Integration of Internet and Social Media in the Marketing Strategies of a Small Business - Essay Example

? Integration of Internet and Social Media in the Marketing Strategies of a Small Business Executive Summary This report is about the integration of internet and social media advertising with traditional marketing methods previously used by a small clothing business. Twinkles Children’s Gear is a small business selling custom- made clothes for school-aged children (7-12 year olds). Previously, the company relied on traditional marketing methods such as newspaper ads, posters, leaflets, etc. to advertise their shop and shows. It also stages quarterly fashion shows to showcase their new styles of children’s clothes. The company explored internet and social media advertising to boost their sales and indeed, sales increased more than 100% in just one year. The report shows evidence that advertising through Google ads, Facebook, Twitter and other internet websites can be very effective marketing strategies to gain more profits for a small business such as Twinkles Children’s Gear. Table of Contents Introduction……………………………………………………………………………4 Research Method…………………………………………………………………….6 Review of the Literature……………………………………………………..6 Internet Advertising………………………………………………….7 Social Media………………………………………………………….7 Interactivity in Advertising………………………………………..…8 Limitations…………………………………………………………………….9 Research Findings………………………………………………………………….10 Sales for the Year 2011-2012…………………………………………..…10 Sales for the Year 2012-2013…………………………………………..…10 Conclusions and Recommendations……………………………………..………13 Introduction Contemporary times have yielded more options for businesses to market their goods and services. Apart from traditional advertising such as television and radio commercials, print advertisements, outdoor advertising, and the like that have been used by generations of businesses to capture their markets, technological innovations have been created to further broaden marketing strategy choices. This development provides much hope for small and medium enterprises to widen their exposure and reach a bigger market. Twinkles Children’s Gear is a small enterprise that sells customized clothes for aged children (7-12 years). Established in 2010, it is a relatively new company that has thrived on traditional marketing to sell their products. They stage fashion shows in hotels to show their new line of clothes on a quarterly basis and advertise these shows in local newspapers, posters and distributing leaflets in local shops, fast food outlets, schools, clinics and establishments catering to children and their parents. The manager of the business found the advertising strategies too time consuming and inconvenient and even encountered difficulty in securing permits for signage. Hence, they were ambivalent in posting signs everywhere to advertise their business. At the same time, expenses in staging fashion shows were getting higher. This pushed them to explore internet advertising to supplement their present marketing strategies. Traditional advertising methods brought them more business as it was able to stir up interest from customers that it kept them coming back or calling for more information regarding show dates, studio location, new styles, etc. When they began exploring the internet as a possible platform for marketing, they found out that possibilities were endless. Upon setting up their first website, they were able to direct their potential customers to it for more in-depth information. At the end of the same year, they promoted their website with Google ads by paying for web hits. This caused traffic on their site to dramatically increase resulting in a busy end of season which helped them in clearing their stocks. They were also aware that mobile surfing was on the rise, which can further increase their potential market. Due to this positive development in their business strategy, the manager became seriously interested in examining the impact of integrating social media and internet advertising in the repertoire of marketing strategies for the business and if it can eventually replace the more tedious and expensive traditional marketing methods they have been using. He wants to be able to compare how effective it is to using traditional media advertising and how businesses can optimize this advertising platform to their advantage. At the same time, he wanted to find out how to make customers more engaged in their social media accounts so it can generate more interest in the business, and eventually, hike up sales. Research Method This marketing research was exploratory in nature to study how the integration of social media and internet advertising to traditional marketing strategies will impact the sales of a small business enterprise. Being a case study, it devotes its research to Twinkles Children’s Gear, following its progress with its marketing issues. A case study is defined by Leonard-Barton (1990) as an “in depth investigation comprising an oral, archival and secondary-based history of a past or current phenomenon. The phenomenon