Use of social media to attract and engage new customer base

International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 - 6510(Online),
Volume 5, Issue 8, August (2014), pp. 35-46 © IAEME
INTERNATIONAL JOURNAL OF MANAGEMENT (IJM)
ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 5, Issue 8, August (2014), pp. 35-46
© IAEME: http://www.iaeme.com/IJM.asp
Journal Impact Factor (2014): 7.2230 (Calculated by GISI)
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35

IJM
© I A E M E
USE OF SOCIAL MEDIA TO ATTRACT AND ENGAGE
NEW CUSTOMER BASE
Dr. Brijesh Sivathanu1, Dr. Rajasshrie Pillai2
1(Assistant Professor, Indira Institute of Management, Pune – 411033 Maharashtra)
2(Assistant Professor, Indira Global Business School, Pune Maharashtra)
ABSTRACT
Social media is a continually evolving realm with an amazing potential for attracting and
engaging customers which is very vital for any business. The social media mix consists of social
networks, network feeds and social networking websites. Social media integrates technology, social
interaction and content creation to collaboratively connect online information. Through social media,
people or groups can create, edit, organize, comment on, combine and share content which help
organizations to better achieve their mission and goals. The most commonly used social media by
marketers are blogs, micro blogs, social networks, podcasts, discussion forums and RSS feeds.
Marketers can use social media to promote the brand and business, tell customers about their
goods and services find out what customers think of their business, attract and engage new customers
and build stronger relationship with existing customers. Currently, marketers are trying to attract new
customer base on the social media platform by deploying measures like search engine optimization,
hosting online competition, providing surprise gifts on clicks and competitive pricing. Social media
marketing has many advantages like broad reach, ability to target particular groups, free or low cost,
fast easy and personal communication with individual customers and groups.
Today, customers expect top level top level content and profile of the companies while
clicking on the links of renowned social networking websites like Facebook, LinkedIn, Twitter,
Google Plus+, Tagged, MySpace and Ning. The customers’ ‘likes’ on the social media also provide a
good mileage for the marketers. Customers expect surprises and innovative content on social media
websites.
The growth in the social media has overwhelmed many marketers as things are moving so
fast in this arena, that they must stay busy keeping abreast of the latest developments and trends by
using the proper social media mix to capture the target market.
In this study, the author attempts to understand the emerging roles and trends of social media and
internet marketing. This paper highlights the significance of social media and internet marketing in
business. This paper analyzes the online consumer behavior, customer expectations and strategies
deployed by marketers for attracting and retaining new customer base though social media by
conducting a market survey.

Keywords: emerging trends, social media mix, online consumer behavior, customer expectation,
social media marketing strategies.
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1. INTRODUCTION

It is a new world today – a world where everyone has the ability to influence opinion; a world
where everyone has the ability to influence purchase and a world where geographical distances are
down to zero. The world today has ushered into the era of E- commerce, which is a world shaped by
social media. Social media is the phenomenon which enables and endorses free flow of
conversations online. Now-a-days, it is just not imperative to use static websites but also the social
media network to advertise, market and connect globally. If blogs and algorithms on the internet
decentralize the business of news even as they made it richer in detail, the real revolution happened
with arrival of social media sites such as Facebook, Twitter, Linkedin, Tagged, MySpace, Ning and
Google + which are the most popular.
Since the last decade, consumers are becoming internet savvy, crossing generations and
cultures alike, and social media has ingrained into their digital worlds. Having online presence is
something that leads everyone to become ever more dependent upon, as being a natural part of their
daily lives.
A research by Nielsen/McKinsey Company (2011) mentions the number of active Internet
users who visit blogs and social network sites are approximately 80% of all users, also these sites are
the top destinations online.
People use social media to get in touch with friends; moreover social media allows people to
share opinions, videos, photos and much more. It has prompted marketers to reconsider their use of
traditional media and influenced their marketing strategies. To use social media, marketers should
find the way how these medium can be useful for their consumers. Social networks, blogs, social
communities, forums and other interactive media help marketing managers all over the world better
understand current and potential consumers.
As per the CMO Survey (cmosurvey.org, August 2011) Social Media Stores enable people to
buy where they connect to millions of users into a social media platform. For example, retailers and
brands can have a storefront in Facebook.
The Internet has redefined how consumers interact with brands and make purchase and
spending decisions. Instead of interacting with a “product specialist” at the “point of sale,” buyers
rely on an array of virtual information resources, social media tools, and peer opinions to narrow
their choices, then on customer service to seal the deal. The likelihood of an average customer
making a final purchasing decision based upon a routine interaction with a line employee has never
been greater.
2. OBJECTIVE OF THE STUDY
In the current era of e-commerce, marketers are targeting social media to leverage their
profitability and sales. In this context, empirical investigation aimed at identifying the antecedents of
online purchase using social networking sites (SNS) has been undertaken by the researcher, which is
of utmost importance for marketers to develop strategies for attracting and engaging new customer
base.
Specifically, the key objectives of the study are:
1. To study the emerging roles and trends of social media and internet marketing.
2. To study the significance of social media and internet marketing in business.
3. To identify the factors which influence the online consumer behavior for online purchase using
social media (SNS).

