Fabian Flores Social Media

8/8/2019 Fabian Flores Social Media

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How Companies Are Marketing Online

What are emerging vehicles?

Buying Process in Social Media

What are the elements to consider in order building a message?

Social Media the Electronic Version of Word of Mouth

Case Study

Conclusions

Sources

5

7

9

15

2

2

2

16



This research implements theory in real

actions, a case study for a specific product

uses the most popular social media vehicle in

Ecuador (South America) to launch a promo-

tion. The selection of the vehicle is determined

after a meticulous assessment of the city in

which the campaign was implemented, and

then the definition of the target groups is

outlined in order to build a message according

to characteristics of the product.

The conclusions of this research provide valu-

able ideas to marketing managers. It providesanswers to the questions “does social media

really work? ”, “can social media be the only

marketing vehicle to advertise a brand? ”

Purpose of Study

Social media is reshaping the way people are

communicating, sharing information and doingbusinesses. The possibility of knowing people

from places that you do not know and the impli-

cations it has, makes social media a fascinat-

ing topic to learn more about.

The purpose of this study is to learn more

about social media groups interact prior to

engage in a purchase. What is the information

social media users demand, what is the mes-

sage companies need to tailor in order to have

an effective communication and finally explore

the outcome of some strategies applied to

communicate about a new product or service.

Executive Summary

This research explores social media within the

business marketing context. The impact of

social media in business is undeniable; man-

agers around the world are investing more and

developing strategies to target specific mar-

kets. Social media is the e-word-of-mouth of

this century, the high-impact recommendation

from a trusted friend conveying a relevant

message might represent up to 50 times more

likely to trigger a purchase than is a low-impact

recommendation.

This research explores the motivations to initi-

ate word-of-mouth interactions and how to

structure a message to address it to a specific

audience. The advantage of using internet is

the ability to measure the outcome of market-

ing campaigns, marketing managers can use a

formula to measure the performance of their

e-word-of-mouth campaigns. This can be a

powerful tool to adjust or change campaigns

and optimize resources.

In order to generate buzz among social media

users it is important to build confidence, what

are the factors that marketing managers must

consider when they implement a campaign

among social media vehicles or even whenthey develop a website. Once these elements

are understood, what is the proper social

media vehicle to be used along the purchase

process?



aggregators such us iTunes.

Widgets: are programs that allow access from

users’ desktops to web based content.

Wikis: are systems for collaborative publishing

i.e. Wikipedia

Online games: game consoles dedicated to

multiplayers interacting online on real time.

Buying Process in Social Media

This chart reflects a regular purchase process

which is perfectly suitable to online communi-

ties; however, what is remarkable here,

according to “social media gurus”, is that this

communities are gathering to form associa-

tions with similar interests and do not want to

be disturbed by “intruders” or “sale people”.

Internet users are bombarded by tons of infor-

mation in a daily basis; therefore, it is important

to develop a strategy to approach this commu-

nity, more than 400 million active users of

Facebook according to its Press Room (1)

because they can shut you down

How Companies Are Marketing Online

According to a recent study of McKinsey Quar-

terly called “How Companies Are Marketing

Online” marketing executives around the globe

look forward to taking advantage of Web 2.0technologies, which rely on user collaboration,

include web services, peer-to-peer networking,

blogs, podcasts and online social networks.

This study shows that in 2010 marketing

executives expect that a majority of their cus-

tomers will discover new products or services

online and 1/3 to purchase goods there.

What are emerging vehicles?

Blogs and Microblogs: are online journals i.e.

Twitter.

Social networks: allow members of specific

sites to learn about other members’ skills,

talents, knowledge, or preferences i.e. Face-

book, MySpace.

Podcasts: are audio or video recordings

which are normally distributed through

AWARENESS CONSIDERATION PURCHASE

Becoming aware

o new productsSearching ino

Inormation gathering

Comparing prices

Buying products

Using services

ater sales

RetentionLOYALTY PROGRAM

1 http://www.facebook.com/press/info.php?statistics

2



vehicles are a relative new application.

