How are social media used to handle crisis situation? The example of Heathrow Airport.

November 3, 2014

Written by Niklas Milesi

Snow storm at Heathrow airport (Source: Daily mail)

URL Source: http://i.dailymail.co.uk/i/pix/2010/12/19/article-1339937-0C86FCCE000005DC-716_634x438.jpg

Snow storm at Heathrow airport (Source: Daily Mail Website)

Snowstorm (Urquhart, 2013), flooding, technical problems, strikes or terrorist threats are some examples of the danger airports are exposed to on a regular basis. Heathrow airport in London (United Kingdom) has on average more than 190.000 daily passenger (Heathrow Airport, 2014a) travelling to and from the airport relying on the operator (Heathrow Airport Holdings Limited, formerly BAA) to experience a smooth and comfortable journey.  This impressive amount of traveller means that if any problem occurs, the risk of a snow-ball effect paralysing traffic is huge and needs to be handled the best possible way.

The aim of this paper is to analyse how companies are using social media platform in crisis situation by taking the example of Heathrow Airport. We will first start by analysing how the development of internet have allowed the emergence of a new form of communication with consumers and how airport operators such as Heathrow Airport Holdings Limited have evolved to better respond to those changes. We will then, with the help of concrete example taken from social media platforms, analyse how the operator has applied some of the theoretical principles toward providing a better response in crisis situation with the help of social media.  

From brochure website to online dialogue

The evolution of the role the Internet has played for airport operators has developed in a parallel way to what has been described by academics publications. At first the Internet was used to create a “brochure ware” website (de Chernatony, 2001). In the case of airports that meant providing standard information such as live information on flights, transport to and from the airport or shops and activities available on site for example. This form of information, often referred to as “Web 1.0” (Chrisodoulides, 2009) has created an asymmetry of information in favour of companies as opposed to consumer allowing them control of any critics (Mitchell, 2001 in Chrisodoulides, 2009). Here the one way flow is very similar to the one used by traditional mass-media.

But the emergence of social media, and thus of a post-internet branding era, has led to a shift in balance in favour of consumer (Chrisodoulides, 2009). With the help of social media consumer can share their opinion and build their own free opinion of a brand or a company based on informations coming from other consumer.

This is particularly true in the airline and airport industry where companies have reacted in two very opposite way to those changes.  On one side companies such as Virgin Atlantic are often praised as examples for their active and innovative approach to using social media platform to communicate and attract consumers (Barwise and Meehan, 2010). On the other end of the scope a company such as Ryanair, the leading low-cost European airline with more than 81 million passenger transported in 2013 (Lundgren, 2014) has no official presence on social media platform. The only presence are from “anti-branding” (Krishnamurthy and Kucuk, 2009) groups such as “Ryanair Sucks!” (Facebook, 2014a) a Facebook page regrouping nearly 3.000 angry consumer actively posting and sharing any critics or bad news concerning the Irish low cost company.

However this strategy of avoiding any official presence on any social networks platform is becoming a more and more isolated case among big international brands (Papasolomou and Melanthiou, 2013). A growing number of them are realizing not just the importance of taking part in the conversation with their consumer but also the potential those interaction represents. Through social media platforms such as Facebook, Twitter, LinkedIn or Pinterest concept such as “collaborative creation” (also called “co-creation”), that is the working with consumers to improve or even create a new product, can be taken to a much broader scale as the example of Lego shows (Antorini, Muniz and Askildsen, 2012). In the case of airport operators the focus is more on the idea of creating and taking part in an interaction with their user. Here the view is that “in social media marketing, the focus is on conversation" (Armelli and Villanueva, 2011) creating a real dialogue with the consumer.

So how does a company manage to adapt to all the changes social media is creating without “losing sight of the fundamentals” (Barwise and Meehan, 2010, p.80)? The two authors answer this question by recommending to rely on four qualities that need to be present in the ‘marketing playbook’ for social media platform (Barwise and Meehan, 2010, p.83):

- Communicate a clear, relevant customer promise

- Build trust by delivering on that promise

- Drive the market by continually improving the promise.

- Seek further advantage by innovating beyond the familiar.

Those four recommendations are of course just some of the aspect that are key when it comes to social media platform. They are however build on two very relevant business examples: Virgin Atlantic Airline as a model of good social media use and Toyota for their great handling of the recall crisis using social media platform. Finally the recommendations offers the advantage of providing a solid foundation on which to start analysing the strategy used by Heathrow airport on their social media platforms in crisis situation.

Heathrow Airport creates online dialogue

The choice of Heathrow Airport was made as it is the world third and Europe biggest airport with more than 72 million passenger in 2013 flying to or from one of the 184 existing destinations (Heathrow website, 2014b).  Its social media strategy is mainly focusing on two platforms, Facebook and Twitter but the organization is also present on Foursquare, Instagram or LinkedIn for example. The four person strong team in charge of the different social media platforms has been created following a change in communication strategy but mostly following important crisis situation for the operator such as the snow storm in December 2010 and 2011 (Thomson, 2013). 

It is in this kind of situation, crisis situation, that social media platform have the best impact as they offer a very quick and direct way to reach a very broad audience. As already mentioned, airport such as Heathrow are often facing a situation of crisis creating a form of near ‘permanent crisis’. This could be coming from harsh weather conditions (snow, wind, fog for e.g.), strikes from the personnel or problem with public transport for example.

Using the four recommendations by Barwise and Meehan (2010) seen earlier, the social media approach of Heathrow airport is going to be analysed:

- Communicate a clear, relevant customer promise

When going to Heathrow airport Facebook page the customer promise is clearly defined: “More than just an airport, here at Heathrow we aim to make your journey better, while also invite education and discussion about the future of the UK’S only international hub” (Facebook, 2014b). 

Both the Facebook page as well as the Twitter feed (Twitter, 2014) account are mainly used to help answer passenger questions as well as inform them as quickly as possible on any potential problems. The use of a clear logo, identic on all platform as well as similar colours is also a good strategy to great a stronger brand image (Park, Eisingerich and Pol, 2013).

- Build trust by delivering on that promise

This is where the role of social media platform such as Facebook and Twitter has the best impact. Those two platforms provide live and easily updated informations to a very broad number of consumer. The Heathrow airport Facebook page is for example updating travellers as soon as a disruption such as a strike or flight cancelation occurs. The Twitter account respond to a lot of information asked by travellers.

- Drive the market by continually improving the promise.

Using social media offers the chance to establish a form of dialogue with the consumer in this case travellers. By asking about their opinion on different aspect, the airport operator can get informations to help make strategic decision. Here the best example is the debate regarding building a third runway for Heathrow Airport (Parker, 2014). The Facebook page is regularly updating its reader on the subject.  

- Seek further advantage by innovating beyond the familiar.

It is also very important for a company to not just use social media platform as a one-way stream just informing the user but also to regularly surprise them in order to keep them active around the brand. This is of course much harder in crisis situation but very much encouraged in more ‘smooth’ periods. Here the recently formed social media team for the Airport Heathrow seems to be doing well as they finished second in the category “Best Airport on Social Media” of the “SimpliFlying Awards for Excellence in Social Media 2013” (SimplyFlying, 2013). Another travelling website cited the airport as an example when it came showing “personality” on social media platforms, citing some example for their Twitter feed (Shankman, 2013).

Furthermore the operator is also applying the right choices in terms of content in order to expand the reach of its message by: encouraging discussion through direct question, choosing more popular form of posting such as video and pictures and by providing informations that reader wants to share (Vries, Gensler and Leeflang, 2012). It is also increasingly trying to favour consumer generated content (CGC) through photo competition for example creating a more solid bound with travellers (Muniz and Schau, 2011).

Future development of Heathrow airport social media strategy?

Heathrow Airport has, like many international brands, incorporated social media platform in its overall marketing and communication strategy. They have perfectly understood the shift from company driven message to a two way discussion led by the consumer being “empowered” (Deighton and Kornfeld, 2009) by social media.

However, a number of question remains. The first one concerns the development and the growing use of social networks on the go. As Kaplan (2011) already underlined 3 years ago this is a deep and solidly developing trend. What impact will this have for airport operators? How can this best be used to provide a better and more personalized service to travellers?

Secondly the horizon is not all blue sky for the airport and its social media platform strategy. Heathrow airport has recently seen the development of a very broad and strong “anti-branding” movement (Krishnamurthy and Kucuk, 2009). This opposition to the operator has been fuelled by the plan to build a third runway for the airport raising massive protest from local resident, environmentalist and opposition parties. Website from the “No Third Runway Action Group (NOTRAG)”, “Heathrow Association for the Control of Aircraft Noise (HACAN)” or online petition such as the one offered by the “No 3rd Runway” are having an overall negative impact on the ‘Heathrow brand’. The supporter of those opposition groups are also very active on social media platforms through their own YouTube channel or Facebook page but also by reacting to post by the different social media channels for Heathrow Airport. The opening of the official “Community Consultation” on the subject is likely to attract a lot of reaction and heated debate on social media platforms. How will they manage those critics while remaining open to a real debate? Is there a risk of seeing strong anti-branding page developing in the same way they have for Ryanair for example?

 Paper reference list:

Antorini, Y.M., Muniz, A.M., Askildsen, T. (2012), ‘Collaborating with customer communities. Lessons from Lego Group’, MIT Sloan Management Review, 53(3), 73-79.

Armelli, G. and Villanueva, J. (2011), ‘Adding social media to the marketing mix’, IESE insight, 9.

Barwise, P. and Meehan, S. (2010), ‘The one thing you must get right when building a brand’, Harvard Business Review, December, 80-84.

Chrisodoulides, G. (2009), ‘Branding in the post-internet era’, Marketing Theory, 9, 141-144.

de Chernatony, L. (2001), ‘Succeeding with Brands on the Internet’, Journal of Brand Management 8(3), 186–95.

Deighton, J. and Kornfeld, L. (2009), ‘Interactivity's Unanticipated Consequences for Marketers and Marketing’, Journal of Interactive Marketing, 23, p. 4-10.

