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A study on Role of Social Media in the Purchase Decision Process Submitted By: Saurabh Ahuja Roll No:130/C PGDM(2013-2015)

Saurabh Ahuja

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Page 1: Saurabh Ahuja

A study on Role of Social Media in the Purchase Decision

ProcessSubmitted By:Saurabh AhujaRoll No:130/CPGDM(2013-2015)

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Flow of Presentation

• Introduction• Objectives of the study• Scope of the research project• Research methodology• Data Analysis• References• Questionnaire

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Introduction• Digital content, including social media, is pervasive in daily

life and its influence on consumers ‘lives is unquestionable and powerful.

• One key issue for marketers at this point understands how digital and social media are used in the purchase decision process.

• Consumers now enter the purchase path at various points, depending on whether they first engage with a brand, research a product, or hear about a product from their social networks.

• Brands are under increased pressure to leverage social media to keep up with the market, and in fact, brands that use social media strategically have an opportunity to deepen connections with their consumers.

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• Today‘s consumers are more empowered than ever before; social networking, blogging, and the availability of digital devices—such as tablet computers and smartphones—allow consumers to connect with each other, discuss brands and products, and interact with brands quickly and easily.

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OBJECTIVES OF THE STUDY

1. To understand how consumers obtain, process, and

select the information before a purchase

2. To determine how consumers perceive the difference

between social media and traditional mass media

channels in terms of obtaining product information

3. To understand what changes social media has

brought to consumers in different stages of their

decision making process

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SCOPE OF RESEARCH PROJECT

• The research aims to serve as an indicator to

potential brands/companies on how they can tap

into the decision making process of consumers

via social media sites .

• The research focuses on the behavior of end

consumers and particularly within the retailing

industry, for instance clothing, food and

beverage, consumer electronics, and so on.

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Research Methodology

RESEARCH DESIGN

Type of Research• Quantitative Research

• Data was collected by Survey Method using Questionnaire.

• A total of 163 people were surveyed.

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SAMPLING

The sampling process for this process is as follows:

1. Target Population: 16 – 55 years

a) Element – Adult males and females

b) Sampling Unit – Households, working class and

college students

c) Population Universe – New Delhi

2. Sampling Frame - Social Media users

3. Sampling Technique –Judgmental

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SOURCES OF DATA

• A questionnaire will be used to measure the

customers‘ attitudes and expectations, and it will

be administered online.

• Thereafter, this questionnaire was floated on web using the online form-filling feature of Google-doc.

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DATA ANALYSIS AND

INTERPRETATION

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RESULTS OF ADMINISTERED QUESTIONNAIRE

Respondent Demographics

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Exposure and Usage of Social Media

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Consumer Attitude and Information Seeking Behavior

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Impact of Social Media on Different Stages of the Purchase Decision ProcessThe linear regression model would be as follows: • The independent variables X ratings of respondents

in different situations of the decision making process • The dependent variable Y ratings of respondents on

the effectiveness of social media as a whole in delivering reliable product information which would influence the decision of a consumer

• The unstandardized coefficients β which would be determined through SPSS to determine the weight age which each stage has to contribute to the overall effectiveness of social media

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• The R Square value, is coming out to be 0.823. This signifies

that 82.3% of the response variable variation is explained by

this linear regression model.

• Hence an overwhelming majority of the response variations

are explained by this model and it can therefore be

determined that this regression model is good

fit for the data.

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• According to the SPSS output shown above, the values of the

unstandardized coefficients are:

• β0 = 0.32, β1 = 0.183, β2 = 0.257, β3 = 0.26, β5 = 0.227

• The final regression equation can be defined as:

• Y = 0.32 + 0.183*X1 + 0.257*X2 + 0.26*X3 + 0.227*X5

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Analysis of t-tests

• The t-tests were conducted with the following null and alternate hypothesis:

• H0 = There is no significant difference in how respondents will rate the 5 factors between social media and traditional mass media channels.

• H1 = There is a significant difference in how respondents will rate the 5 factors between social media and traditional mass media channels.

