Since customer-managed relationships became very popular, many large and small businesses have engaged in social media marketing strategy. Large organization such as Dell and Dunkin’ Donuts has created Twitter accounts to establish deep relationships with their current and potential customers.Social media enables organizations to conduct many marketing strategies simultaneously. Companies can conduct survey about companies and their products. Also, they put advertisement and movie on site. Public relationship is one of the most important factors to create or maintain “perceived mutual beneficial exchange relationship.”
It is obvious that there are many benefits through social media:
· Cost effective
· Close and deep relationships with current and potential customers
· More traffic to companies website
Although companies must take these advantages, they should not ignore some negative effects. I think that one of the most important issues is customer empowerment. Though social media, customers have been participating in everything such as nature of products, design, as well as pricing. When current and potential customers involve in companies’ marketing strategy, those customer tend to expect very high quality and customized products but low price. Failure to meet these high customers’ expectation hurts companies’ images. Companies have been losing a control, and this issue will affects differently to small business and large companies.
Whether small companies succeed or fail depend on how small businesses control these dissatisfied customers who have strong power ever before.
One of the most important issues is criticism and gossip. These comments negatively affect companies’ reputation, and it is very hard to control these issues for small business. Since large organization have already established strong brand image, people who already have positive image about companies tend to ignore these negative information. However, people tend to heavily rely on negative information about small business because of weak brand awareness.
Social media marketing cannot be separated from word-of-mouth marketing.
According to an article;
“Peer recommendations influence business buyers’ decisions more than any other form of advertising. Some 90% of buyers trust peer reviews and 70% trust online reviews, according to the American Marketing Association. Meanwhile, only 15% of buyers say they trust traditional advertising.”
Word-of-mouth information spreads very fast in collective culture such as Japan. Surprisingly, word-of-mouth information spread much faster than information on the Internet.
In addition, here is new form “Web-Word-of-Mouth”
How can small business control current and potential customers and prevent the spread of negative information? It is possible to omit all negative information and restrict dissatisfied consumers? So, my suggestion is that companies must establish strong brand image before they go into social media. Although low cost and easy accesses attract small businesses, they won’t be able to control empowered customers without strong brand awareness.
Social media marketing is new and very complicated strategy. In today dynamic environment, many people use social network with different purpose, and these purpose have been changing over time. Therefore, Companies must understand how social media works.
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I agree that the negative effects especially criticism and gossip that could potentially destroy the brand created by the company. The use of social networking does create a contingency factor that many companies should take into account. The possibility of re-creating your image/brand might outweigh the potential of creating new relationships with future customers. Social media will create a dynamic mix of new marketing processes that will try and minimize these risk of negative effects of social media.
ReplyDeleteSocial media is a new powerful tool for companies to promote its businesses, even though the negative effects when using it as a marketing tool it is clear that is the modern way of interaction with customers and has transform the way of communicating with them. Social networks allow companies to establish a different form of relationship with clients that can help to create customer loyalty and customer equity among other benefits, as is mentioned in the article below about the advantages of social media for small businesses. Companies have to be part of this digital wave if they don’t want to be out passed by innovating enterprises that are using the web successfully.
ReplyDeleteArticle:
http://socialmediatrader.com/social-media-marketing-for-small-businesses/
Good post Yuki,
ReplyDeleteYou have touch some interesting point in your analysis and I agree with you describing the online social media as the new “World of Mouth World”, as I agree that people use social network with different purpose and company has to take really care of this. But I believe that criticism and gossip are not so bad, for a company, as you write; problem rises for a company when we finished to talk about something (product/service or whatever it could be), not when consumers desire to comment, even in a bad way, products and services of a particular company. Obviously is better a good description than a bad description, but I’m however sure that, in any case, company prefer some comments about it instead the silence. I agree with you that small business has more to lose, compare with big company with strong brand image, using social network as part of their marketing strategy; but build a strong brand image is fundamental not only in the case you want to enter in the arena of the social network, but every time a company desire a long and profitable relationship with his customers. Build a strong brand image is a must, also if you just want to draw your marketing strategy just with other channels than social network. Small business’s risks using social network could be high, but life is a risk and if we desire some results from our business, something we have to risk. I think that online social media are a wonderful possibility to communicate for a small business, but is it a new arena and you can’t enter in a new arena without be prepared. Is a new game with personal regulations, and you get to understand the rules before playing. But is a game where small business has to be part. In my blog (http://marketingsquare2011.blogspot.com/2010/11/respect-game-respect-rules-online.html) I suggest some steps that small business should consider before entering in online social media marketing strategy. Give a look and let me know what you think about.
Lorenzo
I think that best case, advertising on social media sites may be useful “for brand awareness for some products and services”. This type of advertising is a long-term commitment to the chosen target group. It is not like people are not going to be satisfied with those advertisements, everybody have different type of branding sense and that's what every one look at a particular product. When the customers feel that the company is devoting resources, effort and attention to enhancing relationships, they are more likely to become a fan of that company’s products or services. This way by providing more benefits and involving consumers into conversation and chatty tones can turn some negative customers into positive. Also when you see the advertisement again and again that product finds a permanent place into your mind and whenever you go to store to buy that product you look for the particular company’s product.
ReplyDeleteSocial media is a new powerful tool for companies to promote its businesses, even though the negative effects when using it as a marketing tool it is clear that is the modern way of interaction with customers and has transform the way of communicating with them. Social networks allow companies to establish a different form of relationship with clients that can help to create customer loyalty and customer equity among other benefits, as is mentioned in the article below about the advantages of social media for small businesses. Companies have to be part of this digital wave if they don’t want to be out passed by innovating enterprises that are using the web successfully.
ReplyDeleteSource:
http://socialmediatrader.com/social-media-marketing-for-small-businesses/