Facebook (2014a), ‘Ryanair Sucks!’, Facebook [Social media group]. Available at: < https://www.facebook.com/ryanairsux > [Accessed 12th of February 2014].

Facebook (2014a), ‘Heathrow Airport - About’, Facebook [Social media group]. Available at: < https://www.facebook.com/HeathrowAirport/info > [Accessed 12th of February 2014].

Heathrow Airport (2014a), “About Heathrow Airport – Facts and figures”, Heathrow Airport [Internet], Available at: < http://www.heathrowairport.com/about-us/company-news-and-information/company-information/facts-and-figures > [Accessed 10th of February 2014].

Heathrow Airport (2014b), “Heathrow traffic and business commentary December 2013”, Heathrow Airport [Internet], Available at: < https://mediacentre.heathrowairport.com/Press-releases/Heathrow-traffic-and-business-commentary-December-2013-7a5.aspx > [Accessed 09th of February 2014].

Kaplan, A.M. (2011), ‘If you love something, let it go mobile: mobile marketing and mobile social media 4X4’, Business Horizons, 54, 129-139.

Krishnamurthy, S. and Kucuk, S.U. (2009), ‘Anti-branding on the internet’, Journal of Business Research, 62, 1919-1126.

Lundgren, K. (2014), ‘EasyJet Narrows Gap With Ryanair in Passenger Numbers’, Bloomberg [Internet]. Available at: < http://www.bloomberg.com/news/2014-01-07/easyjet-narrows-gap-with-ryanair-in-passenger-numbergs.html > [Accessed 10th of February 2014].

Muniz, A.M. and Schau, H.J. (2011), ‘How to inspire value-laden collaborative consumer-generated content’, Business Horizons, 54, 209-217.

Papasolomou, I.  & Melanthiou, Y. (2013), ‘Social Media: Marketing Public Relations ‘New Best Friend’, Journal of Promotion Management, 18(3), 319-328.

Park, C.W., Eisingerich, A.B. and Pol, G. (2013), ‘The power of a good logo’, MIT Sloan Management Review, Winter, 55(2).

Parker, A. (2014), ‘Heathrow to examine alternative plan to third runway’, Financial Times [Online]. Available at: < http://www.ft.com/cms/s/0/4ec78b98-7304-11e3-8e87-00144feabdc0.html#axzz2tQVsDFd2 > [Accessed 15th of February 2014].

Shankman, S. (2013), ‘How UK airports use Twitter to better communicate with travellers’, Skift [Online]. Available at: < http://skift.com/2013/04/04/skiftsocial-what-are-flyers-talking-to-airports-about-on-twitter/ > [Accessed 08th of February 2014].

SimpliFlying (2013), ‘Announcing Airline & Airport Finalists for SimpliFlying Awards’ 13’, SimpliFlying [Online]. Available at: < http://simpliflying.com/2013/announcing-airline-airport-finalists-simpliflying-awards-sfawards13/?src=homepage > [Accessed 08th of February 2014].

Thomson, S. (2013), ‘Social Media: Q&A with Heathrow's head of passenger communications’, Routes News [Online]. Available at: < http://www.routes-news.com/news/1-news/1089-social-media-qa-with-heathrows-head-of-passenger-communications-part-1 > [Accessed 08th of February 2014].

Twitter (2014), ‘Heathrow Airport’, Twitter [Social media platform]. Available at: < https://twitter.com/HeathrowAirport > [Accessed 15th of February 2014].

Urquhart, C. (2013), ‘Heathrow cancels 100 more flights as snow leaves hundreds stranded’, The Guardian [Online]. Available at: < http://www.theguardian.com/uk/2013/jan/19/heathrow-cancels-flights-snow > [Accessed 10th of February 2014].

Vries, L. & S. Gensler & P. S.H. Leeflang, (2012), ‘Popularity of Brand Posts on Brand Fan Pages: An Investigation of the Effects of Social Media Marketing’, Journal of Interactive Marketing 26, 83–91.

The effect of Social Media – Should companies abandon Traditional Advertisement? Part 2

October 30, 2014

Written by  Elisabeth Matsson

Part 2- Social Media versus Traditional Advertisement

The benefits of social media

The massive rise of social media has been a phenomenal sensation and has affected our everyday lives (Powers et al., 2012). As mentioned before, social media has not only effected consumers’ way to act but it has also increased the companies’ possibility to gain valuable information about their customers (Brawise & Meehan, 2010). Social media encourage people to share their thoughts and feelings online, which is consider being both positive and negative for the (Tuten & Angermeier, 2013). This has resulted in that transparency and authenticity of companies has become even more vital due to the arena of social media and this must be a priory for every participating company (Scott, 2008). When a customer feels deceived by a dishonest company and spreads the word, there can be devastating consequences for the company which indicates the importance for companies to be honest (Scott, 2008; Vázquez-Casielles et al., 2013). The effect of social media cannot be denied but whether it is the number one marketing activity for companies of today still remains uncertain.

What about traditional advertisements?

As stated before, social media has made it possible for word of mouth to reach a larger audience and is now considered to be one of the most effective communication tools for companies (Vázquez-Casielles et al., 2013). It has also been proven that positive word of mouth has a positive impact on brand-purchase probability (Vázquez-Casielles et al., 2013). Since social media encourage word of mouth, and word of mouth has an impact on increasing sales, should companies then focus more on social media than traditional advertisement?   

Traditional advertisement can be defined as one-way communication where there is no interaction between the company and consumer (Varisha & Vaish, 2013). Communication through social media invites the consumers to discuss, request and share their opinions with both the company and other consumers as well. Social media has the advantage of being accessible for interactions and providing the company with consumer insights and encourage word of mouth (Brawise & Meehan, 2010). However, traditional advertisement has its advantages as well which cannot be ignored. Traditional marketing allows the company to keep control over the message they wish to communicate and it is also easier to measure the outcome of traditional advertising compared to social media (Armelini & Villanueva, 2011).

Traction or just interaction?

There are many ways of how companies can interact with their customers through social media, for instance by creating Facebook pages, blogs et cetera. Nevertheless, it is important to understand the real effect by using these interacting channels. Having a Twitter account, a Facebook page et cetera should not be considered as a billboard, it should rather be viewed as a café where people do not just receive messages from the company, instead they interact with each other and obtain information from others (Armelini & Villanueva, 2011). If a company instead chose to use an advertising banner on a webpage, it works just like a billboard and this is categorized as traditional advertisement since it is one-way communication.

It is important to distinguish what traditional advertisement is in relation to social media since they can both occur on the same arena but in two completely different ways.  Social media does not focus on a specific sales offer, it focus is on creating an engagement with the consumers and encourage them to buy their products when there is an arising need (Trends Magazine, 2012). Traditional advertisement is however famous for targeting a specific segment for a specific product or service offer (Kotler & Keller, 2011).

Social media versus traditional advertisement

To communicate through social media is relatively inexpensive since companies do not have to pay a huge amount for the marketing space (Swilley et al., 2013).  However, it is easy to be fooled to believe that the use of social media in total is a low-cost alternative towards traditional marketing activities. This is only true to some extent. To establish a presence in social media costs relatively little but to generate content can be very costly since it requires time, creativity and qualified talent (Armelini & Villanueva, 2011).

Regardless of the  evidence of social media functioning as a success-maker for companies, Armelini and Villanueva (2011) and Barwise and Meehan (2010) both states that social media should be viewed as a complement to traditional advertisement. It should not be used as a company’s only communication tool. Pepsi learned this the hard way when they put almost their entire marketing budget into social media. The campaign was successful in terms of followers, fans and votes, but in terms of sales, Pepsi fell down from a second place to a third in the US (Armelini & Villanueva, 2011). According to Powers et al. (2012) offline advertising and brand perception are very important components to the media mix which means that without it, social media would not be a success for companies. Further, Barwise & Meehan (2010) argues that it is because of social media that it has become even more vital than ever before for companies to get their basics right and focus on traditional marketing activities. If they do not, the social media will only create buzz, not sales.

Picture: http://www.bet.com/news/fashion-and-beauty/2012/12/10/beyonc-s-beautiful-face-lands-on-pepsi.html

Even though social media is being rewarded for encouraging word of mouth and increasing the possibility to reach a large audience, not all word of mouth happens online. In fact, according to Keller and Fay (2012), most of the word of mouth happens face to face. A company cannot rely on social media to drive conversations, other tools are needed as well. Both online word of mouth as well as offline word of mouth has been proven to increase sales. However it has also been proven that it is the traditional advertisement that actually triggers word of mouth (Keller & Fay, 2012). If companies disregard traditional media, it will simply result in a lack of word of mouth. Keller and Fay (2012) states that companies should focus on the social consumers instead of social media and that the most effective way to increase sales is to use traditional advertising which gets people to start talking about it. Unfortunately, there is no magical solution for how a company should balance social media and traditional advertisement, it has to be judged in every specific situation (Armelini & Villanueva, 2011). The formula that will be ideal for one company will not give the same outcome in another.

So, what does this mean?

Social media and traditional advertisement are two very different things, but still very related. They are both connected to each other and have a mutual effect on each other’s outcome. Traditional advertisement gets people to start talking and by using social media, their thoughts can reach a larger audience. With this said, it is vital for companies to understand the importance of keeping their doors open for both social media and traditional advertisement. Social media is simply depending on traditional advertisement and the effect of traditional advisement is simply depending on social media as well. There is no magical solution on how to balance this in terms of percentages, it all depends on what effect the advertisement should have, the specific brand as well as the consumers the company wants to target.

To sum up, I would strongly recommend managers to participate in the social arena to boost their brand awareness and engaging customers to spread the word. This will be seen as a complement to their traditional marketing activities that should not be ignored. The combination of these two will generate a better outcome and provide the consumers with both the possibility to express their opinions through social media as well the opportunity to receive controlled message from the company’s traditional advertisement. If this is managed in the correct way, it will increase sales and generate a more profitable outcome.

