A research on Theoretical model for

Impact of Social Media on Online Consumer Behaviour

By
Sijan Pokharel
Submitted as per the requirements
For the Degree of
B.A. Honors
In the subject of
Thematic Independent Study
At the
University of Greenwich
Supervisor: Sandy Wilkinson
July 2014











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Student Number:
Blake Hall College: 12080074
University of Greenwich: 000846623

I declare that the Theoretical Model for Impact of Social Media on Consumer Behaviour is written only
and only by Sijan Pokharel and all the sources used in this research have been properly quoted with using
Harvard referencing system.
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Acknowledgement:
I humbly acknowledge my mentor Sandy Wilkinson and feel grateful with her academic assistance and
knowledge. It would have been nearly impossible to complete this research without her. Her help and
guidance in every step of this research has made it possible. I deeply feel proud to have the lecturer like you
who have made me realise my strength in writing and developing my academic writing as well.
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Abstract:
The author research aims to focus on the impact of social media on the online consumer behaviour. The
author mainly uses the theory of Kotlers Black Box and uses and gratification theory. The author believes
that these theories are still relevant. The author mainly focuses in the decision making process of the
consumer and the factors that influence the consumer while making decisions. He also explains the power of
audience and the reason why and how they use the media at present time. He believes that this research will
help the reader gain some understanding about the behaviour of the consumer and the relationship between
the media and the consumer or audience.





















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Table of Contents
1. Introduction: ............................................................................................................................................................................................. 6
2. Consumer: .................................................................................................................................................................................................. 6
3. Social media ............................................................................................................................................................................................... 7
4. Social Media and Consumer Behaviour: ........................................................................................................................................ 7
5. Decision making process of consumers: ........................................................................................................................................ 8
6. Black box model ....................................................................................................................................................................................... 8
6.1. Need recognition: .................................................................................................................................... 10
6.2. Information search: .......................................................................................................................................................... 10
6.3. Evaluation of alternatives: ........................................................................................................................................... 10
6.4. Purchase Decision: .............................................................................................................................. 10
6.5. Post purchase behaviour: ......................................................................................................................................... 10
7. Uses and gratification theory: ................................................................................................................................... 11
Cognitive needs ............................................................................................................................................................................. 12
Affective needs: ............................................................................................................................................................................. 12
Personal Integrative needs: ........................................................................................................................... 12
Social integrative needs: ........................................................................................................................................................... 12
Tension free needs:...................................................................................................................................................................... 13
8. Conclusion: ................................................................................................................................................................. 13
9. Reference: .................................................................................................................................................................................................... 14


Table of Figures
Figure 1: Kotler's Black Box Model .................................................................................................................................. 9
Figure 2: Buyer Behaviour .............................................................................................................................................. 10
Figure 3: Traditional Decision Making Process ............................................................................................................. 10






