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HELLENIC OPEN UNIVERCITY

SCHOOL OF SOCIAL SCIENCES

Master in Business Administration (MBA)

Dissertation

A study on effectiveness on Facebook on consumer behavior

Student : Anastasia Ntolia

Student id: 91889

Supervisor : Flora Kokkinaki

 September 2016

Ελληνικό Ανοιχτό Πανεπιστήμιο

Σχολή Κοινωνικών Επιστημών

Mεταπτυχιακό στη Διοίκηση Επιχειρήσεων (MBA)

Διπλωματική Εργασία

Μελέτη της αποτελεσματικότητας των διαφημίσεων του Facebook στην συμπεριφορά των καταναλωτών

Φοιτήτρια : Αναστασία Χ. Ντόλια

Αριθμός Μητρώου: 91889

Επιβλέπων Καθηγήτρια : Φλώρα Κοκκινάκη

Σεπτέμβριος 2016

Table of contents

Summary (in Greek) Περίληψη………………………………………..

Summary……………………………………………………………….

Acknowledgements…………………………………………………….

Chapter 1 Literature Review…………………………………………...

Chapter 2 Research Questions………………………………………….

Chapter 3 Method………………………………………………………

Chapter 4 Results………………………………………………………

Chapter 5 Discussion and Conclusion…………………………………

References……………………………………………………………..

Appendixes…………………………………………………………….

Summary

Περίληψη

List of tables

List of figures

Chapter 1

Literature Review

 Internet and virtual communities have transformed consumers and societies with wide spread access to information and enhanced communication abilities (Kuruk K., (2007).

Nowadays social media becomes part of a person's life. Social media such as Facebook, Twitter, Instagram or Linkedin has a numeral number of the user and keeps growing every day. It is estimated that over 500 million people are interacting with social media (Ostrow, 2010 )

Social Media

Social media becomes an important communication tool that people use to connect to other people or organization. People use social media to share their experiences, reviews, information, advice, warnings that are interesting to their friends.

People tend to believe in what their friends recommend. Facebook, Twitter, or Myspace is the most popular social media site that people share their experiences, lifestyle, stories. By posting information could lead their friends to do the same thing or use their information to make decisions.

Generally, consumers tend to make purchases or conduct business on social media. Recommendations by friends or connections on social media also could help consumers on decision making. Those recommendations could help brand attitudes, purchasing attitudes, and advertising attitudes. The influence of social media on buying behaviour can be in any services or products.The more good responses on the products or services, the more attractive for consumer purchasing.

Social media has also influenced consumer behavior from information acquisition to post-purchase behavior such as dissatisfaction statements or behaviors about a product or a company. (Mangold and Faulds, 2009). Previous research has indicated that even a small amount of negative information from a few postings can have substantial impacts on consumer attitudes (Schlosser, 2005) stated that individuals have an underlying need for an emotional bond with high-involvement products that they buy.

Consumers use social networks in daily life for various reasons. Most of them want to maintain relationships with relatives or colleagues/friends. Maintaining interpersonal connectivity between online users of a social media channel has benefits derived from establishing and maintaining contact with other people in a manner of giving social support, friendship, and intimacy. (Utpal et al., 2004) These allow users to connect with peers by adding them to networks of friends, which facilitates communication, particularly among peer groups (Ahuja and Galvin 2003). Online groups exert a noticeable influence on the behavior and consumer buying intent and implicitly on the purchase decision. For example, social media websites provide a public forum that gives individual consumers their own voice, as well access to product information that facilitates their purchase decisions (Kozinets et al., 2010) Shopping has always been a social experience and social networking allows consumers to interact with individuals—many of whom are likely strangers when we talk about online. Cultural aspects have an influence on consumers' usage of social networks and a great impact over the online purchase intentions. (Pookulangaran et al., 2011)

Advertising

Advertising is the core idea that is presented in non-personal ways to create purchase intention. According to Srinivasa, (2008) define advertisement as “the sharing of information about products in a non-personal way usually paid by a sponsor through different media”. Similarly, Ayanwala et al.,(2005) define it as “a non-personal paid form of communication, where ideas, concepts, products or services, and information, are promoted through media (visual, verbal, and text) by an identified sponsor to persuade or influence behavior”.

