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Development of Social Media and Networking for Marketing

6097 words (24 pages) Business Assignment

26th Oct 2020 Business Assignment Reference this

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Introduction - Marketing Defined

The prime objective of all businesses is to acquire, increase and retain customers. For this to happen, organizations need to build competitive advantages; distinguishing points of strength that make the business stand out of its competition according to Arnett and Wittmann  (2014) This requires businesses to communicate with buyers and potential buyers to convince them that your offering is the closest match with what they seek to satisfy their need. This process of identifying the buyers, creating something of value to satisfy those needs and then making sure that your offering satisfies the need is what marketing comprises of.

The American Marketing Association (2013) define marketing as: “The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.  Previously it described Marketing as “The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives (1985, AMA Definition of Marketing).

While the Chartered Institute of Marketing (2015) describes it as: “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”.  Armstrong and Kotler, (2013,p.33) similarly emphasize that that marketing is a process, focused on the creation of value,  and define it as “ the process by which companies create value from customers in return”.  Kotler and Keller (2012,p5), also highlight the vast scale of marketing by stating that marketing is “ the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large”.

Dibb, Simkin, Pride and Ferell: (2006,p.1)  say that “marketing consists of individual and organizational activities that facilitate and expedite satisfying exchange relationships in a dynamic environment through the creation, distribution, promotion and pricing of goods, services and ideas.”

(Arnett and Wittmann, 2014; Slater, Hult and Olson, 2010) highlight that marketing is one of the most important tools when it comes to the profitability of an organization.

The customer-focused perspective of marketing is highlighted by Kotler 1976 providing the definition of marketing as: “ a human activity directed at satisfying needs and wants driven through exchange processes similarly Baker and Hart, (2016,p.8) focus on building relationships, stating that: “ marketing is concerned with the establishment and maintenance of mutually satisfying relationships”.

(Eid and El-Gohary, 2013) agree marketing allows companies to interact, respond and communicate more effectively with their customers and marketing activities have a catalytic influence on a firms success.

The definitions of marketing as defined by ( Chartered Institute of Marketing,2015, Armstrong & Kotler,2013; American Marketing Association, 2013; Baker & Hart,2016 Kotler and Keller, 2012; Eid and El- Gohary ,2013) convey that marketing is the central function of any organization, plays a huge role when it comes to the profitability of a firm and in creating value for customers.

The evolution of the Traditional Marketing Landscape and the internet

The Internet and The Emergence of Social Media

The traditional marketing landscape has seen countless changes in marketing practices ever since the emergence of the internet in the nineties (Trusov, Bucklin and Pauwels, 2008). There has been a significant change in how customers communicate with businesses, interact with others and access information. Pires, Stanton and Rita, (2006) say that the internet has helped consumers overcome issues such as distance and time and enabled consumers to communicate amongst each other,  rapidly form opinions and ultimately define brands by themselves.    This transformation is a direct result of of the web 2.0 era in which consumers have limitless access to information and the ability and means to interact freely with other consumers as well as businesses and brands.

Initially, the internet was used as a tool to seek particular information.  Most of the information that was available on services and products was predominantly from company-owned websites.

After the emergence of social media recently however, the balance of traditional company web presence and control has shifted towards the consumers ( George Ritzer, Dean and Jurgenson, 2012).    Organizations are now faced with their brand identity messages and associations being delivered by customers instead of their marketing departments. 

Digital media are any media that are encoded in machine-readable formats. Digital media can be viewed, created, modified, distributed and preserved on digital electronics devices (Ritzer, Dean and Jurgenson, 2012).   Digital media, by virtue of its infrastructure, has given birth to a subsector called the monumental “Social Media”.

Social Media

What exactly is social media?  Mostly social media is often used as a general term for a wide range of several communication channels which includes instant messaging, blogging, social networking sites, picture and video sharing.  (Siddiqui and Singh, 2016) say that “ It is a virtual network, of people connected over the internet on a common platform. A thematic, real-time online place, where group of people come together to share and exchange information and communicate with one another”.  While Kaplan and Haenlein (2010) in an article on the challenges and opportunities of social media define it as “ A group of internet-based  applications that build on the ideological and technological foundations of Web 2.0, and that allows the creation and exchange of User Generated Content.”