References

Armelini, G. &Villanueva, J. (2011). Adding social media to the marketing mix. IESE insight, no. 9, pp. 29-36

Barwise, P. & Meehan, S. (2010). The one thing you must get right when building a brand. Harvard Business Review, vol. 88, no. 12, pp. 80-84

Bolton, R.N., Parasurman, A., Hoefnagels, A., Migchels, N., Kabadayi, S., Gruber, T., Lourerio, Y.K. & Solnet, D. (2013). Understanding Generation Y and their use of social media: a review and research agenda. Journal of Service Management, vol. 24, no. 3, pp. 245-269              

Dahlén, M. & Lange, F. (2009). Optimal marknadskommunikation, vol. 2, Liber

Deighton, J. & Kornfeld, L. (2009). Interactivity’s Unanticipated Consequences for Marketers and Marketing. Journal of Interactive Marketing, vol. 23, no. 1, pp. 4-10

Keller, E. & Fay, B. (2012). Word-of-Mouth Advocacy: A New Key to Advertising Effectiveness. Journal of Advertising Research, vol. 52, no. 4, pp. 459-464

Kotler, P. & Keller, K. (2011). Marketing Management-Global edition, 14th edition, Harlow: Pearson Education

Persson, N. (2010). An exploratory investigation of the elements of B2B brand image and its relationship to price premium. Industrial Marketing Management. vol. 39, no. 8, pp. 1269–1277

Powers, T., Advincula, D., Austin, M., Graiko, S. & Snyder, J. (2012). Digital and Social Media in the Purchase Decision Process: A Special Report from the Advertising Research Foundation. Journal of Advertising Research, vol. 52, no. 4, pp. 479-489

Scott, D.M. (2008). The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online Video, and Viral Marketing to Reach Buyers Directly: John Wiley Sons

Singh, S. & Sonnenburg, S. (2012). Brand Performance in Social Media. Journal of Interactive Marketing, vol. 26, no. 4, pp. 189-197

Swani, K., Milne, G. & Brown, B. (2013). Spreading the word through likes on Facebook: Evaluating the message strategy of Fortune 500 companies. Journal of Research in Interactive Marketing, vol. 7, no. 4, pp. 269-294

Swilley, E., Hill, P. & Hampton, A. (2013). Blog, Pin and Online Review Effects on Advertising Attitudes and Purchase Intensions. Society for Marketing Advances Proceedings, vol. 25, pp. 174-175

Thomsen, D. (2013). Det måste vara nolltolerans. Dagens Media, Available online: http://www.dagensmedia.se/nyheter/dig/article3633541.ece [Accessed 4 February 2014]

Trends Magazine. (2012). Putting Social Media Advertising to the Test. Trends Magazine, no. 116, pp. 22-26

Tuten, T. & Angermeier, W. (2013). Before and Beyond Social Moment of Engagement: Perspectives on the Negative Utilities of Social Media Marketing. Gestion 2000, vol. 30, no. 3, pp. 69-76

Varisha, R. & Vaish, A. (2013). Content Fusion in Traditional and New Media: A conceptual Study. Journal of Internet Commerce, vol. 12, no. 2, pp. 225-245

Vázquez-Casielles, R., Suárez-Álvarez, L. & del Río-Lanza, A.B. (2013). The Word of Mouth Dynamic: How Positive (and Negative) WOM Drives Purchase Probability: An Analysis of Interpersonal and Non-Interpersonal Factors. Journal of Advertising Research, vol. 53, no. 1, pp. 43-60

The effect of Social Media – Should companies abandon Traditional Advertisement? Part 1

October 27, 2014

Written by Elisabeth Matsson

Part 1 – The effect of Social Media

Introduction

Having a strong brand that generates positive associations and that differentiate the brand from competitors is a crucial factor for successful marketing (Dahlén & Lange, 2009). According to Dahlén and Lange (2009), the quality of the product is not the evident factor when it comes to purchasing a product, the deciding factor depends on how the brand is perceived. This demonstrates the important role of the brand and that a good reputation can increase sales (Persson, 2010). But, how can a company of today increase a good reputation and what are the risks of doing so?

Until recently, companies used to launch an advertising campaign in traditional media when they wanted to reach the public audience. Today, according to Armelini and Villanueva (2011) you do not exist in the consumers‘ mind unless you communicate with them through social media. Social media has become a powerful arena for consumers to share their thoughts and opinions about a company’s brand and products. Companies all over the world have started to take part in this increasing trend hoping to become even more successful. However, is social media really effective when it comes to increasing sales and if so, should companies put all their efforts into the arena of social media? – The answer to this question will be discussed further in these two posts.

The rise of social media

Social media is not as new as people may think but it was not until ten years ago that it was widely adopted (Bolton et al., 2013). Social media can be defined in many different ways but it will here be defined as ”any online service through which users can create and share a variety of content” (Bolton et al, 2013, p. 248).  It includes blogs, discussion forums, social platforms, news-, photo-, and video-sharing sites that provide networks, interactions and relations, and it is up to every company to decide on what social media forum to use (Singh & Sonnenburg, 2012). Social media has made it very easy for word of mouth to travel and for example, just liking or sharing a post on Facebook increases the audience size tremendously (Swani et al., 2013). This indicates that social media can increase the awareness for companies as well as the brand.

There is no doubt that social media is powerful and that it influence consumers in their everyday life, and, as a matter of fact, many researchers have praised social media for benefiting companies and strengthening their brand qualities (Brawise & Meehan, 2010; Powers et al., 2012). The explosion has been massive and has captured the attention among all kinds of companies and consumers which has led to a change in consumption habits (Armelini & Villanueva, 2011). However, there are differences in opinions on what social media really brings to the table and whether a company should focus more on either social media or traditional advertisement. So the question arises, can social media really benefit a company by increasing sales?

There are many advantages of social media, it can for instance increase the brand awareness, reputation et cetera. Nevertheless, social media does not only generate knowledge about the company to the consumers, the companies can also get valuable insights about the consumers (Brawise & Meehan, 2010). Deighton and Kornfeld (2009) argues that social media has increased the power of the consumers instead of the marketers, which can also be very dangerous. Consumers like to share their joy when making a good purchase, but they are also eager to share their negative experience of a product or brand (Powers et al., 2012).

The danger in use of social media

Social media encourage people to spread their thoughts and experiences, but just as quickly as positive word of mouth can spread, negative has the same speed (Tuten & Angermeier, 2013).  Consumers enjoy ventilating their opinions about the company and those opinions are not always too optimistic. Social media has made it possible for word of mouth to travel faster and reach a larger audience than ever before. This emphasize how important it has become for a company and its brand to be authentic and transparent (Scott, 2008). A company or brand should never pretend to be something they are not. If it fails to accomplish this criterion the consequences can be very harmful once it has been exposed and an unhappy consumer spreads his/hers dissatisfaction virtually (Scott, 2008).

The social arena is becoming problematic to handle and consumers of today demand a lot. It is not only important for a company to take responsibility for the content they are providing on their digital networks. They also must take responsibility for what others do that can be associated with the company. The Swedish fashion company H&M learned this the hard way when they didn’t take actions against the online expression of hatred that one writer had to suffer when sending a comment to H&Ms Facebook page. The critics against H&M were massive and everyone agreed that it was H&Ms responsibility to maintain a respectful tone in the comment section on their Facebook page (Thomsen, 2013).

Critic against H&M for not maintaining a respectful tone on their Facebook page”

Picture: http://nyheter24.se/nyheter/inrikes/738173-kunder-rasar-mot-hm-pa-facebook

Social media as a sales increaser?

Social media has been acknowledged for being both a success as well as a danger for a company today. Nevertheless, according to Vázquez-Casielles et al. (2013) word of mouth has been recognized to be one of the most effective communication channels today. Vázquez-Casielles et al. (2013) conducted a study to investigate whether word of mouth has an impact on the probability to make a purchase or not. The study showed that word of mouth in fact does influence brand-purchase probability. It also proved that a positive word of mouth has a larger impact on a positive brand-purchase probability, than a negative word of mouth has on a negative brand-purchase probability (Vázquez-Casielles et al., 2013). This indicates that the benefits outweigh the risks of using social media since the result imply that the positive effects are much stronger than the negative effects.

To conclude, social media facilitate word of mouth since it is an arena for sharing thoughts, expression and opinions. It has been shown that positive word of mouth has a strong connection to brand-purchase probability which means that social media is effective to increase sales. With this said, there is no doubt that social media is attractive for companies since the benefits by being a part of the social arena is evident. However one question still arises, since it has been established that social media is a successful arena for companies to take part in, should companies simply concentrate on social media activities or should they balance this with traditional advertisement? – The answer to this question will be discussed further in part two “Social Media versus Traditional Advertisement”.

LUXURY BRANDS CHOOSE SOCIAL MEDIA MARKETING -- A WISE CHOICE OR NOT?

October 23, 2014

Written by  Liu Xue Fei

Introduction

Before the appearance of Web, business organizations always attracted their customers in two traditional rules: pay a lot of money on advertising or cooperate with a third-party from the media (Scott, 2013). With the development of Internet, communication became more easy and convenient. Some marketers also found their new opportunities and broke the traditional rules. The Internet and electronic commerce turned into a strategic necessity for business organizations (Al-Mashari). As Bemard Martin stated, 'traditional marketing involves talking at someone. Social media marketing involves talking with someone' (Atkinson, 2013).A one-way interruption marketing could not adapt current market conditions and understand customers' need, so some firms start to choose social media marketing instead. According to Akar and Topsu (2013), social media marketing could be defined as a company use social media channels in order to promote itself; the social media channels include social networking sites, cooperative projects, blogs, content communities, virtual social worlds, virtual game worlds and microblogging. If companies ignore social media as their online marketing strategy, they may lose an opportunity to reach potential customers (Kim and Ko, 2012). However, it is hard say that the social media marketing suit for every kind of industries or companies.

Luxury brand industry's product or service is different with commodity or normal industry, luxury Brand also could be seen as a symbolic, imaginary or social added value (Geerts, 2013). Nueno and Quelch (1998) defined luxury brand as that being at the top of the pyramid, which depends on products functional utility, price and the socio-demographic characteristics. In addition, luxury brands have specific features: uniqueness and exclusivity (Jin, 2012). While luxury brands choose social media marketing, their managers will face 'a dialectical tension between the need to keep up with the social media trend and the need to maintain their brand integrity and exclusive reputation'(Jin, 2012). Hence, the luxury brands managers need to consider a lot to decided in order to avoid or decrease the tension. This paper aims to find out whether social media marketing fit for the luxury brands.

