Benefits of Social Network Marketing for the Business

Chapter One

Introduction

For some marketing managers, the twenty-first century may appear a very strange place indeed. Much of that strangeness comes from the ‘electronification’ of traditional marketing practices. O’Connor et al (2004) said that direct and database marketing might be fairly well understood, but what about the concepts such as social network marketing. This is one of the latest tools available to today’s marketing managers. The most popular social network marketing tools are Facebook, Twitter, My Space, LinkedIn, etc., but there are some other different social network marketing methods like blogs, e-mail marketing, video promotion on YouTube and many more. In truth, the migration from traditional marketing to internet marketing is part of a process that has taken place over the past decade. But what is Social network marketing and how it is different from ordinary marketing, advantages and disadvantages of social networking, its impact on other businesses has been researched in this dissertation.

Aim

To analyse how social network marketing can help in the effective marketing of a business

Objectives

• Analyse the impact of social network marketing on other businesses.
• Analyse the advantages and the disadvantages of the social network marketing in a business context.
• Analyse the effectiveness of social network marketing.

Chapter two

Research Background

The Cumin Restaurant

The Anand family have a long and successful history of catering, originating from their home in Nairobi, Kenya. They came to the UK in 1975 and have been in the catering business ever since. Their first restaurant in the UK was The Brilliant, followed by Madhu’s, both in Middlesex. These were followed by Curry Craze in Wembley, Curry Special in Ilford and Curry Fever in Leicester, all of which are still very successful today.

The restaurant capacity is 74 cover over two floors – 20 on the ground floor and 54 on the first floor. Being in the city centre, they are also an ideal place to hold business meetings or lunches. (The Cumin Restaurant online, 2011)

Chino Latino, Park Plaza

Their central Nottingham hotel features Chino Latino, the multi award-winning, on-site restaurant.Chino Latino serves fresh, gourmet Pan-Asian cuisine and Latin-inspired cocktails in a relaxed, modern atmosphere.

One of the top Nottingham restaurants, Chino Latino offers a fantastic choice of a la carte, set, tasting and bento box menus. The bar offers an array of exciting cocktails, bottled beers and bar platters in a distinctively Latin atmosphere.

Chapter three: Literature Review

Introduction

A literature review is a survey and discussion of the literature in a given area of study. It is a concise overview of what has been studied, argued, and established about a topic, and it is usually organised chronologically or thematically. A literature review is written in essay format. It is not a commented bibliography, because it groups related works together and discusses trends and developments rather than focusing on one item at a time. It is not a summary; rather, it evaluates previous and current research in regard to how relevant and/or useful it is and how it relates to your own research. (University of Toronto Online, 02.12.2009)

Ridley (2009) described literature review as the part of the thesis where there is extensive reference to related research and theory; it is where connections are made between the source texts and the research among these sources. It also refers to the process involved in creating the review that appears in the thesis.

The changing media environment

The mainstream print and broadcast media have faced major challenges in recent years, with many newspaper titles facing closure and television channels facing shortfalls in revenue. An important reason for this has been migration of significant amount of advertising budgets to online channels. Research by Forrester Jennings (2007) has indicated that audiences and attention is shifting to online channels as 52 per cent of Europeans are regularly online at home. Around 36 per cent of European internet users watch less TV, 28 per cent have reduced their newspaper and magazine reading and 17 per cent have decreased listening to the radios since going online. This shift away from conventional media has been further exacerbated by the recession from 2008 which led many advertisers to cut their budgets, resulting in print and broadcast media receiving a diminishing share of the declining total budget (Jennings, 2007). Online advertising has been the beneficiary of recent changes in the allocation of advertising budgets, but this general shift hides a number of different formats for communicating with target audience, ranging from mass appeal banner ads placed on frequently visited websites, through to personalised e-mail campaigns in which the message can be uniquely tailored to the requirements of individual target buyers.

