buying behaviour of Singapore
Title of Project: Impact of Social Media Marketing on buying behaviour of Singapore Youths
1. Introduction
Social media has become the new frontier for businesses to implement their marketing strategies. With a low barrier to entry and multiple platforms to utilize, social media offers unparalleled opportunities for companies to reach customers and establish brand awareness. However, using these platforms to their full potential isn’t always easy and carries a unique set of risks. (Wiegand, [no date])
Social media is a critical area of interest for marketing scholars and practitioners. Recent research has shown that 88 percent of marketers are using social media and that they are spending over $60 billion annually on social media advertising (Gil-Or, 2010; Smith, 2011). Successfully making contact with consumers via social media is predicted to show great returns for marketers in the coming years (Okazaki et al., 2007). Despite the importance of social media, there is little understanding of how and why consumers use social media.
Social-media marketing is an excellent way for businesses to broaden their exposure to the public at a much lower cost than traditional marketing. Establishing a presence on widely used platforms such as Facebook and Twitter can help target new customers and make your brand more visible. Additionally, the two-way communication facilitated by social media can improve customer service and enables businesses to gain new information about their customers and tailor communications based on that knowledge. (Wiegand, [no date])
While social media can be a powerful marketing tool, it’s not entirely risk-free. Fans and followers are free to post their comments on these platforms, exposing your business to the possibility of negative publicity. A quick response can help minimize the damage from these comments, but it can’t erase the criticism from your business’s page or feed. Hackers pose another threat to businesses on social media: an attacker can take over a company’s page or feed and share false information that can quickly go viral. Even large, respected businesses have fallen victim to hackers; small businesses need to take security precautions when creating passwords and sharing password information with employees. (Sharma, 2013) A business can easily set up a presence on multiple social media channels; however, none of these platforms will help them gain customers without an investment of time and effort. An unattended Facebook page or Twitter feed can leave a negative impression on potential customers and cause your business to lose fans and followers. (Robinson, 2013) Businesses should consider their resources before developing a social media marketing strategy to ensure that they can provide the attention and frequent communication needed to embrace social media effectively.
1.1 Research aims and objectives:
· To identify the effect of social media marketing on Singapore youth buying decision
· To find out if Singapore youths use social media as a tool for research and review before buying products online
1.2 Research Project Structure
The research project will include a critical literature review on social media marketing, consumer behaviour and Singapore youth. The project investigates if Singapore youth buying behaviour are influenced by social media impact. It also includes methodology that is being used for the report and why it is being used for this report, followed by the analysis and findings from the data collected for this research and finally a conclusion and recommendation is being made.
2. Literature Review
2.1 Social Media
Launched in the early 2000s in the form of innovative online applications that facilitate online content sharing, Web 2.0 rapidly evolved into a phenomenon elevating online communications to a new level (Constantinides and Fountain, 2008). What began as an array of platforms for online interactions with focus on entertainment quickly escalated into a global phenomenon where connectedness to the online networks is everything and the aptitude to “follow,” “like” or “share” means power. The astonishing popularity and the fast rate of adoption of social media lead enthusiasts to speculate on the potential goldmine for marketing that lies within the complex web of user commentaries, testimonials and communities, linking consumers with products and brands (Beer, 2008; Eccleston and Griseri, 2008; Hardey, 2009).
Social media is defined as “a group of internet-based applications that build on the ideological and technical foundations of Web 2.0, and that allow the creation and exchange of user generated content” (Kaplan and Haenlein, 2010, p. 61). Social media includes a multitude of sources of online information that are created, circulated and used by consumers to educate one another about products, services, and brands available in the marketplace (Murugesan, 2007). Current examples of social media platforms include social networking sites like Facebook, photo sharing sites like Flickr, video sharing sites like YouTube, business networking sites like LinkedIn, micro blogging sites like Twitter, and numerous others. Social media sites are inexpensive and, more often than not, completely free to use.
