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EFFECTIVENESS OF SOCIAL MEDIA AS A MARKETING TOOL: AN EMPIRICAL STUDY

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  • IMS Unison University Dehradun

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In an era where technology prevails, entrepreneurs as well as marketers see the need to keep up with the fast pace of change or risk being outdated. Gone are the days when a pure-bricks business model will thrive well in current market scenario. It is practically impossible to design a marketing strategy without considering social networks. Social media had become really important gradient in today's marketing mix in general and in promotion mix in particular. Adapting some form of marketing online through social media is a key node for all businesses, especially in an industry where trends constantly change such as fashion and handicrafts. The paper carries out empirical research to understand the effectiveness of social media as a marketing tool and an effort has been made to analyze the extent social media helps consumers in buying decision making. In addition strategies have been suggested for maximizing the effectiveness. Various statistical tests have been applied to support the research hypothesis.
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International Journal of Marketing, Financial Services & Management Research
Vol.1 Issue 11, November 2012, ISSN 2277 3622
Online available at www.indianresearchjournals.com
88
EFFECTIVENESS OF SOCIAL MEDIA AS A MARKETING TOOL: AN
EMPIRICAL STUDY
ABU BASHAR*; IRSHAD AHMAD**; MOHAMMAD WASIQ***
* Assistant Professor, Brown Hills College of
Engineering & Technology, Faridabad
** Assistant Professor, Brown Hills College of
Engineering & Technology, Faridabad
*** Lecturer, Al-Falah School of engineering
& Technology
_____________________________________________________________________________________
ABSTRACT
In an era where technology prevails, entrepreneurs as well as marketers see the need to keep up
with the fast pace of change or risk being outdated. Gone are the days when a pure-bricks
business model will thrive well in current market scenario. It is practically impossible to design a
marketing strategy without considering social networks. Social media had become really
important gradient in today’s marketing mix in general and in promotion mix in particular.
Adapting some form of marketing online through social media is a key node for all businesses,
especially in an industry where trends constantly change such as fashion and handicrafts. The
paper carries out empirical research to understand the effectiveness of social media as a
marketing tool and an effort has been made to analyze the extent social media helps consumers
in buying decision making. In addition strategies have been suggested for maximizing the
effectiveness. Various statistical tests have been applied to support the research hypothesis.
KEYWORDS: Promotional tool, marketing strategy, SNS, Social Media, Online branding
______________________________________________________________________________
INTRODUCTION
Over the past 40 years, we have experienced a radical shift in how business is conducted and
how people interact. The introduction of personal computers, the Internet, and e-commerce have
had a tremendous impact on how businesses operate and market. The introduction of social
media technology is accelerating and we can expect it to have a similar impact on businesses
now and into the future. As new technologies became available, businesses that learn to use new
technologies gain great benefits. Some of the best-known examples include technology-driven
companies such as Microsoft, eBay, Amazon and Google. In a short span of time, social media
has become one of the most loved mediums for the Indian youths today. Social Media Marketing
is the hottest new marketing concept and every business owner wants to know how social media
can generate value for their business. People are social by nature and collect or share
information that is important to them. Social Media Marketing is about understanding how
technology is making it easier for people to connect socially with their social networks and how
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your business can profit from that understanding. More and more of your customers, whether for
personal use, business-to-consumer or business-to-business reasons use social media in every
aspect of their daily life. There is a common misconception that social media and social
networking sites (SNS) are two synonymous terms. Social media are tools for sharing and
discussing information. It can be described as a kind of online media which encourages every
member for feedback and contribution. It is a social instrument of two way communication
facilitating the sharing of information between users within a defined network via web 2.0
(O'Reilly, 2005). It involves online activities in which the user contributes to content creation.
This
media encourages user involvement which can be as simple as posting comments or giving votes
or as complex as recommending content to other user on the basis of preferences of people with
similar interests and lifestyle. Thus social media can be described as a broad term inclusive of
activities where people create content, share it, bookmark it and network at a phenomenal rate.
