E-Business online business strategy
E-Business online business strategy Introduction The present report is evaluating the online business strategy of…
Table of Contents
Virtual communities on the Internet have proliferated with the increasing participation of individuals and the discussions through the social networking channels, not only about personal matters but also about life in general. This includes several kinds of platforms where the specific interest groups collaborate together to discuss and share opinions about the products and services available in the market. There is an increasing level of participation due to several factors and mainly because of the motivation of the individuals to analyse the information about the products and services available in the market which now can be easily accessed through the medium of Internet. The increasing global proliferation of communication through the Internet has increased the level of information available about the products and services which can be accessed by the customers at a global level. Customers are also able to communicate with each other and with the organisation, develop opinions and share their ideas and this enables them to utilise this channel to control and empower the potential customers. Many organisations have analysed the potential of the large virtual communities and interest groups which are specific targets for the products and services. But along with the advantages of communicating and marketing through virtual communities or Social media marketing and social networking sites, the increased level of consumer activity can also undermine the organisation’s inability to control the amount of negative information. It is necessary for any organisation to develop a strategy to proactively manage the content and hence develop their own systems and procedures whereby specific strategies have to be formed in analysing and manipulating the content over virtual networks.
Social networking media and the associated tools provide individuals with the ability to develop collaboration and communication in the online world. According to Gillespie and Morrison, (2001 )similar to other forms of community-based platforms, the social networking platforms are facilitating the creation and sharing of knowledge, information, ideas, opinions and moreover provides the ability for the individuals in an active participation contrary to the other forms of collaborative platforms. Yoo, Lee and Bai, (2011) have identified that the active participation and communication facilitated by online and the immediate interaction with the users in the community is one of the contributing factors to the development of online social networking sites. The online social networking sites consist of several technological platforms based on multimedia, blogging, sharing etc. Several studies have identified that more individuals are switching to the social networking channels for a variety of motivations. Due to the increasing popularity of social media channels and the corresponding ability to influence the individuals behaviour and mind set (Kumar, 2010) many organisations are turning to these channels to communicate their messages in a proactive manner. But in order to utilise any kind of social networking sites as a platform of marketing for any organisation, a certain strategy needs to be adopted. There are cases when many organisations have suffered minor and major embarrassments and negative opinion due to the lack of adequate strategy in managing the communications through these platforms. One important characteristic of the Social media marketing is that it engages the consumer and provides the consumers with an ability to creatively participate in the development of engagement with the organisation as well as with other consumers (Gillespie and Morrison, 2001). But since the social media sites as a platform for two-way communication, the organisations should have a proactive strategy in managing the communication and participation of the consumers when utilising this platform for the communication of the messages to the consumers.
The aim of the present report is an evaluation of the literature available on the concepts and perspectives of researchers about Social media marketing or marketing through the social networking channels and other virtual communities. Mainly a review of literature is conducted in identifying the motivations of individuals to participate in virtual communities and how the Internet is enabling and empowering the customers. The specific aspects of Social media marketing and the practical considerations of developing a strategy have also been evaluated.
The report mainly through the literature review on Social media marketing is analysing the following of research questions
Online social networks have emerged as one of the most popular platforms used for communicating the messages of organisations to the customers. Several research studies have been conducted on the changes happening in the technological and communications area in many industrial segments where especially the companies need to adapt to the changing market conditions and customer requirements and hence Social media marketing. According to Kumar, (2010) the online activities of bloggers who share the experiences about many organisations products and services has contributed to the development of websites and social media sites particularly focusing on specific areas such as food and beverages, travel etc. But according to Gillespie and Morrison, (2001) Social media marketing even though considered as the modern and most innovative channel for reaching to the customers, there are several cases where organisations have suffered unfair and fair criticism which have dented the consumer loyalty.
Several research studies have been conducted in order to identify and analyse the participants motivation to utilise the social networking channels other than the direct channels of engagement and communication. Yoo, Lee and Bai, (2011) have analysed that the maintenance of relationship with individuals far and wide (those people who are in contact with on a regular basis) and the possibility of anonymity which is required in certain social collaborations are the possible motivations for the individuals to utilise the social networking channels. Gray, Matear and Matheson, (2000) have identified that the modern concept of relationship is based on the links and establishment of strong relationship (considered as social capital) as a method for collaborating with each other. Moreover from a practical point of view, the ability of individuals to communicate with other individuals with whom they have weak ties and linkages in any easier manner and without the need to develop a strong relationship is one of the important considerations of the communication through social media sites (Bang, 2000). The ability of individuals to connect with interest groups and individuals who have common viewpoint and share the knowledge and opinions have contributed to the development of the intellectual capital (Gillespie and Morrison, 2001).
