Impact Of Sns & Blogs On Indian Adult Consumer

“Social Media and its impact on Indian Adult Consumer: A Study on the influence of Blogs & Social Networking Sites On Adult Consumer’s purchase decisions.” A Report by: Adil Mirza 07BS0257 Under the guidance of: Prof. T.V. Ramraj *

This report is submitted in partial fulfillment of the requirements of MBA program

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Acknowledgements I am highly indebted to Prof. T.V. Ramraj, my project mentor, for providing valuable advice in designing and implementing the methodology & various research tools to collect relevant data & cooperation in completing the same. I thank him for his valuable feedback and inputs at various stages of the project. I am also thankful to the Library, Computer Center and other support staff for their cooperation extended to me during the course of the project.

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Contents Acknowledgements ......................................................................................................................... 2 Contents .......................................................................................................................................... 3 Executive summary ......................................................................................................................... 5 Introduction ..................................................................................................................................... 7 The concept of community ......................................................................................................... 7 History of SNS .............................................................................................................................. 8 History of Blogs............................................................................................................................ 8 Internet penetration and usage in India ..................................................................................... 9 Drivers behind social networking and blogging in India ........................................................... 10 Structure of a social networking site ......................................................................................... 12 How does a Social Networking Sites help Adults? .................................................................... 13 Business Model of a Social networking Site .............................................................................. 15 Impact on advertising ................................................................................................................ 15 Orkut & its influence ................................................................................................................. 17 Implications ............................................................................................................................... 19 Blogging ..................................................................................................................................... 20 Blogging as a social activity in India........................................................................................... 20 What do Indians read online? ................................................................................................... 24 Implications ............................................................................................................................... 25 Primary Data Analysis .................................................................................................................... 26 Objectives of the project ........................................................................................................... 27 Scope of the project .................................................................................................................. 27 Limitations of the project .......................................................................................................... 27 Methodology ............................................................................................................................. 28

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Focused group discussions .................................................................................................... 28 Pilot Survey ............................................................................................................................ 29 Sampling criteria .................................................................................................................... 29 Final Survey ........................................................................................................................... 30 Analysis ...................................................................................................................................... 31 Demographic profile .............................................................................................................. 31 Frequency of visits: SNS & Blogs ........................................................................................... 32 No of users: SNS & Blogs ....................................................................................................... 33 Reasons for visiting SNS & Blogs ........................................................................................... 34 Confirmatory Factor Analysis ................................................................................................ 35 Component matrix results ..................................................................................................... 37 Inferences ...................................................................................................................................... 39 Conclusion ..................................................................................................................................... 40 Appendix I ...................................................................................................................................... 41

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Executive summary: SNS & blogs have caught the imagination of marketers of late & it is not a fad as according to internetworldstats.com as of June 30, 2008 there are 360,985,492 people that have Internet that is about 22% of the world population with the number growing every day. Imagine a company blog or SNS getting about 1% of them every month. That is about 3609854 people per month traffic which is growing every day! In the world of rising costs for advertising, dwindling margins, advertising wars & ad clutter; companies are finding it more & more difficult to reach their target audience effectively. Internet & Social media present an unchartered territory for the companies who are willing to take calculated risks & invest their money in online advertising. With these statistics kept in mind this topic was chosen as a topic for my MRP. The objectives of the project were to find out whether an adult Indian consumer is influenced by SNS & Blogs in his purchasing decision & what kind of information affects him when he uses such media. For this purpose secondary data analysis was done in order to find out the reasons people use SNS & blogs & the drivers for the growth of such media in recent times. For this purpose analysis of community on owners of motorbike „Hero-Honda Karizma‟ was chosen on Orkut. While in the same way analysis of blogs on motorbike „Hero-Honda Karizma‟ were searched and it was found that there were more than 10 serious blogs dedicated to it. The primary data analysis consisted of carrying out a focused group discussion to find out whether the consumer purchase decisions are influenced by popular social media & what are the various factors that influence the same? Based on the information obtained from FGDs, a pilot survey was done in order to obtain information for designing the INDEX questionnaire. The INDEX questionnaire was administered on a select set of 110 respondents based on random sampling with the help of online survey portal surveymethods.com & results were analyzed by using statistical tools like factor analysis. The study has shown that consumer purchase decisions are indeed influenced by the SNS & Blogs. More than half of the respondents visited a SNS daily & 95% of them had a personal profile page on Orkut. People also go to such mediums in order to find out what is new & what others have to say about a product or a service, thus tapping „collective wisdom‟ for free & giving the marketers an opportunity to promote their products & services through such vast & untapped mediums.

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Secondary Data Analysis

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Introduction: Blogging and Social networking are the vital expression of user generated content and holds immense potential for growth than any other form of content available to the users today. Gone are the days when marketers controlled the channel of communication between advertisement and the consumer. Today the model has become such that consumer is the creator, consumer as well as the distributor of content. According to the data available for the year 2007, Blog sites and SNS generated $1 billion in advertising revenue in the USA alone. By the year 2011, Blog sites and SNS are projected to generate $4.3 billion in advertising revenue in the US market1. The origin of social media extends beyond the Internet. When Tim Burners Lee created the Web2, he wanted the content to be instantly and equally available to everyone and he also wanted everyone to be able to link to that content without restrictions. This vision of the Web is now a reality and it has manifested itself in ways that Tim Burners Lee never imagined. Many of today‟s Internet savvy consumers particularly in the 18-34 age bracket are as comfortable with social networking and blogging as they are with using the telephone or writing an email.

