Review of article on Social media: oversold and overrated

The article by Mark Ritson on social media being over sold and overrated in the October-December issues of professional marketing by Australian Marketing Institute, is talking about how many companies overestimate the use of Social media tools in marketing to communicate their products to customers. He says that there are revolutionary new ways for companies to communicate and build relationships with customers around brands and products, with the help of Social media there is also the overlooking fact that meaning companies have just jumped on the ban wagon and sent to much time and money on this new form advertising to the old print, TV, radio ways of communicate their product offerings.

He gives the example of Westpac bank that that started a Twitter account, to serve to answer customer’s questions in real time; they have team of six employees to do so. The problem is that while 6,400 customers following on twitter might seem large it is only 1 in every 160 of their customer base, about 0.6% and does it really justify the employee’s time and company money spent on such a small percentage of their customers.

Another example is that of Pepsi in USA who instead of going with their traditional advertising of 150 million dollars spent on Super Blow TV advertisements they used 50% of their branding budget on a social media. They created a Pepsi Refresh Project on Facebook were customers would upload causes to be voted on by all other members and winners would receive   funding by Pepsi. Coke-Cola is Pepsi biggest rival and after reviewing the sales data for that year Pepsi could see that they had lost 5% market share to Coke and their sales have dropped, even that there were four million likes on Facebook it look like Coke using TV, print and radio advertising had more of impact on customer buyer decisions.

Now these article is not saying that social media is bad way to promote and build relationship with customers about products and your brand. It is saying that you wouldn’t just believe all the hype of other companies that have had successful campaigns with using these tool, but maybe you should look at your over ways of communicating product offers, such as TV, radio, print , as well as social media and see which is the best way to communicate your message.   

So marketing managers should beware of the pitfalls of using social media and that more traditional methods of advertising are still very effective, and not just jump on the bandwagon with the successful social media campaigns by other companies, as their objects an goal could be very different form your own. They should judge all the methods of communicating a message to their customer and work campaign that can be used across all modes of advertising not just one, to better communicate to their audience and achieve their goals and objects.

Social media marketing

Social networking websites allow individuals to interact with one another and build relationships and share information and ideas. When products or companies join those sites, people can interact with the product or company. The interaction feels personal to the users, because of their previous experiences with social networking site interactions with other and now with other that feel the same about a product or service can talk about their experiences and views.

Social networking sites and blogs allow individual followers to “retweet” or “repost” comments made by the company about a product being promoted to share their views. By repeating the message, all of the user’s connections are able to see the message the post, therefore reaching more people as they post their own views. Social networking sites act as word of mouth tool. Because the information about the product is being put out there and is getting repeated by loyal customers, more traffic is brought to the product/company to be viewed.

 Through social networking sites, products/companies can have conversations and interactions with individual followers. This personal interaction can instil a feeling of loyalty into followers and potential customers. Also, by choosing whom to follow on these sites, products can reach a very narrow target audience if the wish.

Twitter

Twitter allows companies to promote products on an individual level. The use of a product can be explained in short messages that followers are more likely to read. These messages appear on followers’ home pages. Messages can link to the product’s website, Facebook profile, photos, videos, etc. This link provides followers the opportunity to spend more time interacting with the product online. This interaction can create a loyal connection between product and individual and can also lead to larger advertising opportunities. Twitter promotes a product in real-time and brings customers in.

Facebook

Facebook profiles are more detailed than Twitter. They allow a product to provide videos, photos, and longer descriptions. Videos can show when a product can be used as well as how to use it. These also can include testimonials as other followers can comment on the product pages for others to see. Facebook can link back to the product’s Twitter page as well as send out event reminders. Facebook promotes a product in real-time and brings customers in.

As marketers see more value in social media marketing, advertisers continue to increase sequential ad spend in social by 25% of thier marketing strategy. Strategies to extend the reach with Sponsored Stories and acquire new fans with Facebook ads continue to an uptick in spend across the site. The Facebook  attributes 84% of "engagement" or clicks to Likes that link back to Facebook advertising they offer. Today, brands can increase fan counts on average of 9% monthly, increasing their fan base by two-times the amount annually depending on how they use Facebook to market thier products.

Add example of Social media marketing that I have been using to promote a local business is

https://www.facebook.com/pages/Autotech-Canberra/201207209901803

Where I have been building a social profile of the company for customers to follow events, car projects and new products being used by the company. As you can see the fan base has been growing since the beginning of the year and will be used to keep customer update on events, new product and services and promotions offered by the company. Will act as a relationship building tool between the company and customers so they can keep loyal customer and rewarded them with offers, and discounts and give information about products and events that are coming up.

