Internet and Electronic Marketing-Fashion Sector - Case Study Example

Internet and electronic marketing- Fashion sector Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Executive summary Social media is a platform which has seen increased utility in the recent past. This is more so with different businesses in various fields of operation using social network platforms to carry out their marketing activities. One of these platforms is Facebook which has extensively been used by Hugo Boss, a luxury fashion and style house based in Metzingen, Germany. The history of this company as well as the products it produces are explored in a subsequent section. In addition, the resources, facilities and activities used by this company in its Facebook page are analyzed coupled with the high importance of the Consumer Generated Content (CGC) for this company and its products. Some of the reasons behind consumers befriending a company, most notably, consumer trust, market and media fragmentation and the critical issue of connection through social networks are also investigated. Moreover, the mechanisms through which a Facebook page builds and maintains customer relationships are also analyzed. Lastly, three points to be considered by small businesses seeking to set up Facebook pages, namely, constant update, content accuracy and identity creation are forwarded and justified at the last section of the paper, followed by a conclusion of the entire analysis. Table of Contents Executive summary 2 Table of Contents 3 Introduction 4 Hugo Boss; Overview 5 Hugo Boss in the social media 6 Rationale behind consumers befriending a company 10 Points to consider while setting up a Facebook page by small businesses 12 Conclusion 14 References 15 Introduction It is an apparent fact that the increasing popularity of social media in the recent decades has played a key role in influencing how individuals and collectives interact. This fact is supported by Farooq and Jan (2012, p. 627) who determined that online social networking websites best epitomized by Facebook, Twitter and MySpace among others have posed significant impacts on the lives of individuals. This is founded on the backdrop that these platforms have made significant impacts on how the users of the internet communicate, engage in the creation and maintenance of their profiles, share their wide alley of data as well as establish links with friends from different regions of the globe. It is also worth noting that utility of social media has received enormous growth in the past decades. This is evidenced by statistics in 2009 which pointed to the fact that Facebook had slightly more than 175 million active users worldwide (Kaplan & Haenlein, 2010, p. 49). In the beginning of 2012, Facebook had 900 million users and was projected to hit the 1 billion mark of active users by the beginning of 2013. This depicts the enormous size of Facebook as a company and this number is projected to grow, with the overall global increase of internet use with other social networks like Twitter showing roughly similar trends. The social media platform has also been perceived as being integral in the operations of contemporary businesses. This is revealed by Weston (cited in Bolotaeva & Cata, 2011, p. 2) who determined that if social networking is correctly approached in business, it can be integral in facilitating the processes of finding talent and new consumers, developing brand awareness as well as conducting market research and brand intelligence. The following figure shows the growth trends of social media between 2006 and 2010 Figure 1.0: Growth trends of social media industry, 2006-2010 Source: White (2010). With the increasing utility of social media in different businesses, this paper will primarily focus on the extent to which social media as well as consumer generated content can transform the operations of marketers. This will assume a case study approach with Hugo Boss, a firm in the retail fashion sector being under analysis. It is imperative to first get a brief overview of this company which is fundamental in gaining an in-depth insight into its operations in the social media platform. Hugo Boss; Overview In a generic sense, Hugo Boss can be described as a luxury fashion and style house based in Metzingen, Germany. This company was instigated in 1924 but the economic situation in Germany at the time forced this firm into bankruptcy. However, 1931 saw the founder of this company reach an agreement with his creditors which saw the resurrection of this business. In 1985, Hugo Boss was floated in the stock market and 1991 saw Marzotto Textile Group acquiring a 77.5% stake for estimated $165 million. In 2005, Marzotto engaged in the spinning off of its fashion brands into Valentino Fashion Group which had newly been created. Today, Hugo Boss group is rated as one of the global leaders in premium fashion and luxury segment of the attire market. This company primarily focuses on the development and marketing of high-end fashion for both men and women (Hugo Boss website, 2013, p. 1). In the contemporary times, Hugo Boss is an employer to a large workforce which is estimated to be around 10,000 individuals. In the fiscal year 2010, this company generated annual sales of EUR 1.7 billion, making it one of the most profitable manufacturer of apparel in the globe (Hugo Boss website, 2013, p. 1). In regard to the products, the renowned Hugo Boss brand has a wide alley of product range. This encompasses classic-modern business wear, shoes and leather accessories as well as stylish relaxed casual and evening fashion. Additionally, Hugo Boss has licensed fragrances, watches, eyewear, motorcycle helmets as well as fashion for children in its extensive portfolio. Hugo Boss sells its products in 124 countries around the world