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The Impact of Social Networks on Consumer Behavior for Tesco

Chapter 1: Introduction      

1.0. Background of the Research

Social media has been far forward in the present world and its impact has been readily seen in most of the retail sectors. The status of social media has been effective, as it is an integral part to drive the buying decisions of customers (Goh, Heng and Lin, 2013). Most companies are using the retail organisation with the change behaviour that customers has and for this, the customer can access information with the availability of items among the retail organisation sites. Besides, the purchasing decisions and customer’s behaviour are dependent on the attraction of online retail sites. In this research, the purpose is to analyse the impact of social media on retail organisations, which will evaluate the consumer buying behaviour and demand patterns of Tesco (Kemp et al. 2010). The research also throws light on Tesco to be the market leader in UK in essence to judge the social media in a useful way. Hence, this is because of the level of competition is higher in retail market where new competitors other than Tesco are also booming in the market.

1.1. Research Aim & Rationale       

The aim is to analyse the impact of Social media for Tesco, UK that is defined with aspect to demand patterns and customer buying behaviour. However, the rationale for the research is:

What is the issue?

The major issue could be evaluated in terms of customer behaviour and the essence brought due to the social networking tools (Chu and Kim, 2011). This will help Tesco to analyse the buying behaviour patterns with respect to services and products. Besides, it can be intended that Tesco have to nullify the issue with other techniques.

Why is the issue?

The issue is con ........

is an integral part to drive the buying decisions of customers (Goh, Heng and Lin, 2013). Most companies are using the retail organisation with the change behaviour that customers has and for this, the customer can access information with the availability of items among the retail organisation sites. Besides, the purchasing decisions and customer’s behaviour are dependent on the attraction of online retail sites. In this research, the purpose is to analyse the impact of social media on retail organisations, which will evaluate the consumer buying behaviour and demand patterns of Tesco (Kemp et al. 2010). The research also throws light on Tesco to be the market leader in UK in essence to judge the social media in a useful way. Hence, this is because of the level of competition is higher in retail market where new competitors other than Tesco are also booming in the market.

1.1. Research Aim & Rationale       

The aim is to analyse the impact of Social media for Tesco, UK that is defined with aspect to demand patterns and customer buying behaviour. However, the rationale for the research is:

What is the issue?

The major issue could be evaluated in terms of customer behaviour and the essence brought due to the social networking tools (Chu and Kim, 2011). This will help Tesco to analyse the buying behaviour patterns with respect to services and products. Besides, it can be intended that Tesco have to nullify the issue with other techniques.

Why is the issue?

The issue is considered as a primitive issue for Tesco in terms of market share and growth, and it is deduced that customer base would decline too. Hence, the issue is raised in case of competitive resources mainly.

Why is the issue now?

It is an issue because Tesco has to implement tools for social media within external and internal system (Cheung, Chiu and Lee, 2011). As the competition in the business environment is higher, Tesco has to implement all its social media tools to survive in the business environment. Besides, the organisation has to judge aspects of customer behaviour, as it can increase the market share that is coming down while competitors are rising.

1.2. Research Questions       

  1. What is the effect of Social media in retail business environment of Tesco, UK?
  2. How demand patterns and consumer behaviour could be noticed among the consumers of Tesco?

1.3. Research Objectives      

  • To investigate the effect of social media in retail environment of Tesco in UK
  • To identify the aspects of social media on customer buying behaviour for Tesco
  • To scrutinize about the perception of consumer buying behaviour in Tesco

1.4. Research Significance

The research on consumer behaviour on social media for Tesco is defined with primary research, and it is considered as a major tool for several business organisations. However, this would help Tesco to arbitrate the outline of products among consumers with the help of social media.

Chapter 2: Literature Review         

2.1. Introduction       

This chapter will review critically on the concepts of consumer behaviour and social media on retail organisation of UK. The literature will mainly assess the critical arguments and opinions of various authors and following this, a gap model of buying behaviour will be analysed.

2.2. Social Networks and concept behind retail organisations     

Social network has been a wave in the present society, as every organisation is using it to create sales and image among customers. Brunk (2010) opines that the relationship among customers is mainly established by the network formation. Social networks have been defined from two aspects that are traditional and Modern method. In case of traditional prospect, the interaction is made with face-to-face while in case of modernized method, it is done electronically. In today’s age, the use of technology has been crucial, as it drives customers towards social media sites such as Twitter, Facebook, Instagram and YouTube.

Bakshy et al. (2012) explains that online retailing has been an effective method to attract customers, and for most retail companies, the interaction is done with the online platform. Besides, the major trend in case of retail organisations such as Tesco has been growing heavily while the demography of customers tries to widen the understanding of the demands in company (Bruhn, Schoenmueller and Schäfer, 2012). Apart from the increase in business, customers are also satisfied with service, as they can easily get information about the products from the retail sites. In case of online retail methods, Ashley and Tute (2015) argues that the demands of customers tend to enlarge the design process, as the range of products helps to get wide benefit of the company with the prospective customers.

