Chapter 1
THE PROBLEM AND ITS BACKGROUND Introduction
In this chapter we introduce to the reader the research area by presenting a snapshot of social media marketing and conventional marketing practices in the background section of the study. The new challenges for marketers and opportunities for business establishments are incorporated in problem discussion which tries to build a foundation for the consequent purpose of the study and research questions.
Social Media Marketing (SMM) on sites like Facebook, Twitter, Stumbleupon and Digg has exploded in the past year. But what exactly is it? And what’s in it for you?
How Social Media works? When a user of a social media website discovers your story and likes it, they have the option to share it with their friends. This can cause the story to 'go viral' and be shared with even more people. This can deliver hundreds of thousands of visitors, launch a website or new product and bring significant inbound links. Those inbound links will directly bring your site visits and indirectly help your SEO. Your social media marketing can support your search engine optimization (SEO) by including target keywords in headlines. Then when your story goes viral and other sites use your headline to link back to your site – Bingo! - you get keyword-rich inbound text links.
Social Media Marketing is bigger than TV, radio, newspapers, magazines and books. 18-34 year olds now spend 4.3 times more time on social media than with TV, radio, newspapers, magazines and books combined. This is happening because social media allows users to talk to each other (which they prefer to being talked to) and choose for themselves what they see and read. Social media is a many-to-many conversation and not a one-to-many communication.
Facebook is growing faster than Google ever did. Facebook is the biggest social site with over 250 million users. It took Google ten years to reach 50 million users – something Facebook achieved in just 19 months. Facebook is the world’s online scrapbook and meeting place in one. Friends, customers, stars, fans, and anyone who crashes the party use Facebook to stay in touch, swap photos, pay homage and talk to each other.
Twitter might be the ultimate networking site. Twitter is a microblogging site on which each post is no more than 140 characters long. Friends, colleagues, admirers and the interested all ‘follow’ each other and can read each others’ posts. The result is a collection of thousands of different conversations and mini monologues. This can seem like a mad mess but that chaos is like the hum of chatter at a lively party - narrow your focus and you find that people are amusing each other, helping each other, sharing ideas, making connections and doing business.
Social media are media for social interaction, using highly accessible and scalable publishing techniques. Social media uses web-based technologies to turn communication into interactive dialogues. Andreas Kaplan and Michael Haenlein also define social media as "a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, which allows the creation and exchange of user-generated content."Businesses also refer to social media as consumer-generated media (CGM). Social media utilization is believed to be a driving force in defining the current time period as the Attention Age. A common thread running through all definitions of social media is a blending of technology and social interaction for the co-creation of value.
People gain information, education, news, etc., by electronic media and print media. Social media are distinct from industrial or traditional media, such as newspapers, television, and film. They are relatively inexpensive and accessible to enable anyone (even private individuals) to publish or access information, compared to industrial media, which generally require significant resources to publish information.
One characteristic shared by both social media and industrial media is the capability to reach small or large audiences; for example, either a blog post or a television show may reach zero people or millions of people. The properties that help describe the differences between social media and industrial media depend on the study. Some of these properties are: First, Reach - both industrial and
social media technologies provide scale and enable anyone to reach a global audience. Second, Accessibility - the means of production for industrial media are typically owned privately or by government; social media tools are generally available to anyone at little or no cost. Third, Usability - industrial media production typically requires specialized skills and training. Most social media does not, or in some cases reinvent skills, so anyone can operate the means of production. Fourth, Recency - the time lag between communications produced by industrial media can be long (days, weeks, or even months) compared to social media (which can be capable of virtually instantaneous responses; only the participants determine any delay in response). As industrial media are currently adopting social media tools, this feature may well not be distinctive anymore in some time. Fifth, Permanence - industrial media, once created, cannot be altered (once a magazine article is printed and distributed changes cannot be made to that same article) whereas social media can be altered almost instantaneously by comments or editing.
The most popular platforms include: Facebook, YouTube, LinkedIn, Twitter, MySpace, Reddit and Delicious.
“Social Media: A New Era of Marketing” was one of the popular hits found on Google when looking for the phrase “Social Media Marketing”.
More than 400 million users are active on Facebook today, fifty percent of them use the platform on any given day and for a total of 700 billion minutes per
month. Each user is connected to an average of 130 friends, which means that if a company induces one person to post something about their brand they have the potential of reaching 130 more persons. There are over 160 million objects that people interact with (i.e. pages, groups, and events). An average user is connected to 60 pages, groups and events and creates 70 pieces of content each month. More than 25 billion pieces of content (i.e. web links, news stories, blog posts, notes, photo albums, etc.) are shared every month. Facebook have a very wide global reach, more than 70 translations are available on the site, about 70% of the users are outside the United States, and over 300,000 users helped translate the site through the translations application, which means that language differences are no longer hindrance of communication. There are more than one million developers and entrepreneurs from more than 180 countries. More than 70% of users engage with Platform applications every month, more than 550,000 active applications currently on Facebook Platforms, more than one million websites have integrated with Facebook Platform and more than 150 million people engage with Facebook on external websites every month. Two-thirds of comScore’s U.S. Top 100 websites and a half of comScore’s Global Top 100 websites have integrated with Facebook. There are more than 100 million active users currently accessing Facebook through their mobile devices. People that use Facebook on their mobile devices are twice more active on Facebook than non-mobile users. There are more than 200 mobile operators in 60 countries working to deploy and promote
Facebook mobile products. These statistics speak for themselves, and one can understand why companies around the world are drooling over the endless marketing possibilities presented by the Facebook Platform.
However, the attractiveness of Social Media as marketing platform is not only to be understood in terms of statistics. The way businesses promote their products and the marketing strategies used for their brands to be known to the market is evolving, a never ending change in which social media is playing a central role. All of us are familiar with the old fashion and usual marketing technique used by some companies, like the last time wherein a salesperson called and interrupted your lunch. Consumers are also evolving, following with the current trends, learning how to screen innovative and disruptive communication attempts, which is why this way of marketing is being replaced by the more modern, advance and technologically based form of permission marketing. The advertiser is no longer the one who decides when, how, and to whom to communicate. Nowadays, it is the consumer who decides which company and what information to take part of.