and the consumers from different regions can purchase Hugo Boss products from more than 6,100 points of sale (Hugo Boss website, 2013, p. 1). Hugo Boss in the social media Assaad and Gomez (2011, p. 13) determined that the extension of Web 2.0 and social network, for instance, Facebook and Twitter among others has posed enormous impact on the way diverse firms carry out their marketing ventures. In this regard, this platform has enabled the consumers to receive increased control over and through the communication in regard to different companies and their products. It is also plausible to note that at the heart of any company is its consumers and social networking is a representation of a chance of molding more robust and profitable relationships with the consumers. In actual sense, a company is often in a strategic niche to gain elevated benefits through the utility of social media in its marketing efforts. This is founded on the fact that it is strategically positioned to achieve a better and more comprehensive understanding of the needs among the consumers as well as mold better relationships with these consumers. This is key in heightening the competitive advantage of the company as well as gaining and maintaining its market share (Assaad & Gomez, 2011, p. 14). Hugo Boss has extensively engaged in social networking, a fact which is evidenced by its significant presence in the social media. Nonetheless, this analysis will primarily focus on Facebook and explore the operations of Hugo Boss in this widely used social platform around the globe. It is worth noting that currently, Hugo Boss has 3, 372, 073 likes in Facebook, a phenomenon which is bound to change. Its Facebook page was created in 2009 and has grown in popularity to reach above 3.3 million likes in Facebook in 2013 (Hugo Boss Facebook page, 2013, p. 1). In regard to the resources, facilities and activities which Hugo Boss has on its Facebook page, this company has a wide alley of events which are meant to enhance the interaction of the company and its consumers in the social media platform. This is best epitomized by events like Hugo Fashion Show fall 2013, Vogue Fashion’s Night out and Boss Black Fashion Beijing 3D among others. In addition, Bajpai et. al. (2012, p. 217) determined that Facebook profiles are also endowed with more details as opposed to Twitter. This is founded on the fact that they permit the provision of photos, videos as well as longer descriptions. In this regard, the videos play a central role in showing when different products can be used in addition to how they are used. Moreover, this can also encompass testimonials as different followers of the Facebook page comment on the page for other followers to see. These include comments on various events, new products in the market as well as how the manufacturer can enhance the product based on the experience of the users. Lastly, Facebook can also link back with the pages in other social networks like Twitter as well as send out reminders for various events. In addition, Facebook pages have been credited for promoting different products in real-time and bringing in the consumers (Bajpai et. al., 2012, p. 217). All the above are some of the resources, facilities and activities which Hugo Boss has on its Facebook page. These are integral in not only informing the consumers about how to use different products but also the outlets where they can get these products. Nonetheless, it is imperative to note that Hugo Boss does not actually ‘sell’ its products through its Facebook page. This is founded on the fact that there are no direct lines for ordering different products as well as a price list of these products in various countries. Thus, this page can be perceived as primarily serving the purpose of connection with the consumers as well as gaining feedback from the consumers about different products. This feedback is key in helping the company to enhance its products aimed at improving the consumers experience. This is important in not only creating consumer loyalty but also in expanding its market share in the highly dynamic fashion market. It is also important to note that User-Generated Content (UGC) can also be defined as Consumer-Generated Media (CGM). This refers to any material which is created and subsequently uploaded to the internet by non-media professionals. This can range from a professional quality video uploaded to You-Tube or the profile of a student in Facebook (Interactive Advertising Bureau, 2008, p. 1). Consumer-Generated Content has immense significance for Hugo Boss and its products. Firstly, this content can reveal which category of consumers are increasingly using a certain product and based on which motivations, for instance, a particular fragrance. In this regard, Hugo Boss can successfully engage in market differentiation whereby it can focus its promotional efforts towards a certain consumer category based on the utility trends revealed by the Consumer-Generated Content in its Facebook page. Secondly, Consumer-Generated Content is important in the enhancement of various products to suit the specific needs of consumers. This is founded on this fact that this content can show the dynamics in consumer behavior, which can be triggered by changes in fashion among others. In this regard, Hugo Boss is endowed with a better opportunity to tailor its products to suit the specific needs of various consumers in response to market dynamics and eventually by in a strategic niche to satisfy the needs of its consumers. Lastly, Hugo Boss is able to respond to any misconceptions about particular products when using the Consumer-Generated Content. This is founded on the fact that there can be hidden misconceptions among the consumers in the market in regard to the qualities of a certain product, for