being researched, always dictates, so some extent, the terms of its own dissection and exploration” (p. 249). A thorough academic research of available literature was done as well as engaging in internet advertising via Google ads and social media networks via Facebook and Twitter. Also, actual data from the sales of Twinkles Children’s Gear from the previous year (2011-2012) were compared with the sales this year when internet advertising and social media were added to the repertoire of marketing strategies. Review of the Literature In reviewing the literature on internet advertising and social media, the manager gained much insight on the possibilities these marketing media offered. Advertising via the internet has challenged the efficiency and effectiveness of traditional communication channels such as television, radio and even the yellow pages in directories by offering a more dynamic avenue to showcase products and services and facilitating both “one-to-one” communication as well as “many-to-many” communication (Van Raaij, 1998). Internet Advertising Berthon et al. (1996) summarize how internet advertising differs from traditional media advertising: Customer needs to surf the internet to find a product or service provider for what he or she specifically needs. Website presence is relatively easy to establish and inexpensive to create. The internet sets up a level playing field for all hence opportunities are equal for all players no matter how big or small they are. There is a uniform share of voice. Marketing communications cost structure is modified when the web is utilized as an advertising medium. Social Media Social media is the “production of content by users that is accessible and searchable by all” (Reid, 2009, p.39). Kalamas, Mitchell & Lester (2009) define it as “a communication medium that is devoted to or characterized by interaction between participants or consumers of the medium” (p.3). The arrival of social media in advertising has broken down several barriers that limited media options in the completion of advertising plans. Lester (2012) contends that the low cost of digital media and its ease of use has made marketing materials such as commercials, videos, podcasts and multimedia messaging easy to be filmed, edited, and broadcasted shortly after they are completed. Social media venues attract viewers with the posting of digitally produced material and solicit customer response. They have abundant tactics in creating a sensation throughout the market (Lester, 2012). Powers et al. (2012) contend that leading online brands have created the expectation of accessibility and approachability to their consumers leveraging social media to be updated with market preferences especially those who engage in it. Social media provides them the opportunity to establish and nurture connections with their consumers, hopefully to build affinity and loyalty to their brand. Interactivity in Advertising In order for potential consumers to be engaged, interactivity is crucial for all kinds of advertising, whether it be traditional or contemporary (Karimova, 2011). Interactivity is the “interaction between the senders (advertiser) and receivers (customer) in the communication process” (Raman & Leckenby cited in Yang, 1996, p. 3). Interactive Advertising Bureau (IAB) (2012) defines interactive advertising as “all forms of online, wireless and interactive television advertising, including banners, sponsorships, e-mail, keyword searches, referrals, slotting fees, classified ads and interactive television commercials” (Interactive Advertising Bureau, 2012, p. 14). Peltier, Schibrowsky & Schultz (2003) identify four major components in interactive media as: being a two-way communication system; there is a response control in the communication process; a communication relationship is established and the adoption of database technology. Interactive media or online media allows customers to take part in the advertising process by choosing their preferred information and communicating with the advertisers online (Shrum Lowrey & Liu, 2009). The latest information and communication technologies provide speed, scope and scale of interactivity to the consumer (Pavlou and Steward, 2000). Internet advertising differs from traditional advertising because in the latter, only one way communication from advertiser to the audience happens (Shrum, Lowrey & Liu, 2009). Interactive advertising’s edge over traditional advertising is that consumers are given more power over their choices since it provides them more options and keeps them more involved in their decision making processes. Thus, more customer satisfaction and trust are derived in terms of the information received from the interactive media (Pavlou & Steward, 2000). Limitations This study is based on a single case of a small business. It does not attempt to generalize its results to small businesses in general but may only give suggestive information as well as recommendations on what can be effective for small businesses in the same nature and scale size of the business at hand. Research Findings The