The younger consumers are the most proactive when it comes to this new way of gathering, screening and spreading information over the Internet. It is the younger segment that is most active on social media and also the most difficult to reach in the increasing media buzz. In the Philippines, there are 14, 600, 300 registered users on Facebook, making our country in its 2nd place in Asia, and 8th
place in the whole world. The two dominant age groups are 18-24 with 44.38% and 25-34 with 23.93%. Facebook is thus very attractive, useful, and fastest marketing channel to reach the younger consumers, and specifically interesting and cheaper for start-up companies that do not have an extensive marketing budget.
An honest practitioner who puts the following marketing practices to work will become successful in the all around arena of private practice. Focus on Helping, Instead of Selling - You shouldn't be trying to force people into purchasing your product or service. You should find people who want your product or service and then focus on offering any helpful information to them so
that they can make an informed decision.
Target - If you're trying to target everybody, then chances are, you're not targeting anybody. State your target clearly in all of your marketing materials. Stop Spending Money on Ineffective Marketing - One great way to save money is to stop wasting it on marketing and advertising that isn't producing for you. Don't forget to track the number of responses you are getting from whatever method you use. If you're not reaching your goals, then your strategy needs to be revised. Network - Networking is a great way to get your message out to a large number of people, for free. Set Goals and Deadlines - Collect your thoughts for a moment or two, and set goals and deadlines. These are vital to your business success. State your goals as specific numbers. Focus on Benefits Not on Features - Spend your
time focusing on how your prospects will benefit if they purchase your product or service. Write Tips Articles - Newspapers and other publications are always looking for helpful tips articles that would be of benefit to their readers. Submit simple, problem/solution type articles related to your product or service. State the problem, and then share some insightful tips that can help to solve the problem. Be Persistent - Persistence is power when it comes to increasing your sales and profit. Far too many firms fail because they don't follow-up long enough to produce results. Most sales are made after the seventh or eighth contact--the sale is rarely made after just one contact. Submit Press Releases - Press releases are a very cost-effective way to get your message out to many people . . . for free. Submit your press releases to a wide variety of publications for immediate release. Offer to be a Speaker - Business and civic organizations are always looking for speakers for their meetings and get togethers. Make yourself available by contacting these groups and offering to talk about your area of expertise. Give a Free Demonstration - If possible, give free demonstrations of your product or service to those that might be interested. Follow-up with these prospects in a timely manner to attempt sales conversion. Distribute Samples - If possible, get samples into the hands of people who may be potential customers. People like to try before they buy. Distribute Informative Literature - Make sure that you get your product benefits, features and ideas into the hands of your prospects. Use the Telephone - The telephone can be one of your most effective, and least expensive,
sales tools. Call people who you would like to do business with. Ask for a few minutes of their time so you can show them how your services can help them save time, cut costs, increase sales, etc. Generate Referrals - Referrals are a great way to generate new business. Don't just wait for people to refer you. Proactively ask for referrals from existing customers, acquaintances, family and friends. Don't forget to graciously thank anybody who refers your business to someone. Have Fun - Frustration and stress will slow you down. You will succeed far better when you're doing something that you love. Talk to Your Customers About Them and Their Needs - Most company publications, ads, letters and sales literature are filled with words, photographs and information that do nothing more than toot the company's horn. Talk about your customers needs instead. Rather than using the words, "I," "me," "my," use "you" and "your." Develop Customer-Oriented Relationships - Take an interest in your prospects and customers. Send them helpful articles that you think would interest them. If you know of an event that your prospect or customer will be celebrating, such as an anniversary or birthday, send them a card or small gift. They will appreciate your generosity and will think of you when they need your service, or if they know someone else who may need your service. Tell Your Prospects and Customers What to Do - Getting your message into the marketplace is important, but getting prospects/customers to respond is the real test. Tell your prospects exactly what you want them to do next. Take Advantage of Testimonials - Whenever an existing or potential
customer says something positive about your company, ask them if you could use their statement in your marketing materials. Your company's credibility will increase with the use of testimonials from happy customers. Make it Easy for People to do Business with You - Your customer is not going to work for you. You have to work for them. Do anything you can to make doing business with your company easy and a pleasure. Content First, Form Second- When developing your sales materials and literature, spend less time worrying about the graphics and colors, and more time working on the content -- what's in it for your customers. As long as your message is enticing, black ink on white paper could work just as effectively as expensive four-color materials. Give to Get - There's an old saying, "You can get everything you want, by helping enough people get what they want." Listen carefully to your prospects and customers so you'll know exactly what they want and be generous in your offers. That way you'll be sure to reap the maximum rewards. Learn a New Marketing Technique Every Day - Read, go to seminars, listen to audio tapes. Continuously improving your sales and marketing skills will help you to increase your sales and profits. Associate with Positive, Successful People - Talking to and learning from people who are always striving for and meeting their goals, will help you commit to and achieve your own objectives. Believe in the Product or Service You Sell - If you don't believe in the quality and benefits of your product and service, your prospects won't either. Present the benefits of your product/service with
confidence and enthusiasm. Focus on the Lifetime Value of Your Customers - Don't focus on generating one-time customers. Build a relationship so that a prospect becomes a repeat, lifetime customer. Learn from Someone Who Has Experience - Marketing is an important skill based on both knowledge and experience. The fastest way to gain that knowledge is to find someone who knows what works and has done it successfully. Ask about his or her specific experience in generating marketing results, as well as references, or testimonials. Reasonably priced marketing materials, like books, courses, workbooks, newsletters, audio cassettes, etc. can be excellent resources, that allow you to learn and apply effective marketing systems at your own pace.
We want to determine the choice of social media as a marketing tool among business establishments. Our study will also determine the comparison between prevalent marketing practices and social media as a marketing tool among selected business establishments in Quezon City. We also want to determine which of the two types of marketing (Traditional Marketing Practices and Social Media Marketing) is more effective in terms of targeted segment coverage and expenditure. We also want to know which marketing approach enables business establishments to maintain better relationship with their customers. And lastly, we want to know whether or not it is the right time for business establishments to adapt social media marketing practices.
Background of the Problem
In hindsight it becomes clear that marketing has undergone two notable changes in the past few decades. The first phase was predominantly driven by manufacturers; while the second by retailers. The former drove the market by aggressive promotional strategies while the latter exploited closeness to consumers (Schultz & Schultz 1998). Ever since then marketing has entered a third phase, influenced by the increased role of information technology (IT) in consumer lifestyles which has led to a consumer dominant marketplace (Jim Blythe, 2006) and in the new landscape “consumer really is king” (Rob, 2009).