The concept of community: All said and done we must first understand the meaning of the word “community”. In layman‟s terms the word community is frequently and erroneously used as a general name for group formations. However, the concept of community refers to a method of human interaction, solidarity, interpersonal relationships or things common to a certain group of people3. Communities can be categorized by their objectives (such as meeting new people and making new friends) and by the nature of interaction (such as ideological communities).

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2

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IAB Platform Status Report: User Generated Content, Social Media and Advertising - An Overview, April 2008. http://www.webraw.com/quixtar/archives/2004/10/blogging_101_the_importance_of_blogs.php.

http://youtring.wordpress.com/2008/06/12/social-networking-the-growth-potential-and-challenges/

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History of SNS: Social Networking refers to a formation of an online community. This network facilitates the users to interact for a common purpose and enables them to share mutual views, images, and videos regarding any aspect under the Sun. The prospective users are encouraged to initiate constructive discussion on the topic of their interest with likeminded people. This networking system also facilitates grouping of friends or family members. If we look at the conversations being supported by social media, then it is simply an extension of the human tendency to be social. This behavior dates back to ancient marketplaces and bazaars where people didn't just get together to purchase goods, but also to share ideas, thoughts and information they found interesting. The history of social media starts all the way back to the humble beginnings of the Internet. Since its first introduction within homes, there have been sites that are dedicated to allowing individuals an opportunity to speak with one another. These types of sites started off as simple chat rooms. It has been an incredible run for such sites as well as Web 2.0 content in the past one decade. After some early debacles including Usenet, ARPANET, LISTSERV, the first fully fledged social networking site “classmates” came in the year 19954 for the students of Harvard University. Then SixDegrees.com in the year 1997 dominated the arena. The last two years of twentieth century has marked the mushrooming of websites for socializing purpose.

History of Blogs: Weblogs or blogs, are frequently updated WebPages with a series of archived posts, typically in reverse-chronological order. Blog posts are primarily textual, but they may contain photos or other multimedia content. Most blogs provide hypertext links to other Internet sites, and many allow for audience comments.

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http://youtring.wordpress.com/2008/06/12/social-networking-the-growth-potential-and-challenges/

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Blogging in its current form began in the year 1997, with Dave Winer's Scripting News5; an online record of Winer‟s reflections on a wide range of topics. Dave Winer was a journalist and he started publishing his views on his personal webpage on issues that he covered for his organization. He used this medium to generate awareness about various issues amongst his audience and also to get their views on them. In recent years, tools have been developed to make blogging much easier and more widely accessible. Blogs have been featured extensively in the popular media and have entered political campaigns, news organizations, businesses and classrooms.

Internet penetration and usage in India6: Before we embark on our journey to see the potential of blogs and SNS in promoting the goods and services, it is very important to map the Indian market for Internet penetration and usage. The main reason for this is that India is very diverse in terms of her geography and demography. All this coupled with fueling economic growth is changing the scenario in the markets in short period of time. The consumer tastes and preferences are changing at a breakneck speed. Thus it becomes imperative for a marketer to know about the penetration and usage of the medium which he is looking as a tool for promotion even before he starts thinking of how he promotes his goods and/or services on these mediums. There are a few factors that affect the internet usage in India and along with that the traffic on the blogs and SNS. These are: 1. Urban population still forms the relevant mass of internet users leave alone people who go to blog sites or SNS. 2. Most of the content available over the Internet is in English, familiarity with English acts as a major factor driving Internet usage as well as the traffic on blogs and SNS. 5

Bonnie A. Nardi, D. J. (2004). Blogging as Social Activity. Stanford university press.

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Internet in India, IMRB & I Cube report 2007.

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3. Exposure to PC usage acts as another factor limiting the growth of Internet users in India. 4. In India there is low computer literacy among people which is a major limiting factor for traffic among blogs and SNS. 5. Till now another fact was high prices of PCs as well as the cost of internet connection. 6. In India youth forms the major chunk to the growing Internet user base. If we talk about people in the higher age group it is only the highly educated and elite class that are net or we can say blog savvy. 7. Cyber café still continues to rule as the most prominent point of Internet access.

