Use of Social Networking Sites for Marketing - Coursework Example

Contemporary Issues in Marketing Name Institution Lecturer Course Date Social Networking Sites Introduction The contemporary world of business is changing at a rapid pace with a consequent demand for equal pace in adopting new marketing practices. Organisations, in particular marketing managers, must strive hard to keep up with the rapid change through creating and implementing new and enhanced marketing strategies, as well as adopting new and proven marketing strategies. Failure to do so will eventually see organisations being ejected out of the rapidly changing marketing environment. Increased globalisation is increasingly turning the world into a global village. Consequently, competition in the market is increasing owing to the ability of firms to operate at the global market place, thereby giving multinational corporations a chance to compete with local firms. Further, globalisation has resulted to the widening of the customer base from the geographical perspective wherein a firm’s customers are spread all over the world. Consequently, there is a dire need for marketing managers to search for, implement and/or adopt new marketing strategies that will enable organisations to reach out to their customers spread out all over the world. Further, marketing managers have to seek for enhanced and efficient marketing strategies that will them to compete well with other market players. Social networking, which has gained immense popularity, is one of the newly adopted marketing strategies. Social networking sites can enable a firm to reach out its global customers and communicate new products to the customers. Several firms in various industries have embraced social networking, which was initially meant for creating social networks. These firms are utilising the social networks being created by social networking sites to communicate their various brands to specific segments or to the general population. The mobile phone industry has made extensive use of social networking sites including Facebook, Orkut, MySpace and Twitter to reach out customers and communicate ever emerging products. Statistics show that social networking sites have attracted millions of people, especially middle aged people, who are subscribed to the several social networking sites available (Johnson 2011: 3). The number of people subscribed to social networking sites is expected to increase owing to a number of factors. A general rise in literacy level is expected to increase the number of people accessing the Internet. Secondly, increased access to the internet, due to the reduction in internet costs and the production of internet enabled phones and smart phones is expected to increase internet use and, consequently, the number of people subscribed to social networking sites (Johnson 2011). Therefore, social networking sites form an excellent marketing technique that firms in the contemporary business world should not ignore. The mobile phone industry has realised the potential of social networking sites in realising their marketing objectives, which has resulted to increased use of social networking sites for marketing activities. This paper discusses social networking sites with reference to the mobile phone industry. The paper seeks to evaluate the use of social networking sites by mobile phone manufactures in their marketing efforts. Social Networking Basics The last two decades has seen numerous developments in the field of Information and Communication Technology (ICT). Of great importance is the advent and development of the Internet, which has rapidly transformed the way information is communicated from one party to another. Of importance is the development of electronic communications methods including social media. Before the advent of the Internet, mass media was the sole method of producing and disseminating information including marketing messages. A social networking site (SNS) is a relatively new marketing phenomenon that enables online users to diffuse information including marketing messages (Xie and Kukla 2012, 148). Social networking sites connect people with similar characteristics, such as friendship, trade, kinship, social status, values and ideas among others. Naturally, people with common characteristics interact with each other. Social networking sites provide mediated communication that enable people to get connected with the principle purpose of fulfilling the need for social interaction. Social networking sites comprise of nodes and ties (Sethia and Adhikari 2010: 8). The nodes are the participating elements in social networking sites, which are connected together by ties (Sethia and Adhikari 2010: 8). Ties arise from a myriad of interdependencies including friendship, trade, social status, living place, likes, interests, sexual orientation, financial exchange, beliefs, religion, education, place of education, values, race and kinship among several others. The ties may be simple whereby they only comprise of few people that are closely related or complicated such that there several simple ties are intertwined to form a complex social network. Therefore, this leads to three main social networking types, which include primary networks, secondary networks and tertiary networks. Primary social networking sites are essentially basic networks comprising of closely related people, such as relatives, family members or close friends. Secondary networking sites are somehow complicated and wider that primary sites and comprise of colleagues, classmates, and schoolmates. Finally, tertiary networking sites are exceedingly wide. Tertiary social networking sites combine several primary and secondary social networking sites such that there are numerous strangers in the social network. Facebook, Twitter, Orkut and Myspace are perfect examples of tertiary social networking where an individual does not have control of the people in his or her social network owing to multiple social networks being created. Use of Social Networking Sites for Marketing Social marketing basically involves establishing ties that bring together several parties all over the world. According to Saher, Khan and Khan, a social network is defined as a “collection of social entities including people and organisations among others that are related to each other by a set of socially significant relationships” (2012, 41). These socially significant relationships include friendship, contacts, co-working or information sharing. These relationships enable such social entities to mutually share information, resources and expertise to attain given targets