How Social Presence influences consumer behaviour in an online context

Diploma

Abstract

When buying products consumers are influenced by references. With their consuming behavior individuals symbolize with which groups they want to be associated. A way to do this is by buying products that have a higher status. The degree in which individuals behave towards the references is dependent of two factors: social presence and the personality of a individual; need to belong. This research focuses on how social presence and need to belong influence product rating and product choice in an online context. An experimental study was conducted to test the influence of social presence and need to belong on product choice and product rating. As expected, social presence has a positive influence on the product rating, but only when respondents have a low need to belong. Respondents with a high need to belong, rate the products positive when there is no chat present. These results are opposed to what was expected. The finding that chat applications positively influence product rating indicates that it is interesting for marketers to apply social presence in an online context to positively influence product rating by consumers. Further implications of this finding are discussed. 

Keywords: Social Presence, online consumer behavior, status, Need to Belong, referent groups, product rating, and product choice. 


INTRODUCTION

In the past decade the Internet has grown tremendously and became a new place for businesses of all sizes to expand their market base and provide better customer service. 

One of the mayor differences between the online and traditional offline shopping environment is that the offline environment encompasses a wide range of emotions involving social interactions between humans through multiple sensory channels ( Pavlou, 2001 ; Childers, Carr, Peck & Carson (2001); Jarvenpaa & Todd (1996)). According to Kumar and Benbasat (2002) “shoppers have become guests, shopping has become an experience and malls have become entertainment centers with communities” (Kumar & Benbasat, 2002, p. 8). But on the contrary most online stores have little emotional or social appeal (Gefen & Straub, 2003), although in the current era of “social media”, a change towards more social online shopping is sensible.  Because of the limited social appeal, e-commerce may be viewed as lacking human warmth, since it is more impersonal, anonymous, and automated than traditional person-to-person commerce (Head, Yuan & Archer, 2001). Creating a virtual shopping experience that will seduce the masses must engage both the cognitive and social sides of the user (Kumar & Benbasat, 2002; Parsons, 2002).

As a consequence of the limited social appeal of most websites, consumers experience more uncertainty. The experience of uncertainty has a negative effect on buying products online (Pavlou, Liang & Xue, 2006). Trust is an important factor in decreasing or taking away uncertainty entirely (Pavlou et al., 2006). Trust is also an important factor in the formation of attitude towards online shopping (Hassanein & Head, 2004). Because of this, a lot of research is focused on determining what factors influence the trust of people in the service industry (cf. Basso et al., 2001; Cheskin, 1999; Gefen & Straub, 2003; Riegelsberger & Sasse, 2001). A research topic that has been brought up to increase trust is “Social Presence”. Social presence theory has also been drawn on by researchers to explore the lack of human warmth on the Internet (Gefen & Straub, 2003; Hassanein & Head, 2004; Short, Williams & Christie, 1976). This suggests that social presence is an interesting topic for research and that the presence of social presence in an e-commerce environment improves the online consumer experience. 

In the recent past social presence has been researched in relationship with trust, loyalty and self-efficacy (Teoh & Cyril, 2008; Cyr, Hassanein, Head & Ivanov, 2007; Dash & Saji, 2007), but little is known about the relationship between social presence and actual consumer behavior. That is why this research focuses on what the effect of social presence is on consumer behavior: how do people rate a product and which product would they choose? Therefore, the first research question is as follows.