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1.1 Research Background
"Little Red Book" is considered to be a billion-dollar start-up business that tops the Chinese social media platform and serves more than 300 million registered customers (linkfluence.com, 2022). The application was registered in 2014 and within a very short period, it became one of the best shipping applications for China. This Chinese start-up business has paved the way for raising at least a fair amount of $300 million and getting a valuation of $2.5 billion (Davis and Xiao, 2021). The application is entirely based on the intention of speeding up the e-commerce expansion and is observed to be backed by Tencent.
This application is considered to be different from other platforms as it has a perfect zone of targeted customers. The age group that this company generally targets are Chinese women aged between 18 to 35 years (Johns, 2019). This application provides shopping ventures for cosmetics, fashion, and luxury products. The annual report of Little Red Book states that 80% of the customers are women below 30 years old. The company has been observed to have a typical impact on the consumer buying behaviour of China (Russell-Bennett et al. 2019). The platform provides awareness schemes through which consumers become able to discover many brands and hence continue shopping with various brands.
Apart from this, the company platform provides products from various brands that create a good channel for the customers to touch multiple consumer touchpoints. Consumer behaviour is also touched by this social platform of shopping, by creating a bundle of branded stores as it helps to generate more traffic for the brands and also paves for customers ways to purchase various compatible materials (Greenfield and Veríssimo, 2019). The consumers' buying decisions are mainly keen to be influenced by this online platform as it provides an elaborative discussion about the products that influence the aspects of consumers' daily life. Consumers also gain a way of having typical insights about the product details before purchasing.
1.2 Research Aim
This study intends to examine how social marketing in China's Little Red Book application affects users' purchasing decisions (Guan, 2021). The goal of this study is to examine how Chinese consumers' usage of beauty products has changed through time.
1.3 Research Objective
- To identify the user group of the little red book application.
- To explore the communication mechanism of the little red book application.
- To understand the impact of social marketing in the little red book application has on user’s consumption behaviour
1.4 Research Question
- Who are the user group of the little red book application?
- What is the communication mechanism of the little red book application?
- How the social marketing in the little red book application influences the user’s consumption behaviour?
1.5 Research Purpose
This research study aims to investigate the repercussions of the Little red book application on the consumption behaviour of people. This research will help to understand the effects of social media marketing. This application is beneficial for new companies who are entering the market, but at the same time, it is affecting the existing businesses and their marketing strategies and performances (Cooley and Parks-Yancy, 2019). Little red book applications are using influencers to promote those products and show their application through video. With the influence of social media, people are consuming more products and even sometimes they are purchasing products which they never going to use (Guan, 2021). This rise in cosmetic product consumption is the rising expenses of middle-class families. Social media is creating unrealistic expectations in customers which provokes them to purchase a lot of products. This study will help to understand the effect of the little red book application.
1.6 Research Rationale
The rationale behind writing this thesis is to understand the impact of social marketing, under "Little Red Book", a Chinese shopping platform. The thesis is conducted to understand the way social marketing has impacted consumers' behaviour concerning this famous shipping platform that offers various brands and products (Singh and Dhir, 2019). The research has been conducted to recognize the effects of social media strategies that have been adopted by this company to influence the marketing decision of the consumers.
Social media has involved a lot in the business world that has provided many online businesses to evolve by gaining a lot more consumers at their outlets (Rundle et al. 2019). The study has dealt with the way the different aspects of social media have affected the working of the online marketing practice by Little Red Book and the way this company has adopted the marketing practice to set its goals of getting profound customers. The study is based on providing ideas about the way social media and its marketing styles have brought significant transformations in the buying attitude of consumers (de Oliveira Santini et al. 2020). With this idea being carried forward, the study is also carried out to analyse the way this online platform has applied the idea of social marketing to gain more customers and hence serve them.
