Effectiveness of Social Networking as a Marketing Strategy Review

This literature review examines the effectiveness of social networking as a contemporary marketing strategy, focusing on the retail sector. It analyzes the social media marketing strategies of three major Australian retail chains: Coles, Woolworths, and Foodworks. The review explores the use of various social media platforms, including Facebook, Twitter, YouTube, Instagram, and Pinterest, by each company. It highlights the advantages and disadvantages of social media marketing, emphasizing the importance of a strong online presence for retaining customer loyalty and expanding market share. The study compares the successes of Coles and Woolworths, which have actively utilized social media to engage customers and increase profits, with the struggles of Foodworks, which has a weaker social media presence. The review concludes by underscoring the cost-effectiveness of social media tools and their impact on brand promotion and customer engagement.

Running head: SOCIAL NETWORKING AS A MARKETNG STRATEGY
Literature review on social networking as a marketing strategy
Name of the Student:
Name of the University:
Author Note:

1SOCIAL NETWORKING AS A MARKETNG STRATEGY
Table of Contents
Research topic: Effectiveness of social networking as a contemporary marketing strategy 2
Literature Review: 2
Social media marketing: 3
Social media marketing by Coles: 4
Social media marketing by Woolworths: 6
Social media marketing by Foodworks: 8
Advantages and disadvantages: 8
References: 11

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Research topic: Effectiveness of social networking as a contemporary marketing strategy
Literature Review:
There has been a time where business market has been simple and uncomplicated and the
marketing strategies were much more simplified. However, with time the business market has
changed drastically and the corporate world has become as cut throat as it possibly can. With the
growing consumerism, the importance of having a strong hold on the target market has become
instrumental in order to survive the rough tides of the market (Kim and Ko 2012). However, with
the consumerism at its peak running the market statistics, everything is available everywhere.
Gone are the times when a brand was recognized by the product it made; now the market has
changed completely. In order to hold the customer loyalty and enhance the ratio of customer
satisfaction, the brands are more concerned with providing their customers with everything they
might need (Gensler et al. 2013).
Now, when the conglomerates come into the picture; the scenario of the consumer market
changes drastically. The retail chains target at fulfilling each and every demand of the customers
and retaining the customer base as much as they possibly can. However, there are many a retail
chains in the market and with every other retail market making everything easily available fpr
the customers, the real cut throat competition begins (Kim and Ko 2012). Hence, the retail chains
have rolled their sleeves up for the marketing and promotional activities, and social media has
arrived as a boon for the retail chains o supermarket chains. This assignment will analyse the
social media marketing accomplished by three of the largest retail chains, Coles, Woolsworth,
and Food works, contrasting their individual strategies to arrive at a conclusion about the
advantages and disadvantages of social networking.

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Social media marketing:
Social media marketing can be defined as the critically organized and planned activity of
using the social media platforms to help the business companies have the best chances of
retaining their customer base and preferably widening it by utilizing the social media attraction
in the society in the current age. There are a wide range of benefits of the business companies
that can utilize the benefits of social media marketing, it allows the business companies and
organizations to have direct and continuous connection with customers and cater to any need
they might have. Livingstone and Brake suggested that while the consumerism has reached the
pinnacle the retail chains are expanding generously and with the customers’ inclination towards
the retail chain for the variety and discounts they offer, the social media marketing is the easiest
and the most cost effective method to conduct a highly effective and highly productive social
media marketing that can help them generate a significant customer base (Livingstone and Brake
2010).
There are many a platforms for social media marketing, however the most popular and
influential social networking websites that has actively kept the users hooked, is Facebook, and
for social media marketing as well, Facebook is the first social media website of choice in case
of social media marketing. Kim and Ko 2012 have suggested that more than 95% of business
companies and brands, both of local and global scale; have joined wit Facebook for promotional
activities. Aside from Facebook, Twitter is the second best website for the massive social media
marketing choice for the public relations professionals worldwide. Functioning by 140 character
long tweets, the social networking website allows the business organizations to post photographs,
videos, texts and hashtags to keep the customers informed. Furthermore twitter allows the

