EXAMINING THE IMPACT OF SOCIAL MEDIA ON THE MARKETING STRATEGIES IN SMALL AND MEDIUM FIRMS. THE CASE OF GUERRILLA MARKETING APPROACH.
The changes in the contemporary business landscape are driven by a variety of factors. External environment places more and more challenges for the companies, as they grow international, internationalize their chains and adopt new technology in thi relashionships with suppliers and customers globally. The external environment of a company is comprised of political, economic, social, technological, environmental and legal factors. Each of them has the significant impact on the ways modern companies conduct their business and build their competitive strategies. Some of the most recent trends, however, in a societal environment are especially interesting as they reshape the way companies think and transform the competitive landscape (Sadler, 2003). Indeed, the relationships developed between companies and technology and consumers and technology have tremendous impact on both sides. On one side, technology allows modern companies optimize their operations and enhance their Research and Development (R&D) opportunities, influencing their consumer by offering unique quality and service or differentiated customer experience (Keller and Horn 2003). On the other hand, technology is the strong instrument for social transformation. That said development of mobile technology further helps online businesses to grow. It also increases the access to information, making consumers' switching costs in virtually all the industries significantly lower. Moreover, technology transforms communication and marketing channels. This happens because social media is becoming a powerful communication tool and information sharing channel (Mangold 2009). As a result of the above-outline changes in societal norms and social environment, it is extremely interesting to examine the impact of social media on the organizational marketing strategies.
There are many topic that can be discussed within this area, but the rsearch is limited in time and resources and it is decided to focus on social media specifically. More accurately, this research will look into the social media influence on small and medium firms and the relationships between social media information of Guerrilla marketing strategy (Levinson 1994).
II: Research Aim and Objectives
II.I. Research Aim
The research aims at gaining a theoretical and explorative insight how the understanding and concept of marketing strategies and promotional mix changed influence of the latest trends in the social environment. Considering the importance of social media in modern society, it is possible to argue that the impact of social media on companies’ marketing strategies alone is extremely important (Mangold 2009). Social media influences organizations in many ways. Taking this into account, the researcher prioritizes the need to gain an in-depth insight into this area of studies and specific studies to developing a primary hypothesis and examine it through primary research methods. Hence, the research aim can be formulated as follows: "Examining the impact of the social media on the marketing strategies of small and medium firms. The case of Guerrilla Marketing approach".
II.II. Research Objectives
Given the specific aim, formulated in the previous section of this report, the author aims to address the following research questions:
How Social Media impacts organizational Brand Equity and identity?
What are the ways Social Media affects the marketing strategies and decision-making process in small and medium-sized companies?
How can Social Media enrich the concept of Guerrilla Marketing for such firms?
The above-outlined research questions can be translated into specific research objectives:
Identify the major trends in social media and the root-causes of its constantly increasing popularity;
Examine previous cases and analyze the specific cases, where Social media affected Brand Identity and Equity;
Examine the impact of the social media on marketing strategies of the companies in the target group in the past;
Draw on specific theory and framework of how social media focus in marketing strategies can enrich Guerrilla Marketing approach in such organizations.
III: Literature Review
III.I. Social Media Popularity Drivers and Future Trends
Many companies start realizing that the internet is becoming more and more important element of their marketing and promotional campaigns for two reasons (1) internet marketing strategy is very cost-effective, and (2) the internet generates very high engagement rates (Castronovo and Lei 2012). What makes interest and social media so effective? We live in a social environment which is characterised by a mix of three generations. These generations are generation Z, Y and X. More importantly, this mix creates conflict of interest in business world. More specifically, individuals born between 1966 and 1976 are still in their employment age, while Millennials (or generation Y), born after 1977 and Generation Z, born after 1995 are graduating from universities and start entering first level management roles on the market (Meerman 2010). This wide age range of employees in most of the modern companies creates several opportunities and difficulties. Companies have to learn how to manage internal diversity. Additionally, this mix of generations also changes the consumer market as individuals differ in their tastes, expectations and readiness to adopt new products. Technology-aware Generation X is giving space to highly tech-savvy and demanding Millennials and Gen Z, whose lifestyle is determined by time saving, convenience and strong demand for technology innovation (Hulten 2015). Hulten draws an interesting parallel between the three generation in terms of technology, mobility and works life balance. He suggests that Generation X, Y, and Z can be classified as beginners, Pro's and Freaks in technology awareness level respectively. Similarly, the same generations are named emancipators, globetrotters and integrators in mobility category. Hulter (2015) also tells that Gen X, Gen Y and Gen Z can be characterized as independent, flexible and super flexible in terms of work-life balance. The above allows a better understanding of the future trends and explains the increased popularity of social media. According to PRC report (2016), in 2016 79% of the total adult population used Facebook. Instagram was used by the 32% of the population. Pinterest, LinkedIn and Twitter occupied third, fourth and fifth places in popularity, being used by 31%, 29% and 24% of adults respectively. These numbers have been growing about 5% per annum over the past four years and are expected to grow another 3% by 2020 (PRC, 2016). Interestingly, in Generation Z the use of the social media and networking websites are adopted by over 88% of the population, and only by 79% of the Gen X. It was also observed that the use of social media differs between genders. 75% of women and 83% of men use Facebook and other websites. Similarly, it is possible to observe the differences in social media use between social classes and population in urban and rural areas. According to PRC report (2016), 84% of individuals with the annual income below USD$ 30,000 use social media, while only 75% of the population with the income between USD$ 50,000 and USD$ 79,000 are engaged in such activities. The use of social media in the rural area grows more rapidly due to infrastructure development, but still 83% of urban and only 77% of rural population use social media (PRC, 2016).