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1. Introduction:
There are 2 billion YouTube videos, 500 million Facebook users, 70 million LinkedIn users (Rutledge,
2010)
Consumers are very important to every business regardless of which industry it belongs to. They are the part
of every business and are the main element which determines the success of the business. The behaviour of
consumer plays an important role and business related industry has been trying to understand the behaviour
of the consumer. It is obvious for everyone that in the course of time the way. Traditionally, consumers go to
the store and see the product but now they can view the product, see the review related to the product and
make their decision based on social media sites such as Facebook, Instagram, twitter, Google, Pinterest,
LinkedIn, eBay, and Amazon. The social media has changed the buying behaviour of the consumer and has
also contributed to a change in the way of doing business.
Social media are a part of the society today. They have been able to leave a mark on the daily life of people.
Media such as Facebook, Twitter, and Instagram are the popular among the people. Knowing that there are
large numbers of consumers using the social media, companies have changed the way they used to do
business and started using these social media as a part of their marketing strategy and the result is that these
social media have shape the consumers buying behaviour (). In essence, it has been vital for both consumer
and business to get information related to each other.
According to the research done by Pew Research Center from 2005 to 2013 (Pew Research Center, n.d.),
90% users of the social media were of the age group of 18 to 29 and 78% were the age group from 30 to 49.
Generally these are the potential customers for any business and try to make product bearing in mind of this
age group.
Likewise, Lauren (Dugan, 2012) states that social media helps the business to increase sales, understanding
the consumers need and providing the customer assistance. Similarly, Steve Rappaport (Rappaport, 2011)
believes that social media is the perfect platform to develop marketing and advertising strategy to target
consumers. Businesses can use for this information to their own advantage.
Similarly, James Wright (wright, 2013) is of the opinion that social media is the best platform of not only
getting close to the consumers but it is also a very useful in collecting data. He believes that social media
provides the information such as age, gender, social status, life style which business can focus on and target
the audience which they are likely to attract.
2. Consumer:
Consumer is the actors who play an active role in the market. (lee, 2013)
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Consumers are the actor which may be of any type regardless of which gender, age, sex they belong to.
Their decision or views regarding the products affects the business for every business consumers are most
important and eventually they have to change their strategy of marketing the product. An example of this can
be the Vanilla coke where the distribution of the vanilla coke was stopped and finally they came back after
10 years with the new design and started distributing again in 2013. So, consumer plays a very important
role in making the growth of sales of any product and vice versa. (Coca-cola, 2013).
3. Social media
Social media is the platform or the road map which will determine the communication pattern in the future.
It is best known for word of mouth marketing because nowadays, even minor information gets circulated
very quickly. It is useful not only to the internet users but it has been beneficial to the business as well.
Social Media like Facebook, Twitter, LinkedIn and other online media give access to the people where they
can share their personal information and the activities they are involved in these platforms. The business can
use the large source of information available through these social media.
4. Social Media and Consumer Behaviour:
The author of this research believes that whether it is business or the consumer, social media has a
significance impact. The reason behind this is social media sites greater information and also guarantees that
the message of the business is reached to the target group. Similarly, it is not only business who gets
benefited but from consumer side, they can see the review related to the products, see the video review and
other buyers response who had bought that product. So, social media is the perfect platform for getting
communication both ways and hence creating a positive interaction between the consumer and the
businesses which has the direct effect on the behaviour of the consumer. These were the benefits of social
media however; the author believes that negative responses or opinion on social media can also affect
business while from the consumer end this might be beneficial.
The benefits of Social media can be as follows:
It enhances customers Loyalty as consumer may feel happy or excited to say their positive or negative
opinion directly to the representative of the company. This has also led to narrow the gap between the
consumer and the owners.
Word of mouth marketing increases the sales of the company if the positive responses are left in the social
media for a single message sent form one consumer can circulate instantly and it can reach to the consumer
in every corner of the world with one click.
It helps in developing business as the data or information available on social media can be used to analyse
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How many are using which product?
Why they are using?
Why are they switching from one product to another?
The reason behind such growing power of consumer, businesses and social media is the result of increasing
trend of online shopping and Mobile devices which has also created the link between these three and is
believed to be very effective at present time. The million views WWDC video of Apple Inc. on YouTube,
million likes of Apple in Facebook and Apple trending number one in twitter can be regarded as the impact
of social media in our present time as well as in consumer behaviour.
5. Decision making process of consumers:
The author, Sijan Pokharel, believes that every business should be aware of how the consumer makes their
decisions and what strategies have to be implemented. Many models have been designed related with the
buying behaviour of the consumer. Some of the models that are designed for the ease of the business are
listed below:
Philip Kotler - Black box model
Elihu Katz, Jay Blumler and Michael Gurevitch- Uses and Gratification Theory
John Howard and Jagdish Sheth - The Howard-Sheth Model
Harvard Business School - Harvard Perceived Risk Model
Laurent & Kapferer- FTPEPS (Finance, Time, Performance, Ego, Physical and Social)
Vernon - Perceptual Set
Solomon M et al Gestalt Psychology
Among all the models mentioned above, the author tries to use Kotlers Black Box model which he believes
is still relevant and will help to clarify the issues regarding the consumer behaviour.
6. Black box model
According to the Philip Kotler (Kotler & Armstrong, 2012), consumer behaviour goes through different
stages in relation to the perception. The model that explained the buyer behaviour was named as Black Box
model and was designed in the following way:


Figure 1: Kotler's Black Box Model
The above model explains how the buyer is first influenced by Marketing stimuli which is the elements
of marketing mix; Product, Price, Place and Promotion. Kotler also believes that these marketing
stimuli are attached with the other stimulus factors known as PEST (political, legal, social and
technological). Buyer then takes these factors into consideration and keeps them in the black box.
Black Box is the brain of the consumer where many things occur and yet very little is known and is
assumed to be black. (Eddy, 2010). Black box, here is the characteristic of the buyer which is
influenced by:
Social factors such as family, references, role and status in the society
Cultural factor such as social status
Personal characteristics such as age, life, gender, personality, jobs
Psychology factors such as beliefs, attitudes, perception and motivation
These buyer characters are shown below in the form of pyramid:
Product
Price
Promotion
Place
Market
Stimuli
Buyer
Characteristics
Buyer Decision
Making
Process
Black Box
Product
choice
Brand
choice
Retail
choice
Dealer
choice
Purchase timing
Purchase amount
Purchase
frequency
Buyer
Responses

Psychological
Personal
Social
Cultural
Figure 2: Buyer Behaviour
Kotler further states that the model of buyer behaviour is also linked the decision making of the buyer. The
decision making involves the five different stages they go through before buying the product. The five stages
are also shown below:

Figure 3: Traditional Decision Making Process
The decision making process is explained below in detail:
6.1 Need recognition:
The decision making process starts with the need recognition meaning that there is a need of fulfilment. It
could be a problem which need to be sorted out or the need for replacement with the better ones
6.2 Information search:
Once the consumer recognises their need; either the replacement or sorting out the problems, they tend to
look for the information, search for it so that they can make the right decision. The search for the
information will be related with alternative product, product category, and brands. They start looking for the
information for the product wherever is possible either it could be gathering the information from friends or
relatives.
6.3 Evaluation of alternatives:
Once the consumer has find out the information, identified the alternatives of the product, they start
comparing the alternatives in terms of value, brand, quality, and price.
6.4 Purchase Decision:
After evaluating the different alternatives and then selecting a particular brand. However, the selection of a
particular one could be the first time or repeating purchases. Even then they will still have to make a
decisions on the matter like from where to buy, what quality to buy, how much to buy, until what range to
buy and how to make the payment.
Those consumers who are likely to buy for the first time are supposed to buy the familiar ones rather than
getting confused with the unknown ones/brand.
6.5 Post purchase behaviour:
Once the product has been purchased, the consumer forms their opinion regarding the product after its use.
Their opinion is generally formed on the basis of the performance of the product and their expectations
related with the product before the purchase. Generally, the positive feelings gives them motivation in

