INFLUENCE OF SOCIAL MEDIA ON VEHICLE PURCHASING DECISIONS: AN EMPIRICAL STUDY ON AUTOMOBILE INDUSTRY

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1 International Journal of Mechanical Engineering and Technology (IJMET) Volume 9, Issue 8, August 2018, pp , Article ID: IJMET_09_08_105 Available online at ISSN Print: and ISSN Online: IAEME Publication Scopus Indexed INFLUENCE OF SOCIAL MEDIA ON VEHICLE PURCHASING DECISIONS: AN EMPIRICAL STUDY ON AUTOMOBILE INDUSTRY Darshan B M Assistant Professor of Visual Communication, Amrita School of Arts and Sciences, Mysuru, Amrita Vishwa Vidyapeetham, India ABSTRACT Internet and online resources have made a significant influence on all walks of human life. The advent of social media has given a new shape to the communication and interaction. The internet and online resources are vitally used for the business as well. The persistent growth of online and electronic commerce is highly attributed to the growing influence of the internet and social media. Along with the growth of online marketing strategies, there is an escalation of dependency on people which determine their tastes and purchasing decisions. The current trends indicate that online resources and social media are highly influential on people s purchasing decisions. In this context, the present study aimed to investigate the influence of the internet and social media resources on vehicle purchasing behavior. The samples for the study were drawn from Coimbatore city of Tamil Nadu and Mysore city of Karnataka. A total of 90 people who purchased a car between the periods of May 2017 to May 2018 were participated in the study. The information was collected through a questionnaire which was tested for validity and reliability. The study shows that internet and online resources are highly influential on the decision of purchasing a car. Socio-demographic characteristics of the participants are also prominent factors in the purchasing decision. The study implies the importance of maximizing the online and internet marketing strategies in the field of automotive industry. Keywords: Digital Media, Social Media, Automotive Industry, Vehicle Purchasing Decisions Cite this Article: Darshan B M, Influence of Social Media on Vehicle Purchasing Decisions: An Empirical Study on Automobile Industry, International Journal of Mechanical Engineering and Technology, 9(8), 2018, pp editor@iaeme.com

2 Influence of Social Media on Vehicle Purchasing Decisions: An Empirical Study on Automobile Industry 1. INTRODUCTION The advent of the internet and digital media has made remarkable changes in the atlas of communication and human interaction. The digital media had enough capability to replace the conventional media to great extent in almost all field of human life. The technological outburst along with the increased accessibility has made the internet universal and ubiquitous in all fields. The social media has redesigned the space of communication to a new form and shape which substantially ensure easy access, user-friendly and economical. The business world is not an exception for utilizing the unlimited scopes of internet, digital and social media as a platform for enriching and developing their business and market. The industrialization, globalization, urbanization and increased standard of life have changed the nature of doing business and substantially it impacted on the pattern of purchase and consumption of resources. The automotive industry is one of the fields largely benefitted due to the economic changes occurred. The number of people who purchase a personal vehicle was greater than before. The increase of production of vehicles in India during the last decade is evident [1]. The emergence of the middle class and their preference for a personal vehicle give a boom to the automotive industry of India. As of now, there is a tough competition in the automotive industry between different brands. Being one of the largest automotive industries in the world, India reports a progressive growth in this field. Each of them is adopting newest and innovative strategies to market their brands and reach to its customers. Along with traditional and conventional media, automotive industries are reaching to potential customers through different means. The digital and social media certainly decorate an important place in the marketing strategies of all brands. Utilizing social media as a platform for marketing is a widespread trend among almost all automotive industries in India. The automotive industries are equipped to move along with the time requirements for strategies marketing operations. Indian automotive industries are highly customer