Social media is defined as, “A social trend in which people use technologies to get information they need from one another, rather than from traditional institutions like corporations” (Charlene, 2009). Social media is interactive in nature and is therefore known as consumer-generated-media, new media or citizen media (Rob, 2009). Conventional media is company-generated and information flows in one direction i.e., messages are broadcast from company to target audience (one-to-many) and in social media (many-to-many) in multiple directions.
Dave Evans in his ground breaking study (2008) defines social media as, “The democratisation of information, transforming people from content readers to content publishers. It is the shift from a broadcast mechanism to a many-to-many model, rooted in conversations between authors, people and peers”.
The rise of new social media can be seen from the fact that in first decade of 21st century several words from social media have entered lexicon as word of the year such as “Blog” (2004), “Podcast” (2005), “Facebook” (2007) and most recently a verb
“Unfriend” which means to remove a friend on social network site (SNS) such as Facebook was chosen as the word of year 2009 by New Oxford American Dictionary.
A joint survey conducted by Forrester and the Association of National Advertisers (ANA) in the United States demonstrate the importance of social media as it depicts how marketers plan on advertising spending in 2010. Most marketers intend to increase marketing budgets to Social media by a whopping 77%, Web advertising 73%, and Search engine marketing 59%. Alternately, marketers plan to increase spending on conventional marketing only by 13% in magazines, 9% increase on radio advertising, and a dismal 7% raise in newspaper advertising.
These changes have created several opportunities for micro firms to adopt social media marketing as they are often cash-strapped and lack marketing expertise for carrying out expensive marketing campaigns.
Small firms are moving from conventional marketing practices such as television advertising, newspapers, radio, magazines, word of mouth marketing (WOMM), public relations (PR) and relationship marketing towards more affordable and interactive social media marketing.
We researched about a qualitative study showing how Social Media Marketing sites enhance the perception of brand associations and traditional communication effects. And found out that Social Media Marketing site is an effective marketing tool. Communication professionals, business marketers and company owners praised social media as the future marketing channel and that thesis had gave us the idea of performing a similar study, but applied on Social
Media Marketing sites. Finding out that there is still no accurate research had been previously conducted exploring the effectiveness of Social Media as a marketing medium, and well aware of the platform being the greatest worldwide, we believed to have found the subject for our thesis.
As Marketing students, being passionate about the latest and current trends of marketing a product, we believed that a practical guide explaining how small businesses could build their brand at practically no cost at all would be a great value for many.
Social Media Marketing is still one of a fairly young communication platform and there are not that many studies concerning its effectiveness as means of marketing. Selling online doesn’t help entrepreneurs to enhance their ability on promoting their products and being persistent to get their target markets. Online selling differs from person-to-person selling. Online selling example in Social Media Marketing sites, sellers don’t have the opportunity to interact personally to their consumers, does not have enough capacity to experiment or be creative enough to sell products and interact with their customers. People just come to your site and expose to a one-way reading of your message and scanning flyers or pictures of the products which on the part of the seller can be impersonal. Fan pages are also one of the useful medium on promoting or advertising products and sites. Creating fan pages should also have business strategies and the brand of the product should communicate with their consumers. Building loyalty and getting
trust from your consumers is also one problem to consider. Some consumers are hesitant to shop online because they probably think that it is a scam, vice versa for the sellers, online sellers are prone to “bogus-buyers” .
Recently, there has also been a debate concerning the effectiveness of Traditional Marketing Practices versus Social Media Marketing. (Kover and Goldberg, 1995; Sasser and Koslow,2008). This debate has been supported fuelled by extensive research and according to several studies, traditional approach is to be preferred (Colliander, Erlandsson and Modig 2010). However, these results have yet to be tested.
As mentioned above, Social Media Marketing is fairly a new marketing communications channel and has not yet been fully explored. The contribution of this study is thus to provide whether Social Media Marketing shall be used for marketing purposes and give them useful insights and information regarding on its effectiveness, as well. We also want to provide what is the appropriate approach when targeting the consumers. The study will hopefully also contribute with some qualitative evidence to debate concerning the effectiveness of Traditional Marketing Practices and Social Media Marketing.
Theoretical Framework
An interesting way to describe social media marketing is to compare it with conventional marketing practices. Social media marketing has created new challenges for advertisers, companies and strategists. Due to the increasing popularity of rapidly
evolving social media marketing worldwide it would be interesting to know that whether it is the right time for small firms to adopt the social media bandwagon.
Every day we are exposed to about 1,500 brand-related messages (Lucas & Dorrian, 2006) and had developed what Blackwell (2001) calls selective attention, or advertising skepticism. These “mental barriers” are a necessary reaction of consumers to the increased advertising noise and that marketers must find new ways to break through these barriers. In other words, increasingly difficult for companies to stand out and get consumers to pay attention to their company. In this new marketing landscape advertisers must surprise consumers and adopt methods around which mental barriers have not yet been developed.
Having been exposed to so much advertising, consumers have learned to recognize and recall any attempt of persuasion (Friestad & Wright 1994) and that is why the old form of interruption marketing has been replaced by something new(Godin, 1999). Instead of interrupting consumers and trying desperately to control consumer perceptions, marketers are today looking for ways to engage consumers and interact with them (Meadows-Klue 2007).
Social Media Marketing is yet highly unexplored by the marketing research community and many questions on its marketing effectiveness still remain unanswered. Advertising activities on social media sites are however increasing, even if its effectiveness and its effects on brand perceptions are still uncertain. This can be explained as social media sites offer brands the means to
interact with consumers in a communication that is no longer single-tracked. The advertiser can instead engage consumers in a dialogue, a two-way communication that has been proven to be very effective (Kocken and Skoghagen 2009). Furthermore it is the consumer that comes to the brand when marketing via fan pages and news feeds, thus being very receptive. With this in mind we can assume Social Media Marketing to be one perfect modern marketing platform.
Conceptual Framework
Micro firms are always short of money and money is spent on activities that can bring maximum benefits to the firms. In the back drop of all this hype about social media as a marketing tool we got the clue to find the right tools of marketing for these cash strapped micro firms regarding the choice of conventional tools and social media as a new marketing tool. The purpose of our thesis is to compare and contrast conventional marketing practices with social media marketing in the context of micro firms and then suggest these micro firms as which tools are more suitable for them.
