MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY ------------------- ------------------- NGUYỄN NGỌC LOAN HOW SOCIAL MEDIA USAGE RELATED TO CUSTOMER RELATIONSHIP FROM E-COMMERCE MODEL PERSPECTIVE IN HO CHI MINH CITY, VIETNAM BACHELOR’S THESIS SPECIALIZED IN BUSINESS MANAGEMENT CODE: 7340101 HO CHI MINH CITY, 2018 MINISTRY OF EDUCATION AND TRAINING STATE BANK OF VIETNAM BANKING UNIVERSITY OF HO CHI MINH CITY ------------------- ------------------- NGUYỄN NGỌC LOAN HOW SOCIAL MEDIA USAGE RELATED TO CUSTOMER RELATIONSHIP FROM E-COMMERCE MODEL PERSPECTIVE IN HO CHI MINH CITY, VIETNAM BACHELOR’S THESIS SPECIALIZED IN BUSINESS MANAGEMENT CODE: 7340101 SUPERVISOR M. DINH THU QUYNH HO CHI MINH CITY, 2018 i ABSTRACT It is undeniable that social media has becoming a huge part in everybody daily life in recent years. More importantly, social media has affected customer‟s buying decisions in many ways and thus, the impact of social media is drawing more attention from researchers and E-commerce companies. It is widely believed that using social media may benefit for e-commerce and because of that, many companies has started to involve social media into their business.
However, do social media really make a big contribution to e-commerce? This study regards customer relationship as one aspect of e-commerce and focus to find out the relationship between the use of social media and customer relationship whether it is positive or negative. ii DECLARATION I declare that this thesis research is entirely my own composition, the research‟s result is honest, in which there is no previously published content or other content performed by another person except the quotations are cited completely in the thesis. I am responsible for my thesis. Student iii ACKNOWLEDGEMENT I would like to take this opportunity to acknowledge several individuals who have helped me to complete my thesis.
First of all, I would like to express my special appreciation and thanks to my supervisor Dinh Thu Quynh, you have been a tremendous mentor for me. I would like to thank you for encouraging my research and for allowing me to grow as a proud student of the Banking University of Ho Chi Minh city. Your advice on both research as well as on my future career have been invaluable. Without her motivation and instructions, the thesis would have been impossible to be done effectively.
Secondly, I would especially like to thank my amazing family for the love, support, and constant encouragement I have gotten over the years. Finally, I am grateful to have all of my friends who always support me during time I study in university I am thankful for the times that they have listened to me, advised me and even comforted me. Their kindly help, care and motivation gave me strength and lift me up all the trouble for the rest of my life. iv TABLE OF CONTENT ABSTRACT.
iii TABLE OF CONTENT. iv LIST OF FIGURES. vii LIST OF TABLES .3 AIMS AND OBJECTIVE OF THE RESEARCH .4 SUBJECT AND SCOPE OF THE STUDY .6 STRUCTURE OF THE STUDY .1 The form of social media .1 Customer Relationship Management .1 E-Commerce Business Model .2 E-Business Model Ontology .4 OSTERWALDER & PIGNEUR MODEL .5 SOCIAL MEDIA IMPACTS .2 Feel And Serve (Distribution Channels) .3 Trust And Loyalty .1 CHOICE OF METHODOLOGY. 38 ANALYSIS SCALE STRUCTURE AND DATA PROCESSING .3 Feels and Serve .4 Trust and Loyalty.
MEASURING THE REALIABILITY OF THE SCALE BY CRONBACH’S ALPHA. 66 vii LIST OF FIGURES Figure 1. Social Trinity Model (MCKEE 2010, P. E-Commerce Model Frameworks (Osterwalder & Pigneur, 2002).
Social Media Platforms. Social Media Using Purpose. Respondents distribution of Information Strategy. Respondents distribution of Feel and Serve.
Respondents distribution of Trust and Loyalty. Respondents distribution of Customer Relationship. 51 viii LIST OF TABLES Table 1. Statistical description of Information Strategy.
Statistical descriptions of Feel and Serve. Statistical descriptions of Trust and Loyalty. Statistical descriptions of Customer Relationship. 50 1 CHAPTER 1 INTRODUCTION This chapter provided an explanation of why is this thesis has been presented, starting with a general background of social media and e-commerce development, and explore further into both academic areas.
This chapter includes problem, related researches, aims/objective of the research, subject and scope of study, research method and structure of the study.1 BACKGROUND In recent years, the number of Internet users has increased dramatically in the world, as well as the rate of Internet and information technology development. In 2018, the world‟s Internet users reached 7.63 billion, which was increase of 389. In particular, in April 2018, there are almost 70% of Vietnamese who are using Facebook which is Vietnam‟s mostly used social media platform. As the technological developments of the internet are getting bigger as ever, social media - a media that users easily can participate in and contribute to, have also evolved into a significant communication channel in the 21st century and thus became a common mean of interaction among young generation.
Social media is growing rapidly throughout the world. More adults and teenagers are joining sites such as Facebook, Youtube, Instagram and Zalo to share photos, videos as well as interact with friends, family, and strangers. The introduction of social media has changed the world and affects each individual in different ways. It is easy to see that the way people around the world communicate, search for and share information on the internet is strongly influenced by social networks.