centric and focus on addressing their needs [2], [3]. Hence the automotive industries persistently try to reach its customers through the platforms like social media. The growing influence of social media on people s purchasing decision is widely documented. But in the context of the automotive industry, the evidence is scanty. CMO Council [4] reports that one-quarter of the car buyers were influenced by social media resource for their recent car purchase and most of them share their experiences in the social media. Similarly Naked Lime [5] reports that social media can potentially influence the buyers of vehicles and their purchasing behavior but many of the brands are not using social media efficiently and losing prospective customers. Deloitte [6] also reports that the automotive industry can be potentially beneficial from the social media strategies. The growing influence of social media in vehicle purchasing decision is highly evident [7]. There is a lack of concrete evidence to support the influence of social media on the vehicle purchasing behavior of Indian customers; most of them are based in the western contexts. Hence the present study tries to explore the influence of social and digital media on the purchase of car by south Indian customers. The study hypothesizes that vehicle purchasing behavior is significantly influenced by the social media. 2. METHODS AND MATERIALS The study was conducted among the customers who purchased a new car during May 2017 to April 2018 in Coimbatore city of Tamil Nadu and Mysore city of Karnataka, India. A list of customers was acquired from the selected local dealers of major car companies. Total of 154 customers was contacted through and requested to respond to an online questionnaire. The purpose of the study communicated in the and an informed consent was taken. Out editor@iaeme.com

3 Darshan B M of 154 customers contacted, 93 customers responded to the questionnaire. Three of the samples didn t qualify to consider for further analysis due to its incompleteness of the responded items. Hence, the total sample considered for further analysis was 90 (55 from Coimbatore and 35 from Mysore). Only those participants who have a social media account was included as the samples. The questionnaire was self-constructed with the aim of exploring the influencing factors of car purchasing decisions with a special focus on the influence of social and digital media. Necessary deletions, additions, and editions were made into the questionnaire after having conducted a pre-test. The questionnaire had three sections. The first one was on socio-demographic information sheet; the second section was on vehiclepurchasing trend and social media usage. The third section consisted of 16 questions aimed to explore the influence of social media on vehicle-purchasing behavior. After the pre-test, the questionnaire was validated with the expert opinion. The validity test was followed by a reliability test. Test-retest method was adopted for checking the reliability. It was found that the reliability score was statistically significant at Cronbach s RESULTS AND DISCUSSION This section details the results of the study. The initial section discusses the sociodemographic details of the participants and the later section looks at the vehicle purchasing behavior and social media use of the participants Socio-Demographic Characteristics Underlining the gender dimensions of vehicle-purchasing trends in India, it was reported that more than 91 percent of the respondents participated in the study were males. This trend is consistent with the overall trends of vehicle ownership in India. The evidence from the study indicates the growing trend of vehicle purchase by the people in the younger ages. It was found that around 59 percent of the people who participated in the study fell under the age group of followed by which form around 21 percent of the overall participants. The participants with the age group and 51 and above constitute 10 each of the total samples. Table 1 Socio-demographic Profile Gender Frequency (%) Age Frequency (%) Male Female 82 (91.1) 08 (8.9) above 09 (10.0) 53 (58.8) 19 (21.1) 09 (10.0) Qualification Frequency (%) Occupation Frequency (%) Govt. Employee 17 (18.8) 03 (3.3) Business 23 (25.5) 18 (20.0) Private Firm 37 (41.1) 48 (53.3) Unemployed/Retired 08 (8.8) 21 (23.3) Other 5 (5.5) High School and below Higher Secondary Graduation Post Graduation and above Income (INR) Frequency (%) Residence Frequency (%) Below (6.6) 78 (86.6) (25.5) Urban 12 (13.4) (30) Semi-urban Above (37.7) The study found that more than 53 percent of the respondents participated in the study were graduates and around 23 percent were Post Graduates. A minuscule percent of the respondents were reportedly having a qualification of high school or below. Majority of the respondents participated in the study (41.1%) were working in the private sector while more than 25 percent of them were into business. People who were working in the government editor@iaeme.com

