Social Media and Its Effects as a Marketing Communication Tool

8/11/2019 Social Media and Its Effects as a Marketing Communication Tool

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Social Media And ItsEffects As A Marketing

Communication Tool

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Chapter One: Introduction

This first chapter introduces the reader to the topic of the thesis. The background

provides information, which gives the reader a closer insight into the history and

the current situation of the topic discussed in the paper. This is followed by a

general definition of the segments marketing communication and social media,

which the thesis is focused on. Subsequently the problem discussion narrows

down the topic, the research objectives, the methodology of the research and ends

with the definition of the research questions, which are answered in the main part

and illustrate the reason for this thesis.

1.1 ackground

Within the last 1 years more and more people have been able to access the

!nternet as a medium to communicate shop and gather information about relevant

topics "#ig 1 below$.

#ig 1% !nternet &ser "Source% !T& World Telecommunication' !(T !ndicators

)atabase$

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*s soon as companies started to reali+e the change and saw the potentials of the

!nternet, they developed new approaches to present themselves and communicate

with customers in the online segment. The companies started to create static

websites in the beginning, which became more dynamic after the implementation

of Web .- in the early 1st century. With the implementation of Web .-

companies were not only able to present themselves, but also the establishment of

twoway communication channels on the websites was technically possible. This

enabled companies to react more efficiently to the needs and desires of

customers. With the development of Web .- the sofarinactive consumer was

now able to become an active and processing user. The factor of users now being

capable to develop, change and comment on web material became generally

known as usergenerated content "&/($.The nowadaysvisible outcomes of these

&/(s are blogs, 0ouTube, #acebook and other different platforms where users

can communicate or share content with each other. To reali+e the importance of

social media on the basis of Web .- and &/( it is illustrative to display some

facts about the impact of social media. Within the first eight months of -- the

blog specialist search engine Technorati tracked a rise in the amount of blogs of

almost - million. 2n the famous videosharing website 0ouTube, 1-- million

videos were being watched each day in -- and the world3s numberone social

network #acebook already had 14 million users. 5egarding these figures one can

estimate how big the growth was in the last couple of years and still is. &sers are

organi+ed into groups or vested interests in which they are blogging and share

their information within all different kinds of social networks about certain topics.

5esulting from these kinds of social media actions, there can be seen great

advantages for companies, because of viral marketing and a vast range of the

information spread, but also disadvantages due to unsatisfied customers, who use

these channels to announce their dissatisfaction, which can ruin or weaken the

corporate identity "(!$ of companies or individuals. *s soon as companies reali+ed

how e6cited users were about sharing their e6periences with other participants in

cyberspace, they started to rethink their marketing strategies and tried to figure out

new tools to attract and reach their target markets. #rom this point on companies

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had to and did invest into online marketing and especially into the social media. *s

an outcome, companies established themselves in social media by creating their

own blogs or social networks to get closer to their target customer. (ompanies use

marketing communication to keep in touch with consumers. There are also several

different kinds of social media, which the companies have to be aware of. !n order

to get a better understanding of the different marketing communication tools used

by companies and the diverse manifestations of social media, a definition of these

two fields will be discussed in the following paragraphs.

1.1.1 Marketing Communication

7arketing communications has the aim to get into contact with the target audience

and build up a communication channel between the company and the customer.

Therefore the marketing communications utili+es the 8marketing communications

mi69 shown in #igure . The marketing communications mi6 consists of five

diverse fields of communication channel% advertising, personal selling, public

relations, direct marketing and sales promotion. These different segments "#ig.

below$ of marketing communication "7*5(27$ build the platform of the business

customer communication. !n order to get a better understanding of the compositionand the focus of the single segments within the 7*5(27 mi6, they will be

discussed in the following paragraph.