On the other hand social networking sites are a place where in one forms communities of interest
to connect to others. Social networking sites utilize social media technology to connect with
people and build relationships. Social networking sites allow individuals to construct their profile
within a bounded system, share with other users and view and traverse their list of connections
and those made by others within the system (Boyd & Ellison, 2007). It can be thus concluded
that social networking sites are a form of social media. The increasing dependence on technology
for basic communication highlights the importance of analyzing how these networking sites are
affecting daily processes. Anyone including teens and young adults, women, men, affluent
consumers, and older individuals can join a social network site. Once registered the person can
begin to socialize and create his/her own network of friends with common interests or goals.
Sites like Face book, Twitter, LinkedIn are influencing the way users establish, maintain and
cultivate a range of social relationships, from close friendships to casual acquaintances.
Consumers today want to be more informed about products before they make the purchase. Most
importantly, social networks are extremely capable of informing and influencing purchase
decisions, as many users now trust their peer opinions more than the marketing strategists.
Customers now have the power to talk back at the brand and broadcast their opinions of the
brand. Therefore, marketers have no choice but to treat them differently and with greater respect.
Scope of the Study
The scope of the study has been limited to social media marketing only. The study has been
confined to Delhi & NCR region as this area has greater internet penetration and plenty of social
Network Sites users.
Objective of Study
A) To examine the extent, social media that helps consumers in buying decision making
B) To study the gap between consumer expectation from Social media and its performance
C) To suggest strategies to bridge the gap between expectation and performance to improve
its effectiveness
Research Methodology
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The study is based on descriptive research design. A questionnaire has been designed, to know
the point of view of respondent regarding the extent of social media that helps consumers in
buying decision making. First part of the questionnaire contains information regarding
demographics and usage pattern of social media of the respondent. Second part has series of
close-ended indirect questions which are based on impact of social media in making consumer
buy a product and expectation from such media. The survey was conducted online through social
networking sites and responses of 150 social networkers were collected. The instrument
(questionnaire) was put over Google docs and the link was sent to users to fill the instrument
through various social networking sites like Facebook, Orkut, Twitter, LinkedIn, Hi5, Bebo etc.
The respondents and other people on different social networking sites were also requested to post
the link from their profile. So the sampling technique used was non-probability convenience
sampling. We used regression analysis for testing of hypothesis. For visual representation of
finding and results bar charts, pie charts and tables etc. ahs been used.
Table 1.1 Profile of respondent
Variable*
Classification
Total N
(%)
Gender
Male
71
Female
79
Age
Less than 18
0
18-24
68
25-39
72
40-60
10
*at 95% the two variables are significantly different
Analysis
Fig 1.1 Facebook top the chart
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Facebook is the most popular social networking site for the respondents. Orkut and twitter have
got the second and third positions respectively.
Table 1.2: Motivation behind following a brand or joining a brand page
Variable
Total N
Motivation
to follow a
Brand or
Join a Brand
page
Brand
invitation/Advertising
68
Friend’s invitation
52
Personal research
32
Loyalty towards the
brand
44
The motivational factor for people joining/ following a brand page/ brand on social networking
platforms vary from person to person. The main reason fans come to join a brand page or brand
following is through brand invitation/ advertising followed by a friend invitation. The search
factor (personal
Research) plays an important role, thus it is crucial for brands to be found if consumers search
for them. Brand loyalty also plays a role in motivation towards brand following on the social
networking platforms. Brand loyalists are consumers who will market a certain brand and talk
positively about it among their friends/ peers. This is free word-of-mouth marketing for the
brands and is often very effective.
Social networking sites are a new CRM (to receive exclusive deals and offers, exclusive content)
tool where the consumer wants to feel exclusive. The attachment to brand is a key motivator to
advocate the brands. Demonstrating appreciation for the brand, showing what you like, and
supporting the
Brands values play an active role in generating advocacy. The desire to engage with the brand
either through dialog with the
brands representatives or with other consumers reaches an interesting level.