Inspired by the power of social media to engage users in virtual relationships, organizations began seeking ways to immerse into “people’s internet” and learn to leverage the “likes,” “shares” and “comments” for profit making (Andriole, 2010; Culnan et al., 2010). It is not uncommon nowadays to see businesses launch “Facebook” pages, “Twitter” accounts, “YouTube” channels and blogs in the effort to preserve relevance among competition and to create or strengthen bonds with customers. Proponents of social media speculate that its interactive nature and rich format are potent to support relationships between organizations and consumers (Nair, 2009). For example, Starbucks, Nike, Coca-Cola and Dell successfully use social media to obtain customer feedback, create new products/offers, strengthen customer loyalty and engage in online dialogue with followers (Beuker, 2009; Gallaugher and Ransbotham, 2010).
Uses and gratifications theory is relevant to social media because of its origins in the communications literature. Social media is a communication mechanism that allows users to communicate with thousands, and perhaps billions, of individuals all over the world (Williams et al., 2012). The basic premise of uses and gratifications theory is that individuals will seek out media among competitors that fulfils their needs and leads to ultimate gratifications (Lariscy et al., 2011). Studies have shown that gratifications received are good predictors of media use and recurring media use (Kaye and Johnson, 2002; Palmgreen and Rayburn, 1979). Uses and gratifications theory has also been used extensively within the study of politics and the dissemination of political messages (Blumler and McQuail, 1969; McLeod and Becker, 1974). While widely used in other disciplines, uses and gratifications theory can also be relevant in helping to explain social media uses.
Among the uses and gratifications frameworks available in the literature, this study focused on four: Palmgreen and Rayburn’s (1979), Korgaonkar and Wolin’s (1999), Papacharissi and Rubin’s (2000) and Ko et al. (2005). The Palmgreen and Rayburn (1979) scale was selected because it was the first to look at both uses and gratifications simultaneously and because it looked at television viewing which is somewhat similar in nature to social media. The Palmgreen and Rayburn (1979) scale was also selected because many previous studies have used this scale (Barton, 2009; Leung, 2007). The Korgaonkar and Wolin (1999), the Papacharissi and Rubin (2000) and the Ko et al. (2005) frameworks were selected because they looked at uses and gratifications with respect to the internet.
Review of the four previously mentioned frameworks and scales revealed some common themes. The seven themes that will be discussed are: social interaction; information seeking; pass time; entertainment; relaxation; communicatory utility; and convenience utility. These themes will be explained in the following paragraphs.
2.1.1 Social interaction
Relying on uses and gratifications literature, this usage theme is defined as using social media to communicate and interact with others. The title of this theme comes from Ko et al.’s (2005) research on social interaction motivation and web site duration. Their scale items included “meet people with my interests” and “keep up with what is going on”. Other uses and gratifications researchers have also had a category similar to social interaction. Similar constructs in the literature are social motivation (Korgaonkar and Wolin, 1999), interpersonal utility (Papacharissi and Rubin, 2000), and companionship (Palmgreen and Rayburn, 1979). However, the author feels that social interaction is social exchange between two or more individuals.
2.1.2 Information seeking
This uses and gratifications theme is defined as using social media to seek out information or to self-educate. The title of this theme comes from Papacharissi and Rubin’s (2000) research on information seeking and internet usage. Korgaonkar and Wolin (1999) also had a similar construct called information motivation which they defined as how consumers use the web for self-education and information.
2.1.3 Pass time
This uses and gratifications theme is defined as using social media to occupy time and relieve boredom. The title of this theme comes from Palmgreen and Rayburn’s (1979) research on uses and gratifications for television viewing. Papacharissi and Rubin (2000) also had a construct called pass time which they used when investigating internet motives. Items in their scale included statements such as “use the internet when I have nothing better to do” and “to occupy my time”.
2.14 Entertainment
This type of social media usage is defined as using social media to provide entertainment and enjoyment. Both Palmgreen and Rayburn (1979) and Papacharissi and Rubin (2000) had an entertainment dimension in their scales. Korgaonkar and Wolin (1999) also had a related factor for internet use which they called escapism. They defined escapism as pleasurable, fun, and enjoyable.