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#ig % 7arketing (ommunication 7i6

I. Ad!ertising

*dvertising is the tool within the marketing communications mi6 with the largest

reach. !t includes all types of media like television, radio, print, online advertising

and any kind of ad which is meant to stimulate visual or verbal senses of the target

audience. *dvertising has almost no geographical boundaries and therefore

reaches the largest amount of customers. :ut also other sources of advertising in

public places like billboards, public transportation vehicles or even restrooms are

used as advertising space. ;ven the most unlikely places are used as a space for

placing ads in order to make the customers aware of the brand, company, or a

certain product. "Taylor, --


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company and the customers will generate a large benefit for the company

regarding the customer relationship management. The reason for a business to

perform is to satisfy the needs of customers and therefore each company has to

evaluate the future needs and desires of its target customers. "=elsmacker, -->$

The best solution for evaluating the needs is via personal contact with the

customers, because through performing like this, companies get the necessary

information from the source, which actually creates the demand. Within personal

selling there is one top priority, which should be the attitude for each company

performing this kind of marketing communication. This attitude is 8the customer

comes first9. This means the company is adapting its products'services according

to the demand created by the customer and does not try to create demand for the

customer by selling them products the company thinks the market demands

III. "u#lic relations

=ublic relations "=5$ refer to how a company handles the flow of information

regarding its stakeholders, employees and all other kinds of the public, which is

somehow interested in the company. The importance of =5 as a tool of the

7*5(27 mi6es changes with the si+e of the company. Whereas =5 is lessimportant, but should still be taken into account, for small companies, it becomes

an essential part of the marketing communication for bigger organi+ations. The

main objective of =5 is to create a positive image of the company to the public.

"?unc+ik, --$

The company communicates =5 via different channels, like sponsorship,

interviews, charitable events, financial reports to shareholders, factory tours or

lobbying just to mention a few. These events are supposed to get the companycloser to the customer by providing additional information and revealing more

information than the company actually has to.

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I$. %irect Marketing

The difference between direct marketing and advertising is that the company

reaches out for their target customers without any intermediary channels as they

are used and required in advertising in order to get into contact with customers.

The different components of promotional tools used in direct marketing can be split

up into direct mailing, catalogues, inserts and coupons, online marketing as well

as telemarketing. !f performed correctly direct marketing is seen as one of the

most effective marketing communication tools, because the company creates in

the long run valuable relationships with its customers, who are always well

informed about changes or additional products' services in the portfolio of thecompany. "@ash, ---$

$. Sales promotion

Sales promotion is one of the more simple tools within the 7*5(27 mi6 and is an

essential part of the marketing communication for all types of companies. The

objective of sales promotion is to deliver an incentive for the customer to buy the

product. This incentive is normally delivered by providing free goods, gifts,

discounts, coupons or samples. ;verything that adds additional value to the

actually purchased products is seen by the customer as a benefit and therefore

appreciated by the customer. (ustomers have shown that they are willing to pay a

premium for real value and service, which can easily be influenced by sales

promotion.

1.1.& Marketing Communication Strategies

(ommunication strategies nowadays differ broadly from the ones in former times

or offline times. !t is important to understand the relationship between digital

communication and traditional communication in the old mediaA for e6ample, TB,

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radio, newspapers, maga+ines and billboard ads, the communication model was

and is onetomany compared to the onetoone or manytomany communication

model in digital media, like blogs, social networks, wikis and every form of vital

marketing campaign.

The 8best9 consideration nowadays for a companytocustomer communication is

the one toone or the onetomany model. These models speak of a monologue in

the old media and a dialog in the new media, because of the interactivity of social

network and forum users. 5esulting from this, the goal in traditional media was

branding by convincing the customer of a strong brand. !n contrast the digital

media is about communication with the potential customer or user in a dialog to

create interest by using a pull strategy. !n addition it can be said that it is a supply

side thinking communication in the old media compared to a demandside thinking

in the digital media, where 8customer pull becomes more important9. :esides this,

in old media communication, the customer is a target in comparison to the digital

media communication where the customer is a partner, by answering surveys and

product rankings.

* general definition of marketing communication can be stated as follows. !t is a

8process of sending promotional messages about products to target markets9.

Therefore the communication strategy is divided into different steps. #or the

purpose of this thesis it is suitable to take a step model "#ig. 4 below$, which

includes objectives, target group, channels, measures and outcomes. *dditionally

there can be adapted budget, bodies involved and evaluation. This model is very

suited to showing the marketing communication strategy, because it describes the

process a company has to go through before they implement a successful strategy

"#ill, --$.

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#ig 4% step (ommunication 7odel

1.1.' Social Media

Social media sites are enabled by the technical groundwork of Web .-, which

provided the possibility for internet users to create their own content "also called&ser/enerated (ontent$. * social media side can be defined as an interactive

website providing information, while at the same time the content can be somehow

influenced. This process can be fairly simple by asking for a person3s opinion or a

rating, or rather comple6.

