Social networks equals consumer empowerment?

Written by Masters Student at Lund University

The Internet is a powerful marketing channel through which companies bombard us with their advertisements. On almost every web page we visit, somebody is trying to convince us into buying something. Although advertisement on the Internet is getting increasingly sophisticated, the Internet has made it possible for consumers to view advertisements from a more critical point of view. Through a simple search on Google, it is possible to take advantage of other peoples’ experiences with specific products, services and companies. In a matter of seconds, it is possible to scrutinize an offer with the help of impartial reviews that can be found all over the Internet. In an environment where anyone can to remain anonymous, it’s easy to speak your mind. Would you buy a product or service that has been condemned by several independent sources?


In this paper, I will continue to examine the topic “Marketing online - what is new and what is the same?” and more specific the following question:

How has social networks affected consumer power?

Theory

New Media & Branding

The media landscape has changed during the 21st century and today, there are so many channels where marketers can market and communicate about their brand. Thus, at the same time as the new media landscape opens up for opportunities it also brings a lot of challenges. One challenge is to successfully send a consistent message about a brand to the consumers through all the different channels. What is the brand image, values etc? (Winer, 2009)

The new media has two main characteristics, that it is digital and that it is interactive (Winer, 2009). One of these interactive media channels is online communities/ social networks and the biggest one is Facebook. (News.discovery.com, 2013-02-20) The Internet usage has developed a lot and today consumers exploit the web to interact, share, discuss and generate information and experiences. (Kietzmann, H. Jan, et. al. 2011) Consumers have different motives for being active at online communities. (Varadarajan & Yadav, 2009) According to Hanna et, al. (2011) social media such as Facebook and Youtube has converted internet to a platform for influence and not just a place to gather information. 

Social networks (Online communities) ratings and Trust

Control and the loss of it


In traditional media such as TV, radio commercials and ads in magazines the communication is just one way. In these cases the brand is the sender of the message and the consumer is the receiver. This is a clear contrast to social media and online communities where the consumers can speak their minds freely. What people say and write about a brand in these digital channels are out of the marketers’ control. (Winer, 2009) The lack of control is both in regard of what is said in the online conversations and the brand message that is delivered. (Winer, 2009)

Communicating and sharing opinions


According to Wind (2008) consumers has become “co-creators” and “co-marketers” as new media and the interactivity has given the consumers more power and it is common that internet users spread the word of their experiences through ratings and recommendation communities (Winer, 2009) Consumers are now participants in the branding as they a part from being able to communicate with other consumers, also are empowered to have a direct interaction with the brand. (Christodoulides, 2009) Furthermore, Winer (2009) says that people on internet are both information users and searchers and that consumers takes earlier reviews into account when evaluating the quality of a product/ service/ brand. This is supported by Varadarajan & Yadav (2009), they argue that consumers prefer to gain information about a product from online communities where other consumers have posted their thoughts and opinions rather than from the business/brands own page with information.

When people have an opinion about a company or brand they are now in a position to share and communicate that opinion with others. However, for a consumer to do that in a social network like Facebook it requires that they have a brand awareness and engagement for that brand or product, whether it is positive or negative. (Hoffman & Fodor, 2010) So, opinions and recommendations flourish on online communities, thus, whether or not other consumers rely on those depends on the shopping goal, if it is utilitarian or hedonic. (Varadarajan & Yadav, 2009)  Varadarajan & Yadav (2009) suggests that it´s only when the shopping goal is utilitarian that the recommenders expertise makes a difference while Brown et, al. (2007) mean that many consumers see these as highly credible. According to Varadarajan & Yadav (2009) ”week” brands in terms of brand image are extra fragile when something negative is written about them that then circulate on an online community.

Word of Mouth (WOM) in online communities has an impact on discernment of a product, creation of attitudes towards a brand or a company and making decisions in a higher extent than marketing efforts. (Brown et, al. 2007) As a consumer is the process of sharing your opinions to a global market not so complicated when doing it though social networks, such as a brands Facebook page. It is fast, easy and you don’t need to talk to anyone. However, this quick and easy to write opinion can have a big impact for other consumers evaluations of that brand (Van Noort & Willemsen, 2012) as “branding is about perception (impression) management” (Taranovskaya, Veronika 2013-02-) A brands reputation will be harmed if there is a stream of negative comments. Spreading negative comments can also be called “NWOM” (negative word of mouth). (Van Noort & Willemsen, 2012)

What is said in social media can influence sales, a brand reputation and ultimately whether a company will continue to exist or not. (Kietzmann, H. Jan, et. al. 2011) This is supported by Armelini & Villanueva (2011) that explains that Word of Mouth (WOM) that comes from satisfied customers or consumers that is positive to the brand, strengthens the brands reputation and value while Negative Word of Mouth (NWOM) has the opposite affect on brand reputation, value and sales.

