Consumer Behaviours
Effectiveness of Social Media in Affecting Chinese Consumer Behaviours

Contextual Background

In recent year, it can be seen that the business environment and indeed even the society is being changed by the proliferation of social media. As the social media becoming more popular, more and more people had engaged within social media, and spend a great deal of time on social media sites (Nüscheler, 2009; Noone, Mcguire & Rohlfs, 2011; Huat & Jung, 2014; Wankel, 2009; Mir, 2014; Schultz, Schwepker & Good, 2012; Fieseler & Fleck, 2013; Siricharoen, 2012). Such a situation is demanding the attentions from scholars and the business managers; as such a shift in trend can affect the business landscape significantly.

Indeed, the possibilities offered by social media on businesses are well acknowledged and discussed widely. Often, the social media is perceived as the technologies that enable a firm for dually inexpensive (i.e., cost efficient) and extensive (i.e., wider reach), sometimes reaching millions of users simultaneously (Miller, 2013; Nuria, 2011). Indeed, perhaps for such reason, social media is perceived as one of the most important tool or technique to boost the performance or profitability of a firm in the new economic climate currently (Woodcock, Green & Starkey, 2011; Schultz, Schwepker & Good, 2012).

One of the very important subjects under the context of social media is about the influences exerted by social media on consumer behaviours. Indeed, theoretically, social media is supposed to have huge impacts on consumers’ attitudes and behaviours, due to the impacts of word of mouth effect, whereby under the social media environment, the consumers would more likely to trust the recommendations and suggestions provided by their friends, and therefore more willing to purchase a products perceived as good by the friends or relatives (Korda & Itani, 2013). Then, as people spend more and more time on social media sites, social media is the new alternative channel; and medium to reach the consumers. As such, advertisements or marketing messages delivered to consumers through the use of social media sites can have higher probability and impacts to affect consumers (Hudson & Thal, 2013; Mir, 2014).

In short, the rise of social media is transforming the business environment, and even the societal fabric. People lifestyles are affected, as people spend more and more time nowadays on social media. The importance of social media in modern society is therefore something that cannot be ignored. This is particular true when considering that social media can affect the attitudes and behaviours of people. For any business that wants to stay relevant in the new business climate and to achieve better performance through leveraging on opportunities offered by social media, it is indeed necessary to understand how social media can be used to affect consumers. With that, this research project will focus on the impacts or effectiveness of social media in affecting the Chinese consumers.

Changes in Business Environment

With the emergence of web 2.0, the communication processes between businesses to the consumers as well as the public has been changing fast, as a company now will engage in a much more interactive, primarily two-way communication with the various stakeholders such as prospects, investors, customers and employees (Nüscheler, 2009; Noone, Mcguire & Rohlfs, 2011). Under such a trend, driven by the increasingly usage and reliance on social media platform under the web 2.0 technologies, to involve in social media is becoming a lifestyle for the modern people, especially those younger generation of consumers or public (Huat & Jung, 2014; Wankel, 2009). Such trend is gaining pace in a global landscape, and as evidenced today, had profoundly changed the ways of social and business communication (Mir, 2014). Under the increasing trend of popularity of social media, to manage social media initiatives of a firm has become the strategic imperative for business (Schultz, Schwepker & Good, 2012).

Generally speaking, the term social media refer to the webpages or websites that support interactive communication between the various users, and it is enabled by the advancement of web 2.0 technologies. Under such technology, the internet is no longer the place for people to search for information, but rather to also create, share information, not to mention to interact with other users. That possibility suddenly opened up a lot of new ways in terms of the context of communication between organizations, communities, and individuals (Miller, 2013; Ray, 2004; Fieseler & Fleck, 2013; Siricharoen, 2012). Perhaps for such reasons, the terms social media is also often used interchangeably by scholars with the term web 2.0, such as in Markova & Mircevska (2013).

Anyway, the emergence of increasingly popularity of social media is beginning to exert huge impacts on revolutionising the business landscape, not to also mention about the effects exerted upon society (Hintze, 2012). Due to the emergence of social media, practitioners and scholars felt about the losing of effectiveness of traditional media, such as television or radio to reach the consumers (Miller & Tucker, 2013). Rather, internet becoming more important, consistent with the finding that factors such as word of mouth is becoming more significant in affecting consumer behaviours (Kalpaklioglu & Toros, 2011). In other words, we are entering an era whereby the consumers rely greatly on recommendations, suggestions, advices of friends, acquaintances, or family in trying to make a purchase decision. Indeed, based on the survey from Mc Kinsey & Company (2000), it is found that more than 65% of the economy of United States is influenced by word-of-mouth effects (as discussed within Kalpaklioglu & Toros, 2011).