According to McCarthy and Perrault Jr. (1987), there are many possible ways to satisfy the needs of target customers. A product can have many different features and quality levels. Service levels can be adjusted. The package can be of various sizes, colors, or materials. The brand name and warranty can be changed. Various advertising media – newspapers, magazines, radio, television, billboards, flyers, the Internet – may be used. A company’s own sale force or other sales specialists can be used. Different prices can be charged. Price discounts may be
given, and so on. With so many possible variables, the question is: is there any way of simplifying the selection of marketing mixes? And the answer is yes.
It is useful to reduce all the variables in the marketing mix to four basic ones: Product, Price, Place and Promotion.
The product area is concerned with developing the right ‘product’ for the target market. This offering may involve a physical good, a service, or a blend of both.
Place is concerned with getting the ‘right’ product to the target market’s place. A product reaches customers through a channel of distribution.
Promotion – is concerned with telling the target market about the right product. Promotion includes personal selling, mass selling, and sale promotion.
Personal selling involves direct face-to-face communication between sellers and potential customers. Personal selling lets the salesperson adapt the firm’s marketing mix to each potential customer.
In addition to developing the right Product, Place, and Promotion, marketing managers must also decide the right Price. In setting a price, they must consider the kind of competition in the target market. They must also try to estimate customer reaction to possible prices. Besides this, they also must know current practices as to markups, discounts, and other terms of sale. Further, they must be aware of legal restrictions on pricing. If customers will not accept the
Price, all of the planning effort will be wasted. So, one can see that Price is important for a marketing manager.
All four Ps are needed in marketing mix. In fact, they should also be tied together. But is any one more important than the others? Generally speaking, the answer is no – all contribute to one whole. When a marketing mix is being developed, all decisions about the four Ps should be made at the same time. That is why four Ps arranged around customer C in a circle – to show that they all are equally important.
In the case of the present day study, Social Media Marketing has all the potential to be one of the best market place for a company who wants to sell their product online because social media sites are well known around the globe. But marketing and pre-selling here is not easy. Despite how good the quality or well-known your product is, you will find difficult and challenging to sell your product. It is not just a matter of showing a good product because it will not sell itself, since most customers prefer a direct selling because they can easily acquire the product compare to online shopping which take time to deliver the product.
Given the concept regarding marketing mix as presented above, it is therefore the objective of the researcher to come-up with a marketing tool that business establishments can use.
Research Paradigm
Figure 1 illustrates the research paradigm of the study.
Figure 1 Research Paradigm
The paradigm illustrates the operational concept of the study. Specifically, it present how the study progresses. These are two main areas to be described in this research. First, which is labeled (1), is the Marketing Practices of Business Establishments.
Second, pertains to the interview among business establishments. This is labeled (2) in the research paradigm.
The outcome of the study is to develop a Marketing Tool for business establishments. This is indicated by the cylinder figure, which is labeled (3) in the paradigm.
Statement of the Problem
The study seeks to determine the choice of social media as a marketing tool among business establishments. The study also seeks to determine the comparison between prevalent marketing practices and social media as a marketing tool among selected business establishments in Quezon City.
Specifically it seeks answers to the following questions:
1. Which of the two types of marketing is more effective in terms of targeted segment coverage and expenditure?
2. Which marketing approach enables business establishments to maintain better relationship with their customer?
3. Whether or not it is the right time for business establishments to adapt social media marketing practices?
Research Hypothesis
There is no significant difference in the factors considered in the measurement of the qualitative effectiveness of Traditional Marketing Practices and Social Media Marketing.
Significance of the Study
Social Media Sites were use as means of communication, because of its popularity many people tends to use it as a means of communication. For that reason many companies entered Social Media Marketing and used it as an alternative source of advertisement because they believe as social media sites
popularity occur, many people can see their product and get more customers. In this study we determine on how effective of Traditional Marketing Practices and Social Media Marketing through individuals.
Trinity University of Asia. This study will serve as a guide for future students of Trinity University of Asia in making of their thesis.
College of Business Administration. This study tends to supplement the CBA students wisdom about the world of business and how to construct business strategies which they can use in their future carreer.
Faculty Members of CBA. This study will give the faculty members additonal information about web marketing business werein they can apply or use in their class disscussion especially to the faculty members.
Marketing Students. This study will give marketing students knowledge on how products being advertise and by the use of Social Media Sites, it will give them techniques on how to communicate with different people among other country’s.
Product Consumers. Social Media Marketing will be a good source of products selection to the consumers. In here, consumers can identify the right products of their best that will suite their needs and taste.
Business Investors. The popularity of Social Media Sites to all the web surfers and web browsers will give interest to the business investors choose the site to be one of their advertisement instrument.
Social Media Sites Users. Aside from searching for new set of friends and old batchmates and colleague, Social Media Sites users can also earn income by advertising products to their accounts.
Scope and Delimitation of the Study
There are certain delimitations to our study which we would like to mention before proceeding further. The first delimitation is the time constraint. In order to complete our thesis we had to really keep ourselves from spreading out in the study and complete in time as per requirement of the submission of the study in time.
Further, the subject is very new and there is very scant material written on the subject. We did our best to get a hand on every possible material related to the subject. However, we have tried our best to contribute to the existing marketing literature in the context of business establishments.
The other delimitation is that we have conducted this study from one perspective only, from the perspective of the businesses only.
This study is limited to determining the Marketing Practices Employed by Business Establishments in Quezon City most specifically along E. Rodriguez Avenue. More specifically, they will be analysed according to the marketing tool used.
The study will also be focused at E. Rodriguez Avenue Quezon City. The reason for the selection of the research locale is because the researchers are students of Trinity University of Asia. Thus, it will be more convenient for us to
conduct interviews because of our proximity to the place. A total of 3 business establishments will be included as subject of the study.
Additionally, Social Media Marketing and Prevalent Marketing Practices will only be the focus of the study. This study is limited to analysing and assessing the qualitative effectiveness of Traditional Marketing and Social Media Marketing. It is worth pointing out that Social Media Sites offer many different alternatives to marketers and that fan pages are one of many possible ways for a brand to market itself on websites. In an effort to measure the effect of Social Media on key advertisement indicators, we have chosen to look at brand attitude, seller intention, and word-of-mouth.
