f

Sunderland Business School

MA MARKETING

TITLE:

The application of chatbots in Digital Marketing Communications and their effect on

consumer behavior

Submission date: 16th September 2019

Student name: Paraskevi Tzani

Student number: 189025485

Project Supervisor: Dr Fiona Urquhart

Module: Marketing Dissertation

Module Code: PGBM155

Module Leader: Dr Seema Bhate

Word count: 15301

 Dissertation Declaration

Statement of Originality and Authenticity

I confirm that the dissertation I am submitting is an original and authentic piece of work compiled

by myself that satisfies the University rules and regulations with respect to Plagiarism and

Collusion. I further confirm that I have fully referenced and acknowledged all material incorporated

as secondary resources in accordance with the Harvard System. I also clarify that I have taken a

copy of the dissertation, which I will retain until after the Board of Examiners has published the

results and which I will make available on request in pursuance of any appropriate aspect of the

marking and moderation of the work within the University Regulations.

Name: Paraskevi Tzani

Student number: 189025485

Course: MA Marketing

Module: Marketing Dissertation

Date: 16/09/2019

Signed

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Table of contents
Table of contents……….…………………………………………………………………………….3
List of Figures......................................................................................................................................7
List of Tables........................................................................................................................................8
Acknowledgments................................................................................................................................9
Abstract..............................................................................................................................................10
1.Introduction.....................................................................................................................................11
1.1 Project review......................................................................................................................11
1.2 Problem Statement...............................................................................................................11
1.3 Objectives............................................................................................................................12
1.4 Research questions...............................................................................................................12
1.5 Project limitations................................................................................................................12
1.6 Dissertation outline..............................................................................................................13
2. Literature review............................................................................................................................14
2.1 The evolution of technology- Digitalization.............................................................................14
2.2 The transformation of the consumer behavior..........................................................................15
2.2.1 The wheel of consumer analysis............................................................................................15
2.3 The byer decision process.........................................................................................................17
2.3.1 Need recognition................................................................................................................17
2.3.2 Information search.............................................................................................................17
2.3.3 Evaluation of alternatives...................................................................................................17
2.3.4 Purchase decision...............................................................................................................17
2.3.5 Post purchase behavior.......................................................................................................18
2.4 Digital marketing from firm’s perspective...............................................................................18
2.4 Marketing communications......................................................................................................19
2.5 Artificial intelligence................................................................................................................21
2.5.1 Public relations and Artificial Intelligence............................................................................22
2.5.2 Artificial intelligence in advertising......................................................................................23
2.5.2.1 Definition of Advertising................................................................................................23
2.5.2.2 The AIDA model............................................................................................................23
2.5.3 Programmatic advertising (PA).............................................................................................24
2.5.4 Chatbot advertising and user experience...............................................................................25
2.5.4.3 Importance of quality of the chatbot service...................................................................27

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 2.5.4.2 Benefits of Chatbots........................................................................................................27
2.5.4.2.1 Companies....................................................................................................................27
2.5.4.2.2 Customers.....................................................................................................................28
2.5.4.2.3 Customer experience....................................................................................................29
2.5.4.3 Personality of chatbots........................................................................................................29
2.6 Ethical issues around Artificial Intelligence.............................................................................31
2.6.1 Job losses............................................................................................................................31
2.6.2 The right to be forgotten....................................................................................................32
2.7 The impact of Artificial Intelligence in Consumer behavior....................................................32
2.8 Conceptual framework..............................................................................................................33
3. Research Methodology…………………………………………………………………………...36
3.1 Introduction..................................................................................................................................36
3.2 The research ‘onion’.................................................................................................................36
3.2.1 Research Philosophy..........................................................................................................37
3.2.2 Approach to theory development.......................................................................................37
3.2.3 Methodological choice.......................................................................................................38
3.2.3.1 Triangulation...................................................................................................................39
3.2.4 Strategy..............................................................................................................................39
3.2.5 Time horizon......................................................................................................................40
3.2.6 Techniques and procedures................................................................................................40
3.2.6.1 Structure of the questionnaire and the interview............................................................40
3.2.6.2 Population and sample of the quantitative research........................................................41
3.2.6.3 Data collection................................................................................................................41
3.2.6.1.1 Secondary data collection............................................................................................41
3.2.6.1.2 Primary data collection................................................................................................42
3.2.6.4 Data analysis...................................................................................................................43
3.3 Limitations................................................................................................................................43
3.4 Ethical considerations...............................................................................................................44
4. Data Analysis and Findings............................................................................................................44
4.1 Introduction...............................................................................................................................44
4.2 Results from the quantitative analysis......................................................................................44
4.2.1 Description of the sample- Demographics.........................................................................44
4.2.2 Introductory questions........................................................................................................46

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 4.2.2.1 Frequency of usage of electronic or mobile devices in order to purchase products.......46
4.2.2.2 Concept of AI..................................................................................................................46
4.2.3 Main reason of using chatbots...............................................................................................47
4.2.4 Benefits via a chatbot communication...................................................................................47
4.2.5 Reasons to stop using chatbots..............................................................................................48
4.2.6 Personal Data.........................................................................................................................49
4.2.7 Decision- making model........................................................................................................50
4.2.7.1 Problem-need recognition...............................................................................................50
4.2.7.2 Information search..........................................................................................................51
4.2.7.3 Evaluation of alternatives................................................................................................53
4.2.7.4 Purchase- decision...........................................................................................................53
4.2.7.5 Post- purchase behavior..................................................................................................57
4.3 Results from the qualitative analysis........................................................................................57
4.3.1 Advantages and disadvantages of the adoption of chatbots as an aspect of a marketing
strategy........................................................................................................................................57
4.3.2 Key success factors of online marketing communications in context of chatbots.............58
4.3.3 Chatbots to engage with consumers and build brand loyalty.............................................58
4.3.4 Chatbots to provide a personalized experience and build brand loyalty............................58
4.3.5 Chatbots which exhibit human traits and consumer experience........................................59
5. Discussion......................................................................................................................................60
5.1 Introduction...............................................................................................................................60
5.2 Chatbots as an influencer of decision-making process.............................................................60
5.2.1 RQ1: What is the effect of chatbots on pre-purchase consumer behavior?.......................60
5.2.1.1 Problem- need recognition..............................................................................................60
5.2.1.2 Information search..........................................................................................................61
5.2.1.3 Evaluation of alternatives................................................................................................62
5.2.2 RQ2: How do chatbots facilitate purchase?.......................................................................62
5.2.2.1 Purchase-decision stage..................................................................................................62
5.2.2.2 Personalization................................................................................................................63
5.2.2.3 Engagement.....................................................................................................................63
5.2.2.4 Customer experience…………………………………………………………………...64
5.2.3 RQ3: How do chatbots offer superior customer service post-purchase?...............................65
5.2.3.1 Post-purchase stage.........................................................................................................65
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 5.3 Additional findings...................................................................................................................66
5.4 Recommendations: 8- Step digital marketing via chatbots success framework.......................66
5.5 Summary...................................................................................................................................69
6. Conclusion......................................................................................................................................70
6.1Theoretical implications............................................................................................................71
6.2 Managerial implications...........................................................................................................71
6.2.2 Platforms such as Facebook...............................................................................................72
6.2.3 Chatbot Designers..............................................................................................................72
6.2.4 Legal Implications..............................................................................................................72
6.2 Limitations................................................................................................................................72
6.3 Further research........................................................................................................................73
7. Personal reflection..........................................................................................................................74
References..........................................................................................................................................76
APPENDICES....................................................................................................................................83
Appendix 1: Questionnaire.............................................................................................................83
Appendix 2: Interview....................................................................................................................86

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List of Figures
Figure 1: The wheel of consumer analysis (Peter & Olson)………………………………………16

Figure 2: The Buyer Decision process…………………………………………………………….18

Figure 3: Schramm Communication Model……………………………………………………….20

Figure 4: The AIDA model………………………………………………………………………..24

Figure 5: Chatbots on Facebook……………………………………………………………………26

Figure 6: Chatbot engine recognizing a customer personality……………………………………..30

Figure 7: Conceptual framework…………………………………………………………………...35

Figure 8: The research onion……………………………………………………………………….36

Figure 9: Research methods……………………………………………………………………...…38

Figure 10: How often do you use electronic or mobile devices in order to purchase
products?............................................................................................................................................46

Figure 11: Are you familiar with the concept of AI?........................................................................46

Figure 12: Which is the main reason of using chatbots?..................................................................47

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Figure 13: Which benefits would you expect to enjoy via a chatbot communication?.....................48

Figure 14: What would stop you from using a chatbot service?.......................................................49

Figure 15: Are you willing to hand over personal data in return for more relevant offers and product
information?.......................................................................................................................................49

Figure 16: Are you more willing to buy a product if a chatbot sends you personalized notifications
and advertisements? ………………………………………………………………………………..50

Figure 17: How would you feel if a chatbot can help you solve a problem or cover a particular need
via a messaging app?.........................................................................................................................51

Figure 18: You receive a message from a chatbot that directly relates to your interests. Does that
create a desire to purchase?................................................................................................................51

Figure 19: Do you think that chatbots help the faster implication of purchases?............................52

Figure 20: Do you think that chatbots can help you find products tailored for you?.......................52

Figure 21: If you could find products more easily which cover your needs and wants, would you
buy more often?..................................................................................................................................53

Figure 22: Are you more willing to buy a product when a chatbot provides you information about
different products and their potential differences?.............................................................................53

Figure 23: Are you more willing to buy products from a firm which has adopted new technologies
such as chatbots?................................................................................................................................54

Figure 24: : Do you think that the adoption of new technologies such as chatbots is changing online
customer experience for better?........................................................................................................54

Figure 25: Are you more willing to engage with a brand with a chatbot engine, if it gives you more
intelligent and surprising answers?....................................................................................................55

Figure 26: A chatbot adopts a character which exhibits more human traits and drives experience.
Does that help in better engagement?.................................................................................................55

Figure 27: Do you think that chatbots offer a more personalized experience?..................................56

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Figure 28: Are you more willing to respond positively to a personalized offer based on your
interests and preferences?..................................................................................................................56

Figure 29: Are you more willing to repeat your purchases from a company which sends you order
updates like shipping and tracking via a chatbot service?...............................................................57

Figure 30: The proposed framework regarding the successful use of chatbots in a digital marketing
strategy…………………………………………………………………………………………….67

List of Tables
Table 1: Demographic characteristics of the research sample……………………………………45

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Acknowledgments

Firstly I would like to thank my supervisor Fiona Urquhart that through her precious guidance and

motivation helped me in the fulfillment of this thesis. Moreover I would like to thank my family and

my friends Christos, Victoria, Fani, Katerina and Mantw for their precious support throughout the

writing of this project and because they have always been present during my studies. To conclude, I

would like to express my gratitude to Constantinos Toussas because he accepted to conduct an

interview and the 111 participants that have answered my questionnaire.

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Abstract
The aim of this dissertation is to explore the role of chatbots in Digital Marketing Communications

and specifically their influence on consumer behavior. According to the analysis, chatbots influence

consumers’ behavior. Regarding the primary research, a mixture of qualitative and quantitative

methods was used in order to achieve more credible results. More specifically, a questionnaire was

designed and distributed to 111 participants to examine impact of chatbots in every stage of the

buyer decision-making process. The analysis revealed that chatbots can have a positive impact on

buyers during their pre-purchase decisions, throughout the purchase stage and during the post-

purchase stage. In this thesis, the interview is supported by the well-designed structured questions.

The data were collected with the contribution of one marketing manager via face-to-face interview.

The primary and secondary research discovered the prominence of the adoption of chatbots in

digital marketing communications for ensuring the successful marketing strategy implementation in

order to engage with the right target audiences and convey the right messages. The proposed

framework is a recommendation for the companies regarding the adoption of chatbots in their

digital marketing communications in order to accomplish their marketing objectives and build brand

loyalty and sustainability.

