Impact of Social Networks on Business: A Comprehensive Report

This report examines the role of social networks in modern business. It begins with an executive summary and table of contents, then introduces the concept of social networks and their impact on brand awareness. The project objectives and scope are defined, followed by a literature review covering social media platforms, consumer attitudes, user-generated content, and viral advertising. The report details both the advantages, such as cost-effectiveness and targeted marketing, and disadvantages, including potential for negative publicity. The conclusion emphasizes the evolving landscape of social media marketing. The report also references key concepts such as consumer sentiment towards marketing (CSM), customer technology readiness, and the importance of electronic word-of-mouth. The report provides a comprehensive analysis of how businesses can leverage social networks for marketing and promotion.

Running head: SOCIAL NETWORKS IN BUSINESS
Social Networks in Business
Name of the Student
Name of the University
Author Note

1SOCIAL NETWORKS IN BUSINESS
Executive Summary
The purpose of this report is to identify the advantages and the disadvantages of the use of the
social networks in the business. The following report elaborates on the literature review with
stating the pros and cons of the usage of the social networks in business. The report concludes
with the advantages and the disadvantages of using the social media for the promotion of the
brand of the organization or the business have been discussed. The social networks have become
the new boundary for the businesses to apply the marketing policies.

2SOCIAL NETWORKS IN BUSINESS
Table of Contents
Introduction......................................................................................................................................3
Project objective..............................................................................................................................3
Project Scope...................................................................................................................................3
Literature Review............................................................................................................................3
Defining social media..................................................................................................................4
Consumer attitudes......................................................................................................................5
User Generated Content...............................................................................................................5
Viral Advertising.........................................................................................................................7
Advantages..................................................................................................................................8
Disadvantages..............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
Appendix........................................................................................................................................14

3SOCIAL NETWORKS IN BUSINESS
Introduction
The social network is said to be a community constitution that is made up of the
individuals, the various organizations, interactions between the individuals and the dyadic
attachments. The prospective of the social network gives a set of methods to analyze the
arrangement of the complete social entities along with the explanation of the patterns that are
seen in these structures. The marketing of the business of an organization on the social media
helps to increase the awareness of the brand in the target market of the organization. The social
networks are the fastest growing industry around the globe.
Project objective
 To identify the advantages and the disadvantages of the use of the social networks in the
business
 To elaborate on the literature review with stating the pros and cons of the usage of the
social networks in business
Project Scope
The scope of this project is the identification of the use of the social networks in business.
The advantages and the disadvantages of using the social media for the promotion of the brand of
the organization or the business have also been discussed. The social networks have become the
new boundary for the businesses to apply the marketing policies.

4SOCIAL NETWORKS IN BUSINESS
Literature Review
There are different types of social networks available nowadays. The most frequently
used social media platforms are Facebook, Google+, Instagram, LinkedIn, and Pinterest. The
marketing and promotion of the business by social networks has its own advantages and
disadvantages. The social network can be exploited for the information that it provides on the
customer behavior with regard to the intention of the purchase. Research has further shown that
the businesses should incorporate the social networking sites into their business representation or
the promotional mix (Goh, Heng and Lin 2013).
Defining social media
The organization has to have an understanding of each aspect of the social networks for
the promotion of the business online. The probability of the social network gives a set of
schemes to analyze the arrangement of the entire social entities along with the rationalization of
the patterns that are seen in these structures. The advertising of the business of an organization
on the social media helps to enhance the knowledge of the brand in the target market of the
organization (Aral and Walker 2012). The social networking sites are varied in nature. These can
be operated from the laptops, desktops, mobile phones and tablets. The business organization is
able to share their ideas, photographs, videos and other posts on the platform of the social
networks. The social networks allow the organization to gather various participants, information
and make the buying decisions.
The CSM that is the Consumer Sentiment towards the Marketing is the feature that the
researches of the organization require to measure how the customers recognize the marketing on
social media. The concept of this CSM refers to the sentiments that the customers have for
marketing and the market area. The perception of an individual human being of the total market

