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The use of social networking in brand promotion

Introduction:

Social Networking concept is new in the current business world however its emergence was started two decades ago when the internet was growing and becoming popular among the population. There is a latest trend of using social networking sites for brand promotion however the businesses are realizing slowly of using social networking sites for brand promotion. It has become a global phenomenon for the population as one third of the world population visit social networking sites and blog sites (Fatrhi, 2007). The way of spending the time over the internet by the population is changing day by day which has brought in the greater attention of marketer to change their brand promotion strategies accordingly. Using the social networking website for engaging the people into online communities and promoting the brand over these websites is the latest trend. Social network affect the purchase decision making process of consumers which make the difference in the branding and marketing strategies. However social networking websites are useful for the marketers to increase the brand awareness and product awareness. As per the recent research survey conducted by i-prospect research suggested that 48% of the research marketers have successfully placed the content on websites to create the brand awareness among the target customers (Holden, 2006). Social networking sites are also helpful for increasing the web traffic, increasing the customer loyalty and the success of new product launch. However apart from such benefits, a major role played by social networking websites is promoting the brand.

If considering the example of Skoda, it gives the substantial results for such instance. Skoda has created the community of about 2000 people through social media. This community was started when a female customer has posted its comment about the after sales services of Skoda and a person has picked this comment and posted it on social networking site (Muncaster, 2007). It is not only the corporate biggies who have used social networking sites as a medium to promote their brand but also a phenomena of retailing the designers label to increase the brand awareness among the target customers. Looking at the importance of social networking, this research aims to analyzing the impact of social networking sites on brand promotion. This chapter provides the brief introduction about the research study, including the aims and objectives of the research, significance of the research and rationale behind conducting this research study.

Aims and Objectives of the Research:

The aim of this research is to analyze the impact of social networking sites on brand promotion. In order to fulfill the aim of the research, researcher has laid down following research objectives which has been achieved in this research as a part of research aim.

To understand the importance of social networking websites in branding strategy

To determine the advantage of using social media in marketing and branding

To understand the current and future scope & viability of social media

To identify the strategies of companies using social media as a medium for promoting their brand

In order to achieve the above research objectives, the research has addressed the following research questions in this study.

RQ1: What is the importance of social networking sites in branding and marketing?

RQ2: What are the advantages for a marketer in using social media for its marketing and branding strategy?

RQ3: What is the current and future scope & viability of social media?

RQ4: What are the strategies used by companies for using social media in promoting their brands among the target customers?

Significance of the Research:

This research study is contributing significantly in the studies of marketing and brand management where the researcher has provided some key facts about the current usage of social networking sites in brand promotion and marketing. The research findings will help the marketers to understand the advantage of using social media as a medium for promoting their brands and they can integrate these findings in preparing their brand strategy. In addition to this, the research work provided the base for future academic researchers to conduct the research in the social networking space in relation to the marketing and branding management.

Rationale behind the Research:

Reason for conducting this research is to get the deeper insight about how the companies are using social networking websites for promoting their brand and in what ways they are making it effective among the target customers. In this way researcher would be able to get greater learning in the field of marketing and brand management and can integrate these findings into its professional career.

Chapter Scheme of the Research:

It is essential to divide the complete research into sub sections or chapters to get the sequential understanding of every step taken by the research for completing the research. Therefore researcher has segregated the complete research into fiver chapters. First chapter of the research provide the brief introduction about the research. Second chapter provided the literature of the research. Third chapter includes the research methodology. Fourth chapter provided the discussion, analysis and findings of the research. Last and fifth chapter includes the conclusion drawn by the research from the key findings and provided the recommendation to marketers.

Summary:

There is a latest trend of using social networking sites for brand promotion however the businesses are realizing slowly of using social networking sites for brand promotion. The aim of this research is to analyze the impact of social networking sites on brand promotion. Social network affect the purchase decision making process of consumers which make the difference in the branding and marketing strategies. However social networking websites are useful for the marketers to increase the brand awareness and product awareness. Reason for conducting this research is to get the deeper insight about how the companies are using social networking websites for promoting their brand. This chapter provided the brief introduction of the researcher to the reader.

