encountered
during this exercise and suggestions for future research.
14%
19%
19% 40%
8%
LIkelihood of negative comments on social
media dissuading a smartphone purchase
decision
Very Unlikely Unlikely Undecided Likely Very Likely41
5.1 Why People Use Social Media
An overwhelming majority, 59% of our respondents use social media to meet new people
and stay in touch with family, friends and acquaintances. This is validated by Lin and Lu, (2011))
who say that the most important factor in the use of social networking sites is ‘enjoyment’ and
that ‘’ A user’s friends and relatives influence the level of user’s perceived enjoyment’’ of social
networking sites, and through friends and relatives, users have the opportunity to meet new
friends and therefore expand their social networks. Lin and Lu therefore advise social network
service providers to ensure that their social network platforms incorporate activities and
applications that ‘’ allow people to reach out to each other, to reinforce user’s enjoyment,
increase social connections, and further intensify user’s intention to use’’. Lin and Lu’s
recommendation would apply to businesses that seek to utilize social media to generate need
and influence purchase decisions and actions. An example would be brands that prompt
Facebook users who are already ‘fans’ to write positive testimonials about their products and
services in the hopes of influencing purchase behaviour in the users’ social contacts. A third
(36%) of our survey responders indicates that positive social media commentary about a brand
of smartphones could stimulate need recognition in them.
About half of our respondents (49%) indicate a likelihood to use social media to get
information on goods, services and brands and according to Kiron et al (2013), ‘’Business
leaders are keenly aware that social is becoming a primary tool that people use to share
42
In line with the current trends most businesses now maintain active presences on social media
recognizing the increasing number of people who are turning to social networks for
information. Again, according to Baek et al (2011), information search is one key reason for
social media usage. Social media platforms therefore an opportunity for businesses to present
information in formats best designed to drive need recognition and ultimately influence
purchase decision. Most social network service providers are also empowering users to decide
and determine what advertisements they want delivered to them and in what format and
businesses are partnering with the service providers to create content in the user preferred
formats. Of note is the fact that higher percentages of women and younger responders (18-30
year olds) are likely to use social media to find information on products and services. This
should be of interest to businesses selling products targeted to these demographics.
5.2 Social media and need recognition
While 42% of responders indicate an unlikelihood of recognizing a purchase need from
positive social media commentary, 53% of younger responders (18-30 year olds) indicate a
likelihood of recognizing such a need. This is probably not a surprise as younger people are
more active on social media. This again is an opportunity for businesses marketing products
designed for that age category to utilize social media to stimulate need recognition in these
younger audiences. Of note is that 57% of responders have rarely or never recognized a
purchase need from positive social media commentary, even though as highlighted above only
43
therefore an opportunity to influence more people who are open to social media influences in
need recognition.
5.3: Social media and need recognition in smartphone purchases
69% of 18-30 year olds will use social media to get information about smartphones as well
as half (49%) of the 31-40 and 41-50 year categories. Most respondents in all age and gender
categories think it unlikely that positive commentary from strangers about a particular
smartphone on social media will create a purchase need realization for that smartphone.
However if the positive comments are from members of their social network, 69% of 18-30 year
olds, 45% of 51-60 year old responders and 41% of women now think it likely or very likely that
such positive comments could make them realize a purchase need. This shows again that at
least in certain groups, social media has the potential to generate a need for a smartphone
purchase. Lin and Lu’s (2013), suggestion would apply again in this situation. An opportunity
exists for manufacturers of smartphones business to harness the power of social networks to
influence members in those networks to stimulate need and grow their business with young
adults, women and interestingly 51 – 60 year olds.
In spite of the numbers above, 76% of all responders think it unlikely that positive
commentary on social media about a smartphone would create a need to buy that smartphone.
In contrast, 59% of 18-30 year olds think it likely and 84% of responders have never bought a
smartphone based on positive social media commentary alone. This would indicate that social
44
purchase especially as multiple factors including motivation are at play in the need recognition
process.
5.4: 18-30 Year Olds
I have devoted this section to the younger responders as they typically were the
demography that were more likely to recognize a smartphone purchase need based on the
commentary of their social contacts. They are also more likely to be more focused on fulfilling
the lower (physiological / safety and security needs) on the Maslow’s hierarchy of needs model.