Advertising & Social Media

Social media advertising provides a whole new dimension to advertising, as it offers interactivity to the users, especially on Facebook (Logan. K. et al., 2012 )

The advertising on social media page has built new consumer's behaviour. Consumers spend a substantial share of their social life on websites such as MySpace and Facebook, which host so-called ‘‘online communities'' – consumer groups that interact online to achieve personal as well as shared goals of their members (e.g., Dholakia, Bagozzi, and Klein Pearo 2004)

Facebook & Advertising

Users are using several online formats to communicate, (e.g., blogs, podcasts, social networks, bulletin boards, and wikis) to share ideas about a given product, service, or brand and contact other consumers, who are seen as more objective information sources. (Kozinets, 2002)

Facebook is one such medium that is facilitating its users for global interaction and sharing their ideas and experiences. Facebook is social media that is in fact a “Web based site which bring different people together in a virtual platform and ensure a deeper social interaction, stronger community and implementation of cooperation projects” (Brown, 2009 ).  Kahraman (2010) defines Facebook as “the online platform that people use to share their ideas, experience, and perspectives and communicate with each other”. Millions of people are using Facebook daily.

Facebook advertising offers users or consumers the opportunity to interact actively with the adverts on their page allowing them to ‘‘like'' and ‘‘share'' and also view who else or which friends liked or shared the same adverts. (Milad et al, 2015)

Facebook is type of social media, where people with common interest shares their ideas and comments in a virtual environment (Weber, 2009).

Facebook advertising enables customers to share their experience, ideas, interest and useful information about a brand, is useful in the sense that it is interactively helpful in collecting feedback and demographic information of targeted customers. In current business environment, Facebook advertising is an effective source to reach targeted customers (Sandberg, 2010).  Facebook advertising is done to create likeness, attraction and influence buying behavior in positive way. Attitude-towards-the ads, is an interesting theory of advertising often used to understand the buying behavior.

The success of advertising should be measured taking into account consumers' evaluations of the interest aroused by the advertisements. Facebook creates wide platforms for viral online recommendation (Smock, Ellison, Lampe, & Wohn, 2011

Theory of planned Behaviour

The theory of planned behavior (TPB) (Ajzen, 1991) is an appropriate model in explaining the behaviour of consumer how is affected by advertising on social media, using as the model which assumes that behaviour is planned and preceded by intentions. Social media are a means by which individuals can construct, convey and discuss personal identities through expression and dialogue (Kaplan and Haenlein, 2010). Moreover, social media are built around identities, as users are required to generate profiles that at least partially reflect their identity (Kietzmann, et al., 2011; Kietzmann, et al., 2012). Hence, the TPB will be used as theoretical framework and is extended with selfidentity expressiveness and social identity expressiveness.

The TPB, a well validated model to explain behavioural performance, has been applied in a variety of contexts, such as health, consumerism, and entrepreneurship (Armitage and Conner, 2001;Conner and Armitage, 1998). Moreover, the TPB has been applied to the adoption of communication technologies such as smart phone use, online communication and mobile services (Cho and Hung, 2011)

 According to the theory of planned behavior, human behavior is guided by three kinds of beliefs; behavioral (attitudes), Normative (subjective norm) and subjective (perceived behavioral control). The TPB posits that intentions are influenced by ones attitude towards the behavior, subjective norm, and perceived behavioral control (Ajzen, 1991). Shortly, attitude refers to the degree to which a person has a favorable evaluation or appraisal of the target behavior; the subjective norm refers to the perceived social pressure to either perform or not to perform certain behavior (Rise, et al., 2010). Behavioral control reflects the perceived ease to perform certain behavior, thereby influencing intentions to perform behavior. The TPB has been applied extensively to predict a variety of behaviors in a range of populations. A study by Pelling and White (2009) applied the TPB to explain the use of social network sites (SNS) among young adults. Traditional TPB variables such as attitude and subjective norm significantly predicted intentions to use SNS.

