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To study the Impact of Electronic Word of Mouth Marketing, Social Networking
Sites and Perceived Value on Customers Purchase Intentions.
A study on Cosmetic products
A Research Project submitted
By
Hassaan Elahi (28270)
Anoosha Suleman (27685)
Shoaib Hassan (27788)
Muhammad Zeeshan Faheem (27755)
Qirat Lasi (29100)
To
Department of Business Administration
In partial fulfilment of the requirement for the degree of
BECHOLARS OF BUSINESS ADMINISTRATION
This Project has been accepted by the
FACULTY OF BUSINESS ADMINISTRATION
Mr. Waqas Rana
Supervisor
Research Facilitation Centre – RFU,
Iqra University
Executive Summary
This research is being carried out in order to determine whether the purchase intentions of
cosmetic product customers living in Karachi are influenced by electronic word of mouth marketing,
perceived value of the product and social networking sites and how these variables are influencing the
purchase decisions of online buyers. The study also focuses on finding the significance of perceived
value, social networking sites and e-WOM in influencing the purchase intentions of customers of
cosmetic products living in Karachi. It was really important for us to conduct the research on this topic
in order to find out the gap between our research and the previous researches that have been conducted
in different countries of the world. The pathway undertaken in this paper was explanatory research
which served as a basis for our data collection and analysis as we had to check the existence of any
potential relationship that may exist between our dependent and independent variables. We have used
150 respondents for the sample size of this research. The target population for our research were women
who are the ultimate users of cosmetic products and brands. The sampling technique used in our
research was systematic random technique. The instrument that we chose for our data collection was
questionnaires which consist of Likert scale questions. We have analyzed our data and determined the
relationship that exist between our dependent variable and independent variables by using one sample t-
test technique. The result of the test concludes that each of our independent variable (e-WOM, social
networking sites and perceived value) has an impact on our dependent variable which is purchase
intentions of customers of cosmetic products. Finally, at the end of this report, we have also provided the
conclusions and discussions based on our understanding of previous literatures and knowledge that we
gained while conducting this research. The implications and recommendations were also provided in this
research to facilitate our various stakeholders and to solve the problems that were the focus of this
research. Lastly, we have also given the limitations of this research at the end of the report.
Contents
Chapter 1 Introduction ................................................................................................................................ 1
1.1 Background of the Study....................................................................................................................... 1
1.2 Problem Statement ................................................................................................................................ 2
1.3 Research Questions............................................................................................................................... 3
1.4 Purpose of the Study ............................................................................................................................. 3
1.5 Significance of the Study...................................................................................................................... 3
1.6 Outline of the study............................................................................................................................... 3
Chapter 2 Literature Review....................................................................................................................... 5
2.1 Underpinning, Supporting Theories/Models and Empirical Reviews .................................................. 5
2.2 Hypotheses............................................................................................................................................ 8
Chapter 3 Research Method........................................................................................................................ 9
3.1 Research Approach ............................................................................................................................... 9
3.2 Research Design.................................................................................................................................... 9
3.3 Sampling Design................................................................................................................................... 9
3.3.1 Target Population ........................................................................................................................ 9
3.3.2 Sample Size ................................................................................................................................. 10
3.3.3 Sampling Technique .................................................................................................................. 10
3.4 Instrument of Data Collection............................................................................................................. 10
3.5 Procedure of Data Collection.............................................................................................................. 10
3.6 Statistical Technique........................................................................................................................... 11
Chapter 4 Results and Findings ................................................................................................................ 12
4.1 Hypotheses Testing............................................................................................................................. 12
4.2 Hypotheses Assessment Summary...................................................................................................... 12
Chapter 5 Conclusion, Discussion, Implications, Limitations and Recommendations ............................ 14
5.1 Conclusion and Discussion................................................................................................................. 14
5.2 Implications......................................................................................................................................... 16
5.3 Limitations .......................................................................................................................................... 17
5.4 Recommendations............................................................................................................................... 17
References................................................................................................................................................. 19
Appendix................................................................................................................................................... 21
Questionnaire ............................................................................................................................................ 21
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
1
Chapter 1
Introduction
1.1 Background of the Study
The objective of this thesis, which is conducted within the field of marketing is to analyze the
impact of e-WOM marketing, perceived value and social networking sites on the purchase intentions of
customers of cosmetic products. In this research, we have investigated how online sellers of cosmetic
products are utilizing the platforms of e-commerce, such as social networking websites, to spread
positive word of mouth related to their cosmetic products among their targeted customers which are
mostly females. (Thuy, 2016)
Moreover, we have also investigated that what factors influence customers’ purchase intentions during
e-WOM marketing, how much customers of cosmetic products are influenced by e-WOM and whether
e-WOM increases their purchase intentions significantly or not. Furthermore, in this research, we have
also analyzed the impact of social networking websites, that how online reviews, adverts, pages and
groups related to cosmetic products in different social networking websites, such as Facebook, play their
role in influencing the purchase intentions and the resulting decisions of the customers. (Thuy, 2016)
The last focus of this study is based on analyzing the perceived value of the customers who buy cosmetic
products online. For this we have investigated that what variables should online sellers consider in order
to increase the perceived value of their cosmetic products and what things customers consider mostly
while judging the perceived value of cosmetic products on the internet that influence their purchase
intentions. (Pham, 2016)
All our research and findings will be based on discovering how electronic word of mouth marketing is
influencing cosmetic product buyers, in what ways sellers of cosmetic products can take advantage of e-
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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WOM marketing, which variable, namely e-WOM, social networking sites, and perceived value of the
product, is most important for online sellers in order to influence the purchase intentions of the buyers,
how much each variable is influencing the purchase intentions of the buyers, and what considerations
should online sellers keep in mind while targeting cosmetic product customers on the mediums where e-
WOM is applicable.
1.2 Problem Statement
In all the previous researches, most of the focus was on the fact that when customers buy
cosmetic products or any other products online, their purchase intentions are highly influenced by the
online reviews that are made regarding a particular product. Moreover, it was also observed that
customer feel less reluctant when they are assured that the product is authentic and the online seller is
trustworthy. The quality of the product is another variable that is considered by the customers when they
purchase online. Good quality of cosmetic products not only help the sellers to gain positive word of
mouth regarding their products on different social networking websites, but it also helps to increase the
perceived value of the customers. (Thuy, 2016)
All these previous researches have been conducted in countries like Vietnam, Finland, USA and other
regions of the world, but not in Pakistan. Through our research, we will going to analyze how electronic
word of mouth marketing is impacting Pakistani customers of cosmetic products (taking respondents of
Karachi as our sample of the population) and influencing their attitudes regarding buying online. We
will also analyze that what factors increases their purchase intentions, what factors affect their perceived
value and what can sellers of cosmetic products do who are utilizing the platform of social networking
websites to attract customers living in Karachi where people are highly skeptical to use the internet to
purchase the products. Lastly, we will also try to discover how much our findings differentiate from the
previous researches, and whether there is any common aspect between our findings and in previous
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
3
researches in terms of the influences of the e-WOM and customers’ attitudes regarding cosmetic
products that are sold in different platforms of e-commerce.
