Value That Social Media Can Contribute to Markets and Their Consumer Segments - Coursework Example

Value That Social Media Can Contribute To Markets and Their Consumer Segments Name: Institution: Course Title: Instructor: Date: Abstract Over the years social media has grown as powerful medium of interaction. In realization of the same, businesses have tried to domesticate it as a customer contact point and as a means of customer relationship management. The ultimate goal of the paper was to examine value that social media can contribute to markets and their segments. The paper found out the platform of social media is critical to business by allowing them to communicate with customers, receive feedback and do value addition to products and services offered. In the discourse, the emerging theme is best summarized through customer relationship management. One of the important aspects in CRM analysis is the customer’s contact point inter-phases. This is customer centric marketing approach. The beauty of this approach is that it gives platform where customer can interact with the business and its processes in virtual environment. The final submission which is build from the analysis is that the medium increasingly becoming important aspect of businesses in offering personalized communication and gaining feedback. Introduction The advancement of communication technology in addition to globalization has revolutionized how individuals and businesses operate, communicate and relate with each other. The internet through social networking sites and media tools has presented great opportunity for businesses and other organizations to improve their operations in terms of performance, efficiency and customers. In personal and social life, social networking sites continue to play significant roles with regard to how individuals communicate and relate with each other. In business, social networking sites enable organizations to reach greater levels of economic prosperity, effectiveness and customer satisfaction. However, the greatest challenge arises when it comes to the integration of social networking sites and social media into business processes and operations (Verret, 2011). Social networking sites and social media provide tools that enhance the performance of businesses and processes by making them more efficient, faster as well as more productive. This paper explores and discusses the potential value that social media can contribute to markets and their consumer segments. In order to answer the above statement, the subsequent discourse and interrogations are done so as to qualify the phrase that “Social media (social networking) promises a means of communicating more dynamically with consumers, enabling the co-creation of value, effective targeting of consumer segments, and a feedback loop for continuous improvement (monitoring and control)”. Background Information on Social Networking Sites Social Networking Sites are web-based services which enable people to construct either public or semi-public profile within a system that is bounded in nature from where they are able to connect and share information. As such a social networking site could be described as a computer-mediated communication site or system (Boyd & Ellison, 2008, p.210). There are hundreds of Social Networking Sites around the world with varied interfaces and technological features encompassing a variety of practices as well as interests. Some of the most commonly known social networking sites include Facebook, You Tube, BlackPlanet, Twitter, MySpace, Bebo as well as Cyworld among others. These Social Networking Sites have millions of users whom have integrated them into their daily practices. Value That Social Media Can Contribute To Markets and Their Consumer Segments The growth in the power and use of social networking also spells another era for business today. To understand the value that social media can contribute to markets and their consumer segments, the best entry point is to look at the social media platform as customer contact point, value addition platform and communication medium which all boils down to customer relationship management. While the main of business is to make profits, for this to be guaranteed firms have to manage their relationships with their customers well through physical, human and communication approaches. Well designed customer relationship offers a leeway for exceptional interaction between the firm and the customer. Business can’t rely on single point CRM. There is need for multiple platforms so as to cater for different cadre and needs of a customer. Online trading requires an information system platform that would present an avenue where function providers like sales people and customer care can interact and provide services directly to the customers. This means having the right methodologies, software and internet capacities (Peel, 2002, p.3). Social networking sites provide opportunities not available to business through other communication media. For instance, they help businesses to find likeminded individuals who can easily be integrated into their culture. Their also provide an opportunity that consumers can feel like they are part of the business. Therefore, with the development and growth opportunity of social networking sites businesses cannot sit back and rely on the traditional mediums of communications to strengthen the image of their products. These sites provide business with opportunities to discover and maintain contact with their consumers. Business can use them to know who are the most influential customers, get them to participate in the product development phase, and therefore uplift the image of their brand. Consequently, businesses cannot be able to ignore these social Medias as conversations that affect their business are already taking place in the web through these sites. It is therefore paramount that businesses not only take a closer look at what is happening in these sites but they should also participate in the activities (Microsoft Inc., 2009, p.3). To assert the importance of social networking media to business, research indicates that the number of people visiting social networking sites is growing at a rapid rate. In 2006 for