Lastly, we will choose to limit our research to the Philippine market and the study is also limited with regards to the data sample. We will investigate and observe the effects of Social Media Marketing to business establishments and other individuals, making our results most suitable for brands with a similar target audience.
Definition of Terms
Advertising: is a form of communication intended to persuade an audience (viewers, readers or listeners) to purchase or take some action upon products, ideas, or services.
Blog: is a type of website or part of a website. Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video.
Blog Marketing: is the process of reaching a business' prospects through the use of a blog.
Bogus Buyers: refers to fraudulent buyers.
Direct Marketing: is a form of advertising that reaches its audience without using traditional formal channels of advertising, such as TV, newspapers or radio.
Facebook: A global social platform with millions of members worldwide. Facebook works as a social networking website enabling users to communicate and share information with friends and brands from around the globe.
Fan page: A Facebook fan page is a public profile used by brands to share information with other Facebook users.
Fan: A fan is a Facebook user that has chosen to become a member of a brand’s Facebook Fan Page.
Flickr: is a popular photo sharing website that allows members to upload their own photos into customizable albums that can then be labelled, organized, tagged, and publicly posted.
Friend list: A friend list is a personalized news feed where the consumer himself chooses which friends’ (i.e. members within the personal network) status updates to show.
Friendster: Social networking website that connects individuals across the world with the hopes of helping them develop friendships.
Google: is the world's most popular search engine. The term "Google" is now often used as a verb, synonymous with "search."
Internet: called simply "the Net," is a worldwide system of computer networks - a network of networks in which users at any one computer can, if they have permission, get information from any other computer (and sometimes talk directly to users at other computers).
Like: Members might like a status update by clicking on a like-button below the update.
LinkedIn: is a social networking website geared towards companies and industry professionals looking to make new business contacts or keep in touch with previous co-workers, affiliates, and clients.
Marketing: is the process of performing market research, selling products and or services to customers and promoting them via advertising to further enhance sales.
Marketing Mix: Planned mix of the controllable elements of a product's marketing plan commonly termed as 4P's: product, price, place, and promotion.
Marketing Practice: tended to be seen as a creative industry in the past, which included advertising, distribution and selling.
News Feed: The Facebook news feed is a long list of status updates that each member has visible on his/her profile.
Personal Selling: Face to face selling in which a seller attempts to persuade a buyer to make a purchase.
Post: To post is the action of uploading a status update.
Public Relations: is a field concerned with maintaining public image for businesses, non-profit organizations or high-profile people, such as celebrities and politicians.
Sales Promotion: Activities, materials, devices, and techniques used to supplement the advertising and marketing efforts and help coordinate the advertising with the personal selling effort.
Social Media: are media for social interaction, using highly accessible and scalable publishing techniques. Social media uses web-based technologies to turn communication into interactive dialogues.
Social Media Marketing: which is known as SMO Social Media Optimization benefits organizations and individuals by providing an additional
channel for customer support, a means to gain customer and competitive insight, and a method of managing their reputation online.
Social Networking Sites: places on the Internet where people meet in cyberspace to chat, socialize, debate, and network.
Status Update: A Facebook status update is a short message that users can upload on their profile and that will be visible to other members within their network.
Twitter: is a website, owned and operated by Twitter Inc., which offers a social networking and microblogging service, enabling its users to send and read other users' messages called tweets.
YouTube: A very popular video sharing Web site that lets anyone upload short videos for private or public viewing.
Chapter 2
REVIEW OF RELATED LITERATURE AND STUDIES
The review of related literature is considered a difficult task but plays an essential part in the completion of the study. This will also strengthen and prove the validity of a certain study. Since the study, must be based on facts, it should involve the systematic identification, location and analysis of documents containing information related to the research problem.
Local Literature
According to Carlo S. Ople’s book entitled Social Media Guide For Filipino Entrepreneurs (2010), “Internet Marketing is all a joke.” This is a common sentiment among Filipino entrepreneurs and businessmen. Some even go as far to think that the internet is a waste of time, saying it doesn’t generate return-on- investment. Who can blame them? They’ve gotten used to the success that was brought about by traditional marketing initiatives that they’ve been doing for years.
But this is good news for you. This gives you the rare opportunity to break into an untapped market and build a very cost-effective business in a very fun way.
It’s already 2010 and the landscape has drastically changed over the last decade. Technology has made gigantic strides forward, providing you with new tools and platforms that you can use to bring your business or career to the next
level. If you have a business right now and you’re still marketing it as if it was still the 1990’s, then you have one big problem.
What are the numbers? Your first question would be “How big is the potential for growth?”, and my answer is “Massive.” Various studies show that there will be around 28 million Filipino internet users by the end of 2010. That’s bigger than the entire population of Malaysia! The primary growth drivers here are the combination of the aggressive marketing and sales of leading broadband providers like PLDT, SMART, Globe, and Bayantel, combined with the proliferation of internet cafes all over the country. Online gaming industry experts say that there are around 10,000 internet cafes operating in the Philippines as of this writing. If you’re still not satisfied with these numbers, let’s take a closer look at one of the more popular social networks being used by a lot of Filipinos: Facebook. Care to venture a guess how many Filipinos are actually signed up?
As of 4:45PM, April 1, 2010, there are approximately 11,468, 880 registered Filipinos on Facebook.
According to the website Alexa, 8 out of the top 10 websites visited in the Philippines are social networks. If you want to tap the internet to build your business, then be where everyone is. Setting up a website and leaving it there hanging is tantamount to putting a gigantic billboard in the middle of a farm. Being in social media, on the other hand, is like being the giant billboard along Guadalupe in Makati where everyone can see you.
According to the Cartoon Network New Generations 2009 Philippines Study, 6 out of 10 Filipinos aged 7-14 years old are already online. The same study reveals that the internet is also now the second most popular activity of the same age bracket, next only to watching television. And if you give these kids a few more years, they will eventually be the major decision makers.
The study Digital Philippines: Internet Media Habits Decoded by Yahoo and Nielsen shows that bulk of Filipino internet users are actually within the 15 - 29 year old range. These already include young professionals--decision makers in themselves.
What about ROI? Now this is my favorite topic when it comes to social media. Let me start by asking you these questions: how much does it take for you to acquire one customer? How about social media? Does it have an effect on purchase intent? Do internet campaigns actually convert to sales and how are they compared to traditional media?