Drivers behind social networking and blogging in India: There are several factors that have contributed to the growth of social networking and blogging. Some important factors are as follows: Internet access7: According to the data available for the year 2007, there are 250 million people living in urban areas of India out of which 205 million people are literate and 77 million know English as a secondary language. Out of all the 250 million people living in urban areas only 46 million are internet users! Broadband connections: An increase in the number of Internet users accessing the Web through a broadband connection has made it much easier for users to access video and other bandwidth intensive services much easily and at will. Government has taken various initiatives to promote the internet usage in India e.g. the year 2007 was declared as the „Broadband year‟ by Indian government. Currently broadband penetration in India is only 3.7% of the total internet penetration. However,

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Internet In India: IMRB & I cube 2007 report

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the Indian government is leaving no stone unturned to increase it at a rapid pace and affordable price by setting a goal of 20 million broadband users in the year 20108. Computing power: A lack of readily accessible and cheap computing processing power held back the outburst of social networking and blogging activities. Decrease in the prices of PC hardware and Internet connection has brought this within the reach of less affluent sections of the society. This is evident from the fact that the share of users from SEC D & E in the Internet user population has increased rapidly in the recent years. In October 2007, a Nielsen study found that consumer recommendations are the most trusted form of advertising around the world. One of the more relevant types of SNS pages and blogs sites are where consumers go for brand or product reviews. Here consumers share their brand experiences in order to help others make more informed purchasing decisions. Most of these sites and pages are grouped by category such as electronics, automotive, tourism and so on. These represent attractive advertising opportunities for obvious reasons; consumers are there because they are in the market for a particular product, and they are interested in learning more about the products. Online Social Networking9: Online social networking is the activity by which an individual manages, communicates, articulates his connections and extends his social network through internet tools. In online social networking the connections between an individual and members of his network are articulated and recorded in online systems and specifically designed social networking technologies support the sharing of information and media along those connections. This predominantly takes place through a Social Network Site (SNS) which is defined as: A web-based service that allows individuals to: 

Construct a public or semi-public profile within a bounded system.

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Broadband users in India: An eMarketer report

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Tim Davies; Pete Cranston: Youth Work and Social Networking

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Articulate a list of other users with whom they share a connection.

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View and traverse their list of connections and those made by others within the system.

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By this definition websites such as MySpace, Facebook and Orkut are typical Social Network Sites as their core purpose is supporting individuals to create profiles and to articulate their connections via a friends list.

Structure of a social networking site10: Personal profiles: A Social Networking Site profile usually consists of one or more pages on which an individual can share information about themselves with others. For many young people a Social Networking Site profile acts as their personal homepage on the web. Profiles are usually created by filling in online forms, providing answers to questions set by the Social Networking Site and uploading photos and videos. Friends list connections: A user of a Social Networking Site can add other profiles to the friends list on his profile. Usually a friend connection has to be requested and confirmed by both parties. Once created, it is possible to view an individual‟s list of friends from their profile on the Social Networking Site. Aggregating information: The activity feed on a Social Networking Site displays to a logged in user the details of updates, recently shared media, recently added friend connections and group memberships and other activities which members of their friends list have carried out through that site.

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Tim Davies; Pete Cranston: Youth Work and Social Networking

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Profile message boards: The Message Board feature on the personal page of a Social Networking Site members profile allows their friends or any visitors to the profile, to leave a public message on the profile. Messaging: Alongside the public messaging of walls and message boards, Social Network Sites may include private messaging features. Sharing media and links: Media sharing is a core feature on many social network sites. Here the creator of the profile can upload media which can be viewed by the people while he himself can also visit the profiles of people and see their content. Groups: Members of a social networking site can create and join groups which will generally include space for sharing media and holding group discussions through a forum or discussion board. Most of these groups and pages are consolidated by category which depends upon the choice of the user to join a particular group according to his taste. Games and applications: Add on applications for social networking sites have introduced a number of activities and games played through friends list connections; ranging from virtual games to quizzes.

How does a Social Networking Sites help Adults? Keeping in Touch: Adults use a range of communications platforms such as the mobile phone, text messaging, computer based instant messaging and other sites of online social networking. Young people are part of a constantly connected generation. Where previous online communication spaces (chat rooms, forums) brought internet users together on the basis of shared interests, online social networking allows people to connect through existing social relationships.

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Developing new contacts: While most young people are primarily using online social networking to communicate with their existing friends, a significant number say that they use social networking sites to make new friends. Making new friends may involve getting to know friends of friends, building links with other local or locally connected people or it may involve trying to locate other online social network users with particular shared interests or simply locating others by browsing for profiles. Sharing content and engaging in self-expression: Social networking sites provides a space for young people to create and share media ranging from written blog posts, photos and videos to edited works. Social networking sites are part of a User Generated Content (UGC) revolution that is affording young people greater opportunities than ever before to publish content to a potentially global audience. Accessing information and informal learning: Through browsing social network profiles young people can access a wide range of information. A number of local and national information providers and support services are creating a presence on social network sites or are targeting advertising and information campaigns at online social networking spaces. The wisdom of crowds11: Young people are also attracted towards this mode because of the collective wisdom of crowds that can be had at the mere click of a mouse. The social networking site is a repository of limitless information for those who want knowledge regarding a particular product due to the participation of members of the community in knowledge sharing.

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Victoria Furness; Web 2.0 and The Enterprise: Its impact on business and strategies to maximize new opportunities

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The limitations of other communication methods: Email made communications faster; instant messenger made it instantaneous but then the problems of spam, email overload and documents flying back and forth began to appear. With social networking sites document version control becomes manageable and information becomes dynamic and democratic i.e. it is created by many rather than the select few.

