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Research Paper

Name – Himanshi
Roll no – 221127168017
Class – M.Com.(Final)
E-mail – [email protected]

&

Name – Nisha
Roll no – 221127168026
Class – M.Com.(Final)
E-mail – [email protected]

Pt. N.R.S. Government College Rohtak, Maharishi


Dayanand University, Rohtak, 124001

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IMPACT OF SOCIAL MEDIA ON COMMERCE

1. Abstract:
Social media have a great influence in our life. In recent years use of
social media by businesses have increased to reach their target
audience and market their products and services online. This study
aims to understand how social media affect the purchase intentions
of customers and how it can be used by a business as a marketing
tool. A questionnaire survey was prepared to know the customer
perception regarding online shopping to understand whether social
media does really affect their buying behaviour. This study was
quantitative in nature and data was collected from sample size of 56.
The results shows that large number of respondents often shop
online as because of access of social media to all that allows them to
know about new trends and products. There are some problems
regarding use of social media by businesses and some suggestions
have been provided to tackle those problems. In conclusion we can
say that social media have a great impact on commerce both in a
positive and in a negative way.

Key words: E-Commerce, social network, social media marketing,


customer behaviour.

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2. Introduction:
Social media have become more and more popular all around the
world. There is hardly any person who do not use social media. With
the increasing number of social media users many companies are
using various social media platforms like YouTube, WhatsApp,
Instagram, Facebook etc. to reach out their customers and interact
with them. Social media is helping businesses to achieve outstanding
results. Social media platforms aim at improving the interaction
between the customers and e-commerce businesses instead of just
educating them about profitable deals and new product launches.
They can sell their products instantly to the interested customers on
social media in just a click. Major brands are now adopting social
media marketing as one of their marketing strategies and public
relation tools. Social networks have changed the world of marketing.
This research paper focus on understanding the positive and
negative effects of use of social media for both the customers and
businesses. This research paper presents following research
questions:

1.)What kind of role does social media play in the e-commerce

context?

2.)How shall we use social media to enhance e-commerce?


3.) Does social media really affect the buying behaviour of
customers?

4.) How does social media usage affect business performance?

Social Media and E-Commerce:

The influence of social media on e-commerce have become more


and more important. If one share any information on social media,
there is instant spread of information everywhere. According to
OTX’s social media and the purchase intention research report, 2008,
70% of consumers visit social media websites such as message board,
social networking sites and blogs to get information on a company,
brand or product. Nearly 49% of these consumers made a purchase
decision based on the information they gathered from social media
sites.

There are many social media platforms and social networking sites
that is used by the firms to reach out their customer. Most used are:

1.Facebook

2.Instagram

3.LinkedIn

4.Twitter

5.YouTube

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6.Pinterest

7.WhatsApp

8.TikTok

9.Reddit

10.Snapchat

These are some social media platforms that are extensively used by
the people and many firms are coming on these platforms for their
marketing campaigns.

Literature Review:

In order to understand the buying behaviour of customers, a lot of


information is required by businesses and this information can be
gathered by use of social media. A systematic literature review has
been conducted to understand the comprehensiveness of social
media usage and business performance. A total of 40 articles
published between 2007 and 2021 were reviewed. The review
provides evidence that companies with social media marketing
strategies enjoy better customer relationships, improved customer
satisfaction and enhanced business performance.

According to Weber (2007), the relevance of social media in


improving commerce both nationally and internationally cannot be

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over looked due to its many benefits. In recent times social media
has become a great tool for businesses to transmit information
about their products, has enabled customers to make online
purchases and has helped businesses to cross the national
boundaries. With the advances in the internet and the emergence of
social media platforms, the interactions between individuals have
increased on the internet. This development enables customers and
businesses to collaborate on the internet (Fuller et al. 2009).

Tom Smith (2010) in the “Social Media Revolution” says social media
has changed the manner in which the communication between the
firms and the customers were taking place. It has changed from
talking through mass media to listening and conversing through
social media. Since the consumer online is a commentator, reviewer
and publisher, all the firms have to stop talking and start listening to
how they are being perceived online.