2.15 Relaxation
This social media usage category is defined as using social media to relieve day-to-day stress. Palmgreen and Rayburn (1979) included this dimension in their uses and gratifications of television viewing. Korgaonkar and Wolin (1999) also included relaxation in their dimension of entertainment. Based on the uses and gratifications scale development of Palmgreen and Rayburn (1979), the researcher believes that entertainment and relaxation are two separate constructs. Relaxation provides relief from stress while entertainment focuses on enjoyment.
2.16 Communicatory utility
This category of social media use is defined as communication facilitation and providing information to share with others. This form of usage was investigated by Palmgreen and Rayburn (1979) with television viewing. Korgaonkar and Wolin (1999) also had a similar construct labelled socialization motivation for using the internet. They describe their construct as a facilitator of interpersonal communication and actions and its usefulness in terms of conversational value. This construct is different from the previously discussed social interaction construct. Communicatory utility helps facilitate communication instead of providing social interaction.
2.17 Convenience utility
This category of social media usage is defined as providing convenience or usefulness to individuals. Papacharissi and Rubin (2000) had a construct called convenience for internet uses and Ko et al. (2005) had a convenience motivation factor for interactive advertising. Korgaonkar and Wolin (1999) also had the word convenience in some of their scale items such as “enjoy the convenience of shopping on the web”.
Social Media is playing an increasing role in influencing Singaporean consumers’ purchasing decisions, especially when it comes to food and travel, according to a report released on 5th December 2012 by Nielsen, a leading global provider of information and insights into what consumers watch and buy. (Nielsen, 2012)
Nielsen’s annual global Social Media Report reveals that more than two thirds of Singaporeans’ choice of restaurant or food and beverage related purchases (68 and 67% respectively) are based on social media websites or online product reviews. Travel, leisure and entertainment purchases are also heavily influenced by social media, with 67 percent of Singaporeans saying they would likely buy travel related products based on positive recommendations shared online, 66 percent for entertainment related products. (Refer to Figure 1) The food, beverage, travel/leisure and entertainment categories were also the most discussed products or services via social networking in Singapore in 2011. (Nielsen, 2012)
The Managing Director of Nielsen Singapore and Malaysia, Joan Koh, said that ‘With the increasing relevance and engagement levels of social media, we are now able to see a direct correlation between positive social media sentiment and actual intent to purchase products and services, especially for those operating in the food and beverage, travel and entertainment sectors,’ which means social media represents a huge opportunity for brands to gain positive favour with consumers and savvy marketers can harness the growing influence of social media to impact business. (Nielsen, 2012)
She added that ‘Markets can tune in to conversations taking place on social platforms to better understand consumers’ wants, needs and demands. Social media can also be used as an integrated real-time platform to test new ideas and product strategies to obtain real-time feedback, which is gradually being used to make corrections to product strategy and marketing campaigns. Marketers need to move fast to ensure they stay one step ahead of the curve and know how to win customers in a larger community by serving and inciting their interests.’ (Nielsen, 2012)
Figure 1: Likelihood of purchasing products or services in the next year based on reviews on social media websites
Source: Nielsen Annual Social Media Report for Singapore 2012 (Nielsen, 2012)
2.2 The importance of understanding consumer behaviour
Consumers’ product and service preferences are constantly changing. Marketing managers must understand these desires in order to create a proper marketing mix for a well-defined market. So it is critical that marketing managers have a thorough knowledge of consumer behaviour. Consumer behaviour describes how consumers make purchase decision and how they use and dispose of the purchased goods or services. The study of consumer behaviour also includes the factors that influence purchase decisions and product use. Understanding how consumers make purchase decision can help marketing managers in several ways. For example, if a manager knows through research that gas mileage is the most important attribute for a certain target market, the manufacturer can redesign a car to meet that criterion. If the firm cannot change the design in the short run, it can use promotion in an effort to change consumers’ decision-making criteria, for example, by promoting style, durability, and cargo capacity. (Lamb et al, 2001)
2.21 The consumer decision-making process
When buying products, particularly new or expensive items, consumers generally follow the consumer decision-making process as shown below.