Business Model of a Social networking Site12: Social Networking Sites face very few barriers to market. They are relatively inexpensive to launch and run an Internet-based business. The bandwidth is cheap and there are no expensive manufacturing costs associated with delivering their services. With services or products being offered for free, the SNS business model follows the publishing business model, deriving revenue from advertisers paying to market their products or services to visitors on the site.

Impact on advertising: Social Networking as a major force on the Internet represents the greatest opportunity and challenge to marketers since the advent of the Internet itself. Social Networking sites have provided high-value advertising inventory and audience segments needed to capture more of the market share and targeted audience reach that advertisers demand. Traditionally marketers have been able to buy time or space on other media in a controlled context. They knew where their advertisements would appear, what it would look like, and in what context it would be seen. Advertising in social networking site requires marketers to alter their approach. Instead of broadcasting one-way messages at their audiences, advertisers are compelled to engage in a conversation.

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Victoria Furness; Web 2.0 and The Enterprise: Its impact on business and strategies to maximize new opportunities

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Brand Profile Page13: The most common method of advertising on social networking sites is creating a profile page. An advertiser simply creates a page for its product, much as an individual would for himself. This page can be used to provide all sorts of materials and information. From demonstration videos to graphics that other users can use to decorate their own pages. This also allows other members to include your page in their friend network or tag themselves as a fan. One of the innovative and unique ways in which the advertisers can influence and use this space is custom communities. Custom communities14: Custom communities provide a space for brands to entertain and engage users through interesting content such as games, polls, quizzes or contests. Off-site advertising drives consumers to these communities where they can participate and pass along content they find interesting or valuable. The following example is a testimony to the above mentioned fact: Launched in 2006, the Adidas custom soccer community on MySpace allows visitors to align themselves with one of Adidas‟ two models of elite soccer cleats. Users can post comments praising or defending their chosen brand and access product reviews, graphics, and information about professional soccer players who are on their team. By giving consumers a chance to align themselves with a brand, Adidas builds an intense connection based on identity and personality.

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IAB Platform Status Report: User Generated Content, Social Media and Advertising - An Overview, April 2008 14

IAB Platform Status Report: User Generated Content, Social Media and Advertising - An Overview, April 2008

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In the light of the objectives of the project, Orkut was chosen as a social networking site to be studied in the Indian context because of its popularity in the Indian subcontinent. The following discussion analyses the various aspects of marketing of products and services that were found on Orkut.

Orkut & its influence: It is a social networking site now owned by Google. It has the highest number of users in the Indian subcontinent. The site offers all the basic and augmented features of a typical social networking site and is a huge hit particularly among the Indian youth. It has more than 28 community categorizations ranging from travelling to pets and music to health. For the purpose of analysis community on owners of motorbike „Hero-Honda Karizma‟ was chosen and following facts were obtained. Community on „Hero-Honda Karizma‟15: 

There were more than 10000 members on the community for bike „Hero-Honda Karizma‟.

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It was owned by Mr. Rajendu Chaubisa from New Delhi and thus was not an initiative by the company Hero-Honda.

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The topics of discussion in the forums on this community ranged from asking for solutions for problems that were plaguing the owners of the said motorbike to asking for frank opinions on whether to buy „Hero-Honda Karizma‟ or „Bajaj Pulsar‟ (Bike from a competitor).

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It was seen from the threads in the forums of the community that visitors to this community considered the views of members as well as non-members to be honest. These people gave their views on certain issues pertaining to the bike and there was a high possibility that these people can act as opinion leaders in the

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http://www.orkut.com/communities/hero-hondakarisma.aspx?

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particular context solely on the basis of either the ownership of the product or the knowledge of the product. 

There were also people who engaged in selling second hand bike from the same brand on this community indicating to the potential of actually targeting an interested customer.

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There were also regular polls in the community pertaining to certain issues or aspects of motoring as well as about the brand itself.

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A striking aspect was the inquiries about the new model of „Hero-Honda Karizma‟ that is yet to be launched in the market and has only got coverage from the motoring experts in leading motoring magazines! This clearly indicates the importance of online social networking in „buzz marketing‟ or „viral marketing‟.

SNS Brand Penetration: A research by TNS provides clear proof that Myspace is still number one among a broad collection of international networks with a 32% weekly reach. Its position has been maintained by its focus on music and commercial content, rather than connecting friends. Facebook is not far behind on 22.5% weekly reach and the number one in many markets and surely will grow as it becomes internationalized. However the pattern is very mixed globally. In Asia a variety of local sites like QQ, Cyworld and Mixi dominate in their home markets, while Orkut is number one in Brazil. Facebook and Orkut share 61% & 31% market for users in India.

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Implications: Social networks are today the main platform for sharing content and have increasingly become the means to manage social relationships. Consequently social networks are grabbing ever more of our internet time and so brands and content producers must be active inside them. Large Social Networks have near unlimited inventory. For advertisers to cut-through they need to be relevant and ideally work inside the network, by bringing users to branded pages, applications or connecting them with content. The environment is now perfect for creating and distributing branded content. Consumers expect to see and are happy to share it if the content is good. Brands are part of the modern fabric of society and have as much legitimacy as consumers to create and share content. In the future web distributed content could potentially become another revenue stream for existing content producers and brands as video sites begin to cut the advertising revenue with up loaders.

