The Benefits of Social Media Marketing for Small and Medium Enterprises - Research Proposal Example

Heading: School Curriculum Your name: Course name: Professors’ name: Date Title: The benefits of social media marketing for small and medium enterprises (SME’s) Summary This is a project proposal that seeks to examine various ways in which social media marketing is beneficial to small and medium enterprises in the world today. It also attempts to illuminate on how social media marketing helps in quick spread of SMEs as well as how these social sites help facilitate effective customer service and satisfaction. The proposal investigates the total cost that the SMEs incur if they employ social media in their marketing strategies. Explicitly, many small and medium businesses have realised the importance of utilising social media in marketing their services and products. Some of these sites include Facebook, YouTube, Twitter, and LinkedIn. These are online sites that allow people to meet and interact as their information about the lives, businesses, academics and other personal issues. Studies show that Twitter and Facebook have millions of account holders, and the number increases every second. These sites are highly indispensable for those small and medium businesses that are trying to stabilise and improve their sales and widen their market share. Businesses can also develop their reputation, personal relationships, and meet prospective business partners through social media marketing. Notably, the costs incurred by SMEs in social media marketing are considerably lower than those incurred in offline marketing campaigns. Nevertheless, in the process of launching their pages and accounts in these social sites, the business may incur high charges. It is also expensive to develop a social site strategy by a small or medium business. Ultimately, the benefits enjoyed from employing social media marketing are higher than the costs incurred. In order to succeed in this project, appropriate data collection methodology is essential. The project will employ quantitative methods that include primary data, which are interviews, questionnaires, observations, surveys and use of secondary data method. Introduction Aim: The aim of this project is to illustrate how SME’s can gain more consumers by using social media marketing, and to show how effective and powerful this tool is in terms of marketing nowadays. Objectives: To provide a general overview of how SME’s can gain more consumers by using social media marketing To examine the cost of social media marketing for SME’s To evaluate how SME’s can spread widely quicker by using social media marketing To find out how SME’s can have a closer look at the customer’s needs, also react quickly on consumers advises and issues by using social media marketing Rational: Looking at the number of users of Facebook, according Facebook statistics web-site, Facebook has more than 800 million active users (Facebook statistics 2011). However, the number of Twitter users, according to BBC News reaches around 200 million users (BBC News 2011). Also Twitter has launched its own search engine, where you can search for any product or service, with their pictures and videos of consumers posting them. Nevertheless, this shows that social media is a potential source not just for social activities, but also a way of saving money and find the best price and service. Consumers will be able to find facts of a particular business and are able to have a discussion with others about these products or service, in our case SME’s. SME’s will gain more consumers by doing so, as compliments and criticism, and likes and dislikes, can spread to thousands of people in seconds. Moreover, a major fact is that social media can convince people to try and have the opportunity to take part of the experience. There is major potential for exposure as users on Twitter for example, have the option to “Retweet” posts that they like, which creates a type of self-promulgating promotional tool, and can reach demographics that SME’s would never be able to access in more traditional marketing ventures. The main financial cost of social media marketing is the time it takes in order to succeed. However, a research has been conducted by Michael A. Stelzner, in his report “How marketers using social media to grow their business” this research shows that 91% of marketers indicates that they were employing social media for marketing purpose (see appendices 1). More and more, the research also has shown the figures of their experience in using social media, as more than 65% of marketers either have been started using social media marketing or have been using social media for few months. And the percentage of marketers that have no experience on using social media is 3%, which is very low (see appendices 2) (Social media industry report 2010). Moreover, social media networking is the wider umbrella of marketing on the internet. A major target for marketing strategies is to increase the online presence, which is focused on here in the particular niche of social media marketing. In addition, it is further derived from the information we collected that the lack of knowledge in social media marketing is actually an underlying result of a wider lack of knowledge in internet marketing in general. There are several social media contents, such as, blogs, wikis, social networking sites, video/photo sharing sites. Literature review Today, social media marketing is one of the most effective tools that are employed by SMEs to gain more customers. Despite the fuss about social media, there are a number of benefits that small and medium business can experience as a result of engaging in social media marketing (Zimmerman 2011, pp. 309-311). Explicitly, social media marketing enables small and medium enterprises to