Consumer Behaviour on Facebook - Essay Example

? “Consumer Behaviour of Facebook” Contents Contents 2 Background: 2 1. Story of Facebook 5 2. Facebook Consumers in UK 6 2 Age Range of Facebook Consumers in UK: 6 1.2.2. Gender Consideration of Facebook Consumers in UK: 8 1.2.3. Relationship Status of Facebook Consumers in UK: 8 2.Overall Analysis of Statistical data: 9 3.Factors Influencing the Consumers Decision Making Process: 11 3.1. Individual Factor: 11 3.2. Psychological Factors: 12 3.3.Sociological Factors: 12 4.Recommendations for the Organizations to utilize the Social Commerce Knowledge: 13 5.Conclusion: 14 Reference List 16 1. Background: The social commerce as discussed in the case study of “Social Commerce-The New Retail Frontier” has shown significant contribution towards the consumer buying behaviour. The case study shows that the consumer buying behaviour has changed dramatically with the inculcation of the social commerce, which is considered as the part of the e-commerce. The case study described clearly demonstrated the way people buy things have undergone major transition. The consumer buying behaviours have changed dramatically with the advent of the Social commerce. The case study also described about the major players, who contributed significantly in the social commerce business. The strategy followed by ‘Groupon’ that offered heavy discount on different products was a success. The inculcation of global e-commerce led to the evolution of new infrastructure in the business world. Merchandising was believed to be the key difference between old e-commerce and the new method of selling with the help of internet (Vasudha, 2013). The Consumer behaviour is believed to be the most important concept of marketing. The organization’s success and failure can be determined with the help of identifying the behaviours and attitude of its consumers towards the company’s product (Loudon & Bitta, 2001). Today E-commerce is considered to be the most important and significant evolution in the business world. The e-commerce is represented in terms of social commerce, which is believed to be the subset of e-commerce (Manzoor, 2010). The main function of social commerce is to facilitate the online business activities without the requirement of any hard shape structure of the business. In the new world of technology and efficiency, social networking is becoming the necessity of life for the internet users. The reason is that the social networking helps the people to interact among one another, anywhere in the world. The concept of social networking was inculcated by yahoo in 2005 (Warner, 2011, p. 439). The major reason for such inculcation was the introduction of the more convenient way of shopping. The concept of social commerce or social networking began with the co-operative movements that led to the creation of “Peoples Supermarket” movement (Clapperton, 2012). The idea behind the encouragement of “Peoples Supermarket” movement was to gather the smart entrepreneurs to make money with small start-up capital. With the passage of time, the concept of social commerce began dominating the traditional suppliers of the products. The conglomerate of large entrepreneurs, who entered in the field of social commerce, followed the strategy of ploughing back the profit into the business to offer the online products at more affordable prices (Marsden, 2012). The buyers or consumers of the products, when found the products more easily accessible and even at more affordable prices, their preferences tilted more towards the online products. The successful capturing of consumer market has now made the companies like Facebook & Google the big business giants across the world, with the net worth in billions of dollars (Dobinick, 2012, p.107). The major change that can be observed with the introduction of the concepts such as social media and social commerce, the customers can find the opportunity to directly communicate with the producers of the products. The increase in interaction between the producer and the end consumer has made this field highly acceptable and preferable. The reason is that the social interaction between the producer the consumer can help benefit both the parties. The producers can understand the weak points in their products and receive the feedbacks more quickly, which can help them to mitigate or reduce the negative point. The producers can easily get to know the customers very quickly and can identify and understand the trends. On the other hand, the customers can get the opportunity to communicate their demands regarding the particular products quickly. Therefore, the social commerce is believed to be the most important factor to create impacts on the consumer behaviours. In addition to this, the social commerce also gave the concept of viral marketing, which is referred to as the word of mouth marketing that may lead to the marketing with the help of personal interaction (Wilde, 2013). 