The question that this research makes here is what actually makes these social websites so popular? Charlesworth (2015) outlines several major drivers for social media popularity (1) an expression of identity and validation of social status, (2) finding people with similar mindset, (3) easiness and accessibility of communication, (4) increasing importance of the social media vehicles as news and event information sites, (5) no cost for the use of the social media as an effective communication method. Poell and Van Dijk (2015) bring another perspective on the topic, showing the critical role of emotion in the popularity of social media. These authors analyze the emotions and behavior of the users, when they see he discussions about terrorism, participate in organizational Sustainability campaigns and other emotion-focused social media actions. Moreover, the authors suggest that the increasing interest of public sector organizations in social media increases the total number of users of social media websites. More specifically, state and local authorities increasingly use social media websites for sending public messages and communicating important information (Poell and Van Dijk 2015).
III.II. Social Media and Brand Equity and Identity
A lot of research was done to understand the impact of social media on a construction of Brand identity and equity. Consumers spend more and more time using social media. This makes networking and other social media channels increasingly important to understanding the ways individuals discover, share and research information (Charlesworth 2009). More and more individuals start trusting the reviews and opinions expressed by users about specific brands, websites, and companies through such websites as Facebook, Instagram, and Trip Advisor (Nielsen 2016). Nielsen report (2016) talks about five core sources of consumer choice of specific Brands. These drives include consumer rating of the brand on social media (63%), consumer review (62%), company’s website (50%), call center (47%), and email (45%). But the most important argument in Nielsen’s report is that such sources, as company’s Facebook page (15%), mobile application (9%), and banner internet advertisement (8%) made consumers prefer one or another brand in 2016.
III.III. Social Media Impact on Organizational Marketing Strategies
Contemporary companies are becoming more concerned with the marketing strategies and the promotional mix, used to increase the competitiveness of their products (Hult 2016). That said the control over the message that the company sends to its consumers is critical. It is evident that social media brings a lot of advantages to the organizations, but these advantages also come at a cost. Social media benefits companies as it provides effective and easy access to the public. Social media websites use modern and advanced technology, which can make the significant contribution to the analysis of transactional customer data. Social media websites can help companies to get personalized customer data allowing them to segment the customers and develop personalized promotional and advertisement campaigns through social media (Holt 2016). Many organizations started to use Facebook and Instagram as the strategic organizational asset. As it became evident that this media is the major information source about the brand, companies must develop the proactive approach to ensure the minimal loss of control over the Brand image and reputation created through social media (Gummings and Worley 2009).
Social media is particularly important to small and medium companies, where marketing budget is limited and operational liquidity is one of the central elements of the generic strategy. Nielsen (2016) says that over 80% of the companies have dedicated social media teams, but social media is a relatively new phenomenon and many of these companies still struggle to reach desired results. Some of the most recent trends in the area include the development of Facebook at Work, the increasing use of the employees in the social advocacy programs to promote their organization. These two strategies can have the significant impact on the organizations, as they not only allow expanding the social media reach but also increase the control of the company about the Brand in social networks. Moreover, the engagement of employees and use of social media for business can increase the overall engagement with business posts in many times (Hult 2016). Another critical element of the contemporary social media strategy is the use of social messaging programs, such as WhatsApp and Facebook messenger. This approach often comes along with the use of social video and content advertisement. The statistics show that social media spending by the US companies alone accounts for USD$ 7.52 billion and are expected to grow to US$ 17.34 by 2019 (Statista 2016). This statistic illustrates how increasing popularity of social media makes companies change from being aware about social media to develop social media-driven marketing campaigns. There are many metrics, which can be used by the companies to evaluation the impact of the social media tactics on performance. The fact is that social media is the most effective to increase company's loyalty while the flythrough is the most important measure of success (Statista 2016; Hulten 2015).