Social media can be characterised as “online applications, platforms and media which aim to facilitate interactions, collaborations and the sharing of content” (Universal Maccann International, 2008, p.10). the importance of social network media lies in the interaction between consumers and the community, and in the facilitation of asynchronous, immediate, interactive, low-cost communication” (Miller et al, 2009, p. 306). Social network sites allow individuals to construct a public or semi-public profile within a bounded system; to articulate a list of other users with whom they share a connection, and to “view and traverse their list of connections and those made by others within the system” (Boyd and Ellison, 2007, p. 211). On larger social network sites a connection, individuals are typically not looking to meet new people but are more interested in managing relationships by maintaining contacts with old friends who are already part of the extended social network (Boyd and Ellison, 2007; Hart et al, 2008). To sum up, social network sites can be seen as alternative communication tools which support existing relationships and activities in a fun and colourful way that can enrich the users’ experience (Ofcom, 2008). Many social network websites have emerged; attracting distinctive groups on users in terms of their demographics, for example the average age of users of Bebo is lower than for Facebook. Many appeal to communities with specific shared interests.

In addition to consumers-oriented social network sites, many professional and trade associations have set up networks to exchange information of particular interest to member, for example the social networking site “LinkedIn” is particularly aimed at professionals.

There is now lot of evidence that social network sites have become mainstream and it has been reported that globally, these sites account for one in every 11 minutes spent online. In the UK, this figure is even higher – one in every six minutes (Neilson Company, 2009). Over half (54 per cent) of internet users between 16 and 24 have set up their own page or profile on a social networking site (Ofcom, 2008). The take up of online social media has been at the expense of traditional media, and a study by Ofcom of the media habits of UK 15-24 year olds shows that since using such media for the first time, the amount of time spent reading national newspapers declined by 27 per cent; reading local newspaper by 22 per cent; reading magazines by 21 per cent; listening radio by 15 per cent and watching TV by 13 per cent (Ofcom, 2006). Online social media offers opportunities to connect these hard-to-reach audiences drifting away from traditional media.

Social Network Marketing

Marketers need to be where their customers and potential customers are, and increasingly this is on social networking sites. Most of their marketers have started using social networks to market their businesses and to gain financial freedom. It also markets and then offers the product or service to the relevant audience and provides significant benefits using the dialogues and personal connections and to gain a wider audience for the product, but according to Scott (2007, p.229), ‘marketing on these sites can be tricky because the online community at social networking sites hates open commercial messages’.

There are abundant amount of active users across sites like Facebook, Twitter, MySpace and Hi5; 2.6 billion minutes are spent on Facebook each day (Shih 2009). Social networking has become a rapidly growing global phenomenon spreading across the world. According to Chaffey and Smith (2008) well-run communities on the social networks strengthen relationships, trust and loyalty, as well as maintaining brand awareness in the minds of the community members. Communities also allow a unique opportunity to stay close to customers, their concerns, their worries and their desires. Despite these benefits, building an active community can be time consuming and difficult though cheap. Careful moderation and seeding of topics from a subject expert may be required. An alternative approach is to link up to an established community that has greater independence. Either way social networks are the part of the dynamic dialogue and dynamic opportunities that today’s marketer enjoy.

Social network networking has many advantages which makes it an interesting and a useful marketing tool for any business. This tool is cheap compared to other methods of advertising, when it comes to costing to reach the target audience. Another advantage is that it is easy to record and review any marketing campaign which makes it easier to analyse the changes that need to be made in service or products. But when we look at the negative side of it, social network marketing has got some disadvantages as well. According to Shih (2009), the biggest drawback of social network marketing is that the business could be the main targets for the detractors and their criticism which would make people who are interested in the business turn off by reading the negative comments. Some of the common disadvantages of social networks are security and safety of the business, violation of copyrights, vulnerable to thefts and scams. (Sethi and Adhikari, 2010)

In general, the problem with the social networks is they need frequent updating and it is time consuming as well.

