The Benefits And Risks Of Social Media Marketing For Businesses

Benefits of Social Media Marketing

Question:

Explain Impact of Social Media Marketing on Business.

Now a day, social media marketing has become much popular among every sector or industry. It has been found that among all the marketing strategies, the social media marketing has become the most beneficial one as in these present days people are more familiar in using the internet and the social media sites like Facebook, LinkedIn, Twitter, Instagram and many more. The social media marketing is a strategy that is generally used by most of the companies – both smaller and larger, where they use the websites of social media networking platform to market and sell their products. The primary objective of the social media marketing (SMM) is the development of a database, which will be shared by the users of the social networking among their social group in order to help the organization in brand building and also to widen the consumer reach.

In the social media marketing, the social media optimization (SMO) plays an important role. It is a systematic approach that can gain effective and new visitors to a particular website. However, SMO can be performed by two technologies – one connects the links of the social media to the database, like sharing options and RSS feeds. The second one is to provide advertisement regarding activity by using the social media and by updating the post, blog tweets or status (Zou & Fu, 2011). The information that is shared on the social websites generally help the customers to determine the position of an organization in the market. The reason behind this is that 92 out of total 100 consumers trust more on the word of mouth than any type of advertisement, on the other hand, the online consumers’ reviews are taken as the second most trusted source. It has also been found that 46% of the total web users go through the social sites before purchasing. In addition to this, the firms gather double leads on an average from the persons who use Twitter than who do not. 60% of the agency experts and 70% of the brand advertisers count the social media marketing as the most effective procedure for creating brand awareness.

In the competitive market, it is an essential factor that every organization – smaller and larger should take the advantage of digital technology with the aim to increase its profits (Tuten & Solomon, 2013). This research proposal will indicate that how the SMM is related with the increased rate of the popularity of the firm and the selling of products increased. 

The implementation of the social media marketing strategy increases the sales of a company and thus it also increases the profitability ratio of the firm. However, it has been found that implementation of the particular social media marketing strategy is an expensive factor. Thus, most of the larger companies have implemented this strategy but it has been noted that smaller companies generally do not implement this social media marketing strategy for higher expense. The social media marketing strategy helps the companies to get popularize but it is hard for any new brand or new company to penetrate the market as various risks are associated with the online business. Trust of the customers on the company especially in the process of transaction is the main factor or it can be said that it is the essential factor (Smith & Zook, 2011). Thus, it might happen many times that people do not start trusting any new brand or company and thus they do not purchase any products and services from the new company. Therefore, proper promotional campaign, advertising are required for building the brand and also for increasing the popularity of the firm.

Social Media Optimization

The social media marketing strategy helps to build good relationship with the customers (Singh & Diamond, 2012). However, it has been found that to develop or to build good relationship with the customers, the company has to suffer much. The main reason behind this is that there are various risks related to the online marketing business. These include – the reputational risks, employment risks, legal risks, security risks, intellectual property risks, media risks, defamation risks, operational risks, privacy risks and also social media risks. Social media has changed the process of communication and interaction (Scott & Scott, 2011). Thus the operation of the companies should also vary. The legal risks that are linked with the social media should be considered carefully in order to engage in a social media strategy. The reputational risks are the main problem as through online websites, one company can get affected due to various prank video stories or due to false representation of the company information. The social media sites potentially increase the security risks especially the personal information and details of the customers like account number, debit card number and many more (Pride & Ferrell, 2012). In addition to this, most of the customers remain scared of the transaction factor as hacking is a major problem in case of internet or online shopping. Defamation results due to social media activities and thus companies sometimes might need to be aware of the defamatory statements made by their employees regarding its competitors and the statements made by the people based on the third party social networking pages of the company. On the other hand, the operational risks might also affect in building relationships with the customers of the company. The reason behind this is the risk of endangering the networked computers of the organization by unknowingly acquiring viruses, malware and spyware (Malhotra, 2013).

In such scenario, it has become essential that in order to increase the sales and profitability of the company and its popularity, the firms have to overcome all the risks and barrier regarding the social media marketing (Olivas-Lujan & Bondarouk, 2013). This study will help to fill the gap with the empirical evidence of the impacts and the risks of the social media marketing faced by the companies and it will help the companies to build good relationship with the customers.

The primary objective of this research proposal is to recognize the potential output of the social media marketing strategy that is mainly used by the organization. The research questions are as follows:

1. How does the impact of social media marketing strategy lead to an increase in the popularity and the sales of an organization or of a business?
2. How much is social media marketing effective over the traditional marketing style?
3. How does the social media marketing helps to build the relationship with the customers?