1.7 Research Significance
Social Marketing has a significant impact on customers' consumption behaviour as it aids in making informed decisions for customers. “Little Red Book” is one of the social-marketing applications, which provides Chinese marketers with ample opportunities to promote their brands and build awareness amongst their target customers. This study has been conducted to determine the ways customers’ intentions for the consumption of brands’ products are influenced through the adoption of social marketing initiatives (Nbh, 2022). The brands to understand the areas of improvement, it has gained huge popularity amongst Chinese customers and brands. The present study has provided a clear insight into the effective influence of social marketing on bringing transformations in the consumption behaviour of Chinese customers by making the customers aware of the potential benefits and features of certain products, which helps them in selecting the best products following their needs and preferences (Zhang et al. 2020). This research study has also highlighted the active influence of the built-in feedback mechanism of the site in allowing the users to share their opinions and providing brands with the opportunity to implement these opinions in their product manufacturing and advertising strategies.
1.8 Research structure
An introduction, literature review, methodology, analysis and findings, conclusion, and recommendations are the primary essential five chapters that form a research report. In the first chapter, the aim, objectives, purpose of carrying out the research, rationale and significance of this research have been included. In this chapter, the reason behind research identifying the impact of social marketing in influencing customers’ buying behaviour in China. The next chapter consists of a literature review that includes a conceptual and theoretical understanding of the social-marketing world and its impact on the consumption behaviour of customers in China. The third chapter includes research methodology, which has provided a clear understanding of the data collection and analysis methods applied in the study for ensuring the collection of reliable information regarding the use of social-marketing sites such as Little-Red Book and the perceived benefits of this site amongst Chinese customers in making informed purchase decisions. The fourth chapter is all about analysis and findings, which are aimed at interpreting the information collected in the study to arrive at a proper conclusion on the ways social marketing application has a significant influence on the purchase behaviour of customers. The last chapter includes a summary of the overall research.
Figure 1.1: Research Structure
Therefore, to summarise, it is worthy to state that Little Red Book has incorporated the working of the technological facilities to bring innovations in their customer decisions. This has been done by the company to influence its way of marketing following the changing scenario of social marketing trends. The chapter has put into detail the objectives and aims of the research topic that has further assisted the researcher to align the study with the topic (Jiang et al. 2021). Therefore, the chapter introduction consists of details about the Chinese company in detail and also provides a detailed analysis of the impact of social marketing on the customer's preferences buying and purchasing decisions. The transformations brought about by the social media marketing style have also been analysed here and further space for discussion in other chapters, regarding this topic, has been therefore created.
Chapter 2: Literature Review
Social marketing refers to an approach through the adoption of which the marketers aim at bringing significant changes in the behaviour of target customers and the community. Different types of social-marketing approaches are used for enhancing brand awareness and building a desired brand image in the market by influencing customers’ behaviour. In this section of the study, the impact of adopting social-marketing approaches in influencing customer behaviour and improving business performance has been analysed. This section has also provided an in-depth understanding of the ways social marketing on Little Red-Book is influencing Chinese consumers’ behaviour to a significant extent.
2.2 Conceptual framework
Figure 2.1: Conceptual framework
2.3 Impact of social marketing on Chinese consumer behaviour
According to Farrukh et al. (2021), social marketing is the process of promoting products and services as people have an affection to use a smartphone. Their presence on social media platforms enhances a lot and encourages Chinese consumers to how can particular product is useful for their personal and professional usage. With the utilization of the lucrative advertising pamphlet, reluctant customers are ready to buy the newly launched product as well. Here, the company gets a positive marketing result as customers have much time to find out the relative information. A large number of factors are accountable for changing the consumer’s behaviour. According to Kotler and Armstrong, marketing fact has been classified in the below-mentioned category.
Psychological: Najib et al. (2022) stated that a number of psychological factors influence the buying decision of consumers. Chinese consumers check how much extent they get motivated, perception, learning, belief, and attitudes. In case all these factors are according to get profit, then the consumer can consider their service (Valaskova et al. 2021). Age and life cycle, employment, economic situation, way of life, personality, and self-concept all have an impact on social marketing. Some individual factors prevent customers from purchasing a particular product because it is inappropriate for their age. The Chinese economy recommends that people purchase high-quality goods.