1.3 Research Questions
 To what extent does purchase intentions of cosmetic customers is influenced by e-WOM
marketing?
 How social networking sites affect the pre buying perception of cosmetic products?
 To what degree does the perceived value affect customer purchase decision in relation to
cosmetic products?
1.4 Purpose of the Study
The purpose of this research is to find out whether the purchase intentions of cosmetic customers
living in Karachi are influenced by e-WOM marketing, perceived value and social networking sites and
how they’re influencing the purchase decisions to buy cosmetic products online.
1.5 Significance of the Study
The study pursues to find out the significance of perceived value, social networking sites and e-
WOM in influencing the purchase intentions of customers of cosmetic products living in Karachi. The
study will fill the gap in the existing body of literature in the stated principal of the matter. Moreover,
the study will help to understand the behavior of customers who buy cosmetic products within this city
and how the above variables influence their purchase intentions while buying cosmetic products online.
1.6 Outline of the study
This report has four more section after this introduction, namely:
Literature Review: Presents the past study done in the field of e-WOM, perceived value, social
networking sites and purchase intention.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
4
Research Method: This section will elaborate the approach and methodology used to explore the
research questions.
Results and Findings: Provide verbal description of what we found supported by reports of all relevant
descriptive statistics.
Conclusion, Discussion, Implications, Limitations and Recommendations: Provides a link between
our research and previous literatures along with the guidance for future researchers carrying their
research in similar field.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Chapter 2
Literature Review
2.1 Underpinning, Supporting Theories/Models and Empirical Reviews
E-commerce started to progress gradually after its flourishing development and the emergence of
the concept of Web 2.0, towards social networking services. This has resulted in the emergence of
different and vast online platforms related to information-sharing and service exchange. This includes
Facebook, Blogs, and different social networking websites. Moreover, this prevailing evolution has also
changed the ways for customers to acquire and share information. With the rapid diversified
developments in the cosmetic industry, many companies that provide beauty-care products are utilizing
their websites by connecting it with different online communities, allowing customers to post their
comments and share experiences related to product-use, saving cost and searching time of users.
Customers are better able to understand the information related products and services in order to make
their buying decisions if websites services are based on community style. Hence, revenues and market
share are not only dependent on customers’ initial purchases but also on their continual loyalty. (Chen,
Chen, & Chen, 2014)
According to Pham (2016) in this modern era, purchasing online is an effective way to satisfy fast-paced
customers because people nowadays are very busy and they need those types of products which are time
saving and convenient. However, Pham (2016) further stated that customers have trust issues regarding
purchasing online because of sellers’ dishonesty and also because of the unqualified items which are
sold to them by charging them with prices of qualified ones. This can negatively affect the purchase
intentions of the customers.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Pham (2016) recommended that to the increase knowledge and trust of customers regarding cosmetic
products on issues such as, the ingredients which are used to create them, their effects, their usages,
manufacturing technologies along with the origins of the product must be enhanced in order to increase
their purchase intentions. Moreover, Pham (2016) further stated that manufacturers should provide
proactive information to customers regarding detailed and official information about the products, and
how to spot the difference between fake and authentic products not only on the product packaging, but
also on the company’s official website and on social media pages. By providing these recommendations
about product usages and how to differentiate between fake and authentic products repetitively,
customers’ knowledge about the product will improve and this will also enhance customers’ beliefs on
both the product and company’s brand.
Furthermore, in order to build stronger connections with customers to increase their purchase intentions,
both manufacturers and distributors should introduce more effective marketing campaigns and
promotions to attract more customers towards their products and on their websites. Moreover, another
efficient way to build strong relations with customers and raise their trust in the company is to
strengthen customer service on the social media platforms and websites. (Pham, 2016)
In another study by Thuy (2016) importance of reviews by the bloggers were highlighted that they are
considered noteworthy by customers when they intend to purchase cosmetics. Reviews that are positive
help significantly to build positive brand attitude. The companies can take advantage of these beauty
bloggers by sending gifts to them for reviewing their products positively and they can also share these
positive reviews of the bloggers on their social media channels. However, Thuy (2016) recommended
that the most important thing for the companies is to enhance and improve their products’ effectiveness
and quality. Positive reviews circulated by the bloggers can help customers to perceive the brand
positively which can eventually increase customers’ purchase intentions.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Findings of Thuy (2016) also suggested that consumers’ brand attitude is not affected by the quality of
reviews. This means that the accuracy, comprehensiveness, relevance and timeliness of the bloggers’
reviews are not significantly considered by the customers. This could be due to the reason that
customers are more prone to pay attention on the overall general evaluations rather than on the details.
However, consumers’ brand attitude is influenced by the quantity of reviews. It is observed by Thuy
(2016) that when consumers get the largest number of reviews about the product, they perceive it as
more popular. Lastly, the findings of Thuy (2016) also proved that purchase intention of consumers are
strongly affected by their brand attitude. This means that brands should generate and enhance more
positive attitude, attention and interest from the customers in order to influence their purchase intentions.
According to Kaplan and Haenlein (2010) the social networking system operates by means of websites
which allow customers to make their profiles, exchange data, and connect with peer groups within the
same domain. Social network advertising is utilized by tactical dealers as a promotional source because
these sites are quite famous among people and therefore become the common grounds for promotion.
Apart from its convenient access, the interface can be tailored and modified according to profile of
consumers. Therefore, the worthiness of social networks is dependent on marketers, who have a
selection of manipulating tools which can enhance their promotional activities to their complete extent
and can also help them to tailor the needs for promotions according to the wants and demands of the
customers. Studies on social media classifies customers as either sponsors who are actively posting
explanations or as witnesses who only see and observe what other post. (Schlosser, White, & Lloyd,
2006; Shoa, 2009)
Forbes (2017) states that nowadays, the traditional boundaries have been eliminated and people all over
the earth are utilizing social media networking on a daily basis in order to better connect and
communicate with their peers, co-partners, colleagues and significant others. A large number of
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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corporations provides information regarding their utilities and services through an online mechanism
which become a basis for consideration for customers using social networking sites and therefore these
corporations are restructuring their advertising tactics and procedures. The assimilation of social media
in the structure of promotion is one of their tactics, or one phase of positive variation that is anticipated
to develop and promote their brands, utilities and services all over the globe.
Dodds and Monroe (1985) suggested the relationship model of perceived value and quality by stating
that perceived value is an essential factor in customers' buying choice process, and shoppers will
purchase an item with high perceived value. Dodds and Monroe (1985) and Zeithaml (1988) proved that
shoppers will assess what they give and what they get in their subjective recognition when they are
purchasing an item/benefit. As indicated by Utility Theory, the probability of purchasing an item
becomes even more when customers get more benefits as compared to perceived price they have paid.
(Dickson & Sawyer, 1990)
Wang (2006) used brand image and perceived value as independent variable and consumer purchase
intentions as dependent variable and thus concluded that the higher the perceived value and quality of a
particular product, the greater will be the consumer purchase intentions and purchase decisions.