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Blogging: Weblogs or blogs started initially as online diaries or journals. Today, blogs are used for a wide variety of purposes. Typically it is a means of content publishing and a place where people share their views, opinions or experiences. There has been a phenomenal growth of the Blogosphere. Presently there are close to 112.8 million blogs16, they are doubling approximately every six months!

Blogging as a social activity in India: According to „Blogging India: An MSN and Windows Live Report‟, India‟s blogosphere is driven by youth and a passion for self-improvement and entertainment, with 42% of the online users reading blogs to stay informed about world events, and 49% citing entertainment as the main reason they read blogs. Key facts: 

The blogging landscape was still nascent with only 14% of India‟s netizens actively blogging, although 39% were aware of blogs.

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Three-quarters (76%) of India‟s bloggers are male while women only account for 24%.

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54% of bloggers are between the ages of 25-34 years, 32% under 25 years, and 15% over 35 years.

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Majority of people enjoy reading technology (32%), followed closely by news and education (24%), illustrating the impact of India‟s booming technology sector on society.

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Blogs written by business leaders were found by half of all Indian online users to be the most enjoyable to read. Blogs by politicians were found by 24% of respondents to be of regular interest.

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http://www.technorati.com

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58% of bloggers starting a blog because they wanted to express passionate views, while 40% of India‟s bloggers did so to entertain others through their writing. A majority, 47% of blog owners indicated that writing about their views and commenting on the world around them was what they enjoyed the most about the activity. 90 % of the bloggers spending up to 5 hours a week reading blogs or updating them. The survey hints that the Internet could soon become an inseparable part of the advertiser‟s marketing mix.

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Of the 42 million net users in India a staggering 85% (that‟s roughly 32.5 million people) regularly check blogs.

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Checking blogs has become second most preferred online activity after e-mailing.

According to a WATCONSULT report there were startling statistics found after a survey of metropolitan cities in the various geographic zones of India. The net users were asked questions on their blogging habits and following options were given to them: 

I am an active blogger and an active blog reader.

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I blog occasionally, but am a more of an active reader.

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I only read blogs, but do not possess one.

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My blog is no longer active, but I do read blogs.

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I rarely read blogs - perhaps once in a week.

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I have no clue what blogging is?

The results at the national level were as follows: 

30% of Indians were not aware of blogging. These were net-savvy individuals who were aware of Social Networking.

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14% were active bloggers, which is quite a large number!

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Zonal statistics are as follows: NORTH ZONE: Cities covered: Chandigarh, Jaipur, Lucknow, Ludhiana & New Delhi

SOUTH ZONE: Cities covered: Bangalore, Chennai, Hyderabad, Cochin, Mangalore, Manipal & Vizag

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WEST and CENTRALZONE: Cities covered: Ahmedabad, Indore, Jabalpur, Mumbai, Nasik & Pune

EAST-ZONE: Cities covered: Guwahati, Jamshedpur, Kolkata, Patna & Ranchi 

36% of the people in North Zone had no clue as to what Blogging was.

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East and South Zone had the highest number of regular blog readers. (Active bloggers + Readers + Readers without blogs themselves) at 47% and 46% respectively.

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Bangalore, Hyderabad and Chennai are the 3 leading cities in India when it comes to blogging.

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Pune has the highest number of bloggers who are students which is pretty predictable because of its massive student population.

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What do Indians read online? Results at the national level: 

It was disappointing as well as predictable to see that „Email only’ is the most favored answer. 34% of the people mostly read only their Email.

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21% of the people said ‘Nothing specific‟. Remarkably the most reply was Reading and searching for relevant material for School / College projects and other education related reasons.

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19% of the people go to online gadget review sites as these came out as the most popular followed by Technology related blogs.

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The study gave clear idea about the increasing penetration of blogging in India and its possible impact on advertising on such platforms.

For the purpose of secondary data search again blogs on motorbike „Hero-Honda Karizma‟ were searched and it was found that there were more than 10 serious blogs dedicated to motoring out of which 2-3 specifically spoke about the bike in question. The blog site motorbeam.com was selected for further analysis. The content on the blogs was as follows: 

Review of old as well as new models of „Hero-Honda Karizma‟.

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User views and comments on:  Looks and styling of the bike.  The riding comfort.  The handling characteristics.  The fuel efficiency and engine performance of the bike.

There were also overall ratings for the bike as well as some drawbacks and flaws that the users encountered.

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Implications: Blogs have become a means by which new ideas and information spreads rapidly on the web. They often discuss the latest trends and echo with reactions on different events in the world. The collective wisdom present on the blogosphere is invaluable for market researchers and companies launching new products. In fact, advertisers are already realizing the potential of blogs in influencing buying decisions of their target audience. Often when a buyer is interested in purchasing a product, blogs offer free and frank customer reviews. Many startups have pitched pre-launch and beta version of their products to various bloggers with the hope that their reviews would create a buzz on the blogosphere and bring more attention to their company. Companies like Wal-mart are now trying to win back public opinion on their corporate policies by providing bloggers with exclusive news and inviting them for visits. Even the US Department of Defense is now reaching out to hundreds of bloggers with more information about its counter-terrorism initiatives.