4. To study the strategies deployed by marketers for attracting and retaining new customer base
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though social media.
3. LITERATURE REVIEW
Review of literature is essential to place the study in a proper perspective. The review also
helps to identify the limitations of the earlier studies, identify the gaps and enables the researcher to
focus upon the key areas of the research.
3.1 Social Media Role And Emerging Trends Of Social Media And Internet Marketing
Internet is extensively used as a means of communication, potential source of information,
means of entertainment and many more. Few years after the launch of internet, marketers realized
the possibilities of using it as a medium for business. Modern technology has been developed to the
extent that even shopping is made possible over the internet. Both the products and services can he
purchased by online shopping .Online shopping is used for business to business transactions or
business to customer transactions with applications of E-commerce.
The Internet has become a mass media vehicle for consumer-sponsored communications. It
now represents the number one source of media for consumers at work and the number two source of
media at home. The Internet reaches more than 60% of all United States consumers for an average
weekly usage rate of more than 100 minutes (Rashtchy, Kessler, Bieber, Shindler, Tzeng, 2007).
Below are the examples of social media described by W. Glynn Mangold David J. Faulds (2009):
Table 1: Examples of social media
• Social networking sites (MySpace, Facebook, Faceparty)
• Creativity works sharing sites:
o Video sharing sites (YouTube)
o Photo sharing sites (Flickr)
o Music sharing sites (Jamendo.com)
• Content sharing combined with assistance
• (Piczo.com)
• General intellectual property sharing sites
• (Creative Commons)
• User-sponsored blogs (The Unofficial AppleWeblog, Cnet.com)
• Company-sponsored websites/blogs (Apple.com, PG’s Vocalpoint)
• Company-sponsored cause/help sites (Dove’s Campaign for Real Beauty, click2quit.com)
• Invitation-only social networks (ASmallWorld.net)
• Business networking sites (LinkedIn)
• Collaborative websites (Wikipedia)
• Virtual worlds (Second Life)
• Commerce communities (eBay, Amazon.com,Craig’s List, iStockphoto, Threadless.com)
• Podcasts (‘‘For Immediate Release: The Hobson and Holtz Report’’)
• News delivery sites (Current TV)
• Educational materials sharing (MIT Open Course Ware, MERLOT)
• Open Source Software communities (Mozilla’s spreadfirefox.com, Linux.org)
• Social bookmarking sites allowing users to recommend online news stories, music,
videos, etc. (Digg, del.icio.us, Newsvine, Mixx it, Reddit)

