Marketing and Markets in a Digital World: Facebook Data Breach Report

This report examines the Facebook data breach involving Cambridge Analytica and its profound impact on marketing and markets in a digital world. The report provides a detailed background on Facebook, including its mission, vision, and values, and delves into the theoretical underpinnings of the issue, such as PESTEL analysis, the Data Protection Act 2018, and Porter's Five Forces model. The core of the report analyzes the situation at the start of the case, describing the data breach and its consequences. It then applies PESTEL and Porter's Five Forces to analyze the situation, evaluating the political, economic, social, technological, environmental, and legal factors, as well as the competitive forces affecting Facebook. The report concludes by summarizing the outcomes of the breach and proposing solutions to mitigate the negative impacts, offering insights for businesses and marketers on navigating data privacy issues and maintaining consumer trust in the digital age. The report uses case studies and provides recommendations for future marketing strategies within the context of data protection.

Marketing and Markets
in a Digital World

Contents
ASSESSMENT 1.............................................................................................................................................3
Background.............................................................................................................................................3
Theoretical Underpinning.......................................................................................................................4
The Situation at the start of the case......................................................................................................5
The case studies .....................................................................................................................................5
The Outcome/Solution.........................................................................................................................10
Conclusion ...........................................................................................................................................10
ASSESSMENT 2...........................................................................................................................................12
INTRODUCTION.........................................................................................................................................12
MAIN REPORT............................................................................................................................................12
CONCLUSION.............................................................................................................................................18
REFLECTION...............................................................................................................................................19
REFERENCES..............................................................................................................................................21

ASSESSMENT 1
Background
Facebook is American online social media as well as social networking service which
based in Menlo park, California. It was launched in 2004 on 4th February 16 years ago as well as
founder of Facebook was mark Zuckerberg. In addition to this, they are serving at global level
expect the countries in which it is blocked. Facebook can be accessed from devices with internet
connectivity such as personal computers, smartphone as well as tablets. After registering on
Facebook users can create profile revealing information about themselves. Moreover, users can
post photos, text as well as multimedia which they want to share with any other user who is
agreed to be their friend. As per the data of December 2018, it has been claimed by Facebook
that they have more than 2.3 billion monthly active users.
Facebook is world’s largest social network as they have more that 1.11 billion users. It
help in connecting with friends as well as family members and they can also share photos,
videos, text updates and many more. As users will design their personal profile and establish
relation with companies and other people to who the want. There are some mission, vision and
values of Facebook (Facebook mission, vision & values, 2020). Explanation of these are as
follows :-
Facebook mission statement – Respective Company mission is to give people power of
sharing and making world more open as well as connected. Along with this, people use
Facebook for staying in connected with friend and family for discovering what is going in world
and to share or express what matter to them. Apart from this, there are some major components
of respective company statements such as empowering people, enabling community building and
connecting the world.
Facebook vision statement – People use Facebook for staying in connection with family
as well as friends, to discovering want is going in world as well as to share & express want will
matter to them. Apart from this, vision statement of Facebook includes some other main
components such as global market scope, tools for communication, tool for communication. Tool
for discovering as well as tool for self-expression.

Facebook values – There are several values of respective company such as focus on
impact, build social value, be open, most fast, be bold and many more.
Apart from this, there are several other businesses who are using Facebook for their marketing
purpose because it will help them in doing promotion of their products as well as services in
effective manner. In simple term it can be said that social media is one of the effective which
will provide assistance to company in attracting large number of customers in effective manner.
Because most of the people are using social media tool as it will help business firms in
promoting their offering within market area in effective manner.
Theoretical Underpinning
There are several theories as well as acts which included in this case study and it will
provide assistance in managing things related to marketing issues in more effective manner.
Explanation of these theory and acts are mention below :-
PESTEL analysis – It is a tool which use for analysing macro or external forces which
an organisation is facing. Here, PESTEL stands for Political, Economic, social, Technological,
Environmental and legal. For an organisation it is important to analyse these factors in effective
manner as well as their impact also on the working of company so that positive outcomes will
gain.
Data protection act, 2018 – It is United Kingdom Act of Parliament which updates data
protection laws in UK. Moreover, Data protection act is national law which complement General
Data Protection Regulation of European Union’s as well as updates Data Protection Act 1998.
This act was developed for controlling how personal or customer information is utilise by
business firm or government bodies. Along with this, it protect people as well as lays down the
rules which are related to that how data and information related to people can be utilise. Apart
from this, data protection act is important because it gives guidance and best practices rule for
company as well as government to follow for using personal data such as regulating processing if
personal data, holding organisation liable to fines within event of breach rules, enabling data
protection authority for enforcing rules as well as protecting rights if data subject.
Porter’s five force model – It is a model which identifies as well as analyse five
competitive forces which shape industry as well as provide assistance in determining weakness