instance the number of people visiting 10 social network sites grew from 46.8 million people to 68.8 million in a period of one year (Bausch & Han, nd,). A 2009 survey indicated 770 million people visited these sites (OECD, 2010, p.36). In addition, the former, projected that their growth is not likely to wither years to come but rather it will become entrenched into the mainstream sites. Similarly online advertisement has also experienced significant growth in the recent time. In 2008 growth in online advertisement was found to outperform by a double digit that of overall advertising, a projection from 2003 to 2008. This growth is attributed to many things but one of the key inputs has been the development in forums for high-traffic participative networks. Some of the examples provided being MySpace and You-Tube (OECD, 2010, p.20). This indicates that these sites provide a competitive advantage for any business that is going to invest in these media for developing advertisement inventories. The internet through social networking sites has revolutionized how business organizations transact their businesses. In the travel and tourism industry for instance, Barrows and Powers (2009, p.403) notes that many travelers buy their travel and accommodation online and also go online to do research on travel and accommodation plans. The decisions made by such individuals are in one way or the other influenced by information acquired from social networking sites such as Facebook, You Tube, BlackPlanet, Twitter, MySpace, Bebo, as well as Cyworld among others. Thus, the internet particularly the social networking sites significantly impact the travel and tourism industry and other related business industries like hospitality and transport industries by facilitating online bookings (Barrows & Powers, 2009, p. 403). Social networking sites impact on business organizations performance by influencing pricing of both products and services and how they are created and offered. In business, pricing is one factor that influences the users of social networking sites and social media tools to complete business deals and transactions (Barrows & Powers, 2009, p.403). Other additional benefits of using the social networking sites other than the pricing factor is that social networking sites have enabled business organizations as well as their customers to save time, obtain more and better information online, have more control of the process and acquire bonuses in terms of loyalty club points. The social networking sites enable individuals to inspect products and service online via the websites as well as profiles of business organizations on the social networking sites such as Facebook, You Tube, BlackPlanet, Twitter, MySpace, Bebo, as well as Cyworld among others. Hayes and Miller (2011, p.295) notes that 72 million users of the internet which is equivalent to 38% of the internet users use social media at least once in every month. Social networking sites enable individuals, as well as business organizations to share their experiences with their friends and partners respectively in social networking sites either in print or via video. The shared experiences influence the decisions of both individuals and business organizations on various issues. Thus, according to Hayes and Miller, social networking sites today play a more significant role in increasing decision making by both individuals and business organizations than the traditional advertising strategies. Social media plays an integral part in promoting the performance of business organizations. Social media through Social Networking Sites provides business organizations together with their customers with important information regarding customer buying behavior. In order to effectively attract and satisfy the need of customers, business organizations’ sales processes need to be collaborative and interactive in nature rather than being linear. Social Networking Sites implies interactive and collaborative relationship between business organizations and their customers resulting into mutual understanding and hence benefit to both parties. Thus, the prospect of social networking is that they greatly enable business organizations to monitor and measure the effectiveness and performance of the social media tools that they have engaged. Monitoring of social media tools employed by business organizations allows them to spot the trends and enable them be on the edge of the business market place. Social networking therefore enables business organizations to understand what their customers think and talk about when it comes to their brand, products and services (Porterfield, Khare & Vahl, 2011, p. 566). Social networking provides prospective platform through which businesses and organizations carry out the monitoring of social media. This monitoring of social media is also essential to their users as it enable organizations and businesses to be responsive to their customers during times of frustration or confusion with regard to their products and services. By staying online organizations and businesses are also able to remain relevant and at the top of the minds of their customers and others engaged in web-based social networking sites. In this way, social networking sites will enable organizations and businesses to understand the needs of their customers and address them appropriately (Porterfield, Khare & Vahl, 2011, p. 566). Therefore, by monitoring web-based communication in the social networking sites business organizations are in a position to react to praises, complements, complaints as well as rave comments posted by their customers in the social networking sites. In the business market place, organizations use social networking sites to achieve competitive advantage against competitors. Social media tools and the social sites enable businesses to easily target and reach varied segments of the hotel market which provide a lot of information as well as services with regard to the profiles of the customers, business partners and various stakeholders engaged in the social media and also social networking sites. For instance, in the hospitality industry hoteliers to create separate but interconnected sub-sites to communicate information to their