Role of Social Networking Sites to Promote Marketing Strategies of Entrepreneurs in Emerging Economies

Role of Social Networking Sites to Promote Marketing Strategies of Entrepreneurs in Emerging Economies








MARKETING SAMPLE
8,521 Words
38 Pages

Role of Social Networking Sites to Promote Marketing Strategies of Entrepreneurs in Emerging Economies

Published 13, July 2012

Introduction

Traditionally, the main forms of communicating with the general public are through television, magazines, newspapers, direct mail and radio. The drawback of all of these methods is the lack of provision to directly deal with a specific group of individuals (Scott, 2010, p. 6). However, due to the advent of communication technology in 21st century such as the Internet, the World Wide Web and email, marketing communication has been made easier. Another emergent tool that has arrived at the dawn of the 21st century is social networking through websites that have triggered vast audiences to respond to the changes physically, cognitively or emotionally (Barnes, Ini & Fredrick, 2009, p. 415). The establishment of various social networking sites is one of the best services of today’s technology and is due to the changing requirements of consumers. In the year 2011, more than 4.3 billion USD were spent worldwide on marketing using social networking websites (Williamson, 2011). Dave Evans defines social media as, “The democratization of information, transforming people from content readers to content publishers. It is the shift from a broadcast mechanism to a many to many model, rooted in conversation between authors, people and peers” (Enders, Hungenberg, Denker & Mauch, 2008, p. 21).
Social networking sites like Blogs (2004), Podcasts (2005), Facebook (2007), Linkedln, YouTube, and Twitter are growing in a logarithmic manner with more than a hundred million used profiles all over the world (Winterberg, 2010). A weekly analysis has shown that Facebook managed to acquire more users than Google in the month of March 2010 (Nuttall and Gelles, 2012).
Social networking websites are considered the most important online service that provides various applications depending on the needs of the user (Acar, 2008). They provide sharing activities like rating of services, latest trends, resource sharing, and networking (Weaver, 2008). Acar (2008) further indicates that, when compared to other modes of online communication such as email, social networking sites provide a personalized approach from marketers targeting the individual needs of users such as creating attitude, awareness, post purchase communication and evaluation, opinions, purchase behavior, and information acquisition (Acar, 2008). The internet has provided the opportunity for social networking services to reach and directly deal with individuals on a one on one basis. Advertising on these sites costs a fraction of the amount required by traditional marketing and advertising methods (Scott, 2010, p.6). Social media development has had a significant impact on the manner in which brands and businesses communicate with their target audiences (Baines et al., 2010, p.413). A recent survey conducted by Econsultancy and Adobe showed that more than half of the businesses (57%) around the world agreed that social media marketing has been effective on their clients and their revenues. Figure 1 shows that 57% of organizations were engaged in SNS, and 12% of companies found revenue impact directly from social media. Further, 86% of the companies are likely to be active on Facebook, Twitter, You Tube and Likedln (Figure 1).

Background

The number of new entrepreneurs is increasing every day due to the impact of social media and internet technologies. Social media also motivates existing organizations to develop their processes of interaction, development, and services with regard to their customers. The relation between social media and entrepreneurs is considered to be an important factor for the research, as it forms a new paradigm in marketing communication strategies of small business owners. The implementations of web 2.0 technologies over the last few years led to the development of interactive web technologies that improved the communication process between consumer, shareholders, employees, and top management personnel. By means of this development, the personnel within an organization or outside the organization are able to communicate with each other and share information, resources, and views more effectively when compared to the past. The literature includes a number of studies that report the impacts of the interactive technologies concerning small-scale business and entrepreneurs whose business is based on the network infrastructure.
Madhavan (2007) stated that India is ranked fourth in the world in terms of Internet users. Facebook has managed to penetrate only 3.8% of the Indian population, but even such a small percentage of the population places India near the top in terms of Facebook users. Based on this percentage, social networking sites look at the potential offered by the Indian population; this is what makes India a lucrative market for SNS (Diesner, 2012). In 2008, the population of India was 1,147,995,898 people, 81,000,000 of which were using the Internet, which accounts for 7.1%of the total population of Internet users (Internet World Stats, 2009). Social networking is expanding rapidly. About fifty-six per cent of Internet users do both social and professional networking on the web, while 29 percent do only social networking. The usage of social networking sites in India has increased to 52% since 2011, with 76 million people (McNaughton, 2012).
According to ComScore (2012), Indians spent a quarter of their online time visiting social networking sites. Facebook has witnessed a 1686%increase in their April 2010 share based on the estimation of average time spent on the Internet. With the advent of Facebook, users are seen to spend approximately . three hours searching on Facebook, which is comparatively high with the same users spending two hours on Google (Babu et al., 2010).
According to the 2012 Small and Medium Sized Enterprises Report (SME), the overall Indian employment market is comprised of large enterprises (0.1%), small-sized firms (4.89%), micro sized firms (94.94%) and medium-sized firms (0.17%). This shows that micro businesses are the biggest sector. Over 98% of India’s employment comes from this sector alone; therefore, it is vital for small businesses to increase their contribution to the economy in order to increase their market share. Small organizations and enterprises will have to make efficient uses of available resources in order to reduce their operating costs and make more profit. There are a number of difficulties that are faced by SMEs in India (Murthy, 2012). Some of the difficulties are sales and marketing (40.2%), human resource management (15.3%), general management (14.3%) and operations (8.6%). One of the main reasons as to why small enterprises are finding it difficult to carry out marketing activities is their inability to hire experienced marketers (Murthy, 2012); in order to counter this, they are moving towards social media marketing. This study will delve into the commercial use of social networking websites by Indian entrepreneurs. There is a lot of focus on regarding the ways organizations are using social media to attract customers. The main concern with analyzing the commercial features of social marketing is to evaluate the exponential development of social media in motivating the marketing and advertising features of new businesses (Indrupati, 2012). The objective of this study is to fill the existing gaps by restructuring and implementing the marketing communication plans of new businesses by making use of tools of social marketing.