There are a number of social media platforms that have facilitated


information sharing. For example, Wikipedia, a free online
encyclopaedia, is one of the most popular platforms and has the
facility for users to collaborate on information sharing (Chen et al.
2011a). Other platforms with the ability to generate reviews and
ratings, such as Amazon, Flipkart etc. enable customers to review
and rate products. People on these platforms are cooperatively
interdependent (Chris et al. 2008).

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There are various factors that affect the purchasing intention of
customers. One of them is the website which they are using for
online purchase. Shahir Bhatt and Amola Bhatt (2012) in their
research paper “Factors influencing Online Shopping: An Empirical
Study in Ahmedabad” writes about the factors which influence the

perceptions of consumers regarding online shopping. The study has


revealed three important influencing factors:

i)Attractiveness of website

ii) Service quality of websites

iii) Website security

According to Håkansson and Snehota (2010), social media marketing


is the act of gaining attention through social media sites. Social
media has improved communication for organizations, increased
brand awareness and has improved customer service relationship of
firms. Social media is considered a relatively inexpensive means for
firms to implement marketing to build and improve their brand
value.

Various social network sites are being used by the firms to boost
their brand awareness among customers such as Facebook,
Instagram, WhatsApp, Twitter etc. Social network sites (SNSs) are
considered the core of network resource for organizations that link
strategic value and business performance (Zhou, Wu, & Luo, 2007).

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The great increase in the amount of time people spending using
these social network sites have changed the way people spend their
time online and this affects the way people behave, interact and
share in their normal daily lives (Sunil Karve, Shilpa C. Shinde, 2013).

Business practices have changed due to the presence of social media


inspired by advanced technologies (Olanrewaju, Hossain, Whiteside,
& Mercieca, 2020; Wright et al., 2019). The past decades have
witnessed the use of social media by businesses as a channel to
reach present and potential customers and to engage with the
stakeholders (Chatterjee & Kumar Kar, 2020). Customers are now
more informed due to the high digitalization and search for a wide
range of information on social media platforms including pricing,
product and brand information. Businesses share and communicate
real-time information and make transactions online using social
media (Afful-Dadzie et al., 2021).

Harrigan et al. (2020) noted that businesses derive benefits from


effective social media usage. For example, organizations with high
social media usage enjoy better customer relations and service
enhancement while reducing operating costs (Parveen, Jaafar, &
Ainin, 2016). Therefore, businesses use social media to improve
customer satisfaction through customer relationships management
to enhance business performance (Charoensukmongkol &
Sasatanun, 2017). Firms can attend and listen to dissatisfied

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customers online, thus providing better customer services (Harrigan
et al., 2020).

Research Gaps:

There are various researchers who have done their research putting
the light on impact of social media usage by the firms. After
reviewing the current literature, we can say that there are some
research gaps in current research studies like most of the studies
focus on importance of social media adoption by businesses but
there is less study on what actually are they doing with social media
and why they engage in such practices? How do businesses plan,
organise and enact social media in their organisations? What
organisations claim they do and what they actually do?

In a trend study of internet-related public relations literature since


1992, Ye and Ki (2012) found that 55.7% of articles on social media
Impact on commerce had no theoretical framework. There is a lack
of research studies that attempts to test how social media should be
used and practised in the context of public relations instead of
suggestions of best practice are given based on existing theoretical
principles or industry case studies without any empirical research to
support such statements.

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Many studies shows that firms should use social media to reach out
their customers and to do interaction with them but there is lack of
evidence which shows that does businesses really use the social
media to know the preferences, likings, disliking, their problems or
they just use it for their brand promotions by neglecting customers’
viewpoints.

How do public relations


practitioners’ plan,
organise and enact
social media in their

3. Objectives of the study:


The objectives of the study are:

I. To examine role of social media on business performance: Many


firms are now adopting social media due to its increasing popularity
among people. This study examines how social media affect the

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performance of businesses and whether it have some negative
impact on its performance in some way.

II. To explore social media marketing strategies adopted by firms:


Now a days every company is using social media marketing strategies
to attract customers. This study explores various social media
marketing strategies that can be used by the firms to enhance their
performance.

III. To identify factors affecting customer buying behaviour: There


are many factors that affect the buying behaviour of customers while
doing online shopping. This study aims to identify those factors and
using them to decide firms’ social media marketing strategies.

