Management of IT: Benefits and Limitations of Social Media for Business Organizations

This document discusses the benefits and limitations of using social media for business organizations. It explores how social media can increase sales, enhance customer interaction, and conduct market research. The document also provides examples of current practices in utilizing social media platforms.

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Contents
Abstract............................................................................................................................................3
Introduction......................................................................................................................................3
Literature Review............................................................................................................................3
Current practice report.....................................................................................................................8
Comparison of literature and current practices..............................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12
References for Current Practice.....................................................................................................14
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Abstract
Social media is a very useful platform for business organizations to achieve their goals and
objectives as it enables them to reach their potential customers in a more effective manner, which
helps in increasing the sales of the products and services of the company. There are various
advantages of using social media for business organization which include increase in the traffic
of the customers to the company websites, increase in interaction with the customers of the
company, increased sales of the products and services of the company, helps in conducting
effective marketing research and reaching to global customers. Apart from the benefits there are
various limitations which are associated with using social media platforms for business
organizations which include requirement of additional resources, requires daily monitoring,
require daily managing, possibility of bullying and harassments through negative comments and
potential of negative feedback to harm the reputation of the company. Therefore it is very
essential for business organizations to address the limitations associated with using social media
platforms for ensuring that they enjoy the benefits associated with it in an effective manner.
Introduction
Social Media is a term which is given to web based and mobile based technologies which are
used to transform communication into interactive dialogues. The interactive dialogue can occur
between organizations, communities and individuals. The Internet facilitates millions of users to
connect with each other and also business organizations to promote their businesses to people
belonging from various part of the world by utilizing web based application. The current report
focuses on highlighting the benefits which are associated with using social media platforms for
business organizations so that various business organizations can capitalize the opportunities
which are provided by social media platforms. The current report also focusses on highlighting
the current practices which are observed regarding the utilization of social media and its benefits
in order to enhance the performances of business organizations belonging to various sectors.
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Literature Review
As various traditional methods of marketing to the customers such as advertising or direct mail
are becoming less and less effective with each passing day, business organizations are turning
towards social mediums in order to connect with their customers and the people who inspire
them in various positive ways. The introduction of social media has paved the way for new
dimensions in terms of advertisements and reaching to target customers.
As stated by Ahmad, Abdul Rahim and Ahmad (2019) the level of competition in the business
world has ensured that only traditional advertising strategies are not enough for business
organizations for promoting their products and services. The use of social media by business
organization not only allows the facilitation for tremendous outreach and networking, but it also
allows for interactivity which is considered very vital for business organizations for a number of
reasons. As opined by Alfaro and Watson-Manheim (2015) the increased use of internet has
prompted individuals and business organizations to shift more traditional advertising such as
print media, radio and television. It is gradually being observed that the current population
consumes online advertising more than traditional advertising and therefore business
organizations should target to advertise their products and offerings from online platforms.
As opined by Brown (2015) social media offers various benefits to business organizations as it
enables them to reach out to their target customers and clients and to gain attention of their
potential customers and clients. A recent report regarding the Social Media Marketing Industry
have demonstrated that social media allows business organizations to gain exposure in the
market, to increase traffic to their websites and to gain market insights and information regarding
recent trends in the market and among the customers.
As opined by Duane and O'Reilly (2017) a vital element which is highly recommended for
business organizations is to maintain a website in the form of a landing page and a blog
associated with it in order to remain connected with their target customers and clients in a regular
manner and to inform them regularly regarding their offerings. According to Lin (2015) social
media has transformed into a wide open and vast canvas and therefore in order to take full
advantage of social media, it requires strategic planning. While using social media, business
organizations must ensure that they keep their social media profiles updated on a consistent basis
and maintaining a constant presence in order to gain exposure in the market among the
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customers as when they will get out of sight from the customers, they will eventually get out of
the minds of the customers. According to Iacovou (2016) a carefully planned social media
strategy not only helps business organizations to promote their offerings among the customers
but also allows them to enhance their corporate image and to develop recognition among their
target customers.
As opined by Dreher (2014) if a business organization, in the current time, does not use social
media platforms such as Facebook, Twitter, Instagram, Google plus, LinkedIn etc. in order to
promote their products and to reach to their target customers, then they are depriving themselves
of capitalizing on various significant opportunities which are offered by social media platforms.
Therefore, no matter the size of the business and the nature of the business, every business
organization should have a significant presence in various online platforms and utilize the
opportunities offered by it.