Branding on Social Networks

Social networking sites offer brands many opportunities for engagement. When brand profiles are created, the brands can exist as “people” on the sites. Friends can interact with the brands, share information, photos, and videos, and participate in two-way communication. The brand as person enhances the ability of a brand to use conversation marketing. Building a brand persona strengthens brand personality, differentiates brands from competitors, and sets the stage for a perceived relationship. Assuming the brand’s persona is likable and credible, it can facilitate message internalisation (the process by which a consumer adopts a brand belief as his or her own). (Tuten, 2008)

Why would a person “friend” a brand? There are lots of incentives for friending brands, as explained in the Never Ending Friending report. These include incentive-driven motives like getting invitations to upcoming events, receiving information on sales and special offers and relationship-oriented motives such as a desire to support the company because it offers high quality products, to associate with the brand and its image, and to respond to a friend’s recommendation about the brand. The value proposition is already in place. (Clifton, 2009)

Ultimately, branding on social networking sites promotes brand awareness, brand recall, and, if done well, builds on brand loyalty and brand equity. Social networks offers opportunities for brand promotion and engagement for those brands that learn to leverage the unique attributes of network in question. (Clifton, 2009)

However, social networking is not without its flaws. Advertising, even when developed and distributed in superlative online venues, still suffers from the limitations facing all forms of advertising. Clutter is a tremendous distraction for people as they are faced with advertising in and on every imaginable media. Online readers are bombarded with sometimes numerous ads on a single page. With the many display ads, profile components, and widgets visible on social network pages, clutter is an issue. There is also limited inventory for advertising space on the sites. (Tuten, 2008)

Social networks offer the greatest benefits to brands when the brands play to a network’s culture, developing brand personas and engaging friends in dialogue. However, the workhorse of social network advertising is still the display ad. Unfortunately, display ads are not nearly as effective on social networking sites as they are on other types of websites. Clickthrough rates are much lower. (Clifton, 2009)

Marketing in Post Modernism world

Postmodernism invites a unique perspective of how to manage marketing and how to understand the consumer. Postmodernism says that social experiences are an interplay of myths which produce regimes of truth and that much of what we understand or believe about the individual, self, freedom, structure and so on is arbitrary and short-lived, fleeting rather than essential and fixed. We need to change our views as the customer changes.

“The main conditions of postmodernism marketing are hyper-reality, fragmentation, reversals of production and consumption, decentring of the subject, paradoxical juxtapositions (of opposites) and loss of commitment.” (Kotler, 2009, p. 27)

Ø Hyper-reality: Exemplified by the virtual words of cyberspace and the pseudo worlds of theme parks, hotels and heritage centres, hyper-reality involves the creation of consumption sites and marketing phenomena that ‘more real then real’. Here the distinction between reality and fantasy is momentarily blurred. (Kienscherf, 2004)

Ø Fragmentation: “Marketing in postmodernity is unfailingly fast, furious, frenetic, frenzied, fleeting and hyperactive. (Kotler, 2009)

Ø Reversals of production and consumption: Postmodern consumers are active in the production of meaning, of marketing, of consumption. They do rather than have ‘done’ to them. (Kotler, 2009)

Ø Decentring of the subject: Centeredness is where individuals are defined by their occupation, social class, demographics, postcode, and personalities and so on. Postmodernism suggests that this is not so, and that the harder marketers try to pin down the decentred consuming subject the less successful they will be.