Problem Statement

There are a number of changes associated with the use of strategic marketing tools by new businesses (Laínez et al., 2010; Wirtz et al., 2010). In this study, I will identify current methods adopted by entrepreneurs to promote their products and build their resources by using social networking websites (SNS). The questions that are proposed are as follows:
1.What are the different marketing strategies that are adopted by small business entrepreneurs?
2.How do companies use social media in their marketing communication?
3.What are the perceived advantages and disadvantages of marketing strategies on social media websites?
4.How cost effective is advertising through social media in comparison to other online advertisements?
5.How has marketing via social media affected the business performance of small business entrepreneurs?

Hypothesis

H1: The presence of online advertisements will create intention to revisit the site without advertisements
H2: There is a positive relationship between advertising format and individual characteristics and that could impact intention and behaviour (motives and belief)


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According to The Internet World Statistics, (2011) there are two billion (2,095,006,005) Internet users worldwide. Among them, majority of them are from to Asia and Europe. According to a report from the Internet and mobile association in India, there are about 38.5 million online users in India you mean, as you just said there were 2 billion (Suresh & Shashikala, 2011). However, almost one fourth of the population from developed countries use the Internet for various reasons and purposes. Wang et al., (2002) suggested that most of the goal-oriented users of the Internet are supported and motivated by the online advertising services, which have an impact on consumer behaviour. Hopkins, Raymond, and Mitra (2004) argue that online advertising influences attitude and purchase intentions, with respect to advertisement and brands, as the above mentioned characteristics enable narrative format and virtual presence of the products or services. In the United States, online advertisement earned $5.7 billion during second quarter of 2008 (IAB, 2008).
Many organizations have adapted to e-commerce in order to establish electronic storefronts for managing complex supply chain operations. Epstein (2004) argues that the key question is not the investment made by the organization in e-commerce but how to profit from such investments. There are various aspects related to the profitability of the organization adapting to online marketing. The costs related to search functions and transactions are considerably reduced to a certain extent for Small and Medium Enterprises (SME) in the developing countries. Due to the adaption of online marketing strategies, organizations are able to increase their efficiency and to reduce time and costs.
According to the report from Indian Online Retail Market Analysis (2012), a rapid increase in the online retailers exists in India. Along with the increase in Internet penetration, broadband availability, and use of smart phones, consumers have adapted to buying products using online services comfortably. The major reasons of/for attraction to online services are cash-on-delivery payments and discounts or offers provided by online marketers. The adaptations in the lifestyles of people in metropolitan cities also attracted the consumers to the online services. In India, the online service markets are highly influenced by the increase in the sales of the kids’ products and groceries. However, despite the increase in sales, the online retailing is not given much importance. There are around 80 million internet users in India wherein, the penetration rate is only 7% of the population (17% of urban population) when compared to other developed countries, whose penetration rate is of 36% (Bhinde et al., 2011). Moreover, the Internet is as a medium of online shopping amongst consumers that is relatively low (Shrivastava & Ujwal, 2011), which represents a growth potential for intentional marketers. Despite the huge potential of the Internet usage for online marketing in India, its user perceptions, attitude, acceptance, avoidance, and behaviour have received little attention from academics.

