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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.

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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.
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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
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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
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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

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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
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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
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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,
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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

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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

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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.

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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
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“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
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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
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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

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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
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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
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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
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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.

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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.
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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

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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.

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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

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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.

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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.

 26

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.
 27

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

 28

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.

 29

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
 30

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.

 31

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
 32

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.
 33

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.
 34

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.

 35

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.

 36

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.

 37

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.
 38

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
 39

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
 40

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
 41

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.

 42

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
 43

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.
 44

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

 45

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.

 46

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
 47

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

 48

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.”
 49

As what media practitioners see, Philippine politicians have, in a way,

patterned their campaigns the way United States President Barrack Obama has in

his presidential campaign, thus, creating a statement of challenge whether

Facebook.com will be effective when used by politicians in the country. The

criticisms that praises and negates at the same time shows how the pros and cons

of presidentiables being visible online creates another idea whether people will

still be pulled by the bandwagon of Facebook.com accounts of candidates.

According from a book article written by Lloyd A. Luna entitled Social

Media Marketing in the Philippines, Ten years ago, it wasn’t like this. We didn’t

have much rapport with the Internet technology especially that the Philippines

was just starting to adapt with the trend. Perhaps because at the time, it was still

unclear what it is for. Today, it’s obviously important for us to be in social

networks such as Twitter, Facebook, Plurk, Multiply, and Foursquare among

many others.

Social Media Marketing in the Philippines isn’t in its peak yet. And my

observation is that Filipinos are still in the “consumer” of the technology rather

than “user” of it. Now, the difference is that consumers spend and users profit.

As an Internet marketing specialist in the Philippines and Asia, I think

transformation from being consumers to users isn’t really an easy move. We love

being entertained and get connected with friends. This isn’t like America or any
 50

other developed countries, where standard of living prohibits them from spending

3 hours a day on Facebook and other social networking websites.

We are still lucky to be in this country, but mind you, sooner or later, the

name of the game will be Users of Internet Technology.

Social Media as a tool, whether you are in Manila, Cebu, Davao, or

anywhere else in the Philippines, is something that we can’t afford not to have.

We should have the knowledge on how to read the signs as well as the meaning

over as many clicks as have. Our performance in social networks and media as

part of our internet marketing campaign or identity should be more than what we

have now.

According to the article of Rob Angeles entitled 5 Valuable Social Media

Marketing Tips For Small Businesses, Many business owners are still concerned

about partaking in marketing in the social web. Some of the common concerns

include budget and time constraints. These are valid concerns considering that

small businesses are usually tight on finances and require the owners to be hands-

on in all aspects of the company. But social media marketing isn’t all that

expensive and time-consuming. It may start off that way as you’re learning the

ropes, but as you progress it’ll all be easier. Here are some tips on how you can

make social media marketing easier for small businesses: First, You don’t have to

jump immediately into hiring a social media expert. You can try reading about it

yourself. Allot an hour or so a day to read and absorb the basics of social media,
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then practice it bit by bit. Remember that you don’t have to go full out

immediately. And also, the more you understand what goes on in social media,

the lesser the likelihood of you getting fooled by so-called social media “experts”.

Second, You don’t have to spend on high-tech gadgets. Your tried-and-tested

video camera, even your cellphone camera, can be a very useful tool in making

promotional or instructional videos which you can post on social video sharing

sites like YouTube. Third, To help you maximize your allotted time for social

media marketing, don’t spread yourself too thin. Instead of being everywhere at

once, why not choose a select few that you can concentrate on. Make sure that

those sites you’ve chosen are ones that actually matter. Fourth, If you’re worried

about tracking ROIs for your social media effort, you can simply ask new

customers where they’ve heard about your business. It’s quick, it’s personal, and

it gives you the chance to get to talk to your clients a little more. Fifth, To make it

easier for you to stick to your allotted time, it helps to set up an alarm clock for

when you need to start working and when your time is up for doing your social

media marketing. Knowing that you’re only supposed to work within the said

hours can really keep you focused on work.

According by Dani Babb in his article entitled Make Sure your Facebook

Strategy is the One that Works Best for your Business”, In today's social media-

driven marketing frenzy, online business owners are expected to be top in their

game in using tools like Facebook and Twitter to their advantage. These free tools
 52

are increasing in popularity but also in saturation--many people report not reading

updates anymore because of "information overload." It's important to keep

information fresh, useful and purposeful while adding, if your brand allows, some

humor and interesting information.

One of the most common questions I get about Facebook is, "What

options should I use? Groups or regular pages?" This is a more complicated

question than it seems on the surface, but important for making certain you spend

your hard-earned money and precious time in areas that will give you the most

bang for your buck. You can certainly have both, but it's important to know what

you can and can't do with each.

First, let's take a look at a standard Facebook fan page and some of the

options available to you. Pages can be viewed by unregistered users, though you

will need to set your security preferences for this. A viewer does not need to be a

Facebook member to view your fan page either. You can add extra applications to

make your page more personal and send messages to all members using the

updates feature. Pages also allow you to see statistics. You can create a corporate

"person" page. There are tighter security options now in Facebook than in the

past, so be sure to explore what each of those does. I recommend logging out and

seeing what you can and can't view while not logged in as a registered user. Fan

pages can be useful in helping the viral aspect of social media because "Joe
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became a fan of." pops up on each persons wall (unless they turn it off or remove

it) when they become a fan of your business.

Groups, on the other hand, allow you to send out bulk invitations (for

instance, you can ask all of your friends to join the group) and any of your group

members can also invite their friends. If you have "friends" on your Facebook

page who are acquaintances or just share common interests this is a good way to

market.

A group, however, has a limitation of 5,000 members if you wish to send a

message. They are generally considered to be best for more personal interaction. I

use a group, for example, to help people find online teaching jobs called "Make

Money Teaching Online" where members share experiences, job tips and who's

hiring. Group pages allow you to set other administrators to see who is requesting

to join the group. If you post something to the group page, it will also show up on

your personal wall. Some people don't like this because it ties them to their

businesses, but this can be useful in creating a "person behind the online business"

feeling with your customers. You have more control over participants and

permissions with group memberships.

Both groups and fan pages allow you to create discussions and others to

reply. Both have a wall for people to write on. Both allow you to share videos and

pictures. Both require you to manually remove posts as an administrator if

something does not meet your standards or purpose for the page. Both also allow
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you to create events.

Regardless of which one you choose (of course, you can have both), be sure

to update regularly, keep your audience engaged and offer something of value. If

you use your page or group purely for promotional reasons, you are far less likely

to build loyalty, and there's a good chance that your members and friends won't be

returning to your pages anytime soon.

According from the site www.voicevilleinc.com, an article by Rhyza,

entitled Facebook Marketing, we all know why Facebook is topping the charts.

With over millions of visitors a day, Facebook sure knows its way into the social

media frenzy. We have come to know Facebook as one of the major portals of

social connectivity but other than that, Facebook is leading us into a different

world called Facebook marketing. What Facebook marketing offers matter to

people’s businesses; which is why as a Global Marketing Specialist for Voice

Ville, we utilize Facebook to connect to thousands of people worldwide. Not

only that, we literally make friends with everybody. Facebook is here for a

reason; businessmen take advantage of this social medium to engage or to use it

as an outlet to feel a social vibe. With the help of Facebook, we allow people to

be who they are and we indulge in their interests to show that we respect their

individualism.