Theoretical Framework

Social Media Marketing and Social media

Social media marketing is a process that companies present their own products or services through online social media channels, in order to communicate in a wide community (Akar and Topsu, 2013). Comparing with brand generated traditional marketing, social media marketing consist of three characteristics: multidirectional dialogs, participatory and user generated. Conversation is one of the core views in social media marketing, customers could generate, edit and share online information about company, and also create online communities and networks through social media platforms (Akar and Topsu, 2013), in another word, companies could communicate with customers or buyers directly (Scott, 2013).

Social media is the tool that social media marketing used to increase companies' visibility on the Internet, and social media conducive to establish social networks and information exchanging (Ontario 2008). In addition, using social media of brands also reduced misunderstanding and prejudice toward brands, and elevate brands value, because of the more directly communication between brands and customers(Kim and Ko, 2012). Kim and Ko (2012) mentioned that social media aims to facilitate interaction, collaboration and sharing of content, and it has different forms, for example: social blog, wikis, podcast, picture, video, social bookmarking and etc. Corcoran (2009) divided the ecosystem into three media types: owned media, paid media and earned media. Owned media is the one that could be controlled by companies; paid media is the one that companies need to buy from others; the media that companies cannot control or buy is earned media.

Online groups or virtual groups are formed by social media or social network. In this on-line groups, people share information and trust each others, word-of-mouth principles are stronger in this virtual world than real world (Papasolomou and Melanthiou, 2013). As the statistics (DEI Worldwide, 2008) offered, almost half of customer searched for information via social media sites engaged in word-of-mouth. word-of-mouth is quite important in social media marketing, because the social media could affect brand's reputation(Kim and Ko, 2012).

Social Media and Luxury Brand

Although luxury brand industry was already success in 2010, it still need a growing necessity to ensure supplement income sources: combining luxury and the Internet (Geerts, 2013). Most luxury brands have its social media sites today, such as: Facebook and Twitter(Phan,2011). While luxury brands using social media to directly contact with its customers, they could create new products, service, business model and values together. Luxury brands also can gain more information and strengthen relationship with customers at the same time (Kim and Ko, 2012). However, customer also could use social media as a complaint forum to express negative or unsatisfactory comments (Jin, 2012).

'Young' is the word which belongs to both luxury brand and social media. Depending on Phan's (2011) survey, he found out that 'social media is extremely popular especially among the young adults who have actually grown up with the new communication technologies that are also progressively very intuitive and user-friendly which in turn increases their popularity'. Young customers are also the fastest growing segment of the luxury market who always desired fashion-driven products (Juggessur and Cohen, 2009). Hence, social media and luxury brands have quite similar target customers.

Functional and economic value of products or services are the factors that customers always consider about, but a luxury brand is 'a premium priced brand purchased by consumers for their psychological values' (Nueno and Quelch, 1998), it owns hedonic and symbolic goods. According to Dellarocas et al. (2007) and Smith et al. (2005) research, consumers prefer recommendations from other consumers rather than critics from professional reviews, especially for hedonic goods.

Cases and Discussion

The luxury brand Burberry was founded by a 21 years old dressmaker Thomas Burberry in 1856. The target customers of Burberry are the high-incomes young people, the average age is 18-35. Burberry is one of the earliest luxury brand choose social media marketing, it has accounts on mass popular social network website, for example: Linkedin, Twitter, Facebook, Google+, Instagram, Youtube and etc (Austin Powe,2013) . Now, Burberry has over 16million Likes on Facebook and continually increased. In November 2009, Burberry launched an on-line project with Facebook called 'Art of the Trench'. This project launched as a Trench coat photo-sharing website, everyone who has a Facebook account could share the wearing Trench photo on 'Artofthetrench.com'. Besides, users also free to make comments or add Likes on other one's photo (Ortved, 2011). Trench project aimed to elicit admiration for the design of their trench coats and create more Burberry fans (Samsung Design Net, 2009). After this project, Burberry's online sales increased, it also earned more fans and good reputation. In 2012, Burberry decided to publish their new product on Twitter and Instagram in advanced, and also put its new conference Live on Youtube. After this promotion through social network, the amount of 'Likes' on these three social website rapidly increased (Xiao, 2012). Burberry's profit also increased, after it working through the mass social media marketing. Combining the Burberry case with theories, it is easy to find out that Burberry is well communicated with its customers through the Trench project. Burberry could observe or directly communicate with its customers in order to know their needs. No matter positive or negative comments that customers made, Burberry could discover them in time and made suitable changes. In addition, Burberry's target customers test ' young' theory again. Both social media and luxury brands target customers are young adult, Burberry's target customer is 18-35 which just fit to the theory. Moreover, according to Dellarocas et al. (2007) and Smith et al. (2005) research, consumers prefer recommendations from other consumers rather than critics from professional reviews. Burberry build the social media site provide a public place to customers, customer could gather in to on-line group by themselves. The recommendation of others will affect customer's decision making which is more convincing.

Conclusion

When other luxury brands still insist of using the traditional marketing, Burberry taken a courage step. Social media marketing helped Burberry to earn more customer and good reputation. The conditions provided by social media marketing which just satisfied luxury brand's promotion needs and motivated luxury brand's development. The social media marketing is fit for the luxury brands. However, luxury brands is still a high-ended and expensive brand, even though it promoted through social media network to common, how many customers could carry the price? And how to keep the luxury brand uniqueness and exclusivity while promoted it too popularization and frequently?

Reference List:

 Akar, B, Topsu, 2013. An examination of factors influencing consumers’ choice of social media marketing, Journal of Internet Commerce, 101 (1), pp. 35-67. [Accessed 14 Feb 2014]

Al-Mashari, M., 2002. Electronic commerce: A comparative study of organizational experience. Benchmarking: An International Journal, 9 (2), pp. 182-189. [Accessed 14 Feb 2014]

Atkinson, W., 2013. Adding Social Media Mariceting to tiia IViix, Distributor Focus. [Accessed 14 Feb 2014]

Austin Powe, 2013. Burberry Case Study. [online] Available at: <http://austinpowe.com/Burberry-Case-Study> [Accessed 14 Feb 2014]

Corcoran, S., 2009. Defining owned, earned, and paid media. [online] Available at: <http://blogs.forrester.com/interactive_marketing/2009/12/defining-earned-owned-and-paid-media.html> [Accessed 14 Feb 2014]

DEI Worldwide. The impact of social media on purchasing behavior. [Online] Available at: <http://www.deiworldwide.com/files/DEIStudy-Engaging%

20ConsumersOnline-Summary.pdf> [Accessed 14 Feb 2014]

Dellarocas, C., Zhang, X.M. and Awad, N.F., 2007. Exploring the value of online product reviews in forecasting sales: the case of motion pictures. Journal of Interactive Marketing, Vol. 21 No. 4, pp.23-45. [Accessed 14 Feb 2014]

Jin, S. A., 2012. The potential of social media for luxury brand management, Marketing Intelligence & Planning, 30(7), pp. 687-699. [Accessed 14 Feb 2014]

John, O., 2011. Is Digital Killing Luxury Brand? Business Source Complete, 52(31), pp. 54-57. [Accessed 14 Feb 2014]

Juggessur, J. and Cohen, G., 2009. Is fashion promoting counterfeit brands? Journal of Brand Management, 16(5/6), pp. 383-394. [Accessed 14 Feb 2014]

Nueno, J.L. and Quelch, J.A., 1998. The mass marketing of luxury. Business Horizons, 41(6), pp. 61-8. [Accessed 14 Feb 2014]

Geerts, A., 2013. CLUSTER ANALYSIS OF LUXURY BRANDS ON THE INTERNET. International Journal of Management and Marketing Research, 6(2), pp. 79-92. [Accessed 14 Feb 2014]

Guoke, 2012. [online] Available at:<http://www.guokr.com/article/124373/> [Accessed 14 Feb 2014]

Kim, A. J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand. Journal of Business Research, 65 (2012), pp. 1480-1486. [Accessed 14 Feb 2014]

Ontario. Social media marketing: Introduction to social media marketing. [Online] Available at: http://www.bruce.on.ca/tools/Social_Media_Marketing.pdf [Accessed 14 Feb 2014]

Papasolomou, I. and Melanthiou, Y., 2013. Social Media: Marketing Public Relations ‘New Best Friend. Journal of Promotion Management, 18(3), 319-328. [Accessed 14 Feb 2014]

Samsung Design Net, 2009. Luxury fashion business using technology. [online] Available at: <http://www.samsungdesign.net/Report/Report/content.asp?an=589> [Accessed 14 Feb 2014]

Smith, D., Menon, S. and Sivakumar, K., 2005. Online peer and editorial recommendations, trust, and choice in virtual markets. Journal of Interactive Marketing, 19(3), pp. 15-37. [Accessed 14 Feb 2014]

Scott, D. M., 2013. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases. Online Video, and Viral Marketing to Reach Buyers Directly. 4th ed. New Jersey: Hoboken.

How has the internet changed consumers over the past 10 years and how can companies’ best adapt? Part 2

October 20, 2014

Written by  Liu Fan

Analysis and Apply

The importance of internet

Many company and organization think that there is no necessary delivery their new productions or services through the internet on blog, twitter or whatever. But it is wrong to think by Barwise & Meehan (2010) we are entering a world in which traditional marketing activities, and brand themselves, will become irrelevant. If the company use the internet causes the customer disappointing, but today the scale and speed of social media can make falling short instantly painful (Barwise & Meehan 2010). It is better rather than the company falling down or bankrupt.