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Social media is perceived by consumers as a more trustworthy source of information
regarding products and services than corporate-sponsored communications transmitted via the
traditional elements of the promotion mix (Foux, 2006).
Consumers are turning more frequently to various types of social media to conduct their
information searches and to make their purchasing decisions (Lempert, 2006; Vollmer Precourt,
2008).
Consumers are making decisions based on information they learn from their networks and
using that knowledge to take action and influence others. Where historically, a conversation might
occur between a couple of people over the phone or at a gathering, social media environments are
allowing large groups of people to hear, participate in, and share conversations: positive and
negative. It is an unpaid endorsement when a brand receives the Facebook ‘Like’ or thumbs up from
a fan, and that the fan can publicly indicate this endorsement (and sometimes emotional
commitment, falling into the coveted marketing space defined as ‘True Loyalty’ or even better, ‘Cult
Loyalty’) Flanagan, Wendy (2010).
Social media networks offer channels through which businesses can learn about their
customers’ preferences and get insight into their goods or service acceptance in the field. Some
businesses adopt a broadcast mechanism by which any customer who has opted in to share the
business’s message will be able to share the message with all of the people in his or her network.
Others have adopted a selective mechanism to help detect those customers who would take their
message to their network in an effective manner. To stimulate and to engage customers for active
participation in these new marketing initiatives, businesses are experimenting with novel ways of
marketing and are willing to explore ideas that would help them acquire new customers, retain
existing customers, and in turn increase their sales (V. Kumar Bala Sundaram, 2012)
3.2. Significance of Social Media and Internet Marketing Business
The Internet has become the fastest growing advertising medium of this decade (Ha, 2008).
Advertisers spend hundreds of millions of dollars to place their ads on high-traffic websites.
According to research, when people read an online advertisement, they are more likely to buy online.
An advertising banner on the Internet can level the playing field between large and small companies
(Smith, 2009).
As social media continue to gain in popularity, marketers are searching for a firm foundation
on which to base their strategic decisions regarding how to employ social media to engage and
influence their customers (Hoffman Novak, 2012). Consumers gain information before purchasing
any product. They seek information from organizations and also from other consumers. Firms can
make more profits by attracting and alluring potential buyers via social channels (Curty Zhang,
2011).
Social media is the good reach to provide information to consumers and Below Mentioned
social media statistics mentions the extent of costumer and brand reach
Social media is the good reach to provide information to consumers and Below Mentioned
social media statistics mentions the extent of costumer and brand reach (Alexander, Anson. 2012)

Table 2: Social Media Statistics
• Facebook has 845 million active users.
• The average Facebook user has 130 friends.
• Twitter has 127 million active users.
• 13% of Internet users also use Twitter.
• 54% of Twitter users use it on their mobile devices.
• 36% of Twitter users tweet at least once a day.
• Google+ has had 90 million unique visitors.
• Pinterest has had 21 million unique visits.
• LinkedIn has 150 million registered users.
• There are 2 million companies on LinkedIn.
• 75% of LinkedIn users use it for business purposes.1
Source: Alexander, Anson. “Social Media Usage Statistics 2012 [Infographic]” 10 March
2012. 29 June 2012 http://ansonalex.com/infographics/social-media-usage-statistics-
For both franchisors and franchisees, a well-executed social media strategy can generate
39
(Todd Leiser, 2012):
• Increased sales
• Strengthened relationships with existing customers
• New customers
• Enhanced customer service
• A consumer research tool
• Traffic to your website
The above mentioned numbers of followers convey the brand awareness using social media.
The popular social media networking website and their contribution to business is discussed below
(Madhav Narayanan, 2012):
Facebook: Founded in 2006, Facebook has become the most popular social networking website. It
has transformed the value of social media websites through the sheer volume of users that it has
attracted. 75 % of the fortune 100 companies are on Facebook. Apart from these companies
Facebook is also beneficial for small businesses as it allows them to reach their target audience with
a personal approach.
Twitter: It is an extremely popular online micro blogging service which has gained a very large user
base consisting of more than 500 million users. Twitter has attracted lots of attentions from business