According by Glen, on his article entitled, 10 Ways to Create a More

Engaging Facebook Page (Online Marketing, Social Media), Facebook pages can
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be a huge way to connect to audiences. Facebook statistics tell us that the average

user (at the time of this writing) is connected to 60 pages, groups and events. This

means that aside from all the other Facebook friend activity that goes on, your

page is one of 60 trying to grab attention a fan’s attention. For a more effective

social media marketing program, ten things that you can do to turn your Facebook

page into a dynamic and engaging destination for your Facebook fans. First, Be

unique - There’s nothing worse than a bland Facebook page. Think long and hard

about how your page can be different. Remember, your page is one of at least 60

things that an average Facebook user is giving attention to. It’s insanely important

that your page is unique and stands out from the rest. Second, Don’t use a generic

landing page - Facebook allows you to customize what page different types of

users land on. You can show people who have never been to your page before a

completely different message than people who are already fans on your page. It’s

a great idea to show potential users a page specifically tailored for them. It might

give a little background about your company or site, and would give them a great

reason for joining, Third, Give something away quickly - Your die-hard followers

won’t need any reason for joining your fan page. But if you’re trying to really

grow your Facebook presence, consider giving resources back to your community

and niche. This allows you to reach other potential fans within your niche that

might not have known about your Facebook page, Fourth, Use a large profile

picture - People on Facebook want to see photos. After all, Facebook is far and
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away the biggest photo sharing site on the web. So make sure your page has a

large photo of your company or brand as the profile picture. This helps with

branding and adds trust to your profile, Fifth, Tag fans in photos - This is a great

tip if you’re a brick and mortar business. If you’re somehow able to take pictures

of your customers, tag them within the picture. Many people have Facebook

notifications that alert them when they’ve been tagged in photos, and this will

bring them back to your page, Sixth, Use contests - Contests are a great way to

make your fan page more engaging, and they also give incentive for potential fans

to join. Contests that include giveaways can be excellent marketing tools if

they’re done properly, Seventh, Integrate multiple social networks

You can use multiple Facebook applications to pull in your other already

existing accounts from other social networking sites. With the help of some nifty

applications, you can pull in Twitter, Flickr, and many others fairly quickly,

Eighth, Thank people for becoming your fans - When someone becomes a fan on

Facebook, immediately thank them! Give them something in return, like an e-

book or coupon, or at the very least send them a quick “thanks!” message, Ninth,

Don’t treat your fans like kids - In case you haven’t noticed, Facebook has grown

up a lot in the past few years. What used to be a place for college students and

younger is now a place for everyone. According to this report from strategy labs,

the fastest growing demographic on Facebook in 2009 was adults aged 55 and

over. The largest overall demographic on Facebook is ages 35-54, which makes
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up 29% of all Facebook users and Tenth, Keep at it - Oftentimes people will

create their pages and leave them. Facebook pages are breeding grounds for

excellent feedback and engagement. Many people are starting to find that

Facebook pages have excellent discussions and high interaction rates, oftentimes

higher than Twitter and other social networks. Photos and contests are great

interaction tools, and posting stories and articles also add lots of value to the

community

Foreign Literature

In his 2006 book, The Wealth of Networks: How Social Production

Transforms Markets and Freedom, Yochai Benkler analysed many of these

distinctions and their implications in terms of both economics and political

liberty. However, Benkler, like many academics, uses the neologism network

economy or "network information economy" to describe the underlying

economic, social, and technological characteristics of what has come to be known

as "social media".

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

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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.

Andrew Keen criticizes social media in his book, The Cult of the Amateur

(2007), writing, "Out of this anarchy, it suddenly became clear that what was

governing the infinite monkeys now inputting away on the Internet was the law of

digital Darwinism, the survival of the loudest and most opinionated. Under these

rules, the only way to intellectually prevail is by infinite filibustering."

There are various statistics that account for social media usage and

effectiveness for individuals worldwide. Some of the most recent statistics are as

follows: Social networking now accounts for 22% of all time spent online in the

US; A total of 234 million people age 13 and older in the U.S. used mobile

devices in December 2009; Twitter processed more than one billion tweets in

December 2009 and averages almost 40 million tweets per day; Over 25% of U.S.

internet page views occurred at one of the top social networking sites in

December 2009, up from 13.8% a year before; Australia has some of the highest

social media usage statistics in the world. In terms of Facebook use Australia

ranks highest with almost 9 hours per month from over 9 million users.

One of the key components in successful social media marketing

implementation is building "social authority". Social authority is developed when

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an individual or organization establishes themselves as an "expert" in their given

field or area, thereby becoming an "influencer" in that field or area.

It is through this process of "building social authority" that social media

becomes effective. That is why one of the foundational concepts in social media

has become that you cannot completely control your message through social

media but rather you can simply begin to participate in the "conversation" in the

hopes that you can become a relevant influence in that conversation.

Thus, using social media as a form of marketing has taken on whole new

challenges. As the 2010 Trust Study indicates, it is most effective if marketing

efforts through social media revolve around the genuine building of authority.

Someone performing a "marketing" role within a company must honestly

convince people of their genuine intentions, knowledge, and expertise in a

specific area or industry through providing valuable and accurate information on

an ongoing basis without a marketing angle overtly associated. If this can be

done, trust with, and of, the recipient of that information – and that message itself

– begins to develop naturally. This person or organization becomes a thought

leader and value provider - setting themselves up as a trusted "advisor" instead of

marketer. "Top of mind awareness" develops and the consumer naturally begins

to gravitate to the products and/or offerings of the authority/influencer.

As a result of social media – and the direct or indirect influence of social

media marketers – today, consumers are as likely – or more likely – to make

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buying decisions based on what they read and see in platforms we call "social"

but only if presented by someone they have come to trust. That is why a

purposeful and carefully designed social media strategy has become an integral

part of any complete and directed marketing plan but must also be designed using

newer "authority building" techniques.

Social media can take many different forms, including Internet forums,

weblogs, social blogs, microblogging, wikis, podcasts, pictures, video, rating and

social bookmarking. By applying a set of theories in the field of media research

(social presence, media richness) and social processes (self-presentation, self-

disclosure) Kaplan and Haenlein created a classification scheme for different

social media types in their Business Horizons article published in 2010.

According to Kaplan and Haenlein there are six different types of social media:

collaborative projects, blogs and microblogs, content communities, social

networking sites, virtual game worlds, and virtual communities. Technologies

include: blogs, picture-sharing, vlogs, wall-postings, email, instant messaging,

music-sharing, crowdsourcing, and voice over IP, to name a few. Many of these

social media services can be integrated via social network aggregation platforms.

