Facebook and Users Buying Behavior

Qin Ye

Professor Lee

Academic Writing in Graduate Studies

October 23, 2014

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Introduction

In recent years, there has been a growing interest in studying the effect of social media

in consumer behavior. This interest has been motivated by the development of Web 2.0,

which has transformed the internet to a social environment by introducing social media (Lai

& Turban, 2008). In Web 2.0, internet users not only utility social media-online communities

and social networking sites-to generate content online and interact with other users (Hajli,

2014), but they also participate in e-commerce marketing through social media.

Developments in social media have made new platforms available to businesses: the

social networking site Facebook is a good example. Facebook is not only a platform that

allows users to access and share different information and experiences, but it also allows

them to participate and interact with one another. Besides individual users, an increasing

number of brands also create their Facebook pages, share up-to-date commerce information,

and interact with their fans, for the sake of enhancing popularity (de Vries, Gensler, &

Leeflang, 2012) and increasing sales (Agnihotri, Kothandaraman, Kashyap & Singh, 2012).

Currently, with the expansion of users (include individuals and brands) on Facebook,

users' activities on Facebook is growing research area. However, little attention has been

given to whether Facebook has impact on all users or just part of them, as well as the factors

that may affect buying behaviors of users.

The purpose of this study is to investigate the likelihood about the influence of Facebook

in user's buying behavior and examine the factors that affect Facebook users' buying

behaviors. The research questions are about:

1) Does Facebook influence partial or all users' buying behavior?

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2) Some factors that lead to Facebooks influence on users buying behavior

This study firstly provides a background and literature review. Secondly, two data sets

are collected to analyze the impact of Facebook among its users. One of the data sets is

buying frequency across entire buyer base and Facebook brand fans base for a chocolate

brand and a soft-drinking brand (based on 2011 consumer panel data with a 12-week rolling

average), another data set is from 1,491 adult buyers in the United States through an online

questionnaire about their buying behavior after become Facebook brand fans. By comparison

and analysis, those data reveal a striking trend of buying behavior of entire buyers and that of

Facebook brand fans, as well as the buying behavior between brand fans and non-brand fans.

Finally, the conclusions based on those data are given, as well as the future research direction.

Literature Rreview

Social media, such as social networking sites, have emerged into mass use rather

recently (Boyd and & Ellison, 2008). Because of Web 2.0 applications, social media have

provided new opportunities for users to interact with others on the internet (Hajli, 2014),

generate content online (Lai & Turban, 2008), and participate in e-commerce marketing

through social media. In recent years, there has been a growing interest in consumer

activitiesy onin social media (Heinonen, 2011) and the effect of social media in marketing,

because social media are likely to affect customers intention of purchase (Hajli, 2014).

Numerous social networking sites (SNS) that have generated reviews and content,

facilitated information sharing, and advanced social interactions. (Hajli, 2014). This

advancement enables the internet users and businesses to collaborate on the internet (Fller,
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Mhlbacher, Matzler & Jawecki, 2009). SNS users are engage ining various activities such

as, which are from consuming content, participating in discussions, sharing knowledge with

other users and contributing to other users activities (Heinonen, 2011). These activities lead

to a chain reaction: electronic word of mouth is produced, which then helps users in their

consumption decisions (Pan & Chiou, 2011), and then users are attracted online to exchange

consuming information and receive social support (Ridings & Gefen, 2004). As Yang et al.

(2012) indicates, buyers behavior is reshaped by the development of SNS.

Compared to other social networking sites, Facebook may be the only one that can boast

the speed of increasing users. With around 11 million users in 2013, and 22 million active

users in 2014, Facebook provides marketers with numerous opportunities to attract and

interact with potential customers through messages, videos, and other content (Smith, 2013).

An increasing number of brands create their Facebook pages, attract Facebook users to like

them, share up-to-date commerce information, and interact with their fans in order to enhance

popularity (de Vries, Gensler & Leeflang, 2012) and increase sales (Agnihotri et al., 2012).

Numerous studies have examined the commercial relationship between Facebook, users

and brands. Some studies have demonstrated that brand fans on Facebook may spend more

time and money on Facebook than non-fans (Brown, 2011). Facebook provides businesses

with the capability to interact with actual customers, develop potential customers (ComScore,

2011), change fans into active brand advocates, and create new networks with other users

(Nelson-Field, Riebe & Sharp, 2012). Although studies and discussions about Facebook in

marketing are common, how Facebook leverage brands and user buying behavior is still

limited and inadequate. Figuring out whether Facebook influences buying behavior of all
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users or particular users and the factors that may influences users behavior would help

brands to draw up plans regarding using Facebook to advertise their products, maintain their

current buyers and capture more potential buyers.

Methods

To examine the impact of Facebook in buying behavior, this study used two data sets.

One of the data sets is the buying behavior data from two different groups. One group was

from Facebook Brand Fan base and another group was actual consumersa population of

typical shoppers. The study selected two brands in two different repeat-buying categories: a

chocolate brand and a soft drinking brandboth are fast moving consumer goods and have

Facebook pages.

In order to ensure consistence of the comparison between two groups, it was classified

the buyer categories: a) non-buyersnever buy the brand ; b) light buyersonce purchase;

c) moderate buyerstwo or three times purchase; and d) heavy buyersfour or more times.

Those data sets were mined the average in 12 weeks.

There were two data collection sources used in this study. The purchase data of

Facebook Brand Fans about two brand categories (chocolate and soft drinking) were

collected by self-completion Web-based links. One link was on the brands Fan page on

Facebook, where only the fans of the brand could use the link to respond; another link was

about an online panel, where the Fans of any brand in chocolate or soft drinking category

could provide responds. The purchase data of typical shopper was a panel data about the

same brand for direct comparison.