Figure 2: Consumer decision-making process
Source: Consumer Purchase Decision Process (Kotler, P. & Armstrong, G. 2001)
These five steps represent a general process that can be used as a guide for studying how consumers make decisions. However, the author of this report disagrees with this, as consumers’ decisions do not always proceed in order through all of these steps. In fact, the consumer may end the process at any time or may not even make a purchase.
Stage 1: Need Recognition/ Problem Recognition
The first stage which is the need recognition or problem recognition, occurs when consumers is exposed to either an internal or an external stimulus. Internal stimuli are occurrences one experience, such as hunger or thirst. For instance, hearing stomach growl and realizing hunger. External stimuli are influences from outside sources such as recommendation of a new restaurant by a friend, colour of a mobile phone, design of car, brand name heard from a friend or advertisement on social media or television. (Lamb et al, 2001)
Stage 2: Information Search
The second stage is information search which takes place when consumer recognizes a need or want. Consumers will look for alternatives to satisfy it. For instance, when the car petrol price increases, consumers will be searching for information on vehicles that uses alternatives to petrol such as hybrid cars.
Information Search can occur internally, externally or both. In an internally information search, consumer recalls information stored in the memory. This stored information stem largely from previous experience with a product. For instance, a hotel that consumer had been to and is satisfied with the services and rooms.
In contrast, an external information search seeks information in the outside environment. There are two basic types of external information sources: non-marketing controlled and marketing controlled. A non marketing-controlled information source is not associated with marketers promoting a product. These information sources include personal experiences; personal sources; and public sources such as Underwriters Laboratories, Consumer Reports, and other rating organizations that comment on products and services. For example, if going to the movies, consumer might search their memory for past experiences at various cinemas when determining which one to go to (personal experience). To decide which movie to watch, consumer may rely on the recommendation of a friend or family member (personal sources). Alternatively, consumer may read the critical reviews in the newspaper or online (public sources.)
Living in the digital age has changed the way consumers get non marketing-controlled information. It can be from blogs, bulletin boards, activist Websites, Web forums, or even consumer opinion sites like www.consumerreview.com, wwwtriadvisor.com, or www.epinions.com.
It is argued that people with higher levels of education usually engage more in information gathering and processing and use more information prior to decision making, whereas less well educated people rely more on fewer information cues (Capon and Burke, 1980; Claxton et al., 1974). In contrast to people with lower educational attainments, it is postulated that better educated consumers feel more comfortable when dealing with, and relying on, new information (Homburg and Giering, 2001). A body of research suggests that income is related to e-consumer behaviour (Swinyard and Smith, 2003). This is expected, as people with higher income have usually achieved higher levels of education (Farley, 1964). Therefore, better educated and wealthier consumers are expected to seek alternative information about a particular e-retailer, apart from their satisfaction level, whereas less well educated, poorer consumers see satisfaction as an information cue on which to base their purchase decision. Older consumers are less likely to seek new information (Moskovitch, 1982; Wells and Gubar, 1966), relying on fewer decision criteria, whereas younger consumers seek alternative information. Age moderates the links between satisfaction with the product and loyalty such that these links will be stronger for older consumers (Homburg and Giering, 2001).
Stage 3: Evaluation of Alternatives
After getting information and constructing an evoked set of alternative products, the consumer is ready to make a decision. A consumer will use the information stored in memory and obtained from outside sources to develop a set of criteria. Recent research has shown that exposure to certain cues in your everyday environment can affect decision criteria and purchase. For example, when NASA landed the Pathfinder spacecraft on Mars, it captured media attention worldwide. The candy maker Mars also noted a rather unusual increase in sales. Although the Mars Bar takes its name from the company’s founder and not the planet, consumers apparently responded to news about the planet Mars by purchasing more Mars Bars.