manager implemented Google ads and used Facebook, Twitter and other multimedia outlets to advertise the business in addition to the company’s website to market the products, services and shows of the business. Sales from the previous year when traditional advertising methods were used were compared with the current year when internet and social media advertising were employed. Sales for the year 2011-2012 Sales were mostly from shows held in hotels and private fittings in the shop’s studio. Sales totalled € 49,256. Advertising media used were traditional ones- posters, flyers and local newspapers. Majority of the marketing campaign was allocated to newspaper ads costing the company €5,560. In December, 2011, the business spent €1075 on Google Ads which paid for a prominent placement for the word search. Key words associated with the business (customized children’s clothes; made-to order children’s clothes; kid’s casual/ formal wear) cost 35c per hit. €35 per day was allocated to get 100 hits per day via this medium. From Jan 2012 the Twinkles Children’s Gear site was No.1 on Google search. Hits peaked at 1100 per day in Jan, Feb 2012. Sales for the Year 2012-2013 Fashion shows continued to be staged quarterly for this year and the company’s web page was changed weekly to reflect shows and promote its products. A total of €7290.00 was spent on newspaper advertising for this season. The company website remained at the top slot for the Google search engine and it is now linked to both Twitter and Facebook. After the second show for the year, the only advertising used was word of mouth, the internet sites and Facebook. Sales amounted to €104,715.00 by September 2013. From this amount, shop sales garnered Shop €63,932.00 because internet and social media ads drove more people to the shop. Show sales amounted to Shows €40,783.00. Most referrals were from the Google search. There were also a lot of comments on the Facebook page of the company when shows were announced and when pictures of the latest items were posted. The page also generated a lot of “likes” (17,453 as of October 15, 2013) meaning new posts were featured in 17,453 Facebook newsfeeds. The sales figures are evidence enough to conclude that the integration of internet and social media advertising were very effective in boosting sales. From a mere €49,256.00 in the first year, sales jumped to €104,715.00 on the second year. This figure for the second year is still not final since it only covered up to September of 2013. It is bound to increase especially now that the holiday season is coming. Marketing expenses were also more reasonable from €5,560.00 spent on newspaper ads to advertise shows and €1075 for Google ads totalling €6,635.00 for the first year. The second year, the company spent €7290.00 on newspaper ads and most of the referrals for the shows and shop visits were from the internet and social media inquiries. Since the company utilized internet and social media as marketing tools, it has become more popular as they had tripled their customer base. There was also a clamour from the customers for the company to sell ready-to-wear clothes for more convenience and since June 2013, these have been made available online. This way, it was more convenient to order the products since they did not have to go to the shop to be fitted. They only had to order the size they needed. This move entailed the hiring of more people to sew the clothes, but the expenses for additional labor were negligible compared to the profits earned. Since the company ensured high quality products, the customers raved about it and shared it on social media. A lot of comments endorsed the company such as: “The clothes you sell fit my child so well that she got a lot of compliments wearing it on her birthday.” –Ashley Johnson “I love the new colours and prints! The new styles were amazing!” –Nina Thomas “Twinkles put a twinkle in my child’s eyes! We’re coming back for more!” –Dorothy McDonald Such positive comments are believed to encourage other social media users who read them to check out the company’s website and were potential customers themselves. Conclusions and Recommendations Although traditional marketing strategies worked for the company, integration of internet and social media advertising tremendously boosted sales. Reaching a wider audience meant building a bigger market. The huge increase in sales by over a hundred percent in just a year kept the owners, manager and staff of the small company in awe of the great impact internet and social media advertising brought. With the increase in sales, it may be said that traditional methods used by the company may be replaced by internet and social media advertising, and even make it more convenient for them. Fashion shows may not be needed to be staged anymore as it required so much effort and expense to do so. Still, it was the fashion shows that kept the “personal touch” with customers who wanted to see first-hand the latest styles in fashion for school-aged children. For now while it is still being patronized, the owners have decided to keep doing