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Primary Data Analysis

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Primary Survey:

Objectives of the project: The two key objectives of this project were: 1. To find out the impact of popular Social Media i.e. Blogs and Social Networking Sites on purchase decisions of Adult Indian Consumer. 2. To find out the primary reasons for which the Adult Indian Consumer goes to popular Social Media i.e. Blogs and Social Networking Sites. This helped in determining the scope and methodology for the project as described below.

Scope of the project: The project includes the following key aspects: 1. Profiling of the Indian adult consumer who is also an active internet user. 2. Explore whether the consumer‟s purchase decision is influenced by popular Social Media i.e. Blogs and Social Networking Sites. 3. Determining the factors that are likely to influence the consumer purchase decisions viz a viz popular social media. 4. Analyze the future potential of such media for the promotions of products & services.

Limitations of the project: The following limitations came to the fore after the completion of the analysis: 1. The sample size in the focus group discussion was not the representative of the sample size in primary survey since in FGD the participants belonged to IBS Hyderabad Campus while in the primary survey the respondents belonged to different cities.

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2. Due to the above mentioned reason it might be possible that the list of factors that influence the consumer purchase decisions might not be exhaustive. 3. Almost all the respondents were Post graduates in various fields such as management, pharmacy & so on. This narrows down the scope of the research as in the overall population adult consumers consist of many people who are businessmen or even simple graduates who are active users of SNS & Blogs.

Methodology: Focused group discussions: Two focused group discussions were carried out on the IBS Hyderabad Campus in order to find out whether the consumer purchase decisions are influenced by popular social media & what are the various factors that are influence the same? Two panels of 7 & 8 participants were made for this purpose where the moderator gave the participants structured topics for discussion in order to bring about useful insights. The observer noted down the key insights & topics from the group discussion. After the FGDs it was found out that the consumer purchase decisions were indeed influenced by popular social media. The various factors that were likely to influence the consumer purchase decisions that came to the forefront were: 1. Good review about the product or service. 2. No of reviews about the product or service. 3. Expert opinion about the product or service. 4. Popularity of SNS or Blogs. 5. Information available on Company owned SNS or blogs which makes the product or service. 6. Frequency of visiting the SNS or Blogs. 7. Credibility of the information on SNS or Blogs. Page | 28

Pilot Survey Based on the information obtained from FGDs, an initial Questionnaire was designed. In order to obtain further information for designing the INDEX questionnaire and also test the appropriateness of some questions, the questionnaire was administered to 20 respondents in IBS Hyderabad Campus. The choice of respondents was such that it included a mix of age, educational background and other demographic variables. Some parameters that were evaluated during the pilot survey are as follows: 

Whether the list of variables generated was exhaustive.

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Redundancies, if any.

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The ease of answering questions & proper comprehension.

Sampling criteria: The following criteria for inclusion were looked upon while following a random sampling method: 

Those who were in the age group of 20-35 years were included.

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Those who had access to internet in their daily routine were included.

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Those who visited the SNS & blogs were a part of the respondents for analysis.

The following criteria for exclusion were looked upon while following a random sampling method: 

Those who were not in the age group of 20-35 years were excluded.

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Those who did not have access to internet in their daily routine were excluded.

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Those who did not visit the SNS & blogs were not a part of the respondents for analysis.

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Final Survey: Having completed the pilot study the questionnaire was redesigned to incorporate psychographic questions and other questions related to frequency of using the SNS & Blogs. At the same time certain unimportant variables identified during the pilot survey were eliminated or clubbed together to bring it to a manageable size. This questionnaire was administered on a select set of 110 respondents based on random sampling with the help of online survey portal surveymethods.com. The link to the questionnaire was sent to the respondents through email or chat applications & they were also requested to ask a couple of their friends to take the survey.

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Analysis: Demographic profile: The respondents of the survey had the following characteristics: 

76% were male while remaining 24% were female respondents i.e. male: female ratio was 1: 3.



It was found out that more proportion of males (63% of 76%) than females (45% of 24%) were active visitors of SNS.



Frequency of visiting blogs was also more in males than in females. However, females had a higher percentage of ownership of own blogs as compared to males.



More proportion of Engineers were found to be visiting SNS & Blogs than people of other educational backgrounds. Figure 1: Gender & Educational Background

Gender of the respondents Female 24% Male Female

Male, 76%

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Frequency of visits: SNS & Blogs The question pertaining to the frequency of visits to the SNS & Blogs resulted in the following figures: 

53% of the respondents visited at least one SNS daily while 22% visited a SNS once in a week.



In case of Blogs the frequency was almost opposite with 66% of the respondents visiting a Blog only once a week while only 10% visited a Blog daily.