In Communication: Blogs: Blogger, ExpressionEngine, LiveJournal, Open Diary,

TypePad, Vox, WordPress, Xanga; Microblogging: FMyLife, Foursquare, Jaiku,

Plurk, Posterous, Tumblr, Twitter, Qaiku, Yammer, Google Buzz; Location-based

social networks: Foursquare, Gowalla, Facebook places, The Hotlist; Social

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networking: ASmallWorld,Cyworld, Facebook, Hi5, LinkedIn, MySpace, Orkut,

Tagged, XING; Events: Eventful, The Hotlist, Meetup.com, Upcoming;

Information Aggregators: Netvibes, Twine (website); Online Advocacy and

Fundraising: Causes, Kickstarter. In Collaboration/authority building: Wikis:

PBworks, Wetpaint, Wikia, Wikimedia; Social bookmarking (or social tagging):

CiteULike, Delicious, Diigo, Google Reader, StumbleUpon, folkd; Social news:

Digg, Mixx, NowPublic, Reddit, Newsvine, MyWeboo; Social navigation:

Trapster, Waze; Content Management Systems: Wordpress; Document Managing

and Editing Tools: Google Docs, Syncplicity, Docs.com, Dropbox. In

Multimedia: Photography and art sharing: deviantArt, Flickr, Photobucket, Picasa,

SmugMug, Zooomr, BetweenCreation; Video sharing: sevenload, Viddler,

Vimeo, YouTube, Dailymotion, Metacafe, Nico Nico Douga, Openfilm,

TubeMogul; Livecasting: Justin.tv, Livestream, OpenCU, Skype, Stickam,

Ustream; Music and audio sharing: ccMixter, Pandora Radio, Last.fm, MySpace

Music, ReverbNation.com, ShareTheMusic, The Hype Machine; Presentation

sharing: scribd, SlideShare. In Reviews and opinions: Product reviews:

epinions.com, MouthShut.com; Business reviews: Customer Lobby, Yelp, Inc.;

Community Q&A: Askville, EHow, Stack Exchange, WikiAnswers, Yahoo!

Answers. In Entertainment: Media and entertainment platforms: Cisco Eos;

Virtual worlds: Active Worlds, Forterra Systems, Second Life, The Sims Online;
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Game sharing: Kongregate, Miniclip. In Brand monitoring: Social media

measurement: Attensity, Statsit, Sysomos, Vocus.

Social media marketing is a recent addition to organizations’ integrated

marketing communications plans. Integrated marketing communications is a

principle organizations follow to connect with their targeted markets. Integrated

marketing communications coordinates the elements of the promotional mix;

advertising, personal selling, public relations, publicity, direct marketing, and

sales promotion. In the traditional marketing communications model, the content,

frequency, timing, and medium of communications by the organization is in

collaboration with an external agent, i.e. advertising agencies, marketing research

firms, and public relations firms. However, the growth of social media has

impacted the way organizations communicate. With the emergence of Web 2.0,

the internet provides a set of tools that allow people to build social and business

connections, share information and collaborate on projects online.

Social media marketing programs usually center on efforts to create

content that attracts attention and encourages readers to share it with their social

networks. A corporate message spreads from user to user and presumably

resonates because it is coming from a trusted source, as opposed to the brand or

company itself.

Social media has become a platform that is easily accessible to anyone

with internet access, opening doors for organizations to increase their brand
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awareness and facilitate conversations with the customer. Additionally, social

media serves as a relatively inexpensive platform for organizations to implement

marketing campaigns. Organizations can receive direct feedback from their

customers and targeted markets.

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. Key factors that ensure its

success are its relevance to the customer, the value it provides them with and the

strength of the foundation on which it is built. A strong foundation serves as a

stand or platform in which the organization can centralize its information and

direct customers on its recent developments via other social media channels, such

as article and press release publications.

Building on the principles in his bestselling book, "Social Media

Marketing: An Hour a Day (2010)," social media leader Dave Evans have

indicated in his book that social media plays a vital role in business, taking

customer engagement and collaboration to new levels that help improve

company's products, and services.

Dave Evans, author of "Social Media Marketing: The Next Generation of

Business Engagement (2010)" wrote that implementing Social Media in business

is perfect for marketers, business unit managers and owners, HR professionals

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and anyone else looking to better understand how to use social technologies and

platforms to build stronger businesses. He reveals that social technology, when

applied to business, can spur collaborative innovation and drive winning

programs to improve products, services and your prospects for long-term profits

and growth. He also gives insightful insights on how to become successful

marketers using Social Media through the following: Understand the new social

business ecosystem and how it affects your current and future business; Craft a

scalable, connected social media marketing strategy that enables you to

incorporate what you learn to improve your products and services; Gear up for

customer-led collaboration! Explore a host of best practices for involving your

social contacts in product design; Discover software and analytical tools from

firms like Radian6, Sysomos, BuzzStream, Rapleaf, Lithium Technologies,

Socialtext, Microsoft, IBM, and others to help you monitor and quantify your

social business; Think analytics, analytics, analytics—see how to select and use

social metrics, analyze results, and produce solid insights as you implement a

social media–based business plan; Find out how other companies implement,

manage, and monitor their social business strategies, including consumer-facing

firms like Philips and New Belgium Beer, nonprofit organizations like Found

Animals of Los Angeles, and the business-to-business units of American Express

and Element.
 65

According to Paul Gillin in his book entitled Secrets of Social Media

Marketing (2009), Social media has quickly moved from the periphery of

marketing into the forefront, but this is a new and quickly-evolving field and there

are few established formulas for success.

Research on new advertising formats such as advertorials etc. shows that

they may be more effective than traditional advertising formats. While building

on underlying assumption that the advertising formats blur the boundaries

between the advertising and surrounding content. (Dahlen & Edenius 2007;

Friestad & Wright 1994) We are every day exposed to about 1,500 brand-related

messages (Lucas & Dorrian, 2006)and have developed what Blackwell (2001)

calls selective attention, or advertising scepticism if we are to use the words of

Obermiller and Spangenberg (2005). The fact is that these” mental barriers” are a

necessary reaction of consumers to the increased advertising noise(Dahlen &

Edenius 2007; Friestad & Wright 1994) and that marketers must find new ways to

break through these barriers. It is, in other words, increasingly difficult for

companies to standout and get consumers to pay attention to their company

(Granlund and Grenros, 2007).

In this new marketing landscape advertisers must surprise consumers and

adopt methods around which mental barriers have not yet been developed. We are

approaching a time when the ability will exist to contact individuals at any time,

at any place. This is due to the ubiquity of mobile devices, particularly mobile
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phones with GPS functionality. The technology holds the potential for marketers

to send information and offers to consumers based on their proximity to places

where the marketers' products are available. Given the growing ability to reach

people in a much more targeted manner than was possible in the past, the next

question one must ask is, what do consumers think about it? If consumers have

generally positive attitudes toward such advertising, then this could be the very

technology that allows m-commerce to kick into high gear. If consumers are

generally negative about it then advertisers will have to sell the medium first

before they can successfully use it to sell other things. Mobile advertising in

general is only beginning to receive scholarly examination. A specific type of

mobile advertising, location-based advertising (LBA), has received even less

scholarly attention.

Politicians have their own strategies when it comes to their advocacies.

Various gimmicks are being done. According to the article to the article “The

Transformation of Political Modernity” by John Street:

“A common place to observe how politicians and parties exploit

the techniques and icons of popular culture to promote their ideas and

images. Politics has been transformed to accommodate new media and

forms of communication. (Franklin, 1994; Jamieson)”

Richard Huggins, on the other hand, stated in his article “The

Transformation of the Political Audience” that:

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“In recent years the emergence of new media forms and practices

have excited both optimism and pessimism about the ability of the media

to reinvigorate the public sphere and political discourse and

communication.”