To the question “How is your company’s

current spending on digital-advertising

vehicles allocated?” 14% is for emerging

vehicles, 31% to email and 33% to display ads.

The immediate question for any business

person is how efficient internet-advertising

tools can be compared to traditional methods.

McKinsey Quarterly researchers formulated

the following question: “compared with tradi-

tional media, how efficient is each of the

digital-advertising vehicles your company uses

in reaching your company’s goals?” (page 6)the outcome is for emerging vehicles 29%

more efficient vs. 8% less efficient; the highest

ranked was paid keyword search 60% more

efficient vs. 9% less efficient.

It is remarkable to mention that marketing

managers, according to this study, are plan-

ning spend more over the next three years on

emerging vehicles: 64% increase, 12% remain

the same, 1% decrease and 24% undecided.

Along the purchase process it is possible to

establish a specific strategy:

1. Brand building

2. Consideration

3. Direct response4. Retention

According to McKinsey Quarterly to the follow-

ing question: “what marketing goal do you try

to achieve with the digital-marketing vehicles?”

(page 7). The outcome for emerging vehicles

was:

immediately by creating a negative buzz

among their peers.

Emerging vehicle users are connected one

another because they share common inter-

ests, believes, likes, etc; therefore, psycho-

graphics become important to assess. “Social

media gurus” recommend patience; it is impor-

tant to become part of the group, mix with

them, build rapport and as a result confidence

will emerge.

The awareness stage is important and as any

human relationship this is the moment where

people get to know each other and decidewhether or not to engage. Share information,

accept comments positive or negative ones.

After the awareness process the consideration

process takes place, your prospective custom-

ers are acquainted of your product or service

and may or may not purchase. On this stage

customers have the ability to search similar

products or “shop around”, compare prices,

features, benefits, etc. According to HubSpot

(2) the average time customers take to

purchase a product via social media vehicles is

four months.

According to McKinsey Quarterly on its

research paper “How Companies Are Market-

ing Online” (page 5) marketing executives

responded to following question “Which, if any,of the following digital- advertising vehicles

does your company use?” 12-32% of the

respondents accepted they use emerging

vehicles, compared to 83% of the respondents

use email as their primary advertising tool

which is remarkable considering that emerging

2 www.hubspot.com “The Science of Social Media Webinar”

3



1. Becoming aware of new products: 70%

of users will look for high tech related products

or services, 50% financial services and manu-

facturing

2. Searching for information: 83% high

tech, 58% financial services and 54% manu-

facturing

3. Comparing prices: 45% financial

services, 44% high tech and 34% manufactur-

ing

4. Buying products: 35% high tech, 33%

financial and 30% manufacturing

5. After sale: 61% high tech, 47% financial

and 36% manufacturing

1. Brand building: 19% wants to use it to

meet this goal

2. Consideration: 15%

3. Direct response: 9%

4. Retention: 22%

5. Don’t know: 35%

.

These results demonstrate that marketing

executives prefer to use emerging tools mostly

to retain customers, obtain feedback like opin-

ions to improve their products. As any other

advertising tool the combination of advertising

mechanisms increase effectiveness; therefore,

it is unlikely that emerging vehicles as a whole

guaranty 100% company’s marketing goals.

On the other hand, “experience matters” it is

eye opening realize that emerging vehicles

can be more effective in specific stages of the

sale chain; consequently, the message should

be designed according to.

Some industries are more likely to use

internet-based marketing tools and some

users tend to look for their products through

internet what it means is that some industries

should seriously consider using internet as a

marketing tool along with traditional media.

According to McKinsey Quarterly in the next 3

years among the following industries: High

tech, financial services and manufacturing;

internet users will search these companies’

services more or less depending on the stage

of the purchase process:

4



What are the elements to consider in order building a message?

People judges by looks or likes, first impres-

sions are normally important, social media is

alike, what users feel about someone or some-

thing really cares; therefore, this question

arise: What are the elements to consider in

order building a message? As mentioned

above the ability to engage users depends on

the communicators’ assessment of the groups

needs and desires which are translated on

images, text, voice, and videos that each

emerging vehicle enables to use.

