Customer Engagement Value and Social Media

Table of Contents

Introduction

Chapter 1 - Literature Review
1.0 Social Media- Historical Evolution
1.1 Social Media - Definition
1.3 Social Media – Basic Features
1.4 Social Media – Categorization
1.4.1 Collaborative projects
1.4.2 Categorization of Social Media Users
1.5 Brief Presentation of the most popular Social Media
1.5.1 Facebook
1.5.2 Twitter
1.5.3 Linked In
1.5.4 Blogger
1.6 Reasons for using Social Media
1.7 Factors that influence consumer behavior
1.8 Consumer behavior in Social Media
1.8.1 The process of Consumer Socialization in Social Media
1.8.2 Consumers and Social Media
1.8.3 Social Media in consumer preference and purchase intention
1.9 The Social consumer

Chapter 2 - Research Methodology
2.0 Introduction
2.2 Research design
2.3 Description of the research questionnaire
2.4 Research Analysis
2.4 Limitations of the Research, Future Research, Proposals to Businesses
2.4.1 Research limitations
2.4.2 Proposals for future research
2.4.4 Proposals to businesses

Conclusion

Reference List

List of Figures

Figure 1: Social Media Historical Evolution

Figure 2 :Social Media Historical Evolution

Figure 3: Categorization of Social Media 2011

Figure 4 : The Social Consumer

Abstract

Social media networking are portrayed as modern communication tools possessed from businesses in the new external environment where they operate and their participation in these offers support and stabilization with staggered steps. Thus, it is necessary to analyze these electronic areas, in order to identify opportunities resulting to be used appropriately used by businesses.

The main purpose of this study is to investigate whether social media can influence consumer behavior and thus provide businesses with a competitive advantage over their competitors in the market. For this reason, it is necessary to define social media and identify their characteristics, to analyze consumer behavior and their intention to purchase over social media and the advantages of business participation in social platforms and the increase in customer . Finally, to determine the interactions of users / consumers, who have the leading role in these media, which directly influence their consumption preferences and their relationship with businesses.

Through the analysis of the above, the results is that social networking media are of vital importance and should be included in each strategic business plan.

Key words: Social Media, consumer behavior, competitive advantage, intention to purchase

Introduction

Wikipedia, Facebook, YouTube, Twitter, are some of the terms used in every day life. Social Media seem to escape from being a trend and consolidate their position as a multicultural phenomenon to be further developed, which is evidenced by their ever-increasing usage rates worldwide.

According to the report of the International Telecommunication Union (ITU), the users of Social Media worldwide surpassed 1 billion in 2011.

The leader is Facebook, which has 900 million users (social bakers,2013).

Social Media are the new tools that businesses have in their hands, with which they can identify profitable opportunities. If businesses take advantage of these opportunities, they can acquire lasting competitive advantages and face their competitors effectively.

Social media have now been introduced in the lives of people and have changed the lifestyle. The increasing use of these Internet platforms creates many new communication routes among people, as they play a central role in their activities, in social phenomena, economic and political life.

The traditional communication model is now being questioned as ways of communication are constantly evolving (Helsel and Deis, 2010).

This automatically means that changes have occurred in the socio-cultural environment (part of the macro-environment) and social and cultural factors can influence business activities and business marketing. Nowadays, the marketing department of the company can discover different ways to connect with consumers by simply participating in such sites.

Therefore, their deviation from the socially and culturally acceptable can cause them serious problems. As a result, they should adapt their practices to the changing expectations of the society and be open to new opportunities. It is necessary to dare to use something different from the traditional communication media which were known to them until now, thus gaining new opportunities to achieve their business goals. Their position in the market and acquisition of competitive advantage depends on their ability to adapt to these new conditions and innovate to promote their goods.

For this reason, business activities should be performed in such a way that creates value to the consumer, which would lead to influence consumer behavior and therefore, achieve competitive advantage of the company (Georgopoulos, 2006: 168) and through social sites the user / consumer is at the heart of its strategy. Companies by utilizing social networking can be rewarded and gain many more business opportunities, can compete more intelligently over their competitors and offer more value to the buyers of their products.

Nowadays, more and more companies are rushing to participate in social media, to realize their potential.

They try to keep pace with the needs of the times and manage to thrive in a competitive market environment also through the comprehension of consumer behavior. For this reason the analysis of the particular online environment is considered necessary.

Finally, with the economy in its current state, i.e. changes in the economic environment is imperative that business people understand how uncertainty of buyers affects their consumer preferences and change they way they are influenced. Businesses turn to alternative information media to help them cope and survive with the new economic data.