Justification

The existing literature does not concentrate on the implementation of social networking websites by small and micro business owners. This study tries to reduce the gap by means of determining the complex factors that influence the adoption and implementation of social networking websites by small-scale enterprises. Organizations are diverting their concern towards social commerce rather than e-commerce (Williamson, 2011). The research aims to provide ideas concerning the implementation of new business strategies using social media websites for budding entrepreneurs.

Project Goals

The main aim of this study is to identify the use of social media websites as a tool to promote communication concerning marketing activities promoted by small business owners. There is a need to understand the trends of marketing and usage of social networking websites.

The following objectives are proposed in this study: 1.To understand the attitude towards marketing and promotion among small business entrepreneurs from India.
2.To understand the attitude of Indian small business entrepreneurs towards use of online social networking websites.
3.To identify the current trends in the use of social networking websites as a tool for marketing in India.
4.To identify the perception of advantages and disadvantages of social networking websites.
5.To identify the cost effectiveness of social media marketing versus online advertising
6.To identify variation about demographics in terms of perception of advantages and disadvantages of social networking websites.
7.To identify current methods adopted by entrepreneurs to promote their products
8.To make recommendations by which entrepreneurs’ can improve their customer base.

Literature Review

Networking, Social Networks and Social Networking Websites

According to Anderson et al. (1994) and Pitt et al. (2006), the term “social network” is derived from sociology in order to promote business relationships. In general, a social network is used to sustain the relationship among various business partners as well as the relation among business shareholders and customers. The concept of networking is enhanced by means of various relations that exist among different individuals. The networking concept enables the development of various relations that include individuals, groups, and in some cases large organizations. Wasserman and Faust (1994) argue that there is rapid development and establishment of networks with respect to socializing.

As emphasized by Mangold and Faulds (2009), social media as a hybrid element related promotional mix and hence implement the same as integral part of IMC strategy in organizations. Social media allows customers to be part of the interaction process rather than considering them as targets for the marketing messages of corporations. With the help of social media, organizations are able to focus on customers, address their needs and interact with them effectively. With the incorporation of social media marketing techniques, organizations are able to establish new relationships with customers, interact with them and promote two-way communication instead of one-way communication. The social media marketing strategies are based on the natural, authentic conversation amongst consumers concerning mutual interest (Scott, 2010).

Pitta and Quinones (2012) investigated the importance of social media as a new evaluating tool for market research. The challenges and issues incurred by the firms implementing traditional marketing tool when compared to the implementation of social media marketing approaches are highlighted in the study. The results obtained from the study have provided various research methods related to tackling problems and challenges that are faced when implementing traditional marketing strategies. This study will address the impact of social media on implementing marketing research methods.

In Toplansky’s (2012) study, public opinions is measured by aggregating searches and mentions on-line in aspects of gathering the data and research. Organizations are able to measure “share of opinion” by means of developing Mass Opinion Business Intelligence (MOBI) systems that is helping the organizations to gauge the impact of social networking sites such as Facebook, Flickr, and Twitter. Due to such practices, it helps organizations to broadcast their ideas along with presenting limited opportunities for dynamic chat that are determined in panels and communities. Social media websites also helps the organization with a competitive advantage by promoting development of brand or fan pages. The adoption of social media strategies enables market researchers to do exploratory research for various brands, products or services provided by different organizations. Twitter can be implemented as an online hearing tool and crowd sourcing tool as discussed by Burton and Soboleva (2011), Crawford (2009), and Ehrlich and Shami (2010). Similarly, Facebook is also determined to provide opportunities by focussing on surveys to address the same criteria.

Dave Evans (2008) describes that the social media cannot be considered as a true marketing channel, but social media can be implemented for the argumentation of conventional marketing practices. Weber (2007) makes the suggestion that social media is a new platform for marketing purposes and requires new tools and skills. Time Magazine (2006) made an argument based on the development and promotion of social media and “You” was named as the Time person of the year due to “the growth and influence of user generated content on the Internet” (Stokes, 2008).

Further, Forrester and the Association of National Advertisers (ANA) in the United States conducted a survey that looks into the transition to social media by means of predicting the advertisers planning process for expenditures spent for advertisements during the year 2010. From the Figure 4, it is clear that marketers are planning to increase their spending for social media by 77%, web advertising by 73% and search engine marketing by 59%. At the same time, markets are observed to increase investment for traditional marketing by 13% for magazines, 9% for radio advertising and 7% for newspaper advertising. Hence, from the above discussion and factors, it can be ascertained that social media marketing is observed to be a mega-trend, which is referred to as a “groundswell”. Regardless of the size of the firm or industry, social media marketing strategies are replacing the traditional marketing approaches rapidly and efficiently (Weber, 2007).