acquire more customers through a number of ways. To begin with, social media marketing allows companies to establish their brands as well as raising the clients’ awareness about their brands (Barefoot 2010, pp. 3-10). This is because large numbers of the world’s population already visits social media sites, such as, MySpace, YouTube, Twitter, and Facebook. The fact that the population will come across a business’s brand name in the social sites makes people aware of the available brands. In fact, businesses that intend to establish an image online should opt for social networks. A company can use YouTube to create a funny video about its business. This is beneficial because such funny clips or videos get their way to the public much faster than other things. Therefore, such videos ought to be interesting enough so as to capture a prospective clients’ attention and even spread the news about it to their friends (Pettigrew, Thomas & Whittington 2002, pp. 311-314). Just as important, Twitter and Facebook can be used to create fun on the internet, and reap its best results in a short time. This is because social network funs regularly visit the sites, and that will promote the firm’s online sales. Zimmerman (2011, pp. 309-311) also says that social media marketing is influential to SMEs because they help them in bringing attention to their products. A small or medium business can achieve this by featuring a service or a product on any of the social media sites available. This is one of the quickest ways of creating attention to a product. A business can also benefit from this by offering a promotion alongside to its online community members. Consequently, such a business can witness a sharp rise in the number of online sales. Barefoot (2010, pp. 3-10) asserts that SMEs can also benefit from the use of the social media marketing since they can attain customer feedback or opinions about their products and services. Facebook and Twitter have business pages on which clients can post their comments about a particular product or service (Bharati, Lee & Chaudhury 2010, pp. 3-6). These opinions can also be made with regards to certain products featured on the business page, on the ‘comment’ and ‘like’ options. Richardson (2010, pp. 38-42) says that this is essential in that firms can receive compliments, suggestions, and complaints of their clients. In turn, businesses can work on the customer responses in order to effectively meet their needs. Small and medium enterprises also gain a wide market share through the use of social media marketing. This is possible through listening to customers give their opinions and suggestions on their products and services (Sanli 2011, pp. 1-12). This enables a business to carry out a market research for its services and products. This market research helps a business to keep track of what the clients like. Barefoot (2010, pp. 3-10) notes that individuals like expressing their opinions on social networks because their do not have to do it face-to-face. As a result, a business can get to know the truth about how customers view it. The newly found information in the media can be used effectively to improve standards and efficiency so as to attract and retain more clients (Nwankwo & Gbadamosi 2011, pp. 164-168). Additionally, Bharati, Lee and Chaudhury (2010, pp. 3-6) argue that social media marketing is influential to SMEs because they enable them to enhance their clients’ trust and loyalty. This is because Facebook, Twitter and other social media sites enable a business to interact with a client in a more personal manner, unlike in other situations. Consequently, customers are made to feel that they speaking a fellow friend, rather than a firm or its products. This is vital in making clients build trust and develop loyalty to a business; hence, sticking to it instead of the business’s rivals. This also boosts the chances of clients’ recommendations to the business (Barefoot 2010, pp. 3-10). Furthermore, Pettigrew, Thomas and Whittington (2002, pp. 311-314) point out that small and medium businesses benefit from employing social media sits in their marketing strategies. This is possible through strengthening of customer service in business. Social media sites enable such businesses to respond to clients’ concerns and questions directly and promptly. For instance, a client can post a concern or question on a firm’s Facebook or Twitter page, and the particular business can reply or comment on the post on time. Subsequently, a business’s customer service is enhanced as well as saving the company a lot of money that would have, otherwise, been incurred on making long distance phone calls to customers (Bharati, Lee and Chaudhury 2010, pp. 3-6). Improving customer service by a business increases its customer base through attraction and retention. What is more, Nwankwo and Gbadamosi (2011, pp. 164-168) businesses benefit from social media marketing by improving their contacts and personal relationships. Some of the social sites like LinkedIn, a business can develop its contacts and improve its reputation as a business expert in a specific industry. It can also link with the long-lost college or high school mates. Facebook was initially developed for high school and college mates (Pettigrew, Thomas & Whittington 2002, pp. 311-314). Therefore, when a business’s products are featured on the social site, there are high chances that the subscribers can share the information to their friends, who in turn, have other friends. This way, a business can acquire as many clients as possible; hence, it can boost its sales volume. Social sites also enable small and medium entrepreneurs to share their business information with like-minded individuals (Sanli 2011, pp. 1-12). Twitter is a great source of client insight; thus, it widens a business’s market share. Internet is