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Social Media Marketing And Brand Innovation: Theoretical Analysis And Application Report - Essay Example

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This report presents an analysis of the impact of social media marketing on brand innovation. To this end, the document discusses the concept of brand innovation which is viewed as a method of modifying organisational brands in respond to the firm’s strategy and consumer demands and expectation…
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Social Media Marketing And Brand Innovation: Theoretical Analysis And Application Report
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?SOCIAL MEDIA MARKETING AND BRAND INNOVATION: THEORETICAL ANALYSIS AND APPLICATION REPORT TABLE OF CONTENT Executive Summary………………………………………………………………………3 Introduction……………………………………………………………………………….4 Brand Innovation………………………………………………………………………….4 Social Media and Brand Innovation………………………………………………………5 Theories in Brand Innovation and Social Media …………………………………………7 Theory 1: Online Reputation Management ……………………………………….8 Theory 2: e-CRM ………………………………………………………………….9 Theory 3: Dimensions of Innovation and Brand Equity…………………………..10 Case Analysis…………………………………………………………………………...…11 Case 1: Tesco…………………………………………………………………...….11 Case 2: BT…………………………………………………………………………12 Case 3: BBC …………………………………………………………………........13 Recommendations................................................................................................................14 Conclusion ………………………………………………………………………………...15 References………………………………………………………………………………….17 Executive Summary This report presents an analysis of the impact of social media marketing on brand innovation. To this end, the document discusses the concept of brand innovation which is viewed as a method of modifying organisational brands in respond to the firm’s strategy and consumer demands and expectation. The research identifies that social media is now an inevitable part of brand innovation. This is due to the fact that the internet and its environment has become a major convergence point for consumers. Three dominant theories define the linkages between social media marketing and brand innovation. The first is the theory of online reputation management which requires firms to maintain a positive image in the online environment. The second is the theory of electronic customer relationship management. To this end, a business will link its customer behaviour patterns from online marketing to its core strategy through an automated CRM. Finally, there is the dimension of innovation and brand equity which discusses how firms link their branding trends with innovation through social media. Three UK corporate entities were studied: Tesco, BT and BBC. Tesco and BT maintain a proactive system of reviewing their consumers’ behaviour through social media marketing. BBC outsources this function and learns through general patterns that exist amongst their potential audience. Introduction This paper examines a contemporary marketing issue and undertakes an in-depth study of the matter in order to formulate insights into the situation n a given business context. This paper will therefore assess a number of variables in modern business and evaluate how they are making an impact on the contemporary business environment. The fundamental research question that will be examined is the impact of social media marketing on brand innovation. In order to attain this end, the following objectives will be explored: 1. A critical review of brand innovation; 2. An analysis of social media and brand innovation; 3. An examination of theories in brand management and brand innovation in the context of social media marketing; 4. Application of the theories to three UK companies with an online marketing presence. Brand Innovation Brands evolve due to consumer preferences and changes in firms' strategy (Martos-Partal, 2012). This is because when the consumer's preferences change, the kind of brand or symbol that the entity stands for also changes with it. When innovations come up, procedures will also have to change based on strategic options (Martos-Partal, 2012). Aaker (2007) argues that brand innovation is part of a a company's strategy. This is because brand innovation creates three things: 1. Improved offerings and makes them more differentiated and more attractive; 2. Creates new subcategory to change what customers are buying and 3. Can affect perceptions of the organisation and the project it brands with innovation (Aaker, 2007). Brand innovation builds on old brands (Slotegraaf and Pauwels, 2008). “Permanent and cumulative sales effects from markets are far greater for brands with higher equity and more product introductions whereas brands with low equity gain greater benefits from product introductions” (Slotegraaf and Pauwels, 2008, p293). Brand innovation is a system of innovation which has linkages to the changes and modification of affairs in an organisation relating to its brands and products. It transforms the brand into a dynamic and relevant asset that directs the position of a company's brands and products to the desires and expectations of the markets. Through active participation, communication, interaction and creativity, brand innovation allows an organisation to remake their brands and improve it in order to provide the best of services to their consumers in the market. . Social Media and Brand Innovation The Internet has gained prominence over the past two decades. Businesses have now recognised the importance of the Internet in advertising and promoting business activities around the word since