Keywords

Chatbots, Artificial Intelligence, Digital Marketing Communications, Consumer’s purchasing decision-

making process, consumer behavior

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 1. Introduction

1.1 Project review

This study will provide an overview of the Artificial Intelligence techniques that are used in the

marketing sector. Focusing on the use of chatbots in digital marketing communications, this thesis

will investigate the influence of these techniques on consumer behavior. In addition, this thesis

investigates the effectiveness of the adaption of chatbots in creating to stakeholders a desire to

purchase.

Supported by the relevant literature, a periodization approach of the marketing communications and

differences throughout the years will be presented. This research will also examine the consumer

acceptance of chatbots in marketing communications. The importance of this study is to apply

research in the new methods of Artificial Intelligence using by practitioners and provide an

overview of the new marketing perspectives and trends.

The outcomes of this research will help companies understand how their target groups perceive the

adoption of chatbots in marketing communications and how they influence the consumer buying

behavior. Moreover, this study will help marketers reach their stakeholders and attract new ones by

using up-to-date digital technologies. Finally, this thesis will improve the way that marketers deal

with customers via chatbots taking into consideration ethical issues that may arise.

1.2 Problem Statement

A review in aforementioned studies has revealed that most examinations around Artificial

Intelligence were focused upon the computer science rather than marketing aspects. A lack of

information oriented in the marketing field was observed. In addition, it was detected that previous

studies about the use of Artificial Intelligence in the marketing field examined the benefits from a

company’s point of view. As a consequence, it seems important to develop and improve the
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knowledge around the use of Artificial Intelligence techniques in marketing from a consumers’

perspective. More precisely, this study examines the influence of chatbots in consumer buying

behavior. AI will be examined from various angles and the new standpoints on the marketing field

will be presented in order to help marketers use this knowledge effectively.

1.3 Objectives

1. To survey the effectiveness of the use chatbots in the marketing sector.

2. To examine the impact of the use of chatbots on the consumers’ behavior and find out if

these techniques affect the consumer-decision making process.

3. To recommend appropriate marketing approaches via chatbots in order to create brand

loyalty.

1.4 Research questions

This thesis explores the role of the adaption of Artificial Intelligence techniques focusing on

chatbots in marketing communications. The research questions are the following:

RQ1: What is the effect of chatbots on pre-purchase consumer behavior?

RQ2: How do chatbots facilitate purchase?

RQ3: How do chatbots offer superior customer service post-purchase?

1.5 Project limitations

A significant project limitation is that there are limited journals and academic papers that examine

the role of the use of Artificial intelligence in the marketing field. In addition, the rapid evolution of

technology and the adaption of new techniques is primarily the most important limitation, as new

techniques arise very fast and will be challenging to find out the most up-to-date trends. Moreover,

due to time constraints the survey will be accomplished in 500 hours and demographical and

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psychographic characteristics of the participants in the primary research will not be examined. Last

but not least, marketing techniques sometimes take place in an unconscious level, making it difficult

for customers to understand their existence. So, some customers may not be aware of the artificial

intelligence applications in the marketing communications.

1.6 Dissertation outline

Aimed at the flawless understanding of the task, the outline of the thesis is presented below. The

necessary information of every chapter will be included.

Chapter 1: Introduction. An overview of the project, the problem statement, the research

questions and the project limitations will be presented.

Chapter 2: Literature review. Based on the research questions of the project and the aims of the

study the digital transformation, the change on the consumer behavior and marketing

communications as well as the applications of AI in the new era of marketing communications will

be presented. Regarding the relevant research the knowledge around these elements will be

broadened.

Chapter 3: Research Methodology. In this chapter are outlined the research methods used in order

to accomplish the project outcomes. Ethical considerations and limitations around the research

process will be determined.

Chapter 4: Data Analysis and findings. This chapter is devoted to the presentation of the primary

research findings without trying to draw any conclusions.

Chapter 5: Discussion. In this chapter, data analysis based on the literature review and the

combination of secondary and primary data will be presented. Moreover suggested

recommendations will be exposed.

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Chapter 6: Conclusions. In the last chapter, the outcomes of this research and the summary of the

whole project including further future research will be exposed. Moreover theoretical and

managerial implications of the project will be presented.

2. Literature review

2.1 The evolution of technology- Digitalization

The evolution of new technologies, internet and mobile occurring simultaneously with financial

crisis and economic development put a heavy pressure on business specifically on the profitability

and the revenue (Dirican, 2015). It is well-known that the marketing field is affected by digital

technologies as offline consumers shift to digital technologies. Many authors agree that in a global

world affected by the advancement of technology, the Internet is the core tool for all businesses

(Kannan & Li, 2017; Abbasi, et al., 2011; Fullam, 2017). Internet provides innovative opportunities

worldwide as it bridges geographical limitations (Kumar, et al., 2018).

The advancement of technology, the introduction of innumerable software and the gradually use of

laptop, mobile, desktop, tablets influenced the marketing sector and the business world. Internet

marketing has turn out to be the new era of e-commerce and digital technologies have a significant

resonance in marketing sector. From a linguistic point of view the roots of the word ‘digital’ come

from the Latin word ‘digitalis’ or ‘digit’ in English. The definition of digital that arises from the

Larousse dictionary is referred to the extended use of various tools for individuals (Soni & Pandey,

2016).Marketers use the digital platforms in order to communicate and distribute their products to

their stakeholders (Confos & Davis, 2016; Shaouf, et al., 2016).An important aspect to take into

consideration is that Internet is not only responsible for the distribution of goods and services but

also for communication between businesses and customers (Srinivasan, et al., 2016).

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2.2 The transformation of the consumer behavior

Digital technologies are quickly altering the environment within which businesses operate. The first

and most important step of analyzing the interactions of digital technologies starts with the

investigation of the consumer behavior which is changing due to the access to various devices and

technologies both in the online and mobile context (Kannan & Hongshuang, 2017). The exponential

growth of internet based purchases changed the consumers’ decision making process as consumers

use the Web to cover their daily needs and customize them with the support of the digital

technology. Consequently, organizations adapt digital technologies in order to react in a helpful

manner in their stakeholders’’ requests. As marketing is everything an organization does to sell

goods and to the customers and affect their purchasing behavior it is essential for businesses to

identify their needs and how they can satisfy them (Todor, 2016).

In the Digital Age, consumers may not believe information coming from the mass media or they

may feel confused because of the colossal amount of data. As a consequence customers may depend

on various virtual groups and buyers’ associations (Sturiale & Scuderi, 2013).Maintaining

consumer relationship becomes the most important maneuver of businesses (Royle & Laing, 2014).

So, it is necessary for businesses to identify exactly how their clients behave and how they

anticipate organizations to interact with them (Belleghem, 2016).

2.2.1 The wheel of consumer analysis

There is a strong relation between psychology and marketing. To put it in another way, the

marketing concept proposes a firm should satisfy the needs and the wants of consumers in order to

make profits. As a result to build an operational marketing strategy, an organization has to take into

consideration the consumers insights. Consumer behavior is dynamic as the actions, thinking and

feelings of the customers are changing constantly. An important tool that can help marketers

understand the consumer behavior is the ‘Wheel of consumer analysis’; a framework proposed by

16
Peter & Olson. In order to gain insight into this framework, the three aspects that will be examined

are affect and cognition, consumer behavior and consumer environment (Peter & Olson, 2010).

Figure 1: The wheel of consumer analysis (Peter & Olson)

Source: Consumer behavior & Marketing strategy (Peter & Olson,2010,p.20)

Consumer affect and cognition

To begin with, the consumer affect and cognition denote a mental and an emotional response

customers exhibit. Affect is about their feelings about stimuli, for example if they like or dislike a

product. Cognition is about their thoughts about a specific product (Peter & Olson, 2010).

Consumer environment

Everything external that can influence the way that customers feel, think and do is included in the

consumer environment. Actions of others, cultures, social classes are included. Moreover, it

includes other elements that can shape consumer attitudes such as stores, advertisements and

products. The examination of the consumer environment is very significant for marketing as it is the

medium in which incitements are positioned to affect individuals (Peter & Olson, 2010).

Consumer behavior
17
The physical actions of buyers that can be witnessed by other individuals are the consumer

behavior. Marketers can influence the consumer behavior in order to increase sales and profits.

Some tactics that marketers can use in order to influence the consumer behavior include offering

superior quality, greater convenience, lower prices and easier availability (Peter & Olson, 2010).

2.3 The byer decision process

As presented in the Figure 2, the buyer decision process contains 5 stages.

2.3.1 Need recognition

In first stage the consumer recognizes a problem or a need. A need can be triggered by internal

(when an individual’s regular need like thirst becomes a drive) or external stimuli such as a

discussion with a friend or an advertisement. A marketer has to research the consumers’ needs and

find ways to lead the consumers to a particular merchandise (Kotler & Armstrong, 2013).

2.3.2 Information search

In this stage the consumer is motivated to look for more information about the need. Customers can

find information from personal sources, commercial sources (advertising, displays), public sources

(online searches, mass media) and experiential sources (handling) (Kotler & Armstrong, 2013).

2.3.3 Evaluation of alternatives

In the evaluation of alternatives stage, consumers choose among the alternative brands by

processing information. In some circumstances, consumers use logical thinking and calculations. In

other cases, the same buyers do little or no evaluating (Kotler & Armstrong, 2013).

2.3.4 Purchase decision

In this phase the customer buys the most preferred brand. There are two factors which influence

their final decision. Firstly the outlooks of others can influence the purchase decision. Secondly

18
unexpected situational reasons such as economic crisis may affect the purchase intention (Kotler &

Armstrong, 2013).

2.3.5 Post purchase behavior

In the last stage the buyer may take additional action post- purchase depending on their level of

satisfaction or dissatisfaction. If the merchandise’s perceived performance meets the buyer’s

expectations, the buyer is satisfied (Kotler & Armstrong, 2013).

Figure 2: The Buyer Decision process

Source: (Kotler & Armstrong, 2013, p. 176)

2.4 Digital marketing from firm’s perspective

In parallel with this fundamental shift of consumer behavior due to the digitalization, a number of

changes concerning the way companies interact with their potential consumers have emerged. The

transformation of consumer behavior has noteworthy significances for organizations (Muntinga, et

al., 2011). This transformation poses noteworthy challenges for online retailers. Online providers

need to understand the shifting expectations of their stakeholders and have to figure out their

strategies taking into consideration the factors that lead to advance improvements and create

consumer trust (Kumar, et al., 2018).

A skeptical interpretation of those outcomes would support that businesses cannot sit on the side

lines. As a consequence, firms have responded to this quick transformation by boosting their digital

marketing channels (Stephen, 2016). The ‘Digital Age’ that began forces corporations to open their

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stores into cloud and web and present themselves in social media. This colossal transformation

prompts businesses to operate in a new environment which is called e-business using new features

such as e-signature, e-invoice, e-commerce and e-payments (Dirican, 2015). It is important to notice

that particular services appeared as a result of novel technologies. For example the entrance of

virtual reality software which permits the graphics to look like real places, leaded to the

advancement of the computer games software. Organizations in order to be innovative should be the

first to adopt new technologies (Urquhart, 2019).

The marketable use of the Internet and the World Wide Web changed business landscape. The

prominence of creating a digital connection with the customers is emphasized. Nowadays, value is

created in new ways through new customer experiences and through interactions with the

consumers (Kannan & Li, 2017).

The need of minimizing and optimizing the work processes, while on the other hand the amount of

information is rapidly increasing, led companies to analyze Big Data and use CRM systems. The

next new processes that are going to change the business environment are called Robotics and

Artificial Intelligence (Dirican, 2015). Companies can leverage various benefits by using artificial

intelligence techniques such as reaching their target groups with the use of predictive search,

personalized experiences and recommendation search (Lath, 2018). An example of a firm which has

implemented successfully these techniques is Amazon. Amazon focused on customer desires and

demands and used retail personalization by recommending products to stakeholders. These personal

recommendations are based on previous purchases or items that customers indicated they liked

(Amazon, 2019).