The social media platform offers the organizations to interact and connect with the customers and also to promote the brand of the company. It can also be said that social media marketing strategies help in brand building and in driving the traffic to the website of the particular company (Malhotra, 2012). The involvement of the organizations in the social media platform creates more human face to the particular business. This helps the organizations to get popularize in short period of time. Thus, it can also be said that the social media marketing helps to increase the revenue of the firm along with the profitability ratios of the organizations. However, some issues have been stated in the problem statement of the proposal based on which this research proposal has been structured (Macarthy, 2013). Though there are various types of facilities and positivity in the implementation of the social media marketing strategies within the organization, there are various negativities. These include – firstly, there are a number of major social sites like – Facebook, Twitter, YouTube, LinkedIn, Instagram and Google+ and many more, thus it might create confusion among the management department of the companies as they have to identify first that which social media site is more used by the customers and as per the survey and analysis the firms will use those particular social media sites for marketing. Secondly, there are several risks associated with the social media marketing strategies, these include – social risks, reputational risks, operational risks and legal risks (Lamb, Hair, & McDaniel, 2011). In addition to these legal risks include employment risks, security risks, intellectual property risks, media risks, defamation risks and privacy risks. Therefore, it can be said that the performance of the particular research proposal is justified and significant as every organization should overcome the above stated issues regarding implementation of the social media marketing strategies within the firm. The overcome of the issues will help every firm – both larger companies and smaller companies will be able to implement the particular SMM strategies within the organization (Kotler & Keller, 2012). And implementation of this strategy will help every organization to interact and communicate more with its customers and this will also help to understand the customers better. Thus it makes the companies able to provide the products and services as per the demand and need of the customers. By fulfilling the demand and need of the customers, the companies gain more customers and thus sales of the firm increased along with the profit percentage of the firm also increased. All these positivity help the firm to get more popular within the competitive market and these acts as the competitive advantage of the firm.  

Building Trust with Customers

The outcomes of this particular research study will give an analytical framework for the investigation of the factors that affects the businesses because of the implementation of the social media marketing strategies that ultimately help in developing the growth and the popularity of the businesses and also in analyzing the strategies that are used by the companies with the aim to proof the effectiveness of the social media marketing strategy over the traditional marketing style (Kerin, Hartley, & Rudelius, 2011). This research proposal is also expected to build the relationship of the company with its existing and potential customers through the implementation of the social media marketing strategies (Grewal & Levy, 2012). The response of various businesses might vary but still the research study will help the researchers to understand the scenario and will also help to provide a wholesome picture of the particular circumstance regarding the impact of the social media marketing on the businesses. The adaptation and the performance of the smaller business depends on many factors, these include – the high expense for the implementation of the social media marketing strategy, the ability of the smaller firms to fight against all the types of risks and the ability of the smaller firms to earn the trust and the belief of the customers regarding offering of cost effective and authenticated products and services might affect the implementation of the particular strategy (Evans, 2012). These factors might have an effect on the final output of this particular research study. Moreover, the research objectives and questions will be answered as these have been identified in this research proposal on the basis of the information and data gathered during the interview and questionnaire survey, findings and analysis, which will be performed for the same (Elliott, Rundle-Thiele, & Waller, 2012). All these outputs of the research study will be considered as an important academic work for the specified and stated problem statements that have been recognized only for this research proposal. Lastly, it can also be said that this particular research study will provide benefit to the future owners of the start-up businesses prior to embark of their businesses. 

In this research proposal study, the aim of the researcher is to find out how the use of the social media marketing strategy can help an organization in order to (i) increase the sales of the firm and its profit percentage and (ii) reach out to increased numbers of consumers and to build and maintain a good relationship with the customers. This analysis will also help to understand the reasons for which the social media marketing strategy is considered as more effective over the traditional marketing style. Therefore, a conceptual framework has been proposed by the researcher where both dependent and independent variables have been considered. In this proposed conceptual framework, there is only one independent variable and has two dependent variables. The single independent variable for this particular research proposal is the use of the social media marketing strategy and on the other hand, the two dependent variables of the conceptual framework depending on the research proposal are increase in sales amount and sales volume and reaching out to more consumers (Bosik, 2011). The proposed conceptual framework of the implementation of the social media marketing strategy within an organization or a business has been structured as follows:

Hypothesis:

Challenges and Risks of Social Media Marketing

There are mainly two aims that are needed to be analyzed and discussed in order to analyze the stated problem statements of this research proposal. Firstly, the aim of this research proposal is to investigate whether there is any relationship or not between the use of the social media marketing strategy within an organization and in reaching out to more consumers of the company (Biddle & Emmett, 2013). Therefore, the hypotheses can be stated as follows:

H0: There is no relationship between the use of the social media marketing strategy within an organization and in reaching out to more numbers of consumers.   

