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CHAPTER 3: RESEARCH FRAMEWORK
According to the existing literature, we develop our research framework as shown below (Figure 3-1). We seek to explore the effect of social media marketing and tourism product types on sales performance. Therefore, in this framework, we will examine the relationship between these effects and sales and answer the following questions: (1) can social media marketing facilitate the sale of tourism products, and (2) which types of tourism products are more suitable to conduct social media marketing activities for increasing sales, whereas which types of products are less suitable? We will discuss in detail how to construct each research hypothesis in the following sections.
Figure 3-1: Research Framework
3.1 Traditional EC marketing versus Traditional EC and Social media marketing
Traditional e-commerce is enabled by Web 1.0, featuring one-way communication.
Social commerce is enabled by Web 2.0, a platform that allows bidirectional communication, making consumers become better informed than ever before (Baghdadi, 2013). According to Stephen and Toubia (2010), social media allow people to actively participate in the marketing and selling of products and services in online communities. Moreover, Kim and Hawamdeh (2011) stated that companies utilized social media that help them improve their marketing strategies, increase website traffic and improve sales. That is, traditional EC marketing has some weaknesses that can be complemented by social media, and thus, companies that incorporate social media marketing into traditional EC marketing can generate better
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sales.
Some companies can indeed increase sales using social media marketing activities. Dell, for example, stated that its use of Twitter had generated $1 million in incremental revenue resulting from sales alerts (Kaplan et al., 2010). The Royal Opera House in London made 30 percent of its sales through its Facebook fan page (Ang, 2011). Old Spice, an American brand of male grooming products, was almost certainly in the decline phase of its product lifecycle; however, social media marketing activities revived the brand. Sales of Old Spice increased by 55 percent between April and June 2010 through posting on YouTube with millions of downloads, successful humorous tweets on Twitter, and the creation of a massively popular fan page on Facebook (Berthon, Pitt, Plangger, & Shapiro, 2012). Therefore, we expect that tourism agencies can increase the sales of tourism products with the assistance of social media marketing. Our hypothesis is as follows:
H1. Marketing tourism products in dual channels (i.e., e-commerce and social media) is likely to achieve better sales performance than simply marketing in traditional e-commerce.
3.2 Effect of social media marketing on tourism products
To realize the relationship between social media marketing and sales performance, we propose five dimensions to classify tourism products: the structure of tourism, the involvement of tourists, the scope of tourism, the price of products, and the length of a tour, which will be discussed in the following section.
3.2.1 Structure of Tourism
Based on Chapter 2, the structure of tourism indicates the level of planning that is performed by travel agencies. Accordingly, highly structured travel refers to trips that are to a large extent arranged by travel agencies, such as package tours. In contrast, less structured travel refers to trips that are primarily planned by tourists themselves, such as independent travel, flight and hotel packages.
Shih (2011) indicated that Facebook enables companies to develop online relationships with customers and even to influence conversations about their products.
Moreover, given the flexibility to start marketing campaigns at any time, companies can lunch timely promotions. For travel agencies, after promoting tourism products to their followers on Facebook, these potential consumers may be interested in certain products or special offers even if they did not originally have any travel plan. In such
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a case, Facebook can be a preferable channel for companies to market independent travel compared with package tours because independent travel typically requires more conversations between companies and tourists than package tours do, and Facebook can thus provide a more flexible channel for companies to discuss with customers in terms of travel dates and travel plans compared with traditional websites.
Furthermore, according to Lo et al. (2011), people who like to share travel photos on social networking sites appear to prefer independent travel rather than package tours.
Such individuals are more likely to become acquainted with locals and even attempt to learn some of the local language. Therefore, we expect a stronger effect of using social media marketing activities to promote independent tours compared with marketing package tours. Our hypothesis is as follows:
H2. Incorporating social media into the marketing of independent travel is more likely to increase the sales than in the marketing of package tours.
3.2.2 Involvement of Tourists
According to Chapter 2, a high-involvement tourist refers to an individual’s need for active stimulation from his/her surrounding vacation environment. Their desires can be satisfied by physical or adventure activities that require more interactions with the surrounding environment. In contrast, those who prefer tranquil environments tend to have little interaction with local tourist attractions.
