Role of Social Media Marketing in the Business Profit Generation - Coursework Example

? Internet Technology, Marketing and Security of the of the No. Introduction With time and human and economic development in nations, the state of corporate affairs has become highly complex in nature. Most of the business segments in the contemporary world exhibit high degree of corporate competition in the marketplaces. In order to lead the extensive competition, the business firms adopt efficient marketing strategies. Social Media Marketing is one such means whose contribution is priceless when considered by the corporate firms. Social Media is basically a special tool that the business organizations apply to maintain efficient and good customer relations. Social Media includes internet sites which facilitate the communication between individuals with the help of pictures, videos and writings. This essay will focus on the role of Social Media Marketing in the business profit generation. The researcher would consider the contribution of Social Media in marketing activities of Pepsi. In the later stage, the paper would consider several other empirical case studies and enumerate the importance of Social Media Marketing in future. The learnt from the essay would help to understand the importance of internet commercial segments (Bosari, 2012). Growing Popularity of Social Media Marketing CompuServe was the first Social Media networking site, established in United States in the 19th century. With the rise in literacy levels and the progress in technology, the proportion of internet users has increased significantly. Currently, famous social networking sites like, Youtube, are viewed by approximately 4 billion viewers per day. About 1.11 billion individuals across the world are regular users of Facebook and the viewership ratings for Twitter are about 500 million (Bosari, 2012). In the contemporary world, such sites are used for both commercial and non-commercial purposes. The corporate business firms often use Social Media for marketing their products to the consumers. In the theory of Customer Behavior Management, Customer Relationship Management plays a pivotal role. There are various reasons for which Social Media Marketing has become so popular in the modern days. There are: Social Media helps the companies to easily reach a wider base of customers across different marketplaces. The marketing activities through Social Media are relatively less costly that the other forms of traditional marketing methods. Online shopping has become a popular shopping destination in the modern world. The growing popularity of the digital marketplaces has forced the companies to set marketing strategies through internet media. Most of the consumers today are preoccupied with their daily activities. The proportion of television or radio viewers is much lesser than the proportion of the internet users. Thus, marketing consumer goods and services in the social networking sites helps the companies to reach out to a wider customer base, within the least possible time. Special Media marketing activities of the companies help to reduce their cost of marketing. The accumulated finances which are saved can be used by the companies for the purpose of growth and development. Social Media marketing is a more comprehensive, flexible and trendy form of marketing as opposed to the traditional methods (Bosari, 2012). Figure 1: Growing Popularity of Social Media Marketing (Source: Acra, 2012) The above bar graph shows that among all the different uses of internet media, Social Media is the most popular of them. Figure 2: Steps of Purchase (Source: Acra, 2012) The above graph shows the marketing stages. Figure 3: Social Fieldwork Cycle (Source: Acra, 2012) The above graph shows that social media marketing gives the maximum importance to ‘consumerism’. Advantages and Disadvantages There are various types of advantages and disadvantages of Social Media marketing. Advantages Social Media marketing activities help to enhance the business-to-customer relationships. It helps to engage the customers in the distribution, production and processing methods of the products. The individuals are visually present in the public forum provided by social media. Thus, such means of marketing activities help the firms to maintain a transparency in the customer relations. The customers are able to interact with each other to form their opinions and can easily convey their product usage experiences and requirements to the company. Social Media helps to enhance the business-to-business relationships. A business firm also has other stakeholders apart from the customers. The suppliers, shareholders and media support groups also play important roles in the growth of a company. Researchers have claimed that Social Media is primarily used for enhancing the B-to-C relations and lesser for B-to-B dealings. Thus, if the corporate firms use social media for B-to-B transactions, then it would help them to reduce the cost of business. With the use of Social Media marketing, the companies can interact with its customers regarding the new ideas of business. This can be highly beneficial for the growth of the company in future. These new ideas can also help the companies to reduce the business problems. Disadvantages If the customers are not treated well by a company through its Social Media platform, then the negative brand image which is created can directly influence the physical thresholds of customer inflow for its products or services. Thus, marketing through Social Media makes the consumers’ demand highly elastic and reduces the buyers’ cost of switching. Miscommunication through Social Media marketing can be highly severe in nature as it might portray a bad image of the company to almost all the customers in different marketplaces. There still lies an extensive share of population in the developing nations of the world, who has no access to internet media. If the companies formulate marketing strategies through Social Media only, then it would not be able to reach out to these customers. Moreover, in order to adopt Social Media marketing, the companies need to recruit a special team of web developers. These people would create the contents which are to be utilized by the companies for marketing. If these teams of employees are not efficient, then marketing through Social Media would increase the cost for the company and reduce the business surplus (Razak & Marimuthu, 2012). Many researchers feel that offline contacts between the business firms and the consumers serve as the best means of enhancing corporate relations and brand value. Customers can often also ignore the marketing messages sent by a company through an electronic resource (Social Media). Social Media Marketing of Pepsi The famous multinational beverage producing company, PepsiCo, has used the mode of internet marketing for popularizing its ‘Pepsi Refresh Project’. This project primarily aims to provide grants worth millions of dollars to