How has social media influenced Apple market - Dissertation Example

?How has social media influenced “Apple” market? To evaluate the influence that social media has made on Apple market, academic journals were investigated on the topic of social media and its scope and benefits. This research is based on secondary data gathered which has been collected from different sources such as journals and reputed search engines. The study finds that while Apple has so far refrained from direct engagement with social media, its customers have provided the company sufficient publicity through viral videos, podcasts and information. In fact social media has created a buzz around Apple markets, thereby reinforcing the brand. Through further search it has been found that very recently Apple has started taking interest in social media platforms, particularly in Twitter and rightly so, because competitors are fast gaining ground. Table of Contents Contents 1.0 Introduction 1 1.1 Background 1 1.2 Research Objective 2 1.3 Study Plan 2 2.0 Literature Review 2 2.1 Social media platforms and statistics 2 2.2 Social Media and Marketing 4 2.3 Social media and risks 6 3.0 Methodology 7 4.0 Findings & Discussions 8 4.1 Why Apple does not do social media 8 4.2 How Apple derives indirect benefit from social media 9 4.3 Recent “Apple” interest in social media 9 4.4 Reasons why Apple needs to do social media 11 4.5 Overall Influence of social media on “Apple” 12 5.0 Conclusion & Recommendations 13 5.1 Conclusion 13 5.2 Recommendations for Apple 13 1.0 Introduction 1.1 Background The emergence of the social media platforms has led to a dynamic shift in how people interact and build a communicative space for communication and information. The Internet is the basic infrastructure on which the social media platforms are based. In the initial stages, the internet guaranteed equal distribution and access and over time it has been further developed that enables data to be transported through ‘tethered applications’, or ‘applied services’ such as Apple’s iTunes to download songs or Facebook to channel social contacts (Dijck, 2012). While this may have been possible due to technological advancements, it has now expanded into the realm of the social and cultural spheres to the extent that these social platforms affect interactions and reciprocal relationships. Social media has been described as an online platform that facilitates content sharing, collaboration and interactions (Coyle, Smith and Platt, 2012). It is a platform where participants can freely send, receive and process content for use by others (Aula, 2010). Social networking applications also enable creating and managing digital expression of people’s relationship or links. As the social media has enhanced social interactions and relationships, it is also extensively been used by marketers as one of the platforms for marketing and promotion. As such it is used by companies to engage the customers. Companies such as Starbucks and CNN use it to build brand awareness and brand equity (Palmer & Koenig-Lewis, 2009). The number of Facebook users and Tweets has reached such a state that consumers and their virtual networks drive conversation, thereby posing challenge for businesses. Companies have become engaged and try to keep their customers engaged through the social media because they believe that if they do not do so, “they will be out of touch” (Baird & Parasnis, 2011). While many companies have started using the social media platform it is not known how many actually engage and how many have derived benefits from this platform. It is not possible for this study to evaluate the performance of several companies through the social media. Apple Inc is in the field of computer hardware, software and consumer electronics. Their electronic consumer products such as the iPhone, iPad and iPod have particularly changed the way people use the social media. Apple is one of the most valuable brands in the world and has been generating billion dollar revenue figures for over a decade (Statista, 2013). This study would focus on Apple Inc and its usage and benefits through the social media because Apple is believed to be more of a media platform than a consumer electronics company (Elgan, 2011). 1.2 Research Objective This study aims to evaluate “how the social media has influenced the “Apple” market”. 1.3 Study Plan In this research paper, extensive literature review on relevant topics has been conducted. Various articles and opinions of industry leaders have been evaluated. The different social media platforms have been explored and the benefits and pitfalls of social media as a marketing tool have been evaluated. Methodology has been presented which justifies the use of secondary data and qualitative analysis. Findings on use of social media by Apple have been presented and then discussions held along with the theories and literature on social media. Conclusion has been drawn based on secondary data. 2.0 Literature Review 2.1 Social media platforms and statistics Social media has been called the hybrid element of the marketing mix by Mangold and Faulds (2009) as it enables communication between the customer and the company and also among the customers. In traditional integrated marketing communications managers have control over what is projected to the audience but in social media there is no control over the