Need
Recognition

Information
search
Evaluation
of
Alternatives
Purchase
Decision
Post
purchase
behaviour
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buying product in the future while the negative ones affects the future buying behaviour and decisions
regarding the product. The negative ones are stored as an experience and a feedback.
Kotler explains that once the consumer are out of the Black Box, they make the decision based on product,
brands, their finances, the frequency of purchasing the product and the timing factor.
7. Uses and gratification theory:
Another theory which represents the effect of media from the audience perspective is the Uses and
Gratification theory (Roberto, 2002). This theory was developed by Elihu Katz, Jay Blumler and Michael
Gurevitch.
Roberto states that the model looks into the intention and the motives of people who use the media and asks
the question like why we watch TV show, read newspapers and articles, and why we are so keen in
updating ourselves with these media? He also explains that people have the desire to fulfil or satisfy their
specific need. Rather than questioning on how media uses us (people), this theory raises the question of how
we use the media.
Many theory were developed related with the media and the audience and all those theory were used to
expose the impact of media on audience but this theory is different from the other theories in the sense that it
looks at how we ( audience) uses media to satisfy their needs. The bullet theory states that audience are
passive while this theory explains that audience are active and there are motives behind using these media.
Below are the motives explained by the theory.
Diversion
Personal relationships
Personal identity
Surveillance
According to the Murphy (Murphy, 2012), diversion theory explains that some audience choose media as a
source to escape. Murphy explains that this would give the option to audience to divert their life from daily
routine to something of their choice. However, this may differ according to the audiences age, gender and
lifestyles.
The personal relationships theory states that audience associate themselves to the media to form bond with
other people. Social media such as Facebook, Twitter, and LinkedIn can be an example of this theory. It
further states that such behaviour can be adopted to develop social and interactive skills for some people are
introvert while some other are extrovert. The introvert may choose the media such as Facebook to form a
bond while extrovert may choose the media such as Skype.
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The third theory explains that some audience may choose either reading or watching in order to understand
themselves and reassurance of their role in the society.
Finally the fourth theory states that some may choose the media depending on the source of surveillance and
information given. For instance, people may watch the Cnets tech videos or any technology related articles
or magazines so that they are updated with the latest news regarding the media.
These four theories provide the framework for understanding the relationship between the
buyers/consumer/audience. These theories also divide the needs and gratification of audience into five
different categories.
a) Cognitive needs
b) Affective needs
c) Personal Integrative needs
d) Social integrative needs
e) Tension free needs
Cognitive needs:
People use media for getting knowledge, information and better understanding.
Affective needs:
This includes the emotion, feelings and pleasure and the moods of the people. People use media to relate
themselves so that their emotional needs get satisfied.
For instance, people get upset, sad or even cry when they are watching any kind of emotional show.
Personal Integrative needs:
This is believed to be the self esteem need. It means that people relate their needs to the make sure that they
have the credibility, status and stable condition. Media helps a lot as the advertisement related with the social
status like advertisement of jewellery, or any other valuable items makes them attract and make them feel
that they can have it so the status is maintained and eventually they buy it as well.
Social integrative needs:
These needs are related with getting social with friends, family and other relationships. Traditionally, people
use to get social by meeting or hanging around during the weekend but nowadays the trend has changed and
people get involved in the online environment. The media such as Facebook, twitter, Skype provides them
the opportunity of being social regardless of how busy they are in their life. Updating the status, commenting
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in the Facebook, tweeting in the twitter and getting back tweets and having a video chat or group conference
call in the Skype make them feel being social.
Tension free needs:
People use a lot of media sources to make themselves free from the tension or stress they are having.
The latest example of this can be the football world cup 2014. Everyone is happy cheering for their country
and that moment they feel being out of stress zone.
In short, these media are the source for them to escape and relieve from tension.
8. Conclusion:
The theories mentioned explain about the perception viewpoint. Both Kotlers black box model and Uses
and gratification theory aims at audience and the media and explains the power of one of them in their own
way. The Kotlers model is the traditional model as compared to the uses and gratification theory. Kotlers
models aims at explaining the decision making process the buyer goes through while the Uses and
gratification theory states the power of audience and why and how they use media. However, Uses and
gratification theory is just focused on explaining the power of audience ignoring the power of media. The
media is considered very strong and important in present time which this theory does not highlight. On the
other hand, the model designed by Philip Kotler is still believed to be relevant one. It the same decision
making process they go through no matter which form or industry they use.









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