The Impact of Social Media Influencers on Customer Purchase Intention

2756 words (11 pages) Business Assignment

26th Feb 2020 Business Assignment Reference this

Tags: Business AssignmentsLiterature ReviewSocial MediaTwitter

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Introduction

Social media has been known as an effective marketing strategy in today’s converged communication landscape. Especially influencer marketing, social media influencers are the entities independent third-party endorser in the social network who influence consumers attitudes through blogs, Twitter, YouTube, Facebook and others social platform (Freberg et al., 2011). Company will target the influencers who specialize in their community to finding potential consumers indirectly to help them make a buying decision by influencing their opinion (More & Lingam, 2017; Chandawarkar et al., 2018). An influencer is a person who has a potential to influence consumers by posts a review or blog about new merchandise, their goal is to circulate the information to potential consumers (More & Lingam, 2017). Neilsen (2013) and Soat (2014) compared the advertisements from television, newspapers and magazines that 68 proportion of consumers will consider the recommendation from social media influencers when they purchase products. Moreover, the reputation of influencers is a vital factor when swaying customers’ decision, the source which is high-credibility will have more influential on consumers’ purchasing intentions. (Hsu et al., 2013; Jain & Posavac, 2001). Thereby, the major issue of the study is to explore the relationship between customers' trusting belief in influencers and perceived usefulness on consumers' attitude in influencer's endorsement. The rest of this dissertation will include a literature review covering the correlations between social media influencers with consumer behaviour and some theoretical background. We will then present the research questions and discuss the theoretical framework with reference to the literature.

Literature Review

Social Media Influencers

The fields of social media influencers have been a popular research subject in recent years (Nur et al., 2018). Hsu et al (2013) reported that companies perceived the usefulness of social media influencers’ recommendations and influential effect on consumers’ intention after they cooperated with influencers to promote their services and products. A study by ACNielson (2007) indicate that most of the consumers perceived the recommendations from influencers have the same credibility as brand's website, they make purchasing decisions by interacting with influencers then complying with their opinions (Hsu et al., 2013). More company should try to engage with social media influencers rather than only implement the traditional marketing and advertising strategies. These shows that Influencers has a great impact on customers decision process and could be a successful marketing strategy (Cheung et al., 2008; Hsu et al., 2013). A marketing firm WhoSay (2018) recently done a survey about 2018 industry trends, revealing that 70 percent of marketers planning to increase influencer marketing budgets in 2018. Approximately 90 percent of respondents believe they will get positive impact on how people feel about their brand in this form. The survey carried out by Twitter and Annalect (2016) finds that roughly 50 percent of Twitter users relied on the recommendations from influencers as guidance to made purchasing. In Addition, the study discovered that when Tweets exposed both brand and influencer had a 5.6x lift in purchase intent. While the lift in purchase intent merely 2.7x when Tweets only exposed brand. This highlights that how significance social media influencers in marketing strategy (Chandawarkar et al., 2018).

Factors influencing Consumer Behavior

Most of the company spend a plethora of effort on the research about consumer behaviour, in order to realize what they need since some of products are suitable for the different segment of customers. There are four factors affect consumers purchases: cultural, social, personal and psychological. Cultural factors: People grow up in a different environment have varied preference and behavior, it is determined by their culture, sub culture and social class. Social factors: This factor may be influenced by reference groups, family and role and status. Personal factors: Everybody has different perception and attitude to certain products and services. Age, occupation, economic situation and lifestyle are the factors affect buying behaviour. Psychological factors: This factor is talking about people trying to satisfy their psychology through motivation, perception, learning and attitudes and beliefs when purchasing. (Simbolon, 2015; Stet and Rosu, 2012) The factors above are influencing an action, consumer behavior, when people buying products and services involving the purchasing process. If they satisfy with the product, they may repurchase and recommend to their family or friends, this way is regarded as word-of-mouth (WOM) (Simbolon, 2015).