2.2 Hypotheses
H1. There is an impact of electronic word of mouth marketing on purchase intentions of customers of
cosmetic products
H2. There is an impact of social networking sites on purchase intentions of customers of cosmetic
products.
H3. There is a significant impact of perceived value of cosmetic products on purchase intentions of
online customers.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Chapter 3
Research Method
3.1 Research Approach
As most of the information in our research is already known related to our variables, the pathway
which we will going to take is explanatory research on which our data collection and analysis will be
based. This is because we are only looking for the additional information that whether our independent
variables (i.e. e-WOM marketing, social networking sites and perceived value) have any impact on our
dependent variable which is purchase intentions of customers of cosmetic products, within Karachi.
Moreover, we will also going to find out the reasons behind the relationship (if any exist) between our
dependent and independent variables and for this purpose, we consider that explanatory research
approach is most appropriate for our research project.
3.2 Research Design
The type of research design that we have used for this research is descriptive study as we are
trying to understand the views of our respondents related to our variables and also the characteristics of
our targeted population which are the customers of cosmetic products. We will try to understand the
views of our respondents that whether their purchase intentions is influenced by e-WOM marketing,
social networking sites and perceived value of cosmetic products. So, for that purpose, we will be using
questionnaire as an instrument for our data collection. 150 questionnaires will be used for data
collection.
3.3 Sampling Design
3.3.1 Target Population
Target population for our research will be women who use the cosmetic products and brands.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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3.3.2 Sample Size
Sample size for our survey is 150.
3.3.3 Sampling Technique
The sampling technique that will be used for our research is Systematic Random technique
(Probability Technique) as our target population is female (any age group or occupation), so this method
will help us to target those women who uses cosmetic products and are up to date about brands on social
media.
3.4 Instrument of Data Collection
The instrument we have chosen for our data collection is Questionnaire which will consist of
Likert scale questions that has rating scale from Strongly Agree to Strongly Disagree.
(1= STRONGLY AGREE 2= AGREE 3= NEUTRAL 4=DISAGREE 5=STRONGLY DISAGREE)
3.5 Procedure of Data Collection
The data will be collected about whether there is any relation between electronic word of mouth
marketing with purchase intentions of customers of cosmetic products, whether the social networking
sites affect the purchase intention of consumers of cosmetic products and whether the perceived value of
cosmetic products influence the purchase intention of consumers. The group of interest will be women,
it includes all females from the age of 12-60, who are well aware of cosmetic products and brands of
cosmetic products. Data will be gathered from shopping malls, university students, college students, and
from the random females (including housewives and working women). Survey data will be used to
collect the information and views of our respondents as we are conducting a primary research and our
research instrument will be questionnaires.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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3.6 Statistical Technique
We will analyze our data and determine the relationship between our independent variables and
dependent variable through using one sample t-test technique.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Chapter 4
Results and Findings
4.1 Hypotheses Testing
4.2 Hypotheses Assessment Summary
One sample t-test is conducted for the evaluation of our hypotheses as we have computed means
of our three independent variables. The first hypothesis of this paper is based on testing the impact of e-
WOM on purchase intentions of cosmetic product customers. Since the mean value of e-WOM comes
out to be 3.5 which is greater than test value 3, it implies that there is an impact of e-WOM marketing on
purchase intentions of the customers.
The second hypothesis of this paper is based on testing the impact of social networking sites
(SNS) on purchase intentions of customers of cosmetic products. Since the mean value of SNS comes
out to be 3.4 which is greater than test value 3, it implies that there is an impact of social networking
sites on purchase intentions of the customers.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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The third hypothesis of this paper is based on testing the impact of perceived value on purchase
intentions of the cosmetic product customers. Since the mean value of Perceived-value comes out to be
3.5 which are again greater than test value 3, it implies that there is an impact of perceived value on
purchase intentions of customers of cosmetic products.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
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Chapter 5
Conclusion, Discussion, Implications, Limitations and Recommendations
5.1 Conclusion and Discussion
As the purpose of our study was to analyze the impact of electronic word of mouth marketing,
perceived value and social networking sites on purchase intentions of customers of cosmetic products
within Karachi, the testing of our hypothesis based on one sample t – test are producing similar results
that were conducted in other countries and that were highlighted in previous literatures, which were
carried out on cosmetic product customers.
While conducting our research, when we tried to analyze the effects of our first variable (i.e., e-WOM
marketing) we observed that majority of our respondents agreed that the information related to cosmetic
products which is provided in e-WOM marketing is persuasive. This finding was also supported by the
study, which was conducted by Pham (2016) in his research, that when sellers provide proactive
information about their cosmetic products on different websites, and when customers find more positive
reviews about cosmetic products as suggested by Thuy (2016) it not only helps significantly to build a
positive brand attitude but also aid customers to better understand the product and persuade them to buy
the product.
Likewise, we also discovered that many of our respondents relied on e-WOM marketing to evaluate
cosmetic products' effectiveness and do not opt for cosmetic products having negative e-WOM
marketing. Again, this finding was also similar to the findings suggested by Thuy (2016) in his research
that online reviews are highly noted by cosmetic product customers before making any purchase
decision.
Similarly, when we analyzed our second variable (i.e., social networking sites) most of our respondents
preferred social networking sites as the most convenient way to gain information related to cosmetic
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
15
products that also influence their purchase intentions when they access different social media pages to
gain knowledge about cosmetic products. Moreover, their purchase decisions were also observed to be
influenced by the adverts that are displayed on the social media sites, such as pay per click ads on
Facebook. Likewise, it was also noted that these respondents frequency of visits on social media pages
related to cosmetic products were also high in order to gain information about them. Again, these
findings were also in line with the findings that were proposed by Kaplan and Haenlein (2010) regarding
the benefits of social networking sites for marketers in capturing customers’ attention. We also observed
that utilizing this platform for promotional activities can be an effective way to influence customers’
buying decisions which was suggested by Kaplan and Haenlein (2010) in their research because our
respondents were also influenced by the pay per click adverts, social media pages and promotional
activities that were displayed on these sites, before making their purchase decisions. They also find these
social networking sites a convenient place to gain information related to cosmetic products which can
also be a reason behind their high visits on these sites. However, we observed that most of our
respondents were information seekers rather than information providers on these social networking sites
as most of them were reluctant to share their experiences with the cosmetic products on social
networking websites. So we can conclude that our respondents were mostly witnesses who just observe
what other post rather than sponsors who actively post explanations according to the theory of
classification of online customers which was suggested by Schlosser et al. (2009) and Shao, G. (2009)
in their research.
