1.1. Background to the Study

In today’s contemporary age, social media has turned out to be one of the most vital tools for marketing. Ever since the start of 21st century, the use of Internet and social media has turned out to be a part of business strategies by a lot of companies and individuals. With the revolution of Internet/IT, it has significantly changed the way and manner through which lot of business activities are carried out, and this is why many business organisations have adopted the new technology in order to effectively carry out business transaction. As a result, a lot of business owners these days are using Internet/IT to market their products across the various social media platforms, and these tools have significantly enhance the visibility of a company’s product to the public.

In the last two decades, internet innovations have played an important role in business performances (Kim, Li, & Brymer, 2016). Web 2.0 applications provide the opportunity to transfer internet capability to the social environment where individuals are able to interact online by using social media (Sigala & Chalkiti, 2014). Social media is an effective cyberspace for accessing reliable and update information (Sigala, 2012). The popularity and enormous use of social media facilitates the online learning and the sharing information (Hur, Kim, Karatepe, & Lee, 2017). Social media allows the users, without any need to physical presence, to communicate and generate content (Zhang, Guo, Hu, & Liu, 2017). Moreover, social media has been seen as an effective billboard for a firm's commercial goals and better business performance (Rapp, Beitelspacher, Grewal, & Hughes, 2018). A lot of firms are now using social media to increase business brand image and brand awareness (Nisar & Whitehead, 2016; Pentina, Gammoh, Zhang, & Mallin, 2019). Furthermore, social media influence company branding strategies which leads to eWOM (electronic word of mouth) (Barreda, Bilgihan, Nusair, & Okumus, 2018). Therefore, eWOM attracts consumers and enhances their purchasing intention (Xie, Xie, Zhang, Zhang, Zhang, Zhang, & Lee, 2016).

By using social media, customers have access to different sources of shared information from other customers in regard to their experiences and recommendations. This influences their purchasing decisions (Chen, Fay, & Wang, 2015). Therefore, the important role of social media in developing relationship and trust with customers, suppliers and potential partners is a significant consideration for businesses (Rapp et al., 2018). A business's involvement in social media offers values for their business including enhanced brand value (Gensler, Volckner, Liu-Thompkins, € & Wiertz, 2018; Hudson, Huang, Roth, & Madden, 2016; Nisar & Whitehead, 2016); sales growth (Kumar, Bhaskaran, Mirchandani, & Shah, 2015); ecommerce and social commerce (Hajli, 2014); customer trust and Stickiness (Zhang et al., 2017); innovation and new product development (Palacios-Marques, Merig o, & Soto-Acosta, 2015; Roberts & Candi, 2017); knowledge sharing (Munar & Jacobsen, 2016); CRM, customer relationship management, (Rosman & Stuhura, 2016), eWOM (Ladhari & Michaud, 2015).

Although previous studies have showed interest in social media values for organizations, there are very limited empirical studies on finding the influence of using social media on the performance of SMEs. Kim, Lim, and Brymer (2016), argued that researchers should try to focus on the identification of drivers that produce impact on business performance rather than focusing on social media principles. Moreover, according to the resource based view (RBV), business capabilities and resources could create sustained competitive advantages (Davcik & Sharma, 2016). Therefore, social media enhance SMEs capabilities to increase their performance (Trainor, Andzulis, Rapp, & Agnihotri, 2017). The resource based view of firm provides a foundation for the link between social media usage and value creation for small and medium sized enterprises (Palacios-Marques et al., 2015). Besides, social media use creates value for SMEs in regard to internal operations, marketing, customer services, and sales which are very important factors in case of small and medium sized enterprises (Gensler et al., 2018; Schaupp & Belanger, 2015).

In this epoch of digitalisation and globalisation, customers utilize the Internet by reviewing the retailers and trust other people’s opinions and experiences with the product or service mentioned in the review section. These reviews in social media guide shoppers via emotional experiences. Any negative review left by a customer may discourage the potential future buyers (Ramanathan, et al., 2017). Prior to the age of Internet, customers could only get information about a product by physically visiting the outlet or store. Therefore, firms need to explore more via social media marketing to ensure consumer satisfaction and profitability (Keiningham, Gupta, Aksoy, & Buoye, 2014).