it is a growing convergence platform for various consumers. “The Internet is the new 'normal' way of life for many people … news, book reservations, research for school or work, checking the weather and seeking romantic partners are all done online” (Rianie, 2005). Thus, activities have shifted from the real life to the Internet. Marketing has also shifted from the traditional approaches of using the traditional media outlets to viral marketing and other form of online marketing. Another important aspect that has made the Internet and online commerce and interaction is the growth of mobile media. Mobile media can be used to promote continuous and constant customer engagement in a highly personalised environment (Watson et al, 2013). Due to the all-inclusive nature and the personal nature of social media, it is fast becoming a point where more and more people spend time. The fact that it saves time and helps in making comparisons makes it a point of convergence for more people (Punj, 2012). The Internet gives way for product customisation and ease of access to products (Kiang et al, 2000). There is therefore the constant need for the modification of the brands and the mode of doing things to suite the realities on the ground. Social media advertising provide important points of learning because they provide a direct way of interacting with clients and also accessing new markets and gaining competitive advantage (Tiago and Tiago, 2012). Watson also reports that mobile technology works hand-in-hand with social media marketing to ensure that firms explore consumer attitudes and study trends and personal attitude (2013). This means that social media marketing and mobile technology provides an interpersonal linkage between consumers and the organisation. Another aspect of online marketing is the competitive nature and competitive aspect of the terrain. Online and interactive expenditure has grown over the years. US companies spent $10.4 billion to improve social media marketing in 2008 (Naik and Peters, 2009). This represents 8% of the total marketing expenditure of these companies. This is because the online marketing environment is a low cost method of increasing sales (Zhu, 2013). It challenges the existing process of information diffusion and promotes an efficient system through which firms can interact and learn what they need to change about their brands (Zhu, 2013). Naik and Peters (2009) identify that synergies exist if a firm blends its social media marketing system with other systems of marketing. This is because the online marketing system provides apt and effective information but offline, television and print media marketing on the other hand remain dominant. The psychological model for communication and marketing involve the cognition of views, evolution of culture and psychological development (Obadia, 2013). This is because where there are clear goals and exchange of views in a fast moving and highly informative platform like the social media, which leads to the identification of new options and new ideas in branding and product presentation. Thus, an organisation will need to set clear goals and use the feedback from activities to guide their affairs and modify their brands based on responses they get from social medium platforms (Obadia, 2013). Theories in Brand Innovation and Social Media There are several concepts and ideas that tend to define the way brand innovation is influenced and shaped by social media marketing. This is because social media marketing and brand innovation are complementary ideas that exist in organisations. They shape each other and they provide a symbiotic system and methodology through which a firm improves its marketing systems and also gets to learn more about the markets. Brand innovation is somewhat inevitable if a firm in the social media marketing race seeks to retain market share. This can be done by monitoring the elements and structures of competitive advantage and modifying the firm's position to meet the demands of consumers. A firm will also want to learn how consumers react to certain things. This includes reactions to the products, consumer expectations and other things. This is done through what has become known as electronic customer relationship management. This takes information about consumers in the social media marketing process. This adds up to the firm's knowledge base and gets the firm to improve their offerings and retain their competitive posture or improve upon it. When a firm learns from the external environment, that firm will be able to put out its innovations through a new brand and this brand innovation will seek to attain brand equity. The process involves the presentation of brands in a way and manner that promotes the interest of the entity and also helps people to become connected and attached to the brand. Three theories are examined to clarify these elements of brand innovation. It gives insight into the concept of brand equity and brand innovation. This allows firms to work and attain results in their respective areas of social media marketing. Theory 1: Online Reputation Management Online reputation management is an extension of a firm's quest to manage its reputation in the online marketing environment (Huang et al, 2012). Firms maintain their reputation and brand identity in various ways and forms to promote consistency and extend the corporate brand. In order to retain the same level of goodwill in all areas and aspects of a firm's operation, a firm will use reputation management to examine reputation risks and deal with it. The online reputation management system is meant to ensure that the integrity of the firm and the