Electronic word-of-mouth (e-WOM)

According to the marketing perspective, engage with brand and social media influencer represents a new type of electronic word-of-mouth (e-WOM) (Hsu et al., 2013). The definition of e-WOM can be “any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet” (Hennig-Thurau et al., 2004). Traditional WOM provides the evaluation of services and goods to people then influence their choice (Cheung et al., 2008; Chong Lim and M.Y. Chung, 2014). The past research showed that WOM was more effective than traditional marketing way (Cheung et al., 2008), consumers seek additional information from other buyers to make the decision. There are several notable differences between e-WOM and traditional WOM. First of all, people’s receptively to e-WOM are higher since they find the information spontaneously and the dialogues are keyboard-to-keyboard contact in public network. However, the communication of WOM usually face-to-face in private and perishable. Secondly, consumers can evaluate the credibility of digital sources in computer-mediated communication owing to the source from e-WOM can be anonymity which lack of face-to-face interaction (Kulmala et al., 2013; Andreassen and Streukens, 2009). Few literatures indicate the motives for WOM. There is four main motivation, the first one is product-involvement that people have a great desire for a product then recommend to others to reduce the pressure from expenditure experience. Second, self-involvement, the merchandise present as a way that can satisfy consumers emotional needs. Third, other-involvement, provide the need to give something to other people. Fourth, message-involvement, the discussion is stimulated by marketing messages (Dichter, 1966; Hennig-Thurau et al., 2004). Some of the theories indicate that customers' intention is influenced by other people's attitude, such as the theory of reasoned action (TRA), theory of planned behaviour (TPB) and technology acceptance model (TAM) (Hsu et al., 2013; Vijayasarathy, 2004).

Theory of reasoned action (TRA)

TRA assumes that consumers are under volitional control influenced by information from a group or peers’ attitude, behaviour and action (Simbolon, 2015). The individual's attitude in TRA has to be specific which under volitional control since this can make sure the prediction in the behavioral result. According to the TRA, subjective norm is a type of social pressure to perceive or comply with other people’s expectation (Yousafzai et al., 2010; Cleverism, 2017).

Theory of planned behaviour (TPB)

TPB is an improvement to TRA, which extend the limitation of TRA. TPB predict the attitude to engage in behaviour in people's life. The theory was intended to focus on all behaviours around people, such as their social network, then perceived self-control. The main component of this theory is behaviour intention, it is related with person’s expectation and evaluation of the outcome, also an effort to deal with it or not (Jain et al., 2017; Ghifarini et al., 2018). The main reason why TPB more receptive than TRA is because of TPB more cognizant of people's intention and can predict the conclusion may differ from the plan or out of control (Cleverism, 2018). TPB add the degree of perceived behavioral control (PBC) to solve the limitations in TRA (Ajzen, 2002; Gopi and Ramayah, 2007; Jain et al., 2017).

Technology acceptance model (TAM)

TAM is derived from TRA, the model perceived usefulness and the ease of use in the technology system (Vijayasarathy, 2004). This theory is very little about technology, is about what user believe and perceive the technology to be. The definition of perceived usefulness is the people’s subjective probability to using a system will enhance their job performance in the context. The other belief is perceived ease of use, can be defined as the level of user’s expectation to the specific technology to be free of endeavor (Davis et al., 1989). Perceived usefulness is influenced by perceived ease of use (Yousafzai et al., 2010). According to Vijayasarathy (2004), apply TAM to data collected data from consumers can understand their shopping intention, and also contribute to the cumulative knowledge about IT adoption.

Research Questions:

Question 1) Does social media influencer’s recommendation will positively shape buyers’ attitude? Question 2) Does social media influencer’s reputation and credibility influence consumers’ purchase intention? Question 3) Does social media influencer affect consumer purchase behavior?

Theory

This dissertation theme is based around three theories within the academic literature: 1) ‘Social media influencer has a great impact toward consumers’ attitude’ (Cheung et al., 2008; Hsu et al., 2013). Prior research indicates that after companies cooperate with influencers, they observed the usefulness of their recommendations. 2) ‘Reputation play an important role when swaying customers’ decision’ (Jain & Posavac, 2001). Research shows that high-credibility endorsement will have more influential on consumers’ purchase intention. 3) ‘Customers will interact with influencers then comply with their opinions when making purchasing’ (Hsu et al., 2013). Twitter and Annalect (2016) find that 50 percent of Twitter users take influencers’ opinions as guidance when purchase order.

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