Furthermore, when we analyzed the effect of our third variable (i.e., perceived value) we observed that
our respondents felt more skeptical regarding the perceived value of cosmetic product if the online
seller’s credibility was not well known. Moreover, we also observed that when our respondents felt
more confident regarding the authenticity of a cosmetic product, it helped them a lot to increase their
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
16
perceived value regarding that cosmetic product. These observations were also in line with the findings
suggested by Pham (2016) that customers have trust issues when they purchase online because of
sellers’ dishonesty so online sellers should always provide proactive information regarding their
cosmetic products, such as, ingredients used, their effect, their usages and how to spot the differences
between fake and authentic product in order to increase customers’ confidence. Moreover, we also
observed that when most of our respondents received positive online reviews regarding a cosmetic
product, it helped to increase their perceived value related to that product. This finding was also similar
to the findings of Thuy (2016) that positive reviews circulated by the people or bloggers can help
customers to perceive the brand positively which can eventually increase customers’ purchase
intentions. Based on our observation, we also discovered that the perceived value of most of our
respondents was also influenced by the online adverts which, again, is a similar finding that was
proposed by Kaplan and Haenlein (2010) in their research related to the effective use of social
networking sites for promotions. Lastly, most of our respondents also preferred to buy branded cosmetic
products because of their high perceived value and this observation was also making a link to the
findings suggested by Wang (2006) that high brand image usually have high perceived value which
helps to increase customers purchase intentions to buy a product.
5.2 Implications
The research was carried out to identify the influence e-WOM has on customers of cosmetic
products in Karachi, what are the factors that affect purchase intentions of cosmetic buyers in Karachi
and how marketers can use e-WOM, social networking sites and perceived value of their cosmetic
products as a tool to trigger customer purchase intention positively while they by any cosmetic product.
The findings depicted that e-WOM has significant impact on purchase intentions of customers.
Moreover, social networking sites and perceived value also play a vital role in shaping purchase
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
17
intentions of individuals who buy cosmetic products in Karachi. These findings can be widely used by
online sellers and brands. The significance highlighted clearly shows how important it is to observe and
manage online reviews and comments that customers write on online pages and sites. As online reviews
play an important role to shape consumer purchase intention, organizations can use it as a strategic
communication channel to create awareness about their products or services. This exploration also
conveys a few new bits of knowledge for organizations to utilize electronic word of mouth as a feature
of their strategic marketing effort in increasing new buyers and retaining the ones they have. On the
other hand, customers can use e-WOM and social networking sites as a tool to spread their views about
the products and they can also get information before buying it. It can serve as a platform where major
stakeholder that is customer itself, is helping another customer and in return is getting helped too.
5.3 Limitations
The sample size used for this research was limited to the female customers of cosmetic products
living in Karachi. The findings might not represent the views of the entire population of Pakistan, so the
results of this research cannot be generalized. Moreover, this research is only focused on female buyers,
and has not included males and transgender that also use cosmetic products. Lastly, we have only used
e-WOM marketing, social networking sites and perceived value of cosmetic products as our independent
variables that are affecting the purchase intentions of cosmetic product customers, which is our
dependent variable. However, in reality, purchase intentions of cosmetic product customers might be
affected by other variables too, such as, customer knowledge, attitude towards online shopping, security
and privacy concerns regarding online shopping etc. that have not been considered in this research.
5.4 Recommendations
The further studies that will going to address the same problems should target cities other than
Karachi, specifically interior parts of Pakistan where online and virtual world have not reached the
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
18
height yet. Whereas, in urban areas where people are using the internet all day, in and out, marketers
should develop strategies to create positive reviews so that e-WOM yield positive result for them.
Online sellers should critically monitor social media sites and online trends that can influence purchase
intentions of their potential markets. Additionally, they should try new tactics and strategies to create
strong perceived value which eventually will affect purchase intentions of individuals in the market.
Whereas, customers should actively take part in e-WOM and shall use it as a platform where they can
get aware about different products and services. Lastly, competitors can directly analyze reviews that
customers have about the organizations and can use the information present in those reviews to make
their own brand better and competitive. By strongly monitoring, competitors can adopt strengths and
learn from mistakes in order to grab more market share within the cosmetic product industry.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
19
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Zeithaml, V. A. (1988), Consumer perceptions of price, quality and value: a means-end model and
synthesis of evidence. Journal of Marketing, 52, 2-22.
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
21
Appendix
Questionnaire
Please select your desired response: For example: If
your response is 4 (Agree) than it will be like this
Stronglydisagree
Disagree
NeitherAgreenor
Disagree
Agree
StronglyAgree
Electronic Word of Mouth Marketing
01 I prefer to buy cosmetic products that have
positive online reviews on different websites.
1 2 3 4 5
02 I feel information related to cosmetic products
which is provided in e-WOM marketing is
persuasive
1 2 3 4 5
03 I rely on e-WOM marketing to evaluate cosmetic
products’ effectiveness
1 2 3 4 5
04 I do not opt for cosmetic products having negative
e-WOM marketing
1 2 3 4 5
Social Networking Sites
01 Social networking sites are one of the most
convenient way to gain information related to
cosmetic products
1 2 3 4 5
02 Social networking pages and groups related to
cosmetic products, such as on Facebook usually
influence my purchase intentions
1 2 3 4 5
03 Banners/Pay Per Click Adverts on social media
sites, such as Facebook, influence my purchase
decisions
1 2 3 4 5
04 I often visit social networking sites to gather
information related to cosmetic products
1 2 3 4 5
05 I frequently share my experiences with the
cosmetic products on social networking websites
1 2 3 4 5
Perceived Value
01 I feel doubtful regarding the perceived value of
the cosmetic product if the online seller’s
credibility is not well known
1 2 3 4 5
02 If I get positive online reviews regarding a
cosmetic product, it increases my perceived value
related to that product
1 2 3 4 5
4
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
22
03 I usually prefer branded cosmetic products
because of their high perceived value
1 2 3 4 5
04 Online adverts usually influence my perceived
value related to a cosmetic product
1 2 3 4 5
05 While purchasing online, the more I feel confident
regarding the authenticity of a cosmetic product,
the more my perceived value increases regarding
that product
1 2 3 4 5
Please select ( ) the appropriate choice
Name: __________________________________________________________
Contact #. _______________________________________
Email ID: _______________________________________
Gender: Male Female
Age:
1. Less than 21
2. 21 to 30
3. 31 to 40
4. 41 to 50
5. Above 50
Education:
1. Matriculation/O level
2. Intermediate/A level
3. Undergraduate
4. Graduate
5. Doctorate
Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers
23
Occupation:
1. Employee
2. Own Business
3. Student
Thank you for your cooperation

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Impact of E-WOM, Social Networking Sites and Perceived Value on Purchase Intentions of Cosmetic Product Customer

  • 1. To study the Impact of Electronic Word of Mouth Marketing, Social Networking Sites and Perceived Value on Customers Purchase Intentions. A study on Cosmetic products A Research Project submitted By Hassaan Elahi (28270) Anoosha Suleman (27685) Shoaib Hassan (27788) Muhammad Zeeshan Faheem (27755) Qirat Lasi (29100) To Department of Business Administration In partial fulfilment of the requirement for the degree of BECHOLARS OF BUSINESS ADMINISTRATION This Project has been accepted by the FACULTY OF BUSINESS ADMINISTRATION Mr. Waqas Rana Supervisor Research Facilitation Centre – RFU, Iqra University
  • 2. Executive Summary This research is being carried out in order to determine whether the purchase intentions of cosmetic product customers living in Karachi are influenced by electronic word of mouth marketing, perceived value of the product and social networking sites and how these variables are influencing the purchase decisions of online buyers. The study also focuses on finding the significance of perceived value, social networking sites and e-WOM in influencing the purchase intentions of customers of cosmetic products living in Karachi. It was really important for us to conduct the research on this topic in order to find out the gap between our research and the previous researches that have been conducted in different countries of the world. The pathway undertaken in this paper was explanatory research which served as a basis for our data collection and analysis as we had to check the existence of any potential relationship that may exist between our dependent and independent variables. We have used 150 respondents for the sample size of this research. The target population for our research were women who are the ultimate users of cosmetic products and brands. The sampling technique used in our research was systematic random technique. The instrument that we chose for our data collection was questionnaires which consist of Likert scale questions. We have analyzed our data and determined the relationship that exist between our dependent variable and independent variables by using one sample t- test technique. The result of the test concludes that each of our independent variable (e-WOM, social networking sites and perceived value) has an impact on our dependent variable which is purchase intentions of customers of cosmetic products. Finally, at the end of this report, we have also provided the conclusions and discussions based on our understanding of previous literatures and knowledge that we gained while conducting this research. The implications and recommendations were also provided in this
  • 3. research to facilitate our various stakeholders and to solve the problems that were the focus of this research. Lastly, we have also given the limitations of this research at the end of the report.
