THE EFFECTIVENESS OF SOCIAL MEDIA MARKETING TO BUSINESS OWNERS PDF

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1 Table of Contents CHAPTER I ..................................................................................................................... 4 Introduction .................................................................................................................. 4 Background of the St...

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Table of Contents CHAPTER I ..................................................................................................................... 4 Introduction .................................................................................................................. 4 Background of the Study .............................................................................................. 4 Statement of the Problem ............................................................................................ 5 Objectives of the Study ................................................................................................ 6 Scope and Limitation of the Study ............................................................................... 6 Definition of Terms ....................................................................................................... 7

CHAPTER II .................................................................................................................... 9 Review of Literature and Theoretical Framework ......................................................... 9 Theory Base............................................................................................................... 12 Conceptual Framework .............................................................................................. 13 Research Assumptions /Research Hypotheses ......................................................... 14

CHAPTER III ................................................................................................................. 15 Methodology .............................................................................................................. 15 Method Used.............................................................................................................. 15 Study locale ............................................................................................................... 15 Sources of Data ......................................................................................................... 16 Data Gathering Instrument ......................................................................................... 16 Sampling Technique .................................................................................................. 17 Procedure of the Study .............................................................................................. 17 Statistical Treatment .................................................................................................. 18 Timeline of Activities .................................................................................................. 19 Barriers to Success .................................................................................................... 20

References ................................................................................................................... 21

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List of Figures Figure 1. Facebook Tops the Chart ........................................................................... 11 Figure 2. Time dedicated for socializing Figure 3. Purpose for using social media platform .................................................. 12 Figure 4. Conceptual Framework................................................................................ 13 Figure 5. Map of Davao City ........................................................................................ 16

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List of Tables

Table 1. Profile of Respondent

............................................................................... 11

Table 2. Research Timeline ......................................................................................... 19

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THE EFFECTIVENESS OF SOCIAL MEDIA MARKETING TO BUSINESS OWNERS

CHAPTER I

Introduction Social media marketing is the use of social media platforms and websites to promote a product or service. It is a new phenomenon that has changed how the business environment operates and helps businesses gain access to resources that were otherwise not available to them (Jagongo, A. et. al, 2013).

This first chapter provides the reader the background of what the research study is all about. It will give you a closer look of the topic specifically on the effectiveness of social media marketing as marketing strategy or tool. It will also provide a general insight of the problem that will be addressed in this study. Background of the Study For the past few years, the power of internet has brought a lot of possibilities to the world, making it easier for business owners to bring their products and services accessible to the public. When people saw the potential of internet, new approaches were developed and companies started to create websites to communicate with their customers online. Now, acquiring a social media account, such as Facebook, Instagram, Twitter, blog sites and various company websites, has been the latest trend in the market despite of some marketing risk that may arises.

Direct marketing is the most common method of advertising products and services. These include personal selling, TV commercials, radio announcements, and print advertisements in magazines or newspapers as well as billboard ads. However, this type of marketing is considered as the most expensive way of promoting a company’s products and services. There are still business owners who conduct direct marketing, a traditional method of selling and promoting products and services to existing and potential customers. Some even rent an office or stall in malls where they can display their products and so people can see and notice them.

Today, online marketing has become increasingly important to small businesses of all types. In the past, marketing online was something that local bricks-and-mortar businesses could justifiably ignore. It didn't make sense to waste time and money on online marketing when all your business was local. With online marketing and direct marketing, there can be seen great advantages for companies. Online marketing can spread a vast range of information to customers, but

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also has disadvantages due to unsecured online transactions and presence of online fraud. Meanwhile, direct marketing is the most expensive and time consuming method of promoting product and services.

Statement of the Problem With the rise of the internet, social media marketing has become one of the most powerful tools and cost-effective ways for promoting products and services. Print media and TV advertising has been declining for the past few years due to the rise of the internet.

People now, are more focused on spending time connecting to social media accounts than reading newspapers, listening to radio broadcasts and watching TV. Some people are also engaged in online shopping because it’s hassle free.

With these, direct

marketing has become less significant and internet is rapidly increasing as one of the most important media for sharing information and as a marketplace for businesses and customers. As a result, companies create their own blogs or company websites to get closer to their target markets.