Case

The Airplane ticket

Two months ago a man, a man we can call “Brian” bought a plane ticket to Las Vegas for about 17 000 SEK from an airline we can call “Air”. A few weeks later, he found a much cheaper ticket with a shorter flight time from another airline. Now Brian changed his mind and wanted to return the expensive ticket. Thus, as Brian hadn’t bought a supplement, he had no right to cancel the purchase of the expensive ticket in order to buy the cheap flight ticket from the other airline. As Brian works as a vice customer service manager, he has good knowledge of what a companies weak spots are when it comes to unsatisfied customers, so he knew exactly what to do. He started by calling and sending emails to "Air" with the purpose of canceling the purchase, even though he already knew that his efforts would be without any success. As he had predicted, it didn’t work and “Airs” customer service referred to their refund policy. Thus, Brian had no intention of calling it a day, so he wrote a long complaint comment on "Air's" Facebook page. Then he asked his colleagues and friends to “like” and comment on the post and soon the post had about 60 likes and 40 comments. As a result, the post started to reach others and people who didn’t belong to his circle of friends had begun to take an interest in his case. One day later Brian got an email. “Air” had agreed to cancel the purchase and give him the money back. Brian was satisfied and his plan had worked and he bought the cheaper ticket. As a thank you to “Air”, he wrote a new comment on their Facebook page and this time the comment was of positive character where he thanked “Air” for outstanding treatment and professionalism. (Bergkvist, M. 2013-02-10)

This is a true example that illustrates the leverage a single customer can get with help of social media.

Discussion

The “Air” case is an example of the empowerment of consumers and the fact that social networks are an influential platform. Thus, the interactivity that a social network like Facebook give rise to is also a way to abuse the empowerment consumers are given. In the Air case, the shared opinion was spread fast and there were a NWOM that could affect other consumer’s brand perceptions. Furthermore, because the platform is so interactive, one unsatisfied consumer can get his circle of friends to join the NWOM in order to create and a negative message about a brand. This message is out of the marketers control and if it is like Brown et, al. says, other consumer will believe this to be credible as it got many comments and likes fast. This would then harm the “Airs” reputation and value. Brian tried to be a co-creator, as Christipolis (2009) says and managed to change the company’s  policy by spreading and sharing information to other information users and searchers. When something negative happens  consumers are quick to spread the word, while when something positive happens not as much is being said. As Kietzmann, H. Jan, et. al. 2011, Armelini & Villanueva (2011) and Van Noort & Willemsen, (2012) argues, the impact of what is said in social networks has an influence on other consumers as they find previous customers reviews more trusthworthy, since they are an independent third party and  something that the company has no control over. In an attempt not to harm the brands reputation as in the “Air” case, companies management team are to act fast, maybe loose sales and a few customers in the short run in order to survive in the long run, otherwise their future might be at risk. 

Conclusion

Social networks have had a clear affect on consumer power. Today consumers are empowered even to the extent that it has become increasingly easy for consumers to abuse the power that social media provides. Consumers today have the possibility to hiss or dismiss a brand. With time consumers will get more conscious of ways to get their will indulged. Can one say that brands risk their future on the market if the companies don’t act according to the consumer’s wishes? Furthermore, can one say that brand isn’t what a company tell their customers; it is what the customers tell their friends?

References

Bergkvist, Markus. 2013-02-10

Armelini, G & Villanueva, J. (2011) The Power of Word of Mouth Adding Social Media to the Marketing Mix, IESEinsight, Issue 9, Second Quarter,

Brown, Jo, Broderick, J. Amanda & Lee, Nick (2007) ”Word of mouth communication within online communities: Conceptualizing the online social network” Journal of Interactive Marketing, Summer2007, Vol.21, Issue 3, pages:2-20

Christodoulides, George (2009) Branding in the post-internet era, Marketing Theory, Mar2009, Vol. 9, Issue 1, pages: 141-144

Hanna, Richard, Rohm, Andrew & Crittenden, L. Victoria (2011) We´re all connected: The power of the social media ecosystem, Business Horizons no. 54, pages: 265-273

Hoffman, L, Donna & Fodor, Marek, (2010) Can You Measure the ROI of Your Social Media Marketing, MITSloan Management Review, Fall 2010 Vol. 52 No. 1

Kietzmann, H. Jan, Hermkens, Kristopher, McCarthy, P. Ian, Silvestre, S. Bruno (2011) Social media? Get serious! Understanding the functional building blocks of social media, Business Horizons, No. 54, pages: 241-225 

News.discovery.com ”Top 10 Social Networking Sites” (2013-02-20)

http://news.discovery.com/tech/apps/top-ten-social-networking-sites.htm

Van Noort, Guda & Willemsen, M. Lotte, (2012) Online Damage Control: The Effects of Proactive Versus Reactive Webcare Interventions in Consumer-generated and Brand-generated Platforms. Journal of Interactive Marketing, Aug 2012, Vol 26 Issue 3, pages: 131-140

Varadarajan, Rajan & Yadav, S. Manjit, (2009) Marketing Strategy in an Internet-Enabled Environment: A Retrospective on the First Ten Years of JIM and a Prospective on the Next Ten Years, Journal of Interactive Marketing, No. 23 pages: 11-22

Winer, S. Russel (2009) New Communications Approaches in Marketing: Issues and Research Directions, Journal of Interactive Marketing No. 23 pages: 108-117

Wind, Jerry, Yoram, (2008) A Plan to Invent the Marketing We Need Today, MITSloan Management Review, Summer 2008, Vol. 49 No.4