The above figure clearly shows that most of the young adults are more likely to get more influenced by something on the SNS than on a blog. Moreover, secondary data analysis showed that blogging is primarily considered as a medium to express personal views which might be biased. This shows that concept of blogging has yet to pick up among the adult population in India. Figure 2: Frequency of visits to SNS & Blogs

Frequency of visit to social networking sites: once a week 22%

once a week twice a week

everyday 53%

twice a week thrice11% a week 14%

thrice a week everyday

Frequency of visit to blogs Everyday Thrice a week10% 7%

Once a week Twice a week Thrice a week

Twice a week 17%

Everyday Once a week 66%

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No of users: SNS & Blogs The responses pertaining to the membership of SNS & ownership of blogs showed that: 

Orkut had the highest no of members among the sample size, with 105 respondents having their profile on the mentioned SNS.



Facebook had the next highest no of members among the respondents at 56 while other SNS especially the professional network Linkdin had the next highest members at 49.



62% of the respondents did not own a blog while only 11% are owners of a blog. However, 27% of the respondents plan to start a blog soon in future.

The responses showed that most of the people want to be and are at one or the other SNS with fairly large no (42%) having their profile pages on more than one SNS. The trend of popularity of SNS in India has not been reflected in the current sample size as according to the secondary data there are more no of users of Facebook than Orkut in the Indian subcontinent. Figure 3: No of users- SNS & Blogs

ownership of blogs yes

yes, 11%

planning to start soon, 27%

no, 62%

bigadda

Facebook

bigadda

orkut

facebo…

150 Facebook,Orkut, 105 others, 49 56 100 bigadda, 18 Myspace, 13yaari, 0 50 0

planning to start soon no

Facebook Myspace

Orkut yaari

bigadda others

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Reasons for visiting SNS & Blogs: The primary reasons attributed to the visits to SNS & Blogs were to remain in touch with friends & relatives (88/110) & to know about common man‟s views (74/110). Fairly considerable amount of respondents (37%) felt that SNS & Blogs is a more customer specific media vehicle. Reasonably good amount of respondents (27%) felt that SNS & Blogs are a media where you can get excusive & faster information as compared to traditional media. Figure 4: Drivers for SNS & Blog visits

90 80 70 60 50 40 30 20 10 0

Common man's views, 74

88

41 30

33 Connectivity Get exclusive news Faster Information Connectivity

Common man's views specific media vehicle

The figures obtained clearly show that the adult consumers apart from communicating through SNS & Blogs also obtain information which they perceive as quick & not available on the traditional media. This gives an insight to the consumer usage pattern of the SNS & Blogs for the purpose of information. This can be profitably tapped in order to make consumers aware of a company‟s products & services by actively engaging the consumers in product related SNS or Blog activity.

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Confirmatory Factor Analysis: After obtaining eight influential factors for consumer purchase decisions through FGD, the respondents of the INDEX questionnaire were asked to rate these factors on a Likert Scale from 1 to 5. Where 1 meant completely agree & 5 meant completely disagree. The responses were analyzed by factor analysis using SPSS to know whether these factors are really influencing the consumer purchase decisions. The formulation of Null Hypothesis was as follows: Null Hypothesis; H0 = H1 Null Hypothesis; there is no influence of SNS & Blogs on consumer purchase decisions. KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.778

Bartlett's Test of

Approx. Chi-

129.51

Sphericity

Square

3

df

21

Sig.

.000

KMO measure showed that the sample size used for the survey was adequate since the result figures were .778 & figures above .5 are considered to be adequate. The Null Hypothesis was proved wrong since the Chi square test had values above 100 & 0.0% significance level. Thus, Null Hypothesis; H0 = H1 This means that SNS & Blogs do influence the consumer purchase decisions in some way or the other. The factors that were chosen after the FGD were tested for the variance Page | 35

levels & results were obtained. The results showed that cumulatively 64% of variance was shown by two factors alone. This means that there are two broad factors that are influencing the consumer purchase decisions out of the eight factors obtained by FGD. Total Variance Explained

Initial Eigenvalues

Extraction Sums Squared Loadings

of Rotation Sums Squared Loadings

of

% of % of % of Compone Tota Varianc Cumulativ Tota Varianc Cumulativ Tota Varianc Cumulativ nt l e e% l e e% l e e% 1

3.25 46.505 46.505 5

3.25 46.505 46.505 5

2.71 38.718 38.718 0

2

1.22 17.506 64.011 5

1.22 17.506 64.011 5

1.77 25.293 64.011 1

3

.799 11.420 75.431

4

.540 7.720

83.151

5

.451 6.448

89.599

6

.393 5.620

95.220

7

.335 4.780

100.000

Extraction Method: Component Analysis.

Principal

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Component matrix results: In this part of the analysis values less than .7 were considered unimportant & were not included in the matrix. Component matrix results showed that there were only two factors that had influence on the consumer purchase decisions. Good review about the product or service definitely had an influence on the purchase decisions while company owned SNS & blogs also had a significant effect in consumer purchase decisions. The component matrix yielded a third factor that was a combination of No of reviews, popularity of the SNS & Blog & Credibility of the SNS & Blog which in itself were not regarded by SPSS as individual factors. These factors were shown to have a combined effect on consumer purchase decisions. Component Matrixa Component 1

2

ia gr .805 nor .723 xop cre .737 pop .720 cob Extraction Principal Analysis.