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business marketing websites to provide customer service assistance through tweets, hence it has
proved to be one handy tool for the business companies.
When discussing social networking, the websites like YouTube and Instagram demand
special recognition. With more than 200 million users, Instagram is the new sensation of the
teens, tweens and even the elderly. This website allows the business organization to post
informative campaigns, photos, videos to the website which the followers or the customers can
access and be updated about the recent activities of the brands and organizations. YouTube is
another huge platform that functions by videos; the business organizations can post promotional
videos to engage customers and keep them updated and hooked. Aside from the above
mentioned social media marketing platforms, Google+, LinkedIn, Yelp and WhatsApp are potent
social media marketing tools as well for the business organizations to use for their benefits.
However, it has to be considered that the concept of social media marketing is fairly new and not
all business organizations have crafted the best method to utilize it, however the retail chains
have had one of the best social media exposures so far (Ashley and Tuten 2015).
Social media marketing by Coles:
Coles can be considered one of the greatest and most profitable retail chains Australia with
the annual revenue of more than 28 billion Australian dollars. And the huge customer baa4e of
this retail chain is due to the active social media presence (www.coles.com 2017). Assaad and
Gomez 2011 have suggested that the social media success of the retail chain depends on
identification of a niche audience and catering to their needs and demands, which Coles has been
successfully achieving. They have a stable and significant presence in six social media platforms,
and each one offers assistance and information to the customers of all kinds and shapes. They

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have their own website, beautifully designed to help the customers navigate easily that provides
ecommerce facilities to the huge customer base they have. Aside from that, the most of the
promotional activity is performed by Coles by the means of their Facebook page. With the 57%
of the entire Australian population enamoured by the Facebook and its wonders, Coles has kept
the customers hooked with well designed and concise yet informative content, special offers and
charming discounts (Bruhn, Schoenmueller and Schäfer 2012).
(figure source: www.coles.com 2017)
Coles uses twitter efficiently for the customer promotions and service assistance with more
than 30000 followers on their twitter handle. They tweet very regularly and have had a record of
close to 30000 tweets so far (Eagleman 2013). The YouTube account for Coles has more than
370000 subscribers and with attractive videos Coles has successfully been able to capture a huge
customer base, with celebrity promotional videos, getting hundreds and thousands of likes,
YouTube is serving as a potent tool for the social media marketing that Coles is successfully
handling. Coming to the Instagram and Google+, both the social networking websites is being
utilized by the retail chain expertly (Gensler et al. 2013). Coles has more than 61000 followers in

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Google+ and a very similar number in Instagram which explains the social media craze that the
retail chain has gathered.
(figure source: www.coles.com 2017)
Coming to Pinterest at the very last, the visual networking website is being actively used by the
retail chain as well, however the market presence in this particular website is not very charming
for Coles. Hence, it can be stated that Coles has been making good use of the social media
marketing and that is the reason how it could overcome the last recent financial meltdown in the
past few couple of years (Kaur 2016).
Social media marketing by Woolworths:
When discussing the Aussie retail giants, one can not overlook the pioneer of retail
conglomerates, Woolworths. It is one of the retail powerhouses of the Australian markets and
they have annual revenue of the close to 60 billion Australian dollars (Woolworths.com.au.
2017). Woolworths have more than 872 stores across Australia and 97% of the entire population
of the Australia leave within 10km of a Woolworth’s outlet. Woolworths has had more than 50%
improvements in their 9online sales in the last year, with 1.2 billion Australian dollars increase in

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the just the last year, with Woolworths being one of the largest online retailers the social media
marketing by the retail giant is appreciable a well.
Their personal website is bright, colourful and absolutely attractive for the customers, they
have impressive photo-buttons in their online store and huge and highly active ecommerce
facilities, many authors have suggested their website to be one of the prime attraction factors for
the retail chain. The Facebook webpage for Woolworths has more than 800000 followers and
many Laroche, Habibi and Richard have suggested it to be 6% of the entire 14 million Facebook
users of Australia (Laroche, Habibi and Richard 2013). Authors have also compared their
astonishing social media presence to Macy’s n case of USA and Tesco in case of UK.
(figure source: Woolworths.com.au. 2017 )
The Youtube channel for the retail giant has more than 12000 subscribers and their
promotional videos have gained quite a response as well. However, it has to mentioned in this
context, YouTube as a social media tool is not very effective in case of retail chains. As
mentioned by author, the brand promotional videos and store tours are not attractive for the
customers hence; YouTube has never been as effective as Facebook in promotional activities for
retail chains (Livingstoneand Brake 2010). The Instagram presence for the retail chain has
gathered 20000 followers in the matter of just 18 months with just measly 350 posts. The website