Social media, due to their low cost and ease of access, enable businesses to take with the opportunity to take important steps to reduce their anonymity and increase their awareness of their customers, steps that will cost less than a campaign and lead simultaneously to higher profit margins. Their success has spawned new speculation on the acquisition of competitive advantage from companies and the ways in which this can occur with the use of such systems (Cayley, 2008).

Regarding the changes of the micro-environment, they are associated in the particular case with stakeholders. These groups of people participate in social media and companies are easier to meet them compared in relation to the past. Thus, the wishes and needs of each of these groups are identified more easily to be met by the companies. In a market environment, deep knowledge of the environment and behavior of stakeholders as well as the combination of strategic thinking are factors affecting the earnings and profitability of the business.

For these changes caused in the external environment, the companies by participating in social media can take advantage of new opportunities that arise to acquire advantage over their competitors. Besides each company activity, therefore its participation in social media, has some degree of influence on the services provided to the consumer.

Regarding Consumer Behavior, as a scientific field, it includes the study of individuals, groups or institutions and the processes they use to select, use and sell products, services, experiences or ideas in order to meet their needs, as well as investigating impacts of these procedures to consumers and society (Hawkins & Mothersbaugh, 2010, p.6). At a professional and business level, behavioral studies are formed in various ways, as consumers acquire new experiences and differentiate behavioral characteristics depending on the social, commercial and technological developments. Since our era shows a dramatic change in the telecommunications industry, it moves towards a new digital reality characterized by the everyday use and the convergence of different means of receiving and transmitting data, audio and video.

The acknowledgement of this trend, prescribes an important research topic, which relates to how consumer behavior is differentiated to reflect and benefit from the development of the media, particularly the transition from traditional to Social Media. Following the line of reasoning of Anthony Giddens' (1991), an exploration of the consumer behavior is approached based on the idea that people in the modern era, want and need to tell their stories and create their own experiences in order to gain identity and a sense of belonging.

The scope of the present research is to examine if and how consumer behavior is influenced by Social Media and the extent to which it affects consumers’ intention to purchase.

The study includes a literature review which includes the historical evolution of social media, social media definition and basic features

Chapter 1 - Literature Review

1.0 Social Media- Historical Evolution

In the older generation, the term Social Media sounds odd but it might not be, if is taken into consideration that the modern means of electronic social networking is nothing more than the natural evolution of the known mass media.

According to Wirtz (2011:15), as mass media are defined all technical means for communication and information to a wide audience in printed, audio or visual form.

This definition refers to the traditional media of information such as newspapers, TV, radio. Historically the first traditional means of communication was found in 550 BC in Persia and concerned postal services (Briggs & Burke, 2009).

The traditional mass media are information transmitters, which, however, create one direction communication channels, not giving the possibility to the users to share their opinions. With the advent of Web 2.0, the element of interactivity and interactive media came through thereby allowing the active participation of users.

Figure 1: Social Media Historical Evolution

Abbildung in dieser Leseprobe nicht enthalten

Source:http://matetrack.webs.com/SOCIAL/SOCIAL.html

The social element, therefore, as a second component of social media is what differentiates them from the conventional technologies of mass media (Zhang, 2010).

According to Kaplan & Haenlein (2010) social media in the form understood today became known 20 years ago, with the creation of an early social networking site. This page called Open Diary was invented by Bruce and Susan Abelson and aimed at gathering online diary authors in a community. At the same time, the term weblog appears appears which a year later was called blog. In 2003, My Space appears, while a year later Facebook shows up, which due to its popularity enabled the promotion social media enjoyed today.

Figure 2 :Social Media Historical Evolution

Abbildung in dieser Leseprobe nicht enthalten

Source History of Online Social Networks, Eng Harshana Porawagama(2011)

The most recent addition to the glamorous world of Social Media concerns "virtual worlds". These are computationally simulated environments inhabited by three-dimensional avatars. The most famous virtual world right was the application of Second Life. (Kaplan & Haenlein, 2009c)

1.1 Social Media - Definition

Although the applications mentioned in the previous section can be given a sense of what the term Social Media refers to, a precise definition is required to clarify the concept.

A wide range of definitions is given by international literature (Burgess,2010, Chmielewski et al.,2012, Kaplan & Haenlein,2009) revealing the huge interest on the matter of the Academic community but also of the Marketing global family.

Kaplan & Haenlein (2010) in their article «Users of the world, unite! The challenges and opportunities of Social Media», define mass media as a whole of internet applications based on the ideological and technological bases of Web 2.0 and allow the creation and exchange of User Generated Content.

According to Halonen & al (2008) the term social media refers to interaction means among people where by using them they share and exchange content in virtual communities and networks. The above term is identified with the one given by Jones (2009) who suggests that social media are essentially a category of online media where people talk, participate, share while at the same time he notices that through their use, discussion, comments, feedback, exchange and distribution of information to all stakeholders are encouraged.