2.4 Marketing communications

Digitalization, consumer evolution (Kerr, et al., 2012), the appearance of new media (Chen, et al.,

2013) and the disintegration of traditional media and advertising (Kerr & Schultz, 2010) have been
20
shaping the shift in integrated marketing communications (IMC). As a consequence, the

prominence of changes in messaging and media that prompt to two-way communication is

highlighted (Kerr & Schultz, 2010). The Schramm Model of Communication outlines the main

components of communication between two individuals. It proposes that interpersonal

communication happens by the exchange of messages in a circular and reciprocal manner

(Schramm & Roberts, 1977).

Figure 3: Schramm communication model

Source: (Schramm & Roberts, 1977, p. 24)

Looking at marketing communications historically, the central issue addressed here is that in the

traditional model the communication is one-to-many and it is controlled by the company, while in

the new era of marketing, communication is interactive. Another important element to take into

consideration is that prior to the late 1980s, the promotion mix elements (such as advertising) were

accomplished distinctly and as a consequence they were not well-coordinated or integrated (Kitchen

& Burgmann, 2015).

According to recent reports, the central role of the customer in the innovative marketing

communications is underlined (Kerr, et al., 2012). This supports other researches which highlight

the active role of the multitaskers consumers in the new pull system of interactive marketing

21
communications (Pilotta, et al., 2004). An additional element to be considered is that customers are

more engaged in the marketing process (Gambetti & Graffinga, 2012) and they can use the

technology effectively to control the process, co- producing the goods and services and share

content related to the brand (Gensler, et al., 2013).

In this dualistic scenario, marketing norms and practices are influenced by the tectonic shift from

product-centred marketing to consumer-centred marketing. Due to the technological advancement,

the information can be transferred via various channels and media systems (Vernuccio & Ceccotti,

2015).Technology enables consumers to replace the former one-way communications and

communicate feedback via devices (Mulhern, 2009). So, the first and most important step to a

prosperous business strategy is to respond to the environmental changes and maintain long-term

relationships with the stakeholders (Kitchen & Burgmann, 2015).

2.5 Artificial intelligence

Rapid evolution of technology now exceeds more digital transformation and moves into even newer

techniques. More precisely, the next step of evolution is based on a more abundant use of Artificial

Intelligence across business. This transformation uses data of connected products by means of

intelligent algorithms. That could be hard to be handled by human intelligence (Lichtenthaler,

2018).

Artificial Intelligence has its origins in Greek mythology and other ancient cultures such as Egypt

and China (Nahodil & Vitku, 2013). The initial stages of contemporary AI can be found to classical

Greek philosophers’ endeavors to define human thinking as a symbolic system (Lewis, 2014). Rich

(1985) defined AI as the relating to science studies that computers are able to do, think, interact and

act in various areas of expertise as a human that individuals are good at (Rich, 1985).

22
Practitioners face the challenge of comprehending this colossal amount of data in order to realize

the significant decrease of operational costs as artificial intelligence techniques can predict future

events and help the company maintain customer satisfaction by offering targeted products. Many

large companies use Artificial intelligence such as Apple, General Electric and Bank of America

(Lichtenthaler, 2018). The earliest well-known AI technique is Apple’s Siri, a learning woman who

helps Apple iPhone users (Dirican, 2015).

Artificial Intelligence can offer genuine opportunities for moving progressing methods used by

companies to accomplish various issues in the marketing field (Martinez-Lopez & Casillas,

2013).The increasing adaption of machines that are automated to carry out various functions of

humans automatically (robots) are possible to change how value is co-created by the consumers

(Kaartemo & Helkkula, 2018). Chintagunta, Hanssens and Hauser(2016) agreed that machine

learning is able to develop marketing science as marketers can deliver new theories that assist

companies analyze the Big Data (Chintagunta, et al., 2016). Artificial intelligence enables the

resource integration between providers and consumers by learning customer needs and preferences

(Glushko & Nomorosa, 2013).

2.5.1 Public relations and Artificial Intelligence

Artificial Intelligence in public relation terms can be defined as technologies that demonstrate

humanoid intellectual capabilities and carry out humanoid functions in accomplishing activities,

separately or together with public relations practitioners (Galloway & Swiatek, 2018).Implications

of AI in the public relation context can be found in agencies that use AI techniques to monitor

social media and predict future media trends. Artificial intelligence- based tools such as Hootsuite

for social media analysis are some common tools employed by practitioners (Marx, 2018). Also,

firms are rapidly looking beyond Artificial Intelligence technologies and robotization for subscriber

analysis and storytelling (Sennaar, 2019).

23
2.5.2 Artificial intelligence in advertising
2.5.2.1 Definition of Advertising
Advertising is an important marketing channel which is conducted in an interactive way in order to

attract customers. Advertising refers to providing products, services or ideas by an advertising unit,

institution or individual that involves payment (Duffett, 2015). A number of researches have

reported that advertising effectiveness is associated with factors such as positive emotional

responses and positive evaluation of the brand image (Jalilvand & Samiei, 2012; Cervera-Taulet, et

al., 2013). Zenetti and Klapper (2016) highlighted that the effectiveness of an advertisement can be

varied for each consumer. So, companies need to know how advertising attracts their target

audiences’ attention in order to increase their mental activity and create a desire to purchase

(Zenetti & Klapper, 2016).

2.5.2.2 The AIDA model

In 1898 E. St. Elmo Lewis suggested a useful framework used for the measurement of Advertising

effectiveness called the AIDA model. The AIDA model involves the steps from advertising

exposure to purchase (Michaelson & Stacks, 2011). The first stage (attention) of an advertising

message is to attract consumers’ attention with various ways such as big titles, controversial

messages or shocking content. To create Interest advertising tone and message have to be suitable to

the experiences and attitudes of the target groups in order to create emotions. To prompt Desire,

practitioners need to know how their customers think in order to communicate well with them. In

the last step which is called Action, advertisers compel consumers to purchase the product (Sharifi,

et al., 2019).

24
 Figure 4: The AIDA model

Source: Principles and practice of marketing (Strong 1925 cited in Barry & Howard 1990)

2.5.3 Programmatic advertising (PA)

As the Internet became the desired channel of millions of people worldwide for daily tasks as well

as for purchases of products and services, organizations continually find methods to manage user’s

data and transmit information (Taddicken, 2013) in order to increase the efficiency of digital

marketing strategies and develop the programmatic advertising (Palos- Sanchez, et al., 2018).

Programmatic advertising (PA) is an innovative marketing technique used to the World Wide Web

and pioneering technologies (Leal-Rodriguez, et al., 2015). The algorithm behind Programmatic

Advertising examines real time data and allows advertising campaigns reveal the particular needs of

a user at the particular time at which they are most expected to buy a product or (Huang, 2018).

25
Web pages collect demographic, psychographic, geographical and interest data from their users

using cookies and collect information about previous navigation, most visited pages and search

history. Big Data and Artificial Intelligence help companies to select these data and improve their

PA targeting (Beerli-Palacio & Martin-Santana, 2017). According to this information the audience

for each advert is exactly defined and companies can offer personalized advertisements to their

target groups. Predictive models based on AI algorithms permit firms predict the users’ purposes

and help them know how close they are to buy their product (Ketelaar, et al., 2017).

2.5.4 Chatbot advertising and user experience

AI Chatbots can be located among the contemporary technological innovations for customer

communication (Letheren, 2017; Broeck, et al., 2019). The substantial developments in technology,

the widespread use of mobile devices and applications and the latest progresses in AI and machine

learning increased the interest in chatbots (Brandtzaeg & Folstad, 2017). The word ‘Chatbot’

consists the words ‘chat’ and ‘robot’ and is defined as a computer program which enact humanoid

language with the help of a text-based dialogue system. Chatbots encompass a text input and output

hide identity, which permits users connect with the software behind them and make an impression

of chatting with a real individual (Wang & Petrina, 2013). In these discussion-like interfaces which

are fed with natural language data, an intelligent system learns to propose responses automatically

to the stakeholders in a text format based on historical customer interaction (Riikkinen, et al., 2018).

Chatbots portray a possible shift in how individuals communicate with services online (Brandtzaeg

& Folstad, 2017). As since the introduction of smartphones and mobile applications chatbots are

mostly used for messenger apps rather than computer programs (AbuShawar & Atwell, 2015;

Letheren, 2017) , a closer look will be taken in the use of chatbots on social media.

Chatbots were presented to Facebook’s messenger app in 2016 and allowed companies to deliver

automated customer support, interactive personalized experiences and e-commerce guidance.

26
Facebook uses its own Artificial Intelligence in order sample conversations and learn how to create

analogous discussions on its own (Constine, 2016). Chatbots offer tailored consumer care

discussions, personalized information and suggestions (Zumstein & Hundertmark, 2017). Facebook

offers the opportunity for chatbots to send sponsored messages to users that formerly communicated

with an organization through a Chatbot or chat support (Facebook, 2019).

Figure 5: Chatbots on Facebook

Source: Facebook (2019)

According to recent reports, the strength of chatbots is based upon their ability to blur boundaries

between advertising and assistance (Letheren, 2017; Broeck, et al., 2019). An example that clearly

proves the effectiveness of Chatbots is when it offers relevant apparel options that are personalized

to the customers’ interests and previous buying behavior; users tend to feel more that they are

helped by the company rather than feel being merchandized (Broeck, et al., 2019).

27
2.5.4.3 Importance of quality of the chatbot service

The prominence of quality of the chatbots is underlined in the literature. Perceived usefulness and

perceived helpfulness were found to be two important indicators of perceived quality of the chatbot

service and affecting the attitudes towards them (Brandtzaeg & Folstad, 2017; Zarouali, et al.,

2018).

Perceived usefulness is a term related to the perceived likelihood that the chatbot service can

improve a job performance or a customer’s productivity (Davis, 1989). In addition, previous studies

revealed that perceived usefulness is a key element of attitudes towards a technology (Morgan-

Thomas & Veloutsou, 2013; Lee & Chang, 2011).

Perceived helpfulness is defined as the degree to which the responses of the chatbot service are

perceived as appropriate for undertaking the requirement for information (Johnson, et al., 2006).

The main motivation for using chatbots is the ability of obtaining help and information (Zarouali, et

al., 2018; Brandtzaeg & Folstad, 2017). Studies have shown that individuals appreciate it extremely

when AI services support them save time or access information (Brandtzaeg & Folstad, 2017).

2.5.4.2 Benefits of Chatbots

2.5.4.2.1 Companies
Changes on the communication: Thanks to chatbots companies use innovative ways to

communicate and interact with their stakeholders through one-to-one communication. One

important benefit of chatbots is that enable companies to communicate with their customers 24

hours a day, 7 days a week independent of opening and working hours. In fact, the changes of the

way in which companies inform, communicate and transact with their customers help them save

costs in customer services. Also, organizations do not miss stakeholders’ requests as there is not the

risk that they will not be reached of their customers outside their business hours (Zumstein &
28
Hundertmark, 2017). The use of natural language on these services in online interactions, make

customer service and automated marketing a promising business prospect (Brandtzaeg & Folstad,

2017).

