CHAPTER 2

REVIEW OF RELATED LITERATURE

This chapter proffers the related literature and studies after the thorough and in-depth

forage done by the researchers. The literature adduced in this chapter addresses the different

ideas, concepts, generalization, conclusions and also the different development related to the

study. This will serve as a guide for the researchers in developing the project. Moreover, the

information included in this chapter, helps in familiarizing details that are apposite and similar to

the present study.

DEFINING SOCIAL MEDIA

To consider social media as a tool in promoting a product, a retailer must understand every

aspect of it. Social media cannot be understood without first defining Web 2.0: a term that

describes a new way in which end users use the World Wide Web, a place where content is

continuously altered by all operators in a sharing and collaborative way (Kaplan and Haenlein

2010). “It is much more to do with what people are doing with the technology than the

technology itself, for rather than merely retrieving information, users are now creating and

consuming it, and hence adding value to the websites that permit them to do so” (Campbell et al.

2011, 87). Web 2.0 has evolved from simple information retrieval to interactivity,

interoperability, and collaboration (Campbell et al. 2011).

Kaplan and Haenlein (2010, 61) define social media as “a group of Internet based

applications that build on the ideological and technological foundations of Web 2.0, and allow
the creation and exchange of user generated content.” Sinclaire and Vogus (2011, 294) cite

O’Reilly’s (2005) definition: “social media is a broad term that describes software tools that

create user generated content that can be shared.” However, there are some basic features

necessary for a website to meet the requirements as a social network website: the site must

contain user profiles, content, a method that permits users to connect with each other and post

comments on each other’s pages, and join virtual groups based on common interests such as

fashion or politics. (Gross & Acquisti, 2005; Ellison, Steinfield & Lampe, 2007; Lenhart &

Madden, 2007; Winder, 2007; Boyd & Ellison, 2007 as cited in Cox 2010).

Social media has advanced from simply providing a platform for individuals to stay in

touch with their family and friends. Now it is a place where consumers can learn more about

their favorite companies and the products they sell. Marketers and retailers are utilizing these

sites as another way to reach consumers and provide a new way to shop. “Technology related

developments such as the rise of powerful search engines, advanced mobile devices and

interfaces, peer-to-peer communication vehicles, and online social networks have extended

marketers’ ability to reach shoppers through new touch points” (Shankar et al. 2011, 30).

SOCIAL MEDIA IN BUSINESS

The wide spread generation and consumption of content has created an extremely

competitive online environment where different types of content vie with each other for the

scarce attention of the user community (Asur, 2012). Social media had first developed popularity

due to the number of users interacting amongst themselves. Businesses soon took note of the

amount of online attention social media sites began to attract and realized the potential of
attention that social media can generate (Asur, 2012). Thus, online traffic turned into monetary

value. Social media marketing has since become a popular brand of online marketing.

Businesses have taken advantage of the many marketing strategies that social media have

to offer. One strategy is structuring their business model on ads that are similar to Google. When

Google began to dominate online searches in the early 2000s, it did not take long for them to

discern a then unique model of monetization of search, through online advertising 9 (Asur,

2012). This method is profitable because people on average spend ample amount of time

searching the web. The number of users constantly on the internet has been amplified by the

availability of social media platforms. Businesses have also created their own social media pages

so that consumers can subscribe to their feeds and essentially be a forum for consumerto-

business communication. This can provide an opportunity for businesses to not only interact with

their consumers, but to also see what their competitors are doing and how they are engaging with

their customers.

As an example of how organizations can use mobile marketing and social media, Flat

Tummy Tea has proven month on month growth since its establishment in 2013 at a rate of over

400% annually (Synergy, 2015, para. 5). Flat Tummy Tea is a uniquely formulated two-step

herbal detox tea that works naturally help speed metabolism, boost energy and reduce bloating to

flatten the user’s belly. They have accomplished this growth rate through embracing the internet

and utilizing social media effectively as a key part of their marketing. The company’s secret is a

very specific process and ROI based algorithm used on various online platforms, specifically on

Instagram (Synergy, 2015, para. 6). One of their key activities were simply using individuals

with a strong social media following, such as celebrities. Flat Tummy Tea has built a social
media following of over 500,000 on Instagram, many whom are new customers (Synergy, 2015,

para. 6).