According to a study by Sasha Kannan (2010), there are a number of factors that influence internet users. The study specifically focuses on demographic factors that influence the use of social networking sites, the role of purpose in the usage of social networking sites and how much privacy means to the internet users who are using social networking sites. When it comes to demographical factors, the study revealed that the younger generation of users was more involved in social networking than their older counterparts. A seminal study from Pfeil, Ulrike, Arjan, Raj and Zaphiris, Panayiotis, (2009), which focused on age and use, compared teenagers with a 60+ years group. Notably, the findings suggest that teenagers’ network includes others in a range of +/- 2 years whereas the 60 and over age had a much more diverse friend network. Furthermore, it was also discovered that women were more particular about privacy than men and that they used a variety of measures such as blocking users, and removing any tags of them on publicly available pictures. In addition, the main purpose for internet users to get involved in social networking was to communicate, and share ideas and opinions.


Most of the social network sites provide the users with information related to the products, which they have, used (Business, 2010). Moreover, on-line users are desperate to review the profile pages of the firms (Business, 2010). The online social networks can be used to cover or attract people who have similar interests and share similar information among themselves. There are various factors that enable the organizations to consider social networking sites as an interesting tool for marketing strategies. The majority of such websites enables users to join the online community without requesting a payment. It allows them to share their opinions about products and services thereby recommending the sites for their friends.


There are certain research studies that predict that 78% of consumers suggest what they believe and trust the customer’s recommendation towards products and services (Erickson, 2010). In general, it is argued that a person preferring to buy a product or make use of a service looks for recommendations and opinions given by the users of the products and services more carefully. The main reason for this factor is that the recommendations and opinions of people known to them are given more importance rather than any other opinions.


Members of social networks serve two roles: they supply and consume content. The creators of content are typically highly engaged consumers and, as a result, influential (Erickson, 2010). When one person who affects or influences the opinions of others perceives message as valuable, he or she could be turned into a viral. This event makes these websites a powerful weapon for marketers; users do not feel that the information is being pushed at them, but referred to them by a trusted friend.

A study by Subramaniam (2009) reveals that the Social Media Networking (SMN) sites are becoming more effective in disseminating marketing information, and it is found that the percentage of such a paradigm shift will increase continuously in the near future. SMN sites or platforms are not a direct business solution approach, but it is another tool that can be used to build and maintain relationships and increase returns on the marketing investments business firms engage in. The progression of SMN sites, and the involvement of consumers with them, are growing at a fast pace. Therefore, it appears to be logical for modern business organizations to involve themselves appropriately in the SMN sites, in order to engage with their targeted evolving market segments. They have to further study how they can increase their returns on marketing investment using these trends and enable themselves to generate long lasting customer relationships.

There are various researchers who, in the context of SNS, have focused on mapping the terrain and aptitude of social media. Social networks can be implemented as marketing tools in commercial and service providing organizations, identifying several areas in which SNS can acts as important marketing tool (Rogers et al., 1997; Bickart and Schindler, 2001; Subramani and Rajagopalan, 2003; HennigThurau et al., 2004; Hoegg et al., 2006; Korica et al, 2006, ostantinides and Fountain, 2008; Deighton and Kornfeld, 2009).

Rodgers & Thorson (2000) declared that there are various aspects that influence users towards the Internet advertisements. Intention of browsing depends whether (or not?) a user is goal oriented or casual. Stiff & Mongeau (2003) make the argument that in order to evaluate influence of the/an advertisement, Consumer-Related Factors (CRF) such as age, income, education, and gender are determined as(to be?) critical aspects. In order to understand the attitude of consumers, it is imperative to consider their feelings and beliefs towards advertising (Wellbacher, 2003). (Homer 2006; Mehta 2000; Dutta-Bergam 2006; Shavitt et al, 1998) also commented that the consumer’s feelings and beliefs should be considered towards internet marketing. Fill (2006) suggests that when an advertisement is appreciated, consumers are expected to have a positive perspective with/on the specific product or services. The Push and Pull model of the Internet marketing by describing the interactions of people with their media experience (Peter, 2003). In India, there are several studies that have focused on the buying behaviour of the Internet users (Sin & Tse, 2002) or their attitude and perception towards the Internet advertising (Schlosser et al, 1999) but not much on the belief factor from the push or pull marketing perspective (Sin & Tse, 2002; Schlosser et al, 1999, Shrivastava & Ujwal, 2011). The relationship between consumers and advertising strategy influence on the users’ perception of online advertisements is examined in the study.