Collection of user data: The use of chatbots leads to novel possibilities for providers as they

enable them to collect user and usage data. It is a well-known fact that people link their social

media profiles with their messenger profiles. So, companies gain knowledge about their customers’

preferences in a new way as they have access to user profiles, interests and responses. Moreover,

organizations can collect data during the dialog with users that can give them the ability to address

their customers’ needs in a professional manner by customizing and personalizing offers to their

target groups (Zumstein & Hundertmark, 2017). Furthermore, chatbots store preferences of each

individual based on their purchase history, their requests and other activities (Zumstein &

Hundertmark, 2017). In today’s world everyone wants products that are personalized for them and

their individual desires. Intelligence use of data and connected technology enables companies offer

extreme personalization. An example of a company that offers personalized products is the ‘nrml’

company in New York which makes personalized earphones based on just five photographs of

customer’s ear. Earphones are made on site and adapted by a 3D printer in order to fit perfectly

(Belleghem, 2016).

2.5.4.2.2 Customers
Customer service, information, entertainment, social and emotional support are some advantages

that customers can leverage when using chatbots. Customers may feel more efficient and natural

when communicating with chatbots than a mobile app. Chatbots aid as virtual assistants customers

as they can answer their questions, provide recommendations for future purchases and keep updated

the details of shipping (Brandtzaeg & Folstad, 2017).

29
2.5.4.2.3 Customer experience
In the previous decade, the focus of value creation has shifted from the scope of the organization

towards the consumers (Riikkinen, et al., 2018; Heinonen & Strandvik, 2015), as stakeholders

purchase products that support their own value creation (Humphreys & Grayson, 2008). This

fundamental change has various major implications for the ways in which organizations use their

possessions to attain a maintainable strategic advantage. Chatbots exemplify an effectual way to

support consumers’ value-creating processes, as they provide them value information that is based

on AI use of existing data. Businesses are able to collect information concerning their consumers’

behavior and then they can use this knowledge effectively in order to build customer loyalty

(Riikkinen, et al., 2018). With regards to the user experience, chatbots mimic an interpersonal

conversation with an extraordinary level of personalization both in the communication and in the

potential offers they can confer to users (Letheren, 2017). Moreover, chatbots improve online

customer experience through increasing the feeling of being served at the accurate time and the

perception of employee existence (Wang, et al., 2007).

2.5.4.3 Personality of chatbots

The personality of a chatbot refers to the character that the chatbot engine performs throughout

conversational interactions. In this extent, personality can be observed as a composite of the

background and the profile which are components of the identity a bot is endowed with, language

style that a representative expose during interactions and other explicit and implicit aspects that

depict character. Studies have shown that endowing a chatbot with an identity or personality is

critical to deliver more natural and realistic conversations (Qian, et al., 2017).

Horzyk, et al. (2009) introduced Human Personality Traits (HPT) model which describes particular

human reactions and actions dependent on their personality and figure out several needs linked with

a specific personality. Each HPT uses characteristic words and phrases. In addition, HPT can help

30
companies how to give answers to their customers and manage them individually in order to give

them more satisfaction when they interact with an intelligent chatbot system. The 11 human

personality types suggested by this psycholinguistic model are: dominating, maximalist, inspiring,

discovering, verifying, systematic, Assurant, harmonious, emphatic, task-oriented and balancing. As

it is presented in the Figure 6 below, the capability to identify HPTs and their needs as well permits

chatbots to use suitable algorithms to carry out negotiations, persuade customers, and reinforce

actions and reactions. The use of words and phrases aid the acknowledgment of the HPTs and

customers are treated in the appropriate way in order to trigger positive responses. In an e-

commerce system, the use of a chatbot engine is a prospect for a company to get know their

customers’ ways of thinking and this can be a probable gateway to innovative opportunities for

innovations in e-commerce (Horzyk, et al., 2009).

Figure 6: Chatbot engine recognizing a customer personality

Source: (Horzyk, et al., 2009)

In the same vein, other studies take user history into account in order to build chatbots with persona.

Persona is defined as the personality that an artificial agent, as actor, performs throughout

conversational interactions. In order to endow chatbot systems with persona, they learn their users’
31
personal characteristics (e.g. age, background, profile, speaking style etc.) from the user history

content in the dialog procedure. In the meantime, the model takes user’s characteristics into account

to produce appropriate human-like persona responses. This study introduces two persona-based

models. The Speaker model models the personality of the user and encodes specific user

information that influences the style and content of the responses. As long as speaker information is

encoded, the system is able to provide personalized responses to the user. A useful property of this

model is that enables the generalization of the speaker model, as the model learns speaker

representations based on dialogues produced by different users, as users who respond similarly tend

to have similar embedding. More precisely, even if the training data does not contain unambiguous

information about every attitude of each respondent, this model helps infer answers to questions.

The Speaker- Addressee model models the approach the user adapts their speech to a particular

addressee. Speaking style, content and register not only vary with the identity of the user but also

with that of the addressee. This model predicts how a specific speaker would respond to a message

produced by another speaker. The goal of these persona-based response models is to be able to

select information about the identity of the user which is not known in advance and generate

conversations that imitate that person’s persona in terms of linguistic reply behavior and other

characteristics (Li, et al., 2016).

2.6 Ethical issues around Artificial Intelligence

As the physicist Stephen Hawking said AI is ‘‘either the best, or the worst thing, ever happen to the

humanity’’ (Hern, 2016), ethical considerations around the applications of Artificial Intelligence are

mentioned below.

2.6.1 Job losses

The increasing adaption of Artificial Intelligence applications has led to some ethical issues. First of

all, there are fears about potential job losses, as machines tend to replace humans and automation

32
will eliminate a lot of occupations. Also, there is anxiety around a future in which individuals are

controlled by technologies supposedly keener than they are (Galloway & Swiatek, 2018).

2.6.2 The right to be forgotten

There is a legal background behind the privacy law concept of the ‘Right to be forgotten’ under

current E.U. privacy law. More precisely, the European Regulation 679/2016 on Data protection

conceptualizes the right of individuals to demand that their data that are collected by others can be

erased. The problem that arises with the applications of Artificial Intelligence is the potential

incorrect understanding of privacy regarding Artificial Intelligence. Individuals often view privacy

as hiding their personal information from others. As a consequence, when people make beforehand

public information private they suppose that others forget that information. Conversely, this does

not necessary happens to the Artificial Intelligence machine learning era (Villaronga, et al., 2018).

Authors predict that in the near future humanity will face an extensive range of dilemmas that

necessitate balancing social advances in the name of Artificial Intelligence and vital privacy rights.

As the European Union made a step in introducing the General Data Protection Regulation (GDPR),

legislated this question with rules that protect the consumers (Kaplan & Haenlein, 2019).

2.7 The impact of Artificial Intelligence in Consumer behavior

Any innovative system applied by businesses is beneficial only if customers accept it. To put it in

another way, stakeholders need to put buoyancy into the suggestions delivered by AI and the use of

consumers’ personal data (Kaplan & Haenlein, 2019). Service research suggests that customers

judge the value of a service based on the gap between their expectations and reality (Parasuraman,

et al., 1985). For example, the expectations created by advertising for applications like Amazon

Alexa, Google Home or Apple Siri infrequently match reality (Kaplan & Haenlein, 2019). In the

context of chatbots, it is critical to introduce the personal information of the user in order to build a

personalized chat engine that aims to improve user’s experience. For all the automated chatbots it is

33
important to deliver satisfying answers to the consumers and guarantee that the conversations with

them are going naturally and smoothly, which is necessary for maintaining user’s activity (Liu, et

al., 2018). Matsuyama, et al. (2015) added that a satisfying response of a chat-agent should be not

only relevant to the equivalent inquiry but also enjoyable and attractive for every person by

endeavoring to correspond to user’s preferences, personal style and interests.

2.8 Conceptual framework

The conceptual framework of this thesis is based on four elements: consumer affect and cognition,

consumer environment, consumer behavior and new marketing capabilities. All these variables

interact with each other and they shape the marketing strategy. In this reciprocal system, any of the

fundamentals can be either a cause or an effect of an alteration at any specific time. Marketing

strategies influence consumers but are also influenced by them.

This conceptual framework was adopted by the wheel of consumer analysis (Peter & Olson) and

edited in order to meet the changing expectations in consumer’s needs. The first variable is the

consumer affect and cognition consumers exhibit a mental and an emotional respond. Affect is

about their feelings about stimuli and cognition is about their thinking about a specific product.

(Peter & Olson, 2010).

Consumer behavior is affected by changes in consumer environment such as the emergence of new

technologies, the increased use of mobile devices and Internet and the economic development.

These external elements cause important changes in the consumer behavior as customers shift to an

online environment. At the same time, consumer environment is affected by the consumer behavior

as customers turn from offline to online. As a consequence there is a reciprocal effect between these

variables as the two evolve into a codependent relationship.

34
Shifts in the consumer environment and the changes in the consumer behavior enhance the

marketing capabilities with regards to the communication process. Businesses are forced to boost

their digital marketing channels which are essential for the implementation of IMC. E-commerce,

social media, real engagement and co-production became essential tasks within the general

umbrella of an organization’s marketing communications. While customer expectations change and

stakeholders need more personalized products in order to satisfy their needs and wants, the use of

Artificial Intelligence in the marketing field should not be considered as exclusive from digital

marketing applications. The interrelationships between these four elements are shown by narrows in

the figure below (Figure 7). The conceptual framework is developed in order to help organizations

meet the specific needs of their particular target groups by implementing the suitable marketing

strategy.

35
 Figure 7: Conceptual framework

Source: Author’s own adopted by Peter & Olson (2019)

36
3. Research Methodology

3.1 Introduction

This chapter will explore the selected research methods. Moreover, examining the advantages and

disadvantages of qualitative and quantitative research methods, ethical issues that might be

encountered during the primary research will be covered.

3.2 The research ‘onion’

The research ‘onion’ diagram portrays the issues involved in the selection of data collection

techniques and analysis. Figure 8 shows significant outer layers of the ‘onion’ that need to be

explained and understood in contrast to peel and throw away. This approach suggests an efficient

structure for the research by starting from the most general (outer layers) to the most specific (inner

layers) aspects of the research (Saunders, et al., 2016).

Figure 8: The research ‘onion’

Source: (Saunders, et al.,2016, p.124)

37
3.2.1 Research Philosophy

A system of beliefs and assumptions regarding to the expansion of knowledge is named ‘research

philosophy’. Answering a particular problem in a specific organization is considered as knowledge

development as well (Saunders, et al., 2016).

The research philosophy that was used to articulate this research is interpretivism. Intepretivism

highlights that people are different from physical phenomena for the reason that they create

meanings. As a consequence, social sciences research differs from natural sciences research.

Interpretivists explore these meanings. Humans from different cultural backgrounds, under

dissimilar circumstances and at different time horizons create different social realities and make

different meanings. Interptetivists believe that rich insights into people are lost when trying to

create universal ‘laws’ generalized to everybody (Saunders, et al., 2016). This method was chosen

because; interpretivism creates new, deeper understandings and interpretations of social contexts

(Saunders, et al., 2016). Interptetivism perspective is extremely suitable to business and

management research, particularly in some fields including marketing. The choice of this approach

was reinforced by the fact that in order to conduct the investigation, an empathetic viewpoint is

adopted that encompasses the social world of the research subjects in order to comprehend

humanity of their point of view (Saunders, et al., 2007).

3.2.2 Approach to theory development

Saunders et al. (2016) identified three types of theory development: the deductive, the inductive and

the abductive approaches. In research for new topics with little existing literature, the inductive

approach is more appropriate. The inductive approach generates and analyses data and reflects upon

what theoretical themes the data are proposing. The outcome of this analysis will be the invention

of the theory, often articulated as a conceptual framework. Since the research during this study has

been articulated around consumers, it is critical to develop an understanding of the way in which

38
costumers interpreted their social world. The inductive approach enables the researcher to develop

an understanding of people (Saunders, et al., 2016). For this reason, the inductive approach is used

in order to develop an innovative pace in the area of study using 1-1 interviews. As AI is an

emerging area that has rapidly developed the last years it is important to understand the way that

consumers’ think around this topic.