Social and cultural: As per the reference group, family, roles, and status, the buying decision of consumers changes a lot. Pacheco et al. (2022), said that group lies in the primary and secondary types. For instance, the high-income group intends to buy luxury-class products. Contrary to this side, Low income intends to buy only survival-related products (Ali et al. 2021). The culture, subculture, and social class system inspire the consumer to buy related commodities or not
Figure 2.2: Impact of social marketing on consumer buying behaviour
(Source: inspirajournals, 2019)
2.3.1 Influence of social marketing over its users
As per Brune et al. (2021) Social marketing welcomes feedback and contribution from every end. Furthermore, Chinese consumers get a slew of information and idea during an online conversations. It brings close to the company and audience. No matter what activity People performed here, everything is wide open and available. Chinese people react promptly in the exchange of certain views (Alzoubi et al. 2022.). By the way, brand existence should be honest and authentic. Social media is two-way communication and value both parties’ views. Thus, business connectivity should be linked through a well-targeted audience connection. On the other hand, Yahaya et al. (2021) stated that making the online presence as much as reliable (Nasidi et al. 2021). As per Mason et al. (2021), effective online consumer engagement, Chinese companies have adopted a new model and process to respond to each user properly. As a result, brand identity does not have time to respond to customers. The nature of china's marketing was not as strong as other countries have. Tracking the reliable metric for social strategy was not simple.
2.4 User group of the little red book application
The little red book is a combination of social media applications and e-commerce applications. Its primary target is young, shopping lovers, and working women in the urban area. Their focus is on beauty products, jewellery, clothes, health products, fitness, educational products, and tourism. According to Ärlebäck and Frejd (2021), the features of this app are similar to Instagram, here creators and viewers can communicate through likes, comments, shares and inbox messages. The little red book is helpful for spreading awareness and branding and promoting products.
In this app, brands create their business profile and then set up their online stores. Yao et al. (2019), stated that 8000 brands are available on the Little red book application. International fashion brands like Gucci, Chanel and Dior are running their store on this app. Other than this fitness, health, tourism, and life styling brands are also there. These brands are advertising their products by displaying them, after opening the app and scrolling the user feed. Some people are afraid of purchasing fake products but this app offers them to buy directly from the brand’s online shops. For the people of China trust is key to business, and brands are winning the trust of customers, and this is promoting their products among the customers. Li and Han (2021) mentioned that these brands are always trying to make products according to trends, making their product more relevant.
Figure 2.3: Brand groups and preferences in the Little Red Book
(Source: china-digital, 2021)
Pemarathna, (2019), said that global brands are also hiring influencers to promote their products. There is one type of user on the “Little red book” app who publishes their experiences about particular products, these users are known as social media influencers. Social media influencers get offers from brands for collaboration. To collaborate with influencers brands offer them money in exchange for a good review of their product on the Little red book supplication. And there are some non-paid reviews from influencers also available on the app, these influences are always ready to give their small advice to customers. Other than these social media influencers, some well-known personalities like actors, actresses, models, and players are also posted their reviews on products even though they get paid more by brands than social media influencers is mentioned by Man (2020). In paid collaboration influencers are instructed to demonstrate applications and results of using the products.
This app’s profit depends on the purchasers of products who are ordinary people of China. According to Tajudeen et al. (2018), the number of users of the Little red book application is 300 million. Most customer of the Little red book application is from the age group of 20-35 years or we can say 70% of them are millennial or Gen-Z. Generally, the users are female, and they are from top-tier cities. Young ladies are always interested in new trends and trends are changing every day, which increases their purchases. Brands are making products according to trends and affordable which motivates customers to buy products. And from fear of missing out, they are purchasing unnecessary products. Hong (2020) enchanting advertisements and influencing, affect the decision-making ability of people and they bought those items which they hardly use.