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flashes attractive photographs of their different product ranges with exciting descriptive content
and offers to have the customers enthralled. Their Pinterest handle has 1900 followers, and that
can be considered more than appreciable when considering the Pinterest presence of the rest of
the retail chains. Therefore, Woolworths has made a successful and effective usage of the social
media marketing websites and has improved their profit statistics exponentially (Luo and Zhang
2013).
Social media marketing by Foodworks:
Foodworks is the independent Australian retail supermarket which can be defined as the
brand name for the AURL or Australian United Retail Limited (Foodworks.com.au. 2017). The
supermarket has a decent sales revenue and a decent customer base as well. The marketing
strategy for this particular supermarket chain is bleak when it comes to social media marketing.
With Coles and Woolworths being its prime competitors, not having a glowing social media
presence had cost the Foodworks drastically. They have a meagre Facebook page and a Twitter
handle however their social media presence has not been very exciting hence, their customer
base had never grown bigger than the locals. The lack of active social media marketing can
easily cause the business companies to lose their stable ground in the market which has happened
for Foodworks in the past couple of years and many authors have suggested without a social
media presence it would be impossible for the supermarket to survive the competitive economy
(Nadaraja and Yazdanifard 2013).
Advantages and disadvantages:
From the discussion above, it is clear that the impact of social media marketing is paramount
in order to retain the customer loyalty, Woolworths and Coles, both the retail chains have very

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successfully utilized the social media tools to generate a craze for their brands, products and
exciting discount offers and has been successful in expanding their customer base and enhance
their annual profits. Whereas, Foodworks has failed to maintain a gripping social media presence
and has inevitably fallen from the market position it previously held (Sashi 2012).
According to the Scott in his article, one of the major reasons why the retail giants have
invested such a magnanimous effort in establishing a stable social media presence is the cost
effectiveness, the most enticing advantage of the social media tools in the context of marketing is
that the social media websites charge a negligible amount for the promotional activities, hence
the business organisable gain a huge monetary benefit along with getting the opportunity to have
a strong promotional activity (Scott 2015). The unique features like pay per click advertisement
and geo targeted feature allows the social media sites to target the correct audience for the right
offers and discounts, which allows the business organizations to retain a strong grip on the
customer base (Tiago and Veríssimo 2014).
However, the social media marketing comes coupled with some pitfalls as well, and a single
mistake in handling the PR activity can cost the market reputation significantly. As opined by
Turban, Bolloju and Liang in their article, in case of social media marketing, the business
organization needs to have a vigilant monitoring to ensure that the social networking channels
are not being bombarded by angry comments by miffed customers (Turban, Bolloju and Liang
2011). It has to be understood that in case of a social media marketing the reputation of the
organization is linked intricately with the social media presence, a single negative review can be
detrimental to the reliability of the brands (Tuten and Solomon 2014). Hence, there is need for
constant vigilance to manage and overcome any such activity top restore the brand reputation
and the customer satisfaction and loyalty.

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References:
Ashley, C. and Tuten, T., 2015. Creative strategies in social media marketing: An exploratory
study of branded social content and consumer engagement. Psychology & Marketing, 32(1),
pp.15-27.
Assaad, W. and Gomez, J.M., 2011. Social network in marketing (social media marketing)
opportunities and risks. International Journal of Managing Public Sector Information and
Communication Technologies, 2(1), p.13.
Bruhn, M., Schoenmueller, V. and Schäfer, D.B., 2012. Are social media replacing traditional
media in terms of brand equity creation?. Management Research Review, 35(9), pp.770-790.
Eagleman, A.N., 2013. Acceptance, motivations, and usage of social media as a marketing
communications tool amongst employees of sport national governing bodies. Sport Management
Review, 16(4), pp.488-497.
Foodworks.com.au. (2017). FoodWorks Supermarkets | Grocery Specials This Week. [online]
Available at: http://www.foodworks.com.au [Accessed 21 Aug. 2017].
Gensler, S., Völckner, F., Liu-Thompkins, Y. and Wiertz, C., 2013. Managing brands in the
social media environment. Journal of Interactive Marketing, 27(4), pp.242-256.
Kaur, G., 2016. Social Media Marketing. Asian Journal of Multidisciplinary Studies, 4(7).
Kim, A.J. and Ko, E., 2012. Do social media marketing activities enhance customer equity? An
empirical study of luxury fashion brand. Journal of Business Research, 65(10), pp.1480-1486.