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Fig 1.2 Time dedicated for socializing
Social networking is now an important aspect of the day. With most people spending more than
hour online! The above chart depicts very clearly that how much it is important for the marketers
to exploit the situation by making workable marketing strategies.
Fig 1.3 Purpose for using social media platform
Social media helped people connect with long lost friends. This is evident with 58% respondent
in the survey using such platform to connect with friends. While 24% respondents believe in
exchanging their views and experiences on various products/Services and others apart from just
playing games and participating in contests (16%). So, here marketers have plenty of opportunity
to communicate with their targets and offer them their products/service to persuade them to
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transact and become loyal customer for them. It is a fast growing platform for brands in all the
sectors. It acts as an effective tool as it is the best way to reach out market segment without
incurring huge cost.
Fig 1.4 considering social media in buying decision
It is evident from the above bar chart that most of the respondents are using social media
networks are considering social media before starting of buying decision making process. More
than two third of users are always considering social media networks at the time of getting into
purchase decision. So, it is of enormous importance for the marketers to put information on the
social sites where there is huge probability to come into the eyes of consumers and if successes
into pursuing the customers’ then positive word of mouths will automatically get started. This
will eventually gives rise to multiple impacts and conversation will get started on the web.
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Coefficients
a
Model
Unstandardized Coefficients
Standardized
Coefficients
t
Sig.
B
Std. Error
Beta
1
(Constant)
-18.312
.000
To get Information About
Product Service
.622
.000
.979
.334.
.739.
To Find Friends Review
1.474
.000
2.629
-2.030.
.044.
To Get Exclusive Offers
.679
.000
1.308
1.416
159.
To Interact With Brand
-1.097
.000
-2.338
-2.030 .
.044
a. Dependent Variable: Buying Decision
Residuals Statistics
a
Minimum
Maximum
Mean
Std. Deviation
N
Predicted Value
15.0000
45.0000
32.0000
12.04159
5
Residual
.00000
.00000
.00000
.00000
5
Std. Predicted Value
-1.412
1.080
.000
1.000
5
Std. Residual
.
.
.
.
0
a. Dependent Variable: BuyingDecision
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Regression Analysis was performed where in Buying Decision - the motivation factor why
individuals joined brand page or followed a brand was taken a dependent variable and the
suggestions that explain why individuals follow a brand on social networking sites were taken as
independent variables.
In a regression line, y = a + bx, b represents the slope of the regression equation, y represents the
independent variable and x is the dependent variable. Only two factors are showing a positive
slope. It shows that the independent variable “To get information about product/Service”
Shows 0.62 variations on the dependent variable “Buying Decision . Hence it indicates the more
the companies should instigate individuals to talk about their brands/ products the more the
chances that consumer will get persuaded towards the products/brands and will make purchase
decision accordingly.
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Figure 1.5 Not a grievance redressal platform
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It is pretty evident from the above figure that Social Media Networks are not a very good
grievance redressal platform. It means that consumers do not get what exactly they perceive
about Social Media Networks. At the same time it has been found during surveys that they
(consumers) are not getting the response of the questions they post on the brand page. In some of
the cases very inappropriate and implicit information are being provided.
Findings
There is almost no variability among the social media network users on the basis of gender. It
has been found that younger people are adopting social media like anything and with a pace that
was never before in the past. It has also been found that almost every social media users who
were respondent in this case use to go to brand pages to learn more about the product/services, to
learn about the exclusive offers, to find the reaction of their friends and peer on the selected
brands. The effectivity of social media as a marketing tool will only be possible when
organisation having their presence on social media provide the concrete and timely information
needed by the consumers. The main way fans come to join/ follow a brand page/ brand on social
networking sites is through advertising followed by a friend invitation.
Buying Decision also plays an important role in motivation towards brand following on the
social networking platforms. The desire to engage with the brand either through dialog with the
brand’s representatives or with other consumers (business to consumer + consumer to consumer
communication) leads to advocacy and loyalty towards the brand and such consumer starts
working as a brand ambassador of the product/service. The brand following over the social
networking sites is converted into brand purchase either through offline or online buying channel
if the marketing strategies would be designed by keeping in mind the perception and
expectations of the consumers.