III.IV. Social Media and Modern Guerrilla Marketing
Marketing techniques are becoming more diversified and powerful as technology advances and mobile devices are available to a larger group of the population. Companies can benefit from effective advertisement tools with higher outreach at a lower cost. Guerrilla marketing tactics are unconventional advertisement and promotion strategy, focused on low-cost campaigns and tools, which render the maximum result. The key element of Guerrilla marketing strategy is creativity and innovation. The approach is based on growing brand awareness without extreme marketing spending to create the interest of consumers. Taking into account the low cost and high reach, this approach is very popular among small and medium size companies (Levinson 1994). Some of the most modern Guerrilla tactics include graffiti and urban art, performance-based marketing, such as flash-mob, sabotage and web campaigns (Tayebi and Mohaghegh 2016). Academic literature defines social networks as connected societies with different motivation and structures. This means that all the Guerrilla campaigns can be improved by extending them to the relevant social network communities. This allows concluding that the relationships between Guerrilla Marketing and social networks is mutually beneficial. On one side, social networks impact Guerrilla Marketing as they enable more effective customer reach and attraction strategy. On the other, innovative Guerrilla tactics, such as the ones mentioned above, can build an audience in social networks (Tayebi and Mohaghegh 2016). One of the interesting obsrvations is that the impact of Guerrilla marketing on Gen Y and Z is more significant than on the Baby Boomers (Gen X) for obvious reasons. Innovation and strong reliance on modern mobile technology are the critical characteristics of the modern Guerrilla marketing in small and medium firms. With that, the degree of influence on tech-savvy population is higher than on individuals who continue prioritizing traditional customer experience to e-commerce and digital environment (Dinh and Mai 2016).
III.I. Research Methodology
The purpose of this document is to analyze the relationship between the changes in the contemporary social environment, leading to the popularization of the social media and their impact on the organizational strategies in small and medium-sized companies specifically (Bryman and Bell 2015). While studies, analyzed in this researh, present the significant amount of relevant quantitative and qualitative data on social media and its use in marketing, it is important that the current study explores the hypothesis that social media strategies can improve Guerrilla Marketing strategies in modern corporations. This can be done through deductive research approach (Minor 2005). With that in mind, it is decided to employ mixed research method to this research, involving (1) the literature review of relevant to the topic studies as the inductive approach and (2) case study of small and medium companies in the United States, with expected quantitative outcomes as the deductive approach.
III.I.I. Inductive Research
The ultimate objective of the inductive research is to explore (1) the evolution of the social media and the latest societal trends, resulting in growing popularity of such websites, as Facebook, Twitter, Instagram and Pinterest (2) organizational content marketing and social marketing strategies, and (3) analyze the impact of social media on the concept of Guerrilla marketing. Importantly, as this research is not designed to test a specific theory, the inductive approach is an accurate choice for the explorative study of the social media as part of the marketing and promotional strategies of firms (De Vaus 2001). The literature review will collect qualitative data, which will allow the structured approach to testing the hypothesis, developed for the case study. This research method will represent the subjective analysis of the data and the process-oriented approach.
III.II.II. Deductive Research
The decision to integrate the deductive research method into this study is to analyze the primary hypothesis that:
“Social media enhanced Guerrilla marketing concept and made it more attractive as a generic marketing strategy for small and medium-sized firms in the US” (Gray 2014).
The secondary hypothesis is formulated as follows:
"The development of social media did not influence marketing strategies sufficiently to conclude that it enhances the Guerrilla Marketing concept".
Given the hypothesis, the dependent variables for this research include the following (Ernst 2003):
Social media presence of the companies;
Investment growth in social media marketing;
The rate of substitution of the traditional advertisement tools by social media.
V. Data Collection
V.I. Qualitative Research
The secondary research will be conducted in the form of the literature review of the relevant studies, written between 2000-2017. The research will focus only on academic articles and books as well as statistical reports and research of the authorized companies, such as Nielsen and Pew Research Company.
