The Impact of Social Media Marketing in Marketing Communication Opportunities: in Context of Dell

Table of Content No. | Content| Page Number| 1. | Table of Content| 1| 2. | Abstract| 2| 3. | Introduction| 3| 4. | Literature Review | 4| 5. | Dell Business Model| 7| 6| Impact of Social Media Marketing in Dell Current Communication Process| 8| 7. | Challenges of Social Media Marketing in the Marketing Environment | 11| 8. | Benefits of Social Media Marketing in the Marketing Environment| 13| 9. | Conclusion| 15| 10. | References| 16| 2. Abstract Social media marketing is no longer a foreign to business marketer nowadays. This paper will examine the impact of social media marketing on the marketing communication opportunities in context of Dell in the United States. Basically, this assignment will be begun with the introduction which generally explains about the emergence of social media. Next, several literature reviews will be provided to explain on the marketing communication process and how social media marketing impacted on the Dell current communication process. Then, several challenges and benefits of social media marketing will be illustrated at the end of this paper. Keywords: [social media marketing, marketing communication process, media vehicle, consumers, message] 3. Introduction Undeniably, revolution of socio-technological has significantly changed the ways and means of media consumption. From super-fast digitally empower laptops to mobile eBook readers. All of these aspects have affected how business (brands) and consumers communicate and thus influence the way of marketing communications will be functioning. One of the most significant evolutions when people talk about marketing tools or strategies is the emergence of social media marketing. Fundamentally, social media marketing is a way of connecting with consumers by means of the current technology (i. e. The Internet). As of now, there are more than 800 million active users in Facebook, over 3 billion videos are viewed per day and 100 million people use Twitter every single day. Having all social media channel available for consumers, this provides consumers with plenty of choices in products and services in the market. Alongside, social media marketing has impacted on businesses marketing communication opportunities. 4. Literature Review The emergence of new communication channels via the Internet has tremendously affect businesses way of marketing strategies (Owen and Humphrey, 2009). One of the most significant developments to the marketers is the effects from the Internet evolution from the generation of Web 2. 0 or social media as a media vehicle to deliver the message to the target market (Constantinides et al. 2008). Social media marketing in this context is the opportunities provided for business to communicate with the society, with the help of the organizations’ brand, thus resulting in building a positive connection and develop brand influence through the Internet as the medium of communication (Pandey, 2010). Murphy (2010) mentioned that a good marketing strategy occurs when organization or marketer using the right communication channels or media to send the right message and reac hing the right market. Therefore, it is vital for marketer to understand the communication process when using social media as the media vehicle in the marketing communication. Kotler (n. d. , p. 546) mentioned that there are several elements that involved in the communication process in order to determine effective communication. The major two parties in the communication are the sender (marketer) and receiver (market). Another major communication tool is the media vehicle or media channel which carries the message to the receiver. Alongside the communication parties and media vehicle, there are four major communication functions; encoding, decoding, response and feedback. Finally, the element of noise also interferes in the communication process. Dargiewicz (2010) suggested that in order to communicate in an effective way, the sender must have an understanding of the point of the message, who are the target audience to be reached and how the audience will interpret and respond to the message. Schramm’s model of communication points out that the sender’s ncoding process must be coherent with the target audiences’ decoding process, whereby, the more marketer field of experience overlaps with the target markets’ field of experience, the higher is the effectiveness of process of communication (Dargiewicz, 2010; Holm, 2006). The matches of both parties’ experiences are called the Shared Frame of Reference. Figure 1: Willbur Schramm model Source: Dargiewicsz, K. (2010) Monologue vs Dialogue: How Innovative Social Media Technology Developing Effective Marketing Communication Strategies [online]. Available at http://www. slideshare. et/guywithideas/social-media-dissertation [Accessed 15th December 2011] The high level of trust associated with social media as the media vehicle makes social media is highly acceptable among the target audiences compared to traditional media vehicle such as televisions, newspapers, billboard and etc. (Inklingmedia, n. d. ). Mohr and Nevin (1990), bring up that, the absent of trust may distort the message that is being sent. According to DesignDamage (n. d. ), social media fosters a highly transactional model of communication which it allows two-way communication through the feedback mechanism that traditional media not able to offer. Traditional media vehicles were also argued to be a merely one-way process communication, whereby, the message is not clearly communicated or received by the target audience in most of the time (Dargiewicz, 2010). The Shared Frame of Reference suggested by Willbur Schramm model is integrated with social media because it offers consumers to share their experience in the communication process. Calder and Malthouse (2005) supports that everything that influence the customer’s experience is a potential marketing vehicle. Therefore, in order to illustrate the theory of social media marketing in context of organization, this paper will look at the impact of social media marketing in Dell Corporation in the United States. 