Attitude

Attitude is an essential part of a person's personality. Attitudes are of significant importance as they outline peoples' overall perceptions about the world and also have an influence on their future behaviour (Crano, 2008). Shook & Bratianu (2010) state that one forms one's attitude based on one's beliefs in the possible outcomes. The more favorable the possibility is, the stronger the intention to do the behavior will be, and vice versa: the less favorable the outcome possibility is, the weaker the intention to do the behavior will be.

Subjective Norm

Subjective norms are one's perceptions or assumptions about others' expectations of certain behaviors that one will or will not perform.

(Nurul H., et al.,2012) Specifically, it refers to the belief that an important person or group of people will approve and support a particular behaviour. Subjective norms are determined by the perceived social pressure from others for an individual to behave in a certain manner and their motivation to comply with those people's views. (Ham M. et al., 2015)

Behavioral Control

Perceived behavioral control or simply behavioral control is one's perceived ease or difficulty in performing one particular behavior (Ajzen, 2005). To explain the perception related to this perceived behavioral control, Ajzen distinguishes it from the locus of control suggested by Rotter (1966).

Intention

Fishbein & Ajzen (1975) define intention as a person's subjective probability dimension that connects that particular person to a particular behavior ( “We have defined intention as a person's location on a subjective probability dimension involving a relation between himself and some action. A behavioral intension, therefore, refers to a person's subjective probability that the will perform some behavior.) Nurul Huda et al., 2012

Chapter 2

Research Questions

Research has been designed to answer following questions:

The current study aims to explain the consumers' behaviour by applying the theory of planned behaviour (TPB).

Chapter 3

Method

To address these research questions, we used an online questionnaire, which was uploaded on Facebook. Three hundred thirty one (331) people answered 31 questions which were divided into 3 parts. In the 1st part  there were questions about the usage of social media and the reasons of usage, the 2nd part was about the purchasing behavior of the consumer. More specifically, there were questions on which we try to understand the relation between consumer and the advertising and how this affect his attitude. Responses were measured on a five-point Likert scale, where items ranged from strongly disagree to strongly agree. The final part of the research included multiple-choice questions, which relate to demographic factors (independent variables)

The collected data was coded, captured and analyzed by means of the statistical program known as SPSS (version 23).

Basic descriptive statistical measures (frequencies, means, standard deviations) were used to describe the findings  whereas Pearson's correlation coefficient analysis was utilized to determine the strength of the relationship between variables. A generalized linear model (GLM) analysis of variance (ANOVA), using the Wald's Chi-square and the post ad hoc Bonferroni pairwise comparisons were used to determine if there was a significant difference between the aforementioned variables .

Field, A. (2009). Discovering statistics using SPSS (3rd ed.). London: Sage.

Pallant, J. (2010). SPSS survival manual (4th ed.). New York: McGraw-Hill.

In order to make sure the reliability and validity of our questionnaire, we have made a pre-test of questionnaire by collecting the responses and reliability test is run to check Cronbach's alpha of multidimensional scales measuring the factors. The result of pre-test indicates that all the construct measurements are reliable (with Cronbach's alpha > 0.5).

Chapter 4

Results

The invasion of  quick informing by internet, is clearly nowdays. It is very easy for everyone to search and find whatever he need.  This is also, in totally agreement with the answers of the online questionnaire, as 42% answered that are connected in the internet from more than 6 hours per day. A significant 21.5% are between 4-6 hours and only 1.6% are connected in internet less than 1 hour per day.

(21.5% 4-6 hours, 17.8% 2-4 hours, 17.1% 1-2 hours and 1.6 % less 1 hour per day)

Figure 1. Hours connected in internet

Many people not only use internet but also have created an account  in social media. Specifically the survey showed that 98.8 % create an account and only 0.9% they are not using it.

Figure 2. Use of social media

Figure 3. Create an account in social media

The most popular social media is Facebook, as we can see below 51% of the respondents, they use it in an extreme amount. In contrast with, Twitter which is not so famous as Facebook (51%) and Youtube (25%).

Figure 4. Use of Facebook.