IV. To analyse the effect of use of social media on customer


satisfaction: From past decade almost all the businesses are using
social media platforms to reach out their customers. This study
analyses whether use of social media increases customers’
satisfaction.

4. Research Methodology:

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Research methodology is a scientific and a systematic way to solve
research problems. The main aim of the study is to go through
various research papers and journals related to the area of study.
This would help the further researchers to get the concerned
information and use them accordingly.

Type Of Research:

This research is descriptive in nature because it gives a fair


description of the concept of social media and e-commerce in the
world at present, the benefits of social media, its implementation
and profitability to firms and convenience of customer buying
through electronic modes.

Research Problems:

In todays’ technology driven world, more and more firms are using
social media for their marketing campaigns. Main research problems
of this research paper are:

i)What is the impact of social media marketing on the buying


behaviour of consumers?

ii) Does the increased use of internet and social media lead to
increased online shopping?

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iii) What are the factors which motivate a person for online
shopping?

Research Hypothesis:

There are two research hypotheses; one is null hypothesis and other
is alternative hypothesis. Null hypothesis states that there is no
significant relationship between the two variables being studied.
Alternative hypothesis states that there is relationship between the
two variables studied.

Null hypothesis (H0): There is no significant relationship between use


of social media by the firm and increase in online purchase of
products of the firm by the customers.

Alternative hypothesis (H1): There is significant relationship between


use of social media by the firm and increase in online purchase of
products of the firm by the customers.

Data Collection:

Quantitative type of data is used in this research. The source of data


used is primary data. The main research instrument used is the
online questionnaires which included close-ended questions that
were administered to a selected sample.

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Sampling:

A sample size of 56 people was taken from the target population of


Rohtak city. Random Sampling technique has been used for this
study. Participants ranged from 18 years to 45 years which included
60% males and 40% females.

Data Analysis and Interpretation:

An online questionnaire was prepared to know whether the


respondents prefer online shopping and if yes then what are the
factors that affect their preferences. General information was
gathered from the individual respondents on their social and
demographic characteristics. Following pie charts shows the
responses received from the respondents:

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Among 56 respondents, 7 people (58.9%) were from age group of 15-
20, 33 people (19.6%) from 20-25, 11 people (19.6%) from 25-30, 5
people (8.9%) from age of more than 30.

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Among 56 respondents, 36 people (64.3%) were students, 5 people
(8.9%) were engaged in business, 4 people (7.1%) were homemakers
and 11 people (19.6%) were in services.

Among 56 respondents, 44 people (78.6%) prefer online shopping


and 12 people (21.4%) do not prefer online shopping.

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Among 56 respondents, 19 people (33.9%) prefer online shopping
because of product variety, 16 people (28.6%) prefer due to easy
availability, 12 people (21.4%) prefer due to low price and 9 people
(16.1%) prefer due to return policy adopted by the marketers.

Among 56 respondents, 33 people (58.9%) said that may be social


media impact their online buying preferences, 15 people (26.8%) said
that social media does impact their buying preferences, 8 people
(14.3%) said that social media does not affect their buying
preferences.

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Among 56 respondents, 31 people (55.4%) said product quality, 9
people (16.1%) said extra hidden charges, 8 people (14.3%) said
refund policy, 8 people (14.3%) said payment failure and breach of
personal information are their concern about online shopping.

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Among 56 respondents, 36 people (64.3%) use cash on delivery, 8
people (14.3%) use payment gateways, 5 people (8.9%) use debit
card, 7 people (12.5%) use credit card for payment while doing
online shopping.

Among 56 respondents, 32 people (57.1%) agree that online


shopping is convenient than traditional shopping, 11 people (14.3%)

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are neutral and 16 people (28.6%) do not agree that online shopping
is more convenient than traditional shopping.

Among 56 respondents, 15 people (26.8%) spend 1000-1500, 16


people (28.6%) spend 500-1000, 11 people (19.6%) spend 1500-
2000, 8 people (14.3%) spend 100-500, 6 people (10.7%) spend more
than 2000 on online shopping.

Among 56 respondents, 14 people (25%) had excellent, 21 people


(37.5%) had good, 16 people (28.6%) had average, 3 people (5.4%)
had below average, 2 people (3.6%) had poor online shopping
experience.