5. Dell Business Model The founder of Dell Computer Incorporation is Michael Dell in 1984. Dell’s primary products are personal and office computers and business of Dell also engages in other products such as printers and software. A feature that determines PC companies such as Dell to manage their products is through standardization of PCs. The main benefit of standardization is that it helps Dell to reduce the cost of productions. However, when Dell adopted standardization strategy, it made Dell more generic with other PCs companies such as IBM, Compact and Hewlett-Packard since most of PCs companies had access to the same suppliers such as Intel and Microsoft. Therefore, Dell started a new direct business model based on customization approach that enables computers or laptops to be produced according to customers’ requirements in order to be more competitive. However, standardization approached has still remained in Dell’s business model. The customization approach varies its products from customer to another customer without changing the brand name. Having customization strategy in Dell business model, Dell has to eliminate third party as the middle-man and sell its products directly to the final customer, whether the commercial customers or private users. Such business model allows Dell to reach more clients and business units and cut cost with simplify supply chain. Unfortunately, Dell is facing even a bigger issue to balance out the standardization and customization approach as there is no one perfect method. According to The Indian Institute of Planning and Management (n. d. ), customer is the key economic driver to what Dell is doing. Therefore, Dell extended its approach to engage with their customers through the social media marketing to market their brand and communicate with their customers. 6. Impact of Social Media Marketing on Current Dell Communication Process Many companies including Dell, have realized that social media is a new platform for communication. Dell’s key policy is always being a direct and effective in terms of its communications. Dell and digital communication through the internet was never separated since it started to conduct e-commerce business which selling its customized products directly to the customer. Since Dell engaging the blogosphere in 2006, social media marketing has always been its core communication and marketing strategies. According to Dave (2011), social media efforts at Dell helps to sustain the business objectives such as aim to reduce cost, increase revenue and enhance customers’ satisfaction. According to Blythe (2000), the first key of effective communication is to identify the target audience. Social media marketing provide opportunities for dell to separate their target audiences according to social media channel. For example, Dell Community has a mixture of blogs that reflects several key channels. This includes discussion on education to business consultation. Different range of blogs that provided by Dell ensures that information and discussion would be used to cater several specification of audiences. In a same way, Dell has different kinds of Twitter channels to reflect different purposes. Correspond to Dell Cares, it provides assistance to the customer on any matter related to the Dell’s products. This portrays how Dell has separated its branding strategy and how various Twitter accounts perceived differently by the audiences. Therefore, Dell will be able to encode the right message such marketing campaign, to the specific target audience through the right social media channel. There are many other brands out there in the market today compared to in the past. Dargiewicz (2010) points out that all are trying to communicate a large number of messages to their target audience daily, which interfering the target audience to get the right message across. Thus, social media has changed the communication landscape in providing opportunities for Dell to have a two-way communication with its customers. A good communication is the role of the encoders’ and decoder’s skill and its portrayed by the medium which the encoded message is delivered. Realized the effectiveness of social media as the medium of communication, Direct2Dell was launched by Dell, its very own corporate blog through Twitter. Its social media efforts have provided a two-way asymmetric communications, whereby, target audiences able to provide feedback content such as ratings and reviews with regards to the issues of Dell’s products. Moreover, the feedback provided by the customer is in real-time, whereby, the feedback is