The problem of using Facebook as a strategic marketing tool for Future Shop - Essay Example

? MEMORANDUM Director of Marketing Communications Communications Manager November 25, Dealing with the problem of usingFacebook as a strategic marketing tool for Future Shop This is a report detailing problems affecting Future Shop in its endeavors to use Facebook as a strategic marketing tool. Indeed, Facebook is a very effective marketing communication strategy that can be used to improve the operations of the company if properly harnessed. However, Future Shop is experiencing communication problems with potential customers on Facebook due to its centralization strategy on communication. The company only has two main centers for customer relations and these are solely responsible for responding to customer issues posted ob Facebook. It can be noted that these centers are overwhelmed by the large numbers of customer queries posted on its social site. In order to solve this problem, the communication structure in the company should be decentralised so that each branch has the opportunity to monitor its own site in terms of responding to the needs of the customers in a timely manner. It is also encouraged that teamwork in the company should be given priority since it helps the members to develop a positive sense of belonging towards the organization. It is also important to treat customers as kings so that they can have a positive feeling towards the company. I feel honored to be given this opportunity to take part in this particular report. I would like to thank all people who contributed their ideas and views towards this report which is so enlightening. Should you need any assistance, do not hesitate to contact me. Once again, I wish to say thank you all for your cooperation. TABLE OF CONTENTS Executive summary……………………………………………………………………………….3 I. Introduction ….............................................................................................................................4 II. Future Shop and Facebook ….....................................................................................................4 1. Facebook: a successful marketing tool...............................................................................5 III. Facebook and Future Shop’s issue ………………………………….………………………. 6 1. Poor response system…………………………………………………………………. ...6 2. Lack of response from Future Shop…………………………………………………… ..8 3. Problem affecting Future Shop.………………………………………………………. ...8 Conclusion ……………….............................................................................................................8 Recommendations ………………………………………………………………………………..9 Glossary.…....................................................................................................................................11 References…..…………................................................................................................................12 List of illustrations Figure 1Customer response to market offering by Future Shop …………………………………6 Figure 2 A post to Future Shop……………………………………………………………………7 Figure 3 Response from competitor BestBuy……………………………………………………..7 Table 1 Facebook subscriber growth between 2011 to 2012……………………………………...5 EXECUTIVE SUMMARY This report analyses the impact of Facebook as a strategic marketing tool by Future shop in its operations. Millions of people have Facebook accounts and this social site is very effective in linking people from different walks of life. Facebook as an effective marketing tool When it first used Facebook, Future Shop had only 95.000 subscribers in 2005 and there were only a few posts on its wall to keep the page active. As of July 31, 2012, the number of subscribers has risen by more than four times and there is the average of two posts per day. This entails that this social website is a very effective tool in marketing different products by the company. Problems faced by Future Shop The main problem faced by Future Shop in its attempt to use this social network in carrying out its business is related to poor responses to customer issues posted on its site. This has been attributed to the fact that the communication strategy used by this company is too centralised and it has also been seen that workers lack the expertise of using this social site as a strategic marketing tool. Suggested Recommendations It has been recommended that the company should decentralize its marketing communication strategy so that each branch can have the opportunity to respond quickly to customer queries. It has also been suggested that teamwork should be encouraged in as far as the use of this social network is concerned. The company should also draw some lessons from its competitors in order to improve its performance through the use of Facebook as a marketing strategy. I. Introduction The advent of the internet has resulted in significant growth of online marketing since the beginning of this century. With billions of people using the internet every day, it is undoubtedly true that online marketing through the use of tools such as websites, forums, blogs as well as social networks has become a popular trend for conducting business around the world. Many businesses believe that online marketing through the use of social networks such as Facebook is a good way of solving problems related to costs that are associated with marketing because social websites are cheaper and they have a better chance of reaching internet users compared to other