Influence of Social Media in the Marketing Strategy-Free-Samples

Question: Discuss about the role and influence of social media in the marketing strategy of modern corporations. Answer: Introduction Digitalisation has substantially increased the number of social media users in past decade; people use these sites to communicate and share with their family and friends. The increasing popularity of social media sites attracts corporations, and they started using these websites to connect with their customers, advertise their products and collect feedback on their products. Modern organisations incorporate social media model into their marketing strategy due to its numerous benefits such as larger audience, lower cost, increase in sales, ease in research and many others. Along with benefits, there are several drawbacks of using social media for marketing such as vulnerability to hacking, harassment, lack of measurement methods and many others. Still, most of the corporations use social media for marketing because it provides a new and better platform for companies to show their potential and connect with their customers. This report will focus on analysing the role and influence of social media in the marketing strategy of modern corporations. Further, the report will evaluate various merits and drawbacks of using social media for marketing and provide suggestions for companies in order to increase the effectiveness of their social media marketing strategy Project Objective Primary goal of this report focuses on performing a literature review on the influence and role of social media websites in the marketing policies of enterprises and on the companys performance. The report will take the example of Starbucks Corporation to understand impact and role of social sites in marketing strategy. The secondary objective of the report is to understand various rewards and shortcomings that a corporation has for using social media sites as advertisement tool. Project Scope The report will understand the role of social media from the perspective of Starbucks Corporations marketing strategy. The report will evaluate theories of experts on the similar topic and analyse the perspective of various firms to evaluate the influence and impact of social media sites. The report will also include merits and shortcoming face by corporations for implementing social media advertisement policy into their marketing approach Literature Review Due to digitalisation, the popularity of the internet and online service has grown globally; people access these facilities directly through their smartphones or computers. Social media sites become substantially popular in past decade because of the ease of internet access through smartphones. According to Mangold and Faulds (2009), online social websites are the online platforms on which users can create their account and connect with other people. These sites are internet-based platforms that assist people in communicating and sharing with their family, friends, and colleagues. The social media users are growing rapidly with the popularity of smartphones; in 2017, the social media users in 2.46 billion and by 2021 it is expected to grow by 3.02 billion (Figure 1). Keitzmann et al. (2011) stated that the popularity of social media sites attracted firs, and they started using them to interact and connect with their consumers. The number of corporations on social media is grown as we ll; in the United States, more than 88 percent of the companies use social media for interacting with their customers which means 9 out of 10 companies uses social media (Bennett, 2014). The corporations use social media for various business activities such as recruitment, collecting feedback, interacting with customers, marketing, conducting market research and many others. The ease of social media provides a large platform to companies, and they can use it to their advantage. For example, using social media for recruitment procedure assist companies in reaching global talent and assess them without any additional cost. Henderson and Bowley (2010) mentioned that modern corporations hire people from all around the world, and they use services such as Skype, Facebook, and Google Hangouts to connect with them and conduct the interview. It reduces the cost of advertising for recruitment because interested candidates can directly connect with the company, and they can give an interview without actually visiting the company. According to Paquette (2013), the company can also use a social media platform to interact with the customer and collect their feedback on their prod ucts. The feedback collected by company from the customers can assist in improving the quality and usability of their existing product. According to Tuten and Solomon (2017), organisations such as Starbucks understand the role and potential of social media in marketing, and they utilise it to their advantage. Starbucks is an American coffee house corporation which was founded in 1971; the company operates in more than 26 thousand locations globally. The primary benefit of using social media sites for marketing is that it provides a wider reach to the company which is not available in any other mode of marketing. For example, televisions and radios have a limited range and companies can use them to connect with the local audience; the company can broadcast their advertisement on global channels, but it substantially increases the cost. Using billboards for marketing have limited scope since only local and people passing by the billboard can see the advertisement. All these problems did not exist in social media marketing because the internet is a global platform. Internet provides an open platform to people that can be accessed by anyone from anywhere; it is also a larger platform with billions of active daily users. The