as well as strength of industry. Although, five force analysis generally utilise for identifying
industry structure in determining corporate strategy. This model can be applied to any segment
of economy for analysing level of competition and also for enhancing company profitability. It
includes five forces i.e., competition in the industry, potential of new entrants into industry,
power of suppliers, power of customers and threats of substitute products.
The Situation at the start of the case
The Facebook-Cambridge Analytica data breach occurred in early 2018 when millions of
Facebook user’s personal data as well as information was harvested without consent through
Cambridge Analytica to be predominantly used for political advertising (Fuller, 2019). In
addition, this data breach was largest known leak in Facebook history as well as data was
gathered by an app that created through Aleksandr Kogan, a Cambridge academic within 2013
and consist series of questions for building psychological profiles on users. The app will not
particularly harvest personal information of users which completed questions but also users of
Facebook friends (Palmieri III, 2019). Moreover, Cambridge Analytics sought for selling data of
American voters to political campaigns as well as help and analytics to the Tez Cruz and
campaigns of Donald Trump.
Data breach was disclosed by Christopher Wylie in 2018 who is former Cambridge
Analytica staff. This was disclosed in interviews conducted with The Guardian and The New
York Times. In addition to this within overall situation response is related to apologized for their
role within data harvesting as well as CEO Mark Zuckerberg testified within front of Congress.
These overall happenings sparked an online movement result in delete Facebook which result in
trending Twitter (Natamiharja, 2018). Thus, in simple term it can be said that this overall
situation results in negative impact on brand image of Facebook as business firms not feel safe
while using respective social media tool as their promotional strategy. Because there may be
chances of data theft and no company want to lose their personal information as well as their
customers also.
The case studies
There are several theoretical framework as well as regulation which Facebook have to
implement within their working for managing this situation of personal data theft in more
effective manner. Explanation of these are as follows :-

PESTEL Analysis – It is the framework which provide assistance to company in
analysing macro environmental factors. Here PESTEL stands for political, economic. Social,
technological, environment as well as legal factors. Explanation of these in relation of Facebook
are as follows :-
 Political factor – There are several elements include in political factors such as
government policies, tax policy, fiscal policy, labour law, funding grants, foreign trade
policy, environmental law and many more (Çitilci and Akbalık, 2020). In respect of
facebook they get involved in scandal related to data theft in 2018 due to which they
faced several political issues which impact on their goodwill and market shares. This is
happen because every nation government made strict rules and regulation in respect to
protect society personal and private data safe. So when facebook user’s personal
information was harvested without getting permission by Cambridge Analytica they
faced legal and political issues due to which respective company lose its many users.
 Economical factor – Economic factor include elements like economic growth, interest
rate, wages rates, financial capabilities, exchange rate, inflation rate, disposable income
of businesses and many more. In respect of facebook, they involved in data protection
scandal in 2018 due to which their market value get decrease around the world. In
addition to this, due to respective scandal facebook economic conduction also gets
decreased because their several users left or delete their account from respective social
media. Along with this they also faced legal issues due to the scandal which directly or
indirectly impact on their market goodwill that also affect their economy.
 Social factor – Respective factor include several elements such as population growth,
age discrimination, organizational image, demographic industrial review, cultural trends,
career attitudes and many more. In context of facebook, in 2018 they involve in data
protection scandal according to which facebook sale personal as well as private
information or data to companies without permission of users (Pestel and et. al., 2020).
Due to this they faced legal as well as political issues which impact on their goodwill.
Due to this their social factor also get affected and due to it their several users delete or
left facebook as well as now companies also not like to post promotional content on
facebook as they have fear that their personal information also get theft.