V.II. Case Study
The case study will be conducted by analyzing the marketing strategies of 15 small and medium size companies in different industries, operating in service and product sectors. The specific methodology applied to this study is the observation and informal interviews with the individuals working for the companies. Then, the researcher will ask these individuals to answer the closed-ended questionnaire, comprised of 10 questions. The correlation method will be used to analyze the collected data and test the hypothesis (Brace 2008).
The research will be conducted, based on the personal contact with the members of the organizations. The 15 companies, chosen for the case study will represent 5 industries and fit into the definition of small and medium companies, employing up to 300 individuals. With that in mind, it is expected that 15 organizations can provide sufficient data to be conceptualized for the entire population of such firms in the US (Brace 2008).
The researcher will personally contact the individuals in the selected companies through unsolicited approach, using LinkedIn and ensure their readiness to cooperate with the research. Then benefits of the researchers and the expected outcomes will be explained to the participants and further distributed in a format of the final report. The interviews will be conducted in an informal manner over the phone. The author will further send out the questionnaires to each of the individuals and receive their responses in the written form.
Brace, Ian, 2008. Questionnaire Design: How to Plan, Structure and Write Survey Material for Effective Market Research. London: Kegan Page Publishing.
Bryman, Alan. and Bell, Emma. 2015. Business Research Methods. Oxford: Oxford University Press.
Castronovo, Cristina, Huang, Lei, 2012. Social Media in an Alternative Marketing Communication Model. Journal of Marketing Development and Competitiveness, 6(1), 133.
Charlesworth, A. 2009. Internet Marketing: a practical approach. Boston: Elsevier Publishing.
De Vaus, David. A. 2001. Research Design in Social Research. Thousand Oaks: Sage Publications.
Dinh, T.D., and Mai K. N. 2016. Guerrilla marketing's effects on Gen Y's word-of-mouth intention – a mediation of credibility. Asia-Pacific Journal of Marketing and Logistics, 28(1), 4-22.
Ernst, Andreas, 2003. Comparison of Qualitative and Quantitative Research. Seminar Paper. London: Green Verlag Publishing.
Gray, E. David. 2014. Doing Research in the Real World. London: Sage Publications.
Gummings T.Charles and Worley C.George. 2015. Organizational Development and Change. 10th Edition. Stamford: Cengage Learning.
Holt, D. 2016. Branding in the Age of Social Media. Harvard Business Review. Available at https://hbr.org/2016/03/branding-in-the-age-of-social-media [Accessed 8 December 2016].
Hulten, Bertil. 2015. Sensory Marketing: Theoretical and Empirical Grounds. New York: Routledge Publishing.
Keller, M. & Horn P., 2003. Strategic Management. 2nd Edition. Journal of Literature, 12(5), pp.66-89.
Levinson, J.C. 1994. Guerrilla Advertisement London: Houghton Mifflin Harcourt.
Mangold, Glynn, and Faulds, David J. 2009. Social media: The new hybrid element of the
Meerman, David, S. 2010. The New Rules of Marketing and PR: How to Use Social Media, Blogs, News Releases, Online, Video, and Viral Marketing to Reach Buyers Directly. 2nd Edn. London: John Willey & Sons.
Miller Tina, Birch Maxine, Mauthner Melany. & Jessop Julie. 2012. Ethics in Qualitative Research. 2nd Edition. Los Angeles: Sage Publications.
Minor, James. B. 2005. Organizational Behavior: Essential theories of motivation and leadership. New York: M.E. Sharp.
Nielsen, 2016. How Social Media Impacts Brand Marketing. Nielsen Review [Online]. Available at http://www.nielsen.com/us/en/insights/news/2011/how-social-media-impacts-brand-marketing.html [Accessed 11 January 2017].
Poell, Thomas, and Van Dijk, Jose, 2015. Constructing Public Space: Global Perspectives on Social Media and Popular Contestation. International Journal of Communication, 10(2016), 226-234.
PRC, 2016. Social Media Update 2016. Pew Research Center [Online]. Available at http://www.pewinternet.org/2016/11/11/social-media-update-2016/ [Accessed 12 January 2017].
promotion mix. Business Horizons, 1(29), 357-365.
Sadler Philip. 2003. Strategic Management. 2nd Edition. London: Kogan Page Limited
Statista, 2016. U.S. Social Media Marketing - Statistics and Facts. Statistics [Online]. Available at https://statista.com/topics/1538/social-media-marketing/ [Accessed 8 December 2016].
Tayebi. A. F, and Mohaghegh, N. 2016. Study the Guerilla Marketing Strategies to Attract Audience and Its Effect on Social Networks. Journal of Administrative Management, Education, and Training, 12(4), 51-58.