  • 4. Contents Chapter 1 Introduction ................................................................................................................................ 1 1.1 Background of the Study....................................................................................................................... 1 1.2 Problem Statement ................................................................................................................................ 2 1.3 Research Questions............................................................................................................................... 3 1.4 Purpose of the Study ............................................................................................................................. 3 1.5 Significance of the Study...................................................................................................................... 3 1.6 Outline of the study............................................................................................................................... 3 Chapter 2 Literature Review....................................................................................................................... 5 2.1 Underpinning, Supporting Theories/Models and Empirical Reviews .................................................. 5 2.2 Hypotheses............................................................................................................................................ 8 Chapter 3 Research Method........................................................................................................................ 9 3.1 Research Approach ............................................................................................................................... 9 3.2 Research Design.................................................................................................................................... 9 3.3 Sampling Design................................................................................................................................... 9 3.3.1 Target Population ........................................................................................................................ 9 3.3.2 Sample Size ................................................................................................................................. 10 3.3.3 Sampling Technique .................................................................................................................. 10 3.4 Instrument of Data Collection............................................................................................................. 10
  • 5. 3.5 Procedure of Data Collection.............................................................................................................. 10 3.6 Statistical Technique........................................................................................................................... 11 Chapter 4 Results and Findings ................................................................................................................ 12 4.1 Hypotheses Testing............................................................................................................................. 12 4.2 Hypotheses Assessment Summary...................................................................................................... 12 Chapter 5 Conclusion, Discussion, Implications, Limitations and Recommendations ............................ 14 5.1 Conclusion and Discussion................................................................................................................. 14 5.2 Implications......................................................................................................................................... 16 5.3 Limitations .......................................................................................................................................... 17 5.4 Recommendations............................................................................................................................... 17 References................................................................................................................................................. 19 Appendix................................................................................................................................................... 21 Questionnaire ............................................................................................................................................ 21
  • 6. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 1 Chapter 1 Introduction 1.1 Background of the Study The objective of this thesis, which is conducted within the field of marketing is to analyze the impact of e-WOM marketing, perceived value and social networking sites on the purchase intentions of customers of cosmetic products. In this research, we have investigated how online sellers of cosmetic products are utilizing the platforms of e-commerce, such as social networking websites, to spread positive word of mouth related to their cosmetic products among their targeted customers which are mostly females. (Thuy, 2016) Moreover, we have also investigated that what factors influence customers’ purchase intentions during e-WOM marketing, how much customers of cosmetic products are influenced by e-WOM and whether e-WOM increases their purchase intentions significantly or not. Furthermore, in this research, we have also analyzed the impact of social networking websites, that how online reviews, adverts, pages and groups related to cosmetic products in different social networking websites, such as Facebook, play their role in influencing the purchase intentions and the resulting decisions of the customers. (Thuy, 2016) The last focus of this study is based on analyzing the perceived value of the customers who buy cosmetic products online. For this we have investigated that what variables should online sellers consider in order to increase the perceived value of their cosmetic products and what things customers consider mostly while judging the perceived value of cosmetic products on the internet that influence their purchase intentions. (Pham, 2016) All our research and findings will be based on discovering how electronic word of mouth marketing is influencing cosmetic product buyers, in what ways sellers of cosmetic products can take advantage of e-
  • 7. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 2 WOM marketing, which variable, namely e-WOM, social networking sites, and perceived value of the product, is most important for online sellers in order to influence the purchase intentions of the buyers, how much each variable is influencing the purchase intentions of the buyers, and what considerations should online sellers keep in mind while targeting cosmetic product customers on the mediums where e- WOM is applicable. 1.2 Problem Statement In all the previous researches, most of the focus was on the fact that when customers buy cosmetic products or any other products online, their purchase intentions are highly influenced by the online reviews that are made regarding a particular product. Moreover, it was also observed that customer feel less reluctant when they are assured that the product is authentic and the online seller is trustworthy. The quality of the product is another variable that is considered by the customers when they purchase online. Good quality of cosmetic products not only help the sellers to gain positive word of mouth regarding their products on different social networking websites, but it also helps to increase the perceived value of the customers. (Thuy, 2016) All these previous researches have been conducted in countries like Vietnam, Finland, USA and other regions of the world, but not in Pakistan. Through our research, we will going to analyze how electronic word of mouth marketing is impacting Pakistani customers of cosmetic products (taking respondents of Karachi as our sample of the population) and influencing their attitudes regarding buying online. We will also analyze that what factors increases their purchase intentions, what factors affect their perceived value and what can sellers of cosmetic products do who are utilizing the platform of social networking websites to attract customers living in Karachi where people are highly skeptical to use the internet to purchase the products. Lastly, we will also try to discover how much our findings differentiate from the previous researches, and whether there is any common aspect between our findings and in previous
  • 8. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 3 researches in terms of the influences of the e-WOM and customers’ attitudes regarding cosmetic products that are sold in different platforms of e-commerce. 1.3 Research Questions  To what extent does purchase intentions of cosmetic customers is influenced by e-WOM marketing?  How social networking sites affect the pre buying perception of cosmetic products?  To what degree does the perceived value affect customer purchase decision in relation to cosmetic products? 1.4 Purpose of the Study The purpose of this research is to find out whether the purchase intentions of cosmetic customers living in Karachi are influenced by e-WOM marketing, perceived value and social networking sites and how they’re influencing the purchase decisions to buy cosmetic products online. 1.5 Significance of the Study The study pursues to find out the significance of perceived value, social networking sites and e- WOM in influencing the purchase intentions of customers of cosmetic products living in Karachi. The study will fill the gap in the existing body of literature in the stated principal of the matter. Moreover, the study will help to understand the behavior of customers who buy cosmetic products within this city and how the above variables influence their purchase intentions while buying cosmetic products online. 1.6 Outline of the study This report has four more section after this introduction, namely: Literature Review: Presents the past study done in the field of e-WOM, perceived value, social networking sites and purchase intention.
