Table of Contents
Chapter 2 – Literature Review.....................................................................................................2
2.1 Introduction..........................................................................................................................2
2.2 Theoretical Framework.......................................................................................................3
2.2.1 Theory of Planned Behaviour (TPB)..........................................................................3
2.2.2 Consumer Decision-Making Process...........................................................................3
2.2.3 Social Media Marketing Framework..........................................................................4
2.2.4 Integrated Theoretical Perspective.............................................................................5
2.3 Concepts and Dimensions of Social Media Marketing.....................................................5
2.3.1 Informativeness.............................................................................................................5
2.3.2 Amusements..................................................................................................................6
2.3.3 Interactivity...................................................................................................................6
2.3.4 Authenticity and Transparency...................................................................................6
2.3.5 Social Proof....................................................................................................................6
2.4 Social Media Marketing and Consumer Behaviour.........................................................7
2.5 Brand Awareness, Trust, and Customer Engagement.....................................................8
2.5.1 Brand Awareness..........................................................................................................8
2.5.2 Trust...............................................................................................................................9
2.5.3 Customer Engagement.................................................................................................9
2.5.4 Correlation among the Three Constructs.................................................................10
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2.6 Small Businesses and Social Media and Purchase Decision..........................................10
2.6.1 Small Businesses Problems........................................................................................10
2.6.2 Social Media Enabled Opportunities........................................................................10
2.6.3 Influence on Purchase Decision.................................................................................11
2.7 Empirical Review...............................................................................................................11
2.9 Summary and research gap..............................................................................................13
References:...................................................................................................................................14
Chapter 2 – Literature Review
2.1 Introduction
1
The justification of the literature review is rooted in the establishment of an accurate scholarly
ground, which will be useful in the interpretation of how SMM affects the decision of customers
to purchase, especially in the UK small business context. Due to the fact that social media sites
are becoming a key aspect of consumer lifestyles, companies are increasingly adopting digital
mediums of communication, interaction and influencing their consumers. Under this situation,
social media gives SMEs a cheap and convenient means of product advertisement, brand
awareness, and interaction. Nevertheless, online consumer behaviour is never determined solely
by a set of psychological, social, and technological factors, which require systematic discussion.
The chapter is a synthesis of various theoretical and empirical studies associated with SMM,
consumer decision-making, formation of trust, brand awareness, and customer engagement. It
seeks to describe how social media content affects the perceptions and attitudes of customers and
their buying behaviours. The review starts with the discussion of the main theoretical
frameworks which lead to the creation of the online consumer behaviour background, i.e. TPB,
Consumer Decision-Making Process and modern social media marketing models.
After the conceptual basis, the chapter breaks down the key concepts and dimensions of SMM,
such as informativeness, entertainment, interactivity, authenticity, and social proof. These
dimensions underlie the modern digital marketing and, therefore, are highly significant in the
consideration of SMEs in their quest to carve a niche in very competitive environments. The
awareness of these constructs reveals the process of how customers perceive the content of social
media and make a judgment, and what ultimately makes them purchase from small businesses.
Through the review of classic behavioural theories and modern digital marketing studies, this
chapter provides a critical review of existing knowledge in the area and highlights specific areas
where further investigation is required. This, in turn, forms the basis for the research questions
and methodology in subsequent chapters.
2
2.2 Theoretical Framework
2.2.1 Theory of Planned Behaviour (TPB)
TPB describes how individuals form intentions that lead to actual behaviours. In social media
marketing, the theory aids in understanding why customers decide to buy from a small business
after perhaps interacting with its online content (Rozenkowska, 2023). According to TPB, the
main components influencing behaviour include attitude, subjective norms, and perceived
behavioural control.
Attitude simply refers to positive or negative consumer evaluations of social media content a
business has shared. When a post is visually appealing, credible, informative, and engaging,
consumers are more likely to form positive attitudes about the brand.
Subjective norms include social influences and peer pressures. Social media enhances these
norms because of likes, shares, comments, endorsements made by influencers, and user-
generated content. Intention to purchase a product is strengthened when users see people
supporting a business.
Perceived behavioural control reflects how easy or difficult it seems to buy from a business (La
Barbera and Ajzen, 2020). Clear communication, easy navigation, secure payment methods, and
responsive customer service increase perceived control and influence intention.