1.1. Story of Facebook Facebook is believed to be the most influenced and the friendliest social networking website. According to Vasudha “Social Commerce-The New Retail Frontier” described the facebook as one of the most significant contributor of social networking and social commerce. According to the case study is the software environment to generate applications. The software environment took advantage of the users, who are in the same network to direct them to marketers of different brands (Vasudha, 2013, p.13). Mark Zuckerberg, in 2004, launched the website with the name of Facebook. Mark is responsible for the company’s overall directions and strategies. Mark was the student of Harvard University, when he launched the concept with the name of Facemash, he and few of his friends hacked student IDs in the university and retrieve their pictures and created Facemash. The concept of Facemash was to encourage the students to vote for the student, who is the best looking within the campus. For this project, Mark was called before the disciplinary committee and was put on probation. The success of Facemash led the Mark to the creation of the world’s renowned social networking website, named as Facebook. The initial capital, which was required to build the current billions of dollars net worth Facebook incorporation, was $35. The idea was that to create a channel for the people, which can help them interact among one another more comfortably and get to know new friends with reasonable format. The users of Facebook can create their timelines of life events, share photos, share ideas, create groups and can find new friends. In addition to this, the Facebook is now also significantly used for the marketing of the company’s products, which can be considered as the one of the most important source of earning for the Facebook, Inc. People have now attracted towards this concept in a way that this social networking has now become the important part of their everyday life. The concept was inculcated with the dominant influence among the minds of the users of all age (Sutherland, 2012). 1.2. Facebook Consumers in UK Internationally, facebook generates the most out of the social generated e-commerce revenue. In 2012 & 2013, facebook is ranked first in the social generated e-commerce revenue by generating the revenue of around 35% (Vasudha,2013,p.10) In UK the monthly users and visitors of the Facebook users are ranked second as can be seen from the figure above. In UK is believed to be the second largest country in the world after United States in terms of Facebook users. The demographics statistics of the Facebook users in UK is shown below. The data is collected from the Facebook analyser i.e. fanalyzer.co.uk, which collects the real time data of Facebook users on UK. According to the statistics the total users of Facebook in United Kingdom is around 36Mio. 1.2.1. Age Range of Facebook Consumers in UK: Out of the total users in UK of Facebook, the majority is in the age range of 18-34years. The youngsters within the age range of 18-34 constitute about 50% of the total users of Facebook in UK. As it can be clearly understood from the statistic that major consumers of UK are youngsters. One of the many reasons is that the youngsters have the desire to develop more social interaction and want their existence to be as much prominent as possible. Interesting fact that can be seen from the figure below is that people from all the age range within UK have the existence on Facebook. Initially, when Facebook was established, it was built for the purpose of catering to the youngsters only but with the increasing use of the social commerce and the social networking, Facebook has become an integral part of everyone’s life. Therefore, in countries like UK people from all age groups have their existence on Facebook. In addition to this, the consumers and the users of Facebook in developed countries like United Kingdom, the users of social commerce or e-commerce are increasing day by day (Lusted, 2011).. The reason is that it is now believed to be the easiest and the economical way of doing business and getting entertainment. The people from different age group can find time to entertain themselves and do business more productively and efficiently with the help of marketing activities followed by the social networking sites like Facebook. Age1 1.2.2. Gender Consideration of Facebook Consumers in UK: According to the statistics represented by ‘fanalyzer’ the females constitute around 51% of the consumer base of Facebook in United Kingdom. The male, on the other hand, are 49 % of the consumer base. The data is generated real time, so it can be implicitly assumed that on average the consumer base of male and female in terms of Facebook usage is approximately equal. In other words, the Facebook social networking is not limited to any particular gender and it is widely used by the majority of the young population of UK. Moreover, the strategies followed by Facebook are focused on the main purpose of catering the people from all over the world with no biased approach towards particular gender. Gender2 1.2.3. Relationship Status of Facebook Consumers in UK: The major consumers of Facebook in terms of the relationship status are married, that constitute around 33.47%, Single, which are the second largest category in terms of relation status of consumers of Facebook in UK. ‘In a relationship’ category constitutes around 28% of the total consumers of the Facebook. Interestingly, the people in ‘engaged’ category are the least i.e. around 7%. The statistic shows that the single, married and in a relationship category are closely Relationship-Status3 2. Overall Analysis of Statistical data: The statistics of Facebook users or consumers as shown above can be helpful in identifying the consumer behaviour of Facebook. The Facebook consumers are mostly youngsters with no gender discrimination and approximately equal consideration of the married and single