Overall, it is increasing important and critical for a firm to manage their presence in social media, and to leverage on social media to stay relevant in such business environment, to achieve business performance as well as to tap upon opportunities offered by social media platforms (Miller & Tucker, 2013). Under such background, there are indeed some studies available on how businesses are starting to adopt social media for better performance.

Adoption of Social Media

There are indeed some studies on the adoption of social media by businesses. For example, Hintze (2012) investigated about social media adoption by banks in United State. It is found that the main tools employed include: YouTube, Facebook and Twitter. The purpose of adoption of social media is to drive traffic to their Web sites, and to engage in more interactive relationship with the customers. However, the challenges encountered by these banks include: security issues and that the adoption process has been slow. Yet, Sarah, Contogiannis & Jembere (2013) examine about social media adoption by South African banks, and found that the main tools used are Facebook and Twitter. Overall, these studies available show that adoption of social media is not something unusual in business landscape, and there are indeed some benefits to be reaped from the social media adoption. Many of the social media leveraged by businesses seemed to be YouTube, Facebook and Twitter. However, there are actually more varieties of social media platform. These will be discussed below.

Types of Social Media

There are various types of social media platforms, and these include the following: Facebook, Twitter, YouTube, MySpace, Groupon, LinkedIn and Second Life (Wankel, 2009; Hintze, 2012; Miller, 2013; Whang, Koutroumanis & Brownlee, 2013; Billington & Billington, 2012). However, these are just some of the famous social media websites or platform. Many other types of websites can also be considered as social media, and that include: Consumer Forums, FanPages and blogs (Alvandi, Fazli & Amiri, 2014; Hintze, 2012). From such descriptions, it is obvious that there are indeed many varieties of social media websites or platforms. In the next section, the discussion will however focus on the impacts from these social media platform to the business environment as well as business entities.

Impacts of Social Media

The emergence of social media had exerted many influences of consumers, business environment and the society. A discussion on these impacts from social media will be presented.

First of all, the social media offer new ways to reach the audience or the consumers – and such new form of communication channel has been fast in substituting the traditional medium of communication channel (Alvandi, Fazli & Amiri, 2014; Martini, Massa & Testa, 2013). Due to the social media, the interaction between the advertisers and consumers has become two-ways in nature (Wiederhold, 2012; Rosman & Stuhura, 2013). Indeed, as the information technologies advances, there are also opinions that social media can be integrated into the Customer Relationship Management system, to eventually become Social Customer Relationships Management (Nadeem, 2012; Carolyn & Parasnis, 2011; Ang, 2011). Overall, it can be observed that social media offer an alternative ways, and indeed more appropriately a more advance and interactive to build relationships with the customers.

Then, social media is also becoming the key element that affect the trust of consumers towards businesses, as the consumer gain information pertaining to a business from a friend, and that the consumer tend to trust the feedback provided by friends more (Pan, 2014). In a way, the issues related to word of mouth is becoming a hot topic in research, and marketers have been trying to leverage on word of mouth to enhance the effectiveness of their respective marketing campaigns (Khong, Onyemeh & Chong, 2013).

Then, in a subtle manner, the social media shifting the power to consumers, as under the social media, the consumers’ opinions are now regarded more influential and trustworthy by others audience. As such, the consumers are the judges, which are dissimilar in the past when only one-way advertising are conducted or performed by enterprise to affect the consumers (Wiederhold, 2012). Indeed, as the social media proliferates, it would be becoming easier for consumers to share their experiences about products, brands and services through internet – and such give rise to the viral effects, which can be beyond the control of the marketers (Kalpaklioglu & Toros, 2011).

Given that social media are powerful and has been spreading fast, that along enabled many new possibilities or business strategies for businesses. To summarise the many new possibilities, some of the strategies or possibilities as discussed by scholars will be presented accordingly in Table 1 below.