 

The Four 'P's

The 'four Ps' consist of the following:

 Product - A product is an item that satisfies the consumer needs or wants. It is a tangible good or an intangible service. Intangible products are service based like the tourism industry, the hotel industry and the financial industry. Tangible products are those that have an independent physical existence. Typical examples of mass-produced, tangible objects are the motor car and the books. A less obvious but ubiquitous mass produced service is a computer operating system or video game.

 Every product is subject to a life-cycle including a growth phase followed by a maturity phase and finally an eventual period of decline where sales fall. Marketers must do careful research on how long the life cycle of the product they are marketing is likely to be and focus their attention on different challenges that arise as the product moves through each stage. The marketer must also consider the product mix. Marketers can expand the current product mix by increasing a certain product line's depth or by increasing the number of product lines. Marketers should consider how to position the product, how to exploit the brand, how to exploit the company's resources and how to configure the product mix so that each product complements the other. The marketer must also consider product development strategies.

 Price – The price is the amount a customer pays for the product. The price is very important as it determines the company's profit and hence, survival. Adjusting the price has a profound impact on the marketing strategy, and depending on the price elasticity of the product, often; it will affect the demand and sales as well. The marketer should set a price that complements the other elements of the marketing mix.

 When setting a price, the marketer must be aware of the customer perceived value for the product. Three basic pricing strategies are: market skimming pricing, marketing penetration pricing and neutral pricing. The 'reference value' (where the consumer refers to the prices of competing products) and the 'differential value' (the consumer's view of this product's attributes versus the attributes of other products) must be taken into account.

 Promotion - represents all of the methods of communication that a marketer may use to provide information to different parties about the product. Promotion comprises elements such as: advertising, public relations, personal selling and sales promotion.

 Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations.

Place - refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution. Various strategies such as intensive distribution, selective distribution, exclusive distribution and franchising can be used by the marketer to complement the other aspects of the marketing mix.

Applying the four P’s to the new Call of Duty, Black Ops 2 game, made by Activision and Treyarch games.

http://www.youtube.com/user/CALLOFDUTY/custom

The product is Intangible product as it is the experience of the game that Activision is selling to its consumers, of being in future war. They also add tangible to the product to be sold as it comes in a package case or can come with some tangible objects in collectors pack( such as cards, book, little toys, etc.) to add more of feeling that the consumer is receiving some of value and not just something they can’t hold.

Price there is no pricing on the advisement, by there is option to per order the product which would take you to a game order site, such as EB or Game to order the game and would follow the normal pricing stagey of new games, be priced at the high end as price doesn’t matter there is always massive demand for these games.

Promotion is being fully done online and video game show now as it is the lunch of new game tailer. The online presence is through the use of you tube. The game web site, other video game web sites, such as IGN, G4TV. It will move into other methods of advertisements being in print in magazines and billboards, TV and some radio as all previous Call of duty games have been promoted this way. But we can see I very large focus on creating hype and marketing the game online as many uses of video games are heavy uses of internet services such as, YouTube, Facebook, game sites etc. . . .    

Place is used by linking the online advertisement to online stores to pre order the game. They will use other forms of order of in store where you can pick up the game on release date and that online orders can be sent out to you or picked up in store.   There channel of distribution would be form the game creators to the factory to be made, to middle sales man, to store outlets or delivery to online orders, to the customers.

To ways of looking at culture Factors when entering an international market on the case of Foster’s brewing up it's asian strategy

Prior to the plan to invest in the Chinese market Foster’s had done market research on how they products and brewery’s would develop and sell in the market, the information was gathered in 1930’s and showed that China wasn’t ready economically or technologically at this time for Foster’s to be successful in the market yet but had changed in 1990.

China was seen as large and potential market for the bear market, and future grow of Foster’s 1990. This was because that around quarter of the world population were here at this time and growing, and was having a dynamic economic grow, as well as the Chinese authorities were encouraging Foreign investments with incentives. This was seen by Foster’s as the economic development of China was growing so was the disposable income of the population, and then Demand for beer would grow in the market with a growing young population.

When choose and assessing a foreign market for entry and expanding operations a company must look at, variety of factors including market potential, levels of competition in the market¸ the legal and political environment, socio-cultural influences when assessing a foreign market for entry.  Foster’s choose to do this with a Joint Venture with local production and market agents.

Socio-cultural influences should also be considered to see what cultural differences exist between the firm and host country market, and how this would affect products in the market. Socio-cultural factors are such as religion, customs and beliefs, values, langue and social standings.

Example of these is of Hall’s low-context/ high-context approach, as Australia would been seen as low context and China is high context. Low context cultures is one in which a speaker explicitly convey message to the listener. While high context cultures, is that the context of the conversation occurs is as important as the words spoken, and cultural clues are important in understanding what is being communicated. A society type of culture will have impact on its business behaviour.

Another way of assessing a market for entry is Hofstede’s five dimensions this would have given Foster’s knowledge of how compatible and successful their products and operations would be In the Chinese market.