Web 2.0

The phrase Web 2.0 was actually coined by Darcy DiNucci who is an author, a web designer and an expert in user experience in an article titled “Fragmented Future” in 1999. In the article it is stated that the internet or ‘Web 1.0’ prior to 2000 was basically a prototype for the future. She describes Web 2.0 as “ not just screenfuls of text and graphics but as a transport mechanism, the ether through which interactivity happens” (DiNucci, 1999, P.32). It is also stated that the web will begin to appear in different forms including in a consumers car, their TV, their handheld gaming devices and even on their cell phones. Di Nucci’s(1999)  predictions have mostly come true as Web 2.0 has now become one of the most major influences in the daily life of the general public in 2019.

The term was popularized by Tim O’ Reilly in 2004 after he created an event known as the “Web 2.0 conference”  and it is considered that this event brought the term ‘Web 2.0’ into the spotlight (O’ Reilly, 2007).  O’ Reilly (2007) defines Web 2.0 as a ‘platform’, where software applications are built upon the web as opposed to upon the desktop like Web 1.0.  He further describes the era as ‘ not something new, but rather a fuller realization of the true potential of the web platform’.  Kaplan and Haenlein (2010) say that the internet in Web 2.0 is a space where web content and applications are constantly modified and adapted by users through collaboration and participation.  While Brennan (2010) describes it as “the evolution of the internet from a static environment to an interactive community”. Jones (2010) examines Web 2.0 and explains how it is the second generation of internet technology and that it has given people the tools to become “journalists” in the sense that it enables them to record and publish information. Jones (2010) also links the popularity of this activity to social media. 

O’Reilly (p.37, 2007) goes on to highlight seven competencies  which make up Web 2.0 companies:

  • Services, not packaged software, with cost-effective scalability,
  • Control over unique, hard-to-recreate data sources that get richer as more people use them
  • Trusting users as co-developers,
  • Harnessing collective intelligence,
  • Leveraging the long tail through customer self-service,
  • Software above the level of a single device, - lightweight user interfaces, development models, and business models.

The core competencies outlined by O’ Reilly (2007) indicate similarities between Web 2.0 and the different forms of social media present nowadays. The Web 2.0 term that was conceptualised by O’ reilly and  coined by DiNucci and has helped pave the way  for the emergence of various different social media channels since its inception and it has grown from being a space where fellow users used to interact with each other to a space where business now try and get involved in these interactions.

O’ Reilly (2007,p 18)  goes on to list key changes from web 1.0 to Web 2.0 shown in the table below:

Web 1.0 to Web 2.0 Key Differences

Before                                                                                  After

Personal Websites

Blogging

Page Views

Cost per click

Publishing

Participation

Directories

Tagging

Domain Name Speculation

Search engine Optimization

Double Click

Google adsense

Content Management Systems

Wikis

Table 2.1: Web 1.0 to web 2.0 (O’ Reilly, 2007)

This further reinforces the view that these applications have redirected the focus from the organization to the consumer as Web 2.0 is ‘ Customer centric, user generated, interactive and dynamic, fosters community participation, and builds on collective community intelligence’ (Singh et al.,2008;282). This is mostly due to social media platfroms revolving around user generated content.  Haris and Rae (2009), Singh et al., (2008) and Brennan (2010) all agree that web 2.0 will change the relationship between a business and its consumers.

User Generated Content

Daughtery et al. (2008) define user-generated content (UGC) as ‘ media content created or produced by the general public rather than by paid professionals and primarily distributed on the internet’. An increasing number of organisations are actively using  User generated content social media to share their experiences online with other users, a trend which is dramatically redefining the relationship between a business and consumers (Hariis and Rae, 2009).   User Generated Content was available before the Web 2.0 era, but it has changed significantly as a result of technological drivers, economics drivers and social drivers (Kaplan and Haenlein, 2010).

There is no bigger testament to this than Social media itself.