One of the main characteristics of social media is that these media gather engaged and active participants of a given company (Kaplan et al., 2010). Bartram (2001) stated that increased exposure of adventure activities in the media may indeed stimulate involvement in an activity. Additionally, those who primarily use social media to share their trips tend to be quite young and appear to want a deeper, more authentic travel experience (Lo et al., 2011). According to Foo et al. (2004), younger tourists may prefer higher levels of stimulation, whereas older tourists prefer more tranquil environments. Therefore, using social media to promote tourism products that include more exciting activities may target active users and increase their intention to engage in these activities and to subsequently purchase the products. Thus, our hypothesis is formed as follows:
H3. Incorporating social media into marketing products that require greater tourist involvement is more likely to increase sales than in marketing products that require less tourist involvement.
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3.2.3 Scope of Tourism
According to Chapter 2, tourists may have fewer opportunities to gain a deeper understanding of local destinations when tourism is broad in scope. In contrast, specific tourism is relatively limited in scope, such as visiting only one city or island during a trip. Moreover, there is often a specific theme to satisfy the needs of tourists.
According to Lew (2008), specialty tourism products that are different from mass tourism destinations may have less information available and may be treated with greater caution by consumers. However, advances in communication technology and social media have led to rapid growth in special-interest travel destinations and experiences as well as travel to more remote corners of the globe. Therefore, tourism businesses can also participate in online social media to build a web presence and reputation for these products. For example, providing special interest blogs and tailoring the content may be an effective approach to target specific interest groups (Schmallegger & Carson, 2008). Consequently, we hypothesize as follows:
H4. Incorporating social media into marketing tourism that is limited in scope is more likely to increase sales than in marketing tourism that is broad in scope.
3.2.4 Price of Products
When the price of a product is relatively high, customers tend to search for more information (Beatty & Smith, 1987). Because product price is a stimulus for customer thinking, high-priced products lead customers to devote more thought to their purchase intentions (Wathieu & Bertini, 2007). Additionally, product price is related to perceived risk (Wang & Chang, 2013). That is, higher risk is involved when selecting products with higher prices.
According to the research findings of Wang et al. (2013), if a product’s price is relatively high, then the information and recommendations provided by strong-tie contacts from Facebook have a more significant effect on purchase intentions than the information and recommendations provided by weak-tie sources from Facebook.
However, this effect is not found for low-priced products. Accordingly, we expect that interpersonal influence and communication on social media are more important when consumers consider buying relatively high-priced tourism products. Thus, we develop the following hypothesis:
H5. Incorporating social media into the marketing of higher-priced tourism products is more likely to increase sales than in the marketing of lower-priced tourism
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products.
3.2.5 Length of Tour
In general, the risk of travel increases with the length of stay. Consequently, the anticipation of a longer trip stimulates more information search (Fodness & Murray, 1999). According to Tsiotsou and Ratten (2010), Web 2.0 technologies can foster the sharing of information and lower product uncertainty. Additionally, Litvin et al. (2008) described online interpersonal influence or eWOM as a potentially cost-effective means of marketing tourism, especially for high-risk tourism products. Therefore, we believe that social media supported by Web 2.0 technologies can be an effective tool to reduce the perceived risk of a longer trip and thus to promote better marketing effects. Our hypothesis is as follows:
H6. Incorporating social media into the marketing of longer trips is more likely to increase sales than in the marketing of shorter trips.
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Taiwan, the official tourism bureau indicated that the total number of overseas trips in 2012 was over 10.2 million. Approximately 20.6 percent of people traveled abroad from Taiwan at least once in 2012. Moreover, approximately 85 percent of those individuals sought the assistance of travel agencies, whereas less than 5 percent entrusted their domestic travel to travel agencies. In view of the importance of international travel for travel agencies, we will focus on this type of travel product offered by our case company (called Company A).Company A was founded in 1978 and is one of the best-known travel agencies in Taiwan. Company A has three subsidiary companies, one of which is responsible for managing e-commerce and online marketing. The company sells various tourism products, including domestic travel, international travel, personal travel services, corporate travel services, and inbound tourism, on its official website. When it appeared that business would most likely benefit from the advantages of Web 2.0 applications, Company A began to use them in interactions with consumers. Company A has had its own Facebook business fan page since September 2009, and the page currently has more than 266,000 Facebook fans. Based on prior literature on the five uses of social media (Bernoff & Li, 2008; Li & Soonius, 2012), we classified Company A’s Facebook campaigns conducted from February 1, 2012 to November 30, 2013 and identified those that would be measured in this study (Table 4-1).
Table 4-1: Classification of Company A’s Facebook Campaigns Five Usages of
Social Media
Descriptions of Company A’s Facebook Campaigns allows consumers to rate and share opinions of its products and services. There are currently more than 4,000 reviews on the Facebook page, and anyone can respond to these reviews.