the most convenient place to share one’s expertise, talents and hobbies. In no time, people get the information and share it to the rest. In addition, Nwankwo and Gbadamosi (2011, pp. 164-168) maintain that social site marketing also enable small and medium businessmen to develop their personal reputation. This is because they allow businessmen to get their names to the public and discuss issues that are significant to them. As a result, they can build excellent online reputation that is vital today if they are seeking suitable business prospects. In terms of the cost of social media by small and medium businesses, subscribing to these social sites are mostly done free of charge (Spence 2010, pp. 47-50). In fact, most of the companies find social network marketing as one of the low-cost marketing strategy, which produces tremendous results. Impliedly, social media sites enable emerging small and medium businesses to raise their profiles; hence improving their customer base and sales volume. Nonetheless, there are a majority of firms have not embraced the modern technology because they find it only fit for big business players. Such companies, therefore, require a lot of sensitization so as to see the potential benefits of social media marketing in their operations. In fact, social media is important in that it helps many businesses to save millions of money that could be used in conducting other offline marketing campaigns (Neti 2011, pp. 1-10). Nevertheless, some studies demonstrate that Facebook charges in marketing a business are higher than those of Twitter (Spence 2010, pp. 47-50). Setting up a new account and providing partial continuous instruction to business partners, some of the existing public relations agents can charge a monthly average sum of between $2,500 and $5, 000 every. There are others that charge up to $9,000. These prices are inclusive of interaction with clients and status updates, but exclusive of strategy. On the other hand, using Twitter is slightly cheaper than Facebook. To launch a new Twitter account, that is complete with outsourcing content creation or client interaction, and setup, costs an average amount of between $2,000 and $4,000 every month (Pettigrew, Thomas & Whittington 2002, pp. 311-314). Therefore, the overall monthly price ranges from $1,000 to $7,500. There are also specific prices for the existing accounts that need to be upgraded. In order to create a social media strategy, an SME must incur some cost. The creation of a complete social media marketing strategy, and to outsource the entire work for every channel has a monthly cost of between $3,000 and $20,000. With respect to the Facebook and Twitter audit, a business is likely to incur anything between $2,000 and $10,000. Despite these high prices, the benefits obtained by a business that employs social media marketing are incomparable (Pettigrew, Thomas & Whittington 2002, pp. 311-314). SMES are known to spread extremely fast if they use social media in their marketing strategies. This is because social sites have increasing members and registrations every second. Twitter has been in existence since 2006, and by now, there are more than 200 million account holders. In fact, there are more than 65 million tweets that are being used efficiently. As a result, SME marketers can be provided with a strong brand, communications, and sales touch-point (Bharati, Lee and Chaudhury 2010, pp. 3-6). Other social sites that are effective in the marketing of a small or medium business are blogs and YouTube. YouTube videos and blogs are also accessed by millions of people who, in turn, communicate the same to other millions of friends. Therefore, social media marketing boosts the spread of businesses in the world as fast as the sites acquire members. Furthermore, Richardson (2010, pp. 38-42) says that social media is important to small and medium businesses since they provide them with an opportunity to have a closer look at the clients’ needs. They also help them react on time to these needs; hence improving their reputation and performance. Through effective customer service, these businesses can successfully address some of the issues raised by customers; hence, efficiently meeting their needs. Proposed methodology In this research, there are some proposed data collection methods that will be used in order to meet the project’s aims and objectives. This study will employ quantitative data collection techniques, which depend on random structure data collection and sampling instruments. The instruments employed here are suitable for predetermined reaction classes (Connaway 2010, pp. 145-150). Besides, such methods are also influential in the production of results can be easily summarised, compared and generalised. Moreover, Kumar (2005, pp. 220-222) asserts that quantitative research methods are involved with testing hypotheses that are got form theory, and can approximate the sizes of the phenomena under study. In this project, the method will entail treating participants randomly and differently. In a case in which this is non-feasible, the researcher will collect data on situational characters and participants so as to statistically control their influence on the outcome or dependent variable (Shives 2008, pp. 160-165). Some of the data collection strategies that the project will employ include experiments, management information systems, surveys, closed-ended questionnaires, and interviews. In this quantitative research method, interview instruments are structured into telephone interviews, face-to-face interviews, and Computer Assisted Personal Interviewing (CAPI). Besides, the questionnaires to be used include web based, and the paper-pencil questionnaires (Creswell 2003, pp. 153-156). In this research, collection of data can be done in two ways: as primary data or secondary data. In