Chapter 2: Literature Review

2.1 Introduction:

Social networking sites such as Facebook (400 million users worldwide) and Orkut (100 million), or the micro-blogging site Twitter (which crossed 10 billion tweets recently) may offer engaging distractions to the average user. But the numbers add up to a dizzying truth for brands: social networking sites (SNS) and sites like Twitter are prodigiously fertile spaces to harvest ad business. Adgully speaks to India’s leading brand nurturers and digital agencies to understand how they are leveraging the networking revolution. Social Networking soon became a way for brand Marketing and promotion on social sphere, whereby, the enterprises started using these online communities or websites for developing contacts and driving traffic to their respective websites. Today, these social networking websites form the main tool of social media marketing. The most commonly used websites that have become drastically popular over last couple of years are Twitter and Facebook. Following these two are some other sites such as LinkedIn, My Space, Digg and StumbleUpon (Adler & Kwon, 2002).  Facebook is a Social Networking Site which helps friends and colleagues to share dialogues with each other through Wall Posts, Messages and Comments. Today, Facebook has more than 350 million members and still counting. This site experiences more than two million clicks per day. Statistics state that users spend an average of 20 minutes per day in Facebook. The advanced functionalities of Facebook allow the users a longer shelf life. A user can view your files which are more than five years old. With such wonderful features, Facebook soon became one of the lethal tools of SMM and SMO. Businesses, especially small scale business houses started using the medium of Facebook to promote their brands and services. Setting up a business page and initiating and regulating interactions with the visitors are some of the strategies that business houses adhere to, in Facebook (Alba, 2003).

2.2 Popularity of Social Networking Sites in Developing Countries:

The online penetration is just 3-4 per cent, and less than 1 per cent of our total population has a Facebook account. And the percentage of people using Twitter is even smaller.” Mehra said that despite the percentages, developing countries like India were already the 5th largest consumer of Twitter in the world, owing largely to Bollywood’s enthusiasm for it. “And we are in the Top 10 list of consumers of Facebook. Rahul Mehta, the business head of Ching’s Secret, said, “There are approximately 5 crore Indians and 1 crore NRIs online. Facebook alone has 1.2 crore Indians and 40 lakh NRIs.” Mehta said the RoI on social media was substantially higher than what was offered by traditional media (Albrecht & Adelman, 2007). “These numbers are comparable to most national newspapers,” Mehta said. “Facebook is best place to reach Sec A+, A and B+. With internet penetration deepening, the numbers will rise in the next three to four years,” he said. Ching’s Secret has 98,826 (and counting) fans on Facebook.

Khushboo Maheshwari, the head (digital) of OMD, said, “Today, 5% of Indian population has an online presence and it is growing at a rate of 35% CAGR. In other words, 50 million users have a presence on social media.” And the numbers were growing, Maheshwari said. “With the government planning to spend Rs18,000 crore over the next three years to lay a 5 lakh km optic fibre cable network to reach every gram panchayat, the growth rate is going to touch 100% CAGR,” Maheshwari said. Mobile, web, and broadband will be critical to the growth in the coming years, Maheshwari said.

Mihir Ferrao, who looks into Social Media Optimization and ORM at Starcom IP feels that Internet in India needs to grow by at least 20 to 25% year on year, to shake off the constant comparisons with TV and Print (Alkire, Collum, Kaswan, & Love, 2008). He said, “The only reason why we do not get a fare share of advertising budgets is because, next to the reach & penetration of TV or Print, we are very small. But if we look at the concentration of brand TGs on TV & Internet, then surely the Internet will have higher traction.” Sagar Dhoke, the founder of Fun Element said that the e-revolution had helped to bridge the gap between the product and the end consumer, be it for a movie or an FMCG product. As for the group being targeted online by marketers, Ritesh Patel, the brand manager of CEAT, said, “Social media has indeed proved to be a very useful medium for a brand like CEAT.” He said that CEAT aspired to be a youthful brand and it finds complete match of TG in this medium (Arabie, 2004).

2.3 The Approach:

Sandeep Singh, the business head of Quasar, said that promotional activities designed for online platforms could be a campaign lead in which the target audience is engaged for a specific purpose and for a short duration. Or, brands could choose a more strategic and long-term initiative. “In a campaign lead, the idea is to use social media platforms to create a buzz and receive feedback from the community represented by the target audience,” Singh said. “Strategic initiatives involve the management of social presence from brands’ online-reputation standpoint, and the use of social platforms as a medium of continued dialogue with the prospects and customers.” Singh said experience suggested that the one-size-fits-all approach did not work. “Every product and campaign needs a different approach and activation strategy,” he said (Bainbridge, Brent, Carley, Heise, Macy, Markovsky, & Skvoretz, 1994).