  • 9. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 4 Research Method: This section will elaborate the approach and methodology used to explore the research questions. Results and Findings: Provide verbal description of what we found supported by reports of all relevant descriptive statistics. Conclusion, Discussion, Implications, Limitations and Recommendations: Provides a link between our research and previous literatures along with the guidance for future researchers carrying their research in similar field.
  • 10. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 5 Chapter 2 Literature Review 2.1 Underpinning, Supporting Theories/Models and Empirical Reviews E-commerce started to progress gradually after its flourishing development and the emergence of the concept of Web 2.0, towards social networking services. This has resulted in the emergence of different and vast online platforms related to information-sharing and service exchange. This includes Facebook, Blogs, and different social networking websites. Moreover, this prevailing evolution has also changed the ways for customers to acquire and share information. With the rapid diversified developments in the cosmetic industry, many companies that provide beauty-care products are utilizing their websites by connecting it with different online communities, allowing customers to post their comments and share experiences related to product-use, saving cost and searching time of users. Customers are better able to understand the information related products and services in order to make their buying decisions if websites services are based on community style. Hence, revenues and market share are not only dependent on customers’ initial purchases but also on their continual loyalty. (Chen, Chen, & Chen, 2014) According to Pham (2016) in this modern era, purchasing online is an effective way to satisfy fast-paced customers because people nowadays are very busy and they need those types of products which are time saving and convenient. However, Pham (2016) further stated that customers have trust issues regarding purchasing online because of sellers’ dishonesty and also because of the unqualified items which are sold to them by charging them with prices of qualified ones. This can negatively affect the purchase intentions of the customers.
  • 11. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 6 Pham (2016) recommended that to the increase knowledge and trust of customers regarding cosmetic products on issues such as, the ingredients which are used to create them, their effects, their usages, manufacturing technologies along with the origins of the product must be enhanced in order to increase their purchase intentions. Moreover, Pham (2016) further stated that manufacturers should provide proactive information to customers regarding detailed and official information about the products, and how to spot the difference between fake and authentic products not only on the product packaging, but also on the company’s official website and on social media pages. By providing these recommendations about product usages and how to differentiate between fake and authentic products repetitively, customers’ knowledge about the product will improve and this will also enhance customers’ beliefs on both the product and company’s brand. Furthermore, in order to build stronger connections with customers to increase their purchase intentions, both manufacturers and distributors should introduce more effective marketing campaigns and promotions to attract more customers towards their products and on their websites. Moreover, another efficient way to build strong relations with customers and raise their trust in the company is to strengthen customer service on the social media platforms and websites. (Pham, 2016) In another study by Thuy (2016) importance of reviews by the bloggers were highlighted that they are considered noteworthy by customers when they intend to purchase cosmetics. Reviews that are positive help significantly to build positive brand attitude. The companies can take advantage of these beauty bloggers by sending gifts to them for reviewing their products positively and they can also share these positive reviews of the bloggers on their social media channels. However, Thuy (2016) recommended that the most important thing for the companies is to enhance and improve their products’ effectiveness and quality. Positive reviews circulated by the bloggers can help customers to perceive the brand positively which can eventually increase customers’ purchase intentions.
  • 12. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 7 Findings of Thuy (2016) also suggested that consumers’ brand attitude is not affected by the quality of reviews. This means that the accuracy, comprehensiveness, relevance and timeliness of the bloggers’ reviews are not significantly considered by the customers. This could be due to the reason that customers are more prone to pay attention on the overall general evaluations rather than on the details. However, consumers’ brand attitude is influenced by the quantity of reviews. It is observed by Thuy (2016) that when consumers get the largest number of reviews about the product, they perceive it as more popular. Lastly, the findings of Thuy (2016) also proved that purchase intention of consumers are strongly affected by their brand attitude. This means that brands should generate and enhance more positive attitude, attention and interest from the customers in order to influence their purchase intentions. According to Kaplan and Haenlein (2010) the social networking system operates by means of websites which allow customers to make their profiles, exchange data, and connect with peer groups within the same domain. Social network advertising is utilized by tactical dealers as a promotional source because these sites are quite famous among people and therefore become the common grounds for promotion. Apart from its convenient access, the interface can be tailored and modified according to profile of consumers. Therefore, the worthiness of social networks is dependent on marketers, who have a selection of manipulating tools which can enhance their promotional activities to their complete extent and can also help them to tailor the needs for promotions according to the wants and demands of the customers. Studies on social media classifies customers as either sponsors who are actively posting explanations or as witnesses who only see and observe what other post. (Schlosser, White, & Lloyd, 2006; Shoa, 2009) Forbes (2017) states that nowadays, the traditional boundaries have been eliminated and people all over the earth are utilizing social media networking on a daily basis in order to better connect and communicate with their peers, co-partners, colleagues and significant others. A large number of
  • 13. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 8 corporations provides information regarding their utilities and services through an online mechanism which become a basis for consideration for customers using social networking sites and therefore these corporations are restructuring their advertising tactics and procedures. The assimilation of social media in the structure of promotion is one of their tactics, or one phase of positive variation that is anticipated to develop and promote their brands, utilities and services all over the globe. Dodds and Monroe (1985) suggested the relationship model of perceived value and quality by stating that perceived value is an essential factor in customers' buying choice process, and shoppers will purchase an item with high perceived value. Dodds and Monroe (1985) and Zeithaml (1988) proved that shoppers will assess what they give and what they get in their subjective recognition when they are purchasing an item/benefit. As indicated by Utility Theory, the probability of purchasing an item becomes even more when customers get more benefits as compared to perceived price they have paid. (Dickson & Sawyer, 1990) Wang (2006) used brand image and perceived value as independent variable and consumer purchase intentions as dependent variable and thus concluded that the higher the perceived value and quality of a particular product, the greater will be the consumer purchase intentions and purchase decisions. 2.2 Hypotheses H1. There is an impact of electronic word of mouth marketing on purchase intentions of customers of cosmetic products H2. There is an impact of social networking sites on purchase intentions of customers of cosmetic products. H3. There is a significant impact of perceived value of cosmetic products on purchase intentions of online customers.
  • 14. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 9 Chapter 3 Research Method 3.1 Research Approach As most of the information in our research is already known related to our variables, the pathway which we will going to take is explanatory research on which our data collection and analysis will be based. This is because we are only looking for the additional information that whether our independent variables (i.e. e-WOM marketing, social networking sites and perceived value) have any impact on our dependent variable which is purchase intentions of customers of cosmetic products, within Karachi. Moreover, we will also going to find out the reasons behind the relationship (if any exist) between our dependent and independent variables and for this purpose, we consider that explanatory research approach is most appropriate for our research project. 3.2 Research Design The type of research design that we have used for this research is descriptive study as we are trying to understand the views of our respondents related to our variables and also the characteristics of our targeted population which are the customers of cosmetic products. We will try to understand the views of our respondents that whether their purchase intentions is influenced by e-WOM marketing, social networking sites and perceived value of cosmetic products. So, for that purpose, we will be using questionnaire as an instrument for our data collection. 150 questionnaires will be used for data collection. 3.3 Sampling Design 3.3.1 Target Population Target population for our research will be women who use the cosmetic products and brands.