More and more company have an awareness of using internet is important for their future development. As Barwise & Meehan (2010) mentioned social media can also boost brand awareness, trial, and ultimately sales, especially when a campaign goes viral. The internet is suitable most of the companies that could use website. Internet brands adopt a more relaxed stance on brand management, which involves the consumer in fundamental stages of the brand building process (Chritodoulides, 2009). There is no need worried about you are in the stage of the beginner or you are a big company which has thousands of employees.

Target groups

The big company maybe suits the most of the customers for their products. There is no need to divide into several in order to get the attractive or purchases. But the products and services comparably not popular is still needed by a small group of people actually. Breuer and Brettel (2012) said that advertising should be target group specific in order to achieve the highest impact. Aljukhadar and Senecal (2011) has asserted that four primary underlying motives drive internet use: acquisition of information (searching), communication, exploration (general browsing), and acquisition of goods (shopping). Different customers have different interest for reasoning internet. Otherwise the company should take account into different target groups in compliance with those various aspects of internet use. However, the company might think a small group of the customers is not enough for their desire. They want to gain a large part of the market shares. In fact, the potential benefits to be gained far outweigh the resource implications required to implement a successful segment approach (Aljukhadar and Senecal, 2011). Aljukhadar and Senecal (2011) suggest that consumers who shop online behave differently from consumers who use the traditional shopping channel. The consumers behave has changes by the timing passed, it is becoming various now in the internet era. Aljukhadar and Senecal (2011) has found that age, gender, and income have a significant influence on online shopping intent.

Focusing on contents

Many companies are working so hard that introducing their products and services in order to deal with the consumers’ problem. Indeed, the company do not solve the problem which customer searching for. The organizations or company always do the useless of which they are focusing on their own things, because that are not starting to think as what customer think about it that should be consider it. Barwise & Meehan (2010) have found that market research was product-rather than customer centric: Marketers asked questions about attitudes and behaviors relevant to their brands. However, the company or organization can change the position as a customer. They can think what I offer which is matters of customer. What problems might be giving a solution for people? What are the customer focusing on? What do the customers really care about? Moreover, Deighton and Kornfeld (2009) said that the technology underlying each of these phenomenons enables easy interaction with the content and among viewers. Under the internet with using blog, twitter, or facebook, the company has a chance to exchange the information from the customers to company it selves.

Building your brand

Large amount of companies spend the millions of money to search advertising agencies for their advertisement’s innovation, unique ideas. But the return of the investment is so low that cannot make sense for most of them. However, the website can build for your companies or organizations with blog, twitter, or facebook. And the most important thing is that you can save your money totally, it cost little. Cova and Pace (2006) said that the advent of the internet subsequently advanced the idea that brands can create consumer communities revolving around their web sites. Cova and Pace (2006) have found the possibilities for developing communities around the brands that can supply our basic products. Websites do real significant position on building a brand for customer. If the companies have many of brands on products and services, they can have different websites on each brand, such as P&G. When they are doing the websites, they need carefully about that on target groups. Separate the brands are needs to develop strong identities for products, but if customers need more than one product, they have to do their own integration of brands---often with the same company (Wind, 2008).

Just do it

We talk about the importance of internet, target groups, focus on content, and build your brand. Now it is time to do so. Some of the companies afraid of doing in the wrong way because of them are the first time. Some of the companies are afraid of which platform is suit for them that can attract large of the visitors to come see their web pages. Also there is some of company afraid of what time is the good decision for launching the new products or services. But the point is that there is no need to care about the worries above. If it is necessary for the future development, the employees can set up a blog or twitter for the company. There is a point should be carefully, the company have do build the standard rules for security of company to avoid private information and commercial secrets be captured. Many evidences proved that whether you are using  social media to communicate with consumers, or to influences others to carry a message related brand, effective use of social media can benefit greatly  from a personal touch that is related oriented (Weinberg & Pehlivan, 2011).

Conclusion

The internet has changed people behaviors, such as blog, twitter, facebook, etc. People and customer search information of solution through the websites. However, the company, organization or private can offer the information or solution to customers or people. When the company set up a new website, they might focus on target groups, managing the contents, building your brands and do it as soon as possible. Moreover, the employees can promote the company and give information and solution also. But the company should set a standard principle in order to avoid lose private information and commercial secrets.

The advent of internet cannot live without the people, company, and society. Although the internet is so important that we need them in this era. But the mass media (newspaper, TV, radio and magazine) also has the same position. The best way to coordinate the internet and mass media is that choose your best tools that can promote your company and delivery the information and solution for the customers.   

Reference 

Aljukhadar, M. & Senecal, S. (2011) Segmenting the online consumer market, Marketing Intelligence & Planning, 29(4), 421-435.

Akar, E. & Topcu, B. (2011) An examination of factors influencing consumers’ attitudes toward social media marketing, Journal of Internet Commerce. 10(1), 35-67.

Atkinson, W. (2013) Distributor Focus: Adding Social Media Marketing to Mix

Barwese, P. & Meehan S. (2010) Spotlight: The One Thing You Must Get Right When Building a Brand.

Breuer, R. & Brettel, M. (2012) Short- and Long-term Effects of Online Advertising: Differences between New and Existing Customers, Journal of Interactive Marketing, 26, 155–166.

Christodoulides, G. (2009) Marketing Theory: Branding in the post-internet era. Volume 9(1): 141-144Harvard Business Review,December. Sage. DOI: 10.1177/1470593108100071

Cova, B. & Pace, S. (2006) European Marketing: Brand community of convenience products: new forms of customer empowerment- the case” my Nutella The Community”. Vol.40 No.9/10, Emeralds Group Publishing Limited.

Deighton, J. & Kornfeld, L. (2009) Interactivity’s Unanticipated Consequences for Marketers and Marketing. Journal of interactivive marketing. Boston: Harvard Business School.

Scott, M.D. (2010) The new rules of marketing & PR. Wiley, Third edition.

Wind, J.Y. (2008) MIT Sloan Management Review: A Plan to Invent the Marketing We Need Today. Vol.49 No.4

Weinberg, D.B. & Pehlivan, E. (2011) Social spending: Managing the social media mix. Kelley school of Business, Indiana University. Business Horizon, pp 275-28

How has the internet changed consumers over the past 10 years and how can companies’ best adapt? Part 1

October 16, 2014

Written by Liu Fan

Introduction 

Long time ago, the people can only receive the information of production and service through the mass media. The companies are often using the one-way interruption advertisement to attract the people who are watching the TV or news in order to gain the attention no matter they like or not. But now it is an advertisement explosion era that you can see the commercial information everywhere, no matter what you are in the public or you are at home. As Akar and Topcu (2011) said that the internet has changed the way people work, communicate, and live. It has changed the human behavior largely. People can listen to music in whatever you want---even you are not in your home country. People can get the news on their smart phone---sport news, product promotion, etc. people can watch the movie in the publication or at school. The relationships are getting closer between the people or customer and company through the internet. People not only have mass media that involves television, radio, newspaper and magazine also has the internet which influences the customer or company. The people search the production and services information that they like or they need on the website.

The old marketing rules are more active and positive in the past few years. The advertisements are seemed to be an important component of marketing. It becomes a best way to distribute the information about the company. Moreover, the creativity is taking a large part of the position in the advertisement. The companies are trying to use interruption marketing for making the customer get an attention. And the advertisement and public relations are different activity. They have different goals, standards, and strategies running by two departments. The old public relations are determined to send the messages through the media. Company only can communicate with the journalist across the press releases. And there is nobody can see the actually press unless you are editor. In addition, the companies try to make top news in order to let the journalist write the new production or services via release. If the customer wants to know the news immediately, they merely accept the news from the reporter.

However, the internet has changed the rules of marketing and public relations. Traditional marketing involves talking at someone; social media marketing involves talking with someone (Atkinson, 2013). Which means it targets particular groups, maybe it is large or it is small. Moreover, Atkinson (2013) said that if you are not involved in B2B social media marketing, you are missing out on a huge opportunity, especially as it relates to attracting younger generation customers. Marketing is no only about the popular products and services, but also the things that face a small share of markets. The theory of long tail is telling us the marketing shift is changing from the popular markets to comparably smaller market share; it works such as the online shopping of Amazon. The new rules of marketing and public relations are means, for instance, the marketing is not 4P---product, place, price and promotion, the marketing is not advertising, etc. the company could have their own blog, twitter, podcast or website. And their employees could also have the blog or twitter to introduce the new products or services, too. But for the security aspect, company should make principles. However, the people could get the information or solution via company or employees’ blog or twitter. Comparably investing a huge of amount money in advertisement on television, the website is a smart choice, especially for the beginner of the entrepreneurships.

Purpose 

For the research of this report, we are discussing the significant of internet for the company using such as blog, twitter, website, podcast, etc. Many evidences prove that the company may face the internet media before that have action for the branding or others to compete with rivals. Furthermore, we are aiming to help the organization or company out with the target group, content management, building a relationship with customer. Is it the internet has an effect on branding or not? The question s that how does the company uses the internet on order to get involved in the new era for the future? 

How Social Media Investments Can Increase Purchase Intentions among Consumers – A Four Step Approach Addressed Brand Managers in the Fashion Industry Part 2

October 13, 2014

Written by  Masters Student at Lund University 

PART II

DIFFERENT SOCIAL MEDIA FORUMS

 Facebook

facebook_purchaseintentions_socialmedia_fashion

In 2011, almost 83 % of 500 successful companies tried to reach out to their target customers through some kind of social media (Naylor et al., 2012). This, probably because customers today increasingly search for information about unknown brands in different social media channels with an increased reliance (Naylor et al., 2012).  One of the most common channels used is Facebook and the Facebook fan page (Hutter et al., 2013).  Using a Facebook fan page is a good tool to use in the quest to increase brand awareness, intensify the traffic of e-WOM and most importantly to increase purchase intentions. Even though the fan page initially seems like a good plan, a company needs to be aware of the negative consequences it might generate (Hutter et al., 2013). An overload of invitations and activities from the fan page can annoy the followers and consequently lead to negative effects such decreased participation, negatively changed commitment to the fan page and less or undesirable e-WOM (Hutter et al., 2013). An intense release of new posts can create a feeling that the customer is caught instead of feeling liberated and inspired, and thereby damage the perception of the product and the brand (Powers et al. 2012).