.797 Method: Component

a. 2 components extracted. All these cannot be measured as separate entities and are not independent of each other. Thus there has to be another entity that will measure the influence of these factors. Detailed & separate research will have to be carried out in order to find out the

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underlying entity that influences these three. This is beyond the scope of the research therefore it was not researched in detail. Since all the three are related to the no of users or subscribers of a particular SNS or a blog directly or indirectly; these three factors can be clubbed to make one influencing factor that can be called „Known subscriber base of the SNS & Blog‟. Therefore after confirmatory factor analysis only three factors out of the initial eight were found to be influencing the consumer purchase decisions indicating that SNS & blogs to some extent do influence consumer purchase decisions in today‟s marketplace.

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Inferences: 

The study has shown that consumer purchase decisions are influenced by the SNS & Blogs.



Among the consumers Men more than women are likely to be influenced by the SNS & Blogs in their purchase decisions.



Consumers with applied or technical education are more likely to go to the SNS & Blogs in order to read a product review. These are also the people who are more likely to get influenced by reviews on such social media.



More than half of those who go to SNS visit it daily giving an opportunity to the marketers to promote their products & services through this media since the exposure to the promotion would be at least once a day per person. This is not the case with other media since a consumer is less likely to switch onto a TV or Radio while working in office as compared to visiting his or her profile page on the SNS in working hours.



Reading blogs has yet to catch up with the adult consumer in India as more than half of the respondents of the survey read blogs only once in a week. This implies that Blogs are still way too far in terms of reach as compared to SNS. This gives limited opportunity to marketers to promote their products through such vehicles.



More than 95% of the respondents have a profile page on Orkut indicating the clear popularity of the SNS among the Adult consumers in India. This gives a very good opportunity for the marketers to promote their products & services through this SNS. However, according to the secondary data available on the public domain, Facebook leads Orkut by means of no of users.



SNS & blogs are fulfilling the primitive need of human beings to stay in touch with their friends & relatives by giving them a medium to get connected cheaply. Another tendency of human beings to know what others are doing is also fulfilled by such mediums as they provide open access to other people‟s profile pages & communities as well.



People also go to such mediums in order to find out what is new & what others have to say about a product or a service. Thus tapping „collective wisdom‟ for free!

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Conclusion: For companies, the single most important implication of this survey is that they have to understand the role of Social Media in their particular industry. How much do customers in their industry rely on web information? If the rate is low, that probably means the right online marketplace hasn't yet been created for their industry. This may be a right opportunity for the company that creates the best marketplace in a category usually gets the lead. The example of Amazon.com speaks volumes of the stated fact. Even if Social Media‟s influence in the industry is relatively low, you'll still have a lot of customers making decisions based on the user comments they see online. Most of those comments will be generated by a small percentage of users, who the company can easily identify and court. Since the people posting comments online are also the most enthusiastic web users, the company can use social media to reach out to them and make sure their needs are met. In the age of viral marketing companies have to be more cautious & innovative. Some companies have communities of users online as was seen in the case of community for „Hero-Honda Karizma‟ on Orkut; others are trying to market through online communities as is the case with MTV networks making theme for Orkut & some are trying to build communities of their own. In all cases, the companies need to understand what type of community they are dealing with. Online communities have started to fill the gap left by the fragmentation of offline social groups, brought about by changing living and working patterns, and this need is growing rapidly. The rise in corporate communities is a strong indication of the fact that communities work. The use of tried and tested technology, an understanding of online psychology and the experience built up by constantly engaging in promotion of products & services through such media is going to be the name of the game for future. The main challenge now is how to make money from community, and there are successful revenue streams already being created from some communities of practice. Considering the fact that communities are thriving in the current climate of fierce competition & imitation, the future looks very bright for the companies who want to put their money at the right place!

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Appendix I Questionnaire for Primary Survey:  Personal details: Name, Age, Sex, Educational qualification & e mail id. 1. Do you have access to internet connection in your daily routine? a) Yes. b) No. 2. How frequently do you visit Social networking sites? a) Once a week. b) Twice a week. c) Thrice a week. d) Every day. 3. How frequently do you visit Blogs? a) Once a week. b) Twice a week. c) Thrice a week. d) Every day. 4. You have an account on? a) Facebook. b) Myspace. c) Orkut. d) Yaari.com. e) Big adda. f) Others please mention. 5. Do you have your own Blog? a) Yes. b) Planning to start soon! c) No. 6. You go to SNS &/or Blogs to: a) Stay in touch with friends & relatives. b) You get news which you don‟t get anywhere else. c) Get information faster. d) Know about common people‟s views. e) It is more personal than other mass media. 7. Kindly rate the following on a scale of 1 to 5 where:  1 is completely agree.  2 is slightly agree.  3 is can‟t say or neutral.  4 is slightly disagree.  5 is completely disagree. Page | 41

The following factors influence the decision of consumers when they are buying a product/service after reading about it on a SNS &/or Blog: 1

2

3

4

5

Daily internet access Good review about the product/service Bad review about the product/service No of reviews good or bad (e.g. 40 good reviews & only 5 bad reviews) Expert opinion about the product/service Credibility of the information on SNS/Blog Popularity of SNS/Blog Information available on Company owned SNS/blogs which makes the product/service

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