effectively (Saher, Khan and Khan, 2012, 41). A member of a social network shares information, which reaches numerous other members in the network. In tertiary social networks, the information reaches to millions of members in the site through re-sharing of the information. It is through this process of sharing information that marketers consider social networking sites as appropriate techniques for marketing their products and services. Consider, for example, Facebook, when one member of a social network shares some information, such as a new product. Other members of the social network view the information thereby becoming aware of the new product. The other members can also share the information, which will lead to more and more people becoming aware of the new product. Some social networking sites, particularly Facebook, have a function whereby a member of a social network can “like” a Facebook Page created by a business firm. All members of the social network are notified that the member “liked” the page, which gives them a chance to like the page too (Facebook 2012). When they “like” it, other members are notified, and this leads to an exponential growth of people who have “liked” the page (Facebook 2012). Then, all the people who have “liked” a page can see information posted on the page by the respective firm, which enables the firm to effectively market its products and services to its customers. Alternatively, firms can use paid adverts, commonly known as Ads, which members of a social networking site, such as Facebook, can see. In fact, paid Ads are the main source of income for social networking sites, which are mostly preferred because they can reach all people who have subscribed to the social networking site irrespective of whether a member has “liked” it or not (Facebook 2012). Statics show that social networking sites are paramount in marketing especially where online users facilitate the diffusion of marketing messages. The messaging sharing facility, which is free for all social networking sites, provides organisations with an almost free, creating the marketing message, the network and sharing the massage with the social network takes time and, marketing technique. A research study conducted by Pew Research involving 2,259 adult internet users found out that 75 percent of the participants forwarded news including marketing messages on social networking sites including Facebook and Twitter daily. Of the 2,259 participants of the study, 51 percent admitted to having learnt of new products and events through posting by other members of the sites (Xie and Kukla 2012, 148). Statistics show that social networking sites have attracted millions of people all over the world. For example, Facebook alone has about 150 million subscribers. Based on the results of the aforementioned research study, it shows that about 112.5 million people forward marketing messages on a daily basis on Facebook alone. Of importance is the 51 percent of people who learn of new products through social media sites, which interprets to about 75 million people on Facebook alone. Therefore, if a marketer can manage to make use of the 112.5 million people of Facebook to forward a message about a new product, the new product shall be known by at least 75 million people all over the world. It is apparent, therefore, that social networking sites provide a low cost, effective and efficient marketing technique for business organisations. They provide firms with an opportunity to benefit from viral marketing. Viral marketing, according to Johnson, involves the use of customers to forward marketing messages of a company to their families, friends and colleagues (2011: 1). Traditionally, firms had to establish loyal customers and convince them to do the viral marketing. However, with the social networking sites, a firm does not have to seek and establish loyal customers. Non customers can also aid in viral marketing especially when they comment on a marketing message posted by a member of their social network because other members of the network will be notified of the member’s act of commenting. This is a feature particularly found on Facebook where members of a network know when one of the members comments to message or posting (Facebook 2012). According to Johnson (2011), many firms have shifted to the viral marketing facilitated by social networking sites owing to its efficiency, effectiveness in reaching numerous people at a low cost. Use of Social Networking Sites as Marketing Strategies with reference to the Mobile Phone Industry A basic understanding of the theory behind marketing is paramount to understanding the use of social networking sites as marketing tools by firms in the mobile phone industry. According to Moore and Pareek, marketing encompasses a number of activities and processes that revolve around the creation of products and services, communication with customers to alert them the presence of new goods and services and deliverance of the goods and services to the clients (2010: 20). Marketing involves a number of institutions including, at least, the respective organisation, the marketing organisation and the customer (Moore and Pareek 2010: 20). Marketing is especially crucial if there are shortages of customers, stiff competition for customers and/or a firm has new products and services that it wishes to communicate to the customers. In the contemporary world of business, firms are faced with increasingly competitive markets. In particular, mobile phone firms, such as Motorolla, Nokia, Samsung and LG, are faced with increasing competition owing to the large number of players in the mobile phone market. Additionally, globalisation has resulted to free movement of products thereby intensifying competition. Globalisation has also resulted to the establishment of a scattered customer base wherein customers are spread all over the world (Waters 2001: 188). Due to the large number of firms operating on a specific geographic market, the number of customers for a given firm in the market becomes too small, which leads to a situation whereby several small-sized customer bases are scattered all over the world. Intensification of market competition compels firms to seek efficient and appropriate marketing techniques to ensure they remain competitive. Palmer postulates that firms naturally react to intensified market competition by shouting out louder to attract more customers than their rival firms thereby establishing a large customer base that ensures them market survival (2012: 11). This they do through the creation and implementation of marketing strategies and tools that enable