A Study on Influence of Trust, Social identity, Perceived Risk and EWOM on Consumer Decision-Making Process in the context of Social Network Sites

Abstract: With the advent of Web 2.0 applications, social network sites enable customers to actively participate as market players and reach out to the mass population within a short span of time. The tremendous impact of the rise of social network sites not just shifted the way businesses work, it also changed the manner consumers behave. The objective of this thesis is to investigate the influence of social identity, EWOM (Electronic word-of-mouth), perceived risks, trust and purchase intentions affecting consumer decision-making process in social networks sites. A conceptual model is developed, using Theory of Planned Behaviour (Ajzen, 2005) and Technology Acceptance Model (Dishaw and Strong, 1999) as theoretical bases, to explain the interactions of these salient factors that affect purchase intention and eventually leading to purchase behaviour. With the use of structured questionnaire on 225 respondents via emails, this thesis examine these social networks sites namely, Facebook, MySpace, Twitter, Youtube and blogs. The findings show that 1) purchase intention directly affects actual purchase behaviour, 2) EWOM is positively related to trust in social networks sites 3) perceived risk negatively relates to trust and 4) trust positively relates to purchase intention. Further, the analysis results do not support the hypotheses that social identity relates to trust, perceived risk relates to purchase intentions. Inferences are drawn from previous researches to explain for the phenomenon. Interestingly, the empirical findings reveal that social identity in social networks sites is not the same with other virtual communities and high perceived risk does not affect purchase intentions. Finally, this thesis concludes with how the findings can contribute in understanding consumer decision-making process in social networks sites.