There are various benefits which are associated for business organizations regarding utilizing the
opportunities offered by social media platforms which are as follows:
Gaining traffic- Most business organization realizes the importance of having a website in order
to expand their reach from the ground to the enormous expansion of the internet. Business
organizations need to create a website for their businesses which will allow the customers of the
organization to detailed knowledge regarding the company and the products and services offered
by the company. As opined by Fisher et al. (2014) by creating a website or having social media
platforms, business organizations can interact with their customers when they provide feedback
regarding their thoughts and experiences regarding the company and its offerings in the form of
mail or comments in the website or social media platforms of the company, which also helps in
engaging the customers and getting to know regarding the perceptions and expectations of the
customers towards the company and its offerings. Social media platforms enable business
organization to develop a bond with the customers which helps in increasing the website traffic
of the company. Social media helps in enhancing the entire experience of the customers and
make it more visible for them. The idea involves not only utilizing social media for customer
engagement, but also helps in driving the customers of the company to the business page of the
company, which will in turn help in making the target customers aware regarding the products
and offerings of the company.
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Interaction with the customers- One of the most important advantages which social media offers
to business organizations is that it provides business organizations with an opportunity to engage
with their customers in various new and innovative ways. According to Kane et al. (2014) social
media profiles, allows business organizations to get personal with their customers and develop a
bond of trust with them. By replying to the queries of the customers, and by seeking the opinions
of their customers through social media platforms, business organizations can improve customer
satisfaction while getting more traffic towards the website and social media platforms of the
organization which enables the promotion of business organizations. Business organizations
needs to share photos and videos of their offerings in the social media platform and accordingly
keeping their target customers updated regarding the current offerings of the organization and the
various events of the business organization and which also enables business organizations to feel
a connection with the customers of the company.
Increased sales- As stated by Gazal et al. (2016) a good social media strategy of a business
organization can require an investment, but similar to other advertising campaign, business
organizations needs to consider the return on investment which are linked with advertising on
social media. A good social media strategy of an organization will generate a positive effect on
the sales of the company, as it helps in increasing the overall exposure of the business, make the
customer talk regarding the products and services of the company and helps in exposing the
products and services of the businesses to a wider audience. As the main aim of a business
organization is convert the users and viewers of the company websites and social media
platforms to the customers of the company and therefore by increasing the visibility of the
company to the users, the company can increase its sales.
Marketing research- As social media platforms is an effective way to connect with the potential
customers of the company, therefore business organizations can use social media platforms for
conducting market research. Social media platforms allows business organizations conduct
survey and polls regarding their product and service and seek the responses and opinions of their
target customers through which they can know more about the preferences and views of their
products and services. As opined by Cawsey and Rowley (2016) social media platforms also
enable business organizations to receive reviews regarding their products and services from the
customers which helps them in making modifications to the existing products and services of the
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company and also enables companies to plan their business strategies and new product
development strategies. The usage of social media platforms also enables a business organization
to gain knowledge regarding how other competitors are performing in the market so that they can
develop their strategies accordingly.
Inexpensive- Social media is considered to be less expensive when they are compared with
various other marketing and advertising tools which are available to business organization. The
inexpensive nature of social media platforms make it one the most vital tool which can be used
by business organizations. According to Taneja and Toombs (2014) the social media platforms
are free to use for everyone, and therefore by spending a small portion of an entire day regarding
increasing the social media presence, business organizations can experience increased benefits in
the form of increasing sales of the company, developing a good reputation with the customers
and getting market and consumer insights.
Global reach- Another vital advantage which is associated regarding use of social media
platforms for business organizations is that through advertising in social media platforms,
business organizations can reach global audiences at a very short time interval and with a limited
cost, whereas in order to reach global audiences through traditional advertising requires higher
costs and more time to reach the global audiences.
Savings on advertisements- As stated by Kane et al. (2014) by interacting with the potential
customers of the company, the company can increase their brand awareness which is long term
in natures. It helps is cost savings regarding advertisements for increasing the brand awareness
and the brand value of the company among the customers.
The usage of social media by business organizations not only benefits but also creates various
issues for business organizations which must be addressed for utilizing the benefits related with
using social media by business organizations. The demerits of using social media for business
organization are as follows:
 As stated by Yao (2016) social media platforms of organizations faces risks regarding
unwanted and in-appropriate behaviour on the websites and social media profiles of the
company such as bullying and harassment of their potential customers of the company
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 The greater exposure to online platforms of the company has the potential to attract more
risks towards business organizations in the form of negative feedback, hacking and
information leakages.
 Social media is immediate in nature and it requires daily monitoring and therefore it
incurs extra effort and costs for business organizations.
 If business organizations are unable to manage their social media presence, then they will
be unable to experience the benefits which are associated with social media platforms.
 If business organizations do not have a clear social media marketing strategy, then it may
result in reduction of benefits for business organizations instead of enhancement of
benefits.
 Business organizations require additional resources in order to manage their online
presence which increases the operational costs of organizations.
Therefore, by analysing both the benefits and limitations which are associated with usage of
social media for business organizations it can be stated that, that in order to ensure that the
opportunities offered by social media are fully utilize, business organizations needs to ensure that
they have a well-defined social media strategy in place. As opined by Schlagwein and Hu (2017)
the business organizations that plan to capitalize on the benefits of social media platforms should
also ensure that they regularly monitor their social media activities and programs. According to
Vedenhaupt (2016) business organizations should also ensure that they regularly manage their
social media activities in order to measure the benefits which are associated with social media
platforms. In this regard it can be also stated that monitoring of the activities which occur in the
website and the social media platforms of the company is very vital in order to avoid unintended
consequences of bullying and harassment which tend to destroy the image of business
organizations.