8

Objective

s

WHAT:

Measures

Outcomes

WHO:

Target

Groups

HOW:Channel

Components

of

Communicati

on

Strategy


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The comple6ity of this interaction between the website and the users is almost

unlimited and provides a twoway communication channel for users. Social media

pages can be divided into several different types of networking website. The term

social media combines wikis, social bookmarking, social networking, social news

and social photo and video sharing. :ut each website, which allows a twoway

communication between users, is also defined as a social media site. !n order to

generate a better overview of the different types of social network "#ig. < below$

we will give a short definition of the social media occurrences.

(ig ): *e+ Social Media "latforms

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I. ,ikis

Wikis are websites, which provide a database or a public document, where people

can add or change content found on the website. Wikipedia the online

encyclopedia, which is probably the bestknown wiki, provides users with

definitions and e6planations in a wide variety of languages on almost every topic.

;ach user can share new information on the wiki or change alreadye6isting

content on the page.

II. Social ookmarking

Social bookmarking is used to tag web pages on the !nternet. &sers can search,

organi+e and manage web resource bookmarks via social bookmarking providers

like 7r. Wong or )igg and like this share information with other users. :ookmarks

can be evaluated, commented on and the content can be described in order to

simplify the identification of the content. The difference between file sharing and

bookmarking is that there is actually no data transferred but the bookmark acts as

a reference for the actual source. :ookmarks can be stored privately, within a

certain group of people or shared publicly. Several display options for bookmarks

help users find the bookmarks they are interested in. This can be according to

categories, chronological order or a search engine.

III. Social -etorking

Social networks are platforms, which allow users to generate a personal web

profile and connect it to other users. The bestknown social network is #acebook,

which provides a platform to build a network of friends or people with the same

interests to build up relationships and keep in touch with other people via the web.

Social networks are designed differently. There are wide networks like #acebook,which do not really set a focus on a certain user group, but there are also social

networks, which are speciali+ed on certain specific target groups like students,

professional categories or athletes. Within the social networks the users share

information, debate, share pictures and other media with friends and other users.

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I$. Social -es

Social news is a form of social bookmarking with the focus on sharing the latest

news with other users. Therefore special social news portals such as )igg or

0i//.de were developed. These portals share the latest news with other users.There are all kinds of topics shared on news portals including technology,

entertainment economics and much more.

$. Social "hoto and $ideo Sharing

2n social photo and videosharing platforms "#ig. below$ users can upload their

own videos and photos and share them with other users. ;veryone or only a

selected audience can see these videos'photos. &sually the websites also provide

other functions to increase the communication on the webpage, by implementing

comment functions or rating systems. Bideos can be found by categories or by a

search engine, which simplifies the process of finding the right source. The best

known videosharing network is 0ouTube, which has about 1--,---,--- videos

viewed per day.

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(ig /: 0andscape of Social Media Manifestation

1.& Statement of esearch "ro#lem

Since the rise of the !nternet and its adaption by the public, the way companies

promote their products as well as the communication channels between the

companies and their customers have altered quite a lot. 7arketing and the way

organi+ations communicate their brands and products are nowadays becoming a

more and more challenging task. (ustomers are overwhelmed by marketing

commercials and promotional events.

2riginally companies set their promotional focus on traditional mass media

advertising. This includes TB commercials, radio announcements, print

advertisements in maga+ines or newspapers as well as billboard ads. While the

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!nternet is advancing across the globe as a marketplace and an entertainment

medium the effectiveness of traditional mass media is declining. 2ver time people

have shifted the time they spend on certain media. While print media has been

declining over the past forty years and TB is e6periencing smaller growth rates,

the !nternet is e6panding rapidly to become one of the most important media for

information sharing and as a marketplace for businesses and customers. The

reason for the decline and slower development of media like print and TB is fairly

easy to e6plain. =eople only have a limited amount of time and according to

statistics !nternet usage is advancing and therefore other media channels are of

declining usage.

*nother reason for the decline of advertency of advertisements in other media

than the !nternet is the occurrence of multitasking media usage. 7ultitasking

media usage means that people are using multiple media at the same time. So, for

e6ample, someone is watching TB while surfing on the !nternet at the same time.

