The Growth in the Use of Social Media

The growth in the use of social media has changed the relationship between marketers and customers of brands. Some suggest that marketers have lost control over their brands, and now have to participate in a ‘‘conversation’’ about the brand (Deighton and Kornfeld, 2009). Critically discuss how social media affects consumer behaviour in the 21st century and the challenges and opportunities that social media present for the marketing of products and services.

Real world examples should be used to illustrate your assessment (examples can be taken from any country and any product/service). “With over 500million users, if Facebook was a country it would be the third biggest in the world”. Social media is changing the world we live in and the way in which we communicate in it. Social media is an enhancement of regular media such as newspapers and television commercials. In terms of Web 2. 0 it is giving people information but through interaction and also allowing you to communicate back.

Media is no longer selling a product to a customer but having a two way conversation about it, as discussed by Deighton and Kornfeld. Social media websites include; Social Bookmarking, Social News, Wikis, Social Photo and Video Sharing and the most popular being Social Networking Sites. 22% of all time spent online is spent on social media sites, and although many may see it just as a time filler, it does offers an abundance of opportunities to organizations, mainly because of its global reach.

However we must remember that social media is giving consumers a voice, which could affect an organisation positively but also negatively. A Consumer research showed that “individuals give greater consideration to advice and information shared online, spending more time with websites that provide third-party evaluations” (Huang et al. 2009), therefore it is essential that organisations have good feedback on social media sites because the consequences of gaining a bad reputation online can destroy them.

In this essay I aim to critically discuss how social media affects consumer behaviour in the 21st century and the challenges and opportunities that social media present for the marketing of products and services. I will be using a wide range of resources and real world examples to aid me in this discussion. “Consumer behaviour is about human responses in a commercial world: how and why people buy and use products, how they react to prices, advertising and other promotional tools” (East 1997). Understanding consumer behaviour can be of benefit in particular to marketing managers.

They can try and understand consumers needs/wants and what motivates the individual to purchase a particular product, because essentially a company’s main goal is to sell its product or service and the more information they can gather about consumers the more they can tailor their products accordingly. A Brand is a consumers feeling towards a certain product service or organisation, and with the growth in social media a feeling that can be spread quickly. Marketers need to realise this and do their upmost to ensure that consumers are satisfied with the brand.

Motivation is a large aspect of consumer behaviour and can be described as “the driving force within individuals that moves them to take particular action” Consumers strive for a state of equilibrium and motivation is what forces us to gain a balance between physiological needs such a hunger and social and psychological needs. Although marketing does not create needs, it is able to remind us of them at the right time. Marketing encourages us to want a brand by associating it with the satisfaction of a need.

Every consumer has a different need that marketers strive to meet. Social media allows organisations to track and follow consumers to have a better understanding of these. Examples of theories behind needs and motivation include Maslow’s hierarchy of needs (see appendix 1) which identifies needs such as safety and social, The Freudian Theory of Motivation which assess the ID and Superego, and the most recent Memetics which is a theory of how humans imitate each other’s behaviour. Social media can use these to customise products and services.

Marketers need to understand what people buy, why people buy, and how they buy it. They need to understand the decision making process involved and why consumers chose one product/services over another. The sequential model of marketing can help do this. The model looks at post purchase, action, attitude, learning, perception, attention and exposure. Social media can make exposure much easier as they can target specific target markets and niche groups. Exposing an organisation also has much lower costs in comparison to a TV advert which can cost up to ?

Associating a brand with a celebrity is one route that organisations use; social media can take this to the next level. Very recently we saw celebrities including footballer Rio Ferdinand and boxer Amir Kahn tweeting and uploading pictures of them eating a Snickers bar. Snickers confirmed that they had paid 5 celebrities to tweet about the chocolate bar. Organisations try and change consumer’s attitudes through advertising. Due to social media and consumers ability to discuss products much easier it is increasingly difficult for organisations to do this.

Social media has definitely affected consumer behaviour, but is it as dramatic as a number of researchers think? “Earlier, if you were happy or unhappy with a brand, there wasn’t any platform to discuss it so openly. There were limited avenues. Even for brands, connecting with consumers was never as easy as it is today,” says Saloni Nangia, vice president at management consulting firm Technopak Advisors . Consumers did not have many other sources of information and would have to rely on information given to them by the company or through word of mouth (WOM).

Now this task is much easier with the help of e-WOM including comparison sites, review sites such as Trip Advisor, Blogs and Social Networking sites. Consequences of this are that consumers are having a lot more control in terms of negotiation with price, customization and personalisation. Consumers have a lot more power than they once did and organisations need to be savvy in order to fulfil the customer’s needs and wants. The effect of social media has resulted in a shift in power from companies to customers.

There are four power shifts which are used to describe this change; The Age of the Social Collective, The Age of Transparency, The Age of Criticism, and The Age of Parody (Fournier. 2011). These power shifts demonstrate how consumers are gaining a competitive edge over organisations but also how organisations can use this information to help overcome these challenges. The Age of the Social Collectiveness describes the way in which consumers are like a community but also how organisations will be able to brand via the consumer.

A Nutella fan began a Facebook page for the company which went on to be the third most visited page in 2009. Nutella demonstrated a ‘hands off’ approach and gave control to the consumers. Skittles advanced the notion of branding via the consumer collective by having a live consumer generated feed of captions from both Twitter and Facebook. The Age of Transparency – The convenience and ease of accessing information are two of the best qualities of the internet. From an organisations perspective they cannot hide anything as scandals can spread at an extremely fast rate.

Transparency is a powerful anti-corruption tool, and online social media facilitates this transparency. The damage caused by information coming to head can be long and strong; Enron became the brunt of transparency when they were discovered via social media that they had been lying about their profits. The Age of Criticism – Negative feedback is of great concern to organisations in particular online due to the amount of people that are able to see it, this has allowed consumers to become increasingly more critical about brands. Blogging makes criticising easier and social networking allows the news to travel quickly.

United Airlines learned this lesson when staff damaged the guitar of a little-known country singer, prompting him to produce a series of disparaging “United Breaks Guitars” music videos that promptly generated over 10 million YouTube views (Deighton & Kornfeld, 2010; Reynolds, 2009). Negative critique can also turn a business successful if the correct changes are done, and positive feedback can shoot organisations into success. The Age of Parody – Marketing via social media allows companies to push boundaries. Spoofing and having the ability to mock your business can be the gateway to success.

Viral Marketing is another opportunity for organisations to reach consumers; Old Spice saw their sales double following their YouTube Campaign. Consumers like to relate to products and services and organisations can use this in their favour by playing with emotions such as Mastercards ‘priceless’ slogan. Organisations who decide to use parody are faced with challenges from hypercritical consumers who try to humiliate organisations and cut them away from their values; one of the biggest factors of motivation in consumer behaviour.

One of Sean McDonald’s six guiding truths of social media “marketing has always been about conversations, but the mediums did not always support it. ” (Texas Magazine; Spring/Summer2010, p4-4, 3/4p, 1 Color Photograph) What motivates consumers to buy a product? Motivation. Reference groups have a huge impact on what consumers purchase. In a 2009 article, The Economist reported that contemporary consumers use social media to help make purchases because they rely on “recommendations from friends” (The Economist, 2009).

Ability to target specific niche markets. Viral marketing. Blogs are potentially the most attractive marketing technique with 29 percent of Internet users having blogged about a product or brand according to a report by Universal-McCann (2009). Crowd sourcing, getting information directly from consumers, getting the public to create adverts ect. digital dialogue, citizen marketing, brand democratization.

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