content. With the shift away from the conventional media, online advertising has been the beneficiary. The term social network media is interchangeably used with the term Web 2.0 and this online media is driven by user-generated content (Mangold & Faulds, 2009). The different categories of social media include blogs, social network, content communities, bulletin boards and content aggregators. The social media facilitates interaction between consumers and community. Facebook is worth $100 billion and Twitter has some 140 million active users while brands are currently experimenting with Pinterest, expecting it to be the next big think on the social networking platform (Moth, 2012). While social media marketing was free to marketers, it is now moving to a ‘pay to play’ model if the marketer wants to reach a significant number of audiences (Bullas, 2013). Social media is extensively used by marketers and this is not surprising given the number of different platforms available to them today. While Facebook and Twitter are the two most commonly cited networking sites, others that are gradually gaining ground include LinkedIn, YouTube and Google+. Marketers need to recognize that the social media landscape changes continuously and this knowledge would help make them make their marketing relevant and focused. While Facebook has 850 million users Twitter has 450 million accounts (Bullas, 2012). Facebook offers its members multiple activities to keep them engaged and most of its revenues come through advertisements. Twitter has fewer accounts but its simplicity and immediacy in breaking news of the latest events, is its main attraction. Besides, it carries very interesting content. A chart showing the number of tweets per day between 3rd November 2013 and 3rd December 2013 across three different platforms – Apple, Google and Microsoft – have been presented (Appendix A). LinkedIn is a social network of business professionals and is now an important source for potential job aspirants. Thus it enables exploring opportunities and updating one’s professional profile. Through videos posted through the internet on YouTube, companies are able to enhance communication and customer engagement. YouTube is considered to be an important viral media by marketers and it is known to augment traditional advertising media such as the television (Bullas, 2012). This is the third most visited website according to Alexa. The 18-35 years-olds is the single largest user segment (35 percent) and hence the attraction for marketers. Google+ is a social networking owned by Google and it has crossed 400 million users by the end of 2012. However, this account comes automatically once an individual signs up for Gmail account. People can now access all of these sites through their computers or smart phones. In fact 60 percent of Twitter users access it from their mobile phones (Bullas, 2013). Social media facts and figures are available in Appendix B. 2.2 Social Media and Marketing Social media has become an important tool for marketers for several reasons. Consumers are turning away from traditional source of advertising and demand more control over their media consumption. In fact consumers are turning more frequently to various social media platforms to conduct their information search and to make their purchasing decisions (Mangolds & Faulds, 2009). Most importantly, consumers perceive social media as a more trustworthy source of information and for the products and services than company sponsored advertisements. They look for user reviews and consider these reviews in their decision making. Additionally, consumers feel more engaged with products and organizations when they are able to submit feedback, which may be in the form of criticism or appreciation. In either case, the company benefits. Social media is extensively being used by companies but there is mixed reaction. For instance, not all companies do social media and this does not mean they are not successful. On the other hand, not all companies that do social media can be said to be successful. However, the benefits and potential of social media in marketing continues to attract companies. For instance, social media offers the opportunity to do in-depth research at virtually no cost (Falkowl, 2011). Companies can set goals and get the return on investment but they must know where they want to go and what they want to achieve. While individuals use it to pursue specific interest, marketers have been extensively engaging in social media as it helps them get close to the markets, gather information, host or sponsor communities, provide content to communities and participate as members of online communities. Companies such as Ford use social media before the launch of a new product by engaging with online communities (Parker & Koenig-Lewis, 2009). Other activities that companies can do on social media platform such as Facebook is establish rapport with existing and potential clients, post sales information, new product announcements, promotions through giveaways. Companies are able to keep their valued customers informed of product upgradation, and of upcoming corporate events. Companies have started relying so much on Facebook that Champoux, Durgee and McGlynn (2012) apprehend that corporations may give up their own corporate websites entirely. They cite the example of Starbucks’s Facebook page which has 