The average businessman will probably say it takes somewhere around 100-200 pesos to acquire a customer using traditional methods. But for social media, consider this: 67% of people who follow brands on Twitter and 51% who become fans of brands in Facebook are actually more likely to buy products from you. For the sake of argument let’s say those numbers are overstated for the Philippines so let’s peg it at just around 30%. How much does it cost you to get a fan on Facebook? Roughly around P10 pesos per fan using their CPC advertising
platform. Using dirty math, you’ll end up spending P30 pesos to get one sale if we will use the 30% mark--that’s a lot cheaper than the 100-200 pesos we assumed for traditional methods.
You see, the moment someone becomes a fan or a follower of your product, it means that they are interested already in buying. All you have to do is to provide them with a gentle nudge to actually get them to go to your store and do it.
New Media is the darling of Traditional Media. Another growing trend is that traditional media is giving new media a giant push into the mainstream. Popular media stations in print, radio, and television have aggressively been using and integrating social media platforms into their operations.
FM Station Magic 89.9 is one of the most popular stations in Metro Manila. They’re actually one of the first stations to aggressively push for building a Facebook online community.
As of 5:19 PM, April 1, 2010, they’ve amassed more than 98,000 fans on Facebook. I’m not talking about passive fans here. These guys actively participate in the promos and discussions on the social network as well as the radio show. The DJ’s constantly promote their Facebook accounts on-air. If you think about it, Magic 89.9 is giving Facebook insane amounts of media mileage. It’s time that you also jump in and take advantage of that. Note that I’m not saying that you spam Magic 89.9’s fan profile. That would be rude, unethical, and will backfire.
What I am saying is that you should be in the game. If you’re not there, you don’t exist in their world.
Another media station that’s pushing social media and the internet is ABS-CBN. They’ve integrated Facebook and Twitter into their news programs and special events like the recently concluded HARAPAN: Vice-Presidential Debates. I was even interviewed by Ces Drilon for TV Patrol to discuss the impact of social media in the 2010 campaign.
What does this all mean? Traditional media is pushing people to create accounts on Facebook, Twitter, and other forms of social media so that they can connect and interact with one another. ABS-CBN and Magic 89.9 are part of the reasons why there are now more than 11,000,000 Filipino Facebook users. These stations have integrated social media in their broadcast which means that they acknowledge that the number of Filipino social media users will continue to sky rocket over the longer term.
I Google You... do you Google me? In the past, when people needed to know about whether a product is good or not, they would have to talk to people who’ve bought it before. They’d have to either give those people a call via telephone or meet up with them. Today it’s totally different. You can easily go online and type the name of the product on Google and check out the reviews of other customers.
The power of search is expected to grow tremendously within the next few years, as more Filipinos get access to the internet through their mobile phones.
To get on Google, it’s not enough to make your own website. That’s just one result in the 10 that come out on the first page. Get into social media, because the good thing about these social media sites is that they are properly optimized for search engines. If you have company pages in Facebook, Twitter, LinkedIn, etc. then there’s a good chance that these pages will pop out on the first page as well.
Remember that one of the strongest powers of the internet is that it allows you to focus the eyes of potential customers to good things about your product.
The internet is like a giant marketplace filled with billions of vendors interacting with customers. Marketers don’t just talk, they have to listen.
The internet is surrounded by REAL people. What they say matters, and the biggest factor behind this is the speed at which what they say spreads.
Finding out what’s being said about your product won’t even take much effort. The internet has a lot of really good and free tools which allow you to monitor your “online temperature”.
Google Alerts is by far one of my favorite monitoring and listening tools. As with almost all Google’s products, it’s very simple and user-friendly. All you have to do is type in key words, and voila, Google sends you a notice via e- mail every time that word is mentioned online.
Google Reader is another insanely great tool at no extra cost. I’ve been using this for a long time now because, for me, education never stops. The web is so rich with information and insights which can help you give your career or business a much-needed boost. Google Reader allows you to track all the blogs and websites that have RSS feeds in one page.
Another cool feature is the Explore section. You can click Recommended Items and Sources for blogs that Google thinks you might find interesting. Google also lists down how many other people are subscribed to those other sites and blogs which gives you an indication of their popularity and authority.
With Google Reader, you only take in the information that’s relevant, interesting, and important to you.
Most of you probably know by now that Twitter is steadily gaining a huge following here in the Philippines. It’s actually the 10th most visited site according to the research site Alexa. To hear about what people say about you, your brand, your competitor, or your industry, you can go to Twitter Search and just type the keyword there. The Advanced Twitter Search option opens up to a more detailed form where you can put parameters for your search. You can filter the search via date and location, and even based on the smileys used in the tweets (negative or positive). You might also want to get Tweet Deck. This will allow you to monitor tweets about a particular topic real time.
Search Engines is another way of monitoring your online presence is just to key in the name of your product, your company, your competitor on search engines.
The web is one giant free market research machine that anyone can tap. It’s just a matter of investing time and effort. Believe me, the benefits outweigh the costs by miles (hey, these tools are for free!).
The objective of your Facebook campaign will determine your over-all strategy and execution. Each objective will require different tactics, resources, and manpower to pull off.
For eBook, the three common objectives: awareness, customer support, and community building.
Awareness is probably your objective if you’re part of a start-up. You need to get the word out to the 11,000,000 Filipino Facebook users that you exist. There are several ways to do this. The first and more obvious one is to advertise on Facebook. You can dot his either by directing the advertisement link straight to your website, or to your company’s Fan Profile. The former needs less resources than the latter. If you want to have a Fan Profile, however, note that this will take considerable resources and effort. A Fan Profile is meant for more than just adding fans, it requires constant engagement between you and your customers. They’ll want answers to their comments, and to give them that you’ll need to get someone to manage customer relations.
Customer Support ties in with the Fan Profile concept. The danger with social media is that your channels can quickly turn from promotional vehicles to customer support outlets. If you allow users to post comments on your Fan Profile, expect to get a mix of good and bad feedback from them. When this happens, you better make sure you have someone replying and coordinating with your sales and marketing so you can resolve issues quickly. Always remember that you should reply as fast as you can. If you don’t have a resolution yet, then just let them know that you got their complaint and that you’re working on it. Don’t forget to update them later on once you actually find out what went wrong.