individuals who would help the company with new ideas for the welfare of the society. The company has used online means to popularize the project, through the website, ‘www.refresheverything.com’. The marketing campaign has proved to be highly beneficial for the company. In the course of the project, the company had uploaded about 1000 videos each month in its official project site. The consumers were allowed to voice their own choice of video through votes. At the end, the company had offered about 20 million to the winners who could come up with the best videos (in terms of societal benefits). ‘Super Bowl’ was another project that was launched by the company earlier, but for marketing this project, the company did not use internet media. ‘Pepsi Refresh Project’ has proved to be almost 800% more successful than ‘Super Bowl’. Indra Nooyi, the CEO of the company, had commented that the cost of marketing through Social Media was relatively low than the other means of marketing (one third). It was claimed by the marketing officials of the company that the growing popularity of Facebook and Twitter has helped to augment the benefits of Social Media marketing. Social Media Optimization (SMO) is the most popular marketing tool used by the companies in the modern days. It is claimed by the analysts that SMO helps to integrate the individuals all across the world through simple means of digital communication. However, it is to be considered that towards the end, only few celebrity and non-celebrity clients had become the main sources for project publicity. Jeremiah Owyang, the senior business official of Alimeter Group, had commented that while marketing its Refresh Project, PepsiCo could also have publicized its ‘Super Bowl’ program. However, the CEO of the company had claimed that the Refresh Project was successful in augmenting their revenue, brand value and social media activity. However, it has been found by PepsiCo that Social Media marketing has helped to enhance the thresholds of customer involvement. The increasing number of PepsiCo fans, on the famous social networking sites, further stresses on the empirical relevance that Social Media marketing was (and continues to be) beneficial for the company. The success received by the company from Social Media marketing activities could be easily measured and evaluated (Case Study). International Business Machines Corporation (IBM) The officials of IBM use the internet media (Wiki) to introduce special guidelines for all the IBM users who desire to blog. The guidelines used by the company in the internet media helps it to protect the interests of the bloggers and their own. In 2008 and 2010, the companies had instructed its employees to improve the set of guidelines focusing on the new evolving technologies used by the company, including the social tools. These features have helped to ensure that the requirements of the employees as well as the company principles are met with. The company has utilized Social Media not only to market its products and services, but also to enhance its performance in future (IBM, 2013). Coca Cola Coca Cola is another beverage producing company which has been dominating the soft drink market since 20th century. The company is a multinational firm operating in almost all the nations of the world. It had recently launched a mineral water named ‘Desani’. There were rumors in the market that the mineral water was contaminated, thereby supposedly leading to many health hazards for the consumers. Coca Cola had invested almost ?7 million in Social Media marketing for the product and proved its purity. It also introduced the new Plantbottle technology, considering the environmental conscience of the individuals on the social networking sites (Cokecce, 2012). Contribution of Social Media Marketing in Future According to the report of the Alimeter Group, about 70% of the marketing and the communication activities of the firms are now executed through Social Media (Swallow, 2011). In future, the ultimate cross-functional integration between the different business segments of an organization would only be carried out efficiently through Social Media platforms. It can be assumed that both consumer and producer surplus acquired from the market would increase with the help of such a platform. Social Media marketing in future would help to enhance the transparency in business-customer relations. This would be beneficial to lower the level of market failures and information imperfectness, thereby enhancing the overall level of social welfare. Skills to be considered There are a few skills or resources that a company should possess in order to adopt the means of Social Media marketing, which are: An efficient team of web developers. Skillful employees who would easily be able to focus on the core competences of business. The marketing strategies would be framed on the basis of these competences. Adequate finance to introduce technologically efficient marketing means. The company should possess a fairly established brand image in the market. It should have a team of good analysts who would be able to assess the success of the online marketing. Conclusion It would be correct to conclude that Social Media marketing largely helps to improve the customer relationship in business, thereby augmenting the customer loyalty for the products of a company. Companies in the modern world have also understood the growing importance of Social Media in the market. However, it should be considered that even today, Social Media is primarily used by individuals for non-commercial purposes than the commercial ones. Organizations should work very hard to utilize the benefits of Social Media marketing. It should also be noted that inappropriate use of Social Media can create deadweight losses for firms. It is believed that in the long run, with the advancement of technology and science, Social Media networking would act as the underlying driving force for stimulating the living standards of individuals. References Acra, C. (2012). Social media marketing benefits for businesses. Projekter. Retrieved from http://projekter.aau.dk/projekter/files/63562608/CelineArca_MScInternationalMarketing_MasterThesis2012.pdf. Bosari, J. (2012). The developing role of social media in the modern business world. Retrieved from http://www.forbes.com/sites/moneywisewomen/2012/08/08/the-developing-role-of-social-media-in-the-modern-business-world/ . Cokecce. (2012). Environmental policy statement. Cokecce. Retrieved from http://www.cokecce.com/system/file_resources/24/2012_CCE_Environmental_Policy.pdf. IBM. (2013). IBM social computing guidelines. Retrieved from http://www.ibm.com/blogs/zz/en/guidelines.html. Razak, N. S. A. & Marimuthu, M. (2012). The Relationship between Co-Creation Value and Facebook Shopping. Procedia - Social and Behavioral Sciences, 65,768-774. Swallow, E. (2011). The future of the social media strategist. Retrieved from http://mashable.com/2011/01/14/social-media-strategist-future/. Read More