people. This can help in identifying the market base of Facebook and how the consumers of Facebook are affected by the Facebook based marketing, particularly in terms of clothing fashions & trends. The creation of Mark Zuckerberg, i.e. Facebook, was not initially commercialized. The website was initially developed for Harvard University students only and then with the passage of time it was expanded for other colleges in Boston area, Ivy league and other international universities of Canada (Gilbert, 2009). Up to September 2006, the website was not used for the commercial purpose. After that the, when the business model was proved to be a success then the commercial launching of Facebook took place. It was introduced for everyone of age 13 and older, who use to have valid email ID (Lacy, 2009). The commercialization of Facebook significantly increased the viewers of website internationally. This led to the increase in number of investors, who began taking interest in using the Facebook a major marketing tool for their products (Lacy, 2008). The increase in Facebook based consumers lead to the creation of the concept named as Facebook commerce i.e. F-COMM, which refers to the buying and selling of the goods and services with the help of Facebook. The buying and selling of products and services can be done either directly through Facebook or through the graph of Facebook, which is called the Facebook open graph. The Facebook open graph was the concept inculcated in March 2010. Currently more than 1.5 Million businesses have established their Facebook pages to publicise their products and get connected with their target markets. The pages, which are built on Facebook, are used by the Facebook mark-up language (FBML). The Facebook mark-up language is the Facebook’s own HTML language to make the pages more customized and friendly for both the entrepreneurs and the target market. The increase in business opportunities lead to the increase to the change in the social characteristics of the consumers in terms of fashion and trends from the perspective of the clothing (Marsden & Chaney, 2012). 3. Factors Influencing the Consumers Decision Making Process: The identification and analysis of the factors that may influence the decision making of the consumers in terms of the fashion and trends from the perspective of social commerce are described here. The Facebook commerce provides more easy access to the consumer to make their decisions regarding clothing and fashions. The essay is concerned with the consumers of UK only, so the following evaluation of the factors is described in terms of UK based consumers. 3.1. Individual Factor: The Individual factor is referred to as the evaluation of the consumer decision making regarding the fashion and trends in terms of their own preferences. The preferences of the individual decision making help the consumers to develop their mind frame in terms of the changing fashions and trends. The social networking website such as Facebook with the help of different product promotional pages facilitates the individuals to keep up to date with the new trends in the market in terms of fashion and clothing. In addition to this, the individuals can identify their desired products along with their exact price ranges. The convenience of window shopping helps the individual consumers to make more economical and reasonable purchasing decisions. In addition to this, the availability of the same products at discounted prices relative to the physical market has made this channel more useful for the consumers 3.2. Psychological Factors: The Psychological factors in making purchasing decisions by the consumers are referred to as capturing the mind frame of the consumers. One of the most important psychological factors is that the consumers are becoming use of being facilitated with the online channels to make their buying decisions. In addition to this, the consumers can identify the trends by the majority of the consumers by reviewing their comments on particular fashions and trends on Facebook. The pages created on Facebook keep the consumers and the potential customers up to date with the new arrivals and new trends along with the seasonal fashions and sales. The pages or groups, which are joined by the consumers and potential customers, can help them to be tilted towards the purchase of those products. The reason is that the psychologically the ads and the page update emails hit the mind frames of the individuals and psychologically most of the people are biased towards those fashion and trends, which are followed and talked about more frequently. 3.3. Sociological Factors: The Sociological factors can be described in terms of the social preference of the consumers of the product in terms of their locations and also in terms of their social influences. The consumers in UK, for example, are mostly the followers of western styles and trends. The people in UK are diversified but the fashions and trends in terms of clothing, which are followed by majority of the population depicts the western culture. In addition to this, despite of the diversified culture that can be found within the UK, the social environment is dominated by the culture, which is referred to as the western culture. Therefore, most of the domestic and international brands catering to the UK market have developed their Facebook pages, which are handled separately for different locations. Identification of the sociological