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This study used percentage to compare the buyer proportion data across the Facebook

Brand Fan base and the entire buyer base for the same brand, and also to present the

proportion of buyer categories across Facebook Brand Fans base for chocolate and soft

drinking.

Additionally, this study also used another data sets to analyze the users buying behavior

on Facebook. This data is collected from 1,490 Facebook users who are above 18 years old in

the United States, through an online questionnaire. The percentage data of buying behavior

that was used in this study was based on Facebook brand fans.

Findings and Discussion

Does Facebook have the likelihood of influencing users buying behavior? In order to

find out the answer, this study classified the level of buying rates to study the distribution of

buyer proportion across the entire buyer base and Facebook brand fan base for a same

chocolate brand. The results revealed an extremely difference between the buyer proportion

of a typical buyer population and that of Facebook brand fan base: the entire buyer group had

high percentage of non-buyers (67 percent), fewer light and moderate buyers, and only 3%

was heave-buyers, while the Fans base provided an opposite trenda particular high number

of heavy-buyers (57 percent), and almost no non-buyers (1 percent). (See Table 1)

Table 1: Buyer proportion (%) across the Entire Buyer Base and Facebook Brand Fan Base

for a chocolate brand.

Non-Buyers Light-Buyers Moderate-Buyers Heavy-Buyers

0 (1) (2-3) (4+)

Entire Buyer 67 20 8 3
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Facebook Brand 1 9 33 57

Fan
The same trend appeared in the analysis of buyer proportion regarding a soft-drinking

brand. By comparison, there was few heavy-buyers in the entire buyer group (2 percent) and

most were non-buyers (81 percent) while there was 62 percent heavy-buyers included in the

Facebook brand fan base. (See Table 2)

Table 2: Buyer proportion (%) across the Entire Buyer Base and Facebook Brand Fan

Base for a soft-drinking brand.

Non-Buyers Light-Buyers Moderate-Buyers Heavy-Buyers

0 (1) (2-3) (4+)

Entire Buyer 81 10 7 2
Facebook Brand 3 12 23 62

Fan
Table 3 showed the findings that were consistent between two different brands of two

categories across the Facebook brand fan base: the trend was skewed to heavy-buyersthere

were 56 percent of chocolate brand buyers (n=1000) were heavy-buyers and 63percent in

soft-drinking brand (n=520).

Table 3: Buyer Proportion (%) across the Facebook Brand Fan Base by Category.

Sample Non-Buyers Light-Buyers Moderate-Buyers Heavy-Buyers

Category n 0 (1) (2-3) (4+)

Chocolate 1000 1 10 33 56
Soft-drinking 520 4 9 24 63
Average 3 10 28 60
Furthermore, the analyses of Figure 1 and Figure 2 provided the likelihood of buying

behavior after Facebook users become brand fans on Facebook: 51 percent of Facebook fans
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likely to buy a product of the brand after they became the Facebook fans, and 56 percent of

fans want to recommend brand to friends after becoming fans.

Figure 1 Percentage of fans likely to buy from brand after becoming fans

Figure 2: Percentage of fans likely to recommend brand to friends, after becoming fans

The findings outlined above demonstrate that Facebook could not impact all users
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buying behavior, because although the two brands have their own Facebook pages, the

analyses of Table 1 and Table 2 reveal that the buyer proportion of the two brands in entire

buyer base was in a decline trendmost of buyers were non-buyers or only had bought the

product once (light-buyers).

However, Facebook indeed impacts fans buying behavior. Because the distribution of

buying frequency across Facebook Brand Fans base showed a striking different trendthe

heavy buyer was the biggest proportion of buyer categories in each of both brandsmore

than 50%. Another data set also revealed that Facebook users have buying intention after they

become the brand fans.

In addition, the analyses also demonstrate that Facebook may impact other users

buying behavior through their friends who are fans of brands, because more than 50 percent

Facebook users want to recommend the brands to their friends after they become brand fans.

In this case, as Nelson-Field (2012) demonstrates, Facebook is a platform of delivering an

audience for advertising. Facebook fans can share their experience regarding brands, provide

positive reviews and generate great value for both products and brands. These activities

produce electronic word of mouth (eWOM) (Hajli, 2014). The electronic word of mouth

generates when buyers share any statement about a product, brand, service and so forth

through Internet. This word of mouth may influence non-fans buying decisions through

Facebook interaction (Pan & Chiou, 2011), because brand fans often provide positive

eWOM, which could increase brand credibility and generate potential trust relationship

between brand and Facebook users. On the other hand, recommendation is a useful tool for

developing potential buyers. Research has demonstrated that potential buyers are more
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interested in brand users recommendations rather than only product information (Ridings &

Gefen 2004). By recommending, such interactions in Facebook during brand fans and other

users, could help to increase credibility and build up a networking between brands and other

Facebook users, facilitate to target potential buyers and impact Facebook users buying

behavior..

Conclusion

Currently, Facebook as the biggest social media platform is playing an increasing

significant role in marketing, especially in e-commerce. According to the analyses of data

that represented in this study, Facebook could not impact buying behavior of all users,

although brands have their Facebook page, the proportion of heavy-buyers is virtually zero.

However, the analyses also demonstrated that the high proportion of heavy-buyer exists in

brand fans, and they prefer to buy the brand after becoming fans. The results shows that

Facebook indeed influence brand fans buying behavior, even their interaction behavior

because brand fans like recommending brands to their friends. In the process of interaction on

Facebook, the users who are not brands fans may become the brand fans. The future research

could caution brands using Facebook to drive their grouch. Furthermore, brands should learn

how to use Facebook to capture light buyers who may be the important source for brand

growth.

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