According to “Impact of Trust on WebsiteDesign and Online Buying Behavior” by

Hosein and Chan, websites must meet certain

components to be able to build trust among

users which is the core of social media trans-

actions. The factors of perceived trustworthi-

ness are:

Ability: “competencies and characteristics of

the seller that permits it to have a certain influ-

ence and authority in a specific area”.

Benevolence: “willingness to establish mutu-

ally satisfying exchanges rather than seek only

profit maximization”.

Integrity: “principles applied by the organiza-

tion such us maintaining confidentiality of infor-

mation”.

Social media platforms are successful in

accomplishing that goal, at least the most

used, but the challenge arises for each indi-

vidual account that wishes target its custom-

ers. Thus, these three factors should be con-

sidered when individual accounts are created.

Identifcation

with group

Company

must reect

GROUP

NORMS

Commitment

toward group

MESSAGE

COGNITIVE

ABILITY BENEVOLENCE INTEGRITY

AFFECTIVE COLLECTIVE

SELF-ESTEEM

SAME KIND

COMMUNITY

SENSE OF

DUTY TO THE

COMMUNITY

5



there are three major factors:

Cognitive: “Identification with the group.”

Affective: “Commitment towards the group.”

Collective Self-esteem: Take proud of your

community.

The objective of social groups is share rituals

and traditions and as a result a sense of duty to

the community emerges. But how is this

related to companies? In our daily lives we

interact with objects, products and services;

therefore, this interaction: consumer- product

within a group of peers who share same moti-

vations turn into become a product and conse-quently a brand becomes part of the commu-

nity and interact.

I have noticed that established brands pen-

etrate among social groups easier than new

comers. For instance, I became “Fan of McKin-

sey Quarterly” Facebook site and I noticed

how its posts drag lots of comments which in

returns build company’s brand and drives con-

sumers to its own website which means sales

in the short or long run. It is important to men-

tion that McKinsey is one of the most highly

respected opinion makers in the USA and in

the business world in the globe.

Hosein and Chan state website design impact

consumers and consequently build trustamong users; however as far as social media

sites design, it is limited the options to custom-

ize their websites appearance by marketers

because it is important for social media provid-

ers establish one design that easily identifies

them regardless of country or language. What

these providers have developed is “Apps” or

It is important to pay attention to benevolence

because social media by far is a site to

exchange satisfactory experiences. Observa-

tion on social media users’ behavior shows

that postings express mood, desires, and con-

cerns of users in search of gathering friend’s

support or opinions. Curiosity is in our human

nature and we always want to find out more

about our neighbors and peers, whether to

compete (social status) or to compare with

others, reasons may vary but human beings

like learning more about others. This is what

builds the sense of community and identifica-

tion with the group.

Perception (ability+ benevolence+ integrity)

build an image map of the company social

media users want to deal with. By mastering

those companies become effective communi-

cators which translates in consideration to buy

“my product” and ultimately a purchase. It is

important to mention that “offline” process such

us quality of the product; customer service, etc

determine whether or not companies will have

a loyal customer or referrals from them to close

the cycle successfully.

Social media has this great advantage, build

communities in which marketers can target

initiatives to mine out of them, internet offers

the advantage of an affordable mechanism

that also allows measure performance ofadvertisements. Technically, what are the three

factors that permit us understand how groups

are formed and decide to interact?

According to “Brand Communities on the Inter-

net, a case study of Coca-Cola’s Spanish

virtual community” by Sicilia and Palazon

6



Consequential: Consumers exposed to tradi-

tional marketing campaigns pass on mes-

sages about them or brand they publicize.

Intentional: Celebrity endorsements to trigger

positive buzz for product launches.

Word-of-mouth is about trust, building a brand

is crucial if the company’s goal is to take

advantage of it. People trust what they know

then; finding opinion leaders produce more

buzz than random people. Message plays an

important role, in order to have a message that

stimulates consequential actions, according to

Bughin, Doogan and Vetvik, this must becreative and promotes interactivity.

People trust brands; as a matter of fact, it is

easy for well known brands to spread word of

mouth campaigns. “Experiential” strategies are

a good strategy for these types of brands.