Figure 5. Use of Twitter

Figure 6. Use of You tube.

40.8% of the respondents stated that they use social media in order to communicate with other people.

Figure 7. I use social media in order to communicate with other people.

While only 18.4% believe that they use for learning social news.

Figure 8. I use social media for learning social news.

No more than 25% of the respondents are trying to find a job by searching in social media.

Figure 8. I use social media in order to find a job.

Almost 65% are not interested to use social media for advertising purposes.

Figure 9. I use social media for advertising purposes.

But, they use it in order to find more information for products that they want to buy. A 32% of the respondents answered that they are searching information a lot in internet and especially in social media, (such as, reading other's reviews, learning more about the characteristics of the products).

Figure 10.  I'm searching information about a product or service before I tent to buy it.

A 29% of the respondents, state that they watch advertisements, for products that they are interested in buying them, in order to be sure about their purchasing.

Figure 11. I watch advertisements in social media.

Figure 12. I have been influenced by advertisements.

Even if a  41 % believe that they don't have an influence from the advertisements that they watch in social media, however  an almost 40  % of them, buy products the last 3 months when they are informed by the advertisements.

Figure 13. I purchase the last three months after having been informed by advertisements.

An almost 30% of the respondents believe that is influenced from others reviews when they reading critical reviews about the product or the service that they want to purchase.

Figure 14. I think that I've been influenced from other's reviews.

Also, according to the theory of planned behavior…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Thery of Planned Behavior & Social Media

Predictors of behavior

Figure 15. I believe that social media are useful.

Figure 16. Social media benefit my social life.

Subjective norm

Figure 17. Very important people as family and friends encourage me to use social media.

Perceived behaviour control

Figure 18. I feel very well to use easily all what social media provide.

Figure 19. I rarely encounter problems in social media.

Theory of Planned Behavior & Advertising in Social Media

Predictors of behavior

Figure 20. I believe that advertisements in social media are useful.

Subjective norm

Figure 21. Family and Friends recommend me to take into account advertisements before i buy.

Perceived behaviour control

Figure 22. I trust the advertisements in social media.

Figure 23. I buy products from advertisements that I have been watched in advertisements in social media.

Correlations

T-test

Chapter 5

Discussion and Conclusion

References

Kuruk and Krishnamurthy, 2007 Kuruk K., (2007). An analysis of consumer power on the Internet, Technovation, 27(1–2), 47–56.

Ostrow, A. (2010). It's Official: Facebook Passes 500 Million User. Retrieved from http://mashable.com/2010/07/21facebook-500-million-2.

Mangold G. and Faulds D., (2009). Social media: The new hybrid element of the promotion mix, Business Horizons, 52, 357-365.

Schlosser A., (2005). Posting versus Lurking: Communicating in a Multiple Audience Context, Journal of Consumer Research, 32(2), 260–5.). Palmer (1996 Palmer A.,(1996). Integrating Brand Development and Relationship Marketing, Journal of Retailing and Consumer Services, 3, 251–257.

Kozinets, R.V., Valck K., Wojnicki A.C., & Wilner S. J.S., (2010). Networked Narratives: Understanding Word-of-Mouth Marketing in Online Communities, Journal of Marketing, 74(2), 71–89.).

Pookulangaran S. and Koesler K., (2011), Cultural influence on consumers' usage of social networks and its' impact on online purchase intentions, Journal of Retailing and Consumer Services, 18, 348–354)

Srinivasa, D. (2008) “Advertisements Do They Match Consumer Preferences?”Marketing Mastermind, pp.59-62.)

Ayanwale, A. B., Alimi, T., & Ayanbimipe, M. A. (2005). The Influence of Advertising on Consumer Brand Preference. Journal of Social Science, 10(1), 9-16.

Logan, K., Bright, L. F., & Gangadharbatla, H. (2012). Facebook versus television: Advertising value perceptions among females. Journal of Research in Interactive Marketing, 6(3), 164–179.).