In this app, they provide a feature to give reviews about used products which helps others in shopping. This app gathers brands across the world so the availability of a vast product range in one app is definitely helpful. The little red book app is immensely popular among non-residential Chinese. Their communication and manipulation strategy is very strong, which convinces customers to buy products. Other than e-commerce it is a social media app, according to Coyne et al. (2020) customers spend 4 hours on the app in a day on average. This app is ruling the e-commerce market in China and in future, it will expand more.
2.5 Conception of social marketing activities on business performance
As cited by Bilgin, (2018), social marketing enables businesses in building a strong communication network that aids in enhancing brand loyalty and awareness in the market. Businesses use different social-marketing platforms to introduce their brands to their customers and interact with the customers to make them aware of the possible benefits they are likely to derive from their products or services. Businesses adopt Social-marketing activities not only for making a huge profit; however, also for enhancing customers’ awareness regarding the ways they can bring improvement in their lives by changing their purchase behaviour through informed decision-making.
2.5.1 Social marketing for enhancing customer interaction and engagement
Businesses prefer using popular social-marketing platforms to enhance the likelihood of achieving their business goals by bringing transformations in the purchasing pattern of the customers. Ebrahim (2020), referred that the major reason behind the integration of social-marketing activities with marketing strategies of the business is that it allows the brands to reach out to a vast customer base with the help of content marketing. Social-marketing platforms provide businesses with the opportunities to promote their content conveniently facilitating the rapid growth of brands’ target audience. As opined by Chen (2018), strategic communication on the Chinese social-marketing platforms aids in enhancing customers’ engagement with a brand which in turn aids in enhancing customers’ trust over a specific brand. This also facilitates the process of building an online brand community that helps in reaching out to a large customer base (Jibril et al. 2019). In some cases, the brands use user-generated content as means of promoting their brands while enhancing the loyalty of the existing users.
Figure 2.4: Factors associated with user-generated content leading to increased sales
(Source: Dunn and Harness, 2018)
User-generated content is the customers’ generated brand-specific content, which does not require brands to spend a huge amount of money for the promotion of their brands. According to Dunn and Harness (2018), user-generated content can influence the purchase behaviour of the customers and sales of brands could depend largely on the same. The factors that have a significant influence on enhancing the number of user-generated content on social-marketing platforms and the most important one is the user relationship with the brands (Shahbazi and Byun, 2020). This enhances sales and exposure of the brands in the market leading to a significant improvement in their performance.
2.5.2 Impact of Social marketing on building consumer trust over the brands
A number of different e-commerce features are used for enhancing the effectiveness of social-marketing activities and these include shoppable videos or images, group buying, user-generated video content and so on, which aid in enhancing brand exposure as well as in communicating the product value with the target customers. As opined by Niculescu et al. (2019), user-generated contents facilitate brands’ promotion by making the new prospective customers understand the reason behind preferring a certain brand over others after being satisfied with a specific brand’s products. However, the opposite also happens when brands fail to satisfy their users and they post negative reviews on social-marketing platforms. On the other hand, Dwivedi et al. (2021), mentioned that social marketing can have a significant negative impact on the purchase behaviour of both existing and prospective customers of the brands. In this context, the feedback mechanisms of the social-marketing platforms should be responsive enough to ensure that every feedback is addressed properly, which could enhance users’ trust in the brand. This also helps in attracting a large customer base leading to enhanced profitability of the organisations.
2.5.3 Use of SEO to drive sales and enhance the competitive edge
Integration of social media marketing initiatives with Search-Engine Optimisation is considered to drive brands’ sales by making it easy for the users to find their preferred products or brands. As opined by Hasanat et al. (2020), SEO provides businesses with opportunities to enhance the visibility of their brands on social-marketing sites to gain the attention of new customers. For high-quality optimisation, the brands consider posting interactive content such as clickable and interactive marketing campaigns to encourage the customers to take part in the
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