The environment, internal information, and external information help consumers evaluate and compare alternatives. One way to begin narrowing the number of choices in the evoked set is to pick a product attribute and then exclude all products in the set that don’t have that attribute.
Stage 4: Purchase decision
After evaluating the alternatives, the consumer will have to decide whether to buy or not, when to buy, what to buy, where to buy and how to pay.
When consumer is buying an expensive or complex item, it is often a fully planned purchased based upon a lot of information. People rarely buy a new car on impulse. Often consumers will make a partially planned purchase where they know the product category they want to buy but wait until they get to the store to choose a specific style or brand. Finally there is unplanned purchase where people buy on impulse. Research has found that up to 68 percent of the items bought during major shopping trips and 54 percent on smaller shopping trips are unplanned.
Stage 5: Post purchase behaviour
When buying products, consumers expect certain outcomes from the purchase. How well these expectations are met determines whether the consumer is satisfied or dissatisfied with the purchase. For example, if a person bids on a used car stereo from eBay and wins, he may have fairly low expectations regarding performance. If the stereo’s performance turns out to be of superior quality, then the person’s satisfaction will be high because his expectation was exceeded. Conversely, if the person bid on a new car stereo expecting superior quality and performance, but the stereo broke within one month, he would be very dissatisfied because his expectations were not met. Price often influences the level of expectations for a product or services.
2.3 Singapore Youth
The definition of youth varies from country to country, and in Singapore, the official range is 15-35 years old which is stated on the Ministry of Education website (MOE, 2014)
Annual Survey on Infocomm Usage in Households and by individuals has found out that
98% of the youths between 15-24 years old use computer and the internet during 2010 and 99% in 2011, and 96% of the youths between 25-34 years old uses computer and the internet during 2010 and 2011 as shown on Figure 3.
Figure 3: Individual computer and internet users’ percentage of youth in Singapore.
Source: Annual Survey on Infocomm Usage in Households and by individuals 2010 and 2011 (Infocomm Development Authority of Singapore, 2013)
As technologies advances, more and more Singapore youth owns a smart phone these days. An annual survey which was conducted by the Infocomm Development of has listed out the top 3 internet activities on smart phone among youth aged from 15-34 as shown in Figure 4.
Figure 4: Top three internet activities on smart phone among Singapore youth.
Source: Annual Survey on Infocomm Usage in Households and by Individuals 2011 (Infocomm Development Authority of Singapore, 2013)
Judging from Figure 3 and 4, the author concludes that Singapore youth are aware of social media and it is easy to reach out to them via social media as most of them have access to it.
3. Research Methodology
3.1 Quantitative Research Approach
The importance of choosing specific research strategies is to ensure that the strategy chosen is best for answering a specific research question and objectives, and that such strategies should not be regarded mutually exclusive (Saunders et al, 2009). The researcher has chosen to take a combination of both primary and secondary quantitative approach for this research project. Creswell (1994) defines quantitative research as a type of research that is explaining phenomena by collecting numerical data that are analysed using mathematically based methods in particular statistics. The rationale behind the research choice is predominately due to the nature of the study which requires a quantitative research method in order to measure the relationship between all variables. This choice of a quantitative research method also can be considered as “pattern-matching”, this refers to the predictive approach to intervention for instance, designating a post-intervention pattern of effects and circumstances that would appear to be effective, or without any effects (Gillham, 2010).