Dholakia, Utpal M., and Itamar Simonson (2005), ‘‘The Effect of Explicit Reference Points on Consumer Choice and Online Bidding Behavior,'' Marketing Science, 24 (2), 206-217. Richard Bagozzi, and Lisa Klein Pearo (2004), ‘‘A Social Influence Model of Consumer Participation in Network- and Small-Group-based Virtual Communities,'' International Journal of Research in Marketing, 21 (3), 241-263.

Kozinets, R. V., (1999). E-tribalized Marketing? The Strategic Implications of Virtual Communities of Consumption, European Management Journal, 17(3), 252–64.)

Brown, R. (2009). Public Relations and the Social Web: How to Use Social Media and Web 2.0 in Communications. New Jersey: Kogan Page Publishers.

Kahraman, M. (2010). Sosyal Medya 101, İstanbul: Mediacat 1.Baskı.

Milad Dehghani and Mustafa Tumer Computers in Human Behavior 49 (2015) 597–600.

Weber, M. (2009). Marketing To The Social Web: How Digital Customer Communities Build Your Business. (Second Edition). New Jersey: John Willey & Sons Inc

Sandberg, S. (2010). The Role of Advertising on Facebook. Retrieved March 25, 2014, from https://www.Facebook.com/notes/Facebook/the-role-of-advertising-on- Facebook /403570307130

Smock, A. D., Ellison, N. B., Lampe, C., & Wohn, D. Y. (2011). Facebook as a toolkit: A uses and gratification approach to unbundling feature use. Computers in Human Behavior, 27(6), 2322–2329.).

Crano, W., & Prislin, R. (2008). Attitudes and attitude change, Psychology Press

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179-211.

Kaplan, A. M. & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of Social Media. Business Horizons, 53(1): 59-68. doi: 10.1016/j.bushor.2009.09.003

Kietzmann, J. H. Hermkens, K. McCarthy, I. P. & Silvestre, B. S. (2011). Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons, 54(3): 241-251. doi: 10.1016/j.bushor.2011.01.005

Kietzmann, J. H.,Silvestre, B. S. McCarthy, I. P. & Pitt, L. F. (2012). Unpacking the social media phenomenon: towards a research agenda. Journal of Public Affairs, 12(2): 109-119. doi: 10.1002/pa.1412

Armitage, C. J. & Conner, M. (2001). Efficacy of the theory of planned behavior: A meta-analytic review. British Journal of Social Psychology, 40(4): 471-499. doi: 10.1348/014466601164939

Conner, M. & Armitage, C. J. (1998). Extending the theory of planned behavior: A review and avenues for further research. Journal of Applied Social Psychology, 28(15): 1429-1464. doi: 10.1111/j.1559-1816.1998.tb01685.x

Cho, V. & Hung, H. (2011). The effectiveness of short message service for communication with concerns of privacy protection and conflict avoidance. Journal of Computer Mediated Communication, 16(2): 250-270. doi:10.1111/j.1083-6101.2011.01538.x

Rise, J. Sheeran, P. & Hukkelberg, S. (2010). The Role of Self-identity in the Theory of Planned Behavior: A Meta-Analysis. Journal of Applied Social Psychology, 40(5): 1085-1105. doi: 10.1111/j.1559-1816.2010.00611.x

Pelling, E. L. & White, K. M. (2009). The theory of planned behavior applied to young people's use of social networkingweb sites. Cyber Psychology & Behavior, 12(6): 755-759. doi: 10.1089/cpb.2009.0109

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http://www.ijmess.com

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Nurul H., Nova R. Yosi M. Purnama P. (2012) The Analysis of Attitudes, Subjective Norms, and Behavioral Control on Muzakki's Intention to Pay Zakah International Journal of Business and Social Science Vol. 3 No. 22 [Special Issue – November 2012]

Shook, C., & Bratianu, C. (2010). Entrepreneurial intent in a transitional economy: an application of the theory of planned behavior to Romanian students. International Entrepreneurship and Management Journal, 6, 231- 247.