4 Influence of Social Media on Vehicle Purchasing Decisions: An Empirical Study on Automobile Industry sector constitute around 19 percent while 5 percent reported they are into other' occupations. The underlying trend of personal vehicle purchase was reflected in the study as most of the respondents hail from service class. The income level of the participants indicates that more than 37 percent of the participants had an income above at the time of the study. Thirty percent of the respondents reportedly have an income range of to per month. Majority of the respondents constituting 86.6 percent were located in urban areas while around 13 percent were living in semi-urban areas Vehicle-purchasing Characteristics The study reveals that 70 percent of the respondents have purchased a petrol vehicle while 30 percent were purchased a diesel car. The reflections from the type of fuel are indicative of the trends prevails in India in purchasing passenger cars. It was reported by more than 36 percent of the respondents that the current purchase was their first car while around 32 percent of them were purchased their second car. More than 23 percent of the people participated in the study purchased their third car and around 8 percent of them had their fourth car. Table 2 Vehicle-purchasing characteristics Fuel Type Frequency (%) Vehicle order Frequency (%) Petrol Diesel 63 (70) 27 (30) First car Second car Third car Fourth and above 33 (36.6) 29 (32.2) 21 (23.3) 07 (7.7) Finance Frequency (%) Financed Months Frequency (%) 24 months 7 (7.7) 36 months 24 (26.6) 71 (78.8) 48 months 18 (20.0) 19 (21.2) 60 months 22 (24.4) Nil 19 (21.2) Loaned Full Payment Vehicle capacity Frequency (%) Car Brand Frequency (%) Five Seater Seven Seater 66 (73.3) 24 (26.6) Maruti Suzuki Honda Hyundai Toyota Tata Mahindra 36 (40.0) 14 (15.5) 11 (12.2) 07 (7.7) 11 (12.2) 11 (12.2) The trend in financing passenger vehicle shows that more than 78 percent of the respondents were put a loan to purchase the car while more than 21 percent purchased the car through full payment option. It was found that more than 26 percent of the respondents put a loan for 36 months while 24.4 percent planned the loan for a period of 60 months. Majority of the respondents (73.3) purchased a five-seater car while around 26 percent of the respondents purchased a seven seater car. It was evident from the study that the Maruti Suzuki was the brand most of the people participated in the study purchased followed by Honda with 15 percent of customers. Tata, Hyundai, and Mahindra constitute 12.2 percent of customers each Social Media Usage The trend of social media usage shows is evident from the table-3. More than 86 percent of the respondents were reportedly accessing social media sites through their Smartphone while around 11 percent access it through laptops. A minuscule percent of 2.2 reported other sources for accessing social media. The present study reveals that the Facebook and WhatsApp are the most popular social media among the studied population. Around 53 percent of the respondents use Facebook and WhatsApp together while 23.3 percent uses editor@iaeme.com

5 Darshan B M WhatsApp alone. More than 13 percent of the respondents use Facebook alone while 4.4 percent reportedly using Twitter. The major medium of Social Media Access Table 3 Social media usage Frequency (%) Major Social Media Frequency (%) Facebook 12 (13.3) WhatsApp 21 (23.3) Smartphone 78 (86.6) Twitter 04 (4.4) Laptop 10 (11.1) Facebook and Twitter 02 (2.2) Other 2 (2.2) Facebook and WhatsApp 48 (53.3) Other 03 (3.3) Years Active in Social Media Frequency (%) Time spent on Social Media Frequency (%) 1-2 Years 3-4 Years 5-7 Years 8 Years and above 13 (14.4) 37 (41.1) 31 (34.4) 9 (10.0) 1-2 hours daily 3-4 hours daily 4-6 hours daily Thrice in week Twice in week 47 (73.3) 29 (26.6) 9 (10.0) 3 (3.3) 2 (2.2) A proportionate percent of respondents have been active in social media for long period of time. It was reported by 41.1 percent of the respondents that they are active in the respective social media since 3-4 years while 34.4 percent of the respondents were active in social media from 5-7 years of time. Around 14 percent of the participants were new to social media (1-2 years) and 10 percent was spent quite good time on social media (above 8 years). The participants