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Social Networking Sites' Influence on Purchase Intentions

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Social Networking Sites' Influence on Purchase Intentions Social Networking Sites’ influence on purchase intentions Qualitative study on their holistic influence on the users Moritz Lang Department of Business Administration Master's Program in Marketing Master's Thesis in Business Administration III, 30 Credits, Spring 2018 Supervisor: Peter Hulten This page is left blank intentionally 2 Acknowledgements First and foremost, I would like to express my sincere appreciation and gratitude for my supervisor Peter, who supported and encouraged me during the whole process and inspired me with excellent feedback and advice to advance my work. His contribution was exceptional and helped me immensely. Secondly, I would like to thank all participating interviewees for their time and contribution. I enjoyed every interview and it was very interesting and insightful to discuss your individual experience of Social Networking Sites. Your support was essential for my study which would not have been possible without you. Furthermore, I am thankful for Umeå University for providing all necessary resources and opportunities to educate myself during the Master program. Lastly, I want to express my thankfulness towards my friends and family who supported and encouraged me during the whole time of my thesis work. Especially my girlfriend Giulia was never tired of motivating me to push through the exhausting and challenging time and probably was the one who had to dispense with my busyness the most. Umeå, 14th of May 2018 Moritz Lang 3 Abstract This thesis treats the topic of how Social Networking Sites (SNS) influence the users’ purchase intentions. The topic is highly relevant as SNS receive more and more attention from brands which try to take advantage of the recent growth of the platforms and their ever-increasing popularity among people all around the world. More than 2,4 billion people worldwide were using SNS in 2017 (Statista, 2017a). The greatest share has Facebook with around 2,2 billion registered users and more than 1,6 billion daily users (Facebook, 2018) but other networks are catching up. This thesis focuses on Facebook and Instagram as the most popular and relevant SNS. Similarly to SNS popularity, company spending on SNS are on a constant rise, too. Expenses in 2017 increased by 60% compared to the previous year (4C Insights cited by Morrison, 2017). Previous research has shown that SNS are powerful in influencing users behavior and increasing their purchase intentions (Jackson, 2011). Therefore, much attention has been directed towards investigating how advertisements, electronic word-of- mouth or brand posted content influence the user and how it can be optimized. What is missing in previous research is a consideration of the bigger picture, meaning the influence of SNS in their entirety on the user. So far only individual elements have been investigated but the users have a universal experience of SNS as a whole and not only single elements. This gap will be filled by this thesis by following an explorative design as it is the first study to investigate in this direction. Ten semi-structured in-depth interviews with a diverse sample of SNS users aged under 30 have been conducted. The results have been analyzed in the light of previous knowledge. Advancing the research in this regard contributes in multiple ways theoretically and practically. The findings indicate that brands need to consider their activity on SNS as a whole and must find out how their target audience behaves on and experiences SNS as this affects which angle brands should take to exert influence. Well-known brands should focus more on providing value through their brand content and support the emergence of eWOM, while unknown brands profit the most from advertisements towards interested users. Brand content is seen as minimum requirement and brands are expected to have a presence on SNS. Additionally, ethical considerations and the future of SNS are discussed due to relevant findings from the interviews. Keywords: Social Networking Sites, SNS, Marketing, consumer behavior, purchase intentions, eWOM, advertisements, brand content, brand, Facebook, Instagram 4 Table of contents 1. Introduction ..................................................................................................................... 9 1.1 The rise of a new marketing tool ........................................................................ 9 1.2 Focal area .......................................................................................................... 10 1.3 Social Networking Sites ..................................................................................... 11 1.4 Examples of earlier studies in this field............................................................ 12 1.4.1 Social Media marketing .......................................................................... 12 1.4.2 Social Networking Sites Marketing ........................................................ 12 1.4.3 Personality characteristics ..................................................................... 12 1.4.4 Purchase intentions ................................................................................ 13 1.4.5 Theory gap .............................................................................................. 14 1.5 Research purpose ............................................................................................. 14 1.6 Research question ............................................................................................ 15 1.7 Delimitations ...................................................................................................... 16 1.8 Explanation of terms ......................................................................................... 17 2. Literature review ........................................................................................................... 19 2.1 Personality and SNS usage behavior ............................................................. 20 2.1.1 Identity development ............................................................................. 20 2.1.2 Conscientiousness ................................................................................. 21 2.1.3 Extraversion ............................................................................................ 21 2.1.4 Neuroticism ............................................................................................. 22 2.1.5 Self-esteem ............................................................................................. 22 2.1.6 Fear of missing out (FoMO) ................................................................... 23 2.1.7 well-being ................................................................................................ 23 2.2 Brand generated content .................................................................................. 24 2.3 Advertisement .................................................................................................... 26 2.4 eWOM ................................................................................................................ 27 2.4.1 eWOM on Social Networking Sites ....................................................... 28 2.4.2 Issuing eWOM messages ...................................................................... 28 2.4.3 Valence of eWOM .................................................................................. 29 2.4.4 Trust or source credibility ....................................................................... 29 2.4.5 The influence of eWOM .........................................................................30 2.5 Purchase intentions ........................................................................................... 31 2.5.1 Intention-behaviour gap ......................................................................... 32 2.5.2 Purchase intention models ..................................................................... 32 2.5.2.1 Theory of reasoned action (TRA) ..................................................... 32 2.5.2.2 Technology acceptance model (TAM) ............................................. 33 5 2.5.2.3 Information adoption model (IAM) .................................................... 34 2.5.2.4 Information acceptance model (IACM) ............................................ 34 2.6 Theory gap ......................................................................................................... 35 3. Methodology ................................................................................................................. 37 3.1 Scientific approach ............................................................................................ 37 3.2 Exploratory research ......................................................................................... 37 3.3 Methods used in this thesis .............................................................................. 38 3.4 Disadvantages of interviews as research method ......................................... 40 3.5 Alternative methods and earlier studies ......................................................... 40 3.6 The used interview guide .................................................................................. 41 3.7 Data collection and sample .............................................................................. 42 3.7.1 Sampling approach ................................................................................. 42 3.7.2 Chosen sample ......................................................................................
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