  • 15. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 10 3.3.2 Sample Size Sample size for our survey is 150. 3.3.3 Sampling Technique The sampling technique that will be used for our research is Systematic Random technique (Probability Technique) as our target population is female (any age group or occupation), so this method will help us to target those women who uses cosmetic products and are up to date about brands on social media. 3.4 Instrument of Data Collection The instrument we have chosen for our data collection is Questionnaire which will consist of Likert scale questions that has rating scale from Strongly Agree to Strongly Disagree. (1= STRONGLY AGREE 2= AGREE 3= NEUTRAL 4=DISAGREE 5=STRONGLY DISAGREE) 3.5 Procedure of Data Collection The data will be collected about whether there is any relation between electronic word of mouth marketing with purchase intentions of customers of cosmetic products, whether the social networking sites affect the purchase intention of consumers of cosmetic products and whether the perceived value of cosmetic products influence the purchase intention of consumers. The group of interest will be women, it includes all females from the age of 12-60, who are well aware of cosmetic products and brands of cosmetic products. Data will be gathered from shopping malls, university students, college students, and from the random females (including housewives and working women). Survey data will be used to collect the information and views of our respondents as we are conducting a primary research and our research instrument will be questionnaires.
  • 16. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 11 3.6 Statistical Technique We will analyze our data and determine the relationship between our independent variables and dependent variable through using one sample t-test technique.
  • 17. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 12 Chapter 4 Results and Findings 4.1 Hypotheses Testing 4.2 Hypotheses Assessment Summary One sample t-test is conducted for the evaluation of our hypotheses as we have computed means of our three independent variables. The first hypothesis of this paper is based on testing the impact of e- WOM on purchase intentions of cosmetic product customers. Since the mean value of e-WOM comes out to be 3.5 which is greater than test value 3, it implies that there is an impact of e-WOM marketing on purchase intentions of the customers. The second hypothesis of this paper is based on testing the impact of social networking sites (SNS) on purchase intentions of customers of cosmetic products. Since the mean value of SNS comes out to be 3.4 which is greater than test value 3, it implies that there is an impact of social networking sites on purchase intentions of the customers.
  • 18. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 13 The third hypothesis of this paper is based on testing the impact of perceived value on purchase intentions of the cosmetic product customers. Since the mean value of Perceived-value comes out to be 3.5 which are again greater than test value 3, it implies that there is an impact of perceived value on purchase intentions of customers of cosmetic products.
  • 19. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 14 Chapter 5 Conclusion, Discussion, Implications, Limitations and Recommendations 5.1 Conclusion and Discussion As the purpose of our study was to analyze the impact of electronic word of mouth marketing, perceived value and social networking sites on purchase intentions of customers of cosmetic products within Karachi, the testing of our hypothesis based on one sample t – test are producing similar results that were conducted in other countries and that were highlighted in previous literatures, which were carried out on cosmetic product customers. While conducting our research, when we tried to analyze the effects of our first variable (i.e., e-WOM marketing) we observed that majority of our respondents agreed that the information related to cosmetic products which is provided in e-WOM marketing is persuasive. This finding was also supported by the study, which was conducted by Pham (2016) in his research, that when sellers provide proactive information about their cosmetic products on different websites, and when customers find more positive reviews about cosmetic products as suggested by Thuy (2016) it not only helps significantly to build a positive brand attitude but also aid customers to better understand the product and persuade them to buy the product. Likewise, we also discovered that many of our respondents relied on e-WOM marketing to evaluate cosmetic products' effectiveness and do not opt for cosmetic products having negative e-WOM marketing. Again, this finding was also similar to the findings suggested by Thuy (2016) in his research that online reviews are highly noted by cosmetic product customers before making any purchase decision. Similarly, when we analyzed our second variable (i.e., social networking sites) most of our respondents preferred social networking sites as the most convenient way to gain information related to cosmetic
  • 20. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 15 products that also influence their purchase intentions when they access different social media pages to gain knowledge about cosmetic products. Moreover, their purchase decisions were also observed to be influenced by the adverts that are displayed on the social media sites, such as pay per click ads on Facebook. Likewise, it was also noted that these respondents frequency of visits on social media pages related to cosmetic products were also high in order to gain information about them. Again, these findings were also in line with the findings that were proposed by Kaplan and Haenlein (2010) regarding the benefits of social networking sites for marketers in capturing customers’ attention. We also observed that utilizing this platform for promotional activities can be an effective way to influence customers’ buying decisions which was suggested by Kaplan and Haenlein (2010) in their research because our respondents were also influenced by the pay per click adverts, social media pages and promotional activities that were displayed on these sites, before making their purchase decisions. They also find these social networking sites a convenient place to gain information related to cosmetic products which can also be a reason behind their high visits on these sites. However, we observed that most of our respondents were information seekers rather than information providers on these social networking sites as most of them were reluctant to share their experiences with the cosmetic products on social networking websites. So we can conclude that our respondents were mostly witnesses who just observe what other post rather than sponsors who actively post explanations according to the theory of classification of online customers which was suggested by Schlosser et al. (2009) and Shao, G. (2009) in their research. Furthermore, when we analyzed the effect of our third variable (i.e., perceived value) we observed that our respondents felt more skeptical regarding the perceived value of cosmetic product if the online seller’s credibility was not well known. Moreover, we also observed that when our respondents felt more confident regarding the authenticity of a cosmetic product, it helped them a lot to increase their
  • 21. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 16 perceived value regarding that cosmetic product. These observations were also in line with the findings suggested by Pham (2016) that customers have trust issues when they purchase online because of sellers’ dishonesty so online sellers should always provide proactive information regarding their cosmetic products, such as, ingredients used, their effect, their usages and how to spot the differences between fake and authentic product in order to increase customers’ confidence. Moreover, we also observed that when most of our respondents received positive online reviews regarding a cosmetic product, it helped to increase their perceived value related to that product. This finding was also similar to the findings of Thuy (2016) that positive reviews circulated by the people or bloggers can help customers to perceive the brand positively which can eventually increase customers’ purchase intentions. Based on our observation, we also discovered that the perceived value of most of our respondents was also influenced by the online adverts which, again, is a similar finding that was proposed by Kaplan and Haenlein (2010) in their research related to the effective use of social networking sites for promotions. Lastly, most of our respondents also preferred to buy branded cosmetic products because of their high perceived value and this observation was also making a link to the findings suggested by Wang (2006) that high brand image usually have high perceived value which helps to increase customers purchase intentions to buy a product. 5.2 Implications The research was carried out to identify the influence e-WOM has on customers of cosmetic products in Karachi, what are the factors that affect purchase intentions of cosmetic buyers in Karachi and how marketers can use e-WOM, social networking sites and perceived value of their cosmetic products as a tool to trigger customer purchase intention positively while they by any cosmetic product. The findings depicted that e-WOM has significant impact on purchase intentions of customers. Moreover, social networking sites and perceived value also play a vital role in shaping purchase