Maheshwari of OMD described one of the agency’s typical media activities. “Motilal Oswal Financial Services Limited has been quite active on the social media,” Maheshwari said. “We have uploaded Wealth Creation Study (WCS) Videos on You Tube and also created a Linked In event page for the WCS awards ceremony. Besides, we also have a scribed page where we have uploaded different annual WC Studies.” The creation of Wikipedia pages on the Motilal Oswal Group, on Motilal Oswal and Raamdeo Agrawal had been completed, Maheshwari said. “As a result of these activities, seven out of 10 results on Google are owned and controlled by Brand Motilal Oswal for the search Wealth Creation Study,” Maheshwari said (Baker & Hubert, 2001).

Zapak has carried out several similar campaigns; Axe, Ponds, and Mahindra campaigns — which used a mix of available options — are among the most successful Zapak works. Mehra listed the focus areas: “Fan pages and groups, gaming and other fun applications on platforms like Orkut and Facebook, an active handle on Twitter.” Mehra said it was essential to link the APIs (application programming interface) like OpenID and Facebook Connect to one’s site to promote easy communication and conversations (Barabasi, 2002). Ching’s Secret advertises regularly on Facebook and YouTube, the brand’s Mehta said. “But a lot of traffic has been generated virally because of the content, quizzes, contests on Facebook.” He said that in the end, social media was a long-term strategic investment. “It is not brand building but genuine relationship creation and maintenance,” he said. “And like any relationship, it takes time to build.”

Describing the two aspects of promotion — social applications and paid advertising —they use both options equally well. For ‘Emotional Attyachar’, social advertising was placed on Facebook and other sites. “And we also released an application on Facebook,” Mistry said. “Applications turn on engagement to high levels, users get to communicate with the brand, and they understand the values of the shows. On the other hand, advertising draws people who are unexposed to the brand. So the two options serve different purposes and we use as much of both as they can (Barnlund & Harland, 2005). Patel of CEAT said that any one people-engagement tactic would not work in isolation. If they create a fantastic social application and do not promote it, it will die a natural death owing to the lack of critical mass required to give it a viral effect. “Similarly, only paid advertising will fail to generate brand interaction with consumers which is the essence of social media. Such a tactic would evoke the feeling of a one-night stand and customer would probably not engage with the brand in question in the future. Starcom IP’s Ferrao, also said that lots of their clients are slowly waking up to the fact that social media is a growing phenomena in India. Some of their clients whom they have brought onto the social space are Himalaya Herbal Tea and Foster, while they are enhancing the social presence of brands like Tata Teleservices and Pantaloons. The results they have got, in terms of fans on Facebook and followers on Twitter etc. have given the client reasons to be excited. And has initiated thoughts of how do they leverage these groups further (Bernard & Killworth, 2003).

2.4 Pros and Cons:

Every platform has certain advantages and disadvantages, so it’s a question any longer of them wanting to be on it or not. The advantages are varied: right from being able to monetize certain things to being able to put your content out there; to getting feedback from users. In the past, people could not connect to a brand on a one-on-one basis, but social media allowed that to happen. Most brands feel that going to SNS will put their brands up for public scrutiny, which is considered a disadvantage. But it is considering that to be an advantage because it gives them a good reality check to improve your product or service. But on this channel, Singh warned, one wrong step could snowball into something highly detrimental to one’s brand, in matter of minutes. So they should learn to do it well than not doing it at all, as you can’t run away from such platforms if their consumers are flocking them (Bonacich, 2002). They will have to embrace them today or tomorrow. SNS can definitely contribute to making or breaking the brand image. Brands should be very cautious in venturing into SNS. While developing games for the brands, Dhoke suggests subtle branding techniques to his clients. “Constant hammering of the product is a complete turn-off to the player and user,” he said. “Same applies to social applications and games. The app should highlight the main features of the app in a very exciting way rather than in the brochure style.”

Maheshwari endorsed Dhoke’s assertion about treading carefully. “Yes, a single bad comment or rumor can severely damage the reputation that a brand like MOFSL has taken great pains to establish over the years,” Maheshwari said. “Also since SNS connect users from different parts of the world, it takes little to no time for bad news to spread.”

Patel strongly believes that a consumer’s negative feedback could be used to create customer delight. Today, more and more brands are engaging directly with consumers through various discussion forums, networking sites and forums to understand their expectations (Borgatti & Everett, 1999)

Ferrao of Starcom IP sees the clear advantage of social networking sites in the entire brand experience which one can bring to the consumer. He said, “With Facebook and Twitter, you can communicate so many brand properties to those people who want to listen!” he believes that by doing so, you know the effort is not going to waste and that your initiatives could actually lead to sales (Burt, 2008).