With this, the research study will specifically answer the following questions:

1. What is the difference between direct marketing and social media marketing;

2. What type of social media platform used by the company to reach their target market;

3. How influential social media to customers;

4. How do they manage online fraud and other marketing risk using social media marketing;

5. How often it is necessary to maintain and update a social media platform;

6. In what way social media help business owners in promoting their products and services; 7. How online marketing affects the growth of a business, including its’ profit and return of investments; and 8. Why business owners opt to use social media marketing instead of direct marketing

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Objectives of the Study The objective of this research study is to: 1. Identify the role of social media marketing and its’ impact to businesses;

2. Know why most companies use social media marketing as marketing strategy instead of direct marketing;

3. Identify and evaluate how social media marketing affects the growth of a business and increase its’ profit and brand;

4. Examine and evaluate the effectiveness of social media marketing to promote products and services;

5. Identify the pros and cons of online marketing and direct selling; and

6. Examine why direct marketing is becoming less significant and why social media marketing becomes the most famous marketing strategy for business owners Scope and Limitation of the Study The scope of this study will focus on the impact of social media marketing in increasing a business’ sales and profit. It will also measure how often an employee spends in social media and what type social media tools are they using to promote their products and services. However, recipient of this study will only be limited to small business owners in Davao City who started their business for more than one year. A total of fifteen (15) recipients for this study will be interviewed and must not have a marketing or public relations department. Big companies that have used direct marketing and social media marketing successfully will not be included in the research due to time constraints.

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Definition of Terms Social Media – are computer-mediated technologies that allow individuals, companies, NGOs, governments, and other organizations to view, create and share information, ideas, career interests, and other forms of expression via virtual communities and networks.

Social Media Marketing - the use of social media platforms and websites to promote a product or service. Direct Marketing – the business of selling products or services directly to the public, e.g., by mail order or telephone selling, rather than through retailers; a form of advertising which allows businesses and nonprofit organizations to communicate directly to customers through a variety of media including cell phone text messaging, email, database marketing, fliers, catalog distribution, promotional letters and targeted television, newspaper and magazine advertisements as well as outdoor advertising. Business – also known as an enterprise, company or a firm is an organizational entity involved in the provision of goods and services to consumers. Small business – a business having fewer than 500 employees (SBA, 2011). Internet – the global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link billions of devices worldwide. It is a network of networks that consists of millions of private, public, academic, business, and government networks of local to global scope, linked by a broad array of electronic, wireless, and optical networking technologies. Marketing Strategy – the foundation of a marketing plan that will helps a company identify their best customers, understand their needs and implement the most effective marketing methods. Profit – a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something. Brand – is a set of marketing and communication methods that help to distinguish a company from competitors and create a lasting impression in the minds of customers. Products – an article or substance that is manufactured or refined for sale.

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Sale – a transaction between two parties where the buyer receives goods, (tangible or intangible) services and/or assets in exchange for money.

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CHAPTER II

Review of Literature and Theoretical Framework Social Media Marketing in a Small Business

According to Cox, Sarah (2012), it was essential that small businesses understand today’s social media driven environment. They should also know the strategies behind using social media such as Facebook and Twitter for growing their business and to stay competitive and reach their target markets. However, many small businesses did not have a strategy when they began using social media.

The research was conducted to acquire an initial understanding on how small businesses were recognized for using social media to grow their business, and increased their customers.

The respondent of this study was Bandee, an Internet-based accessory retailer and wholesaler established in 2009. The results showed that with the help of social media, Bandee doubled the number of their clientele who were aware about their products and services. With that, they also considered social media important for communicating with their customers and creating relationships. It also enabled Bandee to develop many relationships with other businesses and clients that would not have normally developed.

The study also concluded that social media marketing increases brand exposure, sales and business profit.

Social Media and the Impact on Marketing Communication

Social media became a communication tool that helped many companies find new possibilities to promote their products and services for the past few years. The purpose of the research was to study how social media influence the marketing communication of companies (Frey B. and Rudloff S., 2010). Two manufacturing companies, one social network platform and one marketing agency were interviewed for the completion of the research. Data collection was also conducted and a qualitative research approach was used combining different case studies in the research strategy.