Garton et al. (1997) argued that despite the importance of the social networking sites, the variations with respect to the networks and the variation among the individuals within the network have not been examined to greater extent. Lea et al. (2006) suggested that small networks might support local requirements, while Pitt et al. (2006) suggest that a large network has an impact on a wide web of relationships (as cited in Stephen & Toubia, 2010).

In general, a small network is identified as having a positive impact on various types of participants in the network. Pitt et al. (2006) declared that networks enable the development of an idea and share the concept of networking, which correspondingly increases the resources shared and the extent to which the resources are shared. The development of social networking sites is determined to have advantageous features when considered in a business context rather than an individual context (Stephen & Toubia , 2010).

In recent years, various studies have been developed with respect to the importance of the social networks. In a survey conducted by McKinsey & company reported that 69% of companies gained measurable growth including higher revenue, marketing at lower cost, improved products and services (McKinsey, 2009). The various aspects that are influenced by social networks in the business context are:


  • Promote the economic value of the business (Bjorkman & Kock, 1995)
  • It helps business gain contacts, clients, and increased public awareness (Pitt, Merwe, Berthon, Sangari & Caruana, 2006).
  • The level of Business transaction among companies (Copp & Ivy, 2001)

A good example of entrepreneurial marketing wherein the social networking websites were used is the sale of the album of Rainbows of Radiohead. This strategy adopted price as a point of leverage with presenting fans the choice of deciding how much they would pay for it. It was observed that some fans offered to pay up to 1000 USD. By this type of marketing the brand made an attempt to present and highlight the difficulties of growing idealistic artists (Peitz and Waelbroeck, 2005). Threadless is another best examples of a business that relies solely on social media for running their operations. Threadless is an online community comprising of designers and artists and this company relies on social media as people are allowed to submit their own designs and other people are asked to vote on the designs (threadless.com, 2012). Thus this business is clearly a good example for the use of social media as a tool for marketing and for running a business. According to Karim Lakhani "Threadless completely blurs that line of who is a producer and who is a consumer and the customers end up playing a critical role across all its operations: idea generation, marketing, sales forecasting, all that has been distributed” (Sipress, 2007). Mangold and Faulds, (2009) noted that this transformation in business methods has compelled entrepreneurs to structure the client needs in a way that satisfies the aims and objectives of the organizations.

Pitt et al., (2006) argued that the presence and development of social networks influence the promotion of small businesses organized by entrepreneurs. This promotion is because social networks support improving the position of the organization and promote the importance of the organization in the market, thereby establishing its name in the list of well-known businesses. Social networking sites are created to assist in online networking. These sites are communities created to support a common theme. Since the creation of social networking sites such as MySpace, LinkedIn, and Facebook, individuals are given opportunities to meet new people and friends in their own community and across the world.

In recent years, social networks have adapted to the internet due to the impact of technology. Kimball and Rhiengold (2000) argue that the implementation of social networks on the Internet not only influenced the nature of the social network, but also promoted networking largely. Evidence revealed that the rapid development in technology has diverted consumer communication towards virtual interaction, while eliminating personal interactions. The virtual interaction is determined to be a form of informal communication that is beneficial for the business environment. Implementation of social networking sites has influenced and promoted the communication process largely. People in different locations, despite the distance between them, are able to communicate with each other in short time duration (Lea et al., 2006). The Internet is swelling with online communities, discussions groups, forums, Tweets and fan pages, all ready to sing the praises of any business working online. For a business to communicate successfully online, it is important to be social, polished and familiar with these sites in order to leverage the benefits obtained through SNS (Pitt, Merwe, Berthon, Sangari & Caruana, 2006).

Social Networking Sites

According to Browning (2010), social networking sites have encouraged networking and interaction among people and the way in which they communicate with one another. Typically, social networking sites tend to facilitate relationship building using the software as system (SaaS) technologies such as Facebook and LinkedIn (Li & Bernoff, 2008). Most of these sites are free of cost for the general public users; however, the sites tend to generate revenues from the ads and sponsors by selling user demographics and other data to businesses (Stokes, 2008).


Facebook. Facebook offers businesses the opportunity to create a profile just like any other individual user; this provides a very good opportunity for the business to put a human face to their organization. Their pages can include events, photos, and custom applications (Zarrella, 2010, p. 67). Because of this, Facebook tends to provide businesses a very rewarding platform to interact with customers and potential consumers as a means to develop themselves (Clapperton, 2009, p. 60).


