The new social Era: Branding through Social Media-Chalenges and Opportunities

Written by  Master Student at Lund University

 

 

Branding through social media- challenges and opportunities for marketers

 

Social Media has been popular for several years but we can see that this field is still evolving. These new channels are redefining ways companies are doing business and in order to be successful, we will see that it takes new ways of thinking.

First, it’s important to understand that humans have always been social:

“To understand the changes that are a foot in the world of business you are better off understanding Human 1.0, which took tens of thousands of years to develop, rather than Web 2.0, which took merely a decade”(Francois Gossieaux, The hyper social organization,2010)

This quote helps us understand that this new social era is giving humans new tools to be even more sociable by creating a phenomenon that we can call “Hyper-sociability” (Francois Gossieaux, 2010)

Francois Gossieaux is not the first to make this statement in fact, Aristotle was already writing: “Man is by nature a social animal” (Aristotle, Politics I).

It may seem obvious but this is really important to understand that since the beginning of the time, human use to organize itself in groups or tribes. The web 2.0 and social media are just giving new tools to people.

This is a game changer for companies because of the increasing importance of others market’s players. In the beginning people thought that it will not be important for all industries or companies, few years later, we can notice that some visionary companies are taking the lead by pushing the limits and using social media.

Many controversies theories and academics disagree on how companies should use these media. The better way to understand the new rules of the game is to watch good practices and their results.

The purpose of this paper is to make a report on the evolution of the field, answer the following questions and try to give some keys on how we have to change.

To aim that goal, we will use different concepts and theories but we will focus on examples and cases that are helping us understanding challenges and opportunities for the companies.

This paper will be structured around these questions:

How can social media help small and medium businesses?

Is it indispensable for every company to brand through social media?

What are the key aspects of branding through social media?

What challenges and opportunities social media represent for a company?

How to face social media challenges in regulated industries?

Internet marketing and social media are young fields of study, theories and vocabularies are still evolving. That’s the reason why I will start with some theory and give some key definitions.

Internet Marketing: “the use of information technology in the process of creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stake holders” (Strauss, Ansary &Frost, 2006)

Branding: “an identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely.” (Leslie de Chernatony and Malcolm McDonald, 2003)

But later, I will introduce the brand as “as a participatory, collaborative, socially-linked phenomenon.” (Fournier and Avery, 2011)

Social Media: “A group of Internet-Based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.” (Kapla & Haenlein, 2011)

Corporate culture: “A blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time”. (http://www.entrepreneur.com/encyclopedia/term/82104.html)

Word of Mouth: “When a consumer's interest for a company's product or service is reflected in their daily dialogs. Word-of-mouth marketing can be encouraged through different publicity activities set up by companies, or by having opportunities to encourage consumer-to-consumer and consumer-to-marketer communications. It includes buzz, viral, blog, emotional and social media marketing.” (http://www.investopedia.com/terms/w/word-of-mouth marketing.asp#axzz2LQp9mCDy)

Later in this article, I will use references from the Three levels of products by Kotler, even if they don’t cover every aspects social media can influence, it’s interesting to see how these platforms can serve the actual product and the augmented product.

Nowadays the increasing globalization, competition and regulation make it difficult for entrepreneurs to start a business. Small companies don’t have enough money to advertise correctly through main media.

They can use social media’s platforms to create a community that will judge if their culture, products and services are meeting their expectations. It’s a fantastic opportunity to learn by failure and adapt practices at an early stage, saving time, money and giving them a better understanding of customer’s need.

This is the end of the industrial Era and the beginning of the “Social Era” (Nilofer Merchant, 2012). This is not only a good opportunity for small and medium businesses, this new era imposes a new set of rules and this is preferable for every company to understand them to play the game.

Once stated that this new “Social Era” is changing the market, we can pursue trying to understand key aspects for branding through social media.

There is no need to state that branding, and marketing in general is about providing the organization with long-term competitive advantage. This goal is achieved by creating a greater customer value than your competitors. It could be by offering the lower price (Easy-jet) or more benefits for a higher price (Burberry). In any cases, companies have their own way to do business and that’s what makes them special.

Traditional and internet marketing have their own way to achieve that goal but in the long term, the second may help the first one.

In fact, in order to succeed companies have to listen and involve customers in first stage of the value chain. That implies that it’s not only changing the marketing strategy but also the structure of the organization. Wind explains well in the article Organizational Buying Behavior (p120, 2010) that it’s going to be a major impact on the organization’s buying behavior.

It won’t only be an impact on the buying process and that’s why managers have to ask fundamentals and broader questions like “how do the buying process” (Wind, 2010), what is our competitive advantage, what is our corporate culture, what could we expect from interactions with our customers.