3.2.3 Methodological choice

The first step in the methodological choice is to choose if the research will be based on qualitative,

quantitative, multi-method or mixed methods research design (Figure 9). In order to achieve

coherence in the research design, there is a different mix of elements for each of these options. Each

research design leads to ethical issues which may be taken into consideration to minimize or

vanquish them (Saunders, et al., 2016).

Figure 9: Research methods

Source: (Saunders, et al., 2016, p. 167)

Mixed-methods research was selected for this study which combines the use of qualitative and

quantitative data. The methods that qualitative and quantitative research can be combined as well as

the way to which this may happen have headed to the creation of different approaches of mixed-

methods research (Saunders, et al., 2016). In this thesis, a concurrent mixed method is used to

39
collect separately qualitative and quantitative data in the same phase (single phase research design).

A concurrent triangulation design is used to associate how these data support one another. The

reason of this choice is to collect data in a shorter timescale (Saunders, et al., 2016).

3.2.3.1 Triangulation
The concept of triangulation is broadly defined by Denzin (1970) as the combination of several

research methods in order to study the same phenomenon (Denzin, 1970, p. 301). The assumption

that weaknesses inherent in a particular approach will be offset via strengths in another is an

important reason of using complementary methods (Jack & Raturi, 2006).

Taking into consideration that a combination of qualitative and quantitative research methods

complements each other providing detail and richness that would be unattainable from the use of

one method alone (Jack & Raturi, 2006), in this thesis the researcher will combine qualitative and

quantitative research methods. In this dissertation the researcher will answer the research questions

by quantitative methods using questionnaires. Qualitative investigation using interviews will help

the author to organize the selected quantitative data and achieve a deeper understanding regarding

consumer’s attitudes. Also, it will improve the ability of the author to draw conclusions and

generalize the findings from the survey conducted on a sample population to the population at large.

3.2.4 Strategy

There are several research strategies suggested in order to conduct a research. More specifically,

these strategies are: experiment, survey, archival research, case study, ethnography, action research,

grounded theory and narrative inquiry (Saunders, et al., 2016). For the purpose of this thesis survey

is used as research strategy. The survey is a popular strategy in business and management research

(Saunders, et al., 2016). Moreover, this survey uses questionnaires that permit the collection of a

large volume of data in a cost-effective way and structured interviews.

40
3.2.5 Time horizon

Saunders et al. (2016) distinguished two categories of time horizons which are cross-sectional

studies that can be taken at a particular time and longitudinal studies that are used for the

representation of events over a given period in order to study change and development (Saunders, et

al., 2016). Due to the reason that this research has to be taken in a very short time period, the

method that is applicable to the study is the cross-sectional. This thesis focuses on the impact of

chatbots in marketing in a particular time and the aim of the research is to discover what is going on

this research area at a particular moment.

3.2.6 Techniques and procedures

3.2.6.1 Structure of the questionnaire and the interview

The purpose of this study is to find out if the use of AI techniques and especially the use of chatbots

affect the consumer buying behavior creating a desire to purchase. Since the purpose of this study is

to find out how chatbots influence the consumer’s purchase decision-making process, 6 sections

composed the questionnaire. To begin with, the first section of the questionnaire contains the

introductory questions to collect demographical data of the respondents and general data regarding

the use of AI and chatbots in consumer behavior. The second section is dedicated to the

problem/need recognition stage of the purchase decision making process in order to examine if

chatbots trigger needs via external stimuli and more specifically with advertising. The following

sections will collect information about the affection of the use of chatbots to the other stages of the

purchase decision making model which are: information search, evaluation of alternatives,

purchase-decision and post-purchase behavior. In order to avoid confusion, the structure of the

questionnaire will not be visible to the respondents and will be used only in the analysis of the data.

The questionnaire is estimated to be responded in approximately 10 minutes. Finally, it counts 23

questions.

41
The qualitative research is conducted with 1-1 interview with a marketing manager. The aim of this

interview is to understand deeply the use of chatbots as an aspect of a company’s marketing

strategy. The questions are focused around the influence of the use of chatbots in customer

experience, customer engagement, personalization, collect information and buying process. The

interview is estimated to last approximately 15 minutes.

3.2.6.2 Population and sample of the quantitative research

Due to the time and budget constraints, the data collection was restricted. The survey was

administrated through Social media (Facebook, Linkedin) and e-mails. For the sampling technique,

111 participants answered the questionnaire. The majority of the respondents of the questionnaire

were students, because the access to this network was easier and faster. So this sample is a non-

representative subset for a larger population.

3.2.6.3 Data collection

3.2.6.1.1 Secondary data collection

For the purpose of this study the author conducted both a secondary and a primary data research.

The definition of secondary data suggested by Hewson (2016) emphasizes the usefulness for

reconnoitering novel research questions. More precisely, as Hewson (2016) said, secondary data are

data which are used for the further analysis of a current dataset. They are collected aiming to

address a research question different from that which the dataset was initially accumulated in order

to generate new interpretations and conclusions (Smith, 2008, p. 3). However, other definitions

seem to disregard the possibility of secondary data analysis in analyzing again existing data with

new approaches. Glass (1976) held the view that second-hand data analysis is the reanalysis of

existing data aiming to answer the original research questions using enhanced statistical techniques

(Smith, 2008, p. 4). The main advantage of selecting secondary data is that a great secondary data

search is generally representative of a broader population and usually covers an extensive sample of

42
people or other entities such as schools and hospitals (Vartanian, 2011, p. 13). For the purpose of

this study secondary data were used in order to investigate in-depth the research topic. Secondary

data used include resources such as websites, marketing publications and blogs. The purpose of the

secondary research is to broaden the knowledge background regarding the role of Artificial

Intelligence techniques in the marketing communications taking into consideration the previous

literature which includes books and journal articles.

3.2.6.1.2 Primary data collection

Kiecolt and Nathan (1985) highlighted the difference between the secondary and primary data

research. The application of analytical techniques to data that have been collected by others is

required for the secondary analysis. On the other hand, primary research requires both data

collection and analysis (Smith, 2008, p. 4). While secondary data introduce numerous opportunities

for researchers, one of the problems of using them is that some questions important for your study

are not encompassed in the data (Vartanian, 2011, p. 15). For this reason, in this research primary

data will be used as well in order to investigate the exact research questions being posed by the

researcher and to get broader conceptualizations of the use of chatbots in marketing

communications. As mentioned, in this dissertation, primary data will be gathered through

questionnaires and 1-1 interviews.

The questionnaire was spread online through social media and e-mails. The link to the questionnaire

was posted on social media especially on Facebook and Linkedin and people answered it and shared

it with their social networks. Furthermore, personal e-mails were sent to people in order to achieve a

high volume of data. By means of these techniques of administration, it was able to collect a great

amount of data in a short period of time and in a cost-effective way.

Data collection has started on the 10th of August and has finished on the 27 th of August 2019. For

the construction of the questionnaire the function ‘forms’ available on Google Docs was used. The

43
main reasons of choosing this software are that is free and also there are no restrictions on the

number of questions and potential answers.

For the purpose of this study, one structured interview with a marketing specialist was conducted.

This interview was face-to-face and the selection of the interviewee was based on the special

interest of the interviewee in AI techniques. This interview has been recorded and the transcript of

the records is presented on a word document.

3.2.6.4 Data analysis

The examination of the quantitative data was conducted using the Google Docs. After the

conduction of the questionnaire and the collection of the data, analysis graphs tools are offered by

Google. So, the graphic representations were composed via Google Docs. Concerning the analysis

of the qualitative data, the questions of the interview were structured into categories in order to

accomplish an effective analysis and answer the research questions by listening the recorder

interview and focus on the most important aspects.

3.3 Limitations

The main limitation that has emerged through this research is the lack of access to a comprehensive

range of scientific literature regarding the applications of AI in the marketing field. Prior studies

related to the topic which can provide the theoretical foundations for the research questions were

limited. Moreover, many concerns will be emerged regarding the sample bias on the quantitative

research. Using mostly student sampling due to the easy access and low costs for data collection

could appear some limitations as the dissertation is comprised of people with various profiles. In

addition, due to time constraints in accomplishing the outcomes of this project did not allow the

examination of a larger sample size. As a consequence, the used sample may is insufficient for

statistical measurement and the results may are not representative of a larger population.

44
3.4 Ethical considerations

In this research endeavor the author took into consideration the appropriate values and ethical issues

while conducting the research. This research was conducted respecting the anonymity and

confidentiality of the participants in the primary research ensuring that the researcher will refrain

from referring their names and any other information around them. The provision of comprehensive

anonymity and confidentiality of data minimizes social desirability pressures and facilitates

collection of more accurate data as there is evidence of increased honesty (Lelkes, et al., 2012).

Also, all the participants contributed in the accomplishment of the study voluntarily. Ethical issues

regarding the advocacy and safety of the participants were taken into consideration.

4. Data Analysis and Findings

4.1 Introduction

This chapter is devoted to the presentation of the primary research findings coming from the

questionnaire and the structured interview. This chapter will present the findings without trying to

draw any conclusions. To begin with, the results from the quantitative research will be presented

and secondly a thematic analysis of the qualitative research will be exposed.

4.2 Results from the quantitative analysis

4.2.1 Description of the sample- Demographics

This research analyzes a subset of people (N=111) who have used chatbots at least once. Table 1

shows the demographic characteristics of the sample used in this research. More specifically, the

demographic characteristics are the gender, the age and the level of education of the people who

took part in this survey. People from different age groups participated in this survey, but there was

almost an equal participation of women and men (50.5 % versus 46.8%). The demographics which

45
are based on the responses of 111 participants show that the average age of people is between 22-29

years old. With regards to the level of education, the biggest percentage of the participants in this

study have a master’s degree (47 people), following by the people who have a bachelor’s degree (37

people).

Table 1 : Demographic characteristics of the research sample

VARIABLES N %

Gender Male 52 46.8

Female 56 50.5
Prefer not to say 3 2.7
Other 0 0
Age 18-21 3 2.7
22-25 46 41.4
26-29 42 37.8
30-34 14 12.6
35+ 6 5.4
Level of education Primary education 3 2.7
High school graduate 19 17.1
Bachelor’s degree 37 33.3
Master’s degree 47 42.3
Doctorate 3 2.7
Other 2 1.8
Source: own research, N=111

46
4.2.2 Introductory questions

4.2.2.1 Frequency of usage of electronic or mobile devices in order to purchase products

As presented in the figure 10 below, 44.1% of participants use electronic or mobile devices in order

to purchase products on a monthly basis, 27.9% of them on a weekly basis and 25.2% of them less

than a weekly basis.

Figure 10: How often do you use electronic or mobile devices in order to purchase products?

Source: Own research

4.2.2.2 Concept of AI
As seen in Figure 11 below, the highest percentage of the participants (66.7%) is aware of the

concept of AI. Only 15.3% of the participants are not familiar with that concept.

Figure 11: Are you familiar with the concept of AI?

Source: Own research

47
4.2.3 Main reason of using chatbots

As presented in the Figure 12 below, people use chatbots for different reasons. The most significant

reasons are to get a quick answer (36%) and to resolve a problem fast (30.6%).

Figure 12: Which is the main reason of using chatbots?

Source: own research

4.2.4 Benefits via a chatbot communication

As presented in the Figure 13 below, there are several benefits people expect to enjoy via a chatbot

communication. Indeed, 52.3% of customers expect 24 hour service using chatbots, 47.7% of them

expect to get an instant response, 27.9% want their complaints to be resolved quickly, 24.3% expect

to enjoy a good customer experience, 22.5% expect friendliness and approachability, while 21.6%

of people expect the convenience ease of communication.

48
 Figure 13: Which benefits would you expect to enjoy via a chatbot communication?

Convenience ease of
communication

Source: own research

4.2.5 Reasons to stop using chatbots

As seen in the Figure 14 below, the highest percentage of the consumers (60.9%) would stop using

a chatbot service if the chatbot could not understand them. Also, 31.8% of people agreed that they

would prefer to communicate with a real-time assistant. Moreover, 29.1% of the participant would

stop the chatbot communication if it was not in a friendly manner. In contrast, the preference to use

a website or an application is the least mentioned reason to stop using chatbots by consumers.