Twitter. Twitter is combination of micro blogging and social network, according to Bernie Borges (2009) and hence is known as a micro blogging site (Evans, 2008). This social networking site provides users the opportunity to share information and opinions on a real time basis. According to Dan Zarrella (2009) in the Tweetosphere or Twitterville there are more than 346 million active Twitterers and as per Nielsen Online, Twitter experienced an unbelievable 1,382 % growth between February 2008 and 2009 (Singh, 2010). According to recent emarket forecast Twitter’s growth peaked in 2011 at 31.9% , however, this number begin to decline with 20.7% in 2012. Nevertheless, 34% of marketers have generated leads while 55% of twitters users access the platform via mobile (digitalbuzz, 2012). According to the July 2012 report from Twitter there are 580 million users (businesstwitter.com, 2012). The current profile of Twitter (2012) is presented in Appendix 1. This SNS provides businesses an opportunity to stay in touch with people and provide inside access to their operations when an event is going on live. For example, when a music concert is going on, the producers can tweet on the backstage happenings, sports associated sponsors can tweet live happenings on the game (Borges, 2009).


You Tube. Almost 60% of the online video sharing market is done on YouTube, according to (Yen, 2008). YouTube is another social networking site that allows users to share videos among peers. About 65 thousand videos are uploaded on YouTube every single day, according to (Rob Stokes, 2008). According to the report released by Google (2012) about 60 hours of video (August 01, 2012) are uploaded each minute in comparison to 48 hours of video in 2011 and over 4 billion viewers viewed and 4 billion hours of video are watched on YouTube (labnol.org, 2012). Therefore, according to Safko and Brake, YouTube is one of the most convenient and cost effective method as it is totally free for the users, starting a social media campaign for businesses. Small businesses can use YouTube to advertise themselves and they can upload inexpensive ads about their products or services since YouTube is free and it has a significant reach among the world’s population (Bernie & Borges, 2009).

Social networks sites provide marketers new kinds of sophisticated marketing channels to advertise their products. Marketing is becoming precise, personal, and social. In social web, hyper target campaigns can be used by taking advantaging of profile information and engaging community members. Social network advertisers will able to provide a direct, customized message for each member. Thus, the content they see is specific just for them, and there is more trustful. The challenge is that social networking is aimed for communication, not for advertising. (Shih, 2009, p.81-86)

Development of Social Media as a Marketing Channel

Social networking sites have experienced tremendous development in recent years. Significant number of internet users are attracted towards these sites due to the availability of a wide range of opportunities with respect to communication (Barnes & Barnes, 2009). The impact of social media on business executives in the modern world is easily examined and evaluated. Most organizations though profit or nonprofit oriented get customized towards social networking sites and their applications irrespective of the size and objective of an organization. The relation between individuals and organizations in the business context are altered by means of the applications provided by social networking sites (Barnes & Barnes, 2009).


Development of Social Media as a Marketing Channel

Two-way discussion between company and consumer. Baker (2009) identified that the products and its corresponding services are the key issues marketers focus on with respect to developing a product. The aspects related to customer satisfaction are also essential to be evaluated. The importance of measures with respect to frequency, influence, and community acceptance are also examined and evaluated.


Mangold and Fauld (2009) argued that when marketing is carried out by means of traditional channels, aspects such as sales volume and customer service improvements could not be examined exactly. The development of social media networking sites has resulted in the enhancements with respect to communication between various consumers on information related to products and solutions associated with the feedback on products and services. The use of social networking sites is advantageous as it enables the customers to examine the issues related to a product or service based on the views and comments of other customers or experts. The feature is also available by means of framing a comparison chart. There are certain differences with respect to the social networking media and conventional or traditional media. Peer responses and comments are low in traditional or conventional media, which has merits in terms of expert reports. Marken (2008) argues that social networking media is advantageous as it involves immediate responses, feedback, and comments on the offered products or services.


Fast, flexible and effective way to reach big audiences. Ranchhold (2004) argues that there are various changes with respect to the marketing environment and these changes are associated with recognition of consumer behavior resulting in demands presenting rapid and flexible responses. The consequences of these demands lead to better planning and implementation measures. Ranchhold’s research revealed that a number of changes related to the marketing environment are associated with identification of effective behavior of the consumer, which demands rapid and flexible responses from the marketers. This demand results in a drastic increase in the need for better planning and implementation measures. The improvements and enhancements in online marketing strategies lead to an increase in reaction with respect to the immediate and real-time responses. The social networking media, along with the development of word-of-mouth marketing strategy also influences the identification of the immediate responses and feedback obtained from the customers (Baker et al., 2009).