Ø Paradoxical juxtapositions (of opposites): We have examples of the mixing and matching of opposites and the combination of contradictory styles in the world famous Irish dance show – Riverdance or Lord of Rings. (Kienscherf, 2004)

Ø Loss of commitment: Growing disillusionment with the delivery of promises and the willingness to try different experiences has resulted in a loss of commitment. The postmodern consumer takes on multiple, sometimes even contradictory projects, to which he/she is marginally and momentarily committed. This is observed in all walks of life: in relationships, in professions, and consumption. Marketing managers experience this when consumer loyalties to brands change. (Kotler, 2009)

Customer Perception and satisfaction

Customers’ perceptions of the quality of a service and their overall satisfaction have some observation indicators. Customers may smile when they talk about the product or service. They may say good things about the product or service. Both actions are manifestations or indicators of an underlying construct we might call customer satisfaction. The term customer satisfaction and perception of quality are labels we use to summarise a set of observable actions related to the product or service. (Hayes, 2008)

The largest contributor to customer satisfaction, however, is something an organisation can’t fully control; the customer’s perceptions. Whether they’re based in fantasy, fiction, or some other state of unreality, perceptions have the weight of fact. In the business of pleasing customers, perceptions are fact.

Perceptions are also wildly inconsistent. Two different customers can consume the exact same product and have radically different perceptions about its quality. The differences may result from expectations each customer brought to the transaction, or they may simply result from varying powers of perception. Moreover, even one customer with consistent expectations might have varying perceptions about a product’s quality, depending on his or her mood, or stress level, the time of day, the alignment of the planets – whatever. It’s tempting to conclude that customer satisfaction is whatever the customer happens to think it is at any point in time. (Hayes, 2008)

Customer Psychology and behaviour

Apruebo (2005) defined consumer Psychology as the study that deals with the activities directly involved in selecting, obtaining, and using products, services and ideas to satisfy needs and desires, including decision process that precede and follow these actions. It is an applied branch of psychology on consumer behaviour.

Consumer behaviour is the study of buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences and ideas. First and foremost, emerging definition refers to the concept “an exchange process,” as a fundamental element of consumer behaviour. A consumer is inevitably at one end of an exchange process in which resources are transferred between two parties. (Solomon, 2009)

Consumer behaviour is an interesting field of study. Its nature is dynamic and an interactive process. All of us are consumers because our tendency or impulse can direct us to market our everyday purchase decisions in the marketplace or any shopping place.

Summary

The review also identifies the impact of social network marketing on businesses along with its advantages and the disadvantages. The literature review gives a greater understanding on the chosen topic set out in the aims and objectives, by the comparative study by different authors, and by highlighting areas of research that have not been fully explored.

The information found enabled the researcher to come across different theories and ideas that need to be considered so as to proceed further into the research.

The limitation that was faced while doing the literature review were that it was sometimes quite difficult to find the information on certain areas of subject as topic being very contemporary and not many books or journals being published on this topic.

The upcoming section will be examining methodology, where the usage of different types of research will be discussed in order to gain appropriate and thorough information.

Chapter four: Methodology

Introduction to methodology

The research methodology defines what the activity of research is, how to proceed, how to measure progress, and what constitutes success. It provides advancement of wealth of human knowledge, tools of the trade to carry out research, tools to look at things in life objectively; develops a critical and scientific attitude, disciplined thinking to observe objectively; skills of research particularly in the ‘age of information’. According to Fisher (2007) methodology is the study of a whole academic field. It is a stepping-back from a subject and a consideration of it at a broader and deeper level.

The research methodology is a science that studying how research is done scientifically. It is the way to systematically solve the research problem by logically adopting various steps. Also it defines the way in which the data are collected in a research project. Several different methods are commonly used in research project and it would vary according to the nature of the aim and objective, scope of the topic and thesis and the sources of data which are used. (Jankowicz, 2005)

Triangulation

Triangulation is the use of multiple methods; usually quantitative and qualitative research, in the study of the study of the same research problem. Triangulation is a complex methodology that usually requires a term of qualitative and quantitative researchers to maintain the integrity of both methodologies. The philosophical basis and assumptions for both quantitative and qualitative research must be maintained when these methodologies are combined, if the findings are to be meaningful. (Grove, 2005)

Objective one: Analyse the impact of social network marketing on other businesses.