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5. Research Limitation:
The source of data collection in this research paper is primary data.
In this research paper a very small sample size of population has
been taken. Every caution has been taken to keep the sample
unbiased and true representative of total population but it may not
be applicable for other parts of nation due to demographic and
socio-cultural diversity.
There are some factors which are not in control of researcher that
might impact the conclusion of the study like sometimes participants
do not cooperate in data collection by showing unwillingness to
answer or by giving wrong information giving unreliable and
inaccurate results.
Sometimes respondents are not able to interpret the same meaning
of the questions researcher have asked in their questionnaire and
they conclude their own meaning and responds to the questions that
gives inaccurate results.

6. Review of Recently Released statistics


about problem:
There are many statistics which shows the growing importance of
social media usage by the businesses that how can they use social
media platforms as an advertising tool and how consumer behaviour
has changed due to growing use of social media.

Social Media Usage Statistics:

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Below is a picture of how social media usage is changing, which
networks are winning and just how hooked consumers are on social
media platforms.
 In 2023, there are estimated to be 4.89 billion total social
media users worldwide.
 The average person bounces between seven different social
networks per month.
 The amount of time internet users spend on social media is
now higher than ever — 151 minutes per day.
 TikTok is the fastest-growing social network with a staggering
100 % usage rate between 2020 and 2022.
 The number of social media users in world grew 3% YoY
only from January 2022 to January 2023 (+137 million users.)

Social Media Advertising Strategies:


Social media platforms are a great platform of advertisements for
businesses. Below points shows growing importance of these
platforms as an advertising tool:

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 It's now predictable that $130.5 billion of total social media
advertising spending will be generated through mobile by
2027.
 Social media recently overtook paid search as an advertising
channel, growing 25% YoY and exceeding $137 billion (just
edging out search’s $135 billion).
 Retargeting ads are the most-used among marketers, with 77%
of B2B and B2C marketers alike saying they use retargeting as
part of their Facebook and Instagram advertising strategies.
 Total spend on social media advertising is projected to
reach 268 billion in 2023

Consumer Behaviour Statistics:


The concept of buying something you saw on social media is nothing
new. From product recommendations to first impressions from
brands, the impact of social media on consumers is well known.
 Most of consumers find the perfect product by seeing a
targeted ad (49%) over an organic post by a brand (40%)’
 The majority (71%) of livestream viewers have purchased
something via social media.

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 Gen Z shoppers anticipate making more purchases
on Instagram, TikTok and Snapchat, whereas Baby
Boomers plan to shop more on Facebook.
 41% of Gen Z and Millennials make an impulse purchase
online every 2-3 weeks. On the other hand, only 10% of
Baby Boomers can say the same.

7. Main Causes or Components of


Problem:
In this research paper the study has been done to analyse and
examine the impact of use of social media by the business on their
performance. Following are the main components of the research
problem:

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1. It shows how use of social media platforms has enhanced the e
commerce adoption by various firms. Now a days every other
company have come on social media to increase their brand
awareness among customers. Further increase in social media
users have exaggerated e-commerce practices by the firms.

2. Social media marketing strategies are now in common practice.


This study examines that which social media marketing strategy
must be adopted by a firm to reach out to the customers and
sell them their product. It is very important to select the best
social media platform and social networking sites to attract the
customers.

3. There are some positive and negative effect of social media


usage by the firms. There are many studies that shows that
businesses should adopt social media as marketing tool but
there are not only positive side but some negative effects are
also there that affect the businesses and customers both.

4. Various factors affect the buying preferences of the customers.


It focuses on how to attract more and more customers to their
brand and how to satisfy them with the help of customer
relationship management and to know does customers will
prefer the products of the brand by seeing them on the social
media platforms.
The main objective of the research problem is to know whether
social media platforms can be an effective advertisement tool for
promoting e-commerce, do customer make purchase after seeing
reviews of the product on social media, does social media interaction
between user and a firm helps to create positive image of the firm
among customers. To solve the research problem a descriptive study
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has been done. A sample has been taken with the help of simple
random theory and hypothesis testing was done to test whether
there is any significant relationship between use of social media by
the firm and customer perception regarding online purchase.