Baker (2009) pointed out that by means of adopting word - of - mouth decision strategies, consumers and audiences are identified easily and directly. Social media also promotes the marketers’ ability to adapt to new and innovative marketing strategies to address customer requirements and promote their satisfaction. Responses with respect to positive and negative feedback are also attained from social networking media.


Possibility to research and develop new products effectively. The survival and competitive nature of the/an organization is mainly due to the development of innovative new products or services. The innovation of an organization is influenced by the adaption of social media in terms of social networking sites (Baker, 2009).


Angel and Sexsmith (2009) argued that efforts are being made with respect to product development that involves social media. The network users are provided with various opportunities for feedback on the product, which in turn provides immediate feedback on the product along with development and marketing of innovative products. Various research and development organizations consider the progress and enhancement of social networking sites to be highly advantageous with respect to product development and promotion.


Personal contact with customers and business contacts

Another important aspect involving the use of social networks is increase in direct access available to potential and current customers. This increase in direct access also enables the organization to establish various communication methods, which promotes business-to-business communications. Social media, along with the promotion of the products, also enables communication among customers and other businesspersons (Baker, 2009).


Disadvantages

Hard to measure and interpret. One of the major disadvantages related to the adoption of social networking media for marketing purposes is the issue associated with the measurement and interpretation. Identification of insights and features of the product are considered as a key aspect by entrepreneurs while making decisions with respect to investments and developing a product. Along with the development of the organization, there is a necessity to gather information and knowledge with respect to marketing channels and performance measurement. One or more of the following aspects are considered for interpretation:


  • Metrics of performance with respect to traffic in the websites
  • Hit rates in the community related to the organization or product
  • Overall rating of the website
  • Time spent by customers and internet users in the website
  • Postings and comments from competitors and customers
  • Degree of response associated with profit or nonprofit

Angel and Sexsmith (2009) argue that it is vital to examine and evaluate direct responses with respect to degree of interaction, quality of service, and desirable response to the product. Sinickas (2007) also points out that there is no direct recognition of outcomes from these visits. The degree of activity and interaction is the only aspect that is easily examined.


During evaluation of social networking sites, the following aspects are considered as key elements:
  • Services or software designed for examining or determining the number of times the company or product is mentioned.
  • Number of customers or users visiting the webpage or profit page.
  • Numbers of users or customers who like the webpage and give their comments on the page.

The above aspects will provide a degree of reliable measurements with which social networking sites can be evaluated.

Problems associated with controlling content. Angel and Sexsmith (2009) and Baker (2009) argued that a/the major objective of the social media was to promote the word-of-mouth effects and its services. It is complicated to organize the type of responses obtained and to identify the responses that are raised or made towards the organization. Hence, too many responses leads to the lack of censorship with respect to the comments made for the organization or products. The nature of the response or comment made by the customers with respect to the organization or product, being either positive or negative, cannot be hidden or censored. Barnes and Barnes (2009) argued that it is a vital and complex process to sustain the copyright, trademark, or issues related to logo. The entrepreneurs are identified to have challenges with respect to ensuring that copying of content from the social networking sites, which enables the duplication of the product or services, does not happen. Ranchhold’s research study concludes that enhancement of social media integration is a complex process when compared to communication channels implemented for marketing.

Rapidly changing consumer behavior and expectations. Ranchhod (2004) identified wide variation with respect to consumer behavior and expectations. Ranchhod (2004) also argues that in the current world more personal one-to-one relationships are required in order to face the heated competition and satisfy customers that are more demanding. The one-to-one relationship means that a customer is known to the company and interacts with the company, so that the company is able to flex and change to meet the customer's needs. The enterprise can then have a unified and closer view of even a single customer.

Research Methodology

Research Approach

Generally, most researches adopt one of two research approaches, which are deductive approach, or an inductive approach. A deductive approach to conducting the analysis of a research involves testing the various theories in order to come up with an answer. Typically, theories are taken from previous studies and are empirically tested in this method. According to Marcoulides (1998), deductive approach allows the formulation of the research hypotheses which further aids in formulating the research questions and provides the guidelines for the survey questionnaire.


An inductive approach, in comparison, starts with collected empirical data which are used to formulate hypotheses in accordance with the data. This approach transforms from general observations to broader theories wherein, the conclusions are based on gathered facts. According to Marcoulides (1998), an inductive approach involves the determination of concepts and theories from previously collected empirical data. Deductive and inductive research approaches differ in the manner in which they carry out their analysis. Typically, a deductive approach makes use of a top down approach whereas an inductive approach makes use of a bottom up approach. The researcher makes use of a deductive approach for the current study as it is easier to collect empirical data once a set of hypotheses are formulated.