TPB is particularly relevant for SMEs because customers often perceive small businesses as
more risky or less established; thus, their social media activities have to reinforce trust and
reduce uncertainty before purchase intention can develop.
2.2.2 Consumer Decision-Making Process
The Consumer Decision-Making Process describes the steps consumers take in making a
purchase: problem recognition, information search, alternative evaluation, purchase decision, and
post-purchase behaviour. Social media can have a significant impact on all five stages of this
process.
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Problem recognition: Consumers may recognise needs after facing appealing social media
posts. Visual content, combined with influencer recommendations, often sets off impulse needs
or awareness of new products (Rahman, Mutum and Ghazali, 2022).
Information search: Browse business profiles, view product videos, comment, and review to be
informed. Through social media, much information generated by other users can be accessed in a
short period of time.
Evaluation of alternatives: Social media makes comparison easy. Consumers can compare
alternatives by searching for hashtags or related content, or by visiting competitor pages.
Purchase decision: Purchase will be made in the platform through the application of features,
including Instagram Shop and TikTok Shop, which make it easier to purchase on the platform.
Post-purchase behaviour: Clients can exchange experiences using reviews, comments, photos,
and videos. Positive post-purchase behaviour leaves a good impression on the business, whereas
bad experiences lead to possible discouragement of the purchaser (Sai Vijay, Prashar and Parsad,
2020).
This model focuses on the pace and dynamism of online customer behaviour that especially
applies to SMEs aiming at persuading customers using scarce resources.
2.2.3 Social Media Marketing Framework
The Social Media Marketing Framework determines the activities that businesses utilise in order
to attract and engage customers on social media. These activities lead to customer trust,
perceptions of the brand and purchase behaviour. The main aspects of this framework are:
Informativeness: It can be understood as giving precise, clear, and useful information about the
product (Li, Larimo and Leonidou, 2022).
Entertainment: Using creative, humorous, or emotionally appealing content to capture attention.
Interactivity: stimulating discussions, responding to comments, and direct messaging.
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Authenticity: To communicate openly and/or share genuinely transparent content, like behind-
the-scenes posts or founder stories.
Personalisation: delivering content to users based on their interests or behaviour.
Social Proof: Showcase customer reviews, testimonials, and influencer endorsements.
These elements shape attitudes, reduce perceived risk, and foster more positive brand
relationships (Bartoloni and Ancillai, 2023). Specifically, authenticity and interactivity are
highly effective in the case of SMEs, as they develop the sense of human connection and provide
contrast between the small businesses and big brands.
2.2.4 Integrated Theoretical Perspective
The paper discusses social media marketing as a multi-dimensional process integrating TPB,
Consumer Decision-Making Process, and the contemporary SMM models. The combined
perspective elaborates:
1. How attitudes toward social media content shape intention,
2. How subjective norms and social influence increase trust (Harizi and Trebicka, 2023).
3. How dimensions of SMM improve brand awareness and engagement.
4. How perceived behavioural control and the ease of making online purchases drive
behaviour.
This combined framework supports the development of the study’s survey instrument and guides
the interpretation of findings.
2.3 Concepts and Dimensions of Social Media Marketing
Social media marketing involves a few strategic dimensions which directly affect consumer
interpretation, evaluation, and response to a business online. This framework is key to
understanding consumer reactions and purchase decision-making.
2.3.1 Informativeness
Informativeness is about how well the social media content of a business provides relevant and
valuable information (Li, Larimo and Leonidou, 2022). The way in which a small business
clearly presents product details, price, availability, shipping, and usage instructions is highly
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expected by consumers. Informative content decreases uncertainty, enhances decision-making,
and builds trust. For SMEs, being informative also offsets the disadvantages of having no
physical store or recognisable brand reputation.
2.3.2 Amusements
Entertainment is the most prevalent content motivation on TikTok and Instagram. Entertainment
is based on creative images, humorous videos, stories, and content based on music, and is
involved in the challenges which are trending. That is why entertainment assists in gaining
attention in the congested digital areas and intensifies emotional resonance, which makes
customers more vulnerable to marketing communication.
2.3.3 Interactivity
The aspect of interactivity is decisive in the establishment of relationships with customers on the
Internet (Mehboob and Munawar Khan, 2022). Social media allows a two-way communication
whereby the company is able to respond to questions and react to comments, and even talk.