The overall result showed that the communication via social media was still in the early stages of its development by that time though companies agreed that social media was an effective tool to exceed and support marketing communication. Other

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findings showed that social media still had huge growth potentials regarding the differentiation and specification of different platforms, because not all of them were suitable for every company.

Study of the Effectiveness of Online Marketing on Integrated Marketing Communication

According to Pawar, AV. (2014), Integrated Marketing Communication (IMC) is a marketing concept that ensures all forms of communication and messages are carefully linked together, integrating all the promotional tools, so that they work together in harmony. It is also a concept that makes all the marketing tools work together as a unified force rather than work in isolation. It makes the use of entire marketing efforts in the form of advertising, public relation, personal selling, sales promotion, internet marketing , direct marketing in order to generate maximum impact on the target audience at the minimum cost.

The study was conducted to understand the importance of Integrated Marketing Communication., online advertising in changing market scenario and understand the reasons for growing popularity of online marketing. It also focused on analyzing the effectiveness of online marketing as compared to traditional marketing tools and identify the limitations of online marketing as IMC tool.

To attain the objectives of the study, the researcher used a descriptive research design where data was collected from secondary as well as primary sources. Data collected was then analyzed with the help of statistical software SPSS 17.0 and Ms-Excel Add-In Data Analysis. Statistical tools used for the analysis were Mean, Median & mode, Standard deviation, Skewness & Kurtosis.

The study showed that respondents relied upon more than one medium in order to enhance their brand related knowledge. They used the combination of various sources for making final purchase decision and heavily rely on modern marketing tool i.e. online advertising. It was also revealed that the main reason for the growth of online marketing was the increasing literacy of people about internet. Internet was identified as truly advantageous and can serve various purposes mainly for social networking, online shopping & media sharing (photo, music, and video).

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Effectiveness of Social Media as a Marketing Tool

Social Media Marketing is about understanding how technology is making it easier for people to connect socially with their social networks and how your business can profit from that understanding (Bashar, A, 2012). The study was based on descriptive research design and questionnaires were provided to know the point of view of respondents regarding the extent of social media that helps consumers in buying decision making.

First part of the questionnaire contained information regarding demographics and usage pattern of social media of the respondents. Second part had series of close-ended and indirect questions which were based on impact of social media in making consumer buy a product and expectation from such media. The survey was conducted online through social networking sites (Facebook, Orkut, Twitter, LinkedIn, Hi5, Bebo etc.) and a total of 150 responses were collected. Results showed that Facebook was the most popular social networking site for the respondents. Orkut and twitter got the second and third positions respectively. For visual representation of finding and results bar charts, pie charts and tables etc. were used.

Table 1. Profile of Respondent

Figure 1. Facebook Tops the Chart

*at 95% the two variables are significantly different

Other findings showed that most people spend more than an hour online! Figure 1.2 clearly showed us how important for the marketers to exploit the situation by making workable marketing strategies. Figure 1.3 showed that 58% of the respondents in the survey used such platforms to connect with friends, 24% were exchanging their views and experiences on various products/services and others apart from just playing games and participating in contests (16%).

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Figure 2. Time dedicated for socializing

Figure 3. Purpose for using social media platform

Results also showed that younger people were adopting social media with a pace that was never before in the past. It was also found out that there was almost no variability among the social media network users on the basis of gender and that almost every social media users who were respondents in this case used to go to brand pages to learn more about the product/services, to learn about the exclusive offers, and to find the reaction of their friends and peer on the selected brands.

There was also a gap between consumer expectations and actual delivery at social networking websites. Consumers did not get the information timely and adequately. There were questions also which were not answered by the brand pages in the speculative time frame of consumer. Theory Base It is stated that a research will work well with existing theories by transforming older theories into conditions. Integral models and theory for the topics related to social media marketing were hardly used due to a lack of suitability. Since Internet is developing rapidly, it is important to review studies made by previous researches and come up with a new theory or invent or implement new theories for this particular study.

The theory will be based on existing related literatures applicable for this study. The theory has to deal more with the insights of how social media affects the performance of a business based on the growth of their profit, sales, and customers and among others. Furthermore, there have to be entirely new approaches in this study, because

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some of the existing theory is just outdated and not useful anymore, even if one transforms it.

Con...