One of the main aspects is to have a real corporate culture to rely on. Managers have to ask themselves if their companies have clear objectives, beliefs, value and practices establishing a strong enough corporate culture to get most benefits of social media.

In other words the empowerment of actors like consumers forces companies to gain consistency in order to not lose credibility and decrease their brand image.

On the contrary, a company with clear goals and practices can use social media to inform people on their products or services and involve their customers in constructive ways that strongly benefits their brand image.

Burberry is the perfect example of how a company could use social media to be even more successful, they are innovative and they take this social era as a good opportunity to make more profits. By allowing people to view fashion shows on Facebook, it helped the company to get more than 14 million Facebook likes and increased traffic on the website. Burberry didn’t stop there and make those videos shoppable. This way, they’re not only increasing sales but they are reorganizing the production like stated earlier. If we compare Burberry (3 billion dollars) to the 15 billion dollars company Nike, it’s impressive to see that Nike got 2 million less likes .(Facebook is completely changing how some big brands make their product, Max Nisen, Business Insider, http://www.businessinsider.com/social-media-manufacturing-2012-12)

In the long term, this difficult work of reorganization will help companies by being more competitive and achieving a better fit with customer’s expectations.

This quote from Wind (2008) will end previous parts and introduce well this one on challenges and opportunities:

“This shift in relationship between consumers and companies is the most fundamental change in the history of marketing, even more dramatic than the historic shift from a product orientation to a market orientation”.

We saw that companies need to evolve and are facing deep structural challenges in order to get the most out of social media. We should now talk about challenges businesses face once they have done the first part properly. In fact, one of the biggest problems is the measurement of company’s actions in this field, it says that the return in investment is hard to calculate.

Internet promotion and communication don’t sell like traditional marketing. Pepsi is a good example of a firm that lost a lot of market shares because they tried to replace traditional by Internet marketing.

Because this is hard to know the ROI, it is also hard to plan and budget.

We can notice that some industries face more challenges than others in the market reorganization but as usual some visionary companies take the lead.

This is the case in regulated industries such as pharmaceutical; Johnson& Johnson seems to do a good job with 81 294 Facebook like and the creation of a community trying to make help improving theirs products thanks to constructive feedback.

We saw earlier a lot of good opportunities for companies but the most important is to find ways to make social interactions positive, constructive and respectful. That’s why it’s important to write a social media policy and terms for social interactions.

We saw that among social media benefits, the creation of a community helps customer loyalty and brand image.

For the first part of my conclusion, I will use this quote from, Armelini and Villanueva, 2011:

“ Maintaining an active social media presence is commonly considered an alternative to traditional advertising as a means of achieving brand awareness. In our view this is a mistake. Facebook, Twitter and other social sites function more like a cafe than a billboard”.

We saw that traditional and internet marketing are both hardly recommended and that the value of social media lies in constructive connections between consumers and the brand. It will help branding which is one of the key assets of a company. Social media help customer’s understanding and build a trust and loyal relationship between customers and the brand.

In my opinion, the Social Media era is the opportunity for small, medium and big businesses to create a strong corporate culture around a community sharing the same values and willing to improve the situation for everyone.

The era of spreadability provides a transformational opportunity: for marketing and communications to act as the listening ear of the company, and to help better align the company to address the wants and needs of its various constituencies. Often, the information, service and expertise companies provide customers are as important as products and services themselves. Marketing and communications will best serve an organization when they put their primary emphasis on serving its audiences.

References:

Books:

  • Wind, 2008

  • Nilofer Merchant, 11 rules for Creating Value in the Social Era, 2012

  • Francois Gossieaux, The Hyper-Social Organization, 2010

  • “Man is a social animal” Aristotle, Politics I

  • “A group of Internet-Based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.” (Kaplan and Haenlein, 2011)

  • “the use of information technology in the process of creating, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stake holders” (Strauss, Ansary &Frost, 2006)

  • “an identifiable product or service augmented in such a way that the buyer or user perceives relevant unique added values which match their needs most closely.” (Leslie de Chernatony and Malcolm McDonald, 2003)

Articles:

  • Wind & Thomas, Organizational Buying Behaviour in an Interdependent World, Journal of Global Academy of Marketing Science, p 120, 2010

  • Sam Ford, In marketing people are not numbers, Harvard Business Review, 2013

Websites:

  • “When a consumer's interest for a company's product or service is reflected in their daily dialogs. Word-of-mouth marketing can be encouraged through different publicity activities set up by companies, or by having opportunities to encourage consumer-to-consumer and consumer-to-marketer communications. It includes buzz, viral, blog, emotional and social media marketing.” (http://www.investopedia.com/terms/w/word-of-mouth-marketing.asp#axzz2LQp9mCDy)