them to shout out loud to reach and attract more customers than their rivals. It also involves the adoption of marketing strategies that have been proven effective in reaching out and attracting more customers than their rivals. Social networking is one of the proven marketing strategies that firms in the mobile phone industry have realised that has the potential to reach out and attract customers all over the world. Use of social networking a marketing technique involves using the ties of social marketing sites to reach out to customers. Uses of social networking sites facilitate firms in the mobile phone industry to make use of viral marketing whereby they let internet users and customers to spread information containing marketing messages. There are several reasons behind the increased shifting to viral marketing through social networking sites. Three reasons stand out besides the low cost aspect of using social networking sites. Firstly, the Internet is widely accessible through computers and Internet enabled mobile devices. Accordingly, social networking including Facebook has become a common channel and a basic communication tool in mobile phone devices. Mobile phone manufactures have created mobile phone applications including social networking sites, especially Facebook (Xie and Kukla 2012). Secondly, it is possible for a single user to share information with millions of other users all over the world (Phelps et al. 2004). Finally, it is possible to share contents on social networking sites, especially Facebook, that deliver detailed information than in other marketing strategies (Phelps et al. 2004). Such contents include, for example, videos detailing a new product, photos of a new product and large articles that give in depth details of a new mobile phone device. With the current rate of adoption of social networking sites, Facebook adoption is quoted at about 85 percent to 96 percent (Xie and Kukla 2012), the shift towards the use of social networking sites to facilitate viral marketing is expected to increase proportionally. Advantages of Social Networking Sites with reference to the Mobile Phone Industry and Implications to Marketing Managers Basic human need to connect and share (socialise) With or without the internet, connecting and sharing of information (socialising) is a basic need. Socialising plays a crucial role in the life human beings according to Maslow’s hierarchy of needs (Sethi and Adhikari 2010: 9). Human beings are social creatures and will utilise any chance provided that can facilitate the process of socialising (Sethi and Adhikari 2010: 9). Social networking sites provide such chances whereby they allow people to connect with one another and share relevant information among them. Such information could be in the form of opinions, knowledge or basic life experiences. Marketing managers should, therefore, make use of the socialising aspect of human beings, in particular the basic need to share information, which is facilitated by social networking sites. Identity Social networking sites provide a social identification of a person (Sethi and Adhikari 2010: 9). Therefore, a person belonging to a given social group will be identified with the social group and all other social groups the person belongs to. The advantage with this feature is that members of a network will know all the social networks of other members. This is a crucial feature that marketers in the mobile phone industry should make use of in their marketing efforts because it provides an easy way of communicating the availability of their firms in social networking sites. Social networking sites are viral in nature This aspect of social networking sites is closely associated with the identity issues described above. The viral nature of social networking sites also imply that social networks are intertwined beyond boundaries and that a message posted by one subscriber is not limited to the number of people who access it (Sethi and Adhikari 2010: 9). In fact, such a message can go beyond one social networking site, say Facebook, to another social networking site, say Twitter. This would be the case if, for example, one person is subscribed to the two social networking sites and posts the message from one site to the other. Such a message will undergo a viral process in the second social networking site. The viral nature of social networking sites is a crucial marketing function of the sites, which marketing managers can use to initiate and realise viral marketing through the internet. The principle role of marketers is to identify the most appropriate social networks in the social networking sites where they place marketing messages and the messages will go viral. For example, marketers of mobile phone firms can post photos of a new and enhanced smart phone in social networks of engineers where members of the network will facilitate the spread of the photos through commenting or reposting of the photos in other social networks. Characteristics of the Mobile Phone Industry that Warrant the Use of Social Networking Sites for Marketing The mobile phone industry is characterised by the existence of fragmented markets that are spread out all over the world, which result from globalisation. Secondly, the mobile phone industry is characterised by high market competition due to the presence of numerous players in the market, all of which are multinational corporations operating at the global level. For example, one will find all the mobile manufacturers competing in a country so long as there are no barriers to entry to the market imposed by the government of the respective country. Due to the large number of players in the market, competition in the country is extremely high. Additionally, the mobile phone industry is characterised by rapid changes resulting to high rate of new products entering the market. Technology change is occurring at an extremely high rate forcing mobile phone firms to ensure frequency of new and innovative products in the market to remain competitive. All these characteristics have resulted to the extensive use of social networking sites, by mobile phone manufacturers, to woo customers by ensuring frequent communication of new and innovative products. In other words, mobile phone firms have found social networking sites as excellent ways through which they can shout out loud to attract and win customers in the highly competitive market. They have found out that social networking sites have the capacity to reach out customers in fragmented markets. Consequently, several firms have created pages in Facebook where they communicate marketing messages to