49
 Figure 14: What would stop you from using a chatbot service?

Source: own research

4.2.6 Personal Data

As seen in the Figure 15, almost half of the participants are willing to hand over personal data

(48.6%). In contrast, a significant percentage of people (27%) are not willing to reveal their

personal data, while 24.3% neither agree nor disagree.

Figure 15: Are you willing to hand over personal data in return for more relevant offers and

product information?

Source: Own research

50
4.2.7 Decision- making model

The aim of this part of the questionnaire is to examine the effects of chatbots in each stage of the

decision-making model.

4.2.7.1 Problem-need recognition

As presented in the Figure 16 below, 44.1% of consumers are more willing to buy a product if a

chatbot sends personalized notifications and advertisements. In contrast, 29.7% of them are not

willing, while 26.1% neither agree nor disagree that they are willing to buy this product.

Figure 16: Are you more willing to buy a product if a chatbot sends you personalized notifications

and advertisements?

Source: own research

As seen in the Figure 17 below, 59.5% of people would feel excited if a chatbot can help them solve

a problem or cover a particular need via a messaging app, while 6.3% of people would feel scared.

24.3% of participants stated that they would feel a bit of both.

51
Figure 17: How would you feel if a chatbot can help you solve a problem or cover a particular need

via a messaging app?

Source: own research

As presented in the Figure 18 below, an important percentage of participants (47.3%) said that if

they receive a message from a chatbot that directly related to their interests, that creates a desire to

purchase. In contrast, 21.8% stated that this does not create a desire to purchase, while 30.9% said

that maybe.

Figure 18: You receive a message from a chatbot that directly relates to your interests. Does that

create a desire to purchase?

Source: own research

4.2.7.2 Information search

Figure 19 depicts the answers of the respondents about if they think that chatbots help the faster

implication of purchases, with 67.6% of the respondents to agree with that. After that it follows the
52
neutral opinion with 23.4% of the respondents. Finally, 9% of the participants disagree with this

statement.

Figure 19: Do you think that chatbots help the faster implication of purchases?

Source: own research

Figure 20 depicts that 64% of the consumers think that chatbots help them find products tailored for

them. After this, 22.5% of people have neutral opinion, while 13.5% disagree.

Figure 20: Do you think that chatbots can help you find products tailored for you?

Source: own research

From Figure 21 it is easy to understand that the majority of the consumers (65.8%) they would buy

products more often if they could find products more easily which cover their needs and wants. In

contrast, 27% of the respondents held the opposite point of view.

53
Figure 21: If you could find products more easily which cover your needs and wants, would you

buy more often?

Source: own research

4.2.7.3 Evaluation of alternatives

As seen in the Figure 22 below, 64.5% of the participants are more willing to buy a product when a

chatbot provides them information about different products and their potential differences. The

neutral opinion follows with 24.5% of the respondents. Finally, the lowest percentage of the people

(10.9%) answered negative to that question.

Figure 22: Are you more willing to buy a product when a chatbot provides you information about

different products and their potential differences?

Source: own research

4.2.7.4 Purchase- decision

Figure 23 presents the willingness of people to buy products from a firm which has adopted new

technologies such as chatbots. The percentage of the positive opinions (61.8%) is huge comparing

54
with consumers with negative opinions (9.1%). Additionally, 29.1% of the respondents have neutral

opinion.

Figure 23: Are you more willing to buy products from a firm which has adopted new technologies

such as chatbots?

Source: own research

From Figure 24 it is easy to see that the majority of the participants (69.4%) agree that the adoption

of new technologies such as chatbots is changing online customer experience for better. The 9% of

the consumers disagree with this, while 21.6% have neutral opinion.

Figure 24: Do you think that the adoption of new technologies such as chatbots is changing online

customer experience for better?

Source: own research

As presented in the Figure 25 below, the largest group of the participants (63.1%) are more willing

to engage with a brand with a chatbot engine, if it gives them more intelligent and surprising

55
answers, while only 9% of people disagree with that. Moreover, 27.9% of consumers have neutral

opinion.

Figure 25: Are you more willing to engage with a brand with a chatbot engine, if it gives you more

intelligent and surprising answers?

Source: own research

Based on Figure 26, it is important to notice that the majority of people (71.2%) believe that when a

chatbot adopts a character which exhibits more human traits and drive experience creates better

engagement. In contrast, 9% of people disagree with that, while 19,8% of them neither agree nor

disagree.

Figure 26: A chatbot adopts a character which exhibits more human traits and drives experience.

Does that help in better engagement?

Source: own research

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As presented in the Figure 27 below, a significant percentage of the respondents (62.2%) think that

chatbots offer a more personalized experience, while 20.7% do not believe that. Additionally, 17.1

% chose the neutral response.

Figure 27: Do you think that chatbots offer a more personalized experience?

Source: own research

As seen in the Figure 28 below, when people asked if they are more willing to respond positively to

a personalized offer based on their interests and preferences, 72.7% responded positively. In

contrast, 20.9% of people are not willing to respond positively to a personalized offer.

Figure 28: Are you more willing to respond positively to a personalized offer based on your

interests and preferences?

Source: own research

57
4.2.7.5 Post- purchase behavior

Figure 29 below depicts the willingness of the consumers to repeat their purchases from a company

which sends them order updates like shipping and tracking via a chatbot service. 65.8% of the

respondents agree with this statement, 21.6% have neutral opinion and 12.6% of them disagree.

Figure 29: Are you more willing to repeat your purchases from a company which sends you order

updates like shipping and tracking via a chatbot service?

Source: own research

4.3 Results from the qualitative analysis

4.3.1 Advantages and disadvantages of the adoption of chatbots as an aspect of a marketing

strategy.

The interview with a marketing specialist indicated the most noteworthy advantages and

weaknesses of using chatbots in marketing communications. The main advantage of the adoption of

chatbots as an aspect of a marketing strategy is that they provide a rapid service as they respond

quickly to the user’s demand. This is in the same line with the results of the quantitative research as

the majority of the participants said that the main motivation of using chatbots is to get a quick

answer. Moreover, another important advantage is the 24-7 availability. Also, the development of

chatbots has really low cost of maintain customer service.

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On contrary, an important disadvantage of chatbots is that they can cause frustration in users if they

feel that the chatbot does not understand their question or it gives them wrong answers. The

interviewee stated that this can lead consumers not to use this kind of communication again. In the

same way, quantitative research revealed that the main reason of stopping consumers use a chatbot

service is if the chatbot could not understand them. The marketing specialist believes that a proper

design of the chatbot is a key to limit all the disadvantages.

4.3.2 Key success factors of online marketing communications in context of chatbots

Chatbots can be a great tool for online marketing communications if they are simple to use and the

communication is in a natural an unforced way. Also, the interview indicated that the key success

factor is to build sustainability with the consumers and brand loyalty. Constantinos Toussas,

marketing specialist at SAM 013, gave an example of using chatbots in an effective way. As he

said, if chatbots ask the date of birth of the consumers rather than the age, they can save this

demographical factor in order to provide personalized information throughout the years. As the age

is a variable which is changing throughout the years, when a company wants to save this costumer

information over the years by asking the date of birth they can calculate the specific age of their

consumers whenever they want to use this information for their marketing strategy.

4.3.3 Chatbots to engage with consumers and build brand loyalty

Companies have to leverage the benefits of the chatbot communications in order to boost consumer

engagement and build brand loyalty. The chatbot communication is more personalized and direct

than ever before. This can increase the connection with the brand as it is easier and faster for the

consumer to engage with the brand.

4.3.4 Chatbots to provide a personalized experience and build brand loyalty

The interviewee pointed out that chatbots which provide personalized experience can create brand

loyalty. One reason is that consumers can find information and products easier. This leads to brand
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loyalty and enhances the consumer experience. Also, he added that a chatbot service could be really

effective in industries that offer a wide variety of products. For example, in the kid’s apparel

industry that he works, they offer products for children to 1 until 13 years old. The target groups are

from different ages and the product mix is wide. The marketing manager stated that in this industry

in which the customer is different than the consumer, companies should mainly communicate with

the parents and not with the children. As he concluded, providing personalized experience in their

marketing communications is a key element in order to create brand loyalty.

The fundamental role of the personalization in increasing sales was highlighted by the interviewee.

Companies have to target specific needs in order to create a desire to purchase. Also, he stated that

when a chatbot can predict a particular need, it is easier to persuade a customer to buy a product. By

creating a need or reminding a customer that has a particular need is a smart way to create a

communication via a chatbot.

4.3.5 Chatbots which exhibit human traits and consumer experience

The interview indicated that it is paramount for companies to categorize their target groups

depending on their personal characteristics in order to use suitable approaches in their chatbot

services. Each customer has a different character and firms need to find ways to categorize the

common psychological characteristics of their target groups. Companies which adopt this strategy

can create a more positive consumer experience.

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5. Discussion

5.1 Introduction

This chapter estimates and examines the collected data from the literature review, the secondary and

primary research as deliberated in chapter 2 and 4. The findings will be discussed according to the

research questions mentioned in the chapter 1, concerning the impact of the chatbots in the

decision-making process. To facilitate the research regarding the chatbots and their role in each

stage of the decision-making model the impact of chatbots on each stage will be examined.

5.2 Chatbots as an influencer of decision-making process

5.2.1 RQ1: What is the effect of chatbots on pre-purchase consumer behavior?

The results revealed that chatbots are an effective marketing tool which can influence pre-purchase

consumer behavior. The pre-purchase stage includes the problem-need recognition stage, the

information search and the evaluation of the alternatives. The impact of chatbots in each stage will

be presented.

5.2.1.1 Problem- need recognition

At the problem-need recognition stage, the study revealed that chatbots appeared to be really

significant in influencing consumers. In this stage that the consumer cultivates a need or a want that

they want to be satisfied, personalized notifications and advertisements affect consumers’ likability

to buy a product. So, the determination of when the target groups develop these wants and needs

would help marketers find the ideal time to send them personalized advertisements and create a

desire to purchase. As mentioned in the Chapter 2 before, firms can leverage significant advantages

by using AI techniques, such as reaching their target groups and providing personalized experiences

(Lath, 2018).

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Moreover during the primary research it was noted that most of the customers would feel excited if

a chatbot can help them solve a problem or cover a particular need via a messaging app. This survey

revealed that solving a problem and covering a need is an important aspect at the problem-need

recognition stage during a chatbot service. AI-based models can collect demographic,

psychographic, geographical and interest data and improve their targeting (Beerli-Palacio & Martin-

Santana, 2017). Ketelaar,et al., (2017) confirmed that companies can use these data and they can

offer personalized and targeted advertisements.

It is important to notice that the problem- need recognition stage is reinforced by the fact that a

chatbot sends messaged that directly relate consumers’ interests. This fact creates a desire to

purchase to the highest percentage of the customers. As working with AI is no longer science

fiction but a reality, marketing professionals should monitor progress of the field; advertising and

marketing should be individualized. Chatbots can leverage the benefits of the Big Data by placing

eye-tracking, personalized, creative and innovative advertisements to their target audience in order

to recognize a problem or a need. Developing and applying intelligence systems that provide

valuable information can affect consumers in the first stage of the decision-making process.

5.2.1.2 Information search

At the information search stage, the survey revealed that consumers appeared to be really

influenced by a chatbot service. More precisely, the findings revealed that chatbots help the faster

implication of purchases and they can help customers find products tailored for them. This confirms

previous surveys about the main motivation of people for using chatbots. More precisely,

consumers appreciate it greatly when chatbots help them save time or make it easier to access

information (Brandtzaeg & Folstad, 2017). In accordance to this, the primary data from the

quantitative analysis exposed that 47.7% of people use chatbots in order to get a quick answer.