corporations for the immense potential it provides for viral marketing. Due to its huge reach it has
increasingly being used by news organizations to disseminate news updates which are then filtered
and commented on by the twitter community.
You Tube: You Tube which began in 2005 became extremely popular as a crowd sourced video
screening service. It is a powerful free tool for businesses and organizations to engage an audience
with online videos. Businesses can leverage the mass appeal of you tube by creating their own public
channel that their fan base can subscribe to.
Online branding communities attract new users to a product, reinforce loyalty to a product and help
marketers better understand consumers and the potential uses of the product (Jaffe 2005; Kahney
2004; Muniz and Schau 2007; O’Guinn and Muniz 2005). Galeotti and Goyal (2009) reports that
companies who use social media networking see higher sales and greater profits. The above all
clearly conveys social media is playing a vital role and changing the scenario of marketing.
3.3. Factors Influencing the Online Consumer Behavior for Online Purchase Using Social
Media
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The term consumer behavior is always been crucial in marketing. It is necessary to
understand the consumer behavior for marketers.
Consumer behaviour is the behaviour that consumers display in searching for, purchasing,
using, evaluating, and disposing of products and services that they expect will satisfy their needs
(Schiffman Kanuk, 2008). Now a day’s online marketing is in boom. Word of Mouth (WOM) is
defined as the act of exchanging marketing information among consumers, and plays an essential
role in changing consumer attitudes and behaviour towards products and services (Katz Lazarsfeld
1955). The emergence of Internet-based media has facilitated the development of WOM online – that
is, electronic word-of-mouth (referred to as eWOM hereafter). Hennig-Thurau et al. (2004) defined
eWOM as ‘any positive or negative statement made by potential, actual, or former customers about a
product or company, which is made available to a multitude of people and institutions via the
Internet’
SNSs represent an ideal tool for eWOM, as consumers freely create and disseminate brand-related
information in their established social networks composed of friends, classmates and other
acquaintances (Vollmer Precourt 2008).
Consumers with a high level of opinion seeking behaviour tend to search for information and
advice from others when making a purchase decision (Flynn et al. 1996). Consumers' perceived risks
associated with online shopping have a critical effect on their decision making. Consumer risk
perceptions and concerns regarding online shopping are mainly related to the aspects involving the
privacy and security of personal information, security of online transaction systems and uncertainty
of product quality. Kim and Benbasat (2003) identified four categories of trust related issues: 1)
personal information; 2) product quality and price; 3) customer service; and 4) store presence
Kini and Choobineh (1998) are of the view that trust in the Internet business is necessary but
not sufficient for an Internet buying behavior to take place. Advertisers spend hundreds of millions
of dollars to place their ads on high-traffic websites. According to research, when people read an
online advertisement, they are more likely to buy online. An advertising banner on the Internet can
level the playing field between large and small companies (Smith, 2009). The Internet can be
referred to as a pull medium because consumers choose the content they view. In effect, the
consumer is pulling from a plethora and free flow of information (Pitta Fowler, 2005). While some
research suggests that pop-up ads can create high levels of ad perception, recall, and intent to
purchase (Chatterjee, 2008), other research has shown consumers become irritated by pop-up ads and
thus avoid online advertising all together (Edwards, Li, Lee, 2002). For a business, one of the

most valuable benefits of using digital media is their capacity to offer consumers a personalized
relationship (Wind Rangaswamy, 2001).
41

Online recommendations are one way to personalize a relationship. Online recommendations
range from personal reviews from other customers to personalized recommendations provided by
recommender engines or systems. Recommender systems are information sources that provide
personalized information to consumers (Ansari, Essegaier, Kohli, 2000). These systems use an
information filtering technique in order to formulate product recommendations that are most likely to
be of interest to the user. Marketers will benefit from providing recommendations to online
consumers, especially if the source is providing personalized recommendations. Consumers focus
more on the recommendation source itself than on the type of website on which the recommendation
appears (Senecal Nantel, 2004).
3.4. Strategies Deployed by Marketers for Attracting and Retaining New Customer Base
Though Social Media
As per the 2013 social media marketing industry report (Michaela Stelzner, 2013) 79% of
marketers agreed that they had integrated their social media and traditional marketing activities. Also
there is substantial increase in strategies like use of blogs, use of social forums and social
bookmarking used by marketers for online marketers.
The study of top retailers using social media for marketing mentions that (Michelle B. Kunz,
Brittany 2011), Successful retailers will continue to employ social media marketing, and consumers
are expected to be response. This paper also pinpoints that viral video of any kind lends itself to the
YouTube platform, so for any visually enhanced promotion, this network may be effective, but not
necessarily for everyone. However, these top retailers seemed to focus their attention on Facebook,
with some activities on YouTube. Facebook has been embraced by retailers and consumers alike.
Facebook, Twitter, LinkedIn, blogging and YouTube were the top five platforms used by marketers,
with Facebook leading the pack. All of the other platforms paled in comparison to these top five
(Michaela Stelzner, 2013).
Twitter may be effective for mining what conversations and tweets are saying about the
brand, but it is not terribly effective for marketing messages. While Dell and Best Buy have used
Twitter effectively to improve customer service and offer especially hard-hitting deals and
promotions, it appears that Twitter may be more effective for up-and-coming brands/companies,
rather than well-established corporations. Advertising on SNSs enables consumers to engage in some
kind of social interactions by commenting, liking or passing along to their social connections
(Interactive Advertising Bureau 2009).
Social media enable people to shop multiple stores together using a range of different social
shopping tools such as ratings and reviews, recommendations and referrals and social bookmarking
(e.g. Kaboodle.com and Storeenvy.com). Research shows 32% of retailers surveyed work with these
sites to drive traffic to their stores or planned implementation/enhancement in 2009 (Mulpuru, 2010).
Consumers feel more engaged with products and organizations when they are able to submit
feedback. For example, Toyota enables its customers to provide feedback on a broad range of issues
via it’s ‘‘Open Road Blog’’ (Toyota, 2008).
Retail Blogs provide news and discussion around e-commerce events, as well as capture
customer feedback and suggestions on desired improvements. The main benefit of blogs is generally
in the opportunity to engage brand enthusiasts (Mahdi Shadkam , James O’Hara April 2013).
Online Consumer Communities are linked to an e-commerce site, usually with a loyalty,
advisory or social CRM (Social Customer Relationship Management) purpose. Customer
communities can be hosted on social media platforms such as Facebook or on website with dedicated
community software (Mahdi Shadkam, James O’Hara April 2013).Advertising on social media

