Dissertation: Social Media Retailing Applications: Opportunities

Pages: 34 (9885 words)  ·  Style: Harvard  ·  Bibliography Sources: 34  ·  Level: Master's  ·  Topic: Business  ·  Buy This Paper

SAMPLE EXCERPT:

[. . .] For instance, social media sites Facebook, Twitter, YouTube, and others are wrongly regarded by marketing executives as being mere "chat rooms" for adolescent socializing and nothing more (Keifer 2010). In reality, though, business is booming on social media networks. Indeed, since 2003, the number of social media site users has nearly doubled, and the time spent visiting and navigating these sites has grown by a staggering 883%! (Kunz & Hackworth 2011). According to Kunz and Hackworth (2011, p. 2), "In 2008 alone, the amount of time spent on social networking sites increased 73%. A large percentage (85%) of social media networking users want companies to interact with them using social media applications."

Today, sixty times a minute, every hour, 24 hours a day, social media site users visit at least one of the leading social networking sites and around 50 social networking sites each have more than one million registered users each (Kunz & Hackworth 2011). In 2007, 37% of the adult population and 70% of adolescents used online social networking at least once per month and the global social networking audience is expected to reach a half billion by 2014 (Kunz & Hackworth 2011).

The use of social media network has become the fourth leading online category in terms of user popularity (Kunz & Hackworth 2011). In fact, Kunz and Hackworth emphasize that, "Social networking is not just growing rapidly, it is evolving in terms of a broader audience, and compelling in functionality. One-third of Internet users report comments by consumers provided on the social media sites have been influential when they make a purchase decision, but just 11% considered advertising to be as effective" (p. 3). This is a gigantic change compared to years past when most consumers relied on advertising and word of mouth referrals from their friends, colleagues, friends and coworkers in formulating a purchase decision. In fact, over the course of the previous year, nearly 50% of U.S. consumers had visited a social media site for product or service research purposes while shopping, and more than one in three had visited a social media site within the past quarter (Kunz & Hackworth 2011).

Taken together, the number of consumers using social media sites has grown exponentially in recent years, and growing numbers of retailers are taking advantage of this enormous consumer base to promote their products and services. In this regard, Kunz and Hackworth (2011, p. 3) conclude that, "Based upon the usage rate and statistics, there is no question that retailers are quickly incorporating the use of social networking sites into their marketing communication strategy." As a result, retailers are jumping on the social media bandwagon in growing numbers, and for good reason. According to Qin (2011, p. 188), "Such social media are perceived to be transparent, inclusive, authentic, grassroots and consumer-driven. The unprecedented openness, velocity (speed) and volume of conversations produced by social media have made them become a vital avenue for transmitting word of mouth."

These are vitally important issues for retailing executives searching for cost-effective solutions to their marketing goals, and there is a growing body of evidence that not only does social media contribute to the achievement of marketing goals today, achieving these goals may not even be possible with it. In this regard, Tenno (2004, p. 9) emphasizes that, "The retail outlet is the most important arena for public choice. It is intense in its range of decisions, and numbing in its range of (similar) products. Inside this arena there are limited opportunities within frameworks."

These retailing frameworks per se are certainly not new, but the manner in which they are being applied to social media networks has changed the playing field in major ways. According to Scott (2008, p. 37), the main challenge for marketing executives "is to harness the amazing power of . . . whatever you call it - viral, buzz, word-of-mouse, or word-of-blog - having other people tell your story drives action. One person sends it to another, then that person sends it to yet another, and on." In order to generate this level of interest and consumer loyalty, though, retailers must have a product or service worthy of generating and sustaining this interest and loyalty, but they also need some way to communicate effectively with their target market and social media networks provide a viable solution. In addition, as discussed further below, companies must also build a trusting relationship with their followers on their social media networks. The opportunities for retailers to capitalize on social media networks include social network giants such as Facebook and Twitter, but extend to retailer blogs as well as shown in Figure 1 below.