Large interactive is the message of greater customer concern and attention. The customers tend
to feel valued and recognised, and this leads to trust in the brand, hence a purchase.
2.3.4 Authenticity and Transparency
Authenticity is the measure of the truthfulness and the sincerity of a business on the Internet.
Contemporary consumers prefer to interact with brands that depict real persons, real procedures,
and real narratives (Poecze and Strauss, 2020). SMEs can effectively make use of this by
releasing backstage video footage, presenting the founders and sharing issues and values. The
scepticism against the less established brands can be controlled by authenticity, which assists in
the creation of trust.
2.3.5 Social Proof
Social proof is one of the most effective factors in buying a product or service. Social proof can
be examples such as reviews, testimonials, comments, influencer testimonials on products, and
user-generated content. When they observe others using a product and referring to it, people are
6
more convinced to purchase the product. Social proof can be an effective and inexpensive
marketing strategy for SMEs that have limited financial resources to dedicate to advertising
(Park and McCallister, 2023).
These dimensions are the heart of effective social media marketing that subsequently influences
the perception, engagement behaviours and purchase decisions of the customers.
2.4 Social Media Marketing and Consumer Behaviour
There is a need to appreciate consumer behaviour on social media to determine the influence of
SMM in purchase decision-making. With social media, the customer journey has been
completely transformed by reducing the time of decision-making, expanding the choices, and
enhancing peer pressure. The choices of a modern-day consumer usually rely on digital data like
images, indicators of interactions, comments, and the views of influencers (Guoqiang and
Bhaumik, 2024). As a result, consumer behaviour via social media is highly dynamic and
emotion, cognition, and social aspects dominate consumer behaviour.
Social media influences customer purchasing behaviour in terms of change of attitudes,
emotional involvement, and credibility. The excellent content, the harmonious branding, and
positive experiences result in the consumer building the perception of a company or a product in
the long term. Emotional engagement is achieved as a reaction to stimulative material, i.e.,
excitement, inspiration, humour, or curiosity. The emotional content will be more effective in
connecting the brands with the consumers, and the brand will be recalled will leading to the
purchase desire.
The perceived credibility is also very vital (Kathiarayan, 2023). Since small businesses may lack
a high offline rating, customers require online indications like reviews, videos about the product,
experiences and authenticity, to make judgments on whether a business should be trusted. High
credibility enhances trust and reduces the perceived risk, and this is very critical when the goods
are bought online, where the customers are not able to see the goods physically.
Another driving force is social influence. Customers are constantly exposed to what other
customers like, share or recommend on the social networking sites. Viewer feedback, influencer
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recommendations and discussion forums make one feel validated. Whenever customers feel that
their peers are using a brand, they tend to mimic the behaviour (Xie et al., 2021). This is based
on the principle of herd behaviour, in which users subscribe to a trend or a fashionable product
due to the effect of the crowd.
Another factor towards consumer behaviour in social media is convenience and usability. As an
example, Instagram and TikTok would include shopping features within the apps; hence,
customers can learn about, review, and purchase products in the apps. These bubble-like
experiences minimise friction, high impulse buying and minimise the decision-making process of
the buyer. The rapidity in content consumption enhances the speed of decision-making, further
compelling businesses to come up with captivating and reliable content within a short time
(Bhardwaj et al., 2024).
On the whole, emotional, cognitive, and social processes influence consumer behaviour in the
social media setting; SMM can become an ideal instrument in conditioning perceptions and
purchase intentions, particularly in the setting of small businesses with the focus on operating in
competitive markets.
2.5 Brand Awareness, Trust, and Customer Engagement
Three constructs that are closely interrelated are brand awareness, trust and customer
engagement, which play a significant role in influencing the purchase decision of customers. To
small businesses, developing all these elements via social media is important because they make
up for deficits concerning brand recognition and physical presence (Kanwal et al., 2020).
2.5.1 Brand Awareness
Brand awareness is about how well consumers are acquainted with a particular business. On
social media, awareness is created through repeated exposure to content, regular posting, hashtag
strategy, collaboration, and visual branding. Such recognition of the brand's name, logo, or style
of content makes customers much more likely to consider that brand during the evaluation stage
in the buying process.