SOCIAL MEDIA AS NEW MARKETING TOOL

Since the rise of social media, businesses have taken upon themselves to adapt to newer

marketing strategies, specifically social media marketing for their benefit. Social media marketing is an

essential component of business in the 21st century. Small business leaders are using this marketing

strategy to promote their business to gain visibility, viability, and sustainability to survive in the current

competitive era (Taneja 2014). Social media marketing is 8 defined as “the process of gaining traffic or

attention through social media sites”. For social media marketing to be effective, Zhu (2015) argued that

marketing efforts need to be congruent and aligned with the different needs of social media users.

Marketing objectives of social media marketing are awareness, brand values or reputation, development

of relationships and sales. However, the most important objective that businesses should reflect within

their social media campaigns is effective communication and engagement with their consumers.

Taneja (2014) analyzed the importance of small businesses incorporating social media into their

marketing efforts. In order for businesses to sell products or services through social media effectively,

they must build a relationship with their targeted audience. Effective customer relationship management

begins with properly identifying, maintaining and developing good relationships with customers and

providing value in an effort to properly allocate marketing resources to relationship developing (Taneja,

2014). In order to build brand loyalty, it is essential that businesses move from a product-oriented

approach to a customer-oriented approach.

In March 2020, much of the world went into lockdown, forcing many businesses to

temporarily shut down. Countries are gradually relaxing restrictions, but the future is still

uncertain. Even businesses that are reopening have restrictions enforcing social distancing, the

wearing of masks, and limits on how many customers can enter a space at one time. When

traditional shopping becomes difficult, or may even be scary, people are increasingly inclined to

shop online. The fact that consumers were already embracing Amazon and other online retailers

with open arms made this transition considerably easier.

Selling online eliminated the limitations of local foot traffic, enabling business owners to

easily connect with customers from anywhere. This means that even small, locally owned

businesses can see their products gain visibility and popularity on a national scale, giving them

vastly increased sales opportunities. 

Online marketplaces like Amazon have an already loyal fan base; in fact, more product

searches start on Amazon than on Google. You can also use your own storefront to find new

customers through social media, search engine optimization, and paid search and display ads!

Let’s put it this way: in 2019, an estimated 1.92 billion people around the world made purchases

online, including more than 227 million Americans. In 2020, online revenue growth was up

44% and in Q1, 2021 it increased 39% year-over-year. There's a good chance that this trend will

continue in the post-quarantine world. The advantages of online shopping aren't going to

disappear even when retail businesses reopen fully. All of this points to why this is the ideal time

to either start or double down on your ecommerce efforts.

Hoffman and Novak [4] have indicated that interactivity is the key distinguishing feature

between marketing communication on the Internet and traditional mass media. Today online

consumers have more control and bargaining power than consumers of physical stores because

the Internet offers more interactivities between consumers and product/service providers as well

as greater availability of information about products and services. Geissler and Zinkhan [3]

claimed that the Internet shifted the balance of power in favor of consumers as it became very

easy for them to make shopping comparisons and evaluate alternatives without being pressured

by salespeople.

Online stores reduce transaction costs and have advantage for both consumers and

vendors. Armstrong, Armstrong et al. [1] have the study on consumer buying behavior based on

purchase intention has been developed in marketing for more than 20 years. One issue remains

disputable is whether purchase intention can effectively predict consumer buying behavior.

Norazah Suki and Norbayah Suki [14] suggested marketers should propose more on attractive

promotion such as advertisements or discounts through the web. Yulihasri et al. [16] studied the

usefulness of internet shopping, ease of use, compatibility, privacy, security, normative beliefs,

self-efficacy, attitude and student’s buying intention. They found that web advertising favorably

influences the purchasing of a company’s products. Shoppers increasingly want what’s called a

“seamless omni channel experience”, meaning one in which retailers allow them to combine

online and brick and mortar browsing, shopping, ordering and returning in whatever combo they

would like. Sharma et al [15], assessed the online buying behavior of consumers in India, and

found that consumers are feared of unsecured transactions in online payment and majority of

online buyers are from 18-25 years.

consumers prefers online buying for convenience and most of the customers are checking the

product information before buying the products. Bauboniene and Guleviciute [13] the main

factors influencing consumers to shop online are convenience, simplicity and better price. Muda

et al. [11] investigated that online purchase behavior of Gen Y in Malaysia and identify the

factors drive the behavior. They found that Gen Y in Malaysia buys mostly from online retailers

operating via Facebook and Instagram.