However, what strategy is it suitable for emerg-

ing companies. Creativity and interactivity is

fundamental, creative messages generate

buzz; therefore a “consequential” strategy is

applicable. “A woman world” a YouTube Chan-

nel:

http://www.youtube.com/user/awomansworld

is a good example in which the endless

women’s goal of losing weight is presented inway any women can relate: their fears, doubts,

insecurities on daily basis activities, it seems it

is based on the famous characters of the TV hit

“Sex and the City”.

applications that can satisfy the desire of users

of being different within their community as

well as, being the “excuse” to interact with

others which also indicates the preferences of

social media users, it may help marketers to

build psychographics.

Social Media the Electronic Version of Word of Mouth

According to Bughin, Doogan and Vetvik, “A

new way to measure word-of-mouth market-

ing” McKinsey Quarterly, page 3, social media

is modern way of word-of-mouth and it is the

primary factor behind 20 to 50 percent of all

purchasing decisions. They say “a high-impact

recommendation from a trusted friend convey-

ing a relevant message might represent up to

50 times more likely to trigger a purchase than

is a low-impact recommendation” (unknown

source).

Bughin, Doogan and Vetvik have concluded

that about 8 to 10% of consumers are whatthey call influential; for instance, a person may

have 300 Facebook contacts but only 10 of

them are indeed influential.

How to understand word of mouth?

Bughin, Doogan and Vetvik have classified the

complex motivations that trigger word-of-

mouth interactions.

Experiential: It results from a consumer’s

direct experience with a product or service. It is

the most powerful motivation to initiate word-

of-mouth interactions.

7



By looking at the impact – as well as the

volume- of these messages, this metric lets a

marketer accurately test their effect on sales

and market share for brands, individual cam-

paigns, and companies as a whole.

It is important to notate that messages are

more effective when either the message is sent

by a trusted brand or closed friends or con-

tacts. So far, it is cleared that it is important to

address the message to well defined groups, it

is more effective if these people know the

brand and/or have used the product before but

what are the characteristics of an effective

message: creativity and interactivity.

The following chart describes the process. The

effectiveness increases when the product is

sorted out according to the target market

(market segmentation) which implies that the

message is more specific, consequently, the

psychographics of the focus group are con-

cise, making marketer’s job customizable.

Plots, language and characters can reflect

what their target demands, creating with that

the call to interact or forward the message to

For businesses with knowledge of its local

market it is highly advisable to identify local

opinion leaders to market their products. Some

companies may require market segmentation;

therefore, identify opinion leaders by segment.

Message can be customized according to seg-

ments to be more effective. “Intentional” strate-

gies are applicable for larger companies that

can afford to pay celebrities; this strategy is

especially good for larger companies that are

entering new markets.

Bughin, Doogan and Vetvik present a formula

to calculate what they call word of mouth

equity :

Average sales impact of a brand by the

number of word of mouth messages

PRODUCT

CUSTOMERS

Sort features out

according to client’s

needs/ wants

Interactive CreativeMESSAGE

BRAND

- Experimental

- Consequential

- Intentional

Find opinion leaders Mass Media

other peers.

However, interaction can be

generated in different ways:

requesting opinions or post-ing messages, blogging sug-

gestions, attaching a pole or

survey, creating a contest,

offering prizes, etc.

8



50 professionals between 25 to 50 years old,

male and female (50% each), at least graduate

level, business owners or currently working.

The survey inquired personal preferences as

well, in order to be able to build the psycho-

graphic pattern of the group. The outcome is

presented in market segments of age groupsof 5 years apart each.

The outcome of this survey places Facebook

as the most used social media tool, followed by

YouTube among the majority of age group seg-

ments. As the table indicates preferences vary

according to age groups which are useful to

design the right message as well as offline

activities to complement online ventures.