companies can use this platform to broadcast or display their advertisement to a broader audience. Starbucks has more than 37 million likes, 11.9 million followers and 15.8 million fans on social media sites such as Facebook, Twitter and Instagram respectively. As per Gallaugher and Ransbotham (2010), the company can use social media websites to promote and advertise their products directly to more than 64.7 million people that are also interested in their products. The reach of social media sites is wider than television or radio since it includes people from different age group. The companies can also use social media marketing to target specific demographic for which they offer their products or services. The research conducted by LaMontagne (2015) provides that 18 to 34 years age group people are more likely to follow the brand on social media for various reasons such as to gain incentives or offers because their friends, family or colleagues follow and for any other reason. York (2017) conducted a study on various social media sites and divided them based on demographics; the companies can use these studies to implement an effective social media strategy. For example, on Facebook, there are more female active users than male and 18-29 and 30-49 age groups are the most active. Chua and Banerjee (2013) stated that Starbucks target demographic includes these people; therefore, they have the highest followers on Facebook than compared to other social media sites. The company uses this platform to their advantage since they remain most active of Facebook and use it to market their products. As per York (2010), using this strategy assist in increasing the sales of Starbucks and it also increases its number of customers since people are more likely to buy Starbucks coffee if they see it in their social media timeline; they see their friends or family trying it or a celebrity they like. Starbucks is popular among a number of celebrities, and people post their picture along with Starbucks coffee which increases the sale of the company. Taylor Swift, Miley Cyrus, Kim Kardashian, and Katy Perry are some of the celebrities who like Starbuckss drinks. These celebrities have huge social media following which assists in increasing following and sales of Starbucks. Many celebrities such as Vanessa Hudgens, Selena Gomez, and Hilary Duff, have uploaded their pictures along with Starbucks drinks on social media which help in celebrity endorsement without paying any cost by the company and it is only possible on social media sites (Jones, 2017). Saravanakuman and SuganthaLakshmi (2012) provided that when compared to traditional methods, social media marketing is easier and affordable way to advertise companys products. Conventional advertisement source such as television, radio, or billboard requires a considerably high cost of investment, and they also have a limited audience. Whereas, in social media marketing, the cost is comparably lower and it provides exposure to larger audience (Figure 3). Social media sites, such as Google Plus, Facebook, Instagram, and Twitter, charge money to display or show advertisement on their sites or to specific users but as compared to traditional methods it are far better. Glesson (2012) contributed an article in Forbes comparing television and digital marketing; the research provided that companies spend more on an online advertisement than offline marketing. People show more trust on online advertisements than compared to television marketing, and they are more likely to buy a product onl ine than offline (Figure 2). Kaur (2016) stated that social media platform provide the opportunity of free marketing to companies which is not available on any other platform. For example, creating a social media account is free, and any corporation can create its social media profile on multiple sites. The interest customers who prefer the brand follow them over different social media account which increases the following of company on social sites. The firm then directly advertise to its audience without paying money to social media sites for displaying its advertisement. For example, Starbucks post on its social media sites that they are launching a new drink and did not have to pay for such post and it reaches their target audience. As per Hanna, Rohm and Crittenden (2011), the launch of new products on social media sites has become increasingly popular, and companies do that to increase hype for their product. On social media sites, companies can easily track their order and see how many people have seen it and clicked on it, but, in traditional marketing, this option is not available. Hoffman and Fodor (2010), the corporation can track its audience and set their marketing strategy based on such information. The social media sites also provide a platform to firms for conducting market research in order to improve their marketing strategy. Many companies conduct a survey on its followers and ask their opinion and suggestions to improve their products. It is easier to conduct an online survey than an offline, and it also provides a larger audience to the companies. Many companies conduct a poll on social media sites asking their follower about which new product they want to see next and follower can easily vote in such poll. Based on its results, the corporation can implement its future development and marketing strategies. As per De Vries and Leeflang (2012), the popularity of mobile applications and internet-based services also assist in increasing the role and impact of social media sites in marketing strategy. The popularity of internet of things devices assist p eople in accessing their social media account through various devices and companies can use these new platforms to make creative marketing strategies. Along with numerous advantages, there are