In a blog created by Stan Schroeder in his site Mashable.com, Schroeder

stated that Facebook.com is yet to be largest online social network. Schroeder

further stated that Facebook.com campaigns is yet to be the most cost-efficient in

the part of the running candidates since it does not require hefty amount of money

to post or campaign ones and advocacies or propagandas. The results, says,

Schroeder, are astonishing because with blinks of the eye, members or supporters

mount up to thousand to millions. He, in a way, puts it as if online battle will

decide who will win in the elections when he wrote:

“This is the strongest example of social network usage for political

promotion yet. By spending very little time and money, Colbert has

managed to gather one million supporters. Whether or not they’ll all vote

for him is another matter, but it’s obvious that these (and all following)

elections will largely be fought online.”

Philippines, like the United States has a very large population of internet

users among its population. Facebook.com being the number one site worldwide,

gives a big avenue for Philippine politicians to follow the Obama’s lead in getting
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votes and influencing their target audience thru their advocacies in

Facebook.com’s Fan Pages or Causes.

Another related article is by Julian entitled “Will Obama Use Facebook

Politics?” published in CNN’s website. The Princeton University professor wrote

that after being successful in using the social networking site in elections, it is a

challenge Obama’s side if the effectively of Facebook.com is still applicable if he

is in government. He also said:

“If President Obama follows through on his promise of suing the

tools of his campaign for the challenges of governance, we will learn just

how strong the net-roots really is. The ambition for many who put this

network together is to provide the same sort of political support that

political machines offered in the late 19th and early 2oth century –

organizational powerhouses that brought people into office and built

support for their legislation.”

This article questions how Obama would treat the machinery that he used,

Facebook.com, to get the votes and convert it for his campaign. Now Zelizer cites

that Obama did not rely solely on Facebook.com. Obama, according to Zelizer,

also came down to the people. When analyzed, its contributory angle to the study

could be the advantages of the Facebook.com campaign when Obbama came

down to the people and what could be the possible effects that had been laid out

with the use of Facebook.com

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Linnie Rawlinson, also from CNN cited in his article “Will the 2008 USA

election be won on Facebook?” that networking sites have made a great leap for

the format of campaigning. She cites that:

“This marks a crucial development in the Internet’s history: Far

from being a place where geeks go to hang out with other geeks, the

Internet is now as vital part of the average college student’s world as

Spring Break. No longer a virtual refuge for lonely nerds, these sites are

used daily by bright young things, keen to arrange the latest hot

club/bar/gig to visit.”

Though Rawlinson praised the concept that presidentiables have explored

the web to reach larger demographics, she explained that politicians should be

very careful when they go online because having accounts on the sites doesn’t

actually make them ‘in’ or cool.

In Sam Goldfarb’s blog, he wrote such article on the strategies of political

campaign entitled “Top 10 Strategies for Running A Facebook Political

Campaign” which cites:

“Facebook is more than just hype – every online business and

politician needs to know how to use this social platform... From our

experience, Facebook pages tend to experience a Snowball effect once a

critical mass of supporters has been obtained.”

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Having such posted strategies, this would reflect the innovations done by

previous users of Facebook.com in their campaigns. It also includes the impact of

the said strategies towards the masses. In the study, we could use the strategies in

constructing our questionnaires and interviews with the respondents.

Writer J.P. Preirie also has a say in the political arena wherein

Facebook.com plays its role. In his article “Facebook Pitches Its Political

Benefits” he says that having Facebook.com accounts has many perks on the part

of the politicians. It is an apt opportunity for them since campaigning online is a

lot easier than posting signs over target places. He said:

“Direct mail isn’t going away anytime soon as a vehicle for

reaching voters. But it’s clear that web-savvy campaign managers would

like to benefit from broadening the way voters support campaigns,

especially with the advent of the social-network generation.”

Preirie cited how easy it is to earn votes in the day of elections via

reaching the target audience thru the medium that everybody is accessible.

Local Studies

According to the New Media Philippines’ study entitled, “Making a First

Good Impression with your Business Facebook Official Profile”, that a lot of

brands are now rushing to Social Media to take a stab at the massive online

market. However most marketers don’t have too much respect for new media.

Since everyone does it, a lot of marketers feel that it’s easy and that it’s something
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that they can do on the fly. This is where they make a fatal mistake which can just

lead to more harm than good. Let’s apply some traditional marketing principles in

strategizing for the official Facebook Profile Page of your business. If you’re a

customer and by some chance you find yourself in the official profile page of a

brand, you’ll most likely see a profile picture and a very busy wall. This is where

the connection fails. You can’t communicate the unique selling proposition of

your product with a wall filled with random comment.

From the dawn of new media, organizations and individuals pushed by a

variety of interest have converted their attention into another area of spreading

their advocacies. Dela Cruz (2009) says the Internet has been a necessity in

human life. Being an avenue that draws the attention of the people, groups have

used the Internet for their own purposes such as election advocacies. The

methodology delved into the analysis of advocacy sites, creators of the sites were

also interviewed on the basic fact and figures of their respective websites along

with a survey conducted among the voters on their perception on the advocacies

online. Dela Cruz states:

“The key to the success of such website is maximizing all possible

functions of the Internet that will help attract audience. Although Internet

has a lot of potentials, utilizing multi-media platform is still the best way

to spread advocacies.”
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Seeing the media as the major role player in the emergence of a damaged

culture, another research proposed the reinforcement of advocacy in advertising

on national television by the possibility of a law supporting the primetime airing

of advocacy advertisements. Relying heavily on interviews, the researchers

interviewed two (2) leading media networks, ABS-CBN and GMA 7, the

Congress and advocacy advertising agencies and institutions. The researchers

concluded:

“...the researchers found that both government laws and self-

regulatory rulings raise problems on supporting the primetime airing of

advocacy advertisements on television.”

The political arena widens during the elections giving way to political

actors such as election candidates and non-government organizations in the

country. Political actors find their space in the Internet as another area of

campaign which made the researcher, Gloria (2004), put up the study on the

election-related websites as a way to maximize the potential of the Internet for

political ends. Gloria analyzed eight (8) election-related websites and interviewed

the Webmasters on their stand on the trend of setting up online presence. And at

the same time, political science and journalism specialists were interviewed as a

contributing analysis together with an online survey to Filipinos. Gloria

concludes:
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“For political communication, the use of election candidates of the

Internet as a campaign tool hardly played any role in the political game.

This manifests that the traditional media today are still the preferred

political tools to pump up support from the electorate.”

As social networking sites boom in the country, there raises the question

on the perks and perils of these sites to the youth, both men and women, as well

as the factors why the youth has clung to the idea of suing or creating accounts on

social networking sites. Macaraig and Samaguil (2008) found out that the students

adhere to the usage of social networking sites because of the benefits that social

networking sites can provide them than on the technical characteristics of the

websites. Between males and females, it has been found that males use the social

networking sites because of the speed showing the friability attitude of the males.

It also shows that females use it for gratification or for the expressiveness allowed

by the sites.

Mass organizations have also entered the virtual world of spreading their

political campaigns and propagandas. Borais and San Juan (2005) studied the

shaping and reshaping of the political groups’ websites and newsletters on the

political socialization of its members. The official website and official newsletter

were textually analyzed together with then technical aspect of the sites such as the

design, political content such as presentation and expression and language used.

The audience also underwent Focus group discussions and focus interviews to
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further into their perceptions on the use of the website and the newsletter on the

possibility that it may or may not contribute to their political socialization. The

researchers states that:

“...the website and the newsletters of the political groups contribute

to the shaping and reshaping of the political socialization of its

members...”