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For SMEs, brand awareness is key as they mostly start off with limited visibility. Social media
works as an equalising tool by offering small businesses the ability to reach wide audiences
without the financial burden of traditional advertising (Nwali and Ntegeeh, 2022). The better
one's brand awareness, the more likely it is that customers will remember the business when they
need its product.
2.5.2 Trust
Among all the factors, trust is the most decisive factor that leads to online purchasing. Because
customers cannot see the products in real life, they rely on digital indicators to assess credibility.
Trust comes with transparency, clear communication, authenticity, reviews, and reliable
customer service.
Being credible to a customer can be promoted through social media by demonstrating real-life
clients of a business that use their products, giving truthful feedback, promptly answering
customer questions, and being open to showing the internal operations of the business. In the
case of SMEs, this aspect of trust would need to be more developed, as small businesses are
overwhelmed by a greater amount of consumer skepticism (Bonus et al., 2022). Trust will
produce reduced perceived risk and a higher purchase intention and is therefore a necessary part
of digital marketing.
2.5.3 Customer Engagement
Customer engagement is seen when consumers interact with the contents of a brand through such
actions as liking, commenting, sharing, direct messaging, and others, such as in polls or stories.
Engagement implies customer interest, involvement and emotional attachment. A high level of
engagement implies that a customer is becoming more attentive to a brand and developing a
relationship with it.
To small businesses specifically, the high engagement will potentially compensate for the
insignificant advertising budget (Prasetio and Purnamawati, 2023). Interested customers tend to
become brand ambassadors and give word-of-mouth publicity, which contributes to the social
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proof of a company. Engagement also provides businesses with an idea of customer preferences
on which they can develop more specific content.
2.5.4 Correlation among the Three Constructs.
Brand awareness makes customers aware of a business. Trust will make them feel that the
business is worth trusting and is secure. Participation is a show of interaction and involvement. A
combination of these constructs creates the psychological basis that results in purchase intention.
A customer who is already aware of a brand, believes in it, and interacts with its content
regularly has many more chances to turn into a conversion (Zulfikar, 2023).
By reinforcing these three aspects, using social media, an SME will be able to remain on the
growth path and compete with better-established and larger enterprises.
2.6 Small Businesses and Social Media and Purchase Decision.
The nature of purchase decision-making has been changed by social media in small businesses,
and more so in the digital-first setting of the UK. As a smaller business, SMEs have less
reputation to rely on and will rely more on online visibility, gaining trust, and individual
communication with consumers to assist in causing consumer pull.
2.6.1 Small Businesses Problems.
Small businesses are forced to work with small budgets, experience and technology (Apriandi et
al., 2023). They recognise how powerful social media can be, but they have difficulties in
creating professional-level material, analytics interpretation, or even in coordinating their posting
routines. These factors may make them incapable of successfully influencing customer
behaviour.
The other challenge is to overcome consumer scepticism. Consumers can perceive unfamiliar
businesses as doubtful about their validity, product quality, or reliability. SMEs require a good
strategic use of social media in the establishment of trust and demonstration of value without
sound brand equity.
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2.6.2 Social Media Enabled Opportunities.
Amid these obstacles, there is also a strong potential that social media could offer to SMEs.
Instagram, Facebook, and TikTok are the platforms that present attractiveness, genuineness, and
handicraft of small businesses (Khanom, 2023). Founder stories, behind-the-scenes videos, and
one-on-one responses can also make the small business more human and distinguish it among
corporate brands.
Social media further enables SMEs to access the local audiences, and they can work with micro-
influencers and interact with customers directly. SMEs are able to get loyal followers in these
interactions as the business can be supported by people due to its identity, authenticity and
connection to the community.
2.6.3 Influence on Purchase Decision
Social media affects SMEs with regard to purchase decision-making based on visibility,
trustworthiness building, perceived worth, and accessibility (Trunfio and Rossi, 2021). Once a
customer starts seeing the same material from a small business, over time, the customer will
become familiar with the content and develop an emotional attachment. Testimonials,
suggestions, and social content build credibility and assure them.
Emotional triggers of purchase decisions of people are relatability, inspiration, social influence,
or personal connection to the business owner. Authenticity and storytelling to SMEs are
significant in turning followers into buyers.