Marketing managers from two organisations will be interviewed in order to justify the first objective which helped him to have a thorough knowledge of the impact of social network marketing on the businesses. They are very short personal interviews which will mainly offer realistic data which is much appropriate to obtain a detailed vision into the first objective, with the hopefulness of achieving first-hand knowledge or primary data. The questions which are designed will be same to all the marketing managers. The researcher was encouraged by the words of Fisher (2007) that the idea of an interview is straightforward, the interviewer engages in informal conversation with the respondent about a particular area of interest. The interviewer may steer the conversation a little, by picking up on the cues and themes raised by the respondent, but generally the respondent leads the direction of the interview. More comprehensive information can be obtained during an interview, however the core strength of an interview cannot always be accurate as some interviewees may feel forced into providing better responses, but actually contributing prejudiced data. Some online articles, books and case studies will also be referred to elaborate the impacts of social networking marketing on the businesses.

Objective two: Analyse the advantages and the disadvantages of the social network marketing in a business context.

The mix of personal and the email interview will the method which will be relevant for second objective and will justify the same. It will be made sure that the format of the questions is simple, easy to understand, concised and precise so that the respondents are able to understand each one of it. There would be around 8 questionnaires in the interview with the mixture of closed and open questionnaire. The difference between closed and open questionnaire is simple. The closed ones have lots of tick boxes for respondents to fill in, whereas open questionnaires allow a free response so that people answer using their own words. (Long, 2007)

The second objective which will analyse the advantages and disadvantages of the social network marketing, mix of secondary resources like books, internet, journals, case studies etc. may be helpful to the research and to get some elaborated information because some people may feel shy sharing the information during face-to-face interview and questionnaires and therefore giving a good backup to the objective.

Objective three: Analyse the effectiveness of social network marketing.

The third objective is to analyse the effectiveness of social network marketing so in order to obtain exceptional outcomes the researcher thinks that it is reasonable to procedure explanatory research, making a precise blend of interviews, statistical data and facts, books and various other methods. The researcher thinks that the information or data relevant to objective three is very limited and hence using a blend of interview, statistics, books etc. is very simple in the growth of knowledge to gain a better understanding. Fisher (2007) thinks that observation is relatively underused method in research hence it will be sensible thing to use this method as it provides good examples and information to illustrate the objective.

Observation can be used as a technique to gather quantitative data, and quantitative data may be combined into a participant observation study as it is most commonly associated with qualitative research derived from an ethnographic tradition of studying different people’s way of life (Long, 2007).

The researcher would be observing his workplace (Cumin Restaurant) to justify third objective as Facebook community page was made by the researcher so as to observe the effectiveness of the social network marketing.

Summary

This report has examined some insight into the theoretical outline that constructs the essentials of the methodology. It demonstrates and explains the choice and use of various research methods that are appropriate to the aims and objective of the research project chosen. It is a sound justification of chosen methods, including evidence of secondary data supporting the choice of methods. Alternative methods have been demonstrated confirming malfunction is not a possibility because of external restrictions and limitations. Some objectives are justified by a single method but there are some objectives which required more than one method to justify it.

Chapter five: Findings

Introduction to aim and objectives

This is the largest and probably the most important part this research. This chapter gives an opportunity to discuss the research findings, based on the methods used that were already been discussed in the methodology. These findings are derived from the analyses of statistical data and interviews used for research collection and the measurement of data. Important points of this chapter are linked back to principle ideas in the Literature Review with the evidence obtained in the research.

Aim

To analyse how social network marketing can help in the effective marketing of a business.

Objectives

Following are the objectives of the report:

1. Analyse the impact of social network marketing on other businesses.
2. Analyse the advantages and the disadvantages of the social network marketing in a business context.
3. Analyse the effectiveness of social network marketing.

Findings from Personal Interview

Mr. Sandeep Anand

Owner, Manager,

The Cumin Restaurant, Nottingham

1. Do you or your business have a profile on any social network? Which?

Sandeep: Yes I had a personal profile on Facebook previously but as I came to know that now businesses can make their community page on it as well, I made my business profile.