Through the use of smart phones, users like business owners have been able to stay connected with social networking websites (such as Facebook, Twitter, LinkedIn) on a daily basis (Raad, Yeassen, Zaidan, & Zaidan, 2015). On social media, user-generated content are generated on a day-to-day basis in the form of product reviews by customers (Mathwick, Wiertz, and De Ruyter, 2016; Zhu and Zhang, 2015). The use of social media has been established to enhance the popularity of a brand (De Vries, Gensler, & Leeflang, 2018). Social media offers buyers the opportunity to consult with sellers or brand directly (Christodoulides and Jevons, 2017; Christodoulides, 2016), and express their perceptions with one another.

Thus, a lot of business owners now use social media networks as tools to disseminate information, communicate, and promote their products and services. Social media makes it possible for businesses to be more interactive in marketing communications and to find innovative applications to make products and brands more affordable through online marketing efforts via social media communication channels. These practices, which express social media marketing activities, include actions that encourage consumers to choose products and brands and that target marketing messages to other consumers online. Thanks to social media marketing activities, businesses can perform activities such as creating their own personal brand profiles and introducing online customer service, product information and special offers in a simple, cheap, and continuous way (Breitsohl et al., 2015)

In addition, with a very low cost, informing customers is very functional in terms of familiarity and brand awareness that products and brands of businesses appear on social networks where millions of users sign in (O'Flynn, 2017). According to McKinsey (2007), business owners are aware of the opportunities and appealingness that social media has presented as part of its marketing strategy. In research, it has been stated that social media are significant parts of branding actions for businesses (Gallaugher and Ransbotham, 2015; Tsimonis and Dimitriadis, 2017).

Based on the above, this present study will examine the effect of social media on business brand, using selected business owners in Babcock University, Illisan Remo, Ogun State.

1.2. Statement of the Problem

In contemporary days, the credibility of social media has emerged as a new concept. Social media has turn out to be one of the important channels for maximizing profit because of its accessibility to consumers and across many users, with the aid of sites like Facebook, twitter and other sites. The universal accessibility of the internet has ushered in the use of the Internet as a marketing tool, and as well offered opportunity to corporations and business owners to change the perception of consumer through social media marketing.

Social media platforms like Facebook, Twitter, and Instagram through which products or services information is communicated to the public or Internet users. Corroborating the above view, research carried out by Li and Suh (2015) found that the information credibility of social media was affected significantly by two factors; which are: medium credibility and message credibility. A research study by Hajli (2018) reported that, in the online platform of social media networks, the reliability of information can affect the consumer’s social word-of-mouth adoption, whereby the social word-of-mouth is seen as the new form of electronic word-of-mouth (eWOM) detailing evaluation by consumers about a product using social media.

The result of previous research shows that the role of marketing communications of a company in social media affects the awareness of social media users on a brand of a company. The result of previous research presented by Kartikasari (2014) showed the adoption of social media can build a corporate brand in the minds of consumers or customers. The process begins to build awareness of the company’s products to customers and then it will give impact to customers’ satisfaction and establish customers’ loyalty to the company.

However, despite the increased use of social media among business owners in Nigeria, there is little or no study conducted on the effect of social media on business brand in Nigeria, as majority of the studies were carried out in developed countries. As a result, there exists a gap in this area. Thus, it is pertinent to engage in a systematic investigation of the effect of social media on business brand among business owners in Babcock University, Ogun State.