platforms or promotional applications is a useful strategy in social commerce in order to attract more
consumers among social media users (Mahdi Shadkam , James O’Hara April 2013).
42

Implementation an appropriate rating and review system assists marketers to get feedback
and also increase consumer trust. Much of this benefit is because consumers can engage in direct
feedback on the offerings most important to them, providing instant and critical insights for a wide
variety of brands, products, and retailers (Mulpuru, 2010).People like to feel special and make it
personalized. Feelings of being special can be produced by offering products, information, and
special deals that are available exclusively to a subset of consumers. For example, Unilever offers its
readers coupons and product samples from Dove’s ‘‘Campaign for Real Beauty (W Glynn Mangold,
David J. Faulds 2009).
4. RESEARCH METHODOLOGY
Besides secondary data, the primary data was collected by the researcher in a survey using a
structured questionnaire and the questions were close ended, keeping in view the context and
objectives of the study. The questionnaire was developed in which each item was measured on five
point Likert scale ranging from “strongly agree” to “strongly disagree”.
After an extensive review of literature, an exploratory study was undertaken among 300
consumers to identify the factors which affect the online purchase using social networking sites and
50 marketers to understand the strategies deployed by marketers for attracting and retaining new
customer base though social media.
5. ANALYSIS AND INTERPRETATION
In accordance with Churchill procedure, the researcher conducted the Principal Component
Analysis with Varimax rotation to identify the antecedents of online purchase using social
networking sites (SNS). To determine the number of factors to retain, the researcher considered the
most usual rule of Kaiser criterion (selected the factors corresponding the to the Eigen values above
1.0). Only items with communality greater than 0.5 and the absolute value of their co-relation to an
axis greater than 0.6 were retained. Then the Cronbach’s alpha was used to assess the reliability of
the antecedents. The estimated coefficients can be described as acceptable as they are all above 0.70
(Peterson 1994).
From the below Table No.3: The Kaiser-Meyer-Olkin (KMO) value of 0.583, which is
greater than 0.5 indicates the measure of sample adequacy which proves that the given primary data
is fit for data analysis using factor analysis. The Bartlette’s test of sphericity indicates that the
correlation matrix is not an identity matrix which indicates that the factor model is appropriate.
Since the p-value is 0.000 i.e. the p-value is less than 0.05 which indicates that the correlation is
significant.
It is clear that three factors F1, F2, F3 were extracted which cumulatively explains 92.017 %
of the total variance.
The rotated component matrix shows that the factor loading of the items on the factors. The
Factor F1 which has been named “E-Trust” consists of the items: Personal information, Product
quality price, Customer service and Store presence, each having factor loading of 0.973.
The extracted factor F2 which has been named “E-World of Mouth on SNS” consists of the
items having factor loading - Likes’ to product on SNS - 0.950, Good comments about the product –
0.773 Amount of shares per page – 0.950, Posts on Forums about the product -0.950 and Product
description by Users- 0.773.
The extracted factor F3 which has been named “Advt. on SNS” consists of the items Pop-
Ups, Personalization and Attractive Online Campaign, each having factor loading 0.959.