Current practice report
There are various examples which help in highlighting the importance of social media platforms
for business organizations. Dacia, which is a subsidiary of Renault, is one of the fastest growing
car brands in Europe, which used Facebook for its social media campaign. As opined by Kwayu,
Lal and Abubakre (2018) the main purpose of the company was to create lead and developing
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awareness regarding the brand among the customers. By utilizing, Facebook’s boosted post the
company put up ads for promoting their various models of product. The company concentrated
on users using desktop or mbile. By including data from past activities, Dacia made sure that a
large variety of testing of ad was conducted which helps in essentially optimizing the impact of
the advertisement depending on where their customers were on the buying cycles. As opined by
Yingxia et al. (2018) the campaign resulted in 35% lessening in cost per lead when compared to
traditional display advertisements, increase in 27 point regarding recall of advertisement, 6 point
increase in purchase intent and 6 point increase in brand favourability.
Red Bull is a popular energy drink among the youth population with the tagline “It gives you
wings.” The products of the company are found in nearly 180 countries of the world and sells
billions of can every year. In order to create awareness regarding the extension of the brand, Red
Bull utilized the Instagram platform as a part of its social media strategy. As opined by Wu et al.
(2015) the main purpose of their Instagram campaign was to boost the awareness and sales level
regarding the new tropical taste “Summer Edition” energy drink of the company in the
Australian Market. With a strong focus on simplicity and building the brand, the company
created the route for their main campaign with a promotional teaser just prior to the arrival of the
Australian Summer. As opined by Stohl et al. (2017) for getting the audiences focus regarding
the newly designed cans of the company, the company included yellow filters across a range of
images and videos which helped in reflecting identical summer days. The company was doubly
as likely to be linked with the “this summer” hashtag trend as any of the nearest competitors. The
campaign resulted in reaching 1.2 million consumers, increase of 9 point regarding favourability,
increasing in 10 point regarding top of mind awareness and reduction of 7 point in unconvinced
market.
TVibes is a creative company which enables the customers to make their individual TV channels
by utilizing their own mobile video which are available in the cloud. They used Facebook as
their social media platform in order to create loyal and engaged apps users. The main purpose of
the campaign of the company was to inspire the customers to utilize the application of the
company for video storage in mobile. As Facebook is considered as an instinctive platform in
terms of generating leads, the company owners has used the social media platform in order to try
and profit from more sign-ups and to increase the followers of the company. According to M
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Nchabeleng, CJ Botha, CA,Bisschoff. (2018) the founders of the app knew instinctively that they
should combine a social media platform such as Facebook into their social app which ensured
simpleness for the followers of the company to create profiles, login, and explore channels which
are created by their contacts, all done easily from their Facebook home pages. As opined by
Wagner (2015) in order to aid in inspiring signups dependent on targeted audience groups, the
founders of the company utilized mobile app installed ads. By separating their customers on the
basis of their reaction to video ads and with the intelligent application of duplicate audiences,
they had an extra-ordinary strategy of optimizing their campaign. The campaign resulted in 20%
higher engagement rates from Facebook user, 10% increase in loyalty and transformation from
the installation driven by Facebook and 50% of new applications installs due to Facebook.
Comparison of literature and current practices
The literature stated that there are various advantages which are associated with using social
media platforms for business organizations which includes increase in sales of the product of the
company, increase in interaction with the potential customers of the company, increasing the
brand awareness of the company among the customers of the company, gaining traffic towards
the websites of the company and generating more leads for the company. As opined by Icha and
Edwin (2016) from the analysis of the current practice section it can be stated that various
business organizations such as Red Bull, Dacia and TVibes used social media platforms such as
Facebook and Instagram in order to create brand awareness for the products of the company, for
establishing loyal and engaged customers, for generating new leads for the company in the
market and to drive awareness regarding the various extension of the company. As opined by
McCann and Barlow (2015) the successful social media strategy of the companies resulted in
increase in the lead generation rate of the company, resulted in increase in brand recall among
the customers, increase in loyalty and conversion rate of the customers, increase in purchase
intent among the customers, increase in brand favourability, increase in customer engagement
and reduction in unconvinced market for the companies.
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Conclusion
From the above report it can be stated that social media is an indispensable component of
modern day organizations as it enables them to improve their performances. There are various
advantages which are associated with using social media platforms for business organizations
such as increasing the traffic of the customers to the company websites, increasing interaction
with the customers of the company, increased sales of the products and services of the company,
helps in conducting effective marketing research and reaching to global customers. From the
above report it can also be concluded that there are various limitations which are associated with
using social media for business organizations and therefore business organizations must focus on
specifically designing effective social media strategy for addressing the needs of the businesses.
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