Social Network Sites as a Marketing and Communication Tool between Global Cosmetic Companies and Consumers

Table of Content

List of Tables

List of Figures

List of Appendices

List of Abbreviation

1. Introduction

2. Literature Review
2.1 Social Media
2.1.1 Social Network Sites
2.2 Uses & Gratification Theory
2.2.1 Uses & Gratification for Social Network Sites
2.2.2 Uses & Gratification Criticism
2.3 Relationship Management
2.3.1 Relationship Marketing
2.3.2 Online Relationship Cultivation Strategies of Companies
2.3.3 Online Relationship Cultivation on Social Network Sites

3. Methodology
3.1 Research Process ‘Onion’
3.2 Secondary Research and Literature Review
3.3 Sample Selection – Selection of Cosmetic Companies
3.4 Primary Research
3.4.1 Qualitative – Focus Group
3.4.2 Quantitative – Content Analysis of Cosmetic Companies’ SNSs
3.4.3 Data Analysis

4. Results of Analysis
4.1 Focus Groups
4.1.1 Research Objective
4.1.2 Research Objective
4.1.3. Research Objective
4.2 Content Analysis
4.2.1 Fans
4.2.2 Online Relationship Cultivation Strategies
4.2.3 Response Time
4.2.4 Post Frequency

5. Conclusion and Recommendation
5.1 Findings
5.2 Conclusions
5.3 Marketing Implications
5.4 Limitations
5.5 Future Research

Reference List

Appendices

List of Tables

Table 1: Selection of Uses and Gratification Studies in the Internet

Table 2: Selection of Uses and Gratification Studies on SNSs

Table 3: Preliminary Test Results – Top 10 Cosmetic Companies

Table 4: Overview Focus Groups

Table 5: Change of Number of Fans within the month of September

Table 6: Company Announcements

Table 7: Understanding Public Voices

Table 8: Action Features Company

List of Figures

Figure 1: Social Media Landscape

Figure 2: Framework of this Study

Figure 3: The Research ‘Onion’

List of Appendices

Appendix A – SNS Description Facebook, Twitter and Google+

Appendix B - Comparison of features of Facebook, Twitter and Google+

Appendix C – Description of the Five chosen Cosmetic Companies

Appendix D - Topic Guide Focus Group Facebook, Twitter and Google+

Appendix E – Focus Group 1 Twitter – Transcript

Appendix F - Focus Group 2 Twitter – Transcript

Appendix G - Focus Group 3 Facebook – Transcript

Appendix H - Focus Group 4 Facebook – Transcript

Appendix I - Focus Group (Online) 5 Google+ - Transcript

Appendix J - Codebook – Content Analysis Facebook, Twitter and Google+

Appendix K - Analysis Research Objectives (see attached CD)

Appendix L –SPSS File (see attached CD)

Appendix M – Participants’ Statements to Each Company in the Focus Groups (see attached CD)

List of Abbreviation

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1. Introduction

The Internet, and all of the tools associated with it, has revolutionised the way how individuals and companies communicate with each other, and as such, it is best considered a word-of–mouth communication (Mangold & Faulds, 2009). Therefore, the web has

become the principal, if not only, source of information (Constantinides et al., 2008). Many users have integrated internet-based social network sites (SNSs) into their daily lives; reaching out to brands or companies which are now more accessible and instantaneous (Mangold & Faulds, 2009).

As of this writing there are hundreds of SNSs, increasing every day, having a variety of communication tools and features to connect with family, friends, and other like-minded people or with companies, whereas users do not use a single form of social media, rather they use a range of tools (Quan-Haase & Young, 2010).

According to the Internet provider Alexa, SNSs occupied four of the top fifteen global top sites on the web in December 2013. Leaders in the social network world are the SNSs Facebook, Twitter, YouTube, and Google+ with more than 100 million people who log in with their personal computer, smartphones or tablets every month (Alexa.com, 2013).