Internet users who have liked the pages. Such firms include, for example, Motorola (facebook.com/motorola), Nokia (facebook.com/nokia), LG (facebook.com/LGMobile) and Research in Motion (facebook.com/BlackBerry). Several mobile phone manufactures are also using Twitter, another prominent social networking site, to reach out customers and share product information with them. Such firms include, for example, Nokia (twitter.com/nokia), Motorola (twitter.com/Motorola) and Research in Motion (twitter.com/BlackBerry). All major mobile phone firms have created Facebook pages and/or handles on Twitter where they communicate with customers. Additionally, these firms have added buttons that correspond to various social networking sites. Therefore, a customer who visits their web sites can activate a link to a given social networking site so long as the customer is subscribed to the respective social networking site. For example, Nokia’s website has three buttons at the bottom that link to different social networking sites. One of the buttons links to Facebook, the other one to Twitter and the third one to You Tube. If a customer clicks, for example, the button that corresponds to Facebook, the page opens the Nokia’s Facebook Page (Nokia 2012). This is done by embedding a Facebook badge on the Nokia’s website (Facebook 2012). The customer has the option to “like” the page and start receiving information from Nokia. Other mobile phone firms have similar strategies for directing customers to their pages in social networking sites. A study conducted to understand the behaviour of consumers revealed that consumers rely on advice or recommendation from other when making crucial decisions regarding purchasing a product. Additionally, the research revealed that professional networks play a crucial role when consumers are making decisions on buying a product (Hinz et al. 2011). Social networking sites facilitate the influence of professional and social networks to determine the purchasing decision of people. Therefore, if a mobile phone company convinces a few people in a network, they can influence others in the network to purchase products from the company. Therefore, the role of marketing managers is to create convincing marketing messages and release them to existing social networks in various social networking sites where members of the networks take up the role of diffusing the marketing messages. Marketing managers must come up with innovative ways through which the marketing messages get into various social networks in the various social networking sites, which determines the success of the online viral marketing. Marketing managers must consider four critical factors that determine the success of viral marketing in social networking sites (Hinz et al. 2011). The content of the message, the attractiveness of the message, determines how it attracts online users and how the users remember it. The structure of the network also determines the rate of viral marketing on the social network. In particular, the behaviour of the members of the network, especially their incentive to share messages, determines the success of the firm in marketing (Hinz et al. 2011). For example, college students may have a higher incentive to share messages than middle aged people in employment. Finally, marketing managers must consider and use the most appropriate seeding strategy (Hinz et al. 2011). The seeding strategy determines the initial set of target consumers that a marketer chooses to initiate the viral marketing campaign on social networking sites (Hinz et al. 2011). The last factor is crucial since it is the only way a marketer can determine the direction and pace of the viral marketing campaign on social networking sites and thereby the success of the firm. Conclusion Marketing in the contemporary world, where competition is becoming stiffer than before, demands rapid change in marketing techniques. More so, it requires rapid creation and implementation of effective and efficient marketing techniques. Further it requires keeping track of new and enhanced marketing techniques and adopting the techniques that have been proved effective. The effectiveness and efficiency of marketing techniques are based on the ability of a firm to shout out louder than its market rivals. They are also based on the capability to reach out numerous customers, deliver enough of the appropriate message to convince customers to purchase a product while reducing the costs of marketing thereby ensuring high firm profits. Social networking sites form one of the contemporary marketing techniques used by firms to reach out to millions of customers all over the world. Social networking sites enable firms to benefit from online viral marketing whereby customers take up the role of advertising a firm’s products and services. Social networking sites have attracted millions of Internet users all over the world thereby forming an excellent way though which firms in the mobile phone industry can reach out to customers spread out all over the world. The number of people subscribed to social networking sites is expected to increase further implying that mobile phone marketers should strategise on increasing the use of social networking sites. Interestingly, mobile phone manufacturers have a major role in determining the use of social networking sites. Internet enabled mobile phones and smart phones determine lead to increased internet access and thereby the number of people subscribed to social networking sites. Therefore, use of social networking sites for marketing, by mobile phone manufacturers, is a two-way process. Mobile phone manufactures use social networking sites to increase the sale of mobile phones including internet-enabled phones and smart phones. Consequently, they increase internet access and thereby the number of people subscribed to social networking sites, which eventually enables mobile phone manufactures to intensify the use of social networking sites for marketing their products. Bibliography Facebook. 2012. Facebook. Accessed October 14, 2012 from Hinz, O., Skiera, B., Barrot, C. & Becker, J.U. 2011. ‘Seeding Strategies for Viral Marketing: An Empirical Comparison.’ Journal of Marketing, vol. 75, pp. 55-71. Johnson, R.L. 2011. ‘Corporate Strategy and the Social Networking Phenomena.’ Journal of Service Science, vol. 4, no. 2, pp. 1-10. Moore, K. & Pareek, N. 2010. Marketing: The Basics. Abingdon: Routledge. Nokia. 2012. Nokia. Accessed 13 October, 2012 from Palmer, A. 2012. Introduction to Marketing: Theory and Practice. Oxford, UK: Oxford University Press. 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