Social Networking - Literature review Example

Literature Review The emergence of internet as a communication means dynamically altered the concept of marketing. Companies have found that marketing on the internet is a cheap and easy way to reach potential customers. Social networking sites such as Facebook are a recent phenomenon and provide ample opportunities for the marketers. Yet the concept has generated wide interest in researchers over its usability. Theoretical Concepts Postman (2009) proposed the concept of Social Corp. He said that companies such as Dell, IBM, and P&G etc have used social media to redefine their relationships with the customer and other important audiences. Companies are able to each more number of bloggers, journalists, analysts, employees, customers, shareholders, and business partners with increased frequency using social networking sites. Such companies are defined as SocialCorp by Postman. Social media networks can be used to generate 1:1 conversations with the customer. These conversations can be used to improve the company’s brand perception, by being better engaged with “influencers”. Customers who see a company using social media for marketing also see the company as more creative and forward thinking (Postman, 2009). Social networks also enable a company to have better relationships with their customers, employees and business partners. Being participative in nature, consumers get the feeling that they play an important role in the shaping the company’s strategy. Using social media gives the feelings to the customer that they are listened to, and the company cares about their satisfaction. Postman lists the six important attributes of social networking sites that make them a useful media opportunity: Authenticity Transparency Immediacy Participation Connectedness Accountability Social networking sites, such as Faebook offers companies easy-to-use ways for companies to created profile pages. This technique can be done for individual products as well. User can then view the related information, products, review the services, may become ‘fans’ of the brand, and may also make purchases. Every such interaction is then shown to all the people in the network of the user. This mechanism leads to increased brand awareness, with the user acting as the brand ambassador (Holahan, 2007). Besides, product and company information, facebook may also be used by professionals as means to build their personal brand. Facebook in its new marketing scheme enables companies to connect their brands to the user in ways that are much enriching than the common banner placement ads. Internet in general and social networking sites in particular have a viral nature to them meaning that an idea can very quickly and widely spread throughout the world. Social networking sites such as facebook with a large number of users growing every day offer an attractive means to achieve any viral marketing objectives, a company may have. Facebook’s Growth Facebook has witnessed a lot of growth in its user base in the past few years. The site had 100 million users in February 2008 (Hempel, 2008). Facebook’s popularity amongst the internet users worldwide is attributed to many reasons. One of the prime such reasons is the “network effect” of the site (Gallaugher, 2008). He proposes that a person is most likely to use this service as most of his/her friends/relatives are already there. The growth of facebook can also be attributed to an individual’s drive t increase his social capital. Coleman (1988) defined social capital as the resource accumulated by a person through relationships with other individuals. Industries and companies Using Social Networking One of the popular industries using social networking sites is the Fundraising organizations. The costs of getting new donors through a social networking site are much less than achieving one by traditional means (Richards, 2009). Easy accessibility of social networking sites makes it easier to for individuals and small groups to organize activities (Townsend, 2009). These arguments make a strong case of using social networking sites for fundraising activities. Another example of interactive marketing on the web was done by “Paramount Pictures”. The company gave away 2, 50,000 virtual fedoras for Indiana Jones and the Kingdom of the Crystal Skull. The Dr. Pepper Snapple Group offered 2, 50,000 virtual Sunkist sodas, which earned 130 mln brand impressions in 22 hours. This is much more than what they might have got from a Super Bowl Ad which gives around 6 to 7 million (Wong, 2008). Other companies using social networking sites as an effective media are Dell, IBM, P&G etc. Considerations While Marketing on the Social Networking Sites While communicating with other stakeholders in a social networking site, it is necessary that the brand managers do not block the information flow. Managers should understand that allowing customers to initiate conversation is what keeps brands alive (Fernando, 2007). It is also important for the marketers to produce a steady stream of information and updates relating to corporate information (Fox, 2009). These can be in the form of photos, news items, feeds etc. This enables the people in the network to constantly think of the business. Besides, it is important to have an important link between communications initiation on the website and the business strategy. Marketers on the social networking sites should also be cautious of the difference in consumer behavior on social networks around the world Against Facebook’s marketing tools Facebook’s shares too much of profile information with companies. This may raise privacy issues with the users of the website, especially of youngsters who are not aware of what to put, and what not to put on the website (Catherine, 2007). Another issue that has been raised in marketing through social networking sites is the effect of unwanted ads on children. Many of the users are younger in age. Some of the contents in the discussions and product campaigns might be not appropriate for people of younger age. Also, researcher have also pointed that not all the products can be marketed using the facebook methodology (Alasdair, 2007). They claimed that although such applications can be used for cool and of-the-moment stuffs such as the iPhone, but not for a product like household bleach. Researchers also argue that profile pages do not support relationships development for a company or a product as much as they do for a person. The profile page formats such as the date of birth or gender do not really apply to many product or company profile (Fox, 2009). In the backdrop of all these studies, it is interesting to see, if the usage of sites such a facebook is beneficial or harmful to the overall brand. This paper attempts to analyze the site facebook as a media tool. References Alasdair, R.2007. Will Facebook ad plan work?. Campaign (UK) Issue 46 [Online]. Available at: . [Last Accessed on 24th July, 2009]. Coleman, J. S. (1988). Social capital in the creation of human capital. American Journal of Sociology, 94 (Supplement), S95-S120. Fernando A. 2007. Social media change the rules. Communication World: January-February 2007, p10. Fox, S. 2009. E-riches, 2.0: Next-generation Marketing Strategies for Making Millions Online. NY: AMACOM Div American Mgmt Association. Gallaugher, J.M. 2008. Facebook Case, [Online]. Available at: < http://www.gallaugher.com/Facebook%20Case.pdf> [Last Accessed on 24th July, 2009] Hempel, Jessi, and Michael Copeland. “Are These Widgets Worth Half a Billion?” Fortune, March 25, 2008. Holahan, C. 2007. Facebook: Marketers Are Your ‘Friends’. Business Week Online, [Online]. Available at: < http://web.ebscohost.com/ehost/detail?vid=5&hid=2&sid=0475c358-303f-474f-b13d-2c3a548ecb05%40sessionmgr11&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=27486440 > [Last Accessed on: 24th July, 2009] Postman, J., 2009. SocialCorp 2nd ed. Berkley: Peachpit Press. Richards, G. 2009. Time to grasp online opportunities. Third sector: 21 January 2009, p. 24. Townsend, S. 2009. Facebook makes organizing easy. Third Sector: 21st April 2009, p.9. Wong, Elaine. “Ben & Jerry’s, Sunkist, Indy Jones Unwrap Facebooks Gift of Gab. ” Brandweek.com, June 1, 2008. Read More