Blogs and online magazines

blog_purchaseintentions_socialmedia_fashion

Blogs are another frequently used tool in the search for information on the internet about products one aims to purchase (Anant, 2011). Particularly in the fashion industry, blogs are playing a significant role when it comes to marketing (Colliander & Dahlen, 2011). This social media forum works as a marketing channel and have proven to be more efficient than online magazines when it comes to build good brand attitudes and purchase intentions (Collinder & Dahlen, 2011). To promote fashion brands and products through blogs is very effective. Since the blogger after a while often is portrayed as an idol to the consumer and a relation between them is created, the consumer will automatically like or buy many of the brands and products that the blogger promotes in the blog (Colliner & Dahlen, 2011. The blogs are therefore something that marketers in the fashion industry cannot ignore (Colliner & Dahlen, 2011). The more admired the blogger is, the more affected becomes the reader and it gets more attached to the brands that is exposed on the blog (Colliner & Dahlen, 2011). It is further important for fashion brands to notice that the relationship between the blogger and the brand must be transparent and genuine with no visible sponsorship involved. Hereby, the fashion brands should start target the bloggers in a genuine way, build trust and liking from scratch. Not until this moment is done consummately, the fashion brands can create a big loyal audience through the blogs (Colliner & Dahlen, 2011).

Using bloggers is also a great way to reach out to the right customers in a sincere way. During fashion shows many fashion brands places popular bloggers in good seats from where they can upload posts on their blogs and their other social media accounts.  By doing this, the purchase intentions of the desired consumers are created the right way, with no obvious manipulation or impact from merchandisers or editors (Kim & Ko, 2012).

Instagram, Youtube and Pins

instagram_purchaseintentions_socialmedia_fashion

youtube_purchaseintentions_socialmedia_fashion

pins_purchaseintentions_socialmedia_fashion

Pictures, videos and movie clips have been a common way in the fashion industry to promote fashion brands / products, activities and new collections (Caro et al., 2012). Often during a fashion show or events, fashion designers have a team working with taping and creating pictures and movies with backstage material to spread to “followers” in different social media forums (Coro et al., 2012). Other common activities using pictures related forums are by creating competitions where the customer is asked to take a picture of him/herself together with a certain brand specific product or tag (Caro et al., 2012). All of those marketing social media activities are created in the quest to interact and to attract new potential customers and it is to be considered as a powerful tool to spread messages and news in the fashion industry (Caro et al., 2012). Usually, the posts on Youtube, Pinterest or Instagram are often additionally shared on larger social media forums like Facebook, which generates a larger total spread which also can generate a better e-WOM (Caro et al., 2012). An additional good thing with the picture channels is that they tend to attract a like-minded audience. It is thereby easy for marketers to reach out to the desired audience and target groups (Caro et al., 2012). Using different kinds of picture-related social media activities is therefore to be considered to be a rather fast, cheap and easy way to market brands and increase purchase intentions within the fashion industry (Caro et al., 2012).

Recommendation #3: Reach out to the right customers in the right way

All of the chosen social media forums examined above have a proven effect on the purchase intention. Therefore, I would recommend fashion brands to investment in all of them, but having different strategies with each forum since they have different impact and effect. To start with Facebook, I would use it to create awareness, to spread messages and to create e-WOM.  I believe that it is important to be present at Facebook, but when it comes to fashion brands, I rely more on other channels who I would recommend fashion businesses to invest more time and effort on because of their spread and establishment. Blogs is probably the forum I would choose to create personal bonds to consumers and to create that desired familiar feeling. It is a good way to create deep trust and liking from scratch, and could therefore be a good starting point and first step, since the liking of a brand has been proven to have a crucial effect on the purchase intention and the future of the brands success. I also experience myself, that different picture-related social media forums get a larger share when it comes to promoting new products in the fashion industry. I have seen that forums like Instagram are taking over from blogs and online magazines, probably due to Instagram’s easiness and convenience for customers who constantly wants to be updated. Many bloggers also have an official Instagram account where they are uploading their daily outfits and purchases. I think a product placement in those pictures, in complement with the blogs, will be an appreciated approach for fashion brands to use in the near future.

GENERAL IMPLICATIONS OF SOCIAL MEDIA INVESTMENTS

The usage of the social media is highly recommended to practice in order to be a successful marketer (Winer, 2009). Even though, it is irrational to believe that the movement from the old to the new era is easy. One crucial thing a marketer needs to remember is to use the right kind of measurements and metrics. As every other marketing activity, an investment needs to be able to track in order to see if the investment has been profitable or not (Winer, 2009). Managers need to investigate how their social media activities are being perceived by the customers since it is desirable that the investments generate a better brand opinion and/ or increase the purchase intentions with consumers. The directors must therefore be aware of their actions and not lose the control of the brand (Winer, 2009). Other valuable insights and recommendations to remember is that the social media activities must be a long term strategy, clear goals must be set up and the investments really have to be well thought through and processed before any actions are made (Phan, 2011).

 Recommendation #4: Track and measure the investments

In order to see if the investments have been that successful and rewarding as you have imagined, it is crucial to be able to track and measure the investments (Winer, 2009). My advice would be to create a customer survey, where the brand managers measure different key indicators in order to see the long term development. It is helpful to compare the customer evaluations from the survey they did in the beginning ( See recommendation #1) with how the brand is being perceived after the social media investments. Indicators such as the image of the brand, if the sales have been improved and if they have managed to deliver that desired added value to the customer are all measures significant to consider. Another good advice would be to track different e-WOMs and to read customer reviews in order to make sure that the perception of the brand is constantly positive or if some adjustments needs to be considered. 

CONCLUSION

After have gone through the impact of the different social media forums above, one could conclude that there is main consensus in the research field, that the use of social media has a positive impact on the consumer’s purchase intentions. Even though it seems easy and fast for fashion brands to create a blog, an account on Facebook or Instagram, they still need to rethink the actions as well as measure and track the investments in a cautious way. The usage of the different media channels have proven to simplify the decision in the purchase process for consumers, even if many other fundamental characteristics must be filled up before a brand can rely on a positive e-WOM and a spread of good reputations. By following the theoretical based recommendations stated above, I am convinced that fashion managers in the future will be successful in social media forums and that they will be pleased that they took the decision to invest in social media activities.

REFERENCES

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Caro, T., Mann, A., Mark, J., Richeson, D., Strout, A., “How can Pinterest, Instagram, and such platforms raise brands' consumer profile?”, 2012, PR Week(US), Vol. 15 Issue 6, pp. 51-52

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Colliander, J. & Dahlen, M.,”Following the Fashionable Friend: The Power of Social Media.” , 2012,  Journal of Advertising Research, Vol. 51 Issue 1, pp. 313-320

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How Social Media Investments Can Increase Purchase Intentions among Consumers – A Four Step Approach Addressed Brand Managers in the Fashion Industry Part 1

October 9, 2014

Written by  Masters Student at Lund University

PART I

THE NEW ERA

The many and comprehensive developments within the technology sector are something that has had a tremendous effect on how individuals and firms live and work today (Wind, 2008). We have been able to see a new marketing era and it has become a rule rather than an exception for fashion brands to invest and focus in social media activities (Winer, 2009) where established accounts on Twitter, Facebook, Instagram, Youtube and blogs are the new common used communication tools (Phan, 2011). Even if theorists seem to advocate social media investments as a recipe for success, I know of companies operating in the fashion industry who do not know how to succeed with their social media activities. Scandinavia’s largest fashion PR agency is a good example of this, where I as an intern, early noticed the bureau manager’s lack of knowledge concerning how to manage their social media investments in order to increase purchase intentions among consumers.

This paper is therefore devoted to answer this question. By presenting relevant theory which subsequently will result in my own analytical recommendations, fashion managers will be inspired about how they can progress with their social media investments.

BRANDS, INTEGRATION AND COMMINICATION IN THE SOCIAL MEDIA

The Brand

It has been investigated among theorists that social media investments generate increased purchase intentions with consumers (Kim & Ko, 2012; Themba & Mulala, 2013; Wang et al. 2012). Even though, the customer’s intention to buy increases only if the brand achieves to deliver an added value to the customer, and even more so if the brand in question have transparent and strong values from the beginning- namely through value equity and brand equity (Kim & Ko, 2012).  Even if the fashion brand is highly present in the social media world and constantly updating and communicating in new creative ways, about 35 % of the respondents still perceive the brand as old- fashioned (Phan, 2011, example Burberry). This really demonstrates the strong correlation between a liking of a certain brand and the purchase intention. Therefore, there is no impact of social media investments on the purchase intentions if the customer does not like the brand from the beginning (Phan, 2011). Additionally, the perception a customer gets from different buzzes in the social media, is based on already existing thoughts and perceptions of the brand (Powers et al., 2012).

Recommendation #1:  Examine your brand

It is important to remember that an investment in social media activities will not increase purchase intentions if a consumer do not like the brand from the beginning, and that new information received will be based on already existing thoughts of the brand (Kim & Ko, 2012; Phan, 2011). It is therefore crucial that the brand image is the same perceived in the consumers’ eyes and in the brand manager’s. If the manager believes that the brand stands for good products and values but the reality occurs to be the reverse, the social media investments will be vain. I therefore have faith in building a clear image where the brand strives to be in the future and compare it, with the help of customer surveys, how they are perceived today. By doing this, the managers know in what areas they have to improve and where the major gaps are between the customer’s and manager’s brand perceptions. Managers must know what they have to work with and what negative rumors they might have to counter in order to be successful in their social media activities. It is essential to build a good image from scratch.

Interaction and e-WOM

The interaction and communication between consumers in the social media is something that has been investigated deeply and broadly (Wang et al, 2012). The research have contributed to the insight that  the way consumers interact with each other in Social Media forums, affect the way the consumers think in their purchase decision (Wang et al. 2012). The social media forums works as a kind of market place where the communication between individuals helps people correspond and argue with each other which further often leads to changed attitudes of brands and products (Wang et al, 2012).