Facebook with 1.15 billion users, with a yearly increase in users of 21% (facebook.com, 2013), dominates the SNSs landscape. Twitter accounts total more than 200 million active users posting about 400 million tweets a day (Twitter.com, 2013) and Google + registers 343 million active users (Tweney, 2013).

In regards to frequency of visits, Facebook dominates with 97%. Twitter accounts for 46%, Google+ for 29% and LinkedIn for 23%^[1] (Mintel, 2012). Noteworthy is also that users in the UK have approximately twice as many friends online as in real life – 121 online friends compared to 55 physical friends (Quinn, 2011).

Common among these SNSs is that the communication is characterised as an intense dialogue, rather than a one-way communication. This phenomenon has evolved from individuals and communities, who share, create and consume blogs, tweets and so forth (Kietzman, 2011).

The reason why SNSs and other mass media are used is of high interest among scholars. As the number of studies show, a significant amount of research exists in identifying the (psychological) reasons why SNSs and other mass media are used, by applying the uses and gratification theory (U&G). However, the main shortcomings of these prior research studies are that they are survey-based, quantitative methodologies. These studies fail to adequately examine gratifications qualitatively. Therefore, this dissertation utilized an exploratory qualitative approach in form of focus groups in order to get more insights into the thoughts, ideas, perceptions and attitudes of the participants’ use of SNSs to fulfil their needs and wants.

Already more than 55% of social network users are connected to brands and 36% have already posted content about a brand on social network platforms (InSites Consulting, 2012). Due to the unique viral effect in sharing information and building online communities (Kent et al., 2003; Bortree & Seltzer, 2009; Men & Tsai, 2012), more and more businesses are realizing the importance of applying social media and especially social networks to their marketing strategies, since these sites can be used not only to communicate with their publics but also to observe and to analyse their behaviour, thus getting customer input (Donath, 1998; Constantinides et al., 2008; Waters et al., 2009).

SNSs are used in many industries. Also, for cosmetic brands that are willing to participate with their consumers, SNSs present an opportunity to integrate the brand into the user’s digital lifestyle in order to constantly communicate with them, thus fostering a relationship (Mintel, 2012). Many cosmetic companies have already recognised the importance of incorporating SNSs into their marketing strategy; world-wide there are about 2250 brands on Facebook tagged as beauty, and 350 on Twitter (socialbaker, 2013).

The cosmetic industry is a very lucrative, innovative, competitive and fast paced industry where product innovation is the key to success (Kumar et al., 2006). The industry embraces thousands of cosmetic brands. Globally, the cosmetic industry represented a $433 (£268) billion market in 2012 with annual growth rates ranging from around 3% to 5.5%. The UK market currently represents a £17 billion industry, with an estimated growth of 16% by 2016 (Euromonitor International, 2009; Łopaciuk & Łoboda, 2013; Aidin, 2013). The industry can be classified into six main categories: skincare, being the largest one, hair care, make-up, perfumes, toiletries and deodorants and oral cosmetics (L’Oreal, 2012; Schulz, 2013).

More and more people are using SNSs to share their opinions and tastes or to read reviews about beauty and personal care specific products. 79% of UK female users create discussions about beauty and personal care products on SNSs, whereas Facebook and Twitter are the most used SNSs, with some cosmetic companies having a YouTube channel. Google+ was not mentioned as a social network site (SNS) of cosmetic companies in this study (Euromonitor International, 2013).

Due to their enormous popularity and mutual and collaborative nature SNSs are an important public relations tool for companies to improve their social network appearance, increase interest in their organisation and build online relationships with their publics (Men & Tsai, 2012).

Scholars argue that relationship building between the organisation and its publics is the heart of public relations (Ferguson 1984; Hon & Grunig, 1999). Organisations, no matter what size or industry, need to build and maintain relationships for strategic purposes and successful outcomes. An organisation has to constantly scan its environment to identify the needs and wants of its publics. It must then communicate in a two-way direction in order to cultivate a high quality, long-term relationship (Grönroos, 1994; Kent & Taylor, 1998; Hon & Grunig, 1999). Nevertheless, essential for a company to build a relationship with its publics is a compelling content on its SNS; only if the content meets consumers’ expectations, the users will revisit the corporate SNS (Rowley, 2004).