Case Study

This case represents the application of the

theory into practice. The first step is:

1. To determine the target group; demo-

graphics and psychographics

2. To define the social media vehicles that

are most demanded within this group

3. To determine the group interaction with

internet

4. To create a social media web account to

apply concepts

The Survey

The study was implemented in Guayaquil,

Ecuador (South America) via survey to

Preferred Web Preferred Acvity Preferred Topics

25 - 29 years 1 Facebook, 2 Youtube1 Movies, 2 Internet &

video games

1 Educaon, 2 Polics,

3 Internet

30 - 34 years 1 Facebook, 2 Youtube1TV,2 Movie,3 Sports &

Internet

1 Educaon, 2 Polics,

3 Fashion, 4 Family

35 - 39 years 1 Facebook, 2 Hi5, 3Youtube

1 Movies and TV, 2Internet

1 Educaon, 2 Family, 3Sports & Polics

40 - 44 years1 Other, 2 Wikipedia, 3

Youtube

1 Video games, 2

pracce sports

1 Polics, 2 Sports, 3

Cars

45 - 49 years 1Wikipedia,2 Youtube 1 Tv1 Fashion,2 Educaon,

3 Polics

9



The size of the market is 2,247,803.67 people

(2008) according Ecuadorian Statistics:

Population of Guayaquil by Age: This graph

shows Guayaquil is populated by young

people mainly. In order to determine the

income of people from Guayaquil, too many

assumptions were made due to; no Ecuador-

ian statistics provide this information

The calculation was based on employmentstatistics (36% in Guayaquil according to

official data), set salaries according to locals’

opinions; determine the percentage of the

income earned according to locals’ opinions

(no official data available), an additional filter

was added; homeownership because the

social media websites are designed to target

prospective real estate investors; therefore, it

is important to learn how many people are

homeowners in order to calculate the size of

the market. This factor, homeownership, was

set according to locals’ opinions also.

Distribution of Population of Guayaquil

According to Income: This graph sorts

Guayaquil population according to income.

This calculations were obtained by own analy-sis because there is no official statistics avail-

able.

Population of Guayaquil by Age

Distribution of Population of GuayaquilAccording to Income

10



What do you use internet for? The outcome

shows that internet is mostly used to work but

it does not mean that social media websites

are used during these hours. It is remarkable

that there is a high number of people who haveinternet service in their phones which may

allow them check their personal websites, but

this is merely a supposition.

The calculation was based on employment

statistics (36% in Guayaquil according to

official data), set salaries according to locals’

opinions; determine the percentage of the

income earned according to locals’ opinions

(no official data available), an additional filter

was added; homeownership because the

social media websites are designed to target

prospective real estate investors; therefore, it

is important to learn how many people are

homeowners in order to calculate the size of

the market. This factor, homeownership, was

set according to locals’ opinions also.

Use of Internet

Internet in Cellphones

Hours a Day Using Internet

Work Study Amusement Chat

25 - 29 years 36% 22% 25% 28%

30 - 34 years 65% 36% 26% 18%

35 - 39 years 49% 20% 24% 28%

40 - 44 years 66% 13% 13% 16%

45 - 49 years 30% 40%

41%38%

70%

57%

0%

45 - 49 y.o40 - 44 y.o35 - 39 y.o30 - 34 y.o25 - 39 y.o

7.5

6.43

7.00

8.57

8.6

25 - 29 y.o.

30 - 34 y.o.

35 a 39 y.o.

40 - 44 y.o.

45 - 49 y.o.

11



As stated before the preferred social media

website is Facebook, according to a local

newspaper (El Universo) which pulled this

information from Facebook in Ecuador there

are as of February 14th 548,320 users; how-

ever, Facebook grows exponentially globally

which means the opportunity exists yet. The

larger group is between 18 to 24 y.o.

The Facebook Account

Name: Prosperity Investments

www.facebook,com/prosperityinvestments

Objective: To target Ecuadorian investors

interested in land banking in California

Target 1: Professionals interested in partner

up with Prosperity Investments such as, local

real estate and agents, investment consul-

tants, bankers. This group may vary in age.

Target 2: Investors interested in land banking

in California. Age range from 35 to 45 mainly,

married, homeowners, ability to pay at least

$170 monthly towards a mortgage or willing to

invest 6% of their household income, in this

scenario the ideal household investor income

is $2,800 a month.