come directly from customers and Dell able to value their products. For instance, product that has five-stars rating should stay and two-star ratings should be removed. According to Pickton and Broderick (2001, p. 182), feedback will improve the accuracy of the communication to ensure that message has been correctly received and understood, which is one of the reasons why social media is a powerful communication vehicle in Dell communication process. Plus, the CEO of Dell Computer, emphasized that company must be able to listen and connect with its customers and emergence of social media has provided Dell the opportunity to engage with its customers (Farrelly, 2009). Given the feedback mechanism that social media can offer, Dell’s has taken a major step to establish a â€Å"Social Media Listening Command Center† in order to stay connected with its customers. Channey (2009) points out that listening are no longer an option but rather a new marketing. Listening is crucial in the communication process because it allows Dell to understand what customers want and how customers perceive the brand. Not only did social media marketing allow Dell to understand their customers, , Dell are able to discover about a massive amount of issues that consumers were having with their products through their blog monitoring platform. The system could track each of these and would instantly recognize trends between products, geographic areas, or specific communications with Dell. For instance, Dell proactively approach consumers in the blogosphere and in online community about battery recall, thus allow better response and rectify customer’s problem as quickly as possible. Plus, customers were also able to check whether their battery part of the recall. Furthermore, social media marketing has fostered high Shared Frame of Reference between the sender (marketer) and the receiver (audience) that influence effective communication. Dell has created online designed studio that gives the ability for its customers to change the design of their laptops by choosing a custom switchable lid themselves. Online designed studio has given Dell’s customers the opportunities to virtually experience the outcome of their customization laptop, thus, encourage Shared Frame of Reference between Dell and its customers. In addition, not only did social media marketing fostered high Shared Frame of Reference between the marketer and the audience but also among Dell customers. Dell has launched online community for its existing and potential customers to communicate and exchange information. According to Bazaarvoice (n. d. ), 90 percent of consumers online belief the recommendations from people they know and 70 percent belief the opinions of unknown users because people tend to trust and often seek the advice from another person or group of people over brands. This characteristic enables consumer to gather as much information about Dell’s related products and services before making purchase decision. Shaw et al. (2000, p. 152) added that a positive feedback can turn into a good promotion the brand of the product. This is why social media perceived to have a higher level of trust and it is more acceptable compared to other media. 7. Challenges of Social Media Marketing in the Marketing Environment Social media marketing has certainly influence the communication process of Dell with its consumer. However, there are several challenges that social media is facing in the marketing environment. Social media allows thousands of conversation streams to be addressed per day. Merely representing a team of marketers will not be able to handle such a great amount of conversation. Definitely, the number of marketers is not sufficient and it is more likely that these marketers are not equipped with comprehensively subject matter expertise that required them to communicate and respond at the proper level of reliable conversation. The consequence of ignoring this can be overwhelming. The risks of involving untrained employees to represents on behalf of Dell could jeopardize Dell reputation. Once Dell encouraged its employees to be active on blogs, Dell is exposed to the risk of staff members writing negatively and revealing confidential information about the organization. For example, in 2007, a former employee of Dell had posted a list of tips in a blog for customers who are searching for Dell products (Farrelly, 2009). The employee had no issues with Dell and just wanted to share information for customers such as the best time to purchase and how to get the greatest deal. Therefore, it is essential for Dell to have proper employees that have the ability to monitor and respond to its consumers’ thought. Additionally, due to high transparency in social media, competitors may know the strategies of Dell and consumers are more well-informed about Dell products and pricing strategy. Essentially, the engaging process with customers has always been in charged by the Dell marketing department. However, the trend has changed since the emergence of social media. The consumers are now communicating about the organization’s product with other online users who are not the employees. In fact, 66 percent of brand opinions are generated by customers and 34 percent are by blogger (Dave, 2011). The growing popularity of online communities has allow consumers to exchange information and able to compare with