traditional communication tools such as TV, newspapers as well as magazines (Laroche et al, 2012). However, not all companies have succeeded in using this social network as a strategic marketing tool. Therefore, this paper has been designed to focus on the following two aspects: (1) How is Future Shop using Facebook to promote its business? (2) What are the trends of using this social tool for Future Shop? These two aspects attempt to compare and contrast different effects of using the internet in carrying out business. ii. Future Shop and Facebook Facebook is a social network that has been carefully developed and it is comprised of a lot of utilities which help users to interact easily through the use of text messages and photographs. Users can instantly chat online through the use of this particular social site. The trend of using Facebook to promote business has gained prominence over the past years. At its inception, companies used their sites to sell their products. When the number of users reached hundreds of millions, different companies underscored to capitalise on this social network in order to carry out their business. Future Shop was no exception since it launched its first website in 1998 before it was acquired by Best Buy in 2001. Until 2004 when Mark Zuckerberg introduced theFacebook.com (its original name) which was changed into Facebook.com in 2005, both Best Buy and Future Shop joined this social network and began to use it as their main tool for marketing their products. Table 1: FACEBOOK SUBSCRIBER GROWTH BETWEEN 2011 AND 2012 Geographic Regions in order by size FACEBOOK Users 31-Mar-2011 FACEBOOK Users 31-Mar-2012 Europe 200,260,360 232,835,740 Asia 131,556,800 195,034,380 North America 173,640,240 173,284,940 South America 69,594,760 112,531,100 Central America 28,090,240 41,332,940 World Total 664,032,460 835,525,280 Facebook (FACEBOOK) Users (Subscribers) Growth statistics in the World from March 31, 2011 to March 31, 2012. Source: Internet World Stats As noted in Table 1, the number of Facebook users is increasing every day. With this huge number of users all over the world, Facebook creates a good business opportunity for companies that use it effectively. In this case, the paper starts by discussing how Future Shop is using Facebook for its business and it will outline the problems they are facing in utilizing this social site as a strategic marketing tool. 1. Facebook: a successful marketing tool When it first used Facebook, Future Shop had only 95.000 subscribers in 2005 and there were only a few posts on its wall to keep the page active. As of July 31, 2012, the number of subscribers had risen by more than four times and currently, there is an average of two posts per day. The main content of these posts on Facebook focus on the shop’s new products such as its shape, features, reviews and comments. Through these posts, customers can have information about the new products which is always followed by a picture to evoke their curiosity. Future Shop stands the chance of benefitting from using this social site since it can receive notices from customers as well as their attitudes about new products. These contributions can help Future Shop to evaluate the demand of a certain product in the market and consider the strengths and weaknesses in distributing this new product. Figure 1: Customer responses to market offerings by Future shop Future Shop should use Facebook as a promotional tool. Since Facebook is a social network, the company has to devise methods of attracting more people to its products such as using gift cards. Through this method, customers may develop a tendency to visit this page more frequently and contribute to its posts in order to win a gift card. This strategy is very effective for Future Shop. iii. Facebook and Future Shop’s issue 1. Poor response system Social media is becoming a very important marketing strategy for companies. In order to establish the extent to which companies are using this strategy, general questions were posted on their Facebook Timeline. These companies include BestBuy, Future Shop, and eBay. The aim has been to establish how companies respond to social media as well as to establish their perceptions about this communication strategy. Different responses were obtained from each company. Figure 2: A post to Future Shop This post was sent to Future Shop but surprisingly, there was no response though they use Facebook as a marketing tool in carrying out their business. This is problematic given that the customers would be expecting to get prompt replies to their messages. Figure 3: Response From the competitor Best Buy BestBuy responded immediately by asking us to contact them through their email address so that a specialist can answer the questions properly. This quick response gives us as potential customers a feeling that BestBuy actually cares about their customers. This gives the company good credit because of the way they responded. From a customer’s perspective, this is a good thing in business to respond faster to every customer on Facebook to avoid frustration. 2. Lack of response from Future Shop In contrast, Future Shop has never responded to the request sent to them which may negatively impact on the customers. Moreover, Future Shop might lose many potential customers especially if thousands of Facebook subscribers recognize how lazy and irresponsible they are. Potential customers may think that Future Shop has a poor IT structure and bad customer service system while it uses e electronic marketing in carrying out its business. It is very hard to build trust among the clients but it is also very easy to lose them. This poor communication system by Future Shop may drive potential customers away to its main competitors with better customer service such BestBuy or eBay. This can be attributed to the company’s poor management of human resources. 