According to Zhang (2010) within this framework greater emphasis is given on interaction despite content.

Social Media, according to Evans (2008:33) are the democratization of information, since through their use their people become publishers of content and do not remain simple readers. While, at the same time, they form a versatile means of communication among users. Furthermore, social media provide social and emotional support and they are information sources for users (Eyadat & Eyadat, 2010).

Social media is a reflection of the discussions that happen every day, either in a supermarket or in a playground, or in a bar except that they enable these talks to reach a wider audience through digital "speaker» (Eyadat & Eyadat, 2010).

And while on the side of individuals, social media is a way of interconnecting and sharing information and content with other people, their definition from a business perspective is different.

According to the known expert in strategic marketing via internet Sally Falkow, social media is a way for businesses to take advantage of users’ discussions on their brand, products or services, participate in discussions, and then use these data to make better business decisions.As it can be seen from all above the common point running through all social media definitions is the mixture of technology and social interaction for value co-creation.

1.3 Social Media – Basic Features

According to Mayfield (2008) social media have some basic features:

Participation: social media encourage the contribution and comments from interested parties. The participation of users blurs the limits between mass media and the audience.

Openness: the majority of Social Media services is open to feedback and participation while there are rarely hindrances in accessing and using content.

Conversation: in contrast to the traditional mass media that concern only content broadcasting to an audience, Social Media form a bi-directional conversation.

Community: Social Media allow easy and direct creation of communities sharing common interests such as their love of photography or a TV show.

Connectedness:

Most types of social media develop their consistency by using connections with other websites, resources and people.

1.4 Social Media – Categorization

Hundreds of social media meet today on the web, while the emergence of new media grows at lightning speed. Social media can take various forms such as social networking sites, bloggiing, multimedia sharing. Many researchers (Bard 2010, Zhang 2010) attempted to categorize social media by using different bases.

Figure 3: Categorization of Social Media 2011

Abbildung in dieser Leseprobe nicht enthalten

Source : http://www.fredcavazza.net/2010/12/14/social-media-landscape-2011/

Kaplan & Heinlein (2010) are based on the combination of two main elements of the Social Media, social process and media theory, Boyd & Ellison (2008) are based on the interaction and socialization offered by each mean, Owyang (2009) is based on the potential of each instrument. Some of these categorizations are presented below:

1.4.1 Collaborative projects

According to Allen (2011) in this category are classified the web sites in which end users can collaboratively process or add content to a specific topic or objective. For this reason, Kaplan & Heinlein (2010) characterize collaborative projects as the most democratic expression of UGC.

The joint effort of many factors leads to a better result rather the one achieved by each factor individually.

The collaborative projects are differentiated from each other and wikis and social bookmarking are included in them.

Wikis are websites that allow users to add, remove, or edit a text content. Wikipedia is perhaps the most representative example of the wikis category. It should be noted that currently is available in over 230 languages.

Social book marking belongs to the category of collaborative projects. According to Noll & Meinel (2007) through social book marking pages is given the potential of commenting, sharing, collection, classification and labeling of links of interest to users.

Delicious and Reddit belong to this category and enable users to place for example an interesting article at their bookmarks making it so popular and by somehow encouraging others to read it.

An important feature of social bookmarking systems is the term tagging. The tagging allows users to organize their bookmarks in a flexible manner and develop common vocabularies known as folksonomies.

In addition, in this category belong social site news, sites like Digg which enable giving the user the ability to read, vote and comment articles on daily new. Collaborative projects, in general, are one of the main categories of Social Media, because they tend to become the main source of information for consumers (Kaplan & Heinlein, 2010).

1.4.2 Categorization of Social Media Users

According to a research by Forester Research (2010) regarding the use of social media, there are six different types of Social Media users which are the following:

Creator: it is the user who actively participates in social media. S/he publishes content in the blogs, posts video and pictures, participates in forums.

Critic: users who belong to this category are the ones that respond and react in content that other users have created. S/he comments and posts evaluations and comments for products or services.

Collector: S/he organizes the content for himself or for others by using RSS feeds 13, book marking.

Joiner: S/he connects to social media like Facebook.

Spectator: S/he is probably the most common user category. Spectator is the individuals that reads blogs, the views of other users that create videos (e.g. YouTube), read discussions in forums, listens to podcasts and often seeks for comments of other users and visitors.

Inactivate: In this category belong people that do not use social media and they just use the Internet. Naturally, it is understood that the number of users is getting reduced during time since more and more websites integrate characteristically of newest social media.