several disadvantages of social media marketing as well; modern companies have to deal with these issues while using online platforms to display their advertisement. One of the primary drawbacks of using social media strategy is the vulnerability to cyber-attack. As per McGuire and Dowling (2013), using social media sites require companies to upload their data to online servers and connect with online platforms which increase the risk of cyber-attack. The rate of cybercrimes is increasing along with the popularity of social media sites, and hackers target large companies social media account to gain an unfair advantage. In past years, there have been several attacks on social media accounts of large corporations which show the risk of using social media marketing strategy. For example, attack on Ashley Madison leaked personal information of 30 million users; the data breach on Apples cloud service iCloud resulted in leaking more than 500 pers onal photos of celebrities (Maddaus, 2017). The accounts of HBO, Sony, Home Depot, eBay and JP Morgan, have also been attacked and hackers leaked the personal data and sensitive files of companies. In 2013, the breach of Yahoos database is considered as one of the biggest data breaches in the history by experts who affected more than 3 billion people (Haselton, 2017). The rate of cybercrimes is growing rapidly, and it increases the risk for companies to use social media for marketing (Figure 4). Using social media marketing also include various insider threats that may result in decreasing companys market reputation. For example, social media sites are 24*7, and corporations also have to interact with their customer all the time, any human error or activity of the user can be detrimental for the corporation. As per Okazaki and Taylor (2013), employees can upload deleterious comment or post on social media sites that may offend followers or public. The insider threat also increases the risk of cybercrime; the attack on Morgan S tanley is a good example in which the hackers gain access to companys online data through inside help. In 2016, IBM conducted a study on cybercrimes which provide that more than 60 percent of the attacks are caused due to insider threats (IBM, 2016). Using social media strategy for marketing also includes the risk of hidden costs that increase the overall marketing budget of a firm. For example, to protect the online account from cyber-attacks, corporation have to invest heavily in security software. The research of Gartner provided that global spending on social media security has increased up to $90 billion in 2017 and by 2020, it is estimated to reach $113 billion (Gartner, 2017). Social media sites provide a larger audience but reaching specific demographic has become difficult for companies because a large number of firms use these services. According to Mainiero and Jones (2013), the company faces harassment on social media sites because anyone can post anything on online platforms which increase the risk of mental problems in employees. Only the large corporations are able to use social media for their marketing strategy effectively, but smaller companies have to invest heavily in order to increase their online followers. Many people also consider social media sites as time waste which increases peoples addiction on internet services; therefore, it also has a negative image in between people. Organisations can assess their market and implement an effective social media marketing strategy to gain a competitive advantage over its competitor. Following suggestions can be implemented by companies to avoid the risk of social media and increase their profitability. The companies which are using social media marketing strategy should invest in online security software because cyber crimes are increasing rapidly and firms can lose all of its followers in case its social accounts are hacked. The corporations should not treat social media sites as any other traditional source of marketing because people have a voice on this platform, and they can ruin a companys reputation. Starbucks has implemented a subtle social media marketing strategy through which they focus more on customer interaction rather than advertising. Instead of posting a large number of advertisements, they upload photos of their customers or product which attract more followers. According to Hajli (2014), the company should also invest in the traditional source of marketing along with social media because many people did not prefer social media marketing (old age people), and they trust other sources of advertisements Conclusion In conclusion, it can be provided that popularity of social media sites is growing between companies, and they are started using social media for advertising their products and services to customers. Social media marketing provides various benefits to corporations such as larger audience, targeting specific demographics, recruitment option, conducting surveys, collecting feedback from customers and many others. Effective use and implementation of social media can benefit the company in increasing its sales and followers. Along with merits, there are several risks of using social media marketing strategy as well, such as vulnerability to hacking, hidden costs, insider threats, and reducing reputation. The companies can assess their market position and implement various strategies to improve their marketing strategy, for example, setting a specific budget for security, and subtle advertisements. The role and impact of social media sites are increasing in modern companys marketing strat egies, and corporations can use it effectively to gain a competitive advantage. References Bennett, S., 2014. 88% of Companies are Using Social Media for Marketing [STUDY]. [Online] AdWeek. 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