2.3. Perception on buying behaviour and customers

According to Rapp et al. (2013), the perception of customers is dependent largely on the understanding of retail organisations while some promotional methods are also used to carry the information regarding the customers. The social media plays a crucial role, as the promotional techniques are defined through the products that customers attract. In order, the advertisement posted in online sites helps to draw the customers of the organisation (Trusov, Bucklin and Pauwels, 2009). Along this, most customers are inclined to the advertisements, which companies promote in social media sites. Besides, most customers tend to go on a specific site to analyse the product, and then purchase it. Hence, this helps the company to position its product in the market from where customer could purchase it after analysing the market. Towards the buying perception, Laroche, Habibi and Richard (2013) have argued that the key issue of social media sites is regarding the consumer views, which spreads dramatically. Further, word-of-mouth also helps to create the perception among the mind-sets of customers for the company.

However, it is analysed that the buying behaviour of customers for the organisation is influenced by the decision process. According to Pookulangara and Koesler (2011), Need Recognition is the first step where the purchasing decision process starts, and this is where the marketer should recognize the customer needs. The next step is the Information Search where consumer searches the information regarding product from family friends, whole sellers, dealers, retailers and through advertisements. As argued by Ngai, Tao and Moon (2015), the third step is the Evaluation of alternatives for which the customer evaluates the alternatives on satisfying power, quality and other features after getting the knowledge for the product. The next step is the Purchase Decision on which the buyer purchases the product after evaluating the alternatives. Laroche et al. (2012) explains that there could also be chances to postpone the buying decision because of some reasons. For this stage, the marketer should try to find out possible reasons and then move either by providing effective information to customers or by offering them guarantee regarding the product.

Figure 1: Buying Decision Process of Customers

(Source: Kemp et al. 2010)

The last step is Post-Purchase Behaviour where after purchasing the product, the customer will be satisfied or dissatisfied. As argued by Hajli (2014), if the customer is not desirably satisfied, he would be disappointed while if he is satisfied, he could be pleased related to his purchase.

2.4. How Tesco uses Social media sites to influence customers

On being the UK’s largest retailer and supermarket chain, Tesco certainly has a huge customer base. At present, Tesco’s operations are seen in 13 Countries along with Ireland and China. As exclaimed by Goh, Heng and Lin (2013), Tesco in the ongoing market of UK has been promising, as it influences varied customers through Facebook, Twitter and Pinterest. Through Facebook, Tesco has done a good job by filling its timeline while engaging the visual content. Unlike other retailers, Tesco also posts one update a day, and it is related mostly related to its products or brands (Diffley et al. 2011). In contrast, Tesco is frequently incentivizing the user comments by offering the Clubcard points, and in return for sharing the stories on several topics (Chu and Kim, 2011). Hence, this is a useful way to drive engagement but it can be seen to pay for likes. However, Tesco offers an effective “Here to Help” tab, which include the contact details for all customer care channels and “Real Food” app, which gives the information recipes.

Incredibly, Twitter also has accounted on Clubcard, Special offers, real food and jobs. As argued by Cheung, Chiu and Lee (2011), Tesco through Twitter offers the predominant churns of the latest product offers and the discounted items. In fact, Twitter people engage with the brands to complain or they want to access the special offers. Tesco has also managed to increase substantially their followers in the last few months and hence probably, it is promoting its product through its e-Com platform.

2.4. Gap Model of buying behaviour

The gap model helps to understand the differences of the purchasing decisions of customers with the social networking sites mainly. According to Bruhn, Schoenmueller and Schäfer (2012), the analysis made with relation to perceived quality embraces with the advertisements of retail organisations that help in creating review for customers. In regard, when consumers do not accept the perceived service quality, then the gap in perception occurs. With the growing use of social networking methods, there has been a huge change in customer’s perception (Brunk, 2010). Besides, as the level of gap is less, the necessity of perceived quality of products could be defined with the satisfaction of customers.

Figure 2: Gap Model

 (Source: Bakshy et al. 2012)

Further, as argued by Ashley and Tute (2015), the companies make certain that they present the best quality so that they can obtain competitive advantage. Thus, customer retention and loyalty are also a major aspect that could be delivered by the companies who endorse online methods. Hence, the company always try to decrease the gap, which will help to increase customer loyalty and attraction.

2.5. Conclusion

The literature concludes on the aspect of social networks that is established with the concept for the retail organisations, and the perception made on consumer decision process. Besides, a Gap Model is also evaluated critically, and the influence of customers among social network sites for Tesco is analysed. 

