- social commerce creates new customer relationship - Case Study Example

Best Buy maintains a very large following in social media, actually using all of the data gathered from customer sentiment and question/answer opportunities with dedicated response staff as an evaluation tool. Best Buy conducts analytical research using social media data to determine whether its promotions are meeting with success. The article warns, however, that there are difficulties to using social media as a promotional tool, citing Starbucks as an example. This company received many photos chastising Starbucks for its labor practices, rather than delivering photos of advertising posters mandated by the contest. 1. Assess the people, organization, and technology issues for using social media to engage with customers.

Pornpitakpan (2003) identifies the importance of using celebrity endorsers for improving a product brand position. Consumers find that a brand is more credible when an attractive and trustworthy celebrity endorses the product. When using social media, the people within the organization become a type of celebrity endorser (such as Steve Jobs at Apple, Inc.), thus the information being provided to customers must be considered credible. Companies such as Best Buy, with their Twelp Force responders, become the face of Best Buy and therefore their behaviors must be controlled, the depth of their competence must be evaluated, and the content being transmitted over the social network must be relevant to consumer needs.

From a people perspective, it would add risk by having employees represent the company and a potential cost burden. The company would also have to organize social media activities within the value chain, ensuring supervision, control systems, and those responsible for developing creative Web content. Using social media might require a more decentralized organization. In relation to technology, the brand using this platform for promotion or customer relationship management would need to ensure they have staff trained in gathering analytical online data and transforming it into useful information. 2. What are the advantages and disadvantages of using social media for advertising, brand building, market research and customer service?

There are many advantages for using these sites. Apple, Inc., as one example, often uses social media to gain more presence with customers. Apple has the highest brand loyalty of any technology company, according to JD Power (Info Tech, 2007). Apple has conducted considerable market research about the lifestyles and attitudes of customers and is able to generate content that is relevant to these beliefs and lifestyles. Thus, what social media does for Apple is create real-time relationship development and interactivity with the Apple brand in a way that is not met by competitors.

Social media sites also fit under the psychological theory of social learning. When people look toward their peers about product purchasing, they will often emulate these behaviors. Thus, the social media sites provide meaningful peer feedback that in turn changes attitudes about a brand. Best Buy, as illustrated in the case study, is a benchmark of using real-time response units to provide better customer service. Social media serves as a platform for engagement in a way not seen traditionally.

Disadvantages can be illustrated by companies like