of the study reported that they spent a substantial time in social media. More than 73 percent of the respondents reported that they spent 1-2 hours daily on social media while 26.6 percent spent 3-4 hours on daily basis. Surprisingly, around 10 percent of respondents reported that they spent 5-6 hours in a day on social media Social Media and Vehicle-Purchasing The indications from the study reveal that social media is highly influential in the vehiclepurchasing decisions of the participants. It was reported by 63.3 percent of the respondents that social and digital media was the most influential factor in their decision of purchasing a particular car of a particular brand. Around 21 percent reported that friends and relatives were significantly influenced their purchasing decisions while 10 percent were influenced by advertisements. The brand reliability was influenced around 3 percent of the respondents while 1.1 reported other factors. Apart from the major factor of influence, most of the respondents (87.7) reported that social media has been used in making the decision of purchasing a particular brand of car. Most Influential Factors on vehicle-purchasing decisions Social Media Friends and Relatives Advertisement Reliability of the brand Other Table 4 Vehicle-purchasing decisions Frequency (%) 57 (63.3) 19 (21.1) 9 (10.0) 3 (3.3) 1 (1.1) How did social media help? Frequency (%) Reviews on cars by customers Talking with other customers Reading the detailed features of cars 58 (64.4) 7 (7.7) 25 (27.7) Did you use social media for vehicle-purchasing decisions Yes No Did you share your experience in social media after purchase? Yes No Frequency (%) 79 (87.7) 11 (12.2) Frequency (%) 56 (62.2) 34 (37.8) It was reported by 64.4 percent of the participants that social media was helpful in reading the understanding the reviews of customers who already purchased a particular car of a editor@iaeme.com

6 Influence of Social Media on Vehicle Purchasing Decisions: An Empirical Study on Automobile Industry particular brand. The detailed reviews published in the social media platform were carefully read by many customers to make their decisions. Around 27.7 percent of the respondents reported that the featuring advertisement published by different social media sites were helped them to understand the features of a particular car and making the decisions. Around 7 percent of the participants used social media platforms to talk with other customers. It was reported by 62.2 percent of the respondents that they used the social media platforms to share their experiences after the purchase while 37.8 percent didn t share their experiences in social media. Table 5 Level of Influence of Social Media on Vehicle-Purchasing Level of Influence Frequency Percent High Moderate Low Total The above table indicates that vehicle-purchasing decisions are influenced significantly by the social media. More than 68 percent of the people participated in the study falls into the category of High influence of social media while 18.8 percent were moderately influenced. Around 12 percent were influenced lightly and they were classified into low category of social media influence. Table 6 Relationship between Age and Level of Influence of Social Media Vehicle-Purchasing Age Level of Influence p-value Total High Moderate Low p < above Total Significant at p <.05 Chi-square statistics were applied to explore the relationship between age and level of influence of social media on purchasing decisions. It was found that there is a significant relationship between the age and level of social media influence. This indicates that people in the younger ages are highly influenced by the social media in purchasing decisions. The calculated chi-square statistic is The p-value is Hence the result is significant at p <.05. Table 7 Relationship between Years Active in Social Media and Level of Influence of Social Media Vehicle-Purchasing Years Active in Social Level of Influence Media High Moderate Low Total 1-2 Years Years Years Years and above Total Significant at p <.05 p-value p <.05. The years active in social media and level of influence of social media on vehiclepurchasing also shows a positive relationship. The people with higher years of active editor@iaeme.com