21 million likes while its corporate site has 1.8 million visitors per month. Samsung Galaxy’s S3 has a Twitter account with almost 2 million followers and it posts daily content on Facebook to 10 million fans (Moth, 2012). Burton and Soboleva (2011) demonstrate different ways in which the interactive capabilities of Twitter can be used to communicate with customers. This newest form of social media is able to create additional marketing communications channels but also add to the existing costs. Companies may require setting up a separate department or a team to monitor and control messages and responses. However, even though Twitter has great potential for external communication with customers, and can be used as a tool to create electronic word of mouth and as a viral marketing mechanism, Burton and Soboleva find no empirical evidence on use of Twitter. 2.3 Social media and risks While enumerating the benefits of social media, Aula (2010) highlights that social media conversation cannot be controlled and content cannot be managed. This can lead to several risks such as reputation risk which affects competitiveness, local positioning, trust and loyalty of stakeholders and could even affect the license to exist. However, an organization should be interactive and respond to the changes in the environment to minimize risks to reputation. If companies have not succeeded after adopting social media, Huy and Shipilov (2012) attribute this to lack of strategy formulation in the adoption of social media. To succeed, companies have to set their objectives and accordingly design their social media strategy. Dell and Best Buy effectively used social media to reduce costs, stimulate innovation and increase revenues. While the number of companies using Facebook may be high, most companies use it only to promote their brand. Fifty five percent of the companies do not use the social media as a tool for customer service and support (Belicove, 2012) which suggests that more important than the number of users is the objective behind using it. However, Tata Docomo with six million followers has proved how social media can be effectively used to extend customer support and service. Dell, on the hand did not service a particular influential blogger and this attracted lot of negative comments about their service (Falkowl, 2011) thereby suggesting that companies have to be responsive and interactive otherwise they risk damage to the brand. While the social media benefits marketers, any negative customer review on YouTube, Facebook or Twitter can cost the company. Huy and Shipilov (2012) cite how Tupperware, with minimal investments in social media, could drive initiative through emotional capital. They could reinforce positive feelings towards the company, towards the colleagues and towards their jobs. Thus the literature reviewed here demonstrates the numerous benefits that marketers can derive through social media although no empirical evidence is available. At the same time, all companies that do social media have not necessarily achieved success. Moreover, social media platform carries risks and requires companies to be interactive. Nevertheless immense potential is envisaged in using social media as a tool for marketing. 3.0 Methodology This research to evaluate how social media has influenced the “Apple” market is based purely on secondary data gathered through different sources. While some research has been conducted through the academic journals, most of the data on Apple has been gathered through internet sources. Secondary data has been analysed based on latest information available on the internet. No primary data has been gathered except for checking the search response from Facebook. This has been done to support the findings from primary data. Data from secondary sources is available in abundance and is relevant to the research objective. Data is recent and provides insight into the influence of social media on Apple. While it could have been possible to gather primary data, the sample size would be very small and may not representative of the whole. 4.0 Findings & Discussions In this section Apple’s stand on social media and how they have derived benefit has been ascertained. 4.1 Why Apple does not do social media While most companies are trying their hand at social media marketing, Apple has refused to join the rush to social, despite being the biggest tech company in the world (Moth, 2012). Most companies have filled their product pages with share icons for Facebook and Twitter and in some cases even Pinterest, but Apple has none (Moth, 2012). Evans (2009) cites reasons why Apple does not engage in social media. Apparently, Apple’s marketing campaigns are so good, social media is unnecessary. Besides, Apple’s customers are happy to blog, podcast, tweet or post videos on the internet, that Apple by themselves do not need to do social media. Social media is supposed to enhance communication with customers and potential customers. Apple does this even without the social media, such as the Annual keynotes at Macworld. Apple Stores is another place where it is possible to have conversation with a real person rather than with an avatar. Despite Apple not using the social media, it tops the social brands list (Wee, 2011). This is because the company works hard on its products and its customers become its brand ambassadors. The profits that the company churns (?7.2bn in the first three months of 2012), suggests that it does not need to revise its marketing strategy, suggests Moth (2012). Apple’s profits are bigger than Google’s total revenues and it sold more than 11.8m iPads and 35m iPhones in Q1 in 2012. Apple is also the hottest property in terms of goodwill and its estimated valuation is $153.3 billion, positioned even higher than Coca-cola, BMW and HSBC (Stat Spotting, 2011). While the number of Facebook fans and Twitter followers is not an indication of the success of a brand, sales figures are. Moreover, the effectiveness or efficacy of social media strategy is unclear as even Coca-Cola’s Powerade experienced much larger growth in sales despite a low social media presence like Apple (Burton & Soboleva, 2011). 