1.3. Objectives of the Study

The primary objective of this study is to investigate the effect of social media on business brand among selected business owners in Babcock University, Ogun State. In order to achieve the primary objective, the following specific objectives are to:

  1. examine the effect of social media on business awareness
  2. assess the effect of social media on business image
  3. evaluate the effect of social media on business loyalty
  4. examine the effect of social media on business performance

1.4. Research Questions

The following research questions are poised for the study

  1. What is the effect of social media on business awareness?
  2. How does social media impact business image?
  3. What is the effect of social media on business loyalty?
  4. What is the effect of social media on business performance?

1.5. Research Hypotheses

The following research hypotheses are formulated in their null form:

Ho1: Social media has no significant effect on business awareness

Ho2: Social media has no significant effect on business image

Ho3: Social media has no significant effect on business loyalty

Ho4: Social media has no significant effect on business performance

1.6. Significance of the Study

The findings of this study will add to the wealth of information presently available on social media and its usage among university students, business owners, brands, potential users among others.

The results of this study would be significant in the sense that, it would enable business owners, brands, companies, and internet users in general identify the importance of social media and its usage in order to boost their customer engagement and patronage as well as promote their brand.

Furthermore, the outcome of this study will provide information on the credibility of social media and its use by business owners. The results of the study also are expected to contribute to closing the gap in literature with respect to understanding the obstacles and opportunities for social media in the business environment.

Lastly, the study will highlight the importance of social media as a vehicle for promoting brands, products and services, as well as encouraging active patronage.

1.7. Scope of the Study

The study focused on the effect of social media on business brand in Babcock University, Ogun State, Nigeria. The study is restrained to business owners at Babcock University with the aim of determining how social media enhances their businesses and how often they use social media. The reason for the choice of Babcock University business owners is that it provide the researcher the opportunity to constantly visit their business owners to gather first-hand and adequate information, with accuracy, on the subject matter. This study is limited to some sub-variables which are business awareness, business image, business loyalty and business performance. In order to make the research manageable, the geographical representation of the study will be confined to Babcock University, Ogun State, Nigeria.

1.8. Operationalization of the Variables

The dependent variable is business brand being the dependent variable, is proxied by business awareness, business image, business loyalty and business performance. On the other hand, social media being the independent variable is represented as a dummy variable (constant).

Where Y= Dependent variable

             X= Independent variable


Y= f(X)

X= Social Media


X = f(X)


Y= Business Brand

Y= f(y1, y2, y3, y4)

y1 = Business Awareness (BA)

y2 = Business Image (BI)

y3 = Business Loyalty (BL)

y4 = Business Performance (BP)

The four specific objectives are operationally expressed as:

To examine the effect of social media on business awareness.

Y1 = f (x)

Y1 = b0 + b1x + u

To assess the effect of social media on business image

Y2 = f (x)

Y2 = b0 + b1x + u

To evaluate the effect of social media on business loyalty

Y3 = f (x)

Y3 = b0 + b1x + u

To examine the effect of social media on business performance

Y4 = f (x)

Y4 = b0 + b1x + u

1.9. Operational Definition of Terms

Brand Loyalty: is an individual’s choice to purchase a particular brand in a product category. It occurs when an individual or consumer view that the brand offers the right product features, images or level of quality at the right price.

Brand Awareness: is the availability of customers having awareness of a brand or product in the market (Crain 2012)

Brand Image: is the way in which consumers view brands

Social Media: is the website and application that enables users to create and share content in social networking.

Effect: is the capacity to have an effect on the character, development, or behaviour of someone or something, or the effect itself.

Business: refer to the a person source of income activities

1.10. Organization of the Study

This research work is divided into five main chapters. Chapter one is the introduction of the project and this will spell out the main aim and objectives of the research together with research background, research questions, research hypotheses, significance of the study, scope of the study, and definition of operational terms. Chapter two is the review of the theories and literatures that are relevant to the research areas which have been carried out by various researchers in the topic area. Chapter three examine the research method, research design, sample and sampling technique, population, reliability and validity, research instrument and method of data analysis. Chapter four is where the findings and analysis of the research will be carried. This will be done by making use of the primary data gathered. Chapter five of the study is the summary, conclusion and recommendations.