Foreign Studies

According to Amy Porterfield, there are 5 Must-Read Social Media

Marketing Studies: #1: By 2010, 26 Million (1 in 7) U.S. Adults Will Use Twitter

Monthly - A new study by eMarketer surpasses their previous estimates of Twitter

usage. The study, conducted just last month, found the following: “In 2009, there

will be 18 million U.S. adults who access Twitter on any platform at least

monthly. That represents a 200% increase over 2008 levels. Usage will reach 26

million U.S. adults in 2010, a further 44.4% climb.”

Earlier this year, eMarketer reported more conservative usage numbers,

stating that there were indications of large numbers of users abandoning the site

shortly after signing up and many others only using it sporadically. However, they

recently revised their estimates because “recent data shows healthy—and growing

—percentages of U.S. Internet users adopting the popular microblogging

platform,” according to eMarketer senior analyst, Paul Verna.

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Twitter is not the only social networking site to report record usage

numbers. In September, Facebook officially hit the 300 million-user mark,

making the social networking site nearly as large as the U.S. population.

#2: Americans Spend 17% of Online Time on Social Media Sites - As

popular social media platforms continue to grow their numbers of users, it is

logical to conclude that Americans are spending more time on social networking

sites. According to a recent study by The Nielsen Company, 17% of the time

spent online was at social networking sites (an increase from 6% in August 2008).

Among those paying the most attention to this recent trend are advertisers.

Online ad spending increased by 119% to $108 million in August 2009.

#3: In 2010, Over 50% of Marketers Will Be Using Social Media -

Marketers are becoming even more aware that social media marketing must be a

key component of their media buy strategy. This was recently affirmed in the

findings of the “2010 Media Planning Intelligence Study” by the Center for Media

Research, which examined the likelihood of marketers including social media in

their 2010 marketing plan. Over half (56.3%) of marketers stated that social

media would “realistically” be part of that mix. The top 5 most popular media for

the 2010 marketing spend were Email (56.8%), Social networks (56.3%),

Keyword search (49.7%), Radio (42.2%) and Magazines (42.1%).

In addition, 57% of media buyers reported they will buy non-traditional

media, including online, display video, search, mobile and event sponsorships,
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while 43% reported they will buy the more traditional media, including TV, print

and radio.

#4: Blogs Most Useful Social Media Tool, Say 51% of Businesses -

McKinsey Quarterly’s “Global Survey” examined companies’ overall assessment

of the value of different social media technologies. As reviewed by eMarketer,

“When it came to customer-related benefits, blogs were the most useful tool,

bringing measurable benefits to 51% of responding companies worldwide. That

was followed by video-sharing and social networking at 48% each, and RSS feeds

at 45%.”

In addition to these findings, the top three reported benefits of Web 2.0

marketing included: Increased marketing effectiveness (52%), Higher customer

satisfaction (43%) and Reduced marketing costs (38%).

#5: 75% of Marketers Plan to Increase Social Media Use in 2010 -

According to a recent survey by virtual events provider Unisfair, marketers are

most focused on attracting and keeping customers in 2010 and they plan to use

social media to make this happen. A few interesting factoids from the Unisfair

findings: The 3 leading marketing priorities in 2010 according to U.S. marketers:

New customer acquisition (60%), Customer retention and engagement (48%)

andThought leadership (45%). And the top 5 marketing tactics U.S. marketers

planned to increase in their 2010 marketing mix: Social media (75%), Web
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search/SEO (51%), Email campaigns (49%), Virtual events (48%) and Online

advertising (28%).

The study also asked marketers to rank the value of social media

platforms. LinkedIn came in on top at 26%, Facebook at 23% and Twitter at 17%.

According to the study, Can Your Business Survive Without Social

Media? By Pete Hollier, It’s time for businesses to seriously consider the impact

of Social Media on their business. Social Media must be investigated from two

different business perspectives.

What is the impact if the business does not initiate a Social Media

Program?

A lot of the benefits of Social Media appear to be more perceived than

based on quality market research. To assist businesses determine if Social Media

is a worthwhile addition to their marketing program I have included results of

recently completed surveys.

Without a doubt the conclusions are clear. Social Media will have a

positive impact on your business, and the risk factor of implementing such a

program is as close to Nil as is possible in a business situation. Risk free

improvement of business performance, seems unlikely but Social Media Programs

come very close to that benchmark.

The Social Media Surveys say it is evident businesses see the value of

Social Media as part of their over all Marketing Mix. Coleman-Parkes Research
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discovered 84% of North American companies feel they require new methods to

interact with customers, including Social Media and mobile devices.

It is also evident Social Media has become an expected activity from

consumers. Companies who fail to embark on a Social Media Campaign do so at

their own peril. Research undertaken by The 2008 Cone Business in Social Media

Study resulted in some impressive statistics which must be noted by business

owners.

The results from the survey showed 60% of American citizens used Social

Media. Of those 93% indicated business should have a Social Media presence and

85% indicated businesses should interact via Social Networks with their

customers. With powerful results such as these it is hard to comprehend why

businesses are not implementing Social Media Marketing.

Consumers surveyed indicated businesses should use Social Media to:

Solve Problems – 43%, Obtain user feedback on product and services – 41%,

Enable consumers to interact with the company brand – 37% and Market to

consumers – 25% .

A survey complete by Coleman-Parkes Research for Avnade an IT

consultancy firm provides feedback on a number of issues from a business’s

perspective. Some of the Barriers to initiating Social Media Programs: Lack of

understanding by Senior Management 58%, Negative impact on employee

productivity 49% and Fear of unknown technology 58%. Companies currently

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using Social Media reported the following: Improved Feedback 78%, Improved

Customer Satisfaction 66%, Improved Customer support 71%, Increased Sales

40% and Improved public perception of company 75%.

Within the survey completed for Avande were some general statements

which must be considered: 52% of respondents stated “Companies that fail to

embrace social media technologies for business purposes will be left behind,

“78% of respondents stated “As we enter a possible economic downturn we need

to focus on new ways of communicating with customers which add real value.”

And 77% of respondents stated “If they did not initiate a Social Media Program

Social Media would enter the company by stealth”.

The results of the surveys clearly indicate that Social Media has become

an accepted and expected method of interaction and communication by

consumers. This fact in itself is quite powerful, when considering many forms of

business promotion are considered to be intrusive by consumers. A method of

business promotion which meet the expectations of consumers and is in fact

wanted is a must win situation for business.

From the business perspective, as with most new methods there is

resistance and Social Networking is no different. Lack of understanding of how to

use Social Media and the technology required and used are predominant factors

for business not initiating Social Media Programs. It is very clear from the survey

that companies that do undertake a Social Media program gain benefits from their
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interaction with customers and prospective customer. Businesses that do not

participate now or initiate in the future will have difficulties, especially in the

economic environment we currently experience. These difficulties include lack of

communication with customers and prospective customers and a lowering of

overall competitiveness within the market place.

Businesses of today must undertake a Social Media Program to succeed in

an increasingly competitive and connected business environment, not doing so is

a risk to the over all success of the business and it’s stake holders.

According to Robin Wauters, Study Finds Marketers Embracing Social

Media Marketing In A Big Way, Integrated marketing services provider Alterian

today released the results of their seventh annual survey on social media

marketing adoption.

The survey covered 1068 marketing professionals worldwide (actually, it

was 98% North America and Europe and only 2% Asia Pacific and other regions).

Alterian found that 66 percent of respondents will be investing in social

media marketing (SMM) in 2010. Of those, 40 percent said they would be shifting

more than a fifth of their traditional direct marketing budget towards funding their

SMM activities.