5SOCIAL NETWORKS IN BUSINESS
area plays an important role in the utilization activities. The customer technology readiness refers
to the inclination of the people to embrace and utilize the innovations in technology that required
to attain the target of the business organization. The social network has the advancement to
provide the platform for the business organization to interact and keep in touch with their
customers. The marketers and the advertisers of the businesses utilize the social networking sites
to reach their clients and provide the organization a new way to increase their growth.
Consumer attitudes
It is important for the business organization to be aware of the issues, which affect the
attitudes and the motives of the customers. The customers are attracted and driven by the
appealing factor of the brands that is organized by the respective company. The research
examines the features of the social networking sites that affect the attitude and the intentions of
the clients. The members on these social networking sites disclose their information on these
social networking sites, which helps the business organizations receive information. The clients
perceive the promotion and the advertising of the businesses in a different manner depending on
the social networks that play a major role in determining the response of the clients. The social
networks promote the approach from one customer to another, exploiting the customers to share
their experiences and creation of a common knowledge on the products and the services offered
by the business organization (Scott 2017). The social networks also provide a direct channel of
communication with the clients by the help of the business to customer approach. The
responsiveness of the intention of the customers is important due to the provision of a deeper
comprehension of what persuades the clients and the customers to create content about the brand.

6SOCIAL NETWORKS IN BUSINESS
User Generated Content
The social network provides a never-ending opportunity for communication between the
clients, customers and the business organization. The user-generated content helps to produce a
social currency for the promotion of the business of the organization and helps to define the
brand. This user-generated content portrays the different forms f the media content that is
available in the public without any cost and is created by the end users. Hence, the social
currency is when the personalities share the brand information of the business organization about
the brand. This social currency affects the performance of the business. The social capital is
formed on an individual level and occurs in the association among the individuals. The
connection of the individual can help to develop the brands of the businesses into an important
part of the interactions of the clients and the customers through the help of social networks. The
businesses should have a presence of their brand on the various social networks to increase the
number of the client audience. According to the recent research the publicity to the electronic
word of mouth messages, generate more amount of interest in the category of the product than
the exposure to the information that is produced by the marketers. Nowadays the customers and
the clients are knowledgeable about the products and the services that they consume. This is
because of the internet that is the social network, which empowers them to gain the access to the
information, which creates active co-producers of value (Heidemann, Klier and Probst 2012).
The customers and the clients are the co-producers of the value, which provides the business
organizations with a great amount of investment due to the increase in the brand awareness. This
helps to signify the importance of the electronic word of mouth messages in the marketing
community of today. The social network as Facebook helps the clients and the customers of the
business organization to be the message senders and pass on the ads to their acquaintances and

7SOCIAL NETWORKS IN BUSINESS
friends. It also enables them to connect to the advertisers and the promoters explicitly, comment
on the advertisements, and then post those respective comments on the viral channels.
The businesses are realizing a need for the creation of their own brand presence on the
social network platform. This is done to stay informed and keep a track of the consumer generate
content surrounding the brand and the marketing of the brand. The companies are not able to
directly control the messages from one customer to the other customer, but they influence the
conversations that the clients and the consumers participate surrounding the product and the
services.
Viral Advertising
The viral advertising is a way by which the trader are promoting and marketing more
information about the products and the services that are offered by the business organizations.
The viral move towards the online advertising has an advantage due to the communication being
targeted to an intended customer of the brand. The viral interaction affords the marketer to get a
higher amount of the creative license through the message delivery standard, which is more
personal and personalized in nature. This helps to increase the likelihood to reach the audience
members. The viral advertising is an unpaid peer communiqué of provoking content that
originates from a sponsor who is identified using the internet to convince or influence the
addressees to pass the substance to the others (Zaglia 2013). This viral advertising differs from
the user-generated content due to the identified sponsor who is associated with the advertisement
thereby signifying the source of the advertisement and who has created it. The social media
provides for a new arena for the brand marketing and the clients and the customers contribute to
the communication of the brand, the business in an active manner, when the business
organizations try to gain control of the marketing.