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When customers feel that they are helped by highly-relevant recommendations in their interests are

more willing to buy the company’s products or services. As it was mentioned in the literature, the

strength of chatbots is focused upon blurring the boundaries between advertising and assistance

(Letheren, 2017; Broeck, et al., 2019).

Putting all puzzles together, when customers have the possibility to find products which cover their

wants and needs, customers would buy products more often. In this stage, chatbots can assist

customers solve a particular problem and make the correct purchase decision. The survey revealed

that chatbots which provide targeted recommendations related to the needs and wants of the

customers create a desire to purchase.

5.2.1.3 Evaluation of alternatives

In the evaluation of alternatives stage, it is noticed that consumers are more willing to buy a product

when a chatbot provides information about different products and their potential differences.

Chatbots can help customers find out what would satisfy them more, comparing the different

alternatives, and help them make the best deal. This study find out that 64.5% of the consumers take

advantage of the information provided by chatbots that help them compare products and services.

5.2.2 RQ2: How do chatbots facilitate purchase?

5.2.2.1 Purchase-decision stage

Since the central part of this thesis is to examine if the adoption of chatbots influence the consumer

decision making, the factors that appeared to be really important in order to influence a customer

purchase a product will be mentioned below. To begin with, the study indicated that 61.8% of the

respondents are more willing to buy products from a firm which has adopted new technologies such

as chatbots. The data reported here appear to support the assumption that the evolution of

technology has changed the consumers’ decision-making process as consumers cover their needs

and wants with the support of the digital technology (Todor, 2016). Taken together, these results

63
suggest that a key element for businesses is to have the knowledge about how their target groups

behave and how they expect companies to interact with them (Belleghem, 2016).

As for the purchase-decision stage, it has been examined from various angles. There is evidence

that the personalized experience, the real engagement and the online costumer experience have a

positive effect in the purchase- decision stage. In this stage customers select what they will purchase

and where. This study revealed that these factors appeared to play a noteworthy role in the mind of

consumers when they have to decide whether they will buy a product or not.

5.2.2.2 Personalization
The primary research revealed that customers who enjoy a personalized experience are more likely

to be willing to purchase a product or a service. Marketers can leverage Big Data to craft

personalized messages for their target audiences. These findings confirm literature on the

importance of personalization in marketing communications. As Belleghem (2016) pointed out, in

today’s world people want products tailored for them and the use of AI enables companies to offer

extreme personalization. Personalized message acceptance specifies that the effectiveness of a

chatbot service is fundamentally reliant on the targeted and personalized communication. The

quantitative data analysis revealed that 62.2% of the consumers think that chatbots offer a more

personalized experience. Moreover 72.7% of the respondents are more willing to respond positively

to a personalized offer based on their interests and preferences. This comes in line with the

literature which revealed that AI-based models permit companies predict users’ intentions and they

can offer personalized information to their target groups (Ketelaar, et al., 2017).

5.2.2.3 Engagement
The significance of changes in messaging and marketing communications that prompt to two-way

communication marketing models was highlighted in the literature (Kerr & Schultz, 2010). This

survey revealed that chatbot communication is more personalized and direct than ever before. As a

consequence, customers can engage easier and faster with brands. This comes in line with previous
64
literature which underlined that customers are able to use the technology effectively, co-produce

products and services and share brand-related content (Gensler, et al., 2013). This is a very

significant element as the important role of the customer in the new era of marketing

communications is highlighted (Kerr, et al., 2012). Consumer engagement increases the connection

with the brand and builds brand loyalty which is very important element for a company’s

sustainability. For the comparison, consumer engagement is the love at the first sight and brand

loyalty is the relationship. As it was highlighted in the literature, it is very important to create a

digital relationship with the customers. Nowadays, value is created in new ways through

interactions with the consumers and new customer experiences (Kannan & Li, 2017).

A quite interesting element is that the data revealed that consumers are actively engaged with the

brand when a chatbot engine gives them more intelligent and surprising answers. Chatbots give the

impression to customers that they interact with a real individual (Wang & Petrina, 2013). So,

another important thing is that 71.2% of the respondents think that when a chatbot exhibits more

human traits and drives experience, this helps in better engagement. This confirms the author’s

predictions based on previous literature which highlights the importance of endowing a chatbot with

a personality to deliver realistic conversations (Qian, et al., 2017). After the examination of the

findings a central issue addressed here is that companies need to categorize their stakeholders

regarding their personal characteristics in order to use a suitable approach during the chatbot

service. An important model based on human interactions dependent on the personality of the

consumer, was proposed by Horzyk,et al. (2009). With the implementation of this model,

companies could manage their customers individually and give them more satisfaction.

5.2.2.4 Customer experience

The present study advocates that the adoption of new technologies such as chatbots is changing the

customer experience for better. This confirms the literature in terms of the enhanced customer

65
experience provided by chatbots when they create an interpersonal conversation with a high degree

of personalization (Riikkinen, et al., 2018). It is critical for companies to build a personalized

engine aiming to improve customer’s experience and deliver satisfying answers (Liu, et al., 2018).

Furthermore, the data revealed that the main reason of stopping use chatbots is if the chatbot does

not understand the consumer’s queries. This comes to a symphony with other studies based on

customer experience that supported that a satisfying response from a chabot engine should be

relevant to the consumer’s query but also enjoyable for each person by trying to match user’s

personal style and interests (Matsuyama, et al., 2015). Online retailers need to be aware of the

changing expectations of their customers ad figure out their marketing strategies (Kumar, et al.,

2018).

5.2.3 RQ3: How do chatbots offer superior customer service post-purchase?

5.2.3.1 Post-purchase stage

This study showed that in the post-purchase decision stage, chatbots have a very strong influence on

the consumers. More precisely, 65.8% of the participants on this survey are more willing to repeat

their purchases from a company which sends them order updates like shipping and tracking via a

chatbot service. Chatbots are an effective tool to promote loyalty and advocacy post-purchase. As

the marketing manager pointed out, chatbots can engage with consumers and increase the

connection with the brand. This can create brand loyalty and enhance the consumer experience.

This last stage is very significant because if the customer is satisfied they may take further action

after the purchase. Consumer’s satisfaction depends on the perceived performance of the product. If

the perceived performance meets consumer’s expectation, the buyer is satisfied (Kotler &

Armstrong, 2013).

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5.3 Additional findings

Further investigation of the primary data that goes beyond the research question revealed that there

is an important growth of internet based purchases. The data revealed that 44.1% of the consumers

use electronic or mobile devices in order to purchase products on a monthly basis and 27.9% of

them use them on a weekly basis. This confirms the previous literature in terms of digitalization

which changed the consumers’ decision making process and led companies to adopt digital

technologies in order to cover the needs and wants of their stakeholders (Todor, 2016).

In the quantitative research, consumers were asked if they are willing to hand over personal data in

return for more relevant offers and product information. The study revealed that 27% of the

participants are not willing to hand over personal data, while 24.3% of them have the do not know if

they are willing or not. This can be explained by the fact that there is an inaccurate understanding of

privacy in relation to Artificial Intelligence (Villaronga, et al., 2018).

Moreover, when companies adopt chatbots in their digital marketing strategies need to know the

benefits that customers expect to enjoy via a chatbot communication. This analysis pointed out that

the majority of the consumers expect to enjoy 24 hour service and get an instant response.

5.4 Recommendations: 8- Step digital marketing via chatbots success framework

A proposed framework in accordance with the collected data from the secondary and the primary

research regarding the impact of chatbots in the decision-making process will be developed. The

framework displays the process following 8 steps for a successful digital marketing strategy via

chatbots implementation. Moreover, suggested actions will be mentioned for implementing the

proposed framework. This framework can act as a roadmap that can help businesses their digital

marketing objectives by gaining an insight to the consumer behavior and the changes of the

environment. This framework will help businesses respond with digital initiatives to the new

67
business landscape. Companies need to have a deep understanding of each step in order to move

successfully to the next one. That is why there is an order of execution of the proposed steps.

Figure 30: The proposed framework regarding the successful use of chatbots in a digital marketing

strategy

Understanding the consumer insight

1

Understanding the consumer decision-making process

2

Brand awareness
3

Personalization
4

Customer experience
5

Engagement
6

Implement
7

Advocacy
8

Source: Author’s own (2019)

Currently, the chatbot implementation with a persona which recognizes user’s personality is not

widely adopted in the new era of marketing communications even if there are some proposed

models in the literature. However, according to the present study participants are aware of the

artificial intelligence techniques and they perceive chatbots as useful tools in marketing
68
communications shaping their decision-making process. Figure 21 illustrates the whole process of

using chatbots as marketing tools taking into consideration the data that came out of the research.

1. Understanding the consumer insight: The first step for companies which seek to improve

and apply the principles of a chatbot strategy is to understand their customers. More

specifically, by analyzing their psychological characteristics in order to categorize them;

companies are able to choose the suitable approach by interacting with each customer

individually and serve their specific needs. Firms need to plan and define the approach they

will use based on the psychological characteristics of each target group.

2. Understanding the consumer decision-making process : The second step is to understand

the consumer decision-making process. By monitoring and ensuring the chatbot

implementation in each stage of the decision-making process companies will be dealing

effectively with their stakeholder’s queries which can ensure their strategy’s effectiveness.

Finding ways to interact with customers effectively in every stage is a key element of a

digital marketing strategy based on chatbots.

3. Brand awareness: Solving customer’s problems was highlighted as the most important

element in a successful marketing strategy. Companies need to create brand awareness by

targeted advertising. Targeting and positioning are crucial fundamentals for a successful

online marketing strategy. By understanding the particular problems, need and wants of the

consumers’ marketers can advertise relevant and useful content aiming to create a desire to

purchase. In this stage, the main duties of the online marketing campaigns are to transform

customer’s wants into needs and build brand visibility.

4. Personalization: In this stage companies need to provide personalized information and

products via marketing automation and ensure contextual relevance.

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 5. Customer experience: Develop a strategic plan in order to create digital experience and

increase stakeholder satisfaction is an important element for firm’s economic success.

Important elements that have to be taken into consideration in this stage are the use of smart

and intelligent answers, the quick replies, the relevant replies and the suitable answers

regarding the user’s personality and interests.

6. Engagement: In this stage companies aim to engage audience with the brand by giving

more intelligent answers for repeat business. Take into consideration tone and voice,

answers, human traits, timeliness are vital elements for successful engagement which

created positive customer experience.

7. Implement: Through effective engagement create customers’ relationships with the brands

and create brand loyalty which comes after a satisfying purchase via chatbots.

8. Advocacy: The last step is the advocacy. Customer loyalty and retention will be created by

providing post-purchase support. By implement the previous stages in a chatbot marketing

communication listed above is only the tip of the iceberg. Companies have to stay in touch

with their customers after the purchase stage in order to maintain their relationship and

repeat business. Heading to the future, companies need to provide shipping and tracking

information to their clients.

5.5 Summary

The results revealed that chatbots are an effective marketing tool which can affect consumer

behavior in all the stages of the decision-making process. Specifically, on the pre-purchase

consumer behavior chatbots can influence consumers by sending them personalized advertisements

and notifications, by helping them implement their purchases faster and easier using highly-relevant

recommendations and by providing them information about different products and their potential

differences. Moreover, in the purchase stage, this study revealed that personalization, engagement

70
and customer experiences are important factors which can influence consumers’ decision. In the

post-purchase stage, chatbots which provide order updates have a positive impact on consumers.

Taking into consideration the above findings a framework which can be used by marketers is

suggested.

6. Conclusion

These last years, the emergence of new types of technology and digital tools allows an extensive

range of potentials between companies and consumers. The adoption of AI techniques in the

marketing field are developing and bringing new possibilities to businesses (Muntinga, et al., 2011).