H1: There is a relationship between the use of the social media marketing strategy within an organization and in reaching out to more numbers of consumers.  

Secondly, the other objective of the firm is to find out whether there is any relation between the use of the social media marketing strategy within an organization and in increasing the sales volume and sales amount of the products and/ or services of the particular firm (Berghoff, Scranton, & Spiekermann, 2012). Therefore, the hypotheses can be stated as follows:

H0: There is no relationship between the use of the social media marketing strategy within an organization and in increasing the sales volume and sales amount of the products and/ or services of the particular firm.   

H1: There is a relationship between the use of the social media marketing strategy within an organization and in increasing the sales volume and sales amount of the products and/ or services of the particular firm.

For every research study, methodology plays a vital role as proper selection of method is essential for completing the research systematical and in time. In this research study, various methods will be undertaken to complete the research in time and to analyze the problem statements effectively.

• Literature Review: The relevant literature and the available information will be used for in-depth study. These include – journal articles, blogs, books, websites, Google Scholar and videos (Bartkowiak, 2012). Thematic analysis of these documents will be performed.
• Data Collection Method (Data Series and Questionnaires/ Surveys)
• Various data and information can be gathered from the series of data. The surveys will be conducted in order to provide an idea regarding the usefulness of the implementation of the social media marketing strategy, increase in the sales and the method of overcoming the risks associated with the implementation of the particular strategy.
• Moreover, questionnaires will be prepared and distributed online in order to save time. The answers of the survey will help the researcher to understand the reason and the relationship between the implementation of social media marketing strategies and in the good relation with the customers.
• Observing Key Indicators: By examining the critical information from the websites of other companies that focuses on implementation of the social media marketing, the analysis of the research study will be performed (Barker, Barker, Bormann, & Neher, 2013).
• Data Analysis Methods: Data will be analyzed by using both qualitative and quantitative methods. The qualitative analysis will include the information gathered from surveys and online forums with the marketing advisors. On the other hand, quantitative analysis will be performed on the basis of the figures, excel sheets, pie charts, statistical and mathematical modeling that are available from scholarly articles and online.

This research study will consider a mixture of all the methodologies mentioned above. By applying these methodologies the researcher will be able to analyze the problem statements in details (Baines, Fill, & Page, 2011).

The organization of the study is as follows:

• Chapter One – It will represent the Research Proposal as structured in this assignment.
• Chapter Two – This chapter will describe the particular case study related to the impact of the implementation of the social media marketing strategies on the businesses.
• Chapter Three – It will include the details of the methodology that is the literature review of the particular research topic, data collection methodologies like data series and questionnaire surveys, observation of primary indicators of the social media marketing strategies and data analysis methodologies (Albarran, 2013).
• Chapter Four – This chapter will represent the Data Interpretations and Findings along with the Analysis of this research proposal.
• Chapter Five – This particular chapter will summarize all the important findings and will discuss about their implications in making the businesses better prepared in order to survive in the competitive market by implementing the social media marketing strategy on the businesses, both smaller and larger companies.

Gantt chart

The table below shows the timeline for the entire Project to be completed.

Research Activities	1-4	4-8	8-12	12-16	16-20	20-24	24-28
Topic of the Research	ü
Analysis of the secondary  source
Layout of the investigation
Literature review and theories
Operations and research plans			ü
Research Plans and Techniques
Primary data Analysis			ü
Interpretation of Data Analysis
Findings  and Analysis
Conclusion and Summary
Formation of Draft
Final Submission of  the research Paper

 Milestones and Deliverables

The budget of this research study is around $5000 with the aim to complete the particular project within the specified time frame as provided in Gantt chart.

The significance of the projected budget is as follows:

• The Literature Review requires the usage of journal articles, textbooks and online resources, which are not free of cost. This will cost about $1200.
• Data will be collected in the form of questionnaires and surveys that will include travelling, printing and mailing expenses (Aaker, 2013). This will cost around $2300.
• For data analysis, charts, graphs, various data and tables have to access. Thus some cost should also be allocated for this purpose. This will cost around $1500.

In summary:

Purpose	Projected Expense
Literature Review	$1200
Data collection	$2300
Data Analysis	$1500
Total Estimated Budget	$5000

 References

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Albarran, A. (2013). The social media industries. New York: Routledge.

Baines, P., Fill, C., & Page, K. (2011). Marketing. Oxford: Oxford University Press.

Barker, M., Barker, D., Bormann, N., & Neher, K. (2013). Social media marketing. Mason, OH: South-Western Cengage Learning.

Bartkowiak, J. (2012). Market research in a week. London: Hodder Education.

Berghoff, H., Scranton, P., & Spiekermann, U. (2012). The rise of marketing and market research. New York, NY: Palgrave Macmillan.

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