3. Problems affecting Future Shop Future Shop is experiencing poor communication problems with potential customers on Facebook due to its centralised structure. The company only has two main centers for customer relations, one is located in the company’s headquarters in Vancouver, and the other is in Montreal. These two centers are responsible for managing the social network pages. The problems may be caused by: Limited number of employees working on the social network pages. Poor knowledge about IT among staff members. Lack of information about promotion programs in different branches. A combination of these issues results in customer representatives ignoring or providing poor responses to customers. Many customers are simply told to visit their local Future Shop branch to receive more information and answers to their questions. Conclusion: In this research that was meant to explore how Future Shop is using Facebook to promote its business and the problem that Future Shop is facing, it can be seen that there are both advantages and disadvantages of applying this new marketing tool. Positive results can only be achieved if this strategy is carefully implemented. It has been observed that Future Shop is failing to effectively harness this strategic marketing tool in its operations as a result of the factors outlined above. Therefore, the following recommendations have been suggested for the organization. Recommendations: Future Shop must be careful with regards to the way they use Facebook in carrying out business. The following three recommendations have been suggested in order to effectively deal with the problems bedeviling Future Shop. 1.1. Take a lesson from competitors: Future Shop should positively transform the perceptions of employees especially those working in the customer relations department regarding the impact of social media like Facebook on the company’s name and image. They should learn from BestBuy about how to take action on customer’s concern and improve the way they represent the company’s mission and vision. 1.2. Improve Teamwork Environment: It is also recommended that Future Shop should improve its teamwork plan. They should encourage employees to take more responsibility of managing the Facebook page by giving them incentives to motivate them to work harder. Future Shop should also have more staff working in the customer relations department to improve the relationship between the company and its customers. If members of staff are involved in creating in the Facebook page, they would reduce the load on the customer relations department. Moreover, the company should train the employees to build and improve their communication skills in order to use them not only for social media but also for in-store customers. 1.3. Moving toward the decentralization: Given that Future Shop has about 140 stores and only two main customer relations centers managing the social network used for marketing, it is recommended that the organization should decentralize its communication strategy. It should empower the employees to take charge of managing the social media networks to build a solid relationship with customers in the communities around each store. Glossary Social network/Social media: a group of internet based applications that builds on the ideological and technological foundations of Web 2.0, and it allows the creation and exchange of user-generated content (Laroche, Habibi, Richard, Sankaranarayanan, 2012). Web 2.0: is a platform in which software and content are not produced and published by individual companies and people, but are produced and developed by different participants in a continuous and collaborative manner (Laroche, Habibi, Richard, Sankaranarayanan, 2012). User Generated Content (UGC): represents all the ways by which users create content and use social media on the technological ground of Web 2.0 (Laroche, Habibi, Richard, Sankaranarayanan, 2012). Initial public offering (IPO):The first sale of stock by a private company to the public (Investopia.com).    Customer relation management (CRM): the strategic approach that most companies had taken in trying to figure out how to supervise their customers’ behavior (Mosadegh, Behboudi, 2011). References: Emerson, M. F. (2010). Become Your Own Boss In 12 Months. Massachusetts, MA: Adam Business. Kaplan, A. M., Haenlein, M. (2010). Users of The World, Unite! The Challenges and Opportunities of Social Media.Business Horizons, 53 (2010). Laroche, M., Habibi, M. R., Richard, M., Sankaranarayanan, R. (2012).  The Effects Of Social Media Based Brand Communities On Brand Community Markers, Value Creation Practices, Brand Trust And Brand Loyalty. Retrieve fromhttp://www.sciencedirect.com.ezproxy.tru.ca/science/article/pii/S0747563212001203 Mosadegh, M. J., Behboudi , M. (2011). Using Social Network Paradigm For Developing A Conceptual Framework In CRM. Australian Journal of Business and Management Research Vol.1 No.4 [63-71] | July-2011 Webster, F. E. Jr. (1992). The changing role of marketing in the corporation. Journal of Marketing, Vol. 56 |  October - 1992. Read More