The literature review revealed that the marketing field is affected by these technologies and

marketers use digital platforms in order to promote and distribute their products to their potential

consumers (Stephen, 2016). The exponential growth of Internet based purchases changed the

consumer’s decision-making process. The transformation of the consumer behavior has important

consequences for firms. The way in which companies interact with their customers has changed as

they have boosted their digital marketing channels. Moreover, companies started to engage with

their stakeholders through a two-way communication rather than a one-way communication

previously used by practitioners (Kerr & Schultz, 2010). Chatbots can be situated among the

contemporary technological innovations for customer communication (Letheren, 2017).

The thesis therefore aimed to examine how chatbots influence the decision-making process at the

various stages. In order to achieve more credible results, a combination of a quantitative and a

qualitative analysis has been used. The quantitative analysis was conducted via questionnaires

which have been administrated to 111 respondents. Moreover, for the qualitative analysis a

structured interview with a marketing specialist was conducted.

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Regarding the main findings, the survey revealed that chatbots have impact on the consumers’

purchasing decision-making process in every stage. More precisely, in the pre-purchase phase,

personalized advertisements and relevant recommendations help the faster implication of purchases

and create a desire to purchase. In the purchase stage, customers are more willing to buy a product

if the company offers a personalized experience, real engagement and customer experience. With

regards to the post-purchase behavior, consumers are more willing to repeat their purchases from a

firm which sends them order updates. Considering the impact of chatbots in each stage, an 8-step

success framework regarding the adoption of chatbots in digital marketing communications is

suggested.

6.1Theoretical implications

The theoretical contribution of this thesis to the literature on the adoption of chatbots in marketing

communications is important. This research contributes to the understanding of the AI techniques in

marketing communications, to scientific knowledge regarding the impact of chatbots in every stage

in the decision-making process and to the importance of personalization, customer experience and

engagement in a chatbot communication. This research provides evidence for the use of chatbots in

every stage of the decision-making process in innovative and valuable marketing communications.

To date, the literature lacks with regard to studies that explore the impact of chatbots on consumer

behavior in all the stages of the buyer decision process. The analysis presented in this thesis

contributes to the ending of this gap.

6.2 Managerial implications

6.2.1 Online retailers

The findings of this research have implications for online retailers. The results show that online

retailing have to focus on personalization and customer experience in every stage of the decision-

72
making process. Moreover, chatbots are a quick and easy way to convince customers and exchange

merchandise.

6.2.2 Platforms such as Facebook

Platforms such as Facebook should develop their algorithm to ensure that users see relevant content

regarding their interests and their history search in order to increase customer’s attention ad build

awareness and engagement with the brands.

6.2.3 Chatbot Designers

The results revealed that companies need to adopt different marketing approaches for different

target groups depending on psychological factors. So, chatbot designers need to take this into

consideration. Moreover they should focus on the exhibition of human traits when they design a

chatbot service. Intelligent and surprising answers could be a plus as they create more value in the

chatbot service.

6.2.4 Legal Implications

Chatbots process a large amount of personal data. As a result data protection is crucial. Data

controller registrations need to be up to date. Moreover, consumers need to be mindful that chatbots

can express incorrect responses.

6.2 Limitations

The results reported in this study should be considered in the light of some limitations. The most

important limitation is the lack of access to a comprehensive range of scientific literature regarding

the artificial intelligence techniques in the marketing sector. Moreover, time constraints for

submitting the thesis may impact the study as the research has been limited to a small sample size.

The sample used cannot be representative of the whole population.

73
Planning the process of the primary research was a vital element in order to achieve the project’s

objectives on time. However, as the research was conducted in the summer period, the participants

of the quantitative research were difficult to be reached on time. This affected negatively the

schedule of the project regarding the collection of the data but not the findings, the data analysis and

the results.

6.3 Further research

Future research is recommended to go deeper in the analysis of the impact of demographical and

psychological variables on the chatbot influence in decision-making process. As chatbots started to

be adopted by companies as a way to interact and engage with the companies, this research will

help businesses gain a deeper understanding regarding the variables that play role in the degree of

influence of chatbots on consumer decision-making process. Moreover in a future research would

be interesting to investigate how different demographics evaluate different personalities that a

chatbot can adopt.

74
7. Personal reflection

I researched and I wrote this thesis in the summer of 2019 in order to fulfill my Master degree in

Marketing. I chose this topic because I wanted to enhance my knowledge regarding the new trends

in digital marketing communications. In the start I had some doubts about the topic I chose because

there was not many information about this in the literature. This was the main challenge for me but

I wanted to serve some broader purpose in the society than just doing my dissertation. Overall, after

this research I feel that I managed to fill the gap in the literature regarding how chatbots influence

the decision-making process. Given the time and effort to complete this project, I have improved

my understanding of how chatbots can be used as a successful marketing tool. Furthermore, I

enhanced my knowledge regarding the changes in the business environment and consumer behavior

due to digitalization. Likewise, I understood in depth the changes in the consumer’s decision-

making process and marketing communications. As a consequence, I am able to use the knowledge

effectively to make marketing plans. The guidance of the supervision sections which provided

inspiration and motivation helped me to enhance time management and efficient planning skills.

With completing this dissertation I was benefited from a variety of things. First of all it was my first

time that I conducted a qualitative research with a manager. Before completing this interview I

found myself wondering if I could manage to do a discussion with a marketing manager in the

English language. After this interview, came hidden strengths I learned about myself. More

precisely, I improved my communication skills and I feel more confident to communicate with

managers.

Moreover, in this dissertation I combined primary and secondary data in order to find the answers in

my research questions. This developed my critical thinking and I learned how to use knowledge

effectively. Also, I learned how to tackle complex issues. After the research in journal articles and

books I enhanced my English language, my research, analyzing and my writing skills.

75
Moreover, I realized the importance of collaboration as I have interviewed a manager who brought

me a lot of knowledge and broadened my horizons regarding my research topic. Also the principle

of collaboration was proved when I asked people to answer and share my questionnaire. Without

their help I would not get so many answers. To conclude, this project was really significant for my

personal and professional development as I understood in depth my strengths and my weaknesses.

As I found ways to overcome my weaknesses, I became a better problem solver.

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APPENDICES
Appendix 1: Questionnaire
1. What is you gender?
Male
Female
Prefer not to say
Other
2. How old are you?
18-21
83
 22-25
26-29
30-34
35+

3. What is your highest level of education?

Primary education
High school graduate
Bachelor’s degree
Master’s degree
Doctorate
Other
4. How often do you use electronic or mobile devices in order to purchase products?
On a weekly basis
On a monthly basis
Less than the above
Never
5. Are you familiar with the concept of Ai?
Yes
No
Maybe
6. Which is the main reason of using chatbots?
Resolve a problem fast
One-to-one communication with providers
Engage with the brand
Provide personalized information
Get a quick answer
7. Which benefits would you expect to enjoy via a chatbot communication?
24 hour service
Getting an instant response
Complaints resolved quickly
A good customer experience
Friendliness and approachability
Convenience ease of communication
Other
8. What would stop you from using a chatbot service?
I’d prefer to communicate with a real-time assistant
I’d prefer to use a website or an application
If the communication wasn’t in a friendly manner
If the chatbot couldn’t understand me
Other
Nothing

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9. Are you willing to hand over personal data in return for more relevant offers and
product information?
Yes
No
Maybe
10. Are you more willing to buy a product if a chatbot sends you personalized notifications
and advertisements?
Yes
No
Maybe
11. How would you feel if a chatbot can help you solve a problem or cover a particular
need via a messaging app?
Excited
Scared
A bit of both
Other
12. You receive a message from a chatbot that directly relates to your interests. Does that
create a desire to purchase?
Yes
No
Maybe
13. Do you think that chatbots help the faster implication of purchases?
Yes
No
Maybe
14. Do you think that chatbots can help you find products tailored for you?
Yes
No
Maybe
15. If you could find products more easily which cover your needs and wants, would you
buy more often?
Yes
No
Maybe
16. Are you more willing to buy a product when a chatbot provides you information about
different products and their potential differences?
Yes
No
Maybe
17. Are you more willing to buy products from a firm which has adopted new technologies
such as chatbots?
Yes
No
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 Maybe
18. Do you think that the adoption of new technologies such as chatbots is changing online
customer experience for better?
Yes
No
Maybe
19. Are you more willing to engage with a brand with a chatbot engine, if it gives you more
intelligent and surprising answers?
Yes
No
Maybe
20. A chatbot adopts a character which exhibits more human traits and drives experience.
Does that help in better engagement?
Yes
No
Maybe
21. Do you think that chatbots offer a more personalized experience?
Yes
No
Maybe
22. Are you more likely to respond positively to a personalized offer based on your
interests and preferences?
Yes
No
Maybe

23. Are you more willing to repeat your purchases from a company which sends you order
updates like shipping and tracking via a chatbot service?
Yes
No
Maybe

Appendix 2: Interview
1. What are the main advantages of the adoption of chatbots as an aspect of a marketing
strategy?
The main advantage is that a chatbot can give quick answers with no mistakes and secondly
it is something that never sleeps. It works 24 hours per day. So they are useful for customers
who need quick answers with no mistakes or they need someone to serve them 24 hours per
day. Also, something very useful is that the development of chatbots has really low cost. So
this means that in any marketing strategy you can find ways to implement the chatbot idea.
2. Can you briefly explain how approaching chatbots as marketing tools can boost
consumers’ engagement and interactions with the companies?

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 Depending on the industry you can use different aspects and features of a chatbot. Let’s say
you can send personalized offers or you can answer not complex concepts and ideas. Uhhh it
is easier and faster for the customer to engage with the brand via a chatbot and the
communication is more personalized and direct than ever before. So this can increase the
connection with the brand.
3. According to you, which are the key success factors of online marketing
communications in the context of chatbots?
First of all, a chatbot should be simple to use and [pause] the communication should be
natural and unforced. But the key success factor is to build sustainability with your
customers and brand loyalty. For example if chatbots ask the date of birth of a customer
rather than the age they can save this demographical factor in order to offer personalized
information throughout the years.
3.1 Do you mean that because the age is a factor that changes throughout the years if
the company asks for the date of birth they can save this information and they can
calculate the specific age over the years?
Exactly, exactly.
4. Do you think that chatbots which offer a personalized experience can create brand
loyalty?
Definitely yes, but depending the industry. Ehh for example in my industry, the kids apparel
industry the customer is different than the consumer. So companies should mainly
communicate with the parents and not with the children. Ehh, also the target groups are from
different ages. We offer products for children to 1 until 13 years old. So our product mix is
wider. That means that a chatbot could be more effective in industries that offer a wide
variety of products. So the consumers can find information and products easier. This can
create brand loyalty and enhance the consumer experience.
5. If a chatbot exhibits more human traits, would that make the consumer experience
more positive?
Normally yes but again it depends on the industry. Human traits have to be self-explanatory,
simple and not confusing. The experience could be more positive if the companies
categorize their target groups depending on personal characteristics and use suitable
approaches. Every customer has a different character. Companies have to find ways to
categorize the common psychological factors of their target groups.
6. How the adoption of new techniques such as chatbots can increase sales?
I think that the key is to send personalized offers. Customers can buy products during all day
and companies target specific needs. So they create a desire to purchase. When a chatbot can
predict a particular need, it is easier to persuade a customer to buy a product. So a smart way
to create a communication via a chatbot is to create a need or to remind a customer that has
a particular need rather than try to satisfy a need.
7. What are the main disadvantages of the adoption of chatbots in the marketing mix?
I think that the strong limitation is that a company needs to have strong social media to
support a chatbot. Also, if a customer feels that the chatbot does not understand the question
or it gives wrong answers, they may not use again this kind of communication as this can
cause frustration in users. I think that a proper design is a key to limit all the disadvantages.
87
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