Chapter 3: Methodology     

3.1. Research Philosophy     

Research Philosophy is of three types: Positivism, Realism and Interpretivism. According to Bernard and Bernard (2012), the researcher has used Positivism philosophy to define the research with the use of research objectives and the fact behind social network usage in retail sites. Besides, this philosophy helps to determine the customer’s behaviour with the impact of social network using the numerical data. Further, Positivism philosophy is carried out with the help of quantitative method so that the analysis can be drawn in a feasible manner (Östlund et al. 2011). Unlike, Interpretivism and Realism philosophy are associated with qualitative method where the numerical results cannot be tested or measured.

3.2. Research Approach      

Research Approach is of two types: Deductive and Inductive. In this research, the researcher has chosen Deductive approach because it involves with the theory and the tested objectives to work with the numerical data (Yvonne Feilzer, 2010). Besides, the deductive research is concerned with the quantitative data whereas Inductive research is defined with qualitative data and for this reason, the ongoing research to be made on the impact of social networks on consumer behaviour for Tesco will be directed with close-ended questions. Unlike, the feasibility of deductive research is concerned with the Gap model that is developed with customer buying process with social networks.

3.3. Research Strategy         

According to Driscoll (2011), the research strategy used is Survey that is effective to gather data among the respondents from a chosen population. The use of survey research is administered because the broad area of the research encompasses with measurement procedures by asking questions to the respondents. In this research, the survey research will be defined by self-administered questions, mostly in the form of close-ended ones, which will help the researcher to ask respondents the questions and then analyse it viably (Bernard and Bernard, 2012). Moreover, the survey research is formalized to gather viable information about the attitudes and experiences of customers of Tesco in a formalized manner.

3.4. Research Method          

Research Methods are mostly of two types: Qualitative and Quantitative. For this research, the researcher has use Quantitative research, which is rather simpler to assess and identify (Dörnyei and Csizér, 2012). The data is produced in numerical form and then analysed using mathematical methods. For quantitative research, numerical data has to be used with the development of Likert scales or multiple options for a single question (Jensen, 2013). On the other hand, qualitative research is used to gain understanding of the reasons, motivations and opinions that will provide insight to develop idea of the research. In general, the use of qualitative research is used mostly in interviews.

3.5. Research Instruments   

For this research, the researcher has used Survey strategy that is to be analysed with Primary data whereas the application of secondary data is already defined in the literature review. Further, the data collection instrument used is close-ended questions where mainly customers are chosen to portray the research.

3.6. Sampling

3.6.1. Population and Research site

As opined by Yilmaz (2013), from the total Population, the researcher at first randomly selected 75 customers and from there after the desired procedure, only 50 of them agreed to take part in the survey process. However, for the survey, the researcher has selected regular customers of Tesco Retail market of UK.

3.6.2. Sampling strategy       

Sampling strategy is generally of two types: Probability and Non-probability. In this research, the researcher will use Probability Sampling strategy where the application of random sampling will be drawn to assess the results (Davies and Hughes, 2014). Besides, the Sample size selected is 50 respondents of Tesco who will be analysed on the implication of Social networks that drives consumer behaviour of Tesco.

3.7. Ethical implications       

It is important that for the conduct of the research, ethical implications have to be considered so that the research is done without any barrier (Robinson, 2014). The ethical considerations are to be kept in mind while conducting the research, as the researcher should give informed consent to the participants that their data and information would be kept confidential and will not have any access to any third parties.

3.8. Research limitations      

On conducting the research, the researcher has faced limitation with time because surveys took a lengthy time because the researcher had to go to every participant to ask for their information regarding the topic. In order, as the research was too short, not much information could be defied in this project.

Chapter 4: Data Analysis and Presentation

4.1. Questionnaires   

1. What is your age group?

Options

No. of respondents

Percentage

18-27

17

34

28-39

14

28

40-51

11

22

52-64

8

16

 

From this question, the respondents that are been surveyed on the age group criteria shows that 34% belongs to 18-27 group while 28% belongs to 28-39 age group. Likewise, the respondent that falls on age group 40-51 is 22% while the 52-64 age groups have 16%.

2. What is your gender?

Options

No. of respondents

Percentage

Male

19

38

Female

31

62

 

The survey on gender analyses that most of the respondents are female with 62% of the overall sample size while just 38% are male respondents.

3. Do you like to purchase from Tesco?

Options

No. of respondents

Percentage

Very Much

22

44

Moderate

18

36

Neutral

5

10

Sometimes

2

4

Does not like

3

6

 

The response intended is defined that if the respondents like to purchase from Tesco or any other stores in UK. However, the response made shows that 44% of respondents like to purchase from Tesco very much while 35% have shown moderate experience. In order, the respondent that does not like is 6%, and just 6% goes to the store sometimes.

4. Which factors you think that make you to buy from Tesco?

Options

No. of respondents

Percentage

Price

8

16

Quality

16

32

Ease of order

12

24

Service

10

20

Not too much travelling

4

8