43

The Scree plot indicates that only three factors F1, F2 and F3 emerged as important as their
Eigen values were 5.512, 3.782 and 1.750 respectively. The remaining components with Eigen
values under 1.0 were dropped as per the Kaiser rule. The below mentioned Graph 1 conveys the
Strategies deployed by marketers for attracting and retaining new customer base though social media
The Graph 1 one indicates that blogs on social media, create fan pages on SNS, creating and
leveraging multiple social media touch points, creating unique online campaign, asking for feedback
tough SNS, writing success stories on social media, online stores linked with social media, viral
video on social networking websites and attractive and dynamic and dynamic advertisement are the
strategies deployed by markets for attracting and retaining new consumer base through social media.
Table 3: Factor Analysis
Factor Name Statements

(Communality)
Reliability
()
Factors
Loading
Eigen
Value
%Variance
Explained
Cumulative
%
F1
(E-Trust)
- .932 - 5.512 45.934 45.934
S1 -Personal
information
S2 - Product quality
price
S3 - Customer service
S4 - Store presence
.995
.995
.995
.995
.973
.973
.973
.973
F2
(E-Word of
Mouth on
SNS)
- .980 - 3.782 31.498 77.432
S1- ‘Likes’ to product
on SNS
S2- Good comments
about the product
S3- Amount of shares
per page
S4- Posts on Forums
about the product
S5- Product description
by Users
.909
.675
.909
.909
.675
.950
.773
.950
.950
.773
F3
(Advt. On
SNS)
- .960 - 1.750 14.585 92.017
S1- Pop-Ups
S2 - Personalization
S3- Attractive Online
Campaign
.996
.991
.996
.959
.959
.959
Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy= 0.583
Overall Cronbach Alpha () = 0.867
Bartlett's Test of Sphericity = Approx. Chi-Square – 3410.135 {(p=0.000)}
Source : Primary Data

International Journal of Management (IJM), ISSN 0976
Volume 5, Issue 8, August (2014), pp.
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35-46 © IAEME
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Graph 1: Strategies deployed by marketers for attracting and retaining new customer
through social media
6. CONCLUSION AND MANAGERIAL IMPLICATIONS
Social media has changed in a very dynamic way over the past decade.
base
makes both academic and practical contributions. From an academic point of view, it contributes to
the existing literature in the area of social
researchers to study online purchase using social media and its antecedent factors
The aim of this research is to contribute modestly to a better understanding of the factors
which influence the online consumer behavior for online purchase using social media (SNS). The
results of this research confirm with many prior studies
2003). From a
managerial point of view, the contributions of the proposed study are as follows:
The key determinant of the future success for many SNS providers will rest on the ability to
monetize the product/service provided.
the next service or product will be for a business based on their needs a
managers can draw meaningful insights to understand the factors which influence online purchase
using social media (SNS). It is clear that the largest SNS providers have incredibly large user bases,
which can be leveraged in terms of
base through social media.
44
The present study
media for business. It can also be used by future
factors.
nsumer (Kim and Benbasat, 2003)
Consumers and online consumer behavior often dictate what
and desires.
nd Marketing
innovation strategies for attracting and retaining new consumer

45
7. SCOPE FOR FURTHER RESEARCH

This paper identifies the antecedents of online purchase using SNS. Future researchers may
empirically examine the relationships among the antecedents of online purchase using SNS.
Future research may incorporate the effect of variables like Rewards gains through social media,
virals and Discounts Offers on social media. Further, demographic characteristics like age, income,
sex and education play an important role in shaping a customer’s online purchase intentions. Future
research may test the effects of these demographic characteristics on the online purchase behavior
using SNS.
This research was carried out only in the city of Pune. It would be important to test the
measures in other cities and parts of India to improve the reliability and validity of the study.
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