However, SNSs are not only beneficial for a company; using SNSs also has a negative side. Companies no longer have control of what is said about their brand which might have an effect on their reputation, if negative word of mouth is spread in the World Wide Web (WWW) (Kietzman, 2011).

Being aware of the benefits of SNSs, researchers have started to identify and examine how social networks should be utilized by organisations to cultivate and maintain relationships. Kent and Taylor (1998) introduced the theoretical framework of online relationship development between an organisations and its publics, which has been adopted by numerous studies to examine the impact of various online strategies for relationship cultivation (Kelleher & Miller, 2006; Waters et al., 2009, Rybalkoa & Seltzer, 2010, Jusoh et al., 2012).

Nevertheless, those investigations only adopt a single perspective either from the company’s point of view or from the public’s point of view. There have only been a few analyses that have incorporated a comparison of both perspectives with the aim of providing a more in-depth understanding of the organisation-public interactions on SNSs.

Moreover, in most of the studies only one or two SNSs were considered, whereas Google+, launched in June 2011, (Google Inc., 2013) has not been analysed in previous

investigations until today.

To the best of my knowledge there have not yet been any academic studies that have analysed SNSs as a marketing and communication tool between global cosmetic companies and consumers from the company and the public perspectives.

Combining two theories - uses and gratifications theory and online relationship cultivation theory – by applying a mixed methods approach in form of qualitative and quantitative techniques, this dissertation will examine the habits and motives of young females using SNSs, their possible perceived gratifications with specific reference to five cosmetic companies and how those cosmetic companies utilize relationship cultivation strategies on the most used SNSs Facebook, Twitter and Google+.

With the present investigation, valuable recommendations will be developed, as to how SNS pages of the global beauty industry can be improved in order to become more informative and interesting (appealing), thereby drawing attention to the target group.

The following research objectives will be answered:

1. To investigate how and why Facebook, Twitter and Google+ is used by young females
2. To explore how and why young females use and participate in SNSs of global
cosmetic companies with specific reference to Facebook, Twitter
and Google+
3. To explore the possible gratifications sought and obtained by young females
using the Facebook, Twitter and Google+ accounts of global cosmetic
companies
4. To analyse how global cosmetic companies incorporate relationship cultivation
strategies on their SNSs and how they implement the uses and gratifications
criterion of young females

2. Literature Review

2.1 Social Media

Today a lot of companies are using social media (SM) channels to communicate with their consumers. However, SM has been defined in several ways in previous research and yet there is no general definition of the term ‘social media’ thus far (Boyd & Ellison, 2008; Agichtein et al., 2008).

Kaplan and Haenlein (2010, p.61) explain social media as “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0 and that allow the creation and exchange of User Generated Content “(UGC). Whereas Smith et al. (2008) perceive social media from a sociological perspective as collective goods produced through computer mediated collective actions. This study adopts the definition of Kaplan and Haenlein.

The term ‘social media’ and how it differs from the seemingly-interchangeable terms of Web 2.0 and UGC often cause confusion among managers and academic researchers (Constantinides & Fountain, 2007; Kaplan & Haenlein, 2010).

Web 2.0, first used in 2004, “is a collection of open-source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes” (Constantinides & Fountain, 2007, p. 232).

It describes a way that allows individuals to experience the WWW as a platform in which content and applications are created and continuously modified by all users in a participatory and collaborative manner rather than being created and published by individuals. Web 2.0 makes the user creators or co-creators, become involved in both the production and the delivery process through collaborative writing, content sharing, social networking, social bookmarking, and syndication (Thackeray et al., 2008; Drury, 2008). Hence, Web 2.0 can be considered as the platform that developed SM (Kaplan & Haenlein, 2010).