8SOCIAL NETWORKS IN BUSINESS
The interaction and communication between the customers dominate the force of the distributing
of the messages that are created by the advertisers. The main concept for the business
organizations is to consider the responsiveness of the customers, which in turn will decide the
promotion and the marketing strategies that are placed on the social networks. The mutual
communication between the customer and the marketer will make it complicated to isolate the
influence of the exposure of the advertisement (Diani 2013). This means that the focus of the
evaluation of advertising will require shifting the focal point on the process and the outcome. It
is important to measure the interaction of the customers with the advertisements that are
displayed online by the businesses to create successful campaigns of marketing on the social
network.
Advantages
The social media platforms allow the exposure of the business to the community at a
lower cost than the traditional methods of marketing. The establishing of the business with the
help of the social network platform helps to target the new customers and enables in making the
brand more visible. The social networks also help to facilitate the two-way interaction and
communication, which helps to improve the consumer service. This permits the business to attain
new information about the customers of the respective business organization and modify the
communications according to that knowledge. The main advantage of using the social networks
for business is related to the cost. Most of the social media platforms are free of charge to access,
creation of the profile and posting of the information. The audience voluntarily seeks information
regarding the business and follows the page of the organization, which helps the company to
reach its desired target market (Borgatti, Everett and Johnson 2013). The click through rates and
the pay-per-click type of advertisements on these social networking sites allow the reach to the

9SOCIAL NETWORKS IN BUSINESS
accurate addressees. The person who comes across the post by the respective company spreads
the news to more people within their own network. This allows the information to reach a huge
number of audiences in a short period of time. The investment of the company in the social
networks as a marketing tool enables the identification of the missing links that connect the
company with the customers. The brand awareness of the product and the services of the
respective organization through the social networks are increased. The social media advertising
and marketing helps the validation of the brand. The presence of the business in the social
networks informs the consumers about the activeness of the brand and focuses on the thriving
communiqué with the customers. The marketing through the social networks helps to increase
the customer loyalty. The receiving of the quick response on the social media allows the
consumer to the recommend the brand of the company to others.
Disadvantages
The social network is a powerful marketing tool but it is not free of the risks pertaining to
it. The followers are liberated to post the comments on the social media platform that exposes the
businesses to a possible negative publicity. The immediate response may reduce the damage that
has been caused due to these comments but the obliteration of the criticism from the feed and the
page if the business cannot be done. The hackers also pose a threat to the businesses that are
there on the social networks. The attacker can invade the page and the feed of the company and
share fake information that can go viral. The renowned businesses have been a victim to these
attacks by the hackers (Kadushin 2012). Hence, the small businesses also require taking security
precaution during the creation of passwords and sharing of information related to this with their
personnel. The updating of the account on the social media consumes time and effort. The
information is visible for a short period of time as the new posts replace the older posts. The

10SOCIAL NETWORKS IN BUSINESS
presentation of the information if not available in the form of a conversation then there will be
loss of followers. There are also other risks involved when using the social networks as the
promotion tool in businesses. The unavailability of a clear marketing strategy on the social
network may reduce the benefit of the business of the organization. The additional resource that
may be required has to be managed by the presence of the business online. The social networks
require daily monitoring. The real benefits may not be visible if the social networks are not
managed in a proper manner. There also the risk of unsuitable behavior on the site that may
cause harassment. There may also be leak of information, which is great risk.
Conclusion
Thereby this report serves the purpose of identifying the advantages and the
disadvantages of the use of the social networks in the business. This report has also elaborated on
the literature review with stating the pros and cons of the usage of the social networks in
business. The social networks have become the new boundary for the businesses to apply the
marketing policies. The social network is a powerful marketing tool but it is not free of the risks
pertaining to it. The followers are liberated to post the comments on the social media platform
that exposes the businesses to a possible negative publicity.