A developed and established concept in the area of online communication is “e-WOM”, electronic word of mouth (Henning et al. 2004). It is a good idea for fashion retailers to invest in social integrated activities since it could be an easy way to create positive e-WOM traffic (Henning et al., 2004). Since e-WOM has been found to be a trustworthy source for information-seeking consumers, it is important that businesses in the fashion industry realize the importance of it (Themba & Mulala, 2013). Noteworthy is also that when a fashion retailer wants to intensify the spread of positive e-WOM, they must reflect upon the commitment of the customer in relation to the brand as well as the consumer’s commitment to fashion overall. If a customer is highly committed to a certain fashion brand, then his or hers engagement in social media activities in relation to that brand will increase (Wolny & Mueller, 2013). Furthermore, customers who have a high need of social interaction in general, are those consumers who are more collaborative in the social media than others (Wolny & Mueller, 2013). The more a brand manages to create a positive and comprehensive e-WOM related to the brand or to the product, the more the purchase intention from that consumer will increase (Themba & Mulala, 2013).

Communication Through Customer Reviews

Customer reviews are a part of the interaction era we experience today and are often to be found in different social media forums, in one way or another. It is important to not underestimate the impact of the reviews, since a positive customer review in some social media can affect the purchase intention among other consumers (Park et al., 2007). The reviews have a function of being both informative and recommendatory and are therefore playing an important role in the customer purchase decision process. The more and the better the reviews are, the more they have an impact on others (Park et al., 2007). One exception is consumers who are highly involved with a brand and its products. Those customers only learn and take note from it when he or she perceives the quality of the review to be rewarding (Park et al., 2007).

One could find it hard to understand that individuals, who are reading reviews online, are so credulous. It has therefore been discussed and investigated if it is good or not to reveal the demographical characteristics of social media engaged customers (Naylor et al. 2012). Does the disclosure have an impact on the purchase intentions and brand opinions of future potential customers or not? The results reveal that even if the presence of those social media involved individuals is virtual and sometimes not very active, their demographical characteristics do have an impact on another customer’s purchase intention and brand evaluation (Naylor et al., 2012). This could be an interesting angel for managers to discover in the quest to reach out to their target markets as well as in business comparisons with competitors (Naylor et al., 2012).

Recommendation #2: Create the right image

Since e-WOM is to be considered to be a trustworthy source when it comes to the consumer’s purchase decision process (Themba & Mulala, 2013), it is important for fashion managers to try to control and make sure that positive buzzes and perceptions about the brand are created and spread from the start. To spread a good brand image and to get new customers, I suggest that fashion managers should turn to their already existing customers, who are highly active in Social Medias, but also who have a strong predilection for that particular brand. In this way, the spread will be broad and the message will be positive. I also think it will be a good idea if managers additionally choose to reveal the promoting customer’s demographics, since the whole investment and activity will be even more trustworthy (Naylor et al., 2012). I believe that consumers, who experience detection and identification, are more likely to trust the reviews and also spread the buzz further. By doing this, it will attract like-minded audience and it gets easier for the fashion brand to reach out new target customers and to increase purchase intentions

END PART I

Which social media forums will be chosen and why? How can managers know if the investment has been profitable? For answers to those questions, look in part two where I also present the central conclusion. 

10 notable changes to market on the Internet

October 6, 2014

Written by  Alexander Landers 

The beginning of this month, February 2014, marked a point in Internet history: it has been 10 years ago since Mark Zuckerberg founded social media network Facebook and it is that network that has become the popular social media network over time. The rise and the enormous use of social media is just one good example of how Internet has changed over the last years and is still changing as we speak.

Read more ---

People’s “online habits and buying process [have] changed, in large part reshaped by the Internet itself” (Duffy 2014). For example, it is not only the people who use today’s biggest social media network for socialising purposes – Facebook has become an often-used tool for marketers as well. In my experience, the Internet has changed from a mostly informative platform for professionals and consumers to a platform where people can literally share anything and react on that published material online.

As the Internet is still changing, marketers change their online tactics as well. In this E-paper, I will try to identify 10 notable changes in marketing on the Internet, in order to help marketers doing their job better.

1. Use of Online Communities

Online communities are social networks on the Internet where people confer with each other “to pursue common goals and/or interests. This interaction often crosses political and geographical boundaries” (Patruno 2013). For example, the brand of the mobile phone that I recently bought, Oppo, uses its online community to help customers (help themselves) with their problems and the software developers to gain customer insights from them. You have to be a member of the online community before you can actually get involved on topics you are interested in.

Marketers should take advantage of Seraj’s main theoretical contribution on online communities where “the need for the concurrent existence of content quality, playful interactivity helps with building social ties and a self-governed community culture with its citizens playing certain roles” (Seraj 2012, p. 220).

2. Focus on two sorts of consumers

The second important notable change to marketing on the Internet is that a marketer nowadays should focus on two sorts of consumers: both the consumers with a utilitarian orientation and the ones with a more hedonic orientation as Scarpi (2012) states in his article. Utilitarian orientated consumers are far more goal oriented when they surf on the Internet to find products, whereas the consumers who are more hedonically orientated and are shopping online for fun; they want to enjoy the shopping experience more. This means that for an E-tailer’s website fun sells off, because then the hedonically orientated consumers return to the website to buy other products several times. However, this sort of consumer spends less on average than the utilitarian orientated consumers. So although a marketer of online products is “more inclined to a utilitarian orientation, they could consider adding features to induce consumers to be more hedonic on the Web site” (Scarpi 2012, p.65). 

3. Managing eWOM
Electroninic Word of Mouth (eWOM) has gotten more effective on the internet, as social the usage of social media usage increased in the last years. It still is very difficult for a marketer to manage eWom, but the authors Sandes & Urdan (2012) have tried to verify in their article if eWom affects consumer behaviour and if companies can manage eWom by actively responding to comments posted by consumers. Sandes & Urdan’s study showed that exposure to comment (both negative and positive) impacts brand image, just as word-of-mouth marketing does in real life. Although online negative-feedback management reduces the impact on brand image but did not change the impact on purchase intention. Therefore, the marketer should engage in the discussion online. 

4. Use of social networks

The fourth notable change to market on the Internet is the changes in use of social networks. For example, the biggest social network of all, Facebook, has changed that consumers can now decide themselves which of their friends get to see their posts. New tactics should help the marketer with the use of social media. Kietzmann and others presented a framework in their article seven building blocks that firms should use for social media:  identity, conversations, sharing, presence, relationships, reputation and groups (Kietzmann, Hermkens, McCarthy & Silvestreet 2011, p. 248). By using these building blocks marketers can be more consistent in their use of social networks and attract as many potential clients as possible.

5. Virtual worlds

Virtual worlds are simulated environments that are computer based. Examples of virtual worlds are Second Life and Habbo. “Second life was designed with the expectation being on the residents to establish their own community rules for appropriate behaviour. On the other hand some virtual worlds such as Habbo enforce clear rules for behaviour, as seen in their terms of condition” (Haskins 2008). That is why it is not so easy for a marketer to get involved in virtual worlds, although research of Eisenbeiss and others states that socializing, creativity and escape emerge as individual drivers for people who are participating in a virtual world (Eisenbeiss, Blechschmidt, Backhaus & Freund 2012, p. 16). So now at least marketers know what the most important drivers are of these people to get involved in those world. There is not enough research done yet to state how marketers should exactly get involved in virtual worlds. 

6. Internet affects generations and genders differently

Research has not only been done about how the Internet affects generations differently, but also on how it affects genders differently. The research done by Hanna, Rohm & Crittenden has results which suggest “that normative (parents, peers, and the Internet) influences affect Generation Y more than Generation X. Conversely, as this study found, informative influences of parents, traditional media, and in particular, the Internet affect Generation X. Furthermore, the findings show that the Internet is an important normative socialization agent influencing men, while it acts as an informative socialization agent for women” (Hanna, Rohm & Crittenden 2011, p. 179).These are very interesting results for marketers on the Internet, if they want to better approach their target group.

7. Offline versus online TV-advertising

Marketers can still spend a lot of money on advertising on TV. Because more and more television is watched online nowadays, it is interesting to know what the differences are in adverting for marketing for both kinds of television. Cho & Cheon already found out through their study “why people avoid internet advertising”, namely because people avoid advertisements because of the perceived ad clutter (Cho & Cheon 2014, p. 90). This is also what Logan confirms in his article about the online TV watching group: the group watching online TV was less tolerant of advertising than the offline TV group (Logan 2013, p. 271). The same article describes that viewers of Online TV do not regard advertising as a means to subsidize the cost of online content. Rather, young adults appear to regard advertising as an intruder in the OTV environment (Logan 2013, p. 271). This calls for new ways of advertising for online TV, if you ask me. 

8. Old media can help use of Internet

Another notable change on the Internet is that marketers tend to think that it is either/or when it comes to marketing through old media and marketing via the Internet. This is not correct, as Pfeiffer & Zinnbauer explain in their article. They argue that old media can enhance new media “To build brand strength, or to actively convey a brand's positioning relative to competitors toward a broad audience, however, classic advertising remains a necessity” (Pfeiffer & Zinnbauer 2010, p. 47). But potential synergies between two or more media channels have to also be taken into account when marketers come to their final media mix decision: that is why old media can enhance new media.

9. Power of social media ecosystem

The change in power of social media on the Internet is also something marketers should take into account. It can make or break the marketing of a company. That is why Hanna and others state in their article that both social and traditional media should be seen as part of an ecosystem. “All elements work together toward a common objective: whether to launch and promote a new product or service; to communicate a new company initiative; or to simply further engage customers in a rich, meaningful, and interactive dialogue”  (Hanna, Rohm & Crittenden 2011, p. 273).

10. Measuring ROI of social media marketing

The last notable change to market on the Internet is that measuring of Return On Investment (ROI) of social media marketing has become easier for companies. Hoffmann and Fodor explain in their article that the social Web has become highly measurable. It has been made “relatively simple for a manager to measure the number of product reviews, blog posts and comments, retweets and appearances in the social network timelines of the company’s brands” (Hoffmann & Fodor 2010, p. 49). None the less, the authors don’t forget to mention that there are still are some situations in which it is difficult to trace behaviour online (for example offline word of mouth and offline purchases).