terms of primary data collection, information will be gathered by researcher himself or herself. This method is more authoritative in that data will not gathered by a third party. Furthermore, this method will enable research team to obtain raw information that will then be tailored as per the team’s needs. Nevertheless, this collection method is more costly than secondary data collection. The most suitable collection strategies in this case include interviews, questionnaires, and observations (Kumar 2005, pp. 220-222). According to Teddlie (2009, pp. 218-222) maintains that secondary data collection will also be considered in this project. This involves a situation in where the research team borrows information already collected by someone else. This data collection technique is beneficial in two ways: First, the method is less costly, in terms of money and time, than the primary method. Secondly, in this method, information can be easily and quickly achieved. However, the method is non-authoritative and that the information is unsuitable as they were gathered by a third person (Kumar 2005, pp. 220-222). In this project, data concerning benefits of social media to SMEs will obtained through interviews, observations, questionnaires, surveys, and use of information systems. Moreover, both primary and secondary data collection methods will be employed. Possible conclusions At the end of this study, the research team is likely to come up with various conclusions drawn from the information gathered from different sources. Some of these conclusions include: Social media marketing improves SMEs’ customer volume through attraction and retention. Social media marketing improves SMEs’ spread and effective satisfaction of customer needs through efficient customer service. Social media marketing enables a small or medium business to enhance its performance through development of a positive reputation and personal relationships. Social media marketing is instrumental in a business’s access to clients’ opinions and suggestions and promptly handling of the same. Social media marketing improves a business’s sales volume by featuring their products and services on the social site pages. Social media marketing is less costly than other offline marketing strategies. However, opening new accounts and creation of strategies are costly. Possible challenges Some of the challenges that are likely to be faced in the study include insufficient time, internet failure, hostility and lack of cooperation from the participants. In order to overcome these challenges, the research team will allocate adequate time for data collection, devise other alternatives Action plan/Gantt Chart Task Time/ Duration Remarks Writing the proposal Week 1 Submission to lecturer/ making consultations Week 2 Data collection Week 3, 4 and 5 Data analysis Week 6 Data presentation Week 6 Drawing conclusions Week 7 References Barefoot, D 2010, Friends with benefits: a social media marketing handbook, No Starch Press, San Francisco, CA. pp. 3-10. Bharati, P, Lee, I & Chaudhury A 2010, Global perspectives on small and medium enterprises and strategic information systems: international approaches, Business Science Reference, Hershey, PA. pp. 3-6. Connaway, L 2010, Basic research methods for librarians, Libraries Unlimited, Santa Barbara, Calif. pp. 145-150. Creswell, J 2003, Research design: qualitative, quantitative, and mixed method approaches, Sage Publications, Thousand Oaks, Calif. pp.153-156. Facebook, 2011, Statistics [online] [viewed 03 November 2011]. Available from: https://www.facebook.com/press/info.php?statistics Kumar, R 2005, Research methodology: a step-by-step guide for beginners, SAGE, London. pp. 220-222. Neti S 2011, ‘Social Media and Its Role in Marketing’, International Journal of Enterprise Computing and Business Systems, vol. 1, no. 2, pp. 1-10. http://www.ijecbs.com/July2011/13.pdf Nwankwo S & Gbadamosi T 2011, Entrepreneurship marketing principles and practice of SME marketing, Routledge, Abingdon, Oxon New York. pp. 164-168. Pettigrew, A M, Thomas, H & Whittington R 2002, Handbook of strategy and management, Sage Publications, London Thousand Oaks, Calif. pp. 311-314. Richardson, N 2010, A quick start guide to social media marketing: high impact, low-cost marketing that works, Kogan Page, London Philadelphia. Pp.38-42. Sanli, O 2011, Social Media Marketing, E-Leader Croatia, pp.1-12. http://www.g-casa.com/conferences/zagreb/papers/sanli-Social-Media.pdf Shiels, M 2011, Twitter co-founder jack Dorsey Re-joins Company [online] [viewed 06 November 2011]. Available from: http://www.bbc.co.uk/news/business-12889048 Shives, L 2008, Basic concepts of psychiatric-mental health nursing, Wolters Kluwer / Lippincott Williams & Wilkins, Philadelphia. pp. 160-165. Spence L 2010, Ethics in small and medium sized enterprises, Springer Verlag, Dordrecht New York. pp. 47-50. Stelzner, MA 2010, How marketers are using social media to grow their business [online] [viewed 08 November 2011] Available from: http://marketingwhitepapers.s3.amazonaws.com/SocialMediaMarketingReport2010.pdf Teddlie, C 2009, Foundations of mixed methods research: integrating quantitative and qualitative approaches in the social and behavioral sciences, SAGE, Los Angeles. pp. 218-222. Zimmerman, J 2011, Web marketing for dummies, Wiley John Wiley distributor, Chichester. pp. 309-311. Appendices: (Social media industry report 2010) (social media industry report 2010) Questionnaire 1. What is social media? 2. Are you a member of any social site? 3. What is social media marketing? 4. What are your marketing strategies? 5. Do you use social media marketing? 6. If yes, how often do you use it? 7. How do you rate social media marketing? 8. What are the benefits of using this marketing strategy? 9. What is the cost of social media marketing? Read More