4.2 How Apple derives indirect benefit from social media While Apple makes all efforts to steer clear of the social media, most of its marketing takes place through this media. Apple’s fans create the buzz around new product launches on blogs and Twitter but Apple maintains complete silence – it neither gets involved in the discussions and nor does it influence the discussions. This is Apple’s strategy – it creates a social buzz by remaining silent and allowing the rumor mill to do the public relations work (Moth, 2012). Through their silence they are able to generate excitement around its products. Apple even forbids its staff such as programmers and software engineers to be very active in online forums and blogs. Even though Apple has not directly involved in social media, it has been watching social internet trends closely (Dilger, 2013). Its greatest success in social networking has been to create a reliable mobile development platform and App store ecosystem for iOS. The App Store has led to the development of apps and the iOS has cultured high volume of social interest in innovative app experiments. 4.3 Recent “Apple” interest in social media In recent years Apple has integrated Twitter into its mobile and Mac operating systems but that is only to satisfy customer wants (Moth, 2012). They have themselves not embraced social for marketing. However, what has been seen is that Apple does see some value in social media as it operated Twitter and Facebook accounts for its sub-brands like the App Store, iTunes and iBooks. Even these accounts just send out push marketing messages for customers; Apple does not respond to customer queries through this media. However, it appears that Apple may not respond to customers on the social media but when complaints are posted on Twitter, the customer immediately receives a call from Apple (Marshall, 2009). This suggests that they do not respond through or are not active on the social media but they pay heed to customer responses and reactions and help resolve issues. Apple has been keeping away from the social media directly but as of September 2013, the new CEO, Tim Cook has joined Twitter (Bennett, 2013). In fact Apple has acquired tweet analytics firm Topsy, which has all kinds of potential applications for the company (Dilger, 2013). This has occurred just a few weeks ago (December 2013) and different industry observers cite different reasons for this acquisition. Topsy has advanced beyond the prototype stage and provides deep analytics on Twitter’s current and archived steams of tweets. This acquisition suggests closer embrace of social networking by the company as well as its needs of tools to glean value from the huge amount of data available to the company. Apple could also integrate social media into Apple’s iOS and OS X platforms. The company may also be keen to use Topsy’s technology to analyse its own data. Apple Stores are storehouse of knowledge and customer information but Topsy’s technology could help Apple to cross reference these observations, enhance operations and inventory management and improve its hitherto neglected responses to customer feedback over social media. 4.4 Reasons why Apple needs to do social media The fact that Apple keeps away from social media is evident from the Facebook search for “Apple” that revealed links only to iPad, iPhone and Apple Store (Appendix C). One single link to Apple Inc revealed some negative reviews to which no company responses were found. This page on Facebook may not be an official page as is evident from the comments posted on the page (Appendix D). The reviews on this page express dissatisfaction with the product and after-sales-service, even expressing the intention not to continue with iPhones. While Apple can rejoice that 84 percent of its iPhone users said they would again buy an iPhone when they need to replace their phones, Apple should also note that more than 70 percent of smart phone users would like to stick to the type of phone they have because of seamless integration of features and access to content (The Telegraph, 2011). This is based on a study conducted by the research firm GfK on brand loyalty in smart phones sector. This study found the following: iPhone brand loyalists who would again pick iPhone 84% Smart phone loyalists with Google’s Android 60% Blackberry Loyalists 48% Overall consumers expected to be loyal to their brand 63% According to the research firm GfK, it is not more about how brands can lure consumers from rivals. What consumers seek is harmonious user experience. This suggests that Apple’s leading market