Wednesday, December 4, 2019
Advantage of Social Networks in Business-Free-Samples for Students
Question: Discuss about the Advantage and Disadvantage of Using Social Networks in Business. Answer: Introduction Social network sites have become popular marketing tools for the marketers towards promoting the brand value of an organization to the customers (Leonardi, Huysman and Steinfield 2013). This study will discuss the existing literature regarding the impact of social media sites on the business performance. Moreover, this literature review will specifically use food and beverage industry for demonstrating the impact of social network sites on business performance. The study will focus on both the advantage and disadvantage of social network sites on the food and beverage industry. Project Objectives To examine the impact of social network sites on business performance To recognize the advantage and disadvantage of social network sites on business performance To provide best way of using social networking sites for enhanced business performance Project Scope The scope of the literature review is to explore the business opportunities through the usage of social network sites. The literature review can also provide ample information regarding the advantage and disadvantage of social network sites on business performance. Moreover, from this literature review, it is also possible to know the better way of using social network sites in business. Literature Review Concept of Social Network in Business Social networking is an online platform, which people mostly use for building social relation or social network with other people. Most of these people use similar career interest, personal interest, backgrounds, activities and real-life connection. According to Luo and Zhong (2015), social networking is the usage of internet-based social media program for making connection with family, friends, classmates, clients and customers. Moreover, social networks are used both for social purpose and business purpose through the sites like Facebook, LinkedIn, Twitter, Instagram, Google+, YouTube and Pinterest. As per Okazaki and Taylor (2013), marketers use social networking sites towards enhancing brand recognition and brand loyalty. Such networking sites make an organization more accessible to the new customers and more recognizable to the existing customers. On the other hand, Laroche, Habibi and Richard (2013) opined that social networking sites assist in promoting brands content and voice. Therefore, it helps in better communication of brand value from one customer to other through social networking sites. According to Gensler et al. (2013), customers may compliment the company offerings and encourage the other customers towards purchasing the products or service. Furthermore, markers can get wide customer base to reach at through the social networking sites, which can in turn enhance the customer base. Apart from that, customers can also get proper customer feedback of any particular product through these social networking sites. Such feedback leads an organization towards modifying the products as per customer preferences, which can lead to high level of competitive advantage and increasing sales. Utilization of Social Networks in Marketing of Food and Beverage Industry Food and Beverage industry is Australia is facing tough competition in todays competitive business environment. In such situation, organizations need increasing business communication with the customers for promoting the brand value. According to Nielsen and Schrder (2014), customers, who are in the same social network, are more likely to share important organizational offerings, product image and features among their friend groups. In this way, the food and beverage sectors communicate their brand value through the customers. On the other hand, Hajli (2014) opined that customers can also share their opinion regarding a particular product through social media networks. Moreover, they can also share their objections regarding any particular products and suggest any recommendation over the products as per their preferences. Such options enhance customer value through gaining valuable customer insights and considering their suggestion over product improvement. In this way, social networ ks can be used for building warm and long lasting relationship with the customers. As per Maier et al. (2015), organizations can also use social media monitoring for gaining key information regarding the competitors. It can help organizations to add unique features to their products or services for gaining competitive edge and enhanced customer loyalty. While considering the example of Dick Smith Foods, it can be seen that the organization perfectly uses social networking sites for adding competitive edge in their business model. Moreover, they check the information of their competitors through social networking sites and incorporates unique blend of ingredients to their foods for gaining competitive advantage (Lin, Fan and Chau 2014). On the other hand, Park and Kim (2014) opined that the food and service sectors significantly use social networking sites for reaching the business content to the customers within shortest possible time. Considering all these positive impacts, all types of businesses in Australia ranging from small to medium sized organizations have started extensive usage of these sites to their business. Figure 1: Proportion of Social Media Usage in Australian Businesses (Source: Hajli 2014) Impact of Social Networks on Consumer Buying Behaviour Over the past few decades, the way of shopping of the people has been changed and improved considerably. They are now more inclined to search for product or service information through social media sites before initiating purchasing action. Social networking sites like Facebook, Twitter and Instagram enable the users towards maintaining great connection among themselves and others. According to Leftheriotis and Giannakos (2014), such customers are more likely to share attractive information regarding their favourite products with the customers through these social network sites. Customers are more likely to trust on such information shared by their closed friends. Therefore, such shared information encourages the customers towards purchasing the products. Recently, most of the people are inclined towards online shopping. They usually do have much time to physically present in the shop and search for information towards purchasing the products. Leonardi (2014) pointed out that social networking sites provide them the opportunities to search for product information by sitting at their home. In this way, they can take immediate purchasing decisions by searching online information about the products. Furthermore, the positive product comments on the social networking sites create good impression about a particular product on consumer mind. Therefore, such positive product comments immediately encourage and motivate the customers towards