  • 22. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 17 intentions of individuals who buy cosmetic products in Karachi. These findings can be widely used by online sellers and brands. The significance highlighted clearly shows how important it is to observe and manage online reviews and comments that customers write on online pages and sites. As online reviews play an important role to shape consumer purchase intention, organizations can use it as a strategic communication channel to create awareness about their products or services. This exploration also conveys a few new bits of knowledge for organizations to utilize electronic word of mouth as a feature of their strategic marketing effort in increasing new buyers and retaining the ones they have. On the other hand, customers can use e-WOM and social networking sites as a tool to spread their views about the products and they can also get information before buying it. It can serve as a platform where major stakeholder that is customer itself, is helping another customer and in return is getting helped too. 5.3 Limitations The sample size used for this research was limited to the female customers of cosmetic products living in Karachi. The findings might not represent the views of the entire population of Pakistan, so the results of this research cannot be generalized. Moreover, this research is only focused on female buyers, and has not included males and transgender that also use cosmetic products. Lastly, we have only used e-WOM marketing, social networking sites and perceived value of cosmetic products as our independent variables that are affecting the purchase intentions of cosmetic product customers, which is our dependent variable. However, in reality, purchase intentions of cosmetic product customers might be affected by other variables too, such as, customer knowledge, attitude towards online shopping, security and privacy concerns regarding online shopping etc. that have not been considered in this research. 5.4 Recommendations The further studies that will going to address the same problems should target cities other than Karachi, specifically interior parts of Pakistan where online and virtual world have not reached the
  • 23. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 18 height yet. Whereas, in urban areas where people are using the internet all day, in and out, marketers should develop strategies to create positive reviews so that e-WOM yield positive result for them. Online sellers should critically monitor social media sites and online trends that can influence purchase intentions of their potential markets. Additionally, they should try new tactics and strategies to create strong perceived value which eventually will affect purchase intentions of individuals in the market. Whereas, customers should actively take part in e-WOM and shall use it as a platform where they can get aware about different products and services. Lastly, competitors can directly analyze reviews that customers have about the organizations and can use the information present in those reviews to make their own brand better and competitive. By strongly monitoring, competitors can adopt strengths and learn from mistakes in order to grab more market share within the cosmetic product industry.
  • 24. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 19 References Chen, C.-W., Chen, W.-C., & Chen, W.-K. (2014). UNDERSTANDING THE EFFECTS OF EWOM ON COSMETIC CONSUMER BEHAVIORAL INTENTION. International Journal of Electronic Commerce Studies, 5, 97-102. Dickson, P. R., & Sawyer, A. G. (1990). The price knowledge and search of supermarket shoppers. Journal of Marketing, 54, 42-53. Dodds, W. B. & Monroe, K. B. (1985). The effect of brand and price information on subjective product evaluations. Advances in Consumer Research, 12(1), 85-90. Forbes (2017). 4 Tips To Help Your Business Flourish On Social Media. Available at https://www.forbes.com/sites/jpmorganchase/ 2017/03/20/4-tips-to-help-your-business-flourish-on- socialmedia/#605da1987dd2 (accessed 4 December 2016). Kaplan, A.M., & Haenlein, M. (2010). Users of the world, unite! The challenges and opportunities of social media. Business Horizons, 53(1), 59-68, doi: 10.1016/j.bushor.2009.09.003. Pham, L. T. (2016). THE IMPACT OF ELECTRONIC WORLD-OF-MOUTH (EWOM) TO THE PURCHASE INTENTION FOR COSMETIC PRODUCTS OF ONLINE CUSTOMERS: AN INVESTIGATION IN VIETNAM. The 10th International Days of Statistics and Economics, (pp. 1871 - 1885). Prague. Shao, G. (2009). Understanding the appeal of user-generated media: A uses and gratification perspective. Internet Research, 19(1), 7-25.
  • 25. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 20 Schlosser, A.E., White, T.B., & Lloyd, S.M. (2006). Converting web site visitors into buyers: How web site investment increases consumer trusting beliefs and online purchase intentions. Journal of Marketing, 70(2), 133-148. Thuy, N. T. (2016). THE EFFECTS OF ELECTRONIC WORD – OF – MOUTH TO CONSUMERS’ PURCHASE INTENTION TOWARDS COSMETICS PRODUCTS. LUT, School of Business and Management, International Marketing Management, MIMM , Lappeenranta. Wang, W. C. (2006). The effect of product knowledge and brand image on purchase intention moderated by product category. Unpublished master thesis, Tatung University, Taiwan. Zeithaml, V. A. (1988), Consumer perceptions of price, quality and value: a means-end model and synthesis of evidence. Journal of Marketing, 52, 2-22.
  • 26. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 21 Appendix Questionnaire Please select your desired response: For example: If your response is 4 (Agree) than it will be like this Stronglydisagree Disagree NeitherAgreenor Disagree Agree StronglyAgree Electronic Word of Mouth Marketing 01 I prefer to buy cosmetic products that have positive online reviews on different websites. 1 2 3 4 5 02 I feel information related to cosmetic products which is provided in e-WOM marketing is persuasive 1 2 3 4 5 03 I rely on e-WOM marketing to evaluate cosmetic products’ effectiveness 1 2 3 4 5 04 I do not opt for cosmetic products having negative e-WOM marketing 1 2 3 4 5 Social Networking Sites 01 Social networking sites are one of the most convenient way to gain information related to cosmetic products 1 2 3 4 5 02 Social networking pages and groups related to cosmetic products, such as on Facebook usually influence my purchase intentions 1 2 3 4 5 03 Banners/Pay Per Click Adverts on social media sites, such as Facebook, influence my purchase decisions 1 2 3 4 5 04 I often visit social networking sites to gather information related to cosmetic products 1 2 3 4 5 05 I frequently share my experiences with the cosmetic products on social networking websites 1 2 3 4 5 Perceived Value 01 I feel doubtful regarding the perceived value of the cosmetic product if the online seller’s credibility is not well known 1 2 3 4 5 02 If I get positive online reviews regarding a cosmetic product, it increases my perceived value related to that product 1 2 3 4 5 4
  • 27. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 22 03 I usually prefer branded cosmetic products because of their high perceived value 1 2 3 4 5 04 Online adverts usually influence my perceived value related to a cosmetic product 1 2 3 4 5 05 While purchasing online, the more I feel confident regarding the authenticity of a cosmetic product, the more my perceived value increases regarding that product 1 2 3 4 5 Please select ( ) the appropriate choice Name: __________________________________________________________ Contact #. _______________________________________ Email ID: _______________________________________ Gender: Male Female Age: 1. Less than 21 2. 21 to 30 3. 31 to 40 4. 41 to 50 5. Above 50 Education: 1. Matriculation/O level 2. Intermediate/A level 3. Undergraduate 4. Graduate 5. Doctorate
  • 28. Impact of e-WOM, SNS, and Perceived Value on Purchase Intentions of Cosmetic Product Customers 23 Occupation: 1. Employee 2. Own Business 3. Student Thank you for your cooperation