UGC, on the other hand, is the sum of how people use SM. The term, which became popular in 2005, usually describes the content that is publicly accessible and that was created by end-users (Kaplan & Haenlein, 2010). In order to be considered as UGC the content has to fulfil three basic requirements: (1) the content has to be publicly accessible and available either on a website or on a SNS to a selected group of people; (2) the content has to mirror a certain amount of creativity and (3) it has to be created outside of professional routines and practices (OECD, 2007).

On the next page (Figure 1), the Social Media Landscape by Fred Cavazza (2013), one of the most famous models, shows the different types of SM channels which satisfy several needs. Nevertheless, only some are well-known and used constantly.

Figure 1: Social Media Landscape 2013

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Source: Cavazza, 2013

As the graphic shows, the SM domain can be categorised in publishing, networking, discussing and sharing platforms. Each of the platforms can be accessed by individuals sharing their thoughts, opinions and interests continuously, not only with friends and family but with everyone in the WWW. Each platform is accessible through different devices such as smartphones, tablets, desk/laptops and other connected devices (Cavazza, 2012).

2.1.1 Social Network Sites

Nowadays companies utilize a wide range of communication tools to create a dialogue with the public, this also includes SNSs, which facilitate the communication with them (Boyd & Ellison, 2008; Men & Tsai, 2012).

Using the definition by Boyd and Ellison (2008) SNSs are web-based services that allow individuals to create a public or a semi-public profile, build and maintain connections and share their social connections within the system with other users. The uniqueness of SNSs are not that they allow individuals to connect continuously with others, but rather that they facilitate self-expression and visibility to other users which is adjustable in the default options (Haythornthwaite, 2005; Boyd & Ellison, 2008).

Facebook, Twitter and Google+, the three major players in Cavazza’s Social Media Landscape (see figure 1), build the main aspect of this research. Competition among the three SNSs is not present since each of them follow a distinct orientation; Facebook is to interact and connect with friends, Twitter offering real time updates and Google+ is for managing someone’s online identity (Cavazza, 2012). (Appendices A and B)^[2]

From a company’s perspective SM and SNSs can be seen as an essential platform to meet and to communicate with its consumers (Utz, 2009; Men & Tsai, 2012). These platforms are of prime importance due to the fact that they offer the organisation the opportunity to review and to observe customer feedback. Furthermore, it opens the company the possibility to influence the attitudes and behaviours of consumers more effectively than traditional marketing communication tools could and can do (Thackeray et al., 2008; Mangold & Faulds, 2009).

On the other hand, the times in which companies were able to control the information about them have passed. Communication about a company or a company’s brand that happens in the ‘new media’ cannot be controlled by the firm in question – the firm becomes an observer. Being constantly available and delivering the right content at the right time to meet the target groups’ needs and wants, put a lot of pressure on the company. With the rise of SM it appears that cooperate communication has been democratized (Drury, 2008; Mangold & Faulds, 2009; Kaplan & Haenlein, 2010; Kietzman et al., 2011).

2.2 Uses & Gratification Theory

The U&G theory is a popular approach and has been widely discussed (Katz et al., 1973; Palmgreen & Rayburn, 1979; Palmgreen et al., 1980; Kent & Taylor, 1998; Roy, 2009; Kaplan & Haenlein, 2000; Ruggiero, 2000; Rubin, 2002; Men & Tsai, 2011; Rybalkoa & Seltzer, 2012).

Already since 1940’s researchers have had a great interest in investigating the motives for the selection of traditional media such as newspapers (Berelson, 1945; Kimball, 1959; Loges & Ball-Rokeach, 1993), television (Palmgreen & Rayburn, 1979; Rubin, 1983; Lin, 1993; Kang & Atkin, 1999), or radio (Mendelsohn, 1964; Ruggiero, 2000)^[3].

With the rise of technology, scholars understood to expand the U&G research by incorporating new media such as cell phones, text messaging, the Internet and social media (Eighmey & McCord, 1998; Leung & Wei, 1999; Ruggiero, 2000; LaRose et al., 2001; Stafford et al., 2004; Grellhesl & Punyanunt-Carter, 2012).