The survey also found more than a third (36 percent) of respondents are

investing in social media monitoring and analysis tools.

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Nearly half of respondents (42 percent), however, said they don’t currently

incorporate clickstream and web analytics data into their customer and e-mail

database.

The research also found that over half of respondents (51 percent) are

placing a ‘fair’ or ‘significant’ amount of effort on moving from a campaign-

centric direct marketing model towards multichannel customer engagement – in

fact only 7 percent make no effort at all.

According from the study entitled Social Media Marketing versus Prevalent

Marketing Practices by Abdul Ghaffar and Muhammad Tariq, Schmiemann (2006), in

the European Union 90% of the businesses are micro in nature and same is true within

Sweden where micro businesses are considered as the backbone of the economy. These

businesses create employment opportunities; germinate entrepreneurial spirit in public

and innovation in organizations. In spite of this still there is very scant published material

on micro firms and it is relatively complex to define micro firms as there are several

connotations of their qualitative and quantitative definitions. Micro firms in qualitative

terms are businesses which are owner managed, have a small market share and the owner

manager has discretionary power of making his or her own strategic decisions (Bolton

Committee, 1971). According to Johnson, (1999) micro business is a business having up

to 10 employees. This quantitative definition might cause some confusion as in this case

the term SMEs can be used interchangeably with small businesses which also cover the

definition of micro firms.

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In the year (2005), European Commission introduced a new criterion for defining

SMEs. Accordingly, Medium-sized, Small and Micro businesses are businesses which

have fewer than 250 employees or either an annual turnover not more than 50 million

Euro. Whereas, Small-sized firms are businesses which have fewer than 50 employees

and their annual turnover do not surpass 10 million Euros. Finally, Micro firms are

businesses which have fewer than 10 employees with annual turnover not exceeding

more than 2 million Euros. From this discussion evidently micro business is easy to

describe but difficult to define.

First, we begin by defining marketing in the context of small firms as, “Small

business marketing consists of those business activities that direct the creation,

development, and delivery of a bundle of satisfaction from the creator to the target user

and that satisfy the targeted user” (Logenecker et. al, 2010).

According to Timmons (1999) business mortality statistics for small businesses

show that, small firms experience a high rate of termination during initial years. The rate

of discontinuance can be as high as 70% during the first five years of inception. Whereas,

Marc (2004) argues that marketing practices like a careful analysis of target market can

lower failure rates of small businesses up to 60%. At the same time small firms confront

several other problems which in descending sequence of their importance are sales and
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marketing 40.2%, followed by human resource management 15.3%, general management

14.3% and operations 8.6% (Huang & Brown 1991). This indicates that marketing is the

most pressing problem confronting small businesses and still it has been recognized as

most important business function for small businesses (McKenna, 1991), and of-course

marketing in small firms differ from marketing in large firms (Bjerk & Hultman, 2002).

The same course of reasoning is applicable in the context of micro firms which are

influenced by owner-manager and resource scarcity (Karolina et al, 2007).

These challenges call for a marketing orientation in small firms to improve

performance with respect to competitors. According to Never and Slater (1991) a

marketing orientation is defined the, “organizational culture that most effectively

creates the necessary behaviours for the creation of superior value for buyers and

thus continuous superior performance for the business”. However, Mike (2002)

state that there are other possible orientations which small businesses can follow

such as production orientation, product orientation, financial orientation. Most

recently Kotler and Keller (2009), advocated the concept of holistic marketing

orientation meaning that “everything matters” in marketing and that a wide,

integrated orientation is needed to compete effectively in marketplace and mind

space.

It has been agreed on that the principles of marketing theory are equally

important for both small and large firms (Sui & Kirby, 1998). There are several

models of marketing that provide guidelines for businesses to survive and grow in
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their respective industries. However, Welsh and White, (1981) proclaims that, “a

small business is not a little big business.” There are several points on which

small businesses differ from big organizations like; owner-management has a

distinct strict discipline in small businesses, lack of trained personnel, short-

ranged management perspective, limited financial resources, adoption to steady

state conditions and analytical models used in big organizations have limited

usage in small businesses (Welsh & White, 1981). This shows that small

businesses are not like big businesses therefore, the needs of these two types of

organizations differ from each other including its marketing needs.

Towards a New Model of Marketing, one set of marketing theory cannot

be generalized for two types of organizations with different characteristics and

requirements. The marketing theories which are written in the context of big

organizations have little or no relevance to small businesses (Chasten & Mangles,

2002).

Little research has been carried out on small businesses and those

researchers tried to draw models and theories specifically for small businesses but

these efforts alone cannot help the needs of the small firms in totality. For

instance, Miller and Antilla (1987) researched 36 Finnish and Swedish firms but

they described their research as being “too qualitative for examining state-of-the-

art marketing in small manufacturing firms”. Similarly, most of the research that

is done on small businesses focuses on the problems or barriers present in the

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small firms (Simpson et. al, 2006). Some research is practical in nature but lacks

real time application. For instance, the Growth/Stage Model by Siu & Kirby,

(1998) advocates the consideration of the stage of growth of small businesses

while formulating marketing models for small firms, but the model is unable to

mention the impact of radical technological advances like the internet.

In the light of the above short comings in theories for the small firms, it

can be argued that the theories need to be either modified to suit the small

businesses or a completely new set of theories and models be drawn for the small

businesses. Simpson and Taylor (2002) came up with a new model of marketing,

“the role and relevance model of marketing”. The role and relevance model of

marketing in SMEs explains the role and relevance of marketing in a small

business environment. The model places organizations in four quadrants

depending on the relevance and role of marketing. These quadrants comprise as;

Marketing led organizations (MLO), Marketing dominated organization (MDO),

Marketing weak organization (MWO) and Marketing independent organization

(MIO).
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In Marketing-led organization (MLO), there is strong marketing

orientation for maintaining or increasing market share in a competitive business

environment. Marketing-led organization is perceived to be organizations

pursuing best business practices to cope with changes in business environment. In

a Marketing-dominated organization (MDO) there is minor relevance and major

role of marketing in strategy making processes. Normally, such organizations

have guaranteed business from a major account or client. Therefore, marketing

may be seen as unnecessary and the organization might be called a marketing-

nominated organization but in the long term marketing can help the organization

move to (MLO) quadrant in the model. In the Marketing-weak organization

(MWO) a sales orientation is prevalent with major relevance and minor role of

marketing. This type of organization does not have a proper marketing department

and these businesses are normally not interested in growth either. A Marketing

independent organization (MIO) resembles a marketing dominant organization

(MDO) but in such type of organization there is no unconditional orientation and

commitment towards marketing. However, a drawback of (MIO) approach is that

the organization future is at the mercy of the major client (Simpson & Taylor,

2002).

From the above discussion we come to know that Marketing-led

organization (MLO) is the best strategy for a small business for maintaining or
 87

increasing market share in the domain of competition. There are three possible

alternative paths identified for small firms to reach the desired (MLO) quadrant.

“Strategy A” which follows the route (MIO-MDO-MLO) is an innovative

approach which is resource intensive in the beginning but should help the small

business later in exploiting actionable opportunities, “Strategy B” which follows

the track (MIO-MWO-MLO) is more a reaction to market demands, and finally

“Strategy C” which follows (MIO-MLO) path is seldom used by Small brick and

mortar businesses (Simpson & Taylor, 2002). Later in the year, (2006) Simpson

and Taylor carried out another research along with Padmore and Hughes to test

their new model. They found that there still lie some deficiencies in their model

but the model has been successful in taking the understanding of marketing in

small firms one step further by categorizing small businesses on the basis of

marketing activities they carry out inside (Simpson et. al, 2006).

