The Influence of Social Media Data on Online Purchase: A Study on Relative Advantage of Social Commerce

The Influence of Social Media Data on Online Purchase: A Study on Relative Advantage of Social Commerce

Ree Chan Ho, Kalai Vaani Rajandram
DOI: 10.4018/978-1-4666-9787-4.ch145
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The Issues And Problems

The potential to target the right customers, according to Mangold and Fauld (2009) is more likely with the increased utilization of social networks. Studies have indicated that the hassle-free environment in which social networking websites find themselves, enables customers to voluntarily partake in sharing and giving of feedback which is invaluable to the company that is promoting its product or services. It facilitates the business process more effectively (Featherman & Halji, 2015). Zhang, Lu, Gupta and Zhao (2014) further adds that customers are also more willing to participate in social commerce due to stronger social support. This is typically the nature of human beings to jump the bandwagon. When a group of customers like a product or service and then give raving comments about it, the rest of the consumers, which now become potential customers, are very likely to think that the product is popular. To them, popular means good. There is no dearth of research relating brand popularity to support of social network. This mentality can actually work in the best interest of companies or vice versa. Companies can leverage on this; social media enables this. This phenomenon complements what Moe and Trusov (2011) say about peer ratings. Product rating by peers in online forums has great viral effect on purchase decision. This view is also shared by Ludwig et al. (2013) when he concludes that social networking sites assist in product selection.

Key Terms in this Chapter

Peer Comment: The product reviews and comments by peers in one’s social virtual community.

Relative Advantage: The perceived efficiencies gained by the innovation relative to electronic commerce website.

Consumer Socialization: The process undergone by young people in which they develop the skills, attitude and knowledge as consumers.

Online Trust: Customer’s trustworthiness over online merchants’ integrity, ability and benevolence in carry out online business.

Peer Communication: It refers to learning about product consumption through interactions between the consumer and socialization agents.

Information Quality: The content and quality of information made available for customers to shop online.

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