Consumer does research with search engines to locate their product/service and brand of intrest.
With more networks are more likely to gather opinions through their online network, read blogs
and query the Twitter channel as early steps in the decision making process.
There is a gap between consumer expectations and actual delivery at social networking websites;
Consumers don not get the information timely and adequately. The questions are not being
answered by the brand pages in the speculative time frame of consumer. The consumers also do
not perceive social media networks in general and brand pages in particular as a grievance
redressal platform. Because the brands are not promptly respond to the issues raised by the
consumers.
Conclusion
In conclusion, business today is being transformed from a transactional relationship to a social
relationship. It is now more critical than ever that successful businesses use Engagement
Marketing principles to plan for successfully engaging their prospects and customers before,
during and after their purchase cycle, and that the basis for this engagement is high-quality and
relevant information. Information which are demanded by target market at a time and place of
their choice (24/7 and 365 days/year). Marketer’s job is to provide this information in such a
manner that you are viewed in a positive light, create a positive brand and product reputation,
and are selected as their brand of choice. With the present growth and scale of social networking,
we would even be able to buy products and services through the social medium. The medium is
growing very fast and holds huge potential but is still in its nascent stage in India. Therefore, it is
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time for the companies to make effective strategies and execute them to win larger share of
business through this revolutionary medium and become the innovative firm of coming future.
Recommendations
Social media channels have a remarkable ability to attract customers with very brief statements,
and they can lead your prospects and customers to valuable content located on your website. On
the other hand, your website can encourage visitors to engage with your company by
prominently linking to your social media channels. In order to accomplish this goal the following
steps may be followed,
1. Modify your website to complement your Social Media Strategy.
2. Identify the Actions you want your Customers and Prospects to take
3. Implement your Conversations
4. Provide the Content your Visitors Want.
5. Maintain a consistent Communication Style
6. Send Advertisements.
7. Use your Web Properties to drive people to take the actions you are targeting
In order to influence your prospects and customers, your sales effort must follow a process
that captivates and transforms your prospects by implementing these steps, which must be
integral part of Social Media Marketing strategy.
a) Develop the proper context of your message
b) Create an appropriate draw.
c) Create the proper content that engages
d) Provide a sample offering
e) Ensure you follow-up.
f) Request they share.
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Abstract Social network,sites,(SNSs) are increasingly attracting the attention of academic,and,industry researchers intrigued by their affordances and reach.,This special theme section of the,Journal,of Computer-Mediated,Communicationbrings ,together scholarship on these emergent phenomena.,In this introductory article, we describe features of SNSs and propose a comprehensive definition. We then present one perspective on the history of such sites, discussing key changes and developments. After briefly summarizing existing scholarship concerning SNSs, we discuss the articles,in this special section and conclude with considerations for future,research.
Article
Purpose – Direct marketing faces challenges and opportunities associated with the emergence of social network media. Companies need to address target audiences both directly and also indirectly through social media. The purpose of this paper is to provide a review of the changing media landscape of direct marketing, and proposes a model of direct and indirect targeting of buyers. Design/methodology/approach – A conceptual model is presented which brings together the needs of producers, sellers and communities. Customer experience is used as an integrative framework for reconciling the sometimes differing needs of these groups. Findings – The literature is reviewed, noting changes in media habits. Previous studies of social network users provide a picture of the benefits sought by members of online communities. Originality/value – Assessment of direct marketing has traditionally emphasised cognitive and behavioural metrics. This paper has proposed an experiential framework which may be more difficult to measure, but evidence is presented that emotions associated with use of social network web sites may be more important as a key success factor for direct marketing.
The New Symbiosis of Professional Networks: Social Media's Impact on Business and Decision-Making The Society for New Communications Research Social Network Sites: Definition, History and Scholarship
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A new breed of brand advocates -Social networking redefines consumer engagement
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The brief history of social media
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Aircel Enters Punjab. The Tribune
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How companies are marketing Online: A McKinsey Global Survey
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