Ham M., Jeger M. & Ivković A.F (2015) The role of subjective norms in forming the intention to purchase green food. Economic Research-Ekonomska Istraživanja, 2015 Vol. 28, No. 1, 738–748, http://dx.doi.org/10.1080/1331677X.2015.1083875

Appendixes

Table 1

1. How many hours are you connected in internet?

Frequency Percent Valid Percent Cumulative Percent

Valid 0 1 ,3 ,3 ,3

0 hours 4 1,2 1,2 1,5

1-2 hours 57 17,2 17,2 18,7

2-4 hours 59 17,8 17,8 36,6

4-6 hours 71 21,5 21,5 58,0

>6 hours 139 42,0 42,0 100,0

Total 331 100,0 100,0

Table 2

2. Do you use social media?

Frequency Percent Valid Percent Cumulative Percent

Valid Yes 324 97,9 97,9 97,9

No 7 2,1 2,1 100,0

Total 331 100,0 100,0

Table 3

3.Do you create an account in social media?

Frequency Percent Valid Percent Cumulative Percent

Valid Yes 327 98,8 98,8 98,8

No 4 1,2 1,2 100,0

Total 331 100,0 100,0

Table 4

4. To what extent do you use the following social media? [Facebook]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 14 4,1 4,1 4,1

2 28 8,2 8,2 12,2

3 74 22,4 22,4 34,7

4 47 14,3 14,3 49,0

5 168 51,0 51,0 100,0

Total 331 100,0 100,0

Table 5

5.  To what extent do you use the following social media? [Twitter]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 222 67,3 73,3 73,3

2 61 18,4 20,0 93,3

3 20 6,1 6,7 100,0

Total 303 91,8 100,0

Missing System 4 8,2

Total 307 100,0

Table 6

6. To what extent do you use the following social media? [You tube]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 27 8,2 8,2 8,2

2 47 14,3 14,3 22,4

3 88 26,5 26,5 49,0

4 88 26,5 26,5 75,5

5 81 24,5 24,5 100,0

Total 331 100,0 100,0

Table 7

7. Why do you use social media? [In order to communicate with other people.]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 7 2,1 2,2 2,2

2 27 8,2 8,7 10,9

3 54 16,3 17,4 28,3

4 88 26,5 28,3 56,5

5 135 40,8 43,5 100,0

Total 328 93,9 100,0

Missing System 3 6,1

Total 331 100,0

Table 8

8.Why do you use social media?  [In order to learn more about social news.]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 21 6,1 6,3 6,3

2 21 6,1 6,3 12,5

3 101 30,6 31,3 43,8

4 122 36,7 37,5 81,3

5 65 18,4 18,8 100,0

Total 330 98,0 100,0

Missing System 1 2,0

Total 331 100,0

Table 9

9. Why do you use social media?  [In order to find a job.]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 74 22,4 23,4 23,4

2 68 20,4 21,3 44,7

3 81 24,5 25,5 70,2

4 61 18,4 19,1 89,4

5 34 10,2 10,6 100,0

Total 318 95,9 100,0

Missing System 2 4,1

Total 320 100,0

Table 10

10.Why do you use social media?  [for advertising purposes.]

Frequency Percent Valid Percent Cumulative Percent

Valid 1 216 65,3 68,1 68,1

2 61 18,4 19,1 87,2

3 20 6,1 6,4 93,6

4 7 2,0 2,1 95,7

5 14 4,0 4,3 100,0

Total 318 95,9 100,0

Missing System 2 4,1

Total 320 100,0

Table 11

11. To what extent do you believe that very important people (like family or friends) are encouraging you, to use social media?

Frequency Percent Valid Percent Cumulative Percent

Valid 1 41 12,2 12,2 12,2

2 81 24,5 24,5 36,7

3 135 40,8 40,8 77,6

4 67 20,4 20,4 98,0

5 7 2,0 2,0 100,0

Total 331 100,0 100,0

Table 12

12. To what extent do you feel able to use social media and do very easily whatever you need?

Frequency Percent Valid Percent Cumulative Percent

Valid 2 14 4,1 4,1 4,1

3 34 10,2 10,2 14,3

4 149 44,9 44,9 59,2

5 134 40,8 40,8 100,0

Total 331 100,0 100,0

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