SOCIAL MEDIA

The concept of Web 2.0and social media are interrelated to each other, yet they are not identical to each other. The main difference in the terms is due to the nature of the utilisation of the concepts. Thus there is a need to define the two terms in details. As we know that Web 2.0 is the revolution in business brought forth in the computer industry due to the usage of Internet in the form of a platform. An attempt was made for understanding the rule pertaining to success brought forth by the new inventions and platform. ‘Web is considered to be a platform wherein applications and contents are being modified at a continuous rate and are being exchanged among all the users across the system in collaborative or participatory manner. The data is not anymore published or created by a single individual in the system’ (Vinerean et al., 2013).  Even though Social media seems like a modern phenomenon, essentially it is built upon age-old concepts of word of mouth, community and socialization.

There have been several debates and discussions regarding the proper definition of the term ‘social media’. Sweetser and Lariscy (2008) define social media as ‘a concept of a read-write web, where the online audience moves beyond passive viewing of web content to actually contributing content’.         According to Kaplan and Haenlein (2010) “Social media is a group of internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allows the creation and exchange of User Generated Content”.

This is because social media has been transformed slowly into an integral and developing form of media (Siddiqui and Singh, 2016). Fischer and Reuber ( 2011) noted that social media is based on the interconnection of various aspects, such as communication, content media and social interaction. It is now easier to spread information all over, by the use of social media, useful and important information now can be spread to a wider audience more efficiently. This, in turn, leads to effective communication between various audiences and has an effect worldwide. The following figure provides us with an idea of the components that are involved in Social Media. (Fischer and Reuber, 2011).

Figure 1: Utilization of Social Media

Source: (Zhang and Mao, 2016)

Social media helps in providing a platform for individuals from various geographic areas and different communities to come together by the use of Internet. The individuals gathered on the platform share their knowledge and opinions, by using various sources and other websites (Atwong, 2015). In simple words, social media portrays the new methods of facilitating the methods that are involved in creating, commenting, sharing and editing. Kietzmann et al. (2011) and Siddiqui and Singh (2016) outline that social media in its true spirit is the broadest broadcast of information available to the general public that is available online. Social media can be dedicated to a content theme to cater to a specific type of audience or it can be generic for mass content consumption. For example,  a Radio station broadcast or a TV channel broadcast can revolve around a single theme, for instance, current affairs, the news or entertainment, similarly online social media platforms also have varying themes with varying content.

Social media has altered the way that businesses now communicate with their customers (Duffett, 2015, Mangfold & Faulds,2009, Henning-Thurau, et al., 2010, Labrecque, 2014 and Yannopoulou, 2013).  Social media can be used by businesses in the modern world to perform multiple functions, including customer support, online sales, building their brand, market research and generating word of mouth communications (Tiago and Verissimo, 2014). (Hennig-Thurau et al., 2010) noted that social media not only improves communication between businesses and consumers but it also provides brands with multiple ways of reaching their customers, while enabling brands to measure and monitor their behavior as well. Which can be regarding communication, browsing habits or purchase-related behavior. Furthermore, social media is also an external source of information that can be used by organizations to acquire customers opinions and understand customer attitude, this information can contribute assist firms in creating value for customers, through tailoring offerings to customer needs (Wieneke and Lehrer, 2016).

Social media is increasingly being used as a tool for discovery, driving a significant percentage of web traffic, in addition to search engines (Kingsnorth, 2016). Marketers now wish to understand what happens after “the click”, with click-through rate is otherwise known as CTR being the standard online metric measurement tool that is used, to understand what has driven the activity, in addition to how to direct advertisements at consumers (Duffett,2015).

Customer information and Insights

While Hennig-Thurau et al., (2010) noted that social media enables brands to measure and monitor the behavior of their customers (Breuer and Brettel (2012), Pazgal and Soberman, (2008), Kukar-Kinney and Close, (2009), Arora et al., 2008) all note that “the online environment affords companies the opportunities to collect extensive information on existing as well as potential customers”.