2.5 The Future:

Patel also highlighted the fact that only a select age group was active in social media. While Youngistan is spending more time online, the older age group is not very active yet. Also, online options are more popular in metro and tier-II cities. Internet penetration is still an issue in rural India. But Dhoke sees things differently. “Things will change in the next five to six years. When 3G is operational, the number of internet users will grow by about 25-35%. It is estimated that by 2013, India will have the third largest Internet user base. Singh goes a step further and says that as in the West, the audience is now online. When you refer to the audience, these are the guys with high disposable incomes and spending power. These guys are online for sure. And most brands are eying their wallets. If you talk about numbers, we still have some way to go to before the medium reaches the masses. The Indian audience was enjoying the internet and its offerings. Gaming is an offering that has now become a passion among the youth (Carley & Krackhardt, 1996). The online gaming industry is growing and how! Year-on-year, they are recording a rise in the number of gamers in the country. Zapak, which was started just three years ago, already had 7 million unique registered users, and continues to grow. Soon, there will be a day when the online Indian farmers on ‘Farmville’ will outnumber all the real farmers of our country put together. Other than Twitter and Facebook, there are couples of other websites that have gained immense popularity. LinkdIn is a professional social media website where a stream of professional gets the chance to review and interact with their counterparts. With more than 50 lacs people registered with this site, LinkedIn offers a solid platform for establishing new business relationships. LinkdIn by facilitating more of a personal communication between the business professionals can help the business as a whole. MySpace also have a massive impact in the social networking world. Once registered with MySpace, a user can not only inform the entire networking circle about their likes and dislikes but can also submit videos. A lot of personal stuffs can also be added to the site, and an active mode of communication can be initiated. MySpace also helps in Social Media Marketing by enabling the businesses to create their own profile page and communities and develop interactive dialogues with targeted mass of people. This enables in building brand awareness and can be of immense help to small business houses. Social media and networking Sites have not only contributed to take inter-personal communication to a different level, but also have been a great marketing tool for the small businesses. Well planned approach to social media marketing via social networking sites can be of great help in promoting the business, create proper brand awareness and in the end, meet the ultimate business ends. A business house must have proper expertise and planning to approach in the network so as to reap the fruits of benefits to the very best (Cartwright & Harary, 2007).

2.6 Spreading brand awareness:

We all know word-of-mouth propagation is a great way of spreading your brand awareness. This is what social network can do. As soon as brand becomes recognizable to a large number of customers, they start discussion about the product. Maximum people who are satisfied with the product they often post their comments through these social networking, which encourage other customer to buy the product. Big companies create a blog in relation with the social network to give customer a wide area to discuss about product and give reviews. This way social network spread your brand awareness to millions of customer online (Cohen & Prusak, 2001).

2.7 Engage customer interest:

A social media website is ideally suited for product discussions, demonstrations, and showcasing of expertise and quality. Businesses can engage the interest of customers from a global market and build a powerful brand image. People will become fans of your website, product or business because they choose to; Make them feel comfortable with this decision by posting quality information.

Talking about online business, social networking is a great opportunity to keep your site busy by attracting potential customer with well developed networking strategies. Organizations are already making use of new and creative way to utilize the massive popularity of various social media to promote their particular product. The additional benefit is the long-term impact on business revenue through brand management. Social media websites are just right for business marketers to spot potential customers (Eveland & Bikson, 2007).

But in order to get benefit from social networking, business owner should study to handle their social networking assets carefully. Most famous social networking sites like facebook, twitter and my space are the great for carrying your message to abroad. But new businesses must always remember that benefits from social networking solely include arduous work (Crane, 2009).

2.8 Summary:

A social network is a social structure made up of individuals or organizations called “nodes”, which are connected by one or more specific types of mutuality, such as friendship, common interest, financial exchange, dislike relationships of beliefs, knowledge or prestige. It was initially intended to make friendship and stay connected with colleagues, but now days every businessman would have known how important social networking is for their business. Mainly online business has made social networking a priority as well. Premier Websites have made it possible for businesses to develop their contact lists, handle their relationships and created the ideas of viral marketing. It is because Shopping and social networking Web sites gather a lot of information about online users, and has become tremendously useful for companies to track and model consumer behavior. Businesses are looking to companies like Twitter, MySpace and Facebook to help companies to sell more products and services. Let’s see how it makes an impact on your business in reality (Fararo & Skvoretz, 2004).