11SOCIAL NETWORKS IN BUSINESS
References
Aral, S. and Walker, D., 2012. Identifying influential and susceptible members of social
networks. Science, 337(6092), pp.337-341.
Borgatti, S.P., Everett, M.G. and Johnson, J.C., 2013. Analyzing social networks. SAGE
Publications Limited.
Carlson, B.D., Suter, T.A. and Brown, T.J., 2008. Social versus psychological brand community:
The role of psychological sense of brand community. Journal of Business Research, 61(4),
pp.284-291.
Chauhan, K. and Pillai, A., 2013. Role of content strategy in social media brand communities: a
case of higher education institutes in India. Journal of Product & Brand Management, 22(1),
pp.40-51.
Diani, M., 2013. Networks and social movements. The Wiley-Blackwell encyclopedia of social
and political movements.
Fosdick, M.A.G.G.I.E., 2012. The globalization of social media: Consumer relationships with
brands evolve in the digital space. Strategic Direction, 28(6).
Füller, J., Matzler, K. and Hoppe, M., 2008. Brand community members as a source of
innovation. Journal of Product Innovation Management, 25(6), pp.608-619.
Goh, K.Y., Heng, C.S. and Lin, Z., 2013. Social media brand community and consumer
behavior: Quantifying the relative impact of user-and marketer-generated content. Information
Systems Research, 24(1), pp.88-107.

12SOCIAL NETWORKS IN BUSINESS
Habibi, M.R., Laroche, M. and Richard, M.O., 2014. The roles of brand community and
community engagement in building brand trust on social media. Computers in Human
Behavior, 37, pp.152-161.
Heidemann, J., Klier, M. and Probst, F., 2012. Online social networks: A survey of a global
phenomenon. Computer Networks, 56(18), pp.3866-3878.
Kadushin, C., 2012. Understanding social networks: Theories, concepts, and findings. OUP
USA.
Laroche, M., Habibi, M.R., Richard, M.O. and Sankaranarayanan, R., 2012. The effects of social
media based brand communities on brand community markers, value creation practices, brand
trust and brand loyalty. Computers in Human Behavior, 28(5), pp.1755-1767.
Palmer, A. and Koenig-Lewis, N., 2009. An experiential, social network-based approach to
direct marketing. Direct Marketing: An International Journal, 3(3), pp.162-176.
Park, N., Kee, K.F. and Valenzuela, S., 2009. Being immersed in social networking
environment: Facebook groups, uses and gratifications, and social outcomes. CyberPsychology
& Behavior, 12(6), pp.729-733.
Putnam, R.D., 1993. The prosperous community. The american prospect, 4(13), pp.35-42.
Scott, J., 2017. Social network analysis. Sage.
Trusov, M., Bodapati, A.V. and Bucklin, R.E., 2010. Determining influential users in internet
social networks. Journal of Marketing Research, 47(4), pp.643-658.

13SOCIAL NETWORKS IN BUSINESS
Zaglia, M.E., 2013. Brand communities embedded in social networks. Journal of business
research, 66(2), pp.216-223.

14SOCIAL NETWORKS IN BUSINESS
Appendix
Questionnaire:
1. What are the social media sites used?
YouTube
Twitter
Instagram
Facebook
Whatsapp
2. How many of them are used?
1
2
3
More than three
3. How much time is spend on these social networking sites?
Half an hour
An hour
Two hours
More than three hours
4. Is the social networking sites used from the mobile phone?
Yes
No
5. Do you think the social networking sites provide the required information?

15SOCIAL NETWORKS IN BUSINESS
Yes
No
6. Are the social networks a helpful platform for advertising a brand?
Yes
No
Uncertain
7. What type of community is subscribed on the social networks?
Educational
Entertainment
Informational
Others
8. Do you prefer to express your ideas and feelings on social networks?
Yes
No