This fact e6plains the loss of effectiveness of the TB commercial, because the

consumer is not paying his full attention to the advertisement and therefore the ad

loses its effect to make the person aware of a need.

#or sure there is still potential for traditional mass marketing and the effects of it

are still there, but they are fading slowly and shifting towards other media. What

also has to be taken into account is the segment of business companies are

advertising for. *lthough the trend is heading more and more towards the !nternet

and interactive media, there is still a difference regarding how fast and in which

degree companies have to or will shift their marketing efforts. !n product categories

like books, movies, music and other products, which are rich in information, it is

more essential for marketers to shift advertising and brand presence online rather

than in other segments, which still mainly use the traditional channels for

communicating. :ut the !nternet is not just the ne6t step for companies to

communicate with their customers and advertise products in a different medium.

With the !nternet and the development of Web .- the !nternet will cause a shift in

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the control of communication and advertising. The web switches the power of

control from the companies to the customer.

(onsumers find themselves in a strengthened position regarding the e6posure of

advertisements. !n the web the customer decides what he wants to see, read orlisten to so the companies have a hard time getting the attention of the customers

and delivering their message.

7ore and more companies have blogs and are connected with customers through

web gadgets "e.g., Twitter$ in order to keep them informed with the latest

information about new products and news concerning the organi+ation. These

pages are designed to be a communication place for the company and the

customer. (ustomers can leave comments in the blogs or share information

differently via ratings, for e6ample. :ut companies also have to be aware of the

fact that this is not the only place where information about the company is shared.

=eople also write about companies in their own blogs, too. *nd it is not only this

blog which maybe deals with the companyA there are a lot more. There is a whole

blog network combining people interested in the types of products a company

distributes or the company itself. !n these portals, blogs and people in social

networks share all kinds of information.

=eople who are satisfied share their e6periences with the product or service,

which is actually some kind of positive word of mouth via the web for the company,

but there is also a drawback about this kind of information sharing for companies.

*lso people who are not satisfied want to share their information with others and

form groups with other people with the same interests.

There is nothing worse than bad publicity, which is spread by the customers, forcompanies. These informationsharing systems have hardly any boundaries and

information spreads like wildfireA especially if it negative information. There is not a

lot companies can do about people3s perceptions of a company on the web or

what type of information consumers share via blogs or social networks. !n order to

get some of the control back or be able to join the communication channels of the

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consumer companies need to be present where the consumers have their

communication channels and this is actually within blogs and social networks. The

discussion here is how companies should act in social networks and how

marketing communication is connected to these portals and what type of role the

company takes in the social network.

With regards to this discussion the research problem can be formulated as follows%

1.' esearch O#2ecti!es

The general objective of the research is to study how Social 7edia influence the

company3s marketing activities and communication process as a communication

tool.

The specific research objectives are to%

The advantage C disadvantage of using social media for the companies as

a marketing tool.

To understand the objectives and goals of companies in using different

social media. To know what types of social media is used by companies to manipulate the

target group.

To e6amine how companies define about which social media is perfect for

them to reach the target group

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3o does Social Media influence the Marketing

Communication of companies in the &1st centur+4


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1.) esearch 5uestion

5esearch Duestion 1

#irst of all it is crucial to find out about the different social media and their features

in order to be advantageous for companies to advertise via their platforms. This

positioning in the markets is the main criterion for the companies to invest into

social media or into this special provider. :ut there are also disadvantages.

RQ1: What are the advantages and the disadvantages for companies of using

socialmedia as a tool for marketing communication?

5esearch Duestion

*nother important issue in finding an answer the main problem is the question

about the long and shortterm objectives of the companies. The strategic

approach of companies has been always essential, and nowadays it is important

to know what longterm effects companies should e6pect when they invest in

marketing communication tools within social media. :ut also how they transport

their message to the target market respectively group is a crucial issue.

RQ2: What are the objectives of the companies using social media as a marketing

communication tool?

5esearch Duestion 4

!n order to reach and attract the right target group it is essential to find out about

the target customers and their needs.

RQ3: what tpes of media the companies use in order to reach the right target

group?

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5esearch Duestion

Documents

Social Media and Its Effects as a Marketing Communication Tool