One thing that I’d like to recommend is that you come up with rules and regulations for posting comments on your Facebook Fan Profile. There’s nothing wrong with moderation because there are clear and present dangers which can go after your brand. Constructive criticism is welcome but not at the cost of disrespecting the administrator and their fellow fans.
The strongest feature of social media platforms is the ability to build, nurture, and mobilize communities. It’s a long term relationship which grows over time. More than that, it needs time, effort, and sincerity.
You need to have a deliberate strategy for your social media campaign. Start asking the difficult questions before you get into this. Set objectives. Someone has to man the ship. You can’t leave your social media channels immoderate.
Social Media is long term. You earn your customers, you don’t buy them off. However with enough prodding and patience they will become brand ambassadors and evangelists.
It’s all about COMMUNITY.
To set-up an official page, log on to
http://www.facebook.com/pages/create.php. Once you fill in the initial information, you’ll land on a very boring, empty, and blank page. The challenge now is to make this page interesting enough so that you can actually build a community using this platform, and keep users coming back for more.
Step 1: Create a Profile Picture - The profile picture is very important because this is the face of your company for Facebook. It’s also the first thing that they’ll see if they get an invitation, message, or when they land on your wall. Get a graphic artist to come up with a decent stylized logo or product photo.
The main message that I want to get across to you now is that you shouldn’t be limited to the conventional Facebook profile for the picture. Use an image that best suits your objective. If you want to make an impression quick and fast, then you might want to consider this approach.
Step 2: Edit Settings - After uploading a good profile picture, the next task is to edit the settings for your page. The first setting tab will be country limitations. You can set what countries can only view your page. If you don’t input any, the default is that all countries can see your page. If your business is
just based here in the Philippines, then I strongly recommend that you just limit the viewing here so that you won’t encounter any problems and mix-ups. At the end of the day there’s no point in getting international visitors especially if you have a brick- and-mortar operations (unless you’re going to do online selling).
Step 3: Content - The first thing you need to fix is the Info Tab. There will be several information slots you’ll need to fill up with basic company information. After that, edit the Note Box which is located under your Profile Picture. Since this is the second most visible thing after the Profile Pic, you might want to put the URL of your website here or something important which will help you get your fans to your storefront. Next we have the media that you will be uploading. Select very good photos and videos that you can use to promote your brand. Pick only the best and the more “viral” ones so that users can share them with their personal networks.
Step 4: Add Applications - Facebook has a lot of applications that you can use to spice up your official page. Focus them on just one channel. Instead, a good default app to add is the “Events” app. You can use this to invite your fans for your major promos and events and actually schedule it in their calendars so they don’t forget.
Add a Landing Page to your Official Page - One app that everyone should get is the Static FBML application. This allows you to create a beautiful and effective landing page for your profile. Why is this important? Because you can
control what users will see when they first visit your page. The Static FBML landing page capability lets you focus the eyes of your potential fan to one singular, strong, and quick marketing message that you control.
Step 5: Promote, promote, promote! Now that you’ve built a proper Facebook Official Page for your business, the next task is to drive traffic to it.
Integrated Marketing - One of the best and most affordable ways to drive sign-ups is to use your actual offline business to promote your Facebook Official Profile. Have tarpaulins or those table menus printed announcing that you’re on Facebook and that you’d like your customers to sign-up as fans. Let them know that you’ll be running contests and promos exclusive to your Facebook community. Give them a good reason to log-in when they get home and search for your page so that they can sign-up.
If your business is online, all you have to do is put banner ads on your site. It’s even simpler if you have an e-mail or SMS database. Just send out a broadcast announcing your Facebook Official Page and wait for them to start trickling in.
Your community has to be alive and kicking. Your Facebook Official Page has to offer value to your customers because if it doesn’t, then it’s as good as spam.
Facebook Advertising is one of the most cost-effective platforms available to Filipino entrepreneurs. The great thing about the Facebook Ad Platform is that it’s very user-friendly and it gives you a lot of options so that you get the
maximum exposure possible for your target market. You also get to pick the method of payment and there’s a tracking mechanism built-in which will allow you to monitor the performance of your campaigns.
Facebook Advertising is not as simple as it looks like. You really have to put even more effort in coming up with phenomenal creative because you have such a small space for both the image and your copy. You’re also contending with two other ads as well as the social stream on the wall of your prospects. But Facebook Advertising can bring your business to a whole new level if you leverage on the built-in targeting features of the platform.
ADD VALUE. That’s the single most powerful tip I can give to you before you start doing social media, especially Twitter. The more value you give, the more value you add to yourself and your company. Social Media is not about buying, it’s about earning via giving.
Secondly, Twitter is not just about talking - it’s also about listening and learning. There’s so much information and insights that you can get via Twitter’s search mechanisms that will have a profound impact on your business and career.
Connecting Smiles with Friendster - People say Friendster is already “yesterday” but the fact of the matter is that a lot of Filipinos are still using the pioneer social networking website. The traffic they’re getting is still high enough to get anyone’s attention, especially companies who want to tap Filipino netizens - more specifically young Filipinos.
Building your Friendster Fan Profile - To start, you need to create a regular account for your brand or company. Head on over to www.friendster.com and sign-up for an account.
The Friendster Self-Advertising platform – DIY(Do It Yourself) Ads offers a lot of advantages in advertising compared to Facebook. The most obvious is the ad placement and the ad size. Friendster gives you a large canvass of 300x250. The placement of the ads is also optimal since it usually pops up at the upper right section of the profile. Another amazing feature that’s not available in Facebook is the ability to target up to the locality of the target market (you can pick cities, regions, etc).
Friendster’s definitely still in the game, especially if we’re talking about the Philippines. The marketing tools that you have at your disposal on Friendster are quite formidable especially if you leverage it properly.
Blog Marketing 101 - Bloggers are starting to gain more prominence as great ways to raise awareness. Some bloggers here in the Philippines have more monthly readers compared to national best-selling glossies!
A blogger has one thing that all ads don’t - credibility. They have a relationship with their readers that makes them an authority and subject matter experts.
According to the book of Lloyd Luna entitled The Internet Marketing Handbook ( Principles and Strategies for Corporate Sales, Personal Branding and
Business Success, 2009), There is no denying that the world has evolved swiftly. The old rules have changed and it happened without a warning. What seemed to be a perfect business model in the last century no longer holds a healthy cash flow.