Ma
jor
 88

To sum up the above discussion in few simple words the authors have

tried to form a launching pad for the RQ1 of this thesis. In the first place an effort

has been made to define accurately micro firms and therefore we have adopted for

this thesis the standard definition of micro firms given by the European

Commission (2005). Second, the authors have tried to describe how marketing is

seen and carried out in small firms as by design or default a small business is not

a little big business. Therefore the authors try to explain that marketing practices

in small firms should be seen as distinct from big business and a new model of

marketing is discussed which classifies small firms in four quadrants depending

on the role and importance of marketing for a small business.

Conventional Marketing Mix and Social Media, Traditional marketing

practices are centred on the marketing mix model. The marketing mix model was

introduced by Borden in the 1950s (cited from Neil, 1984). Soon after in the

1960s according to McCarthy (1960), the marketing mix model was termed the

4Ps of marketing as it contains Product, Price, Place and Promotion variables.

Ever since then it became the indisputable marketing model and replaced the then

existing functionalist approach and parameter approach of Copenhagen Business

School of Scandinavia (Alderson, 1957).

Further with the passage of time researchers like Booms and Bitner

proposed more supplementary “Ps” of marketing to existing list of “4Ps” such as

people, process and physical evidences constituting a “7Ps” approach which is

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more inclined to services marketing (Fifield & Gilligan, 1996), and personnel,

physical assets, procedures and personalization (Goldsmith, 1999). Most recently

Otalcan (2005) has introduced the concept of (2P+2C+3S) by including

Personalization, Privacy, Consumer, Community, Sales promotions, Site and

Security in the marketing mix list of variables which are more inclined to E-

Marketing practices. It is important to know that although the original marketing

mix model has been oversimplified by restricting it merely to 4Ps of marketing

(Gronross, 1999) still it is interesting to know that embedded in the Promotion

“P” are sub variables such as advertising which can be both below-the-line (BTL)

and above-the-line (ABL) or a hybrid combination of both known as through-the-

line advertising (ABL+BTL =TTL), Sales promotions such as (Samples,

Premiums, Point of Purchase (POP), Trade shows, scientific shows, sweepstakes),

Personal selling, Public relations and Direct marketing (Wilmshurst, 2007). Most

recently according to Glyn and David (2009), with the arrival of social media a

new dimension has been added to promotion mix as social media in a

conventional sense can help companies to interact with consumers, while in

unconventional manner it makes possible for customers to interact directly with

other customers.

The table 2-2 (a) below reveals the fundamental changes that social media

has induced by making media instantly updatebale, control, archives accessibility,

freedom and in terms of measuring the effectiveness of a marketing campaign. On

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the other hand traditional media is unchangeable with archives not accessible and

reaches a finite number of people (Stokes, 2008).

Table 2-2(a) Traditional Media versus Social Media

Traditional Media Social Media

Fixed, unchangeable Instantly updateable

Commentary limited and not real time Unlimited real-time commentary

Limited, time delayed best seller lists Instant popularity gauge

Archives poorly accessible Archives accessible

Limited media mix All media can be mixed

Committee publishers Individual publishers

Finite Infinite

Sharing not encourage Sharing and participation encourage

Freedom Control

Source: Rob Stokes, (2008)

The above discussion is further elaborated by Charlene Li and Josh Bernoff

(2008) who, based on their observation of hundred of businesses, have come up with five

common objectives such as listening, talking, energizing, supporting and embracing as to

why companies use social media. These five objectives correspond to the traditional

business functions as shown in the table 2-2 (b) which also reveals that how things have

become different in the domain of groundswell.

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Table 2-2(b) Objectives of Social Media versus Conventional Business

Functions

Traditional Business Social media functions Differences in the new

Functions or objectives of landscape
groundswell

Research Listening Ongoing monitoring of

your customers
conversations with each
other, instead of occasional
surveys and focus groups

Marketing Talking Participating and

stimulating two way
conversations your
customers have with each
other, not just outbound
communications

Sales Energizing Making it possible for your

enthusiastic customers to
help sell each other

Support Supporting Enabling your customers to

support each other

Development Embracing Helping your customers to

work with each other to
come up with ideas to
improve your products and
services
 92

Kotler and Armstrong (2004) define a product as, “Anything that can be

offered to a market for attention, acquisition, use or consumption that might

satisfy a need or want”. It can be a tangible physical good (s), service (s) and

idea(s) which are intangible in nature. Based on consumer welfare and satisfaction

Shapiro et al, (2002) have categorized products into four categories as shown in

figure (2-3).

As the figure reveals that desirable products have both high immediate

appeal and long term satisfaction. Salutary products have low immediate appeal

but may benefit the customer in long run e.g. Air bags. Pleasing products have

high immediate appeal but might hurt the consumer in the long run such as

cigarettes and deficient products have neither immediate appeal nor long run

benefits. Marketers plan their products on the basis of customer value hierarchy

consisting of five distinct levels as shown in Figure (2-4). According to

Logenecker et al, (2006), the basic level is the core benefit which signifies the
 93

fundamental benefit for which the consumer buys the product. The second level

consists of generic or basic product and the third expected product. The fourth

level is augmented product which means any additional features, benefits or value

laden services on the basis of which organizations compete and finally, potential

product which include the total augmentations and transformations a product

might produce in future time (Kotler, 2000).

Price is the reflection of market forces and is defined as, “The sum of the

values that customer exchange for the benefits of having or using the product or

service” (Wong et al, 2005), and “The amount of money charged for a product or

service” (Kotler & Armstrong, 2008). Boone and Kutz (2001) argue that price

refers to the exchange value of a product or service. Pricing tactics normally

changes as the product or service goes through the product life cycle (Kotler et. al,

2005). For imitative products firms normally follow four types of strategies such

as Premium pricing, good value, overcharging and economy pricing strategy, as

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shown in the figure (2-5). For innovative products firm can chose from market

skimming to penetration strategies (Kotler et. al, 2005). It is important to discuss

that many small businesses consider under- cutting pricing as the most

appropriate strategy in the initial stages for attracting customers and booming

sales. However, the small business owner should bear in mind that established

competitors normally have more resources than new one and in a cut throat price

competition they can be wiped out the small business (Logenecker et. al, 2010).

As the Figure (2-5) reveals below Premium pricing strategy means having

high-quality product and higher prices and on the other hand, Economy pricing

strategy has a low quality product or services and charges lower prices.Whereas,

good value pricing offers high quality at an affordable price and overcharging

strategy means that the organization over prices its product or service relative to

the quality of the product/service (Kotler et. al, 2005). Companies which launch

new innovative products, with the fear of easy entry for competitors, often use

skimming pricing startegy also known as market-plus pricing as in these strategy

higher prices are set initially on purpose to skim the profits from the market. The

term takes its origin from the expression “skimming the cream” (Boone & Kurtz,

2001).

On the other extreme, market penetration sets lower prices in beginning to

penetrate the market initially and then gradually raise the prices as demand pull is

created (Kotler & Armstrong, 2008).