Hall and Nougaim, (1968). They are also more likely to be heavy users of and consequently
more easily influenced by social media, according to Braun (2013) and Ozguven and Mucan
(2013). In the current age, smartphones are a clear necessity and owning one would be
satisfying a basic need under Maslow’s hierarchy of needs model. There are therefore
significant opportunities in the social media usage habits of this age group for smartphone
marketers to harness to fulfill purchase needs of this group and drive their own business
growth.
5.5: Limitations of this study and suggestions for future research
There were some practical limitations to this research methodology employed and the
study itself that are discussed below.
Sample limitations: Even though I was careful with the sample selection, the final list of respondents was not totally representative of all age groups. Respondents in the 18-30 and
51-60 year categories were significantly fewer than the other age ranges (31-40, 41-50). This
45
Additionally, the sample was drawn only from professional urban dwellers in Amsterdam. It is
therefore again difficult to generalize the findings to the broader population, which would
include rural dwellers and people without a university education as well as people who live in
other countries. It would make sense to carry out the same or a similar study with those
different groups to compare findings before making any final conclusions.
Research methodology: The research method was a formal survey research that utilized
a questionnaire with closed ended questions, which was sent to our selected sample. In
keeping with a standard questionnaire format, a range of possible answers were provided for
respondents to select from. This was the easiest means of capturing information from a fairly
large number of respondents within the period required to complete this thesis. This means
respondents have had to indicate the answers that best capture what they think their response
should be and some nuances or any additional insight that would have been captured with
open ended qualitative questions might have been lost. More quantitative and qualitative
studies with the same sample would probably provide this additional insight and would be
recommended. This research has mostly focused on how social media influences need
recognition in the purchase of smartphones. It would be interesting to carry out similar studies
focused on other product types to see if social media influences need recognition differently
depending on the product or service to be purchased. Additionally as with most surveys, I
assume there has been some response bias in the responses that have been provided.
Response bias occurs in situations where respondents have provided answers that they think
the questioner wants to hear rather than what is accurate or answers that indicate what they
46
Again it is my recommendation that similar studies be carried out to validate the responses that
have been provided on this study.
Time limitations: Finally, this research effort has been done within a 3 month period. Time limitations have prevented a much more thorough and in depth study of the topic at
hand. A similar study without time limitations focused on the different ways that consumers
recognize purchase needs and the possible influence of social media on those would be
advisable before drawing any final conclusions.
5.6: Conclusions
This research effort has focused on understanding the impact of social media on consumer
need recognition in the purchase of smartphones. The literature reviewed showed that social
media usage is increasing among all age groups. Marketers are now partnering with consumers
to create marketing related content geared towards stimulating need and driving purchase
decisions using social media platforms. Consumers are therefore becoming content generators
and their ability to influence other consumers is therefore growing.
The survey results showed that about half of consumers use social media to get information
and young adults are likely to be influenced by the opinions of other consumers in their social
networks. Additionally, positive comments on social media from members of their social
networks are likely to make them recognize a need to purchase such products. While older
consumers equally use social media, their influence on need recognition appears to be fairly
47
While this study has focused on smartphones purchase need recognition, the questionnaire
also included questions around social media use and need recognition in general. This was done
with the goal of understanding if the survey findings were specific to smartphones or could be
more generally applied to other consumer goods in general or indeed to other business sectors.
The responses indicate that at least a third of all respondents (with the exception of the 51-60
year age group) are likely or very likely to recognize a purchase need from positive social media
commentary on products and services in general if the positive comments are from members of
their social network. Another third of responders would consult with their social network
before making a purchase decision. Thus positive commentary on social media especially from
members within the same social network can generate purchase need irrespective of the
product or service. This insight could enable marketers more effectively engage different age
groups with the product types that are marketed to those specific age groups. For example,
marketers of white goods and home appliances could seek to engage middle aged buyers in the
41-50 age range via social media, cosmetic marketers could seek to target female users etc. I
would also expect companies that sell complex high technology products to use social media to
drive need recognition and provide information that is relevant to purchase decision. Such
purchases would naturally be high involvement with possibly multiple persons in the decision
making chain, however the same process of positive social commentary stimulating need
recognition should apply in the early stages of the decision process. This could be another area
48
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