7 January 2011

Social Media is the answer – but for which question?

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First of all we have to see what social media is about. It is more than just a platform that gives you the opportunity to discuss with each other or promote products as companies do Social Media is much more complex. Let us start with analyzing the basic structure. Despite advertisement and personal selling, companies can reach a customer by independent reports and word-of-mouth. The latter occurs particularly on social media- people are talking about a product, service or its provider. This all increases the customer’s influence on companies. Positive Word of Mouth can be a very effective marketing instrument for gaining new customers and also for increasing consumer loyalty due to the public commitment effect. On the other hand word of mouth can have negative effects. Like you can see in the picture below, the receiver might not get the original content of the message because of all the different outside influences. The customer could get a negative attitude of the firm and this means a decrease in purchase intention.There are two sides of the same coin and you cannot avoid one. People have to talk to each other, it is an inherent necessity and Social Media platforms can fulfil this need. An important fact is that not only direct customers exchange experiences but also journalists and competitors and firms could lose the control and influence about their customers and their image- Big Brother is watching you on social media. So it’s up to you to seize this chance- as a customer to inform others about a firm’s product and service or as a company to get in contact with your consumers and for everyone to get insider information for free. In the end it seems to get more transparent for customers to get information but what happens when companies try to get more control over the discussions about them by being more present? Stay awake of the aspect of possible manipulation. How can I differentiate which user is credible and giving an authentic and truthful account?


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