Quantitative research methods aids in maximizing reliability, generalizability of results, objectivity and are often used to create predictions. Harwell (2011) states that the fundamental in quantitative approach is to require the researcher to set aside his or her biasness, perceptions and experiences in order to be objective while conducting the research and when drawing upon conclusions. Johnson and Onwuegbuzie (2004) pointed out that the strengths of these quantitative researches are that such approaches examines and authenticate theories that are constructed currently on why and how phenomena occur. The results presented are often numerical and precise; data collection process is fairly quick as well. Furthermore, studies that are conducted in quantitative approach possess the ability to come up with strong answers that are solid and supported (Ratnesar and Mackenzie, 2006). However, Burns (2000) argued that quantitative research does have its disadvantages; it is more difficult to read and understand as compared to qualitative approaches. It is also hard for average educational journal readers to read and understand the quantitative report’s statistical aspects. Also, such approaches decontextualize any forms of human behaviour, thus abolishing the circumstances from the actual setting and overlook the results of the variables that were probably not within the model itself. Anderson and Taylor (2009) have highlighted that quantitative approaches richness and depth of the data is insufficient, this is due to the large amount of respondents utilizing the same methods, thus making it impossible to fully understand every single participant’s data. Through conducting a quantitative research, the researcher utilizes a questionnaire design to calculate and create assess to obtain key characteristics and patterns of the targeted population with mathematical precision. Light et al (1990) have pointed out that, survey researches can contribute to further advancements on the entire topic if it has utilized wisely. The survey attempts to find answers to questions like for example, “How many people feel a certain way?” and “How often do they engage in certain behaviours?” Bryman and Bell (2007) proposed that importance of measurement within a quantitative study is that it allows more precise estimates of the degree of the relationship between concepts. Moreover, through a survey research, it allows the researcher to observe comparisons among each and every sub-group in a clearer and precise manner. This particular kind of research also requires participants that are being randomly sampled, in other words, every individual within the targeted respondents’ audience possess a likelihood of being sampled by the researcher.
3.2 Data Collection
Surveys that are conducted online have proved to be a crucial research instrument used by various different research fields, such as official statistics, marketing and social researches. For this study, the 11 item questionnaires are to be self-completed by participants online with a sample size of fifty which consists of 25 males and 25females. The survey would be done by respondents that are Singaporean and Permanent residents between the ages of 15-35.
3.3 Self-completion Questionnaires
Self-completion questionnaires are useful in a way that it removes the interviewer from the process when participants are doing the survey; this provides greater anonymity for the respondent, which cancels out the large probability of biasness in any kinds of responses, that may be developed by the variability of interviewers’ skills and characteristics of interviewer, and allows participants to be honest when responding to subjects that are more sensitive (Brace, 2008). Self-completion methods also permit a larger geographical coverage as compared to interviews that are conducted face-to-face, without the need to incur extra costs of travelling and time. Through this method, questionnaires are cheaper and easier to administer, the only costs are those related to electronic distribution or printing. However, there are a few limitations of utilizing self-completion questionnaires. Since there is no interviewer to identify when a respondent has misunderstood or to ask for clarifications there are inconsistencies present in certain results. The questions in the survey ought to be kept short and simple, because there are no chances to clarify or probe with any forms of misunderstanding that may occur. There would be no control on who are the participants that completes the survey, and researchers are unsure that the correct target audience has completed the survey. Also, there are respondents that may be excluded from the survey, as participants with poor access to the internet or possess low levels of literacy skills, makes it difficult for them to complete a survey, and might probably generate inconsistent data that affects the overall results (Seale, 2011).
3.4 Ethical Considerations
According to Saunders et al (2009: P184) “Ethics refers to the appropriateness of your behaviour in relation to the rights of those who become the subject of your work, or are affected by it”. The main ethical consideration for this study is on the privacy and confidentiality of the survey respondents. To uphold every participant’s rights towards privacy and confidentiality is the core principle that is associated to every researcher’s studies. Despite that, countless of issues on privacy are idiosyncratic to the research audience (American Psychology Association, 2000). For instance, extra attention should be given towards how data is managed and handled especially in cases whereby researcher is not present (Cooper et al, 2007). Respondents doing the questionnaires for this research are remained as anonymous, in this case, individual confidentiality and anonymity are usually protected. Additionally, participants are assured beforehand that their information will be kept confidential, as well as being informed on how their data will be used, to further secure their consent.