8. Suggestions: -
The result of this study offers suggestions for other researchers and
practitioners. In this research paper a research model in term of
social media and e-commerce has been prepared. It can be extended
to a research model of social commerce as well. Social media and
social commerce have recently been hot topic and more and more
researches are paying attention to them this research paper provides
a theoretical starting point for researchers who are interested in
further studying social media and social commerce.
In this research paper, samples were mostly collected from a single
city and work needs to be expanded to include other geographical
areas. Further studies should focus on a specific social networking
site and the gathering of data through their members to do in depth
analysis of how social media influence the purchase intentions of the
customers.

There is need for more research study to know what businesses are
actually doing with the social media, on what basis they decide that
they should implement social media marketing strategies and how
do they plan, organise and implement social media in their
organisations. Previous researches have shown that social media
reviews do affect the buying behaviour of the consumers but there is

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lack of studies that shows do they really change the perspective of
customers toward the products of the firm.
Social media tends to play a role as a many-to-many information
channel enhancing information spread, the users in social media and
its related e-commerce website may be easily influenced by that
information. People tends to influenced by the group information
that these social media platforms spread because information
system has become integrated now. More research should be done
to understand customer behaviour in context of both social media
and e-commerce instead of social media context only that have
studied by previous researchers.
There is lack of empirical study in this field. Most of the research
studies are based on theoretical framework only. Therefore, more
research studies should be conducted to provide empirical evidences
to support the theoretical aspects of the research studies.
This research paper provides some suggestions for business
managers. E-commerce managers need to directly develop social
media-based applications or collaborate with other popular social
media websites to improve the users’ social interaction. In doing so,
e-commerce websites should try to encourage users, especially
expert users to share information about their shopping experiences
and knowledge. Users’ interactions with each other will make social
media a great platform to transmit product information. Managers
should provide more information and knowledge about products to
help users select products.
As it has been proved that social media marketing has a significant
impact on customers buying decision process, it can be used by e-
retailers as an effective tool of marketing. But now a days almost all
the e-retailers are present on social media so it is very important to
be different in order to attract the customer to respond to
advertisements. It is of vital importance to make advertisements

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unique, attractive and customize them as per the likes and dislikes of
customers.
Facebook is most effective tool of marketing as per the study but
now a many people are using new social networking sites like
Instagram, Pinterest, LinkedIn, Twitter etc. so there is an opportunity
to use these new social sites optimally. These sites can improve their
marketing efficiency by enhancing features like targeting the
advertisements to the right group of audiences and making the ads
more appealing so that more and more audience are attracted
towards them for socializing as well as seeking product information.

9. Conclusion: -
The findings and the results of this study clearly signifies that social
media marketing influences the building of brands as well as
influences the sales of the business. In recent years use of social
media have increased all over the world. With the increasing use of
social media, it helps in e-commerce. Thus, it is important that
marketers and firms adopt social media as a marketing strategy in
reaching to their target audience effectively. It is therefore necessary
for marketers and firms to tap into the endless opportunities social
media has to offer.

There is rise in online shopping from the past few years. The
websites of Amazon, Flipkart, Snapdeal, Meesho, Facebook, Myntra
etc. are user friendly, attractive and useful to increase e-commerce.
Social media marketing offers organizations many ways to connect
with their customers. The feedback obtained from the customers
further help to design the marketing strategy of their products.

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Companies use a combination of multiple social networks, but the
most popular and the most commonly used by the them are:
Facebook, YouTube and Instagram. What traditional marketing
cannot achieve is achieved by social networks and enable the
company to connect with customers. Each social network has its own
audience. It is important to define our business goals, to choose the
target audience and based on that to choose the platform on which
firm will establish themselves. To be successful it is not necessary to
be on all social networks but to choose an appropriate social
network that will contain all the key features.
Social media usage has been increased by the businesses in past few
years and it has facilitated both customers and business. Now
customers can review the product sitting at home without actually
using the product by reading reviews of others on social media.
Interactions among social media users have increased. Consumers
are now content generators through social media. They share
information and experiences with other consumers and have easy
access to one another’s information.
Effectiveness of social media marketing depend upon strategy of the
firms to use social media platforms efficiently. Social media help to
increase engagement between customer and firm. Their regular
interaction help building customer loyalty. In conclusion we can say
that social media offers a great avenues for businesses.

10. References: -

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