core values of the entity is transposed to online marketing platforms and systems like the social media environment and platform they work on. Online reputation management improves the marketing process on the Internet (Huang et al, 2012). Typically a firm will have an online reputation management system that will integrate elements of professionalism and maintain the same level of standards that exists in the firm's mainstream marketing system. This is often done through a centralised reputation management system and online reputation management becomes a branch of this centralised structure or system (Huang et al, 2012). The method and system of promoting online reputation management is a proactive method and structure that ensures that a firm always examines the current position of its reputation both positively and negatively and undertake a modification if there is the need for that. Reputation management has to do with firms' brands because it might involve a complete overhaul of a firm's existing brand portfolio to reflect the realities of the organisation (Huange et al, 2012). Reputation management has other indirect influences on brands because it helps to shape the overall corporate strategy and this in turn goes on to change the online branding system that is used in the social media environment to represent a firm. Theory 2: e-CRM The Internet has a direct impact on the performance and outcome of a business. The Internet marketing concept is based on conventional marketing to meet the leads to consumers. This provides a strong case for using the methods and tools of acquiring customers and following up on consumers who have made purchases in a firm. It is common in marketing literature to find sources that state that it costs 3 to 7 times more to attract a new customer than to retain an old one (Watson et al, 2013). This means firms will need a system of maintaining consumer information and examining it continuously. One of the things this customer relationship management system does is that it helps to develop brands and access new markets and also gain and retain competitive advantage (Tiago and Tiago, 2012). There are three main frameworks within which this works. First of all, there is the access to global markets which comes with unique dynamics and systems. Online social media marketing needs an electronic CRM system to assess this information and also integrate it into their operations and activities. Global predictions and analysis are also based on some unique trends and patterns. A good electronic CRM system is able to detect everything that a given market niche has and this can be used for decision making and analysis. Location of activities can be varied with a high degree of effectiveness of electronic CRM systems and structures are kept. This is because the markets can be monitored with real-time information that will enable the firm to detect and analyse information and improve their brands. Also, to ensure that a firm is able to plan and do things that are appropriate for a given area, there is the need for the creation of an electronic CRM system that will gather information of consumers and use that as an emergent strategy for the improvement of the system (Tiago, 2012). The electronic CRM system needs to contain a knowledge management system and this will be connected to the internet marketing campaign and process (Tiago, 2012). This electronic CRM system is also linked to the supply chain management system and the mainstream CRM system in order to create a systematic means through which information will be gathered and used to direct affairs in a given entity. Theory 3: Dimensions of Innovation and Brand Equity “Product innovations – this is new products launched by a firm that provides consumers benefits to the market. - can create differentiation, enhance a brand's value proposition, expand usage contexts and block competition” (Martos-Partal, 2012 p689). This means that product innovation and brand innovation is meant to provide differentiation and add to brand value in order to attain some kind of result that will enhance the business. The fundamental end of brand innovation is to attain brand equity. “Brand equity provides key strategic assets that can maximise long-term performance” (Martos-Partal, 2012). Brand equity helps a brand to become more profitable through the benefits of greater brand loyalty, premium pricing, lower price elasticity and lower sales ratio and trade leverage (Martos-Partal, 2012). Brand loyalty is done through the use of several dimensions in innovation meant to reinforce the brand. According to Bererland et al, 2009), there are four main processes that this takes the following form: 1. Incremental market driven: This involves the improvement of the processes and activities of the brands by presenting a standard brand. However, as things change from the outside, the brand improves the brand through an emergent system and procedure. 2. Radical and market-driven brand: This is done where a firm is the category leader of a given brand. In this case, the brand makes important changes to the processes and activities. This leads to changes in the market by presenting new brands and new processes that are unique and distinct. 3. Incremental and driven market: This blends the process of building improving the brands with emergent signs and also adding up the firm's desires and expectations. 