U&G is a communication theory that focuses on how people use media and other forms of communication tools to fulfil their individual needs and wants (Severin & Taknard, 1997). The theory can be applied to explain and to understand the psychological needs which shape peoples’ reasons and motivations to use certain media (Rubin, 2002). Katz et al. (1973, p.510) explained that U&G studies are focused on: “the social and psychological origins of, 2. needs, which generate, 3. expectations of, 4. the mass media or other sources, which lead to, 5. differential patterns of media exposure (or engagement in other activities), resulting in, 6. need gratifications and 7. other consequences, perhaps mostly unintended ones”.

Drawing from Rubin (1994, p. 420) and Haridakis and Whitmore (2006, p. 767), U&G theory can be summarized in five assumptions of a modern view: First, “communication behaviour, including the selection and use of the media, is goal-oriented, purposive and motivated”. Second , “audience members are relatively active participants who initiate the selection and use of communication vehicles”. Third, “social and psychosocial factors guide, filter and mediate behaviour”. Forth, “the media compete with other forms of communication – or functional alternatives – such as interpersonal interaction for selection, attention and use to gratify our needs and wants” and lastly, “people are typically more influential than the media in this process, but not always”.

Scholars applied the U&G theory to understand the motives of individuals using the Internet and other media, however, it became clear that gratifications are not generalizable and that each medium has to be seen as unique with its own gratification.

For example, as noted by Raacke and Bonds-Raacke (2008), the Internet has changed the way people interact, users are seen as goal-orientated, active and motivated in the use of media in order to satisfy their psychological and social needs and wants (Haridakis & Whitmore, 2006). This psychological perspective shifts the focus to what people do with the media (active) instead of the traditionally view of what media do with people (passive) (Rubin, 2002). This assumption of an active audience seems suitable to study a medium which is associated with active use and known for its interactivity (Morris & Ogan, 1996).

Thus, the online world must be viewed as unique and has to be analysed on its own merit as many scholars have done.

Table 1 provides an overview of previous research utilizing the U&G theory in the context of the Internet:

Table 1: Selection of Uses and Gratification Studies in the Internet

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As the table shows, there are several motives and gratifications for a user using the Internet; information seeking (including imagination, stimulation, surveillance and global exchange), entertainment (including diversion, relaxation, mood changing, and pastime) and relationship maintenance (including interpersonal utility and social interactions) have been the most frequently identified gratifications by researchers.

In further research, scholars have expanded the view of gratification by differentiating between gratifications sought (GS), or motives for media consumption, and gratifications obtained (GO), or perceived benefits achieved from the medium (Katz et al., 1973; Palmgreen et al., 1980). As Palmgreen and Rayburn (1979, p. 158) explain “The distinction between gratifications sought and obtained [...] emerges as a crucial one in an era of central concern to the uses and gratifications approach.”

Essential is that whatever gratification an individual seeks (GS) from media can differ from what the user actually receives (GO). The resulting gap in between can predict the satisfaction or dissatisfaction with the medium and also if the user will use it again. Hence, it is of importance to analyse this gap in order to understand how individuals differ in using specific media, what their expectations are and the gratifications they actually perceive by using the medium (Palmgreen & Rayburn, 1979). The perceived gratifications can be classified in three types; (1) content gratification: content carried by the medium for example, entertainment, information; messages carried by the medium; (2) process gratification: the experience with the media usage for example, playing with the technology, browsing; actual use of the medium and (3) social gratification: the interpersonal communication and social networking on the Internet (Stafford et al., 2004).

As research showed, GO is a better predictor of media use than GS, and if the medium meets an individual’s expectations, recurrent use will occur (Palmgreen & Rayburn, 1979).

2.2.1 Uses & Gratification for Social Network Sites

There is no doubt that SNSs have changed the manner in which individuals interact with each other. SNSs offer users a variety of possibilities to stay in contact with their family, friends, companies and strangers, thereby satisfy a range of needs.

