Impact of Social Media on Business

Chapter 1: Introduction

1.1. Research Background

The business has changed significantly over the years, owing to the advancement of technology along with the change in the structure of the marketplace. Social media has become an important part of the modern-day business environment, especially owing to the aspect that it has a significant influence in terms of the way people communicate on a wider scale nowadays (Kapoor, Jayasimha & Sadh, 2013). In the business context, social media in business forms a major element since it becomes an integral part of the communication infrastructure of companies. Social media marketing enables companies to be able to communicate with customers or potential buyers in a real-time setting.

In terms of statistics, the use of social media in the current business is deemed to be significant. As per a survey, as much as 77% of the current business units are making use of social media as a tool of business marketing while 45% of the companies have been using Facebook as a prime means of conducting marketing and communication relation operations of the business. It needs to be mentioned that the use and importance of social media become much more important in the case of small and medium business units since social media offers cost-effective marketing means, which is not visible in the case of traditional marketing approaches (Mansfield, 2018).

As per the report of Statista (2019), social networking forms a major part of the daily lifestyle and activities of people in this Indonesia. As per figures of 2017, as much as 28% of the overall population of the country has access and activity on social networking sites, which is further increased up to 32% till the year 2019. In terms of the future projection is concerned, the figure is expected to reach 37% by the year 2023 (Statista, 2019). The data has been presented by graphically hereunder.

The fact that Indonesia has one of the largest landscapes of digital audiences across the world further shows that the prospect of brand equity and customer retention through social media usage is quite high for companies (Greenhouse, 2019). Social media and brand equity go together specially in the current business context. Alam and Khan (2015) have argued that the prevalence of web 2.0. has provided a strong platform for sharing information related to brands, products and satisfaction levels on a wider scale. The researchers have further added that social media as marketing has become the most important aspect of communication in the modern-day setting owing to its cost-effective nature and wider reach to the public. Brand managers further perceive it as an opportunity of using social media for building brand equity and positioning (Neti, 2011). Social media helps in creating a strong word of mouth among the general public, which further translates into strong brand equity in most cases. This can further be termed as E-WOM. The different dimensions of electronic word of mouth further contribute towards improving the brand equity of any brand at large. In this regard, the study of Colicev & et al. (2018) has noted that social media and customer-based brand equity are interlinked with one another. It further depicted that social networks help in increasing awareness among the public since it is the strongest means of communication available in the current era. Since firms can be able to develop two-way communication through social media, it ensures increasing the level of satisfaction and engagement of the customers with the brand, further elevating brand equity in a significant manner (Kaplan & Haenlein, 2010). This aspect has been widely explored in the LR and Findings chapter of this research study.

Network marketing also regarded as a multi-level marketing model where certain independent contractors get involved with a company and earn percentages of commissions for the sale of a product or services. This sector offers people with utmost flexibility in the domain of marketing, where contractors can decide on their working hours and work process altogether. The role of social media in network marketing is prominent in the current era as it helps network marketers to conduct their operations in a convenient manner to attain market leadership for the product and services they are associated with.

1.2 Research Problem

The study has also sought to explore the impact of social media on customer intention. Notably, Toor & et al. (2017) have provided a clear picture of the influence of social media on customer intention. It is seen that effective marketing communication would assist in enhancing brand equity, brand association, brand loyalty, and brand awareness. The advertisement in social media helps in promoting products and services, which have a stronger influence on customer’s purchase intentions (Mansfield, 2018). Since the internet helps consumers to communicate through two-way communication between sources and consumers, so choosing the right products to become very easy. Interactions activity assists the customers to get involved in purchasing as they initiate various actions (Neti,2011). Since customers have greater likeliness to purchase products when the advertisement of products is favourable, so the role of social media is higher in enhancing the customer's purchase intentions.

However, it is reviewed that majority of the networking industry doesn’t use internet or its associated social media as a strategic tool. They spend huge amount of money on the traditional sources to increase the brand value but doesn’t analyse the value of social media. Moreover, there is even gaps in literature while testing the relationship in between the brand equity and social media marketing. This is very less research which are made upon the relationship between social media, brand equity and customers intension in network marketing company. Thus, to answer the knowledge gaps, this research study will analyse the impact of social media towards equity of products and customers intention in Network marketing company Biovital in Indonesia.

1.3 Research’s Aim & Objectives

1.3 Research’s Aim & Objectives

The objectives of this study are as follows:

To understand the concept of social media, brand equity, and customer’s intention

To analyses the engagement of customer in social networks

To acknowledge the impact of customer engagement in social media on brand equity

To determine the impact of social media on customer intention and brand equity of products

To analyses the impact of social media on the brand equity of products and customer intention in Biovital

To evaluate the measures to enhance the impact of social media on the brand equity of products and customers intention in Biovital

1.6 Research’s Structure

This research possesses six chapters wherein introduction is the first chapter followed by Literature Review which utilizes secondary data to analyse the research topic. The research methodology is the third chapter in this study which has explained the research strategy, philosophy, designs, data collection methods, and other methodologies. The fourth chapter is the finding chapter which makes the usage of primary data to collect relevant information. Discussion is the fifth chapter, which had analysed regarding both primary and secondary data followed by conclusion which summarise the whole data and gave a conclusive result.

Reference

Kaplan, A.M., & Haenlein, M. (2010). Users of the world, unite! The Challenges and opportunities of social media. Business horizon, 53, 59-68.

Kapoor, P.S., Jayasimha, K.R., & Sadh, A. (2013). Brand-related, Consumer to Consumer, Communication via Social Media. IIM Kozhikode Society & Management Review, 2(1), 43-59.

Neti, S. (2011). Social media and its role in marketing. International Journal of Enterprise Computing and Business Systems, 1(2), 1-15.

Wang, J.C., & Chang, C.H. (2013). How online social ties and product related risks influence purchase intentions: A Facebook experiment. Electronic Commerce Research and Applications, 12(5), 337-346.

Weisberg, J., Teeni, D., & Arman, L. (2011). Past purchase and intention to purchase in e-commerce: The mediation of social presence and trust. Internet Research, 21(1), 82-96.