2. How often do you update your profile?

Sandeep:My web designer generally updates my business page which is usually updated once a week.

3. Did it make any difference to your business?

Sandeep: Not really at the moment, because the profile is quite new, not many people know that we are in Facebook but I hope as the time passes we will get some customer through it. In my knowledge I have got three costumers giving reference from Facebook.

4. Did anybody recommend you to have a profile on social network?

Sandeep: Yes, my web designer recommended me to have one, which I thought is a good idea.

5. If no, then what made you join?

6. Have you identified any business advantage of using Facebook over traditional media?

Sandeep:The biggest advantage of using Facebook is there are good choices which you can make according to your budget and if you are not interested to spend any money just make a profile page and don’t publish it. But you have to put extra effort to make it more effective.

7. What are the drawbacks of social networks to the business?

Sandeep:I have seen some business which has got negative comments which can be viewed by all viewers which is not good for the business. So I think privacy and security is the biggest drawback.

8. Would you recommend anyone to have a business profile on social networks? Why?

Sandeep: Yes definitely, because it gives you an edge over other businesses with very little cost and is more effective than the traditional forms of advertising if used effectively. I will highly recommend to the small and medium businesses which are coming into this sector as a fresher with a minimal budget.

Findings from Email Interview

Ms. Srijana Gurung

Restaurant Supervisor (Chino Latino)/Duty Manager,

Park Plaza, Nottingham

A same set of questions was sent to Ms. Srijana Gurung who is a Restaurant Supervisor and a duty manager in Park Plaza Hotel in Nottingham.

Answer 1: Yes I have a personal profile and a profile for my hotel’s restaurant Chino Latino. My hotel gave me liberty to make a profile page for their restaurant as it is good for their hotel’s business and for their restaurant as well.

Answer 2: I go on to the profile daily just to have a look and to make necessary updates for eg. I introduced a new staff uniform for my restaurant’s staff, so I have put the pictures of it.

Answer 3: Fan following and liking has gained good publicity of our restaurant but we haven’t measured any difference but I hope it goes well in the future.

Answer 4: No, nobody recommended me.

Answer 5: It is one of the most upcoming trends of having a profile on the Facebook and in this post recessionary period many businesses have made their pages on Facebook and results are very positive. So I thought of having one for my restaurant.

Answer 6: Yes, I am sure there are many advantages of social network marketing over traditional media. They are very cheap, cost efficient, easy to manage and operate and the bst one is they are very contemporary.

Answer 7: They take time to show results. There is very less privacy. Anybody can have their profile page on these social networks and even fake profiles can be made and some of these fake profile.

Answer 8: Yes absolutely, they are here for us to use and to use efficiently and as they are very cheap they are very affordable but has to be managed properly and updated regularly. But do maintain the business’s privacy level so as to protect from spam and fraud.

Statistical Data (Econsultancy, 2010)

* Facebookclaimsthat 50% of active users log into the site each day. This would meanat least 175 million users every 24 hours… A considerable increase from the previous 120 million.

* Twitternow has75 million user accounts.

* LinkedInhas over50 million members worldwide.This means an increase of around 1million members each month since July/August last year.

* Facebook currently has in excess of350 million active users on global basis.Six months ago, this was 250 million… meaning around a 40% increase of users in less than half a year.

* More than 35 million Facebook users update their status each day.

* Wikipediacurrentlyhas in excess of14 million articles, meaning that it’s 85,000 contributors have written nearly a million new posts in six months.

* Photo uploads to Facebook haveincreased by more than 100%.Currently, there are around2.5 billionuploads to the site each month – this was around a billion last time I covered this.

* There are more than70 translations availableon Facebook. Last time around, this was only 50.

* Back in 2009, the average user had 120 friends within Facebook. This is now around 130.

* Mobile is even bigger than before for Facebook, withmore than65 million users accessing the site through mobile-based devices.In six months, this is over 100% increase. (Previously