Conclusion

In this E-Paper, I have discussed 10 notable changes to market on the Internet for marketers. The sum of it all is that I do not think that marketers underestimate changes on the Internet, but it is all about how they adapt changes of the Internet over the last 10 years. I have tried to pick out the most notable changes on the Internet to me, but I can see the limitation of my research, because there are far more changes that have happened over the last decade. I hope the changes I have mentioned, will give food for thought for marketers that want to market on the internet. Just imagine: how will the Internet will look like in 10 years from now?
 

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Kietzmann, J.H., K. Hermkens, I.P., McCarthy & B.S. Silvestreet, Social media? Get serious! Understanding the functional building blocks of social media, Business Horizons, 54 (2011), pp. 241-248. 

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Logan, K., And now a word from our sponsor: Do consumers perceive advertising on traditional television and online streaming video differently?, Journal of Marketing Communications, Volume 19, Issue 4, 2013, pp. 258-276.

Oppo 2014
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Sandes, F.S. & A. T. Urdan, Electronic Word-of-Mouth Impacts on Consumer Behavior: Exploratory and Experimental Studies, Journal of International Consumer Marketing, 25(3) (2013), pp. 181-182. 

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Social Media Fails: Can a Brand Benefit from It?

October 2, 2014

  Written by Masters Student at Lund University

Social Media Revolution

Nowadays, it is difficult to imagine the world without the internet as over 2 billion people use it and 70% of them use it daily. The number of internet users has grown by an astonishing 566% since 2000. Most of the time online spent on social media, around 3.2 hours each day; it has become an integral part of people everyday life (www.thecultureist.com).

These numbers and the importance of social media platforms simply cannot be ignored by the companies if to develop their brand. Whether to participate in this communication or not is up to a brand but both decisions will have a remarkable impact on brand equity (Kietzmann et al., 2011). People are there and they are discussing and spreading the word without permission of the firms in question or as Akar and Topcu (2011, p. 36) put it, “Social media converts consumers into marketers and advertisers, and consumers can create positive or negative pressure for the company.”

The social media revolution is here and the question is how to make a good use of it rather than fail. There seems to be a lot of noise on the Internet as well as literature on how damaging it is if to fail at social media and how much it can affect your financial performance and brand. But is it always the case, especially when talking about big brands? Are there any possibilities to avoid a significant damage and even to capitalize on your fails, benefit from it?

The following section will provide a review of the current theories and thoughts regarding social media marketing, addressing such questions as: What is social media and why should companies consider establishing their presence on it? Two very different real-life cases will be discussed to answer my research question and support an idea that social media fails is actually something a company can benefit from and should not be afraid to confront.  Finally, this paper will be concluded with a few suggestions regarding social media fails effect on the performance of the business and what it could possibly depend on as well as some possible suggestion for the future research.

Why Implement Social Media?

The beginning of 21st century has experienced an explosion in new media being utilized by companies to reach their potential customers, so called, social media.  What is social media and why companies should be considering being present in it?

 Nair (2011) refers to social media as to all available online tools, where content, insights, perspective and information can be shared while Papasolomou and Melanthiou (2012, p. 319) describe it as “…synonymous with social networks like Facebook and MySpace.”

Why is it important for a brand to be present in social media? The major drive is the shift in consumer’s lives. The social media has completely changed how individuals communicate with each other and how users exchange and process information with others (Aula, 2010). Moreover, social media has transformed where and how people spend their time, so if to imagine that most of their day people spend in front of desktops and mobile devices as well as if to consider that 48% of 18-34 year olds check Facebook right away when waking up, it should be obvious that marketers need to shift their budget into new media categories if to continue developing their brand and reach the potential customers (www.digitalbuzzblog.com). The evolution of social media has significantly changed the approach towards online marketing; however, it has not caused the old marketing methods, such as television and magazine advertising to become completely insignificant (Winer, 2009). In fact, marketing strategy should consist of both to form an ecosystem where all the elements work together towards a common objective (Hanna et. al., 2011).

It should also be mentioned that the swift growth of Internet and social media has taken the power from companies to the consumer (Kietzmann et al, 2011; Deighton and Kornfeld, 2009).This has caused the consumers’ expectations to change as they are not willing to be talked at but rather with (Varadarajan and Yadav, 2009; Wind, 2008) or as Christodoulides (2006, p. 801) contends, “Command and control branding simply cannot be tolerated online”, therefore today companies are almost expected to be present in social media and facilitate the conversation with their customers. Social media marketing is user generated; therefore the aim of it is to make users talk (Akar and Topcu, 2011). Adding to an idea, Fournier and Avery (2011, p 193) in their article summarize this phenomena really well by stating that, “The technology that was supposed to empower marketers has empowered consumers instead.”  

In such manner, due to its interactive nature, more opportunities are available for companies to collect consumer insights that could be helpful for the advertising campaigns, product development and market research (McAfee et al., 2011).Undoubtedly all of the reasons listed above should be a good push for a company to adjust its marketing strategy and consider implementing social media.

However, let`s imagine for a second that a company has implemented social media advertising and trying to be active, follows the rules, innovates and engages but suddenly fails to meet customer expectation by being rude, not answering a message or maybe just an angry customer has posted a complaint on their Facebook page and that has been shared hundreds of times. What should a company do? Unfortunately academic articles suggest all sorts of ways how to go social but a few of them say how to get out of social media fails and how much it actually affects your business performance if it does at all. Therefore the purpose of this research is to prove by representing two case studies that social media fails do not necessarily mean losing loyal customers or experiencing a loss in sales but could be something a company, if dealt with in certain ways, can benefit from.

Examples of Social Media Fails 

Nestlé

Nestle has been established over 140 years ago and now is a world`s leading and most recognized company with an extensive portfolio that covers almost every possible food and beverage category (www.nestle.com). It is most certain that you will find at least one of their products in your own kitchen and it is very likely that you have heard about Nestlé social media failure back in 2010 that will be briefly discussed below.  A three-month campaign has been started by Greenpeace against Nestlé due to their excessive use of Palm Oil that has been known for deforestation and loss of endangered species.  Greenpeace took it to YouTube by posting a video that Nestlé urged to be removed.  Shortly after adjusted logos started appearing on Nestlé Facebook page but Nestlé representatives went defensive by stating that whoever is commenting with a “provocative” logo will have their comments removed (Hickman, 2010).  Social media failure is evident as this sort of behaviour is unacceptable for a brand and social media users are aware of it but how much damage did it actually cause to a business? According to Mulier (2011) the revenue went up by 6.2% regardless of the Greenpeace campaign and all the mistakes made.  Of course, it is difficult to predict whether it could have been even higher without it but the numbers are there and they are positive. In such manner, it could be argued that social media fails certainly put a pressure on brands and only those companies that got the basics of marketing right, and gained a significant number of loyal customers outside of social network can manage to survive the social media fails and keep the sales up (Barwise and Meehan, 2010).

Maker`s Mark

The following case is more recent than Nestlé but takes a different perspective on social media fails where the quality of the product, in this case whiskey, is questioned. Back in February 2013 Maker`s Mark announced its` plans to reduce the amount of alcohol from 45 to 42 percent due to high demand and low bourbon supply (Stampler, 2013). Angry but at the same time loyal customers took over all the possible social media websites to complain about watering down their favourite whiskey. However, this case is a brilliant example of how a brand can turn social media fails into a success and record an amazing 44% sales increase, which has been a topical issue discussed by Dooley (2013) in Forbes magazine.  What did they do right? First of all, Maker`s Mark was quick to realize they have made a mistake and that a swift action needs to be taken. As a consequence, the company has reversed its decision to lower down the alcohol level in their beverage and apologised to their customers by posting just a short, well thought message on a Twitter “You spoke. We listened”, which has become a popular hashtag. This is a great example of how a company can reduce or even avoid the damage by social media fails if to monitor, be quick and stay true to a product, respect your customer opinion.

Major Lessons on Social Media Fails

The number of internet users is going up and given this tremendous growth a company should try and figure out the way to employ social media to reach the millions of potential customers that use it on a daily basis (Parsons, 2013).  A company should not be afraid to fail but rather test and correct mistakes as it goes.

On the whole, the damage social media fails make to a brand depends on a wide spectrum of factors. The main ones identified through the analysis of the above case-studies, that might be of a help for other companies to consider, are discussed below. First of all, it depends whether the brand has already been well established outside of the social media, like in the case of Nestlé, where we can see that there is a loyal base of customers that did not turn their back on the brand. Secondly, whether the quality of the product is questioned like it was discussed in Makers Mark case. Similarly it is essential to be able to respond quickly, thus be efficient in social media communication even though it is tremendously time-consuming it gives a business a greater chance of getting away from a significant loss (Kietzmann et al., 2011).

Are there any ways to benefit from social media fails? Certainly, if dealt with correctly by providing a prompt response and listening to your customers a brand is still able to capitalize on social media fails. It raises publicity and statistics presented earlier suggests that it might actually trigger a purchase intention rather than putting consumers off. However, a different view is presented by Phan (2011), who has conducted a research regarding the use of social media for fashion brands to establish whether a presence in social media has any influence on consumer brand perceptions and product purchase. The outcome of it is negative – no, it does not. In such manner, whether positive or negative information, for example regarding a failure, is posted on social media does not necessarily affect the purchase behaviour thus sales should not be affected by the negative publicity.  Most importantly social media fails should be seen as a lesson for a company, opportunity to learn and adjust the strategy. Certainly, even if social media fails might not necessarily cause a significant financial damage to brands that is of course still not a reason to leave it unnoticed.

Trying to develop a tool to measure a failure, define terms for social media fails as such, could be a suggestion for the future research as there is no real clear guidance on it. It is very unclear whether it should simply be assessed based on sales figures, share prices or shall we measure social media fails based on the volume of negative publicity and word of mouth. Hanna (2011) suggests that companies are confused by the indicators of the performance, where to look and how to measure as there is clearly a lack of research conducted in this area. 

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