In this chapter the background to the research area is presented. This presentation leads to a discussion of the issues within the research area which further leads to the formulation of a research question. This research question will be answered later in this thesis. The purpose of this thesis is also presented.


A new phenomenon has gripped the online world which has been fashionably labeled as Web 2.0 (Stern & Wakabayashi, 2007). Web 2.0 describes the fundamental changes in how people are now interacting with the internet. More specifically, a set of new technologies now enable consumers to interact and influence one another in a virtual environment (Tapp, 2008). This interaction is called social networking through online social networks has been exponential since the conception of the internet with its popularity gaining rapidly particularly from 2005 to 2009 (Constantinides & Fountain, 2007). The ability to interact through online communities is said to dominate the use of internet in the future and is therefore coined the second phase of internet development or Web 2.0.

The act of interacting between people is not a new concept. Traditional social networks were first built through physical encounters and later assisted through technology such as the telephone. People gather together through common conditions that are shared by those in the group. Defined as human communities (Wikipedia, 2009a). these conditions can involve shared emotions and one or several attributes such as intent, resources, risks, needs, beliefs and / or consumption preferences (Patterson, 1998; Evans, Jamal & Foxall, 2006). Cova & Cova (2002, pg. 598) define community as “a group of people with something in common, for example the district of residence or occupational interest.” Literature suggests that the presence of communities is associated with different types of consumer behaviour shared amongst those that belong to the group.

Today, the concept of community and interaction between people has not change, rather it is the way we communicate and interact with each other which has changed. Modern technological advancements such as Web 2.0 are dramatically changing how we interact, with whom we interact, and when and where we interact. These gatherings have created a new phenomenon termed virtual communities or E-Tribes by Kozinets' (1999) or online communities by Tapp (2008). The term online communities will be continued to be used in this thesis to describe these groups. Online communities can be described as “Social aggregations that emerge from the net public discussions long enough, with sufficient human feeling, to form webs of personal relationships in cyberspace” (Kozinets, 1999, pg. 253) Therefore online communities, similar to traditional communities are a collection of users who share social interaction, social ties and a common ‘space'. The difference today is that they often never physically meet, nor are they bound by time or place. Research into the diverse and full social interactions of online consumers reveal that the online environment can under many circumstances be used as a medium of meaningful social exchange (Kozinets, 1999).

Online communities have given rise to thousands of different communities, accessible and available to anyone and everyone through the World Wide Web. Most of these online communities are structured around consumption and marketing interests and research has indicated that online groups are market-oriented when it relates to their interest (Evans, Jamal & Foxall, 2006; Kozinets, 1999). Kozinets (1999) therefore defines these groups as “virtual communities of consumption' whose online interactions are based upon shared enthusiasm for and knowledge of, a specific consumption activity or related group activities. The challenge for marketers today is to capitalize on the opportunities presented by online communities, both as a marketing research tool and as a vehicle to deliver messages to a more defined audience. With online communities attracting millions of new users seeking faster real-time functionality the term community is expanding rapidly and spreading globally, creating more markets and opportunities for marketers to reach potential customers. The increasing importance of the internet and influence of online communities is therefore presenting an opportunity for companies to differentiate themselves and gain a competitive advantage.

To date, marketing activities on online communities have been largely trial and error involving a shift from traditional marketing. Companies today have been trying to develop ways to capitalize on this trend. Now with the move to Web 2.0 and the popularity of real-time content, companies are wondering how to use this functionality and how best to integrate it. It has been reported that both Google and Microsoft have been slow to catch on and are trying to cope with social media's move to a real-time world (Nuttall, 2009). Real-time updates have also opened up a fresh frontier for marketers and companies to manage the flow of instant information (Nuttall, 2009).

The potential power of online social networks is real and undeniable. Marketers who rigorously understand them and the opportunities they present will be able to position themselves to benefit from fundamental changes that are occurring in the way people decide on which products and services to consume, and how they actually consume them (Kozinets, 1999.) However, in order to effectively reach these users, an understanding of who they are and their characteristics are fundamental to the creation of tailored marketing campaigns. Profiles identified can be categorized into segments who share common behaviour and attributes. It is first with this understanding that marketers can realize the potential of online communities. When they understand who they are talking to.

1.2 Research Area

Marketers today use segmentation approaches to reduce rivalry and increase competitive advantage with the understanding that a company cannot satisfy everyone in every market with the same strategy. Segmentation is advantageous given fewer competitors in any given segment reducing the risk of downward pressure on pricing and reducing perceived substitutes in a particular market (Cahill, 1997). Segmentation also allows a company to differentiate themselves from the competition and build expertise and experience in the market and therefore create barriers of entry for its competitors.

Segmentation of a market refers to the process of dividing the total market into homogeneous groups with similar needs and desires that can be identified (Vyncke, 2002). It also refers to the notion that a consumer group, comprising a market for a product, is composed of subgroups, each of which has specific and different needs or wants (Barnett, 1969). Within these subgroups, consumers are seen to exhibit homogenous characteristics that cause them to behave in a similar fashion which is distinctively different from consumers in other segments.

The challenge today is applying segmentation approaches appropriate to online communities. Kozinets (1999) is one researcher who has developed a segmentation model specifically for online communities. His model segments users based on their social commitment and level of activity within the community. Further studies in online social networks have been sparse due to the rapid development of this media. An understanding of the new media is urgently needed today as online networks rapidly bring together more and more consumers in a global marketplace divided into finer and finer consumption activities.