 

Table 1: New Strategies and Possibilities Offered by Social Media

Scholars New possibilities
Hauptmann & Steger (2013), Remidez & Jones (2012) Social media as the platform to effective human resources management
Martini, Massa & Testa (2013) Social media can be used to manage innovation process within organisation
Ray (2014), Vuori & Okkonen (2012), Billington & Billington (2012) Social media as a tool and platform for knowledge management process in an organisation
Alton & Banerjee (2013)

 

Social media as a tool for knowledge and value co-creation process with the customers
Zauner, Koller & Fink (2012), Lyon & Montgomery (2013) Social media can be used for publicity
Aula (2010), Siricharoen (2012), Montalvo (2011) Social media as tool for reputation management and branding purposes
Lee, Oh & Kim (2013), Harris (2011) Social media as a tool for stakeholder management
Debi & Sharma (2013) Social media as the platform to gain more market insights and data for market analysis purposes

 

Last but not least, it is crucial to aware that social media can exert significant effect on consumer behaviours (Hudson & Thal, 2013), of which is the main theme of this research project. Indeed, perhaps this is the most critical aspects of social media, from business management point of views, as ability to influence the behaviours of consumers will definitely affect the performance of any business – which arguably the prime interests of the business person and managers. For that, due to the tendency of consumers to trust recommendations from friends, any successful social media marketing campaign will likely reach out to a lot of people, and yet that will exert huge influences on the perceptions and the behaviours of the mass public (Mir, 2014; Korda & Itani, 2013). Therefore, it can be asserted that social media can be leverage to enhance the performance of a business, through the influence it exerts on the mass public. Anyway, in the next section, some discussion on consumer behaviours will be provided – as that is the second theme of this research project.

Understanding Consumer Purchase Behaviours

Generally speaking, purchase behaviours can be analysed as multiple dimensions, such as: why certain consumers buy, where they buy, how they buy, the amount they spent, how often they buy and even how they choose to consume a particular product or service (Gupta & Mehra, 2010). Studies on purchase behaviours of consumers are treated importantly in the literature, as to sell more to consumers are one of the core business objectives of any business enterprise that want to survive in the competitive business environment (Tan, 2011). Indeed, when a company cannot convince the consumers to purchase, then it would be very challenge for the business to stay relevant any longer. This is similar to the context of marketing, as the primary role of a marketer is to influence the consumers to buy (which, often regarded as to enhance the revenue of a company).

Overall, there are many factors that can affect purchase behaviours. For example, some of these include: brand image, product involvement, brand knowledge of consumers (Bian & Moutinho, 2011), mood of the consumers, the social influences (Zhang, Lu, Shi, Tang & Zhao, 2012), marketing communication messages delivered by a firm (Yao & Liu, 2012), pricing (Carrigan & Attalla, 2001), personal beliefs, ethical judgment of consumers (Marques & Almeida, 2013), and many others. However, within the scope of this study, it is not the intention or within the resources boundary to examine all of these factors, as this research will only focus on issues related to social media and its effect on consumer purchase behaviours.

Overall, it can be seen that purchase behaviours are important issues in the context of business management, especially in the context of marketing management. Understanding purchase behaviours of consumers are therefore critical in research on business management. There are many factors that may affect purchase behaviours of consumers. Nevertheless, this study will only focus on the impacts due to social media related issues. In order to understand more about how social media related issues may be related to consumer behaviours or consumer purchase behaviours, some of the studies available in this area will be presented in the next section, as below.

Social Media and Consumer Behaviours

Theories

Theoretically, social media can affect the behaviours of consumers significantly. There are many reasons for that. First of all, people increasingly spend more time on social media, and to spend time on social media is becoming the lifestyle of people nowadays (Zauner, Koller & Fink, 2012). As such, their exposure to social media is high, and any information delivered to them has higher probability of affecting them. Then, as social media is more interactive in nature and that the comments from friends or recommendations from friends are considered as more trustworthy, consumers will likely react more positively towards certain products or services that are suggested to be of good quality by the friends. Given that, it is reasonable to expect to see positive relationships from the consumers’ perceptions on social media and their usage on social media as affecting their purchase behaviours – on advertisement or recommendations in social media. There are indeed some studies on how social media may affect consumers’ behaviours. These will be presented. The first part below will discuss about these available studies around the world, while the second part will focus on the empirical evidences available in China.

Empirical Studies

There are indeed more studies in the recent years on the applications of social media from marketing perspectives and how social media can affect consumer behaviours. This section will present some of these materials. For instance, there are studies on how certain social media related factors may affect consumer attitudes. In the study conducted by Alvandi, Fazli & Amiri (2014), the influences of the important features of social media such as informativeness, entertainment, interactivity, usefulness and personalization on consumer’s attitude (i.e., trust, purchase intention and commitment to firm) were examined. Based on a sample of 467 internet and interactive media users, it is found that each characteristic of interactive media has positive effect on consumer’s attitude and the positive attitude in turn will influence their purchase intention, trust and commitment level. Overall, this study shows that features of social media can be one of the significant factors affecting consumer behaviours.