Social media has led to an increase in consumer insights detailing how consumers interact with each other,  with products and services (Leeflang, Verhoef and Dahlstrom, 2014). Organizations can also gain insights into how customers collect and use information and how information affects their decision making and customer journey (Leeflang, Verhoef and Dahlstorm, 2014). Customer data can now be collected in an increasing rate and variety, but firms must understand how to transform this data to generate meaningful insights (Wienke and Lehrer, 2016). 

Social Media Advantages for Businesses

Social media data, in semi-structured and unstructured forms, has the potential to be of value to businesses, as it includes consumer experiences, opinions, and sentiments towards brands in real-time (Bekmamedova and Shanks,2014).  Another aspect which is very helpful for businesses is social media analytics, which Zeng et al., 2010 define as” Social media analytics is concerned with developing and evaluating informatics tools and frameworks to collect, monitor, analyze, summarize, and visualize social media data, usually driven by specific requirements from a target application. Social media analytics research serves several purposes:

  • Facilitating conversations and interaction between online communities and
  • Extracting useful patterns and intelligence to serve entities that include, but are not limited to, active contributors in ongoing dialogues.”

In simpler terms social media analytics involves the interpretation and use of insights which can assist in a decision making process.  Firms can use this information in creating a competitive advantage.  Combining social data with traditional internal and external data sets, almost real time insights can be created (Palmer, Galizia, Mahidhar and Sharma, 2013). This process of collecting social data, analyzing it in order to make better decisions is referred as Social Business Intelligence (SBI) (Palmer, Mahidhar, Galizia, & Sharma, 2013), (Kobielus, 2007).

The Social Media Types

Even though the term ‘social media’ nowadays is usually used to describe large scale social networking sites like Twitter, Youtube, Facebook, etc marketing and social media experts broadly agree that social media includes the following 13 types of social media.  Aichner et al, (2014) found that the following are popular forms of social media:

According to Kaplan and Haenlein (2010) and Saravanakumar and SuganthaLakshmi (2012), the following segments are the most popular when it comes to social media:

Social Bookmarking or Social News sites

Social News sites and Social Bookmarking sites, for example Reddit, and Slashdot enables users to be in control of their news streams, and also allows individuals to “submit and vote on content around the Web” but the core value of the latter one is to allow users “to collect and interesting links they have discovered and may wish to revisit.” (Zarrella 2010, 103.)

Social News sites enable individuals to vote and submit content all over the Web and provide them the facility of organizing their news feeds.

Basically individuals are able to customize and control their news streams. These websites allow individuals to discover websites that most people have already discovered. Social news  sites give users the option to choose their own personal news feeds or any other form of targeted news. These websites also direct users to a point of free interaction and debate.

Social Networking Sites (SNS)

However one of the most popular forms of social media nowadays is Social networking sites.  ‘A social networking site is typically initiated by a small group of founders who send out invitations to join the site to the members of their own personal networks. In turn, new members send invitations to their networks, and so on’  (Trusov, Bucklin and Pauwels, 2007).

While Boyd and Ellison (2010) describe Social Network sites as: “web-based services that allow individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. The nature and nomenclature of these connections may vary from site to site”. Basically Social networking sites are a website on which users can create  personal profile pages that are utilized to interact and connect with other users thus forming a personal network. Harridge-March and Quinton (2009) describe social a network as a ‘sub culture compromising an aggregate of daily life that demonstrates a desire to be connected and share perceptions of experiences including consumption. Social media websites like Facebook have now gained more users than several countries in the world. The most popular social media platforms other than Facebook are Twitter; probably the most serious platform after LinkedIn (a professional networking website) for sharing serious news and opinions, used by government officials and authorities as it is considered to be more credible and reliable than other social networks. Instagram is also another popular social media platform its main differential points is that it is centered around the concept of photo-sharing very heavily. Snapchat is a similar social media app heavily focused on photo and video sharing as well but with a unique twist that videos and photos disappear after a while. These websites have completely changed the way people now communicate with each other in their daily lives.  Every social network tries to position itself uniquely among the different types of social media websites and apps and almost all popular social media applications and websites have a point of difference. This is how social media platforms differentiate themselves from the clutter and attract a diverse blend of audiences.

To facilitate the research question and explain the influence social media has on consumer behavior it is important to have a good understanding of the major social media platforms.

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