The first is that of Social orientation which is individualism (the culture belief that the person comes first) that of Australia, and collectivism (the belief that the group comes first) that of China. Foster’s would have been able to see that the Chinese make choices as group, as Australia their home culture makes them as individuals.

The second is power orientation, refers to the beliefs that people in a culture hold about the appropriateness of power and authority in hierarchies such as in business.

 The third is uncertainty orientation is about how people of a culture feel about uncertain and ambiguous situations.

The fourth is goal orientation, how the people are motivated to work towards goals.

The last is time orientation and is extent in which members of a culture adopt long term or short term outlook on goals, life, and concerns of others.

In the case of Foster’s they could see that the Chinese market differed from their home market in Australia because, they made choices base as group or family , the younger members would respect decisions of older members about products, were uncertain about their products, and it would take time for the customers to adopt the new products offered by Foster’s. And that because of the differences in cultural there were problems with the how the products were distributed and made, as their partners did not show the same View on time as fosters did, so lead to problems in production and goal objects. As you can see it is not just how, who and when you are going to market products to new customers but also involves evaluation of new market in size, entry mode, and social and economic factors that play a large role in success of market entry and market growth internationally.  

Relationship marketing

Relationship marketing

Relationship marketing emphasizes customer retention and satisfaction, rather than sales. It differs from other types of marketing as it recognizes that is long term value form customer relationships, and extends its methods of communication beyond just advertising and sales promotion.

 With the growth of social media and the internet relationship make has evolved, it has made it easier for companies to track the likes and dislikes of their customers, where they live and how often they buy products.

Satisfaction

The Relationship marketing relies upon the communication and acquisition of consumer requirements solely from existing customers in a mutually beneficial exchange usually involving permission for contact by the customer through an "opt-in" system. With particular relevance to customer satisfaction the relative price and quality of goods and services produced or sold through a company alongside customer service generally determine the amount of sales relative to that of competing companies. Although groups targeted through relationship marketing may be large, accuracy of communication and overall relevancy to the customer remains higher than that of direct marketing, but has less potential for generating new leads than direct marketing and is limited to Viral marketing for the acquisition of further customers.

Retention

A key principle of relationship marketing is the retention of customers through varying means and practices to able to ensure repeated trade from pre-existing customers by satisfying requirements and needs of customer , making a mutually beneficial relationship. Can use a technique to counterbalance the new customers and opportunities with current and existing customers as a means of maximizing profit and counteracting, which new customers gained in older direct marketing oriented businesses and older ones are retained by relationships. This process of can be less economically viable than just retaining all or the majority of customers using both direct and relationship management as new customers requires more investment.

Companies using relationship marketing well redirect or allocate large amounts of resources and attention towards customer retention. Markets with increasing competition it may cost 5 times more to attract new customers than it would to retain current customers. As direct or "offensive" marketing objects requires much more extensive resources and threats form competitors.

Customer retention efforts involve considerations such as the following:

1. Customer valuation – describes how to value customers and categorize them according to their financial and strategic value so that companies can decide where to invest for deeper relationships or need to be served differently or even terminated.

2. Customer retention measurement –a company's "customer retention rate". This is simply the percentage of customers at the beginning of the year to the ones still at the end of the year. This could be increase in retention rate from 80% to 90%, by doubling of the average life of a customer relationship from 5 to 10 years. This ratio can be used to make comparisons between products, between market segments, and over time.

3. Determine reasons for defection – Look at the root causes, not just mere symptoms. Other techniques include the analysis of customers' complaints and competitive benchmarking (

4. Develop and implement a corrective plan – This involves actions to improve employee practices, using benchmarking to determine best corrective practices, visible endorsement of the management, adjustments to the company's reward and recognition systems.

Application Relationship marketing and traditional marketing is not mutually exclusive and there is no need for a conflict between them. Most firms blend the two approaches to match their portfolio of products and services. As most products have a service component to them and this service component has been coming more need today.

Types of relationship marketing

Internal marketing Relationship marketing also stresses what it calls internal marketing. This refers to using a marketing orientation within the organization itself. It is claimed that many of the relationship marketing attributes like collaboration, loyalty and trust determine what "internal customers" say and do. According to this theory, every employee, team, or department in the company is simultaneously a supplier and a customer of services and products.

Referral marketing is developing and implementing a marketing plan to stimulate referrals. It can take months before you see the effect of referral marketing,.

Marketing to suppliers is aimed at ensuring a long-term conflict-free relationship in which all parties understand each other’s' needs and may exceed each other’s' expectations. Such a strategy can reduce costs and improve quality.