position may change if it does not step up its marketing activities. Engagement with the social media could be critical for the future success of the brand. Android and Windows OS smart phones are fast picking up market share and could pose challenge for Apple in the smart phone market. While competitors such as Samsung use the social media aggressively to invite fans to be a part of the launch, offering previews, teasing content and encouraging them to ‘meet the next Galaxy’, Apple was not proactive enough in pushing positive messages about iPhone 5 and the innovation it offered (Macdailynews, 2013). This low level of proactivity and staid marketing tactics leaves the social space open for competitors to take advantage. When the company finally does react, it is usually too late. Its long stretches of silence create a vacuum for others to take advantage of. This is not effective public relations and another reason why Apple needs to do social media. 4.5 Overall Influence of social media on “Apple” Apple has gained indirect benefits through the social media, primarily because of the buzz created by its customers. Customers create hype about a particular feature on any of its products and the word spreads, thereby attracting those that were yet to decide on their purchase of Apple products. The reliable mobile development platform and App store ecosystem for iOS developed by Apple demonstrates that they have not been ignoring social networking, as is generally presumed. They do monitor the social media even though they may not respond on the social platform. Instead, they make up for it through personal calls. Therefore, it can be said that they may not have their own blog/page on the social media but they do monitor it and know how to use social media, which according to Belicove (2012) is more important than having a mere presence on social media. 5.0 Conclusion & Recommendations 5.1 Conclusion Apple is an iconic brand and people associate the brand with status. It is one of the very few brands that have kept away from the social media simply because their own marketing campaigns have been effective enough, evident from their year-on-year sales. Social media enables the company and its customers to keep in touch between and among themselves. Apple has been maintaining regular contact with its customers and its customers maintain contact with each other through the social media. Moreover, Apple’s customers provide immense publicity through videos, podcasts and discussions to the extent that despite Apple steering clear of social media, most of its marketing takes place through this media. Therefore, it can be surmised that Apple’s success to some extent has been because of the influence of social media. Social media has influenced them to the extent that they now see value at least through Twitter, which has prompted them to buy the analytics company, Topsy. The new CEO too, has registered with Twitter, possibly to understand how this platform can be effectively used to enhance communications with existing and potential customers. It can thus be concluded that while the general impression is that Apple “steers clear” of social media, Apple has actually been influenced by this media to a large extent. 5.2 Recommendations for Apple However, despite currently Apple being the market leaders, Samsung is fast closing in the gap. Samsung has risen to the top of the mobile phone market in terms of buzz rankings surpassing Apple (Shields, 2013). Apple, despite once again named as the world’s most valued brand is losing “its competitive edge” according to the BrandFinance Global Top 500 brands survey (Baker, 2013). Sales of iPhone did not reach the expected 50 million mark while Samsung’s Galaxy S3 became the most pre-ordered smart phone. Thus, Apple needs to consider corporate blogging seriously, particularly Twitter, to enhance corporate communications. Consumer are not satisfied knowing about deals and offers; they seek answers and solutions to their queries and problems. They expect real-time resolution of their concerns and grievances, failing which they may not hesitate to switch brands. Regardless of their size, any company needs to respond to the social media chatter that occurs in the cyberspace. Hence, Apple should not become complacent and ignore the market trends. Apple should thus maintain separate Twitter account for each of its divisions and provide a link to this directly from the corporate website, thereby authenticating the account. Social media thus adopted would help Apple to reinforce its brand and reach beyond the realms of traditional marketing. Apple is now a global company and brand reinforcement could reach it to greater heights. References Aula, P. (2010). 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(November 27, 2011). "Apple iPhone users most brand loyal", Available from http://www.telegraph.co.uk/technology/apple/8915861/Apple-iPhone-users-most-brand-loyal.html [Accessed December 21, 2013] Wee, W. (2011). "The Brand that doesn’t use Social Media Tops Social Brands List", Tech in Asia, Available from http://www.techinasia.com/apple-social-brand/ [Accessed December 21, 2013] Appendix A Tweets per day: Apple, Google & Microsoft Appendix B Social Media facts, figures and statistics Source: Dazeinfo (2012). Appendix C Links to “Apple” on Facebook Appendix D Reviews on Apple Inc. on Facebook Read More