The concept of friendship has changed with the adoption of social networking media and anyone with common interests and opinions can now be considered as a friend through the online social media channels. Studies conducted by Burton and Soboleva, (2011) have identified that the development of opinion and its dissemination is a value adding process for the individuals utilising the social networking channels. The members are able to access information, solve problems and make informed decisions. Contrary to the earlier suggestions that the social networking channels only developed weak linkages and relationships Baird and Parasnis, (2011) have concluded that the members of the social networking channels are seeking to develop productive relationship through interaction and which is not possible through the traditional forms of interaction. Burton and Soboleva, (2011) have analysed the necessity of individuals to develop an identity of their own and their need for self-expression as one of the prime motivators to be involved in virtual communities. The gratification of the individual through the emotional connection established with other members of a virtual community and their consequent ability to express themselves are some of the important contributions from the research conducted by (Baird and Parasnis, 2011). The participants of virtual communities are also finding gratification in analysing the personal problems and opinions of other members and helping to find solutions. One significant character of the virtual communities is that, they provide a certain level of anonymity to the participants along with the ability to control their emotions and experiences. One important research study by Rothschild, (2011) have indicated that the necessity to feel belongingness with a larger group or community and the desire or the need for attention and respect are some of the important motivations of individuals to participate and collaborate in virtual communities.
Many research studies have identified that due to the increasing ability of participative communication between individuals, the consumers are able to actively participate in discussions, analysis of opinions and recommendations of different product and services with the information received from websites of organisations as well as other channels through the Internet. The ability of the consumer to collect information about a product available in any market has increased because of the availability of such information over the Internet (Vel and Sharma, 2010). It is not only because of the information sponsored by the organisation itself about its own products, but the modern trend is towards opinion development and information spreading (Palmer and Koenig-Lewis, 2009) about the various products and services of by the customers through the Internet. It is on this basis that several researchers have identified the websites, Internet and the social networking channels as the new platforms for marketing on a proactive manner. Several research studies have identified that due to the ability of the consumers to get information from not only the organisation but also from impartial sources have empowered the consumers and also there is more emphasis on interaction between organisations and consumers through these channels (Vel and Sharma, 2010).
The traditional channels of marketing were a one-way communication method where the advertising through newspapers and televisions was done after an initial analysis of the consumer’s behaviour. The modern Social media marketing channels through Internet have developed the possibility of adapting the marketing strategy and mainly the communications such as advertising to attract and by utilising a continuous analysis of consumer behaviour (Gillespie and Morrison, 2001). There is also evidence from research studies conducted by Lefebvre, (2011) suggesting that many consumers are now interacting with producers in order to put forward ideas and opinions about new products, defects and the specific requirements. The role of the consumer has changed from that of consuming the products and services to that of collaborating in the value chain (Bang, 2000). On the other side, the traditional channels of marketing allow the organisations to have control over the messages spread among the consumers because it was effectively created by the organisations and disseminated by it without active participation of the consumers. According to Jones, (2010) the development of communication through Internet which facilitates two-way communication have empowered the consumers by the methods of participation, assessment, sharing and the development of attitudes and behaviour by the analysis of such communications with the consumer group. According to Sturman Corgel and Verma, (2011), the consumers are now actively participating in the spread of communication about several products and services in a positive as well as negative manner and are able to exert a significant influence over how the organisation conducts itself.
The ability of the consumer groups to access the power of the Internet has been facilitated through the collaborative platforms of social media networking Sturman Corgel and Verma, (2011), and in these online communities have brought the consumer groups together thereby the organisations are able to now directly affect consumer behaviour influencing Social media marketing. Many organisations understand the necessity of communicating with the consumers and understanding their attitudes and behaviours which has now become possible through an evaluation of the messages and user developed content on the Internet (Jones, 2010). Moreover many organisations are actively fostering the participation of customers in the analysis and the development of opinion through the Internet and mainly through the collaborative platforms of social networking sites. But as mentioned before the active collaboration of consumers can also affect the company in a negative manner as any deficiencies noted by the consumer groups or individuals could be immediately passed on to the larger consumer segment (Hsu and Powers, 2002).
