Essays on Social Influence, Network Effects and Use of Social Media in Impacting Consumer Behavior

Download or read book Essays on Social Influence, Network Effects and Use of Social Media in Impacting Consumer Behavior written by Kamer Toker Yildiz and published by . This book was released on 2014 with total page 99 pages. Available in PDF, EPUB and Kindle. Book excerpt: The wide adoption of the Internet and social media has changed how consumers communicate amongst themselves and how companies communicate with their customers. Therefore, investigating the role of social interactions is important in understanding how consumers influence each other through online as well as offline channels for both marketing researchers, and companies that wish to leverage social media more effectively. This dissertation consists of two essays focusing on social influence, network effects and their marketing implications in today's socially engaged world. The first essay focuses on peer influence and studies the differential impact of online and offline social interactions on consumer's repeat usage behavior, and the effectiveness of monetary incentives in the presence of these social interactions. For this purpose, we develop a modeling framework that parses out the impacts of these individual effects and investigates their relative impact on behavior using a unique data set from a wellness program. We find that the effect of online interactions does indeed vary significantly in the presence of offline interactions and that ignoring the latter may well bias the estimates of the former. Furthermore, our results show that monetary incentives relative to social interactions have a significant, though lesser impact on repeat usage behavior. We finally offer several strategic implications by exploring a variety of scenarios through simulation analysis based on the model estimates. The second essay introduces anonymous others ("non-peer") influence in addition to peer influence and compares the relative influence of these two sources on consumers' product evaluations in an experimental setting. We show that contrary to the existing intuition, peers are not always more influential than non-peers and that the influence of these two sources depends on the proportion of people who endorse the product (i.e. , endorsement status: majority/minority endorsement). Interestingly, we find that peers have more positive influence than non-peers only under minority (but not majority) endorsement (experiment 1). We further show that peer influence manifests under minority endorsement because of consumers' endorsement and product fit perceptions (experiment 2). However, this effect diminishes if the endorsement is framed negatively (experiment 3) and gets stronger when the numeric size of the source is large (experiment 4). We discuss these findings in light of prevailing source influence theories and offer suggestions for marketing actions and firm strategy. We believe that this dissertation contributes not only to the marketing literature but also to other disciplines including social psychology, economics and operations research while offering useful implications for companies leveraging social media for both internal and external purposes.