Understanding How Users Make Purchase Decision on Social Media: Choice-Based Conjoint Analysis Approach.

Abstract

The continuous advancement of technology has profoundly influenced users' decision-making process, particularly within social media. With social media platforms firmly ingrained in our daily lives, users are confronted with an abundance of choices and information that profoundly shape their decision-making behaviours. A notable consequence of the evolution of social media is the rise of social commerce, which empowers users to engage in commercial activities directly on these platforms. By leveraging social media, businesses can effectively showcase their products or services, while users can make purchases without leaving the platform. In light of this dynamic landscape, the primary objective of this study is to delve into the intricacies of how users navigate their purchase decisions on social media, primarily focusing on the role played by the available attributes within these platforms. This research sheds light on the factors influencing users' decision-making processes in social media-based transactions by closely examining these social media attributes, such as user reviews, product descriptions, visual content, and social endorsements. Through a comprehensive exploration of these dynamics, this study aims to provide valuable insights into the interplay between social media attributes and users' purchase decisions. Ultimately, the findings contribute to a deeper understanding of consumer behaviour in the realm of social commerce and provide actionable knowledge for businesses seeking to optimize their strategies in this rapidly evolving landscape. The study employed an experimental design to manipulate social media attributes to comprehend the study participants' choices. The consumption values theory and the random utility model guided the research. The consumption values theory enables the segmentation of user choices based on their attached values. At the same time, the random utility model acknowledges that users have varying preferences for options and ultimately select the option that provides the most significant utility or satisfaction. The research focused on students, and simple random sampling was used to collect responses from a total of 304 students from the University of Ghana (UG) and the Ghana Institute of Management and Public Administration (GIMPA). The collected data was analysed using choice-based conjoint analysis and hierarchical Bayes estimation as the analytical techniques. Based on the study's findings, users tend to consider several factors when making purchase decisions on social media platforms, such as warranty terms, vendor attributes (such as a verified account), sponsored ad characteristics, and product attributes (such as the price). Additionally, the study revealed that these preferences vary based on users' demographics, including gender, age, and level of education. The study offers valuable implications across research, practice, and policy domains. In terms of research, it encourages further exploration of social media purchase decision-making using diverse perspectives, populations, theories, and methodologies. In practice, businesses on social media can optimize their strategies based on user preferences identified in the study, thereby increasing lead generation. From a policy perspective, implementing measures related to warranty, account verification, transparent pricing, and informative advertising can aid consumers in making well informed purchase decisions on social media platforms.