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According to Longenecker et al, (2006) small business should not

recognize off target pricing as an irreversible error as pricing is not an exact

science and there are no established hard and fast rules. If the pricing strategy

misses the target then small firms should make necessary adjustments to their

strategy.

According to Boone and Kurtz, (2001) a marketing channel is defined as,

“A system of marketing institutions that promotes the physical flow of goods and

services, along with ownership title, from producer to consumer or business user;

also called a distribution channel”.

Companies seldom work in isolation for creating value for customers as

majority of firms are only part of larger distribution network (Kotler et. al, 2005).

Therefore it is crucial for firms to determine the type of channel which is most

appropriate for attainment of their objectives. Some channels have many

marketing intermediaries such as a wholesalar, agent/broker, and a retailer (Boone

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& Kurtz, 2001) while in a direct-marketing channel there are no intermediaries

involved, as shown in the Figure (2-6) below (Kotler et al, 2005).

Intermediaries are used in distribution channels as they create efficiencies

in providing products to end-users as these intermediaries are more specialized

expertise in these operations (Kotler & Armstrong, 2008).

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The above Figure 2-7(left) reveals that intermediaries enable economies as

there are three manufacturers who are reaching three end users. In this

arrangement nine different contacts are required. On the other hand in the Figure

2-7 (right) there are also three manufacturers who are using one distributor that

uses six contacts. The result is distribution decreases the number of contacts or

amount of work which needs to be done by both manufacturers and end users

(Kotler & Armstrong, 2008). This reduces the cost of operation and, hence, more

benefit for the end user.

Wibur Schramm (1995) defines communication as, “the process of

establishing a commonsense or oneness of thought between a sender and a

receiver”. According to Boone and Kurtz (2007), integrated marketing

communications try to organize and direct the elements of marketing mix

(advertising, personal selling, sales promotions, public relations and direct

marketing) to create a customized message for target audience to attain

organizational objectives. Longenecker et al, (2010) proclaims that small firms

use promotions in different extents; a small business rarely would use the entire

promotional strategies available. In conventional promotional mix, the five

elements are designed by businesses in coordination with paid advertising

agencies and marketing research firms (Glynn & David, 2009). This method has

been used ever since, World War II for creating integrated marketing

communications strategies with organizations operating from a position of control

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(Muniz & Schau, 2007). However, Blackshaw and Nazzaro (2004), proclaim that

recently the strategies for interacting with target audience have changed with the

advent of consumer generated media, as control of managers on timing, content,

and frequency is diminishing to a great extent (Glynn & David, 2009). This is

mainly been made possible through the social media trend where consumer

interact with one another independently and get the information which they

normally would get from institutions (Charlene & Li, 2009).

In this regard for comparion purposes Emily Riley and Rebecca Jennings,

(2009) in collaboration with Forrester research have devised a template for

aligning social marketing tactics with traditional marketing channels as shown in

table 2-3 below.

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In order to carry out this type of comparison the businesses must first

determine their goal which can be brand building, engaging customers,

information gathering, inducing purchase and customer service. Then the

marketer should analyze which tactics might take the place or be compared to a

traditional marketing approach (Emiley Riley et al, 2009). After discussing the

evolutionary developments which marketing mix has undergone, now we shall

elaborate the specific variables of the marketing mix model one by one.

We are witnessing a transition from traditional media to social media. In

an effort to cover both sides of the continuum we would start with conventional

promotional strategies and then towards relationship marketing and finally to

social media adoption practices.

According to PricewaterhouseCoopers, 2009 worldwide marketers spend

in excess of 400 billion dollars on advertising of which major amount of money is

spent on television advertisements. According to Boone & Kurtz (2001,

advertising is non-personal (one-to-many), paid form of communications (unlike

publicity) which uses several types of media for informing or inducing trial in

target audience. Whereas, Kotler et al, (2005) define advertising as, “Any paid

form of non-personal presentation and promotion of ideas, goods or services by

an identified sponsor.” According to Baker (2006), for creating effective

advertisements Strong's widely accepted model of AIDA- (Attention, Interest,

Desire & Action) is used. Businesses use advertising for informing, persuading,
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and comparing their products or services to competitors (Boone & Kurtz, 2001;

Kotler et al, 2005; Baker, 2006; Stanton et. al, 2003; & Kotler & Armstrong,

2008). Majority of small businesses use other people competencies for their

advertising purposes such as advertising agencies and research firms

(Longnecker, 2006).However, today broadcasters are faced with numerous

problems which are mostly technology oriented. For instance, Baker (2006),

stresses that with the arrival of Personal video recorders (PVRs) like TiVo,

consumers can record many hours of programming and can easily skip

advertisements.

Regarding two types of advertising (informative and persuasive) there are

two schools of thought. The Harvard School of Thought see advertising mostly as

anti-competitive and persuasive in nature, whereas, the Chicago School of

Thought view advertising as informing consumers by having a favourable impact

on competition (Beuscart & Mellet, 2008). Furthermore, there are two main

categories when it comes to the types of media for advertisements such as Above-

the-line (ATL) which contains all commission based media such as Television,

Newspapers, Magazines, Radio and Below-the-line (BTL) which are non

commissioned such as publicity (Wilmshurst, 1994).

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Table 2-4: Profiles of Major Types of Media

Medium Advantages Limitations

Television Mass-marketing High absolute costs; High
coverage; Low cost per clutter; fleeting exposure;
exposure; combines sight, less audience selectivity
sound and motion

Newspapers Flexibility; Timeliness; Short Life; poor

good local coverage; reproduction quality;
highly believable small pass along
audiences

Direct Mail High audience selectivity; Relatively high cost per

flexibility; no ad exposure; “Junk Mail”
competition allows image
personalization

Magazines High geographic and Long ad purchase lead

demographic selectivity; time; high cost; no
credibility & prestige; guarantee of position
long life; good pass-along
readership

Radio Flexibility; high repeat Little audience selectivity;

exposure; low cost; low Creative limitations
message competition;
good positional strategy

Internet High selectivity; low Demographically skewed

cost; immediacy; audience; relatively low
interactive capabilities impact; audience control
exposure

Source: Kotler & Armstrong, (2008)

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According to Kotler et al, (2005) advertisers need to make media related

decisions in the light of reach, frequency, timing and media impact; and Baker

(2006), stresses that advertising medium requires attention in terms of character of

medium; atmosphere; coverage; cost; size and position of the medium. In terms or

frequency of advertisements it is important for small firms to decide how often to

advertise as it involves a number of objective and subjective elements. Therefore

prudent entrepreneurs seek professional advice and recommendation in this regard

(Longenecker et. al, 2010). According to Robert Kiyosaki and Sharon Lechter

(2000), advertising works on a six-week cycle. Small businesses should not

lookout for results from promotional campaigns until the completion of six-

week‟s cycle. Kiyosaki (2000) stresses that small firms should not abandon

promotional campaigns prematurely particularly during economic recessions as in

these economic circumstances consumer turn to those businesses which stay more

visible by being persistent in their promotion (cited in Longenecker et. al, 2010).

According to Cant and Heerdan (2005), personal selling can be defined as,

“the process of person-to-person communication between a salesperson and a

prospective customer in which the former learns about the latter’s needs, and

seeks to satisfy those needs by offering the prospective customer the opportunity

to buy something of value, such as a good or service”. Salesperson play a vital

role in the process of personal selling that is why sometimes they are referred as

the eyes and ears of organization as they cross and up sell to customers (Greend,