A strategy that was implemented was to nameFacebook’s site after the company’s website,

www.prosperityya.com, which will bring aware-

ness and build our brand. Prosperity Invest-

ments is a new company; therefore, does not

carry along the advantage of a big brand,

Facebook Users in Ecuador

Prosperity’s Account in Facebook

12



its communication goal is to position the

company’s brand with messages that establish

its brand name as: Reliable, serious, well

informed, the posted content is related to its

objective or to related subjects, and an educa-

tional source.

The first source of “fans” came from a personal

account in which a massive email was sent to

data base of real estate agents of Latin

America, then friends. An event was created to

advertise an offline event and increase the

number of “fans”: “Become a Land Banking

Agent” which will be delivered in Guayaquil.

In order to promote it a paid advertisement was

placed targeting people who live in Ecuador,

22 years old and older. This event attempted to

reach people in the “target 1” previously

stated.

Event: “Become a Land Banking Agent”

Metrics of the Outcome of the Event

13



The outcome was very attractive 16 people

confirmed attendance; however, the day of the

event none of them showed up. The explana-

tion of such discouraging result might be;

according to locals, that the day of the event

was not properly selected and the lack of park-

ing spots available that day because the same

day of the event other meeting was presented.

Other factors attributable to this outcome could

be: Prosperity Investments is an unknown

brand, lack of knowledge about the theme to

be presented, and a history of scammers who

have taken advantage of people with same

proposals.

After this, the conclusion is: social media does

work even for unknown brands, it is important

to mix advertising tools online as well as offline

in order to achieve marketing objectives.

Social media tools are more or less effective

according the stage within the communication

and marketing process the product or brand is

in. Next a chart recommends a strategy to use

social media tools and other offline tools to

increase results in marketing campaigns.


B e c o m i n

g a w a r

e

o f n e w

p r o d u

c t s

S e a r c h i n g

i n f o Comparing prices

Buying products

Using services

Retention

LOYALTY PROGRAM


B e c o

m i n

g a w

a r e

o f n e w

p r o d u

c t s

S e a r c h i n

g i n f o Comparing prices

Buying products

Using services

Retention

LOYALTY PROGRAM

-Internet

-Emailing-Newspaper

-Mailing

-Telemarketing

-Radio

-TV

-Google-Newspaper

-Catalogs

-Company’s

websites

-Company’s

websites

- Retailers

-Company’s

websites

-Retailers

CRM

Online Marketing Mix

Offline Marketing Mix

14



Conclusions

Social media is the electronic version of word

of mouth.

Messages are more effective when are sent byclose/trusted brands (influential), consumers

had their own experiences with the product.

Experiential, consequential and intentional

behavior determines social media user

responses to marketing messages.

Social media alone should note be consider

the only avenue to promote brands; therefore,

it is important to use offline and online mecha-

nisms.

It is important to use social media tools accord-

ing to the process a brand or product is along

the purchase chain process.

Messages must be creative and interactive in

order to be more effective.

It is possible to determine the e-word of mouth

effectiveness of a marketing campaign invest-

ment.

Apps might seem a good source to drive view-

ers to social media sites.

It has not been determine if English messages

affect the response from my “fans”. Consider

language barriers.

YouTube Account

Prosperity’s Website

15



Sources

Jean-Francois Martin, “How Companies Are

Marketing Online”, McKinsey Quarterly, 2010

Nasim Hoseim, Peng Chan, “Impact of Trust

on Website Design and Online Buying Behav-

ior”

Jacques Bughin, Jonathan Doogan, and Ole

Jorgen Vetvik, “A New Way to Measure Word-of-Mouth Marketing”, McKinsey Quarterly,2010

David C. Edelman, “Four Ways to Get More

Value from Digital Marketing”, McKinsey Quar-

terly, 2010

Maria Sicilia and Mariola Palazon, “Brand

Communities on the Internet, A Case Study of

Coca-Cola’s Spanish Virtual Community”, Uni-

versity of Murcia, 2008

Dave Evans, “Social Media Marketing, An

Hour a Day”, Sybex, 2008

Diario “El Universo”, Ecuador

Facebook

YouTube

Documents

Fabian Flores Social Media