competitors’ prices without any barriers. This means Dell have lost their ability to control over on how and where their products and services are being presented to existing and potential customers. Moreover, any disappointed Dell customer able to share their negative judgment on particular products. The bad feedback posted on Twitter or Facebook can easily go viral as good news. For instance, in 2005, Jeff Jarvis, blogger and famous journalist and professor created a personal blog known as Dell Hell. Jeff had a problem with his Dell computer and frustrated with Dell customer service. Therefore, he expressed his frustration with Dell’s products and customer support on the blog. Dell Hell served as a place for other consumers to express their frustration on Dell. As for Dell, the situation has attracted the attention of other media from The New York Times, Business Week, The Houston Chronicle and many others, thus, reputation of Dell as the well-known brand for PCs was at disaster. Moreover, the social media habit or consumption of the young audience may differ compared to the previous generation. It has been a challenge for the marketers to develop marketing communication strategies in order to sync with this modern language to make sure that the transmitted brand messages are received and properly encoded across different age group. The young audiences who are called â€Å"digital natives† were raised up in the modern technological era. They have been adapted to the development and respond to information in a different way with their predecessors. Different to the young audience, the previous generations are known as â€Å"digital immigrants† because they are exposed with modern technologies only in the later stage compared to the young audience. They have different ways of understanding the language of social media. Therefore, this will be probably a challenge for businesses including Dell to strategize how to get the message across different age group through social media marketing. 8. Benefits of Social Media Marketing Although social media marketing have its disadvantages, it has also brought several values in the marketing environment. Firstly, due to the fact that social media has no barrier for communication; it has encouraged companies like Dell to allow customer participation in their marketing strategies. For example, Dell has created Dell’s IdeaStorm, one of the online Community blogs to encourage conversation with its existing and potential consumers. The benefit that the IdeaStorm is able to give is it allows crowdsourcing from the consumers. This is an effective way for Dell to obtain ideas for their company and more importantly, it provides a sense of belonging from onsumers because their opinion influences the internal decision making, thus increase their loyalty, brand awareness and reaffirm their positioning. Plus, not only social media provide suggestion to Dell, it also help other fellow customers to fix their problem. The process are similar to other social media, whereby, people join the community, recommend their opinions or ideas and then, Dell will respond to the most popular ideas accord ing to the number of votes. In addition, it also provides a free market research for Dell. This is a benefit for Dell because most of surveys conducted are deemed to be ineffective because it only focus on certain groups and also incur higher cost. Finally, social media marketing has also assist Dell in their pricing strategy. Since the consumers are more active in social media, Dell able to get their opinion and forecast the demand and price of their products. Plus, Dell product customization business model through the social media marketing can reduce their sales cycle. Different from short sales cycle, long sales cycles requires people at several stages of the buying process. Ironically, when salespeople are spending their time engaging new businesses and relationship to ensure that customers receive satisfactory answers, he or she is rather unproductive because company only creates money if customers are actually buying the products. This leading up to opportunity cost because the salesperson is not making any deals. Therefore, Dell able to reduce the marketing cost through social media marketing. 9. Conclusion In conclusion, Dell has continuously evaluated its business model to search for rooms of improvement and ways to enhance their customer service. Social media marketing has certainly influenced Dell in their marketing communication process and widened their reach to its existing and potential customers. In the early years of Dell in the blogosphere, Dell has effectively incorporated social media into its marketing and communications strategy and had been awarded for its efforts. Despite of the effort to integrate social media marketing into the business, social media marketing has its drawbacks. Dell cannot afford to put their brand reputation at risk and thus, must find ways to overcome the challenges. Today, Dell US is one f the top companies that is being respected and known as the citizen of the social media. Hence, Dell had applied this new establish knowledge to really change the culture and advance the marketing strategy while constantly being focus and direct with its customers. (3078 words) References 1. Bazaarvoice (n. d. ) Social Commerce Statistics [online]. 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