main site while protecting the brand of their businesses (Briggs, 2001, p.38). Hoteliers and other business organization create sub-sites linked to their main hotel website intended to communicate different messages to their customers. In this way, businesses in the hospitality industry are able to reach large and different segments of the hotel market. Business organizations have recognized the influential role that social networking through social media tools plays in various industries with regard to promotion of business and increasing the number of customers (Hayes & Miller, 2011, p. 296). As such to effectively adapt to the internet age, businesses must take advantage of the opportunities that social networking sites have presented to them in order to promote their businesses and increase their customer base. This can only be possible if they manage social media in an effective way by creating business websites, which should consist of a blog, photo sharing functionality, survey and feedback functionality. Businesses must actively participate on the blog and create a profile for the business in major social networking sites such as Facebook, You Tube, BlackPlanet, Twitter, MySpace, Bebo as well as Cyworld among others (Thraenhart, 2007, p. 55). Business must also subscribe to a social network monitoring service with a reputable background. Businesses need also to carry out proper advertisement on popular and selected social networking sites and social media in order to benefit from the prospects of social networking sites (Hayes & Miller, 2011, p. 296). According to Briggs (2001, p. 36), social networking sites include the most current information which are usually updated on frequent basis. Therefore, business organizations are able to promote their products and services, improve their business performance and increase their customers by updating their social networking sites frequently. Through these social networking sites, business organizations are able to update their customers on their most current products, services and other business packages. Through these sites, business organizations are also able to update their customers, business associates and shareholders on their operations. In so doing business organizations become reliable and their customers gain confidence in them. This will help them in increasing their customers who will communicate their experience with that particular business organization with others in their social networking sites (Articlesbase.com, 2011). By employing the use of social networking sites in promoting sales, business organizations provide their potential clients with a 360o view of important attributes of their products and services. Therefore, social networking sites are prospective since they can be integrated by business organizations to effectively create the businesses’ website, profile or fun pages with links to the web. Thus, the links direct whoever is logged on the businesses’ web site, blog and fun pages in an interactive manner so as not to allow the customer or rather the user of that particular social networking site to leave the circle and visit other web sites or social networking sites and social media (Lucas, 2008, p. 56). When individuals and business organizations engage in activities within social networking sites, they are able to measure online social activity. By measuring social activity via social networking sites, businesses are empowered to spy on the competitors in terms of what they are doing on the web and also gain information on what their customers’ views and suggestions are. This information on the competitor can be very vital and may enable business organizations acquire competitive advantage over their competitors. Online measuring of social activity also enables business organizations to understand their ideal customer with regard to their needs (Porterfield, Khare & Vahl, 2011, p. 566). Social networking sites like social media are major tenets of the internet technology that have greatly influenced the business organizations ways of transacting business (O’Connor, 2000, p. 3). Individuals and business organization customers use the internet to gain information on various products, services and packages associated with the services they provide (Law & Hsu, 2006, p. 295). This has influenced business organizations to adopt the use of internet through social networking sites in order to continue increasing their customer numbers as well as business productivity. Therefore, the adoption of the internet technology via social networking sites and social media tools has revolutionized how most contemporary business organizations relate with their customers and transact their daily business operations. Conclusion As the world continues to become web-based so does the communication within both social life and business market place. Therefore, for businesses and institutions to ensure sustainability, good performance, increase their customers and promote their businesses operations and activities, they must adopt, apply and embrace the advancement in technology via social networking sites and social media tools which have demonstrated greater prospects with reference to these. The critical aspect that is emerging from the discourse is the ability of social networks to provide customer contact points and thus, enhancing customer relationship management. Through social media, one can communicate through advertising and public relations. These sites can be segmented to cater for different tastes and segments of the customers. The ultimate result of this is improved brand/ corporate image and value creation. References Articlesbase.com. Social Networking the Best Way to Successful Business Networking. Retrieved on 17 October, 2012 from: http://www.articlesbase.com/internet-marketing-articles/social networking-the-best-way-to-successful-business-networking-3622520.html. Barrows, C.W & Powers, T. 2009. Introduction to the Hospitality Industry, 7th edition. New Jersey, John Wiley & Sons. Bausch, S., and Han L. Nd. Social Networking sites Grow 47 Percent, Year over Year, Reaching 45 Percent of Web Users, According to Nielsedn//Netratings. 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