1.5 Brief Presentation of the most popular Social Media

1.5.1 Facebook

According to a reference written in the article "Online social networks: Why do students use Facebook? "by Cheung & al (2010), Facebook was launched in 2004 by a former Harvard student Mark Zuckerberg and his original aim was to connect all students in a community. Three years later, in 2007, Facebook becomes accessible to everyone, by offering the possibility to all users to create a profile by entering personal information, communicate with friends and create groups of common interest.

Apart from the traditional services offered by a social networking website like mail, sharing comments and photos, through Facebook users can play online games, create virtual worlds, do “like”, write on the "wall" of their friends. In addition there is a special function called "newsfeed" which allows users to learn the latest actions of their friends.

Nowadays, Facebook is the most popular social networking site worldwide having more than one billion members while it is the most popular and has the second place worldwide in the Google search engine.

Facebook is accessed in 70 languages. 55% of Internet users worldwide use Facebook, devoting one out of the seven minutes of their Internet use whereas 2,7 million likes and comments are done on a daily basis.

Facebook is the leading social network having value of 29,11 billion dollars while Youtube follows (18,09 billion) and Twitter (13,30 billion).

YouTube is a powerful website that offers new ways of consumption, creation and sharing video and music (Cayari, 2011). More specifically, it is a web video sharing files, created in February 2005 by three ex PayPal employees, Chad Hurley, Steve Chen and Jawed Karim. In November 2006 it was acquired by Google for billions of dollars.

Users apart from watching and uploading video in the web page, they have the opportunity to comment on videos and songs they listen and indicate whether they like it or not, simply by pressing a button. YouTube by exploiting its popularity (monthly projections exceed 92 billion) has developed marketing activities by offering the possibility to businesses to create their own channel and be advertised through it.

Specifically, 94% of top 100 advertisers, use YouTube to promote their campaigns (Wikipedia.org).

Ιn 2011, YouTube had more than one trillion views, while 70% of its traffic is from users outside the US. YouTube is classified in the third position on the global websites ranking (Alexa.com, 2013).

1.5.2 Twitter

Twitter is known as the «sms internet" and it is the next most known social network after Facebook. It falls into the category of website creating micro-blogging and allows those who have a profile to read and send messages that interest them. The messages are small, like sms messages (140 characters) and are known as "tweets". The members can follow the messages of other users and respond to them.

It was created in 2006 by Jack Dorsey and has since grown rapidly. At the end of 2012, there were more than 465 million active user accounts, each minute 11 profiles are created and 100,000 tweets are sent.

First country in the use of Twitter is the Netherlands while active users are 85,000 Greeks who make 180,000 tweets per day (InNews, 2012).

1.5.3 Linked In

It is a social network for professionals. It enables users to create their own profile, network with colleagues and networks of business partners, communicate and cooperate with qualified professionals. Its main use is free, but there are charges to extra provisions targeting employers who advertise for job positions.

Nowadays, Linked In has more than 150 million users worldwide whereas 2 million are businesses. 75% of users uses it for professional reasons while 50% of users are University graduates (Anson,2012). It is classified as 14th on the global website ranking (Alexa.com,2013).

1.5.4 Blogger

It is a blog creation agency created in 1999 by Pyra Labs and acquired in 2003 by Google. The users publish in it material in the form of text, audio, image. Other users can add comments to published content. A prerequisite for creating a blog is to create a Google account.

1.6 Reasons for using Social Media

Every day millions of users get into social media, they create profiles, even profiles with a short life (Obrist & al., 2008). The international scientific community has made many attempts to comprehend how the user populations selects, uses, disseminates, adopts and accepts the technology of Social Media. Many researchers such as Shin and Kim (2008), Willis (2008), Shin (2008, 2010), Lee (2010) 20, Sin et al (2012) have tried to explore the reasons that lead users to the adoption of Social Media through the TAM model.

The TAM model is the most appropriate tool to explain the reasons that "push" people in adoption and use of social networks due to its effectiveness to explain and predict the adoption of any new technology (Mathieson, 1991). According to TAM the two important factors to adopt the use of a technology is the perceived ease of use and perceived usefulness.

Another theory that can explain better why someone uses media in general and, by extension, Social Media is the theory of Uses and Moral Gratifications (U & G Theory). According to McQuail (1994) there are four drivers: 1) information, 2) entertainment, 3) social interaction and 4) personal identity.

Brandtzæg & Heim (2009) in their research published in the article «Why People Use Social Networking Sites», examined the reasons for using social network websites which are the most popular part of Social Media under U&G theory. The research was conducted in Norway and more than 4.000 participants from who 1200 were chosen so as to ensure the solvency of the research.

It appeared that the most important reason for using social networks was to meet new people and the second top reason was to communicate with friends. Followed in descending order were other reasons such as socialization, to get information for discussion and to contrast opinions with other people. The findings of the research matched the model of U&G theory and shows that the primary purpose of using social networks is social interaction i.e. communication among people.

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