Influence markets involve a wide range of sub-markets including: government regulators, standards bodies, lobbyists, stockholders, bankers, venture capitalists, financial analysts, stockbrokers etc. These activities are typically carried out by the public relations department, but relationship

Live-in Marketing is a term used to describe a variant of marketing and advertising in which the target consumer is allowed to sample or use a brands product in a relaxed atmosphere over a longer period of time.

These are only a few of different kinds of relationship marketing to give idea of what they do and how relationship marketing works.as you can see relationship marketing is concerned with building relationship with customers and supplier,  to either gain return customer or have a better supply chain to offer better value to customers.

Value chain

Value chain

The value chain is a concept from business management developed by  Michael Porter, the goal of the value chain is to look at how firm’s business activities can create value  to their products as the reducing costs of business activities to increase profit and efficiency.

The value chain is analysis of a Firm Inbound logistics, operations, and outbound logistics, Marketing and Sales, Services  that are activities that add value to products and can create a competitive advantage for a firm. The support activities of a firm, Procurement, technology development, human resource management and the firm infrastructure that can be more efficient to gain cost savings.

Inbound Logistics, this includes the receiving, warehousing, and inventory control of product or the raw materials need  to make them.

Operations, are the facilities that are used to create value to the products form  Inbound Logistics, e.g. Toyota has manufacturing plants so that they can to steel into cars.

Outbound Logistics, this how a firm gets their product to end user (the customer), by transport, warehousing , etc.

Marketing and Sales, the activities associated with promoting, advertising, selling the needs and benefits of a product to get consumers to buy.    

Service, the add extra’s to sell value of a product such as repairs services, warranty and customer support.

Support Activates, these are what help the above to faction and support them.

 Procurement, are the purchasing of raw materials and other inputs to made in value add products.

Technology Development, this is any research and development, technical process,  and technology bought by the firm to support the value adding operations.

Human Resource management, the activity of recruiting, hiring, development of staff.

Firm Infrastructure, the firm’s areas of legal, finance, quality and management  etc.   

After a firm has done analysis on all of this factors they can see whether there is a better way of adding value to their product, such as cheaper suppliers or distribution methods or if they can cut costs to the firm by making the Support activities more efficient by adding new technology to make the production time fast or higher. Once one or both of these have been done the cost of business goes down making the firms products more competitive and increases their profitability.

Maslow’s Hierarchy of Needs

Maslow’s hierarchy of needs is most probably the most well know motivation theory he hypothesized that within every Human there existed hierarchy of five needs. The five needs are levels which each level is a stepping stone to the next need in the hierarchy. That is that once the basic needs are meet they would progress to the next level of needs.

 The five needs in the Hierarchy are Physiological needs; are the needs of hunger, thirst, sex, shelter and other basic needs to live.

Safety needs; are the need to feel safe form physical and emotional harm.

Social needs; are the need to have a sense of belongingness, affectation, acceptance, and relationships within our lives.

Esteem needs, are the needs to have self-respect, achievement and autonomy internal needs, and the external needs to have attention, status and recognition. 

Self-actualization is the need, drive and ability to become the best we can be, which includes growth, reaching our potential, and self-fulfilment.

Maslow’s Needs Hierarchy can all so be used to help explain the needs of consumers when wanting to purchase products whether they are goods or services. As the model explains why people are driven to meet particular need at any time, can be used by marketer to target the needs of consumers in demographics age, income, sex as  needs in Maslow’s hierarchy meet different segments of these.

Example is two different  car advertisements for Toyota and Nissan witch focus on different needs of Maslow’s Hierarchy to target Consumers.

The Frist is that of Toyota  with their safety first advertisement

 

By watching this Advertisement we can see that Toyota is focusing their advisement on the Safety needs in Maslow’s Hierarchy. As they are using glass crush test dummies with glass insides to promote that Toyota has the safest cars on the market and tested in the most realistic ways to meet human safety. The choice of music used in the advertisement is to make you think back when you are child, when very think was safe and fun.

The advertisement is for the Nissan R35 GTR

 

This Advertisement by Nissan focus on the Physiological needs with the portrayal that the car is sex , by the way they show the imagining and design of the car.

The Esteem needs by shower that the car is powerful, advanced and is high performance car, this done by showing the car to performing in different conditions, the quotes form magazines that come up, and the choice of music used as it relates to would of the most watch Import and car movies of all time Tokyo Drift theme song. It meets esteems needs by saying that if you own this car you will get respect and confidence and have a sense of achievement(witch I japan owning car like this mean you have power, wealth and stats).

Meets the needs of Self-actualization by saying that the car will make you the best driver you can be on any road condition, by showing how well it performs on each and that anyone can do so and that it’s so  technologically advanced it makes any driver great no matter where they are.

As you can see Maslow’s Hierarchy of needs can be used to break customer needs into segments to better target them through advertisements, to meet the wants and needs of the target make by selling the needs ofthe product with Maslow's Needs Hierarchy.