Communication is becoming more convenient 2 and much faster than real life human interaction, it makes globalization a reality and more importantly, it gives chances for many businesses to getting closer to consumers. Before various social media applications emerged, a lot of business activities have already existed in the online electronic world and were referred to as e-commerce. Unlike the traditional business way, e-commerce established a new business model, which included buying and selling of products over the Internet. Today, product reviews, recommendation systems and search function are well integrated into e- commerce websites, and the features of social network are increasingly adopted in online businesses.
Many believe that adding social networking features to e-commerce can improve the level of trust between a company and its customer. Currently, these companies are spending less money on advertisements thanks to social media platforms which have given them a cheaper and better alternative. Moreover, customer feedback is now can reach the companies much faster and more reliable. What is more, customers can also spread out information to a much broader audience through friends on social media.
The combination of e-commerce and social media is becoming more attractive and important in online business. In general, according to “Three Types of Social Commerce” (2001), social commerce can be classified into three types. The first type is that an ecommerce website adds some social features. For example, at Tiki.vn, customers can read reviews, comments and recommendations when they are shopping, in competition with Tiki is Lazada.com and Shoppee.vn, both are well-known e- commerce website that are growing big in Vietnam with many users around the country.
The second type is where social networks add an e-commerce function like opening a store on Facebook as there have been many brands that feature the “shop” categories which show the price of each products as well as automation inbox reply when customers visit to their page. The third type is group-buy social commerce, which uses the social network to organize an online purchase group. 3 With the constant development of Internet, the online business environment is also changing, which brings social innovation of the e-commerce model. The use of social media will produce technological changes and influence the social communication.
These changes will further challenge the traditional e-commerce model. Therefore, it is important that researchers and e-commerce companies consider from the business model perspective when they look into social media impacts. Since customer relationship is a key aspect in ecommerce as it in the traditional business, it is essential to understand how social media is related to the customer relationship. Therefore, analyzing the relationship between social media and customer relationship of e-commerce would be strategic for e-commerce companies to take the advantage of this new Internet concept to carry out marketing strategies.2 RELATED RESEARCHES According to recent research of Mehta, Vinita in terms of “Why does using Facebook feel so good” (2012) has found that the social network satisfies basic human desires, both body and soul.
The network may owe some of its success to the positive, feel-good state it invokes in its users. Research findings also revealed that two primary social needs might be responsible for people repeatedly visiting the site. The first need is the central desire to belong. Humans are wired to connect with other humans, as well to feel accepted by them.
“The second social motivation Facebook responds to is self- presentation, in which users fashion ideal rather than accurate versions of themselves through their profiles” (Mehta). This is manifest in, for example, the number of „friends‟ in their network and photographs. Subsequently, Facebook personas that are presented online may be a more socially appealing „self‟ that is aspired to in reality, but one that is not yet realized. Via this research, it is easy to grasp the reality of why 4 Facebook has become such a staple to daily life.
People enjoy feeling in control of their own worlds and Facebook is precisely the place to do so. The research of Nancy Atkinson about “Social Media Use in the United States: Implications for Health Communication” in Journal of Medical Internet Research (2009) claim that the use of social media will keep growing in the future among all user groups. This research found out that younger age was the only significant predictor of blogging and social networking site participation; a statistically significant linear relationship was observed, with younger categories reporting more frequent use. Social media is not just a fad and it gradually changes the way that users communicate online.
The research of Stephen and Toubia about “Deriving Value from Social Commerce Network” in Journal of Marketing Research (2010) examines the economic value implications of a social network between sellers in a large online social commerce marketplace and thus found that social commerce networks have a power- law distribution 1 by investigating the evolution of the network in a large online market. The research of Gayatri Swamynathan about “Do Social Networks Improve e- Commerce? A Study on Social Marketplace” in WOSP‟08: Proceedings of the first workshop on Online social networks (2008) examined the impact of social connections on the online business transactions and argued that social network adoption has a positive impact on the user satisfaction. The result found out that in general, users perform few transactions with their friends on the social network. It is found out that Overstock‟s business ratings are accurate, in that they have a strong correlation with user satisfaction after their transaction.
The research of Rehmani and Khan about “The Impact of E-Media on Customer Purchase Intention” written in the International Journal of Advanced Computer Science and Application (2011) also investigated the social media impact on customer purchase 5 intentions. Their study argued that the electronic word of mouth and seller generated online information are the constructs of social media, and hypothesized these two constructs both have a positive impact on customer purchase intention. The research of Georgios Tsimonis and Sergios Dimitriadis about “Brand strategies in social media” (2013) examined why companies create brand pages in social media, how they use them, what policies and strategies they follow, and what outcomes do they expect; and second – from firms‟ point of view – how users are benefited from such pages. The main actions of the firm are making prize competitions, announcing new products/ services, interacting with fans, providing advice and useful information, and handling customer service issues.
The basic motivations are the increasing popularity of social media, competitors‟ presence, headquarters‟ strategy, and cost reduction pressure.