7 Darshan B M participation in social media are significantly influenced by the social media. The calculated chi-square value is The p-value found is The result is hence significant at p <.05. Table 8 Relationship between vehicle order and Level of Influence of Social Media Vehicle- Purchasing Vehicle Order Level of Influence High Moderate Low Total First car Second car Third car Fourth and above Total Significant at p <.05 p-value p <.05. The people who purchase the car for the first or second time tend to depend highly on social media and all other available sources of information. The table-8 shows that there is a positive relationship between the vehicle order and the social media influence. The calculated chi-square value is found The p-value is Hence the chi-square calculation is significant at p <.05. The results of the study indicate the strong relationship between socio-demographic and social media usage characteristics with the influence of social media on vehicle-purchasing decisions. The results of the study reiterate the previous research findings and give fresh reflections on the influence of socio-demographic variables on the social media influence. 4. CONCLUSION The purpose of the present study was to unveil the influence of social media on the vehiclepurchasing decisions of the customers who brought a car in the recent period of time. A rigorous methodology was adopted for the investigation. Appropriate samples were selected to explore the trends. The reflections in the study indicate that vehicle-purchasing decisions are highly influenced by the social media. A majority of the respondents were significantly utilized social media resources for making the decision of purchasing a particular car of a particular brand. The study further reveals that socio-demographic factors like age and the influence of social media are positively related. The people in the younger ages are highly tended to be influenced by social media. The people who were active in social media from quite sometimes are also reported highly influenced by social media. The indications from the study underline the growing importance of social media on purchasing decisions. It is a prime hour for the automotive industries to adopt more appropriate social media strategies for creating an efficient business environment. REFERENCES [1] Singh, J. India s automobile industry: Growth and export potential. Journal of Applied Economics and Business Research, 4(4), 2014, pp [2] Rana, V.S & Lokhande, M.A. A Study of Consumer Preferences & Attitude towards Passenger cars of Maruti Suzuki & Hyundai Motors in Marathwada Region of Maharashtra. Pratibha: International Journal of Science, Spirituality, Business and Technology, 3 (2), 2015, pp [3] Kamra, K. Influence of Social Media on the Indian Automotive Consumers: Primary Study in National Capital Region. IOSR Journal of Business and Management, 17 (8), 2015, pp editor@iaeme.com

8 Influence of Social Media on Vehicle Purchasing Decisions: An Empirical Study on Automobile Industry [4] CMO Council. The 2014 CMO council report, [5] Naked Lames (2013). Social Media for Automotive Dealers. Retrieved from [6] Deloitte. Driving through the consumer s mind: Steps in the buying process [7] Nayeem, T. The role of external influences in high involvement purchase behavior. Marketing Intelligence & Planning, 31 (7), 2013, pp [8] Darshan, B. M., and Kalyani Suresh. Changing Structures of Contemporary Political Communication: A Review of Literature Related to Social Networking Sites in the Indian Political Context. International Journal of Scientific & Engineering Research, 8 (1), 2017, pp [9] Ramya K.Prasad, YouTube Videos as an Effective Medium in Branding - A Study among Urban Women in Mysuru City. International Journal of Mechanical Engineering and Technology, 9 (7), 2018, pp [10] Sindhushree M T, A Study on the Influence of Fairness Cream Advertisements on the Purchase Behavior and Belief System of Youth in Mysore, International Journal of Mechanical Engineering and Technology, 9(7), 2018, pp [11] Vinod Durgam, The Influence of Social Media Platforms on Startups, International Journal of Management, 9 (3), 2018, pp [12] Rahim Munshi, Influence of Social Media Marketing on the admission decisions in higher education in the city of Vadodara. Journal of Management, 5(4), 2018, pp [13] Esther Hepziba. R and Dr. Florence John, an Exploratory Study on the Influence of Social Media Marketing Strategies on Customer Engagement. International Journal of Marketing and Human Resource Management, 8(3), 2017, pp ABOUT THE AUTHOR Darshan B.M is currently working as Asst. Professor of Visual Communication at Amrita Vishwa Vidyapeetham Mysuru campus. He is pursuing his doctoral degree in Communication and Media Studies under the guidance of Dr. Kalyani Suresh, Vice Chairperson, Department of Communication, Amrita Vishwa Vidyapeetham, Coimbatore. His area of interest includes New Media and Technological Communication, Social Media and Politics, Corporate Communication, Film Communication and Print Journalism editor@iaeme.com