4. Radical and driven market: this is reserved for only the market leaders. They use major changes in the processes and systems to attain results and to set the pace. This involves product brands that are accepted and recognised in the industry. Case Analysis At this segment of the paper, an enquiry will be made into the application of the brand innovation systems and processes employed by some firms and entities in the UK. This will involve the application of elements relating to online reputation management, electronic CRM and brand innovation and brand equity processes. Case 1: Tesco Tesco's online reputation management system was not clearly defined in 2011. At that point, Tesco just pursued their reputation management in social medias and other outlets as a non-specialised part of their firm structure. However, sentiments and concerns increased in 2011 and they suffered a 17% drop in their brand reputation (Luker, 2012). In response to this, Tesco employed an independent online reputation manager who was meant to visit blogs and monitor social media results (Luker, 2012). Through this, Tesco was able to improve their online reputation results and attain a better system of coordinating their brands online. Concerning electronic CRM, Tesco's CRM system got digital when they started using the Tesco Clubcard. The Clubcard created an infrastructure of online shopping that was kept in the shops. It was used to gauge consumer preferences. As the social media marketing drive increased, the Tesco Clubcard was connected to the online marketing environment. This led to the improvement of the brands to meet the specific needs of consumers (Jackson, 2012). This was done through the monitoring of purchase patterns to change brand issues and matters (Jackson, 2012). Innovation is managed by various managers who examine and monitor results from the operations of the social media marketing drives. The efficiency in prices and other matters are integrated into affairs before Tesco makes changes to its online marketing systems. From results, Tesco seem to have a radical and driving innovation system. This is because they are market leaders and pacesetters in the industry. Hence, they examine things from social media and use their expert view and strategic expectations to make innovations as appropriate. Case 2: BT BT's online presence and reputation management as well as the electronic CRM structures are strongly linked to the BT Tradespace which is a centralised system through which they make changes and modify things. BT's Tradespace is a central system that mobilises the firm's online social media systems. They issue their blogs and social media information through the Tradespcace and promote brands through it. The eCRM component of Tradespace is what is known as “Let's Talk” which is a network of webchats and feedback collection systems. Consumer requests for improvements and trends are monitored and integrated into production. Sales from social media activities and other online drives are documented and given further treatments for new decision-making on brand improvement. Issues are collated and taken to management for review through Tradespace. This provides a system where online reputation matters are centralised and monitored. Also, when there are further needs for improvement, Tradespace acts as a strong proactive point where information is gathered and analysed. Bommer identifies that the social media brand innovation in BT is mainly market driven (2012). This is because they use an incremental and emergent strategy for the identification of different opportunities. Hence, they make changes if there is evidence that there are genuine needs for changes. And this is supported by the patterns that are presented by documents and other important marketing trends as it is learnt from social media. Case 3: BBC BBC on the other hand has a different outlook altogether. They are not a for-profit entity. Rather, they are a national information dissemination entity that has an international mission. The online reputation of BBC is mainly traditional in nature and it comes with other traditional media outlets (Giovinco, 2012). Their approach is based on brand evaluation and this is linked to the reputation of the BBC corporate structure. The biggest reputational risk faced by BBC involves scandals and issues with independence and objectivity. They therefore train their staff to ensure that each brand is operated on the social media without prejudice or risks. Customers are the listeners and the equivalent of a customer relations management system is the monitoring of habits of listeners and viewers (Williams, 2010). This function is outsourced to an external party which uses marketing processes and survey results to identify the trends and advise BBC appropriately. This way, they innovate and improve their brands and their services. BBC redefines their brands and their programmes based on what they believe to be appropriate and based on the circumstances. This is an incremental and driven markets approach and this is done through reaction to digital channels and changes on audiences' preferences, habits and choices (Grant, 2012). Recommendation for Improvement Each of the three firms are entities that have acquired some degree of success in creating an online reputation management system. Through this, they use a proactive and emergent system to promote study the external environment and improve their brands. In order to ensure further improvement. They will need the following Tesco With the basic infrastructure, they will need to enhance the features of the Tesco Clubcard and ensure that it can be easily integrated into other systems and structures. Tesco will also benefit significantly from a social media system that will be developed to improve consumers access to Tesco's shopping and online services. This will be promoted and marketed on the social media systems and they