Role of Social Media in Consumer Decision Making Process

Role of Social Media in Consumer Decision Making Process

Consumer decision problem:

Word of mouth referral is the best form of marketing that a service/product can get. Social media today is capitalizing on this factor and enabling brands to reach consumers like never. Social media usage by brands has been brought into question, both for effectiveness within an overall marketing strategy and for defining ROI. To understand the strategies that major brands use, consumers’ affinity for social media and behaviour must be considered, both for better social campaigns and targeted social tactics. Social networks also offer other additional features like text, voice and video chat, Messaging and notification services which enable easier communication.  Word of mouth quickly spreads through this type of social networks and it is facilitated by the share feature which these networks come with. The most popular are Facebook, WhatsApp and LinkedIn.

The project aims to study how social media affects various stages of a consumer decision making process of identifying needs, collecting information, evaluating alternatives and finally making a purchase decision. The project will assess the importance of social media in increasing sales and suggest recommendation for companies to use it for their advantage. We also plan to assess whether the huge amount of money focused on social media marketing leads to final purchases.

Introduction:  

Traditional Method of Marketing is getting revolutionized with the emergence of Web 2.0. Social Media has enabled easy two-way communication the Brands and the consumers.

Objectives:

• Analyse the decision-making stages in which Social Media has more impact
• Analyse behaviour of various classifications of Consumers on Social Media
• To determine if social media users are inclined to browse for products based on utilitarian, hedonic motivations or both

1. Web 2.0 and Social Media:

The idea of Web 2.0 surfaced in the wake of the dot.com crash of 2001 and dialogs about what characterized organizations that were all the while succeeding amid the shake-out. The term was initially utilized as a part of 2004 by Dale Dougherty in discussions with Tim O'reilly of O'reilly Publishing, John Battelle, writer of the 2005 book The Search, individuals from Media live International that puts on exchange shows, and others about arranging a gathering on the Internet. That prompted the Web 2.0 Summit, a yearly gathering that started in early 2004.

Turban et al. refer to Web 2.0 as "a popular term for advanced Internet technology and applications including blogs, wikis, RSS and social references". These authors highlight that Web 2.0 applications are made for people and by people. The main difference between Web 2.0 and traditional web, Web 1.0, is collaboration. Online social networks are websites that use Web 2.0 tools to facilitate the formation and development of social networks through the Internet. Current online social networks were preceded by systems like AOL and GeoCities, which relied on chat rooms to allow large groups of users sharing similar interests to meet and have conversations in real time

Social media marketing is no longer a new aspect; however, it is a highly developing and evolving topic. The several types of Social media are explained below:

Social Networks:

These services allow people to connect with other people having similar interests or background. They usually come with a basic profile page where the user fills data about oneself and can search and communicate with other people by giving a ‘connect’ request to the other person. Once the other person accepts the users can communicate freely and are able to view each other’s profile content. Social networks also offer other additional features like text, voice and video chat, Messaging and notification services which enable easier communication.  Word of mouth quickly spreads through this type of social networks and it is facilitated by the share feature which these networks come with. The most popular are Facebook and LinkedIn.

Bookmarking Sites 

Services that allow the user to save, organize and manage links of various websites and resources around the internet.  A main feature in these sites is the tag feature through which users can search and categorize their links.  The most popular bookmarking sites are Delicious and StumbleUpon.

Stumble Upon:

[pic 1]

Social News

These Services allow users to post various news items or links to outside articles. Another feature to popularize a post is through vote.  The voting items that get the most votes are displayed above other posts with lesser votes and get displayed more prominently.  This way it is the people that decide which news content gets seen.  The most popular are Digg and Reddit. Most reviews of new products are posted through sites like these.

Media Sharing

Media sharing Services facilitate the user to upload and share various media in the form of pictures and video.  Some of the other features are having a profile, commenting on the video and voting up a video to make it popular. The most popular are YouTube and Flickr. Product reviews and unboxing videos are often posted on these media sites and users commonly form a first opinion of newly released products on the market. Occasionally consumers trying to vent on a brand create songs and videos and damage reputation of brands. The Brands also introduce product demos and features through videos posted on their own ‘Channel’. [pic 2]

Microblogging [pic 3]

These Services let users follow one another or a topic or entity. All updates/posts are pushed to subscribe users.  The most popular is Twitter. Facebook also has this feature which is status updates, but Twitter is the site that is most popularly known for Microblogging.  These sites don’t require a robust internet connection and work well even on basic hardware. Messages spread on these sites spread very rapidly since posts are only a few characters long.

Blog Comments and Forums Blogs and Forums allow users to post their content and comments trend over time. Reviews of products and often solutions to problems are often found in these types of sites.  

1. Social Profiles of Consumers:

Social Networker:

This type of consumer uses social media to primarily meet new people and to gather information about brands and products. This type of Customer is constantly on the lookout for new product launches and product updates from the brands.

Socializers:

Like to know about other people and share a lot of content on the social media. Follows most of the brands and spreads both positive and negative word of mouth about the bran.

Pessimists:

They do not believe in the concept of social media, they think that social media is for people who don’t have a real life. They believe that everything is over exaggerated on the social media and that social media is a misinterpreted reality.