A mixed method approach, as the name suggests, involves making use of both the qualitative research approach as well as the quantitative research approach. According to (Straits et al., 2004), the research problem is more important than the methods used to solve the problem. Thus by making use of a mixed method approach, the researcher has certain benefits including the ability of the researcher to answer broader research questions since the research does not use a single method or approach.

The Study Area

The following are some of the resources to identify possible entrepreneurs and recognize the potential respondents for the study.


Dare. (2011). Inspiring 50 Entrepreneurs of India - Jury Choice. Retrieved November 19, 2012, from http://dare.co.in/people/inspiring-50-entrepreneurs-2011/inspiring-50-entrepreneurs-of-india-jury-choice.htm


This website lists out 50 inspiring entrepreneurs in India based on Jury’s choice. Entrpreneur Yearbook, India - Indian companies directory . (2012). Retrieved November 19, 2012, from http://www.siliconindia.com/yearbook/ This website provides details on Indian rural entrepreneurs.


India.CarbonOutlook. (2012). Directory: INDIAN RURAL ENTREPRENEUR SOCIETY, 3.0. Retrieved November 19, 2012, from http://india.carbon-outlook.com/content/directory/directory.This website is a directory of entrepreneurs listed yearbook 2012.

The data collection will be restricted to Indian entrepreneurial ventures. Following the initial contact, five specific entrepreneurs who are in the restaurant industry business will be contacted to identify their in-depth opinion.

Population, sampling method and sample size

The researcher observes entrepreneurs of various industries and the research will consider employees who are willing to respond to the questions. All entrepreneurs are contacted personally by means of phone communication, providing the details and purpose of the study before sending an email. When the confirmation is obtained by the researcher, an email with the questionnaire as well as an information sheet providing the details such as the purpose of the study, the reasons for conducting interviews, the expected outcome, confidentiality, willingness to participate and voluntary withdrawal is forwarded to 100 firms. The response rate expected for the study is a minimum of 40-50 employees.

Data Collection

The study constitutes both primary and secondary data in which the secondary data are collected from various sources materials such as books, electronic databases, journals, articles, newspapers, television, and radio.


Primary data collection. The primary data for the present study is collected by means of the survey and questionnaire approach. The questionnaire approach for the study is designed keeping in mind various aspects such as demographic details as well as internal and external factors that impact internationalization and the internationalization process techniques. The questionnaire process for the study is designed to be completed in 25-30 minutes. For achieving the reliability and validity of data, the questionnaire approach makes use of validated scale of instruments.


Questionnaire. According to (Collis and Hussey, 2003), questionnaires can be defined as “methods of data collection in which information is gathered through oral or written questioning”. Questionnaire designed for this study is presented in Appendix.


Pilot study. Sauder et al (2009) argued that the questionnaire should be piloted before subjecting the questionnaire to the population in gathering data. In order to examine the factors such as reliability of the study, time consumption of questionnaire, logical flow, sentence structure, spelling, and grammar. The questionnaire is subject to a pilot study. The study subjects five managers of organization to survey approach. The sample observed in the pilot study responses are not considered and observed in the main study.

Ethical consideration

The study is initialized by obtaining permission from University Canada West. All participants of the study will be provided with the approval that explores the detailed purpose and other factors with respect to the study. The researcher ensures the confidentiality with respect to the responses of the participants. The questionnaire will be analyzed considering the company details rather than participants name.

Statistical Analysis

The primary data collected by means of a questionnaire approach is evaluated to ensure if the responses obtained are valid and completed. The evaluated data is entered in Excel and analyzed by statistical analysis software (SPSS). Frequency analysis will be adapted in order to evaluate the categorical data, while continuous data are/is analyzed in terms of mean, media, range, ranking, and standard deviation. Chi-square analysis method is adapted in the study to examine and evaluate the association between organizational size and factors related to internationalization process.

Strengths of the Study

The study adapts to the validated questionnaire for gathering data. The questionnaire process is subjected to a pilot study in order to iron out any faults with the questionnaire. As the study observes entrepreneurs from various areas, the findings obtained can be generalized to representatives of entrepreneurs among the nations?

Limitations of the Study

The study has concerns for aspects that impact the developing marketing strategies by means of social networking websites. The study does not give much importance for/to the/a follow up study and the elements that has impact on the promotion with respect to the business.

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