Online social networks, smartphones and tablet computers are part of our daily activities and changed people's lives and behavior (Wei, Lee, Lu, Tzou & Weng, 2015). A mobile application is defined as “application software that allows the user to perform a specific task that can be installed and run on portable devices such as smartphones and tablets” (Liu, Au, Choi, 2014: 327). A mobile application differs from general software, as it is optimized for smartphones, it is designed mostly for personal use, it is offered free of charge or for sale, and it is made available for download directly through an online marketplace (Liu, et al., 2014). The introduction of the smartphone into the mobile market has enabled application developers to increase customer engagement by developing downloadable mobile applications (Chiem et al., 2010). This increased customer engagement comes from the fact that a mobile phone is rarely used by any other person than its owner and this allows for highly personalized marketing and targeting (Pousttchi, 2009). According to Ghose and Han (2014), the global mobile app market is expected to grow to US$150 billion over the course of the next two years. Mobile marketing is growing fast, as for 2017 the number of mobile phone users is forecast to reach 4.77 billion (Statista, 2016). Global importance of mobile phones and associated possibilities is thus continuously increasing over the years as the market growth keeps increasing. This enables for continuous opportunities for mobile application developers. However, according to Gartner, an information technology research and advisory company, in 2018, only 1% of mobile applications will generate a profit. A possible major contributor is the fact that people rely almost exclusively on the recommendations from peers and social networks (Gartner, 2014). It is therefore of major importance for application developers, to acquire knowledge about this influence and find out to what degree this influences the purchase intention of their consumers. Despite the fact that knowing what influences your consumers purchase intentions seems important to understand, not a lot of literature covers this topic. Most research focusses on the model of technology acceptance (TAM). This model consists of a number of constructs in relationship with behavioral intentions of consumers. Examples of such papers are those of Wang, Lin, Luarn (2006); Chong (2012); Wu, Wang (2005). What these papers have in common, is that they find different factors that influence purchase behavior, however they fail to include social influence in their research. While, as mentioned before, social influence is a possible major driver of consumer purchase intention. This paper will therefore cover the topic of social influence in relation to the purchase intention of consumers and will enhance our understanding of what drives consumer purchase intentions. Kang (2015), tries to cover the intention to purchase an application to some degree. His research however, does not make a distinction between in-app and application purchases. This paper will differ from that of Kang, as it will also cover the intention to make in-application (in-app) purchases. The choice for covering both the intention to purchase an application as well as the intention to make in-app purchases, lies in the fact that 98% of the revenues generated by the top 200 mobile applications in the Google Play store was created by in-app sales (Schoger, 2013) and most companies realize their revenues by selling in-app purchase items (Cho, 2015). Thus merely looking at application sales only, does not cover the entire sales aspect of the mobile application market, as in-app sales are of major importance. Lastly, this paper will also look if there are differences among educational levels, in the relationship between social influence and the purchase intention of consumers. As according to Ahkter (2003), the divide that separates people based on how they use the internet, has received inadequate attention. This divide has far reaching consequences as it could aid in answering, why some people are more likely to use the Internet for making a purchase than others (Akhter, 2003). To try and fill up the gaps that exists in the literature, this paper will attempt to find out what the impact of social influence is on the purchase intention of consumers and will look for possible differences among educational levels. Thus, the following research question has been formulated:
What is the effect of social influence on the intention to purchase mobile apps, on the intention to make in-app purchases and what is the moderating effect of educational level on this relationship?
Academic relevance of this paper, lies in the fact that it will attempt to fill in the gap that surrounds a major driver of consumer purchase intention. It serves as a basis for covering the sales aspect of mobile applications, by including both application sales and in-app sales. It helps researchers better understand what drives consumers to purchase, with possible implications for differentiation among educational levels. Managerial relevance of this paper, emerges from the fact that it might contribute, to a better understanding of consumers, and might aid application developers in the process of segmenting and targeting their consumers more effectively.
In the following chapter the factors will be defined, the literature surrounding these factors will be covered and reviewed, hypothesis will be proposed based on literary findings, and a conceptual model will be made. In chapter 3, the methodology will be explained, in chapter 4 the results will be shown, and finally in chapter 5, results will be discussed.
...(download the rest of the essay above)