Then, several studies are also available on how social media may affect consumer behaviours, or in contributing to better corporate performance. For example in Seung (2012), the focus of study is on the marketing potential of social media for luxury brand management. Louis Vuitton’s Facebook page was use as the case study, and questionnaire was used to elicit opinions from the research participants. Overall, it is found that there are statistical significant relationships between satisfaction with a luxury brand’s (Louis Vuitton) Facebook page, attitudes toward the brand, intentions to utilize the brand’s social media (Facebook and Twitter) for online shopping, and intentions to research online and purchase offline (ROPO). Such study indicates that usage of social media is indeed also one of the important areas of consumer behaviours on the social media era.

In the research carried out by Schultz, Schwepker & Good (2012), the impacts of social media on sales performance was examined. Based on the data from a total of 273 B2B salespeople, the following findings are discovered. First of all, ager is inversely related to social media usage; while social media norms positively affect social media usage. The use of customer oriented selling technique in the context of social media was also positively related to sales performance.

Social media can also be used effectively for social purposes. In the study carried out by Korda & Itani (2013), the possibility and effectiveness of social media for health-related issues were discussed and analysed. Based on that discussion, it is concluded that although social media have quite a good potential as techniques for health promotion and education, it is important to recognise that it requires careful application and may not always achieve their desired results. Such study suggests that it is also important to pay attention to how the social media is being used, as that will affect the effectiveness of the social media in achieving certain objectives.

Yet, in the study conducted by Hudson & Thal (2013), the impact of social media on the consumer decision process, in the context ad field of tourism marketing was examined and discussed. It is found that social media engagement of users can affect their decision making process, especially purchase behaviours significantly. It is later concluded that savvy tourism marketers can benefit from such finding by trying to engage the customers via social media platforms.

Overall, there are evidences that social media can affect consumer behaviours, such as in the context of their purchase decision. Then, there are also evidences that social media can be used to achieve certain marketing related objectives, such as to influence the behaviours of consumers and to increase revenue.

Previous Studies in China

The focus of this study is on how social media may be effective in influencing the Chinese consumer behaviours. There are some limited studies on such issue indeed. Although the previous studies on how social media may influence consumer behaviours are insufficient and limited, the available studies will be presented as well, as to provide relevant information to this particular research on how other studies in the past had discover some information on effectiveness of social media in affecting the Chinese consumers’ behaviours.

In the study conducted by Yang (2013), the young Chinese consumers’ viral marketing attitude, eWOM motive, and behaviour were investigated. From that particular study, it is found that young Chinese consumers’ perceived pleasure, affection outcome expectation, and subjective norm of viral marketing affected their market mavenism while their subjective norm and pleasure influenced their viral marketing attitude.

Yet, in the study conducted by Pan (2014), the path of influence of e-WOM on consumer purchase intention in China was examined. It is found that e-WOM indeed had some influences on affecting consumer decision making process, which is affecting their eventual purchase behaviours. Such study reaffirms the importance of word of mouth as the phenomenon that can be significant in affecting consumer behaviours – a similar findings to other scholarly research in other countries.

Overall, it can be seen that studies on social media influences or effectiveness in affecting consumer behaviours are limited, but the limited evidences shows that social media seem to be powerful and significant in affecting Chinese consumer behaviours – via eWOM (i.e., electronic word of mouth). Anyway, the studies are indeed not sufficient and lacking, and there is a gap in the literature that worth addressing. This research project will indeed focus on covering such gap by providing more empirical evidences on how social media can be effective in affecting Chinese consumer behaviours.

Summary

Overall, the review of literature had shown that there are significant changes on the business environment due to the emergence of social media, especially when the social media is affecting the lifestyle of people around the world. Then, there are also some evidences that businesses have been trying to leverage on social media to achieve their corporate or marketing objectives. Besides, it is also discovered that social media can bring a variety of impacts to the business landscape and the society. One of the very important impacts is about how social media may affect consumer behaviours. This is indeed the focus of this particular research project, and more review on the previous empirical evidences on how social media may affect consumer behaviours are conducted and discussed. The many empirical evidences were reviewed. Overall, there are evidences that social media can affect consumer behaviours, such as in the context of their purchase decision. Then, there are also evidences that social media can be used to achieve certain marketing related objectives, such as to influence the behaviours of consumers and to increase revenue. Then, from the context of China, some of the limited studies on how social media can affect Chinese consumers were also reviewed and examined. Some evidences on how electronic word of mouth can affect consumer behaviours were available. However, the lack of research on how social media related issues (such as the use of social media habits of consumers and consumer perceptions on social media) may affect consumer behaviours is a gap in the literature that researchers should aim to address.

 

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