Figure 1. How Consumers Interact with Retailers through Social Media Networks

Source: http://upstreamcommerce.com/blog/wp-content/uploads/2012/01/Shoppers-Interacting-Social-Media-590x413.jpg

One of the biggest advantages of using social media networks for retailing promotions is their low cost and their ease of use. According to Kunz and Hackworth (2011, p. 3), sponsored promotions on social media networks "do not cost a great deal of money; rather it is simple and quick to post a promotion on Facebook, Twitter, YouTube, etc. The key is to then monitor not just the 'buzz' of pass-along messages, but to analyze the content of the discussion: what consumers liked, disliked, etc." While most authorities agree that it is important to monitor and respond to online feedback to ensure that pranksters are not allowed to flood the social media network with profanities and false accusations, the point made by Kunz and Hackworth concerning the need to analyze the legitimate feedback, both positive and negative, is especially noteworthy. This strategy is congruent with Davidow's (2003, p. 67) finding that "not only did handling complaints lead to an increased intention to repurchase but it decreased negative word of mouth and increased positive word of mouth, thus increasing the overall benefit to the firm."

One of the more interesting aspects of social media is that it capitalizes on some age-old marketing concepts, but expands them in ways never before possible that introduce new opportunities for marketers but which present some new challenges as well. For instance, Qin (2011, p. 188) reports that, "Social media has become an important avenue of word-of-mouth and a recent study has found blogging to be an important lead-generation source among social media options." The vast body of marketing research over the past half century confirms that most consumers regard word-of-mouth has a credible source of information for making a purchase decision (Qin 2011).

Given the ability of social media networks to facilitate back-and-forth communications in an online venue, it is not surprising that retailers are increasingly recognizing the advantages of word of mouth referrals and testimonials for their marketing applications. In this regard, Saastamoinen (2009) emphasizes that the World Wide Web and online communities of consumers with like interests has created a word-of-mouth framework that is unprecedented in marketing history. Likewise, Qin (2011, p. 189) points out that, "The Internet and online communities have brought word of mouth to an even wider reach at a faster speed. For instance, online word of mouth can influence people's online purchase via buyers' subjective norm or via seller reputation."

Positive word of mouth can be generated in a number of ways, including:

1. Online reviews;

2. Discussion boards;

3. Video sites;

4. Blogs;

5. Microblogs; and,

6. Social networks (Qin 2011, p. 188).

The foregoing word-of-mouth opportunities are far more than just a laundry list of online content, they represent the vanguard of the future for retail marketing using social media resources. In this regard, Qin (2011, p. 189) emphasizes that, "With the rapid increase in popularity of Web 2.0 technologies and the explosive growth of online social communities, social media, i.e. consumer-generated media and content, have emerged as new channels in which consumers interact and influence each other, as well as channels in which businesses and consumers interact and influence each other."

Indeed, since the dawn of mankind, all of the printed material published does not equal the amount of user-generated content being published in social media networks each month. Therefore, another noteworthy point of special interest to retailers is the fact that consumers are not only socializing on social media sites and playing games such as Farmville, they are actually actively discussing -- sometimes in passionate ways -- the products and services they use or do not use. As Qin (2011, p. 189) points out, "Not only are a huge percentage of consumers and businesses online engaged in social media, but also a very large percentage of consumers discuss the brands and products they love or hate." Clearly, these issues represent an important opportunity for retailers, but there are some downsides to using social media networks that must be taken into account when formulating social media network retailing strategies and these issues are discussed further below.

Retailing Downsides and Dangers Associated with Social Media Networks

Using… [END OF PREVIEW]

Media Comparison Essay


Social Networking Sites Began in 1997 Term Paper


Analysis About Fairfax Media Limited Case Study


Need of Swarovski's Customer in the Digital World Literature Review Chapter


Marketing Plan Project Research Paper


View 227 other related papers  >>

Cite This Dissertation:

APA Format

Social Media Retailing Applications: Opportunities.  (2013, October 18).  Retrieved August 22, 2019, from https://www.essaytown.com/subjects/paper/social-media-retailing-applications/5815330

MLA Format

"Social Media Retailing Applications: Opportunities."  18 October 2013.  Web.  22 August 2019. <https://www.essaytown.com/subjects/paper/social-media-retailing-applications/5815330>.

Chicago Format

"Social Media Retailing Applications: Opportunities."  Essaytown.com.  October 18, 2013.  Accessed August 22, 2019.
https://www.essaytown.com/subjects/paper/social-media-retailing-applications/5815330.