Most people who have done their business in the past were caught with one unique question in their mind: What happened?
In recruitment, traditional way of headhunting has changed unbelievably. Door-to-door job application was replaced with an online resume submission eliminating a human interaction during the first level of screening. Most jobseekers don’t have a clue on how an applicant is selected. They, too, are caught with one unique question in mind: What happened?
In education sector, teachers in primary, secondary, and tertiary education no longer get due respect from students who claim to be far better than they are. Information has been made available in the Internet and every assignment can simply be solved with a power “CTRL+C (Copy) and CRTL+V (Paste).” Students, in theory, can now be literally better than their teachers. And so people in the academe are left with a unique question in mind, too: What happened?
Those who’ve been doing traditional marketing and selling face the same difficult challenge. Gone are the days where businesses get an impressive number of responses from people using cold calling and facsimile transmittals.
The days of door-to-door selling was replaced with something else more economical. Businesses can cut personnel and still get the same sales result. Obviously, the rules have changed and so have the tools.
It occurs to me that there are things that no longer work however we try our very best. There are things in the past that simply cannot be an effective tool to help us improve or develop the way we live our lives. Those old school tools become more burdensome rather than it is irrelevant.
People who belong in the older generation continuously struggle to catch up. Most of them developed an irrational fear called Technophobia, the fear or dislike of advanced technology or complex devices, especially computers. On the other hand, the younger generation appears to be more welcoming on technological developments.
The new generation of business people wanted to innovate and adapt the new technology but the old generation seems to still hold on with “what made us successful” in the past.
It seems to me like the young is moving forward while the old is moving backward. Result? Status quo—the most dangerous side you can ever be!
The Internet Marketing Handbook is effective only to people who are ready for it. If you fail to get the message, then the philosophy is lost.
According to Juanita P. Roxas in her book entitled Marketing Practices in the Changing Philippine Macroeconomic Environment, Marketing strategies of
Philippine corporations are highly adapted to the obtaining macroeconomic conditions. Manufacturing companies were more dynamic than the service sector in their pricing, product and research and development practices when stagflation - a period of shortages, inflation and recession - hit the country due to the 1990 Persian Gulf crisis. The applicability of the stagflation model outside of the US was also validated.
Over the years, Facebook has increase its popularity in the Philippines and it kept growing time and time again. Latest figures from CheckFaceBook.com show that the Philippines is now among the Top Ten Largest Countries in terms of Facebook population with close to 15.3 million users (as of July 22, 2010). The Philippines is the 8th largest worldwide and the 2nd largest in Asia, next only to Indonesia whose Facebook population currently stands at close to 26.3 million. Facebook is the number 1 Website in the Philippines in terms of audience and search traffic.
Number of users on Facebook in Philippines is: 15,284,460. Male users are about 7,247,000; while Female users are 7,950,540. Philippines-based users yields around 611,000 to 612,000 logon every day since March. Majority of that are women at 353,000. Majority of that are in the age group - 18 to 34 years old (around 260,000). Dominant are college students or yuppies at 18-24 years old (around 150,000++), according to All Facebook.
Facebook is a popular name among those who are so into it. Filipinos who have an account in Facebook are now using more of their time to socialize with other people amidst the distance and lack of time. And even if a community like Facebook serves numerous advantages, it also proves to have certain disadvantages as well. There are now series of improvements in the system just to make up with the shortcomings. Arguments regarding the different advantages and disadvantages of Facebook for the Filipinos are stated below.
The advantages of Facebook are: Allows user search for new and old friends, Accessible to chosen universities having a high level of security, Makes it less awkward when communicating with people you are not familiar with, Love attraction - can be used as a dating service system, Makes it easier to join groups having similar likes and dislikes, and it allows members to check students who are taking the same class, living within the same area, or coming from the same academy.
On the other hand, its disadvantages are: Overcrowding, Weakening long distance relationship, Unsupported by physical adjacency, Contributes wide-range procrastination, Rampant addiction, Stalking is possible and Acquaintances be labeled as friends.
Surely, the disadvantages don't pose a threat just by merely looking at it. Someone else has to prove that what users do with their profile is directly in proportion with what can happen to them. A user must understand what he is
trying to give out otherwise things might get messy and people will mistook them as someone else.
It is quite obvious that a trade-off is happening between the advantages and disadvantages of Facebook. While it increases the communication and connection between friends and the online community it also increases the risk of procrastination and makes it easier for others to stalk a user. Worse, some are actually punished for what they put on their profile and would claim that it was there only for fun.
Despite the above mentioned advantages and disadvantages of an online networking service, it still is gaining demand and popularity among the young Filipinos. There are about 10,000 students (professionals and young professionals not yet included) who are joining into Facebook every day. This is regardless of the age or any demographic profile of individuals. Some are now trying to criticize the status of professionalism of this site whether it's just another fad like other online networking services are.
As media sees the early smell of elections in the air, networks have also cited the significant role of Facebook.com in most politicians’ campaigns. According to abscbnNEWS.com’s article entitled “Politicians using Facebook for 2010 election preparations” it is said that politicians are among the top users of said social networking site even if the 2010 elections was just a year away. The article also states that according to information technology expert Jaime
Garchitorena of Youth Vote Philippines, several social networking sites which includes Facebook.com, Friendster.com and Multiply.com voters to know more about the candidates.
In the article “Pres ‘l Campaign to Spread in Facebook, My space” by the Herald News Team, certain facts regarding the maximization of social networking sites which cites that politicians who are running for post have hired full-time staffers to maintain their online presence in social networking sites especially the presidential candidates. The article also expects much-awaited discoveries that presidentiables might see and maximize by using Facebook.com. Yet the news team recognized the fact that candidates have just started to tap the full potential of cyberspace and other social networking sites.
Lynn Lopez of Gmanews.tv criticized the attachment of the candidates themselves in networking accounts that they have in her article “POLITICIANS ONLINE: A one way street?”. She shared actual experiences and said feedbacks are very necessary to be critical about because users don’t even know if they are really in touch with the politicians. She said:
“One thing that hasn’t changed much is the websites’ sheer indifference to feedback. Those e-mail addresses you see? And those contact forms? That’s all for show, people. Write to them and wait weeks for a response, or sit back and watch awestruck as your messages bounce to you instantly.”