In the meantime, it minimises the buying process by giving direct access to purchase links,
product videos and customer reviews (Dahniar et al., 2023). The trendy, rapidity of purchasing
on TikTok and shopping functions on Instagram present fast buying decisions, which provide an
added value to these platforms with regard to the attractive and/or fashionable products that
SMEs offer.
Whereas SMEs have challenges in digital marketing, conversely, social media is a lucrative
platform for controlling buying behaviours by engaging, authenticity and building trust.
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2.7 Empirical Review
Empirical research has kept on revising the fact that social media marketing can play a
significant role in the attitude of consumers, trust and purchase intention. Most of the studies
have shown that engagement and interactivity are regarded as the essential predictors of online
purchasing behaviour (Jeswani, 2023). Businesses acting on the comments, messages, or reviews
give an impression of an even stronger connection and trust in the minds of the consumer, which
is extremely important to the SMEs that do not have a brand name.
The power of social evidence, customer reviews, ratings, testimonials, and influencer
recommendations has also been researched as important. These are the signals that reduce the
perceived risk and give potential customers confidence, especially in the case of smaller
businesses which cannot be personally viewed by customers. Several studies in the fashion and
cosmetics sectors, through home-based products, have shown that user-generated content often
has a more extensive influence on raising the likelihood of purchase than more conventional
advertising.
The other general observation is that of authenticity (Suparto, 2024). People are becoming more
inclined to accept sincere, familiar content rather than deeply enhanced marketing content. Real-
world experience reveals that any genuine communication, like the sharing of backstage
activities or direct customer experiences, instils a sense of trust and enhances brand loyalty. This
also implies that authenticity is an inherent competitive edge of SMEs, which, in the vast
majority, work with personal branding and disclosure.
Also, the factors of informativeness and entertainment are effective. However, unlike
informative posts, which support a more informed purchasing decision, entertaining content
increases visibility and emotional impact, particularly on TikTok and Instagram, where the
contribution of content to an algorithmic appearance is extremely high. According to the
research, posts that are visually attractive promote engagement and recall more frequently and
indirectly contribute to increasing purchase intention (Rahman, Mutum and Ghazali, 2022).
Although there is a significant body of research on large corporations, research concerning SMEs
has both opportunities and problems. Lots of small businesses can efficiently take advantage of
12
social media using limited funds, while others suffer irregular updates, lack of computer literacy,
and confusion about the strategies that have a genuine customer impact. Significantly, a need for
empirical research dedicated to the specific case of small businesses in the UK still exists,
although the UK marketplace is becoming more digital.
Despite the increasing trend in social media marketing, one can identify a number of
shortcomings in the literature (Morales Pedraza, 2021). Although the bulk of the research is done
on big companies as opposed to small businesses, the results might not be generalised to SMEs
whose constraints and communication characteristics are different. In addition, a significant
portion of the available literature is done outside of the UK, where the cultural, trust, and
consumer behaviour of the UK customers do not coincide.
The other limitations have to do with the lack of platform-specific knowledge because most
studies do not differentiate between the peculiarities of TikTok, Instagram, or Facebook. Since
the mechanisms of social commerce (such as built-in shopping functionality and short-video
algorithm) are quickly changing, research that was conducted more than a specific date may no
longer be reflective of consumer behaviour.
Secondly, the majority of the available literature discusses SMM elements individually, rather
than presenting the interaction between various factors, including trust, authenticity, and
engagement in forming a purchase decision (Astuti, Helmi and Riyono, 2023). This disjointed
way of thought creates a knowledge gap on how these dimensions can work together to produce
consumer results in SMEs.
2.9 Summary and research gap
The chapter has been a review of the underlying theories and research studies on social media
marketing and consumer behaviour. In these terms, the literature demonstrates that
informativeness, entertainment, interactivity, authenticity, and social proof may have a great
impact on trust, engagement, and purchase intentions. Such results bring to the fore the
increasing significance of social media as a promotional weapon, and more particularly to small
business owners in need of a low-cost channel of communication to their target audience.
13
Conversely, there were also some clear gaps identified in the review perspective, such as the lack
of research on UK SMEs, platform-specific data, and outdated models that do not demonstrate
the full emergence of social commerce. Such are the gaps that have led to the need to undertake a
specific study on the effects of social media marketing on customer buying decisions among
small businesses in the UK.
14
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