A study by Quan-Haase and Young (2010) found that users do not use a single form of SM but use a range of tools for communication and that users embrace new tools and add them to their existing communication repertoire.

In their research, the scholars utilized the U&G approach to understand the motivations of university students’ in Canada to join Facebook and to understand the GO when using Facebook, as well as comparing the GO from Facebook with those from Instant Messaging (IM).

25 gratifications for using Facebook were derived through factor analysis which can be categorised as follows: pastime, affection, fashion, share problems, sociability and social information. Facebook and IM are used for similar reasons and gratify similar communication and socialisation needs. Both platforms are primarily used for pastime activities, to have fun, to kill time, to relax, and to provide a form of escape from everyday pressures and responsibilities. However, the platforms differ in their GOs. Facebook stands out in the aspect of ‘social information’, receiving information about social events, friends’ activities, and social information about peers. Due to asynchronous communication users do not need to be online simultaneously as in IM. Users can post on their wall, which can be seen from their entire network no matter if they are online or offline. On the other hand, IM is seen as providing a more intimate environment allowing the discussion of problems with friends in a more private setting.

Dunne et al. (2010) conducted a focus group among girls aged 12-14 years in Ireland to explore why young people use and participate on the SNS Bebo and what are the GO. The study found that girls are very active using Bebo for their own personal motives and gratifications in terms of presenting a certain identity and personality in the social context. Furthermore, the relatively impersonal nature facilitates the communication with the other sex. GS can be summarized as: communication, entertainment, escapism and the alleviation of boredom, interaction with the opposite sex, and information searching.

GO using Bebo unveiled namely, the portrayal of one’s ideal image, peer acceptance, relationship maintenance, safety from embarrassment and rejection, and finally, engagement in playground politics.

In this context, Pai and Arnott (2012) examined the motives of Taiwanese Facebook users’ aged 18–44 for adopting and using SNSs with the aim to provide a more in-depth understanding of the fundamental reasons behind the SNS adoption behaviours by integrating a means–end approach with U&G theory. Through laddering interviews four values associated with SNS adoption resulted: belonging, hedonism, self-esteem, and reciprocity.

A selection of further research using the U&G theory in the context of SNSs is exhibited on the next page (Table 2).

Table 2: Selection of Uses and Gratification Studies on SNSs

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The predominant motivations found for using SNSs summarised from all research are mainly social connection such as keeping in touch with friends or locating old friends, pastime and entertainment, as well as information seeking.

Previous research is mostly based on quantitative methods which do not offer an in-depth understanding as qualitative methods do. This study follows a qualitative approach, investigating the possible gratifications that young females are seeking and what gratification they obtain by using the SNSs Facebook, Twitter and Google+ with specific reference to SNSs of global cosmetic companies.

2.2.2 Uses & Gratification Criticism

Although the U&G theory has experienced popularity among many scholars it is not unchallenged. Criticism focuses on the ideas that the theory (1) suffers from theoretical shortcomings, (2) lacks clarity of central constructs and how researchers attach different meanings to concepts such as motives and gratifications, (3) treats the audience as being too active or rational in its behaviour, (4) is atheoretical, and (5) is confusing and equivalent in the meaning of major concepts and terms employed in uses and gratifications studies such as the word ‘function’ (Swanson, 1979; Palmgreen et al., 1980; Ruggiero, 2000; Rubin, 2002).

Elliot (1974) argued that the U&G approach is overly “mentalist” by making assumptions about individuals’ mental processes and why they chose specific media to satisfy their needs, all of which cannot be observed because those needs only exist in the mind of the individual. Hunger and thirst on the other hand can be more easily understood.

[...]

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^[1] The results are based on a sample size of 1,525 social network users aged 16+.

^[2] The appendices include a brief description of the SNSs Facebook, Twitter and Google+, followed by a comparison of features of the three SNSs.

^[3] Some of these research results are presented in Lazarsfeld-Stanton collections (1948 – 1949) (Merritt, 1950).