The innovations of Facebook and Twitter has made social networking an attractive tool for small businesses. These networks has made it possible for in order for businesses to facilitate "beneficial exchange relationships" that add value to their product/service. The tool is extremely attractive to small businesses because of the relatively cheap start-up cost and the potential for attracting new customers through the social networks. The use of social networking has led to businesses increasing their market share in their respective industry. Specifically, the use of Groupon (a social network that provides group purchase discounts to consumers) has made it possible for small businesses to gain market share and maintain this market share even after the promotion was over. The following article shows how a restaurateur in Chicago, Dan Yoo, was able to utilize Gourpon to not only increase sales through the use of promotions but also maintain the increase in sales even after the promotion was over due to increase of awareness of his business.
On the other hand, the use of social networks has drawn negative feedback from various sources. Although the relatively low start-up cost of these networks the maintainability of the networks require extensive time and effort (time=money). The possibility of negative consequences from the network could potentially reach a large amount of brand loyal customers, and therefore could potentially destroy the image of the brand. All in all, social networking is here to stay and businesses are finding new ways to utilize the networks in order to maximize their profits, maintain relationships, and provide added-value to their consumers.
For small businesses, social networks are an important tool to promote businesses and enhance market share. Using Groupon could really help a business expand to both new customers and also expand globally. However, as you mentioned, there are several negative effects that can result from joining social network sites. As long as an organization effectively controls the content and does not allow offensive comments, it can succeed using social media.
ReplyDeleteGroupon is a great example of how small businesses could use social media to promote themselves without spending money in advertising, but it must be said that Groupon does take a cut from the purchases made by its users. Some consumer goods companies have another approach to social networks; they are directly offering special discounts and coupons to their followers or fans through Facebook and Myspace, similar to those offered in traditional media like newspapers and magazines, with the difference that companies don’t incur in direct expenses for those offered through online social media.
ReplyDeleteI totally agree with you and I especially liked that you mention brand loyalty because it is one of the most important functions of the social networking for businesses.
ReplyDeleteI was watching TV yesterday and I saw the Tempur-Pedic commercial called "Ask Me" (http://www.youtube.com/watch?v=wjQ10-rUlH8) that encourages prospect clients to go to the social networking profiles in Facebook and Tweeter to read the comments about their mattress unedited from real costumers. For me, this means that this company is so sure about the effectiveness of this product that they their costumers to share their experiences in these channels to promote their products through brand loyalty and consequently more sells.
Groupon can be an effective way to get the word out about a promotion or just a product in general.
ReplyDeleteBut like you said in your blog, there has been plenty of negative reaction to websites like this. I personally received Groupon emails daily. At first it was kind of cool, I was interested to see if I could get any good deals. But after about a month and a half, I had not purchased one Groupon. Not one email they sent me was any product or service I had any interest in.
Needless to say I took my email address off the Groupon list. The emails became annoying and eventually I just stopped reading them.
Advertisers have to find a way to appeal to the largest group possible when using social media, which is tough to do. It's the exact reason why people would generally prefer no advertisements on social media sites.
Social network have surely revolutionized the way people see marketing. This new marketing medium has a one to one interaction with customer. Customer can feel closer to brand. They can bring changes to the upcoming products. And companies are now taking this medium seriously. Companies try to launch their products prototype in these marketing platforms and based on consumer reaction they bring products to markets. The power of this medium is so immense and fast that a single tweet can be followed by millions of users and they can get instant message on what’s coming next. There can be criticism on how people use these networks to do so many other activities apart from marketing but this would not affect marketing. Also when people say it requires continuous time and resources to keep up with current markets and inform consumers on the list of events and activities. This is nowhere close to amount of Money Company’s use on outbound marketing activities like TV commercials or brand endorsement activities.
ReplyDeleteI agree with every single aspect. I like the comparison you do with ancient times, in fact the so called word-of-mouth, in my humble opinion, is the cheapest and most efficient way of advertising. The “modern social media” such as Facebook, Google and twitter can definitely increase small biz exposure. Moreover, of the coolest features of “social media” is along with on-line advertising tools one can target customers in a certain geographically area and attracts them to its company page.
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