Several of the research studies have analysed the potential of Social media marketing or marketing through the channels of common social networking sites as well as the development of forums or virtual communities by the organisation itself. Many of the research studies have identified that the organisation should understand the needs and motivations of the customer as a first stage in the development of a relationship based marketing strategy through the online channel. Palmer and Koenig-Lewis, (2009) have analysed that the promotion of participation by means of encouraging the consumers to create their own content and also cultivating connections between the consumers thereby creating enjoyable experiences as an important factor and to be considered as a second stage.
Figure 1 – Process of developing online marketing strategy/Social media marketing
(Source – Palmer and Koenig-Lewis, 2009, page 23)
As the third stage, the organisations should motivate the cooperation of the consumers, their inspiration of ideas and the mobilisation of opinion leaders in order to promote their own messages. It is after the final stage whereby the organisation have developed a particular platform through which they are able to communicate their message to a larger section of the consumer that the company can effectively utlised the channel of social networking for the marketing and communication of the messages.
Although the above process or the stages to be adopted in the development of a proactive customer base in order to foster the interactions and the proliferation of the messages of the organisation are generally conceptual, the organisation will need to adapt to the specific aspects of consumer’s behaviour, of the product and service category etc. In the area of hospitality, almost all kinds of organisations can adopt marketing through the social networking channel and other platforms on the Internet. There are several large and small organisations which have developed their own Facebook pages through which these organisations communicate the message and develop consumer generated content in a positive manner. One important aspect of the marketing strategy to be developed is the continuous monitoring of the content generated by the users. Although all kinds of negative contents need not be censored, a strategy has to be developed by the organisations where some form of negativity needs to be introduced so that the consumers do not feel the large-scale manipulation. Most of the content promoted by the organisations are manipulated and developed by the organisation itself. But in order to develop more consumer content and foster active participation, the organisation should cede some form of control to the opinion leaders within the community. It is necessary for the organisation to understand the motivations of the consumers and actively participate with them, promote their ideas and also to develop new and innovative ideas from the opinion generated through these channels.
From the above analysis and the review of the literature, the development of virtual communities and other platforms through Internet such as social networking channels and their increasing importance in the marketing strategy of organisations has been evaluated. From the literature review, it was identified that individuals and participants have different forms of motivations and reasons for participation in virtual communities could be different. It is necessary for the organisation to develop a strategy of motivating the consumers to participate and collaborate in the development of a channel through the Internet. Although social networking channels provide many advantages such as participation from the consumers, their active collaboration in developing opinions, the organisation should also consider the negative aspects of any comments and opinions created by the user. Although full-fledged manipulation of the content is not recommended, the organisation should continuously monitor the activities of the channel so that any negative fallout can be minimised.
In the literature review, the issues concerned and analyses were of general in nature and relevant to all industry segments. Several researchers have argued that marketing through online channels are much more significant in the case of service-based organisation. There are several parameters to be identified and discussed in the case of services other than products and the consumers tend to actively discuss this particularly if the services are targeted at the higher or the upper or the premium segments of the market. One specific example is the huge content available on the Internet about technology related products and services. The messages, blogs, opinions and recommendations about several technology related products and services through user generated content has the potential of changing the attitudes and behaviours of the consumers. Moreover it has been identified that such kind of creation of messages and opinions and the discussion is mainly about products and services for the premium segment.
For any organisation in the hospitality sector such as that of a hotel, travel agent or restaurant, and specifically targeted at the premium segment of the market can generate large levels of content by self as well as the customers. Many hotels in the top segment of the market have identified that the individuals they are targeting are the most prolific users of social networking channels (Mawson, 2000). The five-star hotels, speciality restaurants, travel agencies etc. have developed their own blogs and Facebook pages so that the customers are able to contribute their ideas and opinions and promote active participation of potential customers. The ideas and opinions developed by the customers who have used the services of these organisations have the potential to modify and motivate the attitudes and behaviour of the potential customers.
As mentioned before the hospitality segment and especially those organisations targeting the premium segment has a unique opportunity in the way that it can target that specific segment in any easier manner than through the traditional forms of marketing. The user generated content has the ability to manipulate and motivate the potential customers in order to purchase or use the services of these organisations as well as the threat of forming negative opinions. A satisfied customer is likely to generate positive opinion and content but needs to be motivated to do so. But according to Kotler, (2008), a dissatisfied customer is more motivated or forced to generate negative content which could harm the organisation. It is necessary for the organisation to actively monitor the social networking sites created by themselves as well as the opinions, messages and discussions about the services through the Internet.
From the evaluation of the literature and the subsequent discussion relating to the implications for the organisations in the hospitality segment, certain recommendations have been generated as follows.