purchasing a particular product. Advantage of Social Networks in Business Increased Brand Exposure Social networking sites expose an organization to the new customers and enhance the recognition of brand value to the existing customers. Such sites enhance the effectiveness of word of mouth for the products through one customer recommending their favourite product to others. In this way, social networking sites increase the brand exposure of an organization to wide customer base. Increasing Website Traffic and Search Ranking According to Ashley and Tuten (2015), high quality contents of the advertisement posted on social networking sites integrate the targeted keywords of the organization. Social networking sites direct people to the company website and enhance the search ranking. Moreover, such sites also enhance the customer referrals, which actually increase the total volume of customer base. Learning about Customers Social networking sites can generate huge amount of data regarding the customers in real time. Moreover, Habibi, Laroche and Richard (2014) stated that organizations can gather huge customer information regarding their brand preference, dislikes and suggestion. In this daily active engagement and social listening effectively gather relevant customer data and use that information in making smarter business decisions. Better Customer Service Social networking sites allow the customers sharing their feedbacks over a particular product or service. Moreover, Kim and Park (2013) opined that customers can even share their objections regarding the products and service experience and get better modified product or service for better customer service. In this way, better customer service leads to successful business through having long term satisfied customers. New Opportunities Apart from getting feedback over a particular product or service, organizations can also get effective suggestions from the customers through social networking sites for the betterment of the products. In this way, organizations can get new business opportunities through the suggestions provided by the customers on the social network sites. Better Competitive Analysis and Sales Social networking sites can help in better analysis of competitive edge of the competitors. In this way, the organization can target the customers of the competitor companies through adding some unique features to the products (Nielsen and Schrder 2014). It helps organizations in gaining competitive advantage over the rivals and increasing overall sales volume. Disadvantage of Social Networks in Business Time Investment It takes only 30 minutes to build any social media account. However, managing social media account on day-to-day basis is an extremely time consuming activity. Moreover, Okazaki and Taylor (2013) opined that organization has to set aside time and resources for posting product information, interacting with customers and giving them right feedback. All these things need adequate amount of valuable time of the organization, which could have been used by other means towards enhancing organizational productivity. Negative Feedback Positive experience shared by the customers on social network sites can encourage other customers to purchase a particular product. However, if a customer faces any bad experience with a particular product, he/she may be compelled to share his/her bad experience over social network sites. As per Luo and Zhong (2015), the business owners are to properly handle such negative comments on the social network sites or otherwise, it can ruin the reputation of an organization in the market. Legal Risk Social network sites can also open an organization towards legal risks. Moreover, legal obligations can be raised for false advertising or potential leaking of confidential information on the networks. In the year 2011, Australian court had fines an organization for their comments on Facebook page, which was considered as misleading (Hajli 2014). Hidden Cost The use of social media platforms can be free, but it has some hidden cost associated with it. Effective social media usage requires posting regular updates on the selected platforms. It requires employing effective personnel having comprehensive knowledge about the medium, ability to write attractive and high quality content for the page and adequate time to research, planning and publishing the post on the networks (Ashley and Tuten 2015). Therefore, social networking sites add some hidden cost to the business, which enhances the overall business expenditure. Proper use of Social networks in Business Organizations need not to use each and every social media platform for promoting their brand value. Moreover, they should choose specific social media platform, which can add to the growth of the business. Moreover, the organizations can also set specific key performance indicators for the growth of business through a specific social media platform. Moreover, the organizations should use highly attractive product information in the content of the social media platform. It will attract both new and existing customers towards the products and services. Furthermore, organizations should effectively and promptly handle the negative comment on the social network sites (Maier et al. 2015). The customer should positively answer the customers and try to resolve their issues immediately before it leads to customer dissatisfaction. In this way, the organizations can protect their business reputation from getting hampered by negative comments. Gap of the Literature This literature review has some literature gaps associated with it. It was not possible to apply accurate theories and models due to time and budget constraints. Moreover, the literature review has lack of critical analysis and penetration, which can negatively affect the summary of the literature review. Moreover, it was also quite difficult to gather adequate information regarding the topic of the research, which can hamper the quality of the final research outcome. Furthermore, the information collected from the secondary sources can also be manipulative in nature, which can reduce the accuracy level of the research outcome. In this way, the lack of authenticity of the literature review can hamper the ultimate quality of the research outcome. Conclusion While concluding the study, it can be said that social networking sites enhances the brand promotion of an organization. Over the years, several small, middle and large scale food and beverage organizations have started to use social median platform for getting high level of business growth. Such networks enhance business communication through positive word-of-mouth advertisement. On the other hand, social networks get better customer insights and opinions, which can be aligned with the business model for gaining high level of business competiveness over the rivals. On the hand, social network sites can also have some disadvantages on the business. 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