instance, linkages between a certain brand of fragrance with certain diseases, From the Consumer-Generated Content, Hugo Boss can be able to clarify on the contents of the fragrance under scrutiny and subsequently succeed in creating a positive public image of this product among members of the public. Rationale behind consumers befriending a company Several reasons can be forwarded to explain why consumers befriend a company in the social media platform. Firstly, most of the consumers have the urge of feeling as being part of a larger social set. This fact is supported by O’Brien (2011, p. 33) who determined that as human beings, there is often a psychological need of being our own individuals. Nonetheless, there is also a desire of belonging to a larger social set. In this regard, individuals might befriend a certain company in the social media platform in order to belong to a larger social set which is the company, above the confines of their individual space. Secondly, there is the issue of consumer trust. Neti (2011, p. 1) determined that social media is core in winning the consumers’ trust through connecting them at a deeper level. Thus, when an increased number of individuals befriend a certain company in social networks like Facebook, other individuals in different regions are motivated to befriend the company. This is based on the fact that the large group which has befriended the company exhibit their trust in the operations and products of this company, thus aspiring to befriend the company. Other subsequent users of the social network can also be influenced to befriend the company based on this already established trust exhibited by previous users. Thirdly, there is the issue of market and media fragmentation. According to Hampton et. al., (2012, p. 3), recent figures have revealed that close to half of the adults and three quarters of the teenagers in most developed countries are direct consumers of the social media. Facebook has been cited as being the most popular when juxtaposed with other social sites. In this regard, it is evident that there is immense fragmentation in the market in regard to the consumption of social media. Subsequently, most of the young people can be motivated to befriend a certain company which is associated with the young people’s fragment of the market. This will ensure that they get the latest updates on the products for young people as well as events where these people from this particular age group will come together and share common experiences about the products from this company. Lastly, there is the critical issue of connection through social networks. Anjum (2012, p. 96) determined that the importance of the social media as formidable platforms for connection, interaction, marketing and communication is growing. As a result, when individuals befriend a certain company, they expand their networks and connections in regard to the source of fundamental products which they require. In addition, these individuals are also endowed with the capacity of connecting with particular individuals whom they admire, for instance, celebrities. This is best epitomized by the posting of Aaron Eckhart in a Boss suit in the Hugo Boss Facebook page. In this regard, Facebook users can befriend this company in the social network level in order to be able to connect with this renowned actor. Facebook page build and maintain customer relationships in various ways. Firstly, the consumers are able to get real-time update on various events which a certain company is holding. Subsequently, the questions from the consumers about the particular event are answered on the Facebook page by the administrator which facilitates the development and maintenance of a positive company-consumer relationship. Secondly, in case the consumers forward genuine concerns about a particular product produced by a certain company in its Facebook page, the producer is given a chance to address this concern as soon as possible. In a situation where the company responds accurate and promises relevant action, this is bound to develop and maintain a robust relationship with the consumers. This is where the customer feels like his/her concerns are being addressed and believes that the company cares about his/her comfort and wellbeing. Lastly, through healthy interaction between consumers on the Facebook page, the company is able to trigger interesting discourses about its products on this page. As a result, the company is able to gain some ideas from the consumers in regard to certain products. This interaction is bound increase the trust and loyalty of the consumers to the company which is key in building and maintaining consumer relationships. The importance of social media platforms like a Facebook page in building and maintain consumer relationships is supported by PriceWater House Coopers (2013, p. 1) who determined that most top brands around the globe are increasingly putting the social media into utility as a meaningful and relevant mechanism of deepening their relationship with their consumers. Points to consider while setting up a Facebook page by small businesses There are several points which small businesses seeking to establish Facebook pages ought to consider before setting up the page. Three points will be explored and justified in this analysis. Constant update; the small business ought to establish a mechanism of providing constant updates on their page. This can be through appointing an individual who is mandated with the role of providing real-time updates on events as well as uploading photos and videos to the page. This is key in ensuring that the consumers are constantly informed and any of their questions regarding these events addressed as fast as possible. In addition, constant updates are critical in showing that