Written by a Master's Student of the Lund University School of Economics and Management
Internet and Social media
In the past few years, we have seen radical changes and advances on the Internet, which has brought new opportunities and challenges in not only our lifestyle but also various business over the world. The Internet has a great power beyond imagination. Especially, The Internet is more meaningful when it comes to business performances. It is not optional anymore but mandatory to make use of the Internet in business perspective.
The start of the digital marketing is probably from the advent of web 2.0. People started to use the terminology, web 2.0, to illustrate a new platform whereby content and applications are not created and issued by individuals anymore, but instead are continuously updated and changed by all users on the Internet where people can easily access (Kaplin & Haenlein, 2010).
Figure 1. Day in the life continuum, Image source: (Martin & Todorov, 2010)
Web 2.0 allowed people to come and be more active on the Internet, which created a concept, user-generated content (UGC) that has enriched the internet environment with overflowing information (Peters et al. 2013; Berthon et al. 2012). A notable example is Wikipedia where people collect and modify information. Furthermore, the social network services such as Twitter, MySpcace, and LinkedIn sprang up everywhere like mushrooms after rain, which made people easily communicate online. At the same time, the advent of mobile device accelerated the proliferation of social media. People nowadays spend most of time in a day on their smartphone. As shown in the picture (Martin & Todorov, 2010), digital devices have been a part of our life and it is clear that we are entirely exposed to many advertisements, news, and information through social media.
Social Media Marketing
As social media has been a general trend in the marketing context, it is important for marketers to distinguish the internet marketing from the conventional marketing and understand the new marketing platform in order to catch up with the online market that is changing so fast. In the traditional marketing perspective, consumers are homogeneous in their consumption and they prefer a cheap price when shopping. Therefore, the cost advantage of mass production is the main element in the traditional marketing activities. The marketing goal in this context is only about increasing market share and maximizing short term profit, conducted by the 4Ps marketing mix (Kotler & Armstrong 2014).
In contrast, as marketers started to approach consumers, target marketing which progressed from the conventional marketing mix considers consumer orientation important. In this context, consumers want to satisfy their needs like self-actualization and social needs beyond the basic needs. Additionally, they are more likely to consider not only design, brand image but also price when purchasing. In the progress of the marketing evolution, marketing activities toward the consumer orientation transferred 4Ps marketing mix into 4Cs, Customer Solution, Cost, Convenience, and Communication (Olsson & Gyorei 2002; Lin et al. 2013).
Figure 2. 4Ps to 4Cs, Image source: (Schmidt, 2014)
In the recent year, as e-commerce has grown so fast, the digital marketing has been advanced and prevalent in a short period. Especially, various social media platforms which have the powerful force of disseminating information are being very widely used by many marketers in order to reach people as many as possible. Hennig el at. (2013) insist that key issues in consumer behavior due to the rise of social media are increased active participation and a strong networked interconnectedness. Marketing nowadays cannot reach many people and capture wide attention from consumers without social media and it is more important for marketers to use both traditional and social media (Hanna et al. 2011).
The power of consumers in social media
The internet space allow people to communicate one-to-many and many-to many as well as one-to-one (Pitt et al. 2002). In this way, consumers pay attention to the public opinion via social media when they make a decision to buy. It is more obvious that consumers in the social media era would like to experience, communicate, and engage in their brands/products when buying. This smart consumption that consumers usually check information before shopping is getting more generalized, thereby the consumer relationship is looming larger as an important point for marketers.
Consumer’s voices are much louder in social media. To consumers who are going to buy something, electronic word-of-Mouth (eWOM) has been an important source conceived by other buyers who have already experienced (King et al. 2014). More importantly, Blazevic et al. (2013) indicate that consumers interact more actively with other consumers, exchange their experiences through eWOM when they feel successful in their purchase based on social media conversations. Therefore the effect of eWOM in the marketing context has a powerful impact in terms of embracing many people and easily influencing them.
Social media is hard to control. It is actually impossible. Social media activities like blogging, video sharing etc. empower consumers to share their own personal experiences with people in their social networking groups (Fournier & Avery, 2011). Consumer generated contents play an important role in social media which has various aspects of transparency, collectivity, criticism, and satire (Fournier & Avery, 2011), since contents written by an active person in social media are very useful, sincere, and trustworthy.
Building a strong relationship with E-Loyal consumers
Loyalty in the traditional business context is not a completely new concept in the e-business. Reichheld & Schefter (2000) stated ‘When it comes to customer loyalty, the old rules are as vital as ever. Loyalty is still about earning the trust of the right kinds of customers…’ (Reichheld & Schefter, 2000, p. 109). Considering the consumer power in social media that I discussed above, marketers should be more careful of managing consumers. Many companies in social media are trying to analyze the consumer needs by collecting data and customizing products and services in order to build a strong relationship with consumers for E-loyalty, while understanding consumer behavior that is changing every time in regards to the rapid change of the Internet (Eisingerich & Kretschmer, 2008). There are a couple of good examples that I want to show you.
Social Media Marketing (KLM) – emotional, sincere, faithful, communicative
Figure 3. KLM Command center, Image source: (Carter, 2014)
KLM which is the Royal Dutch Airlines is actively capitalizing on social media in different ways for their marketing. Having their slogan ‘Happy to help’ with a hashtag ahead which intends to attract people in social media, they are trying to make an effort to help their consumers and find a solution in social media. For instance, they established KLM command center at Amsterdam’s Schiphol airport where their employees monitor social media in real-time and help out anyone who has problems
in their journey (Carter, 2014). In this way, KLM is building a strong consumer relationship by using social media, while showing its faith, sincerity, responsibility in its business to the consumers. Watch the KLM commercial here (KLM, 2014)
Subscription Commerce (Årstiderna) – honest, reliable, curated, customized
Figure 4. Årstiderna, Image source: (Kingham G, 2014)
Årstiderna selling organic foods online in Sweden is also a good example of the social media marketing. They provide fresh vegetables, fruits and other foods which they cultivate by hand in the organic way. In case that consumers have signed up the subscription and ordered in the homepage or other social media platforms of Årstiderna, they periodically deliver a box of fruit or vegetable which are selected and curated by the experts of organic foods to consumer’s door. Their products that are based on the data about consumer’s preference and the customized nutrition are honest and trustworthy, because all progress from production to delivering service are open to the consumers. The consumers can even receive useful information about organic foods in the social media platforms, which makes the consumer relationship strong.
Social media based on E-loyalty
Social media as a cornerstone to build a strong brand in digital marketing plays an important role in building a strong consumer relationship which directly leads to loyal consumers. Loyal consumers in social media are highly contagious and influential to other potential consumers (Samson et al. 2014). There are still many companies that don’t know why they use social media platforms and how to utilize them effectively, even if they realize the need to be active in social media (Hanna et al. 2011). As the power of consumers online is getting bigger, marketers need to be very well-prepared for the E-loyalty of consumers, otherwise they may turn out as your enemy with invective or parody (Deighton & Kornfeld, 2009).
It is not easy to control consumers online at all. Social media is not controlled by marketers but by consumers (Hoffman & Fordor 2010). Marketers in digital marketing should focus on the E- loyalty emphasized by the consumer relationship which are too expensive to gain. As a role in reducing the cost of investing the consumer relationship, social media would be the best method for marketing but marketers need to remember that holding a high level of E-loyalty should be the most important thing in social media marketing.
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