fashion shows to present their new clothes to the public. Expenses incurred for internet and social media advertising were considerably less expensive than expenses for traditional methods such as placing ads on the newspaper, printing leaflets and brochures, shooting and paying for television commercials, etc. not to mention the permits necessary to be secured. Even staging fashion shows entailed a big expense considering payment for the venue and token payments to the child models. In terms of interactivity, customers have more opportunity to voice out their inquiries and comments in the internet and social media platform. With traditional methods such as newspaper ads, posters, leaflets and even commercial ads, customers can only interact when they make a further move to contact the company. Online advertising usually have stand-by agents for live chats in case there are customers who have immediate concerns. Hence, Pavlou & Steward (2000) were right in their contention that customers felt more power in this platform because it keeps them more involved in their decision making processes. Recommendations: The manager, impressed with the results of the integration of internet and social media advertising in the company’s marketing repertoire, strongly recommends that the company continue with this move and further explore its possibilities. Since search engines and social media networks direct traffic to the company’s website, it should be kept updated with both current information and attractive layout and design. This is the main website that represents the company so each detail should reflect its philosophy and commitment to high quality. The designer of the website should also consider adding a “child appeal” because the business caters mostly to children aged 7-12 years. It can add more features to make child visitors feel more comfortable in the site and tell their friends about it. To maximize the use of the internet, it is also recommended that the company place ads in websites catering to mothers who have the purchasing power to buy their goods. The comment threads in these sites are influential in convincing customers to patronize certain businesses. It would be good if their business will be the focus of the comment threads’ topics. Comment threads in various sites pertaining to their products should be encouraged because these are considered “word of mouth” and can create much interest in the company. This is one way to reach their target market. Since comment threads seem to be effective marketing venues, the customers also recommended the generation of new threads or blogs on the pleasant shopping experiences of mothers and their children with the shop. This may be done through safe and secure mothers’ or mother & daughter sites such as Kidsbook, Kidswhirl, MagicMum and Mummypages which are designed for the target market of the shop. It is also worth considering using the shopping sites E-bay, DoneDeal, Amazon, etc. to sell their wares. DoneDeal is an e-mail based special offer with discount which attracts buyers with the enticing low prices for quality goods. These sites not only sell items but also advertise the shop and the shows the company stages. Regarding social media networks, aside from Facebook, Twitter is also highly recommended to keep customers updated with show dates, shop sales, etc. It was also a way for old customers to be in touch and mark the dates on their calendars for planned events. Mobile technology is not to be left behind as customers recommended its use to advertise shop sales or upcoming shows. A generic text message to all customers sent occasionally could serve as a reminder to visit the shop or watch the shows. Sending warm wishes can build up the company’s image too. References Berthon, P., Leyland, P. and Watson, R.T. (1996) Marketing Communication and the Internet, Business Horizons, Sept/Oct. pp. 26-32 Interactive Advertising Bureau (IAB) (2012) Lab analysis shows digital media are vital influence on consumer electronics purchases. Retrieved on 20 Nov. 2013 from http://www.iab.net Kalamas, M.,Mitchell, T. & Lester, D. (2009) Modeling Social Media Use: Bridging the Communication Gap in Higher Education, Journal of Advertising Education. Karimova, G.Z. (2011) Interactivity and advertising communication, Journal of Media and Communication Studies, 3(5), 160-169. Lester, D.H. (2012) Social Media: Changing Advertising Education. Online Journal of Communication and Media Technologies, Vol.2, Issue 1 Pavlou, P.A. & Stewart, D.W.(2000) Measuring the effects and effectiveness of interactive advertising: A research agenda. Journal of Interactive Advertising, 1(1), 62-78 Peltier, J.W., Schibrowsky, J.A. & Schultz, D.E. (2003) Interactive integrated marketing communication: Combining the power of IMC, the new media and database marketing, International Journal of Advertising, 22, 93-115. Powers, T., Advincula, D., Austin, M.S., Graiko, S. & Snyder, J.(2012) Digital and Social Media in the Purchase Decision Process, Journal of Advertising Research, Dec. 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