IMPACT OF SOCIAL MEDIA ON CONSUMER BEHAVIOUR

IMPACT OF SOCIAL MEDIA ON CONSUMER BEHAVIOUR

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

Modern technical developments can have a significant impact on organizations by changing the social environment and promoting information sharing and the generation of new ideas. (2005) Kling et al. It will be helpful to use social media as an illustration of new technical innovation that is having a significant impact on today’s organizations. The social media-inspired technologies were once thought of as a chapter. But time has shown that to be false. We have witnessed how these new communal technologies are changing the world on a daily basis, giving groups with impacts that were once not thought to exist new hope. Most businesses nowadays are primarily interested in integrating social media into their organizational structures, but they lack a solid understanding of what social media is all about. Additionally, they lack a concrete way to gauge the benefits that new technologies will bring them. In a 2009 survey by McKinsey & Company, it was found that by using social media effectively, many firms were able to collaborate and gain from one another in ways including idea sharing, improved communication, and improved work environments. As more businesses endorse and take use of the numerous social media opportunities, the value that social media offers to organizations is enormous technological innovation. In order to support their diverse organizational and business processes, they can do this (Starmark, 2008;). Although social media presents many intriguing potential, it is crucial to understand how to use it and its associated effects in an organizational environment in addition to the situations when it can be used for actual initiatives. The modern workplace should consider issues including how employees can utilize social media tools for work and what effects they have on workers. Modern businesses should consider these to be crucial questions. These inquiries can assist businesses in comprehending the usefulness of social media in the workplace.

As a result, it gives them the chance to study and comprehend how to make use of what it has to offer in light of the impact it has on how individuals communicate and collaborate, as was previously mentioned. According to Hill (2009), globalization is the historical fusion of several national markets into one vast global marketplace. It is a departure towards a more unified and dependent economy. According to the Economic Intelligence Unit (2009), during the recession that began in 2007, changes in consumer spending patterns, inflation, and currency rate fluctuations overwhelmed the world market.  These economic developments have ended up compelling organizations to redesign their business strategies so they can be able to communicate their brands more effectively. Davis (2001) writes that brand is one of an organization’s most prized assets which simply imply that there is a demand on the present day organization to understand that it is important for them to capitalize on their brand. This can help them maintain a profitable growth and achieve sustained profitability objectives.There are various means of building brands, which can come in form of advertising, meeting specific needs of customers, attaching a particular image to a service or product, identifying and meeting a need that competitors are to identify, combative communication and strategizing price (Burger et al, 2009). As recessions is towering in recent times of high, it became very imperative for organizations to maintain honest, clear medium of communication and retain a good image in a cost effective means (Unit for Economic Intelligence, 2009). Social media marketing was one of the popular channel organizations used to communicate their brands during the recession. Some of those mediums are; online electronic media which helps facilitates participation, responsiveness, consultation, connectivity and networking amongst online end users (Mayfield, 2008). Social media channels like Twitter, Facebook, YouTube, LinkedIn etc are some of the dynamic tools that have helped facilitate online rapport (Golden, 2011). Relatively, it is a low cost pattern of marketing which allows organizations to engage direct end-users through their contacts (Heinlein and Kaplan, 2010).  Given the options available to customers and the major role of social media marketing given that they now have an impact on the economy, brands and consumers have a shifting role to play in the organization’s strategy (Mayfield 2004, Lindeman, 2008). Customers have a significant impact on other customers’ purchasing decisions, as do brands. These occurrences have an impact on repurchases, which therefore have an impact on future profitability and long-term organizational stability (Oliveira and Sullivan, 2003). Thus, a prominent brand frequently has an impact on consumer purchasing behavior. By creating demand (through repurchases) and securing the organization’s future earnings, this value is created (Sullivan and Oliveira, 2003).

Social media marketing relies on novel and distinctive thought processes and offers communication chances (Heinlein and Kaplan, 2010; Kweskin, 2008). This improves the product and brand experience for customers. For company strategy, this new era of digital communication and social interaction is unrivaled. As a result of increased global competition, it is important for businesses to explore marketing strategy in more engaging and creative ways in order to draw in more customers (Rockendorf, 2011).

1.2 PROBLEM STATEMENT

The introduction of the Internet and the general acceptance of it have significantly changed how businesses market their services and goods as well as the channels of communication they use to interact with their clients. This is evident in how they currently sell and explain their brands and products, which is a difficult project. Consumers are inundated with marketing advertisements and promotional activities. Customers’ propensity to become excited about promotional events is waning, and they are starting to reject the attempts of some businesses to sell them.

Essentially, the promotional emphasis of some organizations is on the traditional mass media advertisement approach, which includes billboard placements, radio jingles, print advertisements in newspapers and magazines, and TV and radio commercials. It is now known that traditional mass media’s effectiveness is rapidly declining as the Internet spreads quickly throughout the worldwide marketplace.