factors, therefore, is an important consideration in evaluating the consumer behaviours towards particular products. The Facebook based consumers and the producers can interact directly with each other to analyse the weaknesses in the marketing, as well as, the product development strategies for their business. The social factors can also help the businesses to help design their Facebook pages so the consumers can be attracted towards their products even more. 4. Recommendations for the Organizations to utilize the Social Commerce Knowledge: The organizations can use the knowledge of social commerce, social networking and particularly Facebook commerce, to market their products more effectively and efficiently. The newly developed organizations should directly interact with their target market by creating the Facebook business pages. In addition to this, the concept of F-commerce described above can help the organization to identify their target markets and directly approach them in more effective way. The usage of the marketing tools such as Television commercials, newspaper ads; billboards, flyers distribution etc. are highly expensive. Moreover, the marketing campaigns significantly affect the profitability of the company. The reason is that the identification of target market through physical channels is more time consuming and risky. The major risk, which is involved in the marketing campaigns using the billboards, TV ads etc., may not necessarily reach the target market. It is also difficult to evaluate and identify how many targeted consumers have viewed the ads. The feedback from the consumers is also a difficult, expensive and time consuming process. Therefore, the concepts like f-commerce, as described above, facilitate the organization with the identification of the target market. It can also help the organization to publicise their products directly to the consumers after evaluating the views or likes by the consumers on Facebook. The number of group members, who have joined the page of the company can also help the organization to be aware of their products preferences. In addition to this, the facility to comment on the new products by the consumers helps the organizations to receive the direct feedback of their products in an economical way. The online marketing through the social networking channels such as Facebook, which is discussed in this essay paper, have significant influence both on the business success and the consumers behaviours. The business can directly identify their strength, weaknesses, opportunities and threats without any significant assumptions. The consumers on the other hand can develop their preferences and buying behaviours without physically roaming in the market. 5. Conclusion: The use of the social commerce, particularly the Facebook commerce can help identify the consumer behaviours. The UK is believed to be the second largest market for the Facebook. On average 30 million people from UK visits Facebook on monthly basis. The introduction of Facebook commerce has helped both the companies and the consumers to directly interact with each other and mitigate each other’s concerns regarding the particular products. The concept of retail frontier in online marketing has given the opportunity to the consumers to utilize their decision making more effectively and efficiently. The discounted prices and the economical ways of shopping can help the consumers to keep themselves up to date with the changing fashion and trends. In addition to this, other companies can also utilize the online tools such as Facebook, twitter etc. to increase the revenues and profitability of the product by utilizing more directional and focused marketing strategies through economical and highly cost effective channels. Therefore, the consumer behaviour is changing with the introduction of new marketing tools. Moreover, the consumers are taking more sophisticated buying decisions because of the opportunity to evaluate the products more easily and comfortably. Reference List 1. Clapperton, G., 2012. The social commerce: Turning social media into sales. John Wiley & Sons Ltd. 2. Dobinick, S., 2012. Mark Zuckerberg and Facebook. The Rosen Publishing Group Inc. 3. Gilbert, S., 2009. The Story of Facebook. Jaico Publishing House. 4. Lacy, S. 2009. The Facebook story: The people, the hype and the deals behind the giants of web 2.0. Crimson Publishing. 5. Lacy, S. 2008. The stories of Facebook, YouTube and MySpace: The people, the hype and the deals behind the giants of web 2.0. Crimson Publishing. 6. Loudon, D. & Bitta, A. 2001. Consumer behaviour 4/E. Tata McGraw Hill. 7. Lusted, M.A. 2011. Social networking: MySpace, Facebook & Twitter. ABDO Publishing Company. 8. Manzoor, A. 2010. E-Commerce: An introduction. LAP LAMBERT Academic Publishing. 9. Marsden, P., 2012. The social commerce handbook: 20 Secrets for turning social media into social sales. McGraw-Hill. 10. Marsden, P. & Chaney, P. 2012. F-commerce: 10 Secrets for unlocking the sales potential of Facebook. McGraw Hill Professional. 11. Vasudha. 2013. Social commerce: The new retail frontier. Amity Research Centre Bangalore 12. Warner, C. 2011. Media selling: Television, print, internet & radio. Wiley-Blackwell. 13. Wilde, S. 2013. Viral marketing within social networking sites: The creation of an effective viral marketing campaign. Diplomica Verlag GmbH. 14. Sutherland, A., 2012. The story of Facebook (The business of high tech). Rosen Central. Read More