will be able to share information and insights more easily through chats and other things. This will expand the scope of work and help them to attain results quickly and appropriately. This can be integrated into their emergent strategy system to ensure that Tesco can learn from things in the social media environment and make appropriate changes BT BT's eCRM system can be improved through more marketing campaigns and activities on social media systems. They can use the social media platforms for surveys and structured interviews to get consumers to tell them more. This will ensure that they get more people to contribute their views and opinions to the brand development process. This will mean expansion of their market-driven brand innovation system via social media. BBC BBC's incremental drive can be improved if they maintain a separate social media interaction unit to monitor progress more closely. With the abundance of information via social media, it is not very appropriate to continue using outsourced information. So BBC can enhance their activities by playing a proactive role in examining marketing trends right from their own in-house units. And with that, BBC will need to run an activity that will compile information directly through online surveys in social media houses. This should be officially documented and integrated into the modification of brands and strategies. Conclusion Brands are the symbol of a given firm. Good brands lead to brand equity. And with that, a firm will be able to increase its performance and profitability by increasing revenue. Brand innovation is necessary to retain competitive advantage. The social media is a popular and emerging platform through which firms learn about the markets and improve their products. Social media creates a catalyst for change and innovation and this affects firms’ brands and leads to innovations. All three firms studied in the case analysis have an online reputation management system based on their traditional innovation management methods and systems. Whereas Tesco and BT run an emergent strategy of brand innovation in relation to their online social media marketing, BBC relies on external entities. Tesco and BT. Electronic customer relationship management systems are used by Tesco and BT who integrate aspects of the social media marketing with their customer relationship management system. BBC is primarily interested in examining the markets and habits of their audience by watching their approaches. BBC makes their products available in a radical manner whilst Tesco uses a similar approach, their emergent system links up to the system and enhances the system of proactive brand innovation. BT is mainly an incremental entity that adds up to their brands through an emergent strategy. References Aaker, D. (2007) “Innovation: Brand It or Lose It” California Management Review 50 (1) Fall 2007 Bererland, M. B, Napoli, J. and Farrelly, F. (2009) “Can all Brands Innovate in the Same Way? A Typology of Brand Position and Innovation Effort” Journal of Product Innovation Management 2010 27 pp33 – 48 Bomer, F. W. (2012) “BT Brand Innovation and Social Media” Now, Here, This. August 4, 2012. Giovinco, S. W. (2012) “Repairing your Online Reputation after a Scandal: The BBC Case in Point” Recover Reputation November 12, 2012. Grant, J. (2012) “The Brand Innovation Manifesto” Wiley Marketing 2012 Edition Ho, J. Y. C. and Dempsey, M. (2010) “Viral marketing: Motivations to forward online content” Journal of Business Research 63 (2010) 1000 – 1006 Hung Y. H., Huang, T. L., Hsieh, J. C., Tsuei, H. J., Cheng. C. C., Tzeng, G. H. (2012) “Online reputation management for improving marketing by using a hybrid MCDM model” Knowledge-Based System 35 (2012) 87 – 93 Jackson, P. (2012) “eCRM: The Way to Run your Business” Figaro Digital 25.09.2012 Kiang, M. Y, Raghu, T.S., Shang, K. H. M. (2000) “Marketing on the Internet — who can benefit from an online marketing approach?” Decision Support Systems 27 (2000) 383 – 393 Luker, S. (2012) “Tesco Hit by Online Reputation Plunge” PR Week 7 June, 2012. Martos-Partal, M. (2012) “Innovation and Market Share of Private labels” Journal of Marketing Management 28 (5 – 6) pp695 – 715 Naik, P. A. and Peters, K. (2009) “Hierarchy Marketing Communication Model of Online and Offline Media Synergies” Journal of Interactive Marketing 23 (2009) pp288 – 299 Obadia, D. R. (2013) “Flow Theory and Online Marketing Outcome: A Critical Literature Review” Procedia Economics and Finance 6 (2013) pp550 – 561 Punj, G. (2012) “Income effects on relative importance of two online purchase goals: Saving time versus saving money?” Journal of Business Research 65 (2012) 634 – 640 Rainie L. (2005) “Internet: the mainstreaming of online life. Pew Internet & American Life Project” www.pewinternet.org (accessed November 11, 2013). Slotegraaf, R. J. and Pauwels, K. (2008) “The Impact of Brand Equity and Innovation in the Long Term Effectiveness of Promotions” Journal of Marketing Research XLV pp293 – 306 Tiago, M. T. and Tiago F. (2012) “Revisiting the Impact of Integrated Internet Marketing on Firms’ Online Performance: European Evidences” Procedia Technology (2012) 418 – 426 Watson, C., McCarthy, J. and Rowley, J. (2013) “Consumer attitudes towards mobile marketing in the smart phone era” International Journal of Information Management 33 (2013) 840 – 849 Williams, M. (2010) “BBC and Digital Marketing Agencies in Talk over eCRM Brief” Campaign 04.06.2010. Zhu, Z. (2013) “Discovering the influential users oriented to viral marketing based on online social networks” Physica A 392 (2013) 3459 – 3469 Read More
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