• The tests are carried out at 95% confidence interval

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Influence on Consumers

Influence on Consumers • Significance value is 0.183• We can accept the null hypothesis. • There is no significant difference between the

influence which social media and traditional mass media channels have on consumers

Credibility of Product Information

• Significance value is 0.416. • Therefore, the null hypothesis can be

accepted.• According to the respondents, there isn‘t

much difference in the credibility of information which is provided by both social media and mass media.

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Ease of Obtaining Product Information• Significance value is 0.001. • Therefore, we can reject the null hypothesis. • The respondents perceive that there is a significant difference

between social media and traditional mass media channels in terms of the ease of obtaining information

Availability of Product Information • Significance value which is observed is coming out to be less

than 0.05. • Therefore, we can reject the null hypothesis. • The respondents perceive that there is a significant difference

between social media and traditional mass media channels in terms of the amount of information which is available for the consumers to make a decision.

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Scope of Product Inquiry • The significance value which is observed is less

than 0.05, meaning that the null hypothesis can be rejected.

• There is a significant difference between social media and traditional mass media channels when it comes to gauging the scope of product inquiry.

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Drawbacks of Traditional Mass Media

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Reasons for Following Products/Brands on Social Media

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CONCLUSION

• The accessibility and transparency that social media offers has led changes in how consumers position themselves in today‘s market, where it is now inevitable and necessary for companies to equip with a new marketing mindset.

• Additionally, the research, perhaps, could help organizations in gaining new insights from this perspective and to identify potential pitfalls and opportunities via social media.

• The data analysis has proved that, no matter if it‘s social media or traditional mass media, consumers are highly selective in processing and selecting the information before a purchase takes place

• According to the findings, social media has a huge role to play in searching and evaluation options for purchase, which is also when a consumer tries to obtain the maximum information to substantiate the purchase decision for a product. • Social media may have a different impact

depending on the stage at which the decision making process is at, but it can be said for sure that the impact of this medium can never be underestimated.

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LIMITATIONS OF THE STUDY

• The above findings cannot represent all individuals across India as a whole, due to the fact that the decision making process involves different psychological factors which may result in different behavioral actions.

• The sample size which was taken for the purpose of this study was too small.

• This research has used a questionnaire survey. There could be the possibility that the respondents did not understand the question or answered incorrectly, which in turn could have affected the results.

• Limitations arising due to lack of a diverse data collection. Even though there was a conscious effort in this study to maintain the diversifications due to different group influences, but a more detailed study can be done to include the various differences due to cultural and other sociological changes.

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REFERENCES

• Boyd, D. M, Ellison, N. B. (2007). Social network sites: Definition, history, and scholarship. Journal of Computer-Mediated Communication, 13(1), article 11. available on the web at http://www.postgradolinguistica.ucv.cl/dev/documentos/90,889,Social_network_boyd_2007.pdf

• Constantinides, Efthymios and Fountain, Stefan J. 2008. Web 2.0: Conceptual foundation and marketing issues. Journal of Direct, Data and Digital Marketing Practice, 9 (3). 231-244. USA: Palgrave Macmillan.

• Healey, J. 1974. A Model of Communication Impact and Consumer Response. Association for Consumer Research, Advances in Consumer Research 1: 384-392. Available on the web at (http://www.acrwebsite.org/search/view-conference-proceedings.aspx?Id=5671)

• Delaney, J.; Salminen, N.; Lee, E. 2012. Infographic: The Growing Impact of Social Media. (http://www.sociallyawareblog.com/2012/11/21/time-americans-spend-per-month-on-social-media-sites)

• Miller. 2012. Consumers Spend 20-30% of Time Online in Social; Ad Tolerance Improving. (http://searchenginewatch.com/article/2230668/Consumers-Spend-20-30-of-Time-Online-in-Social-Ad-Tolerance-Improving-Study)

• O‘Reilly, T. 2006. Web 2.0 Compact Definition: Trying Again. (http://radar.oreilly.com/2006/12/web-20-compact-definition-tryi.html)

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Questionnaire

Questionnaire