the company is progressing on daily basis which is fundamental in gaining the confidence and trust of the consumers. This is whereby in case the small business fails to provide real-time updates to the consumers, this can generate a feeling that the company is on a downward trend which can have detrimental impacts on the company. Content accuracy; the small business ought to engage in extensive research about their facts which are eventually disseminated to consumers. This is related to aspects like market trends as well as prices of competing products. The importance of this is founded on the fact that the consumers are bound to make their decisions based on the information which is provided on the Facebook page. In this regard, this small business seeking to establish a Facebook page ought to ensure that it has acquired credible information from renowned sources which it will post on the Facebook page. In addition, it is imperative to note that in the course of engagement with the consumers, an informed person ought to be appointed to address any questions from the consumers with accurate and credible data. This is founded on the fact that this engagement process is fundamental for any social marketer as well as in the establishment of successful social business practices (Evans & McKee, 2010, p. 11). Identity creation; in this case, the small business ought to make increased efforts to create a particular identity in its Facebook page. This is whereby in case the business offers products which are mostly consumed by young people, it ought to underpin the contents which are posted on this page from the young people’s perspective. The above fact is evident in the Hugo Boss Facebook page whereby the act of posting the picture of Aaron Eckhart in a Boss suit in the Hugo Boss Facebook page creates a sought of identity in the page whereby young people and those aspiring for celebrity status can identify with the content in this page. Thus, the small business ought to create a robust connection between the products it is offering, the personalities and events in the page and the particular group which it is targeting. The above approach is bound to create strong consumer identification not only with the company and the Facebook page, but also with the events being posted in the page and the different products that this company is offering. Conclusion From the above discourse, it is apparent that the utility of social media has elevated in the recent decades. This has also seen the increase in the use of social network platforms for marketing purposes by various businesses. This analysis has been centered on the case study of Hugo Boss, a luxury fashion and style house based in Metzingen, Germany. It has explored its history as well as the various products from this company. In addition, it has analyzed the undertakings of this firm in the social media, most predominantly in Facebook in terms of the resources, facilities and activities as well as the significance of consumer generated content for this company and its products. Towards the end of the paper, the rationale behind consumers befriending a company have also been explored. Lastly, three points to be considered by a small business seeking to establish a Facebook page, namely content accuracy, constant update and identity creation have also been forwarded and justified. References Anjum, A., 2012, ‘Social Media Marketing: A Paradigm Shift in Business’, International Journal of Economics Business and Management Studies, Vol. 1, No. 3, pp. 96-103. Assaad, W., & Gomez, JM., 2011, ‘Social Network in marketing (Social Media Marketing): Opportunities and Risks’, International Journal of Managing Public Sector Information and Communication Technologies (IJMPICT), Vol. 2, No. 1, pp. 13-22. Bajpai, V., et. al., 2012, ‘Social media marketing: strategies & its impact’, International Journal of Social Science & Interdisciplinary Research, Vol.1, No. 7, pp. 214-223. Bolotaeva, V. & Cata, T., 2011, ‘Marketing Opportunities with Social Networks’, Journal of Internet Social Networking and Virtual Communities, Vol. 1, pp. 1-8. Evans, D., & McKee, J., 2010, ‘Social Media Marketing: The Next Generation of Business Engagement’, Wiley Publishing, Inc, Indianapolis. Farooq, F. & Jan, Z., 2012, ‘The Impact of Social Networking to Influence Marketing through Product Reviews’, International Journal of Information and Communication Technology Research, Vol. 2, No. 8, pp. 627-637. Hampton, KN., et. al., 2012, Why most Facebook users get more than they give, Pew Research Center’s Internet & American Life Project, Washington D.C. Hugo Boss website, 2013, ‘The Hugo Boss Group’, retrieved 23rd March 2013, . Hugo Boss Facebook page, 2013, ‘Hugo Boss’, retrieved 23rd March 2013, < http://www.facebook.com/hugoboss?fref=ts>. Interactive Advertising Bureau, 2008, ‘User Generated Content, Social Media, and Advertising — An Overview’, retrieved 23rd March 2013, < http://www.iab.net/media/file/2008_ugc_platform.pdf>. Kaplan, AM. & Haenlein, M., 2010, ‘Users of the world, unite! The challenges and opportunities of Social Media’, Business Horizons, Vol. 53, pp. 59—68. Neti, S., 2011, ‘Social media and its role in marketing’, International Journal of Enterprise Computing and Business System, Vol. 1, No. 2, pp. 1-15. O’Brien, C., 2011, ‘The emergence of the social media empowered consumer’, Irish Marketing Review, Vol. 21, No. 1 & 2, pp. 32-40. PriceWater House Coopers, 2013, ‘Social Media: The future of Consumer Relationships’, retrieved 23rd March 2013, < http://www.pwc.co.uk/consulting/publications/social-media-the-future-of-customer-relationships.jhtml>. White, DS., 2010, ‘Social media growth from 2006-2010,’ retrieved 23rd March 2013, < http://dstevenwhite.com/2010/08/08/social-media-growth-from-2006-to-2010/>. Read More