FACTOR CONSIDERED IN USING SOCIAL MEDIA AS ONLINE MARKET

Performance Expectancy

The UTAUT model by Venkatesh, Morris, Davis, and Davis (2003) defines PE as ‘the

degree to which an individual believes using the system will help him or her to attain gains in job

performance’. PE is expected to affect the decision on adoption positively. When individuals

believe that adoption of a particular new technology could improve their performance, they are

more likely to adopt it. The higher the degree of belief that it can improve performance is the

faster and higher the adoption rate. In this study, PE is defined as ‘the degree to which a student

entrepreneur believes that adoption of social media as a business platform improves his or her

online business performance’. Previous research using the UTAUT model found that PE

positively affects perceived advantages of Facebook as a social media platform, which directly

affects the intention to use Facebook as a learning tool (Escobar-Rodríguez, Carvajal-Trujillo, &

Monge-Lozano, 2014).
Perceived Trust

Trust is defined as ‘the willingness of a party to be vulnerable to the actions of another

party based on the expectation that the other will perform a particular action important to the

trustor, irrespective of the ability to monitor or control that other party’ (Mayer, Davis, &

Schoorman, 1995). This concept of trust is regarded important in both social interaction and

factors affecting technology adoption where it affects the consideration of using the social media

platform (Hallikainen, 2015). Perceived trust is expected to affect the adoption of social media as

a business platform. Building trust is a process that takes time and once trust is built, an

individual’s behavioural intention is affected and it leads to a specific decision-making. In this

study, perceived trust is defined as the degree of trust an individual has on social media as a

reliable business platform and perceived trust is expected to affect the adoption of social media

positively. A recent study by Akinwunmi, Olajubu, and Aderounmu (2015) found that trust is

important in technology adoption; this study involved the adoption of cloud technology. In

studying the adoption of mobile commerce among early adopters of mobile services in South

Africa, it was found that trust has a strong positive effect on adoption (Joubert & van Belle,

2013). Students are prone to technological adoption, and a study that explored the decision to

adopt found that trust is an important part of adoption and technology acceptance (Bahmanziari,

Pearson, & Crosby, 2003).

Perceived Enjoyment

PEE is defined as the extent to which the activity of using the technology is perceived to

be enjoyable in its own right, apart from any performance consequences that may be anticipated

(Davis, Bagozzi, & Warshaw, 1992). PEE is expected to affect adoption especially when an

individual finds it enjoyable to use a new technology apart from increasing his or her
performance. When an individual uses technology and immediately has a sense of joy or

pleasure and thinks that it can be enjoyed, he or she is more likely to utilize it. Davis (1989)

assures that enjoyment influences usage behaviour and significantly affects technology

acceptance that goes beyond usefulness. Sigala, Christou, and Gretzel (2012) studied social

media usage for travel information search and found that enjoyment has a positive significant

effect on social media usage for travel information search.

Perceived Risk

Perceived risk (PR) is defined as something that affects people’s confidence in their

purchase decision (Im, Kim, & Han, 2008). Hassan, Kunz, Pearson, and Mohamed (2006)

explain PR as a loss if an action’s consequences are not favourable and an individual’s thought

that the consequences will be unfavourable. Risk is regarded as a situation where the possibilities

of outcomes from a decision are unknown. Because of this, risk is regarded as an important

factor in new technology adoption. Empirical evidence suggests that PR has a negative effect on

adaptation intention (Featherman & Pavlou, 2003), adoption of online banking services

(Farzianpour, Pishdar, Shakib, & Toloun, 2014), perceived usefulness and perceived ease of use

in the online shopping channel (Li & Huang, 2009). This explains that if the PR is high, it

hinders the adoption of technology, and lower the PR, more likely a new technology will be

adopted. Individuals will always have a certain level of PR towards technological adoption and

they are aware of the risks involved.