Chapter 3: Research Methodology

Introduction:

A research methodology enables the researcher to get the right direction in achieving the research aim and objectives. Therefore it is important for the researcher to understand the different research methods available and making the right selection of the appropriate research component to design the complete research methodology. This chapter provides the detailed explanation of the research methodology that has been used by the researcher for this particular research. The aim of this research is to analyze the impact of social networking website on brand promotion which requires a robust research methodology.

Research Methodology:

Before moving further, a research first needs to understand the difference between exploratory and explanatory research and make the appropriate selection between them. Exploratory research is useful where the research wants to conclude the research through in-depth and detailed discussion about the research objectives and findings of the research. On the other hand explanatory research is useful where the researcher conclude the research based on the key facts and using statistical measures without having in-depth discussions. Here the research wants to conduct the analyses to understand the impact of social networking websites on brand promotion therefore it requires statistical measures to conduct the impact analyses. Hence researcher has used explanatory research in this study.

Research Design:

There are the various authors who have provided the approach to design the suitable research methodology. However the most relevant research methodology design is given by Saunders et al (2003) by developing the research onion. Each layer of this research onion provided the research component and selecting the research components gives the complete design of the research. Research has used the research onion developed by Saunders et al (2003) for designing the research methodology. Description of selecting the research components by using research onion is provided in the following section.

Research Approach:

Research approach is chosen from the first layer of the research onion. A research can go for deductive, abductive or inductive research approach. In this research, researcher has used abductive research approach which enables the researcher to get the deeper understanding of research objective and need of correlating the literature with key findings of the research. Other research approaches such as inductive and deductive approach has been rejected by the research since both the approaches more focused towards the theoretical implications and less towards the practical implication of the research.

Research Philosophy:

Research can select the research philosophy by removing the second layer of the research onion. There are the two research philosophies such as positivism and interpretivism research philosophy. Interpretivism research philosophy is useful where the researcher interpret the study results using literature and less focused towards the practical implications of the research study. Since the research approach used by the researcher is abductive which requires the practical implication hence interpretivism research philosophy is irrelevant. In positivism research philosophy researcher only considers the practical implication along with the use of literature to be linked with research findings. Hence in this research, researcher has used the positivism research philosophy.

Research Strategy:

Research strategy can be chosen by removing third layer of the research onion. Research strategy enables the researcher to conduct the analysis and presenting the key findings of the research. In addition to this research decides on methods of data collection. A research can use survey questionnaire methods or face to face interview method to collect the data. It is essential to capture the views of marketing managers about the impact of social networking websites in brand promotion. Hence the research has used survey questionnaire method for collecting the data. Once the data is collected, a researcher needs to understand the way of conducting the analysis and presenting the data. In this research, research has used question by question analysis and drawn the conclusion. Research has used both the secondary and primary data in this research and method for each of type of data is described below:

Data Collection Methodology:

Secondary data is the data which is already existed in the published format. On the other hand primary data is the data which is not available and researcher collect the information using questionnaire method from the relevant respondents. In this study, researcher has collected both the secondary and primary data. The methodology description of collecting each type of data is provided below:

Secondary Data:

Secondary data in this research has been collected using various secondary sources such as academic journals which have been procured from the university library, books, news articles, web articles, company websites and general internet search. Secondary has been used to compile the literature in this research.

Primary Data:

In order to capture the view points of marketing managers towards the impact of social networking websites, the data has been collected using primary research. In primary research, researcher has prepared the quantitative questionnaire and administered the questionnaire using email. Others details of primary research is provided below.

Target Respondents:

Target respondents were marketing managers who must have knowledge about the social networking concepts and websites and responsible for preparing branding strategy for their companies.

Sample Size:

A total of 200 questionnaires were sent to the target respondents out of which 59 responses were received by the researcher. Therefore the total sample size of this study is 59.

Sampling Methodology:

Convenient sampling methodology has been used by the researcher for designing the samples in this study. In this research, the researcher already known to the screening and qualification criteria of the target respondents therefore the convenient sampling methodology is useful for this research study.

Data Analysis:

A researcher has used excel tool for analyzing the data. Each questionnaire responses are filled in Excel and developed a final data file. Researcher has used some basic statistical measures to analyze the data and key findings of the research has been presented using charts and graphs which have been prepared using Excel.

Ethical Consideration & Research Limitations:

There are certain ethical issues that have been taken into consideration by the researcher. Researcher has followed the market research guidelines to meet the ethical challenges in this research such as disclosing the respondents’ names & contact information as per the respondents’ consent, acknowledging the information sources, use of authenticated data sources and websites and meeting the university guidelines to avoid plagiarism. Some limitations faced by the researcher are access to the company information, coverage of sample size and reach out to the target respondents.

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