In order to further enrich Kozinets' (1999) model of ‘virtual communities of consumption' a psychographic and behavioural segmentation approach is needed. This is because psychographic behavioural variables based on lifestyle, personalities and attitudes can explain the way consumers think and behave. This is compared to traditional segmentation approaches such as demographic and geographic variables, whilst still useful, can only explain the characteristics of sub-markets and the classification of key factors of a market segment (Lin 2002). As a result, psychographic and behavioural variables have been prominent in marketing literature in understanding psychological attributes of online users (Lin 2002; Vyncke, 2002).

In combination with the growing significance of online communities is the parallel growth in online shopping and the growing number of shoppers purchasing from online stores (Barnes et al, 2007). Therefore it is imperative for marketers to develop an understanding of internet surfers and shoppers (Donthu & Garcia, 1999; see Barnes et al, 2007). There has however been little research into the understanding of how retailers can segment online shoppers. As a result, Barnes et al (2007) have developed a typology of segmenting online buying behaviour based on practical and relevant constructs of purchase behaviour as features for segmentation.

With the aim of contributing to the understanding of online communities for the benefit of modern marketing practices and to enrich and build on existing theories in this area, it was of great interest to investigate whether segments of online community users could be further defined by their online buying behaviour. These two constructs are of interest to marketers as they provide implications as to how businesses can use online communities to their advantage in selling their goods and services online. By refining the existing segmentation approach of online communities created by Kozinets (1999) through the addition of online buying behaviour dimensions, as presented by Barnes et al (2007), this research aims to provide a deeper insight into the understanding of online community users for the benefit of market practitioners and future researchers alike.

1.3 Research problem

With the move to Web 2.0 people are now able to interact in a new and faster way as online social networks expand every day. This has created both threats to traditional marketing and opportunities for companies to reach their target audience in a different manner, on a larger scale and for a lower cost. Moreover companies are realising the potential of online communities but are uncertain as to how to integrate it as part of their marketing repertoire. Therefore there is a pressing need for further research in online communities as they become more and more integrated in our daily lives. Specifically a better understanding of the users of these online communities is needed.

By identifying homogenous characteristics of online users, valuable segments can be defined for the benefit of marketing practitioners. The main problem is that there are few segmentation models in regards to online communities. There is also a need to use psychographic and behavioural variables in order to gain a better understanding as to how online users think and behave.

Kozinets' segments of ‘virtual communities of consumption', segments members based on their level activity and social commitment within the community (Kozinets, 1999). However the model has not been empirically tested nor does it further explain online buying behaviour. Online buying behaviour is of great interest to marketers since they look upon these users as potential target groups in which to sell their products and services. Therefore, in order to develop a profile of online community users based on their online buying behaviour, attributes of online buying behaviour of the internet user population are of interest. A model presented by Barnes et al (2007) identifies three distinct clusters of online buyers. His findings are of interest in further examining Kozinets' model since Barnes et al uses both practical and relevant constructs in examining online buying behaviour. Therefore both these models can be used to enrich the understanding of online community users and their online buying behaviours. Profiles identified can then be grouped into segments based on their homogenous characteristics for the development of useful and effective marketing strategies.

1.3.1 Research Question

Can online community users be classified by their online buying behaviours so they are useful to marketers?

1.4 Research purpose

The purpose of this research is to contribute to the understanding of online communities, a phenomenon that is dramatically changing and shaping human interaction and behaviour today. In order to achieve this, an understanding of the users behind online communities and their characteristics is essential. The aim of the research is to provide a new dimension of research understanding to an existing segmentation theory of online communities.


The research area of online segmentation and its users are broad and complex. In order to answer the research question posed the scope of this thesis has been limited. Firstly, the thesis focuses on examining respondents who are existing users of online communities. This includes users from online social networks such as Facebook, to online community groups found on discussion forums. As online communities are composed of individual users, the models used and the findings are only relevant from a business to consumer perspective. Furthermore, Kozinets' model of ‘virtual communities of consumption' is an existing segmentation theory on online communities which is used as the basis of this thesis. In order to provide a new dimension of research understanding to Kozinets' existing model, Barnes et al's typology of online buying behaviour is used. Therefore the variables used to analyse online buying behaviour are limited to those presented by Barnes et al (2007) providing a natural limit to the study of online buying behaviour.

1.6 Definitions

Discussion forums

A discussion forum is an online discussion site which can be seen as a modern version of the traditional bulletin board. It is a web application managing user-generated content and enables members to discuss topics that are of interest to them. In a forum entries are structured under categories then different threads within the category. (Wikipedia, 2009b)

Likert scale

The Likert scale offers a way of determining the respondent's attitudes towards statements in a questionnaire. The respondents can chose from a range of choices such as “strongly agree”, “agree” “disagree” and “strongly disagree”. Each statement is then assigned a numerical value for analysis. (Encyclopedia Britannica, 2009a)

Online communities or

virtual communities

Online communities are a group of people who interact with each other via the internet. The online community is both a complement and supplement for communicating with people face-to-face. Examples of online communities are Facebook, Flickr and blogs. (Wikipedia, 2009c)

Online community user

A person who uses online communities whilst they are on the internet.

Online social networks

An online social network is helping people to build an online community where they can share their interests and/or activities. The social networks has encouraged new ways to communicate and share information. Today millions of people use online social networks regularly to interact with others. (Wikipedia, 2009d)

Online social network user

A person who uses online social networks as a means of building connections with others.


Uniform Resource Locator (URL) is an address of a resource on the internet. It can be of any type, such as a web page, a text file, a graphic file or an application program. (Encyclopedia Britannica, 2009b)

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