 Technological factor – It is consist of several factors such as copyright, production of
goods and services, business operations functions, potential return on investment, target
market, communication, distribution of goods and services and many more. In respect of
facebook they use technology in data protection scandal due to which their faced several
issues in the society as well as their market value and goodwill get decreased. In respect
of this now facebook is updating their system with high or advance technology so that
users (individual or company) can protect their personal as well as private information or
pictures accordingly. This helps respective company in gaining users trust successfully.
 Environmental factor – The respective factor include elements related to environment
such as decline of raw material, geographical location, weather environment, promoting
positive business ethics and sustainability, pollution, greenery and many more. In respect
of facebook they involve in scandal related to data protection in 2018 due to which their
market value and goodwill get decreased (Saensook, 2020). Due to this, respective
company goodwill gets decreased at market which impact on the company market shares.
In respect of this, respective company need to conduct practices related to the
environment so that they can regain trust of users as well as it will also help them in
gaining strong goodwill at marketplace.
 Legal factor – It include several elements such as health and safety law, equality law,
consumer protection act, product labeling act, safety and security act, labour law,
competitive legislations and many more. In respect of facebook they conducted unethical
practice by stealing and selling personal as well as private information of users to the
other companies. This will impact on the company goodwill and market shares as well as
their users also get decrease. Due to this respective company go through several legal
issues which impact on their goodwill and market shares. This is generally take place
because every country have their specific rules and regulation related to data protection
through which they able to save the society personal as well as private information
(Onyusheva, Machula and Manuthammathorn, 2020). So when respective company
conduct illegal activities they go through or experience legal issues which affect their
market value as well as due to this many people delete their account and companies stop
positing promotional content.

Porter’s five force analysis – This framework reveals issues which affecting position of
business firm as one of the top most players within international social media market. By
Michael Porters Five forces analysis model was develop which help in evaluating external forces
that influence companies’ industry environment. Moreover, respective framework of Facebook
focus on customers as well as substitutes as their strong force which are based on external
factors. As its strongest forces are rely in external factors within social media business as well as
each and every external factors within internet advertising are affecting business performance of
competitors such as Twitter, Snap Inc. Google LLC and many more. Here, five forces include
competitive rivalry, bargaining power of buyers or customers, bargaining power of suppliers,
threat of substitutes as well as threat of new entrants. Explanation of these in relation of
Facebook are mention below :-
 Competitive rivalry (moderate force) – Facebook have leading position within social
media market still they are experiencing significant impact of competition. As this model
help in determining how competitors impact company’s industry environment. Thus,
external forces result in moderate force of competitive rivalry against company such less
number of companies (weak force), moderate variety of firms (moderate force) and low
switching cost (strong force). On the basis of these elements of five force it has been
identified that competitive rivalry is considered by Facebook’s within their strategic
management and strategic formulation.
 Bargaining power of buyers or customers (strong force) – On respective company
customers impose pressure related to what they want from company. Within this element
of Porter’s five force model impact of buyers on display advertising industry environment
will examine or analyse. There are some external forces which result in strong force of
customers bargaining power on social network and related services of company such as
high substitute availability (strong force), Low switching costs (Strong force) as well as
high demand from buyers (Weak force). Thus, these elements shows that respective
company must give prioritize to their customers foe ensuring competitive advantages.
 Bargaining power of Suppliers (weak force) – Suppliers are the factors which influence
social network as well as display advertising services of respective company. This
elements of five force analysis reflect how suppliers impact environment of company as

well as firm. There are some external factors which result in weak bargaining power of
suppliers such as Moderate size of individual suppliers (Moderate force), high overall
supply (weak force) and large population of suppliers (Weak force).
 Threat of substitutes (Strong force) – Substitutes result in reducing business performance
of respective company as well as also create challenges within social media firm industry
environment. In addition to this, there are some notable external force which result in
creating strong or high threat of substitute on working of Facebook such as Low
switching cost (Strong force), moderate cost of substitute (moderate force) as well as high
substitute availability (strong force).
 Threat of new entrants (Weak force) – Social media giant result in negative impact on
new entrants within industry environment. In addition to this, Facebook external analysis
case and it social network as well as related products. These following external factors
result in weak threat of new entry such as high cost of customer loyalty (weak force),
Low switching costs (strong force) as well as high cost of brand development (weak
force).
Data protection act - It is United Kingdom Act of Parliament which updates data protection
laws in UK. Moreover, Data protection act is national law which complement General Data
Protection Regulation of European Union’s as well as updates Data Protection Act 1998. This act
was developed for controlling how personal or customer information is utilise by business firm
or government bodies. Along with this, it protect people as well as lays down the rules which are
related to that how data and information related to people can be utilise. Apart from this, data
protection act is important because it gives guidance and best practices rule for company as well
as government to follow for using personal data such as regulating processing if personal data,
holding organisation liable to fines within event of breach rules, enabling data protection
authority for enforcing rules as well as protecting rights if data subject. Thus, It is important for
Facebook to implement each and every policy related to the same act because it will result in less
chances of data theft as well as business firm who want to promote their products by using social
media tool will also feel safe. Because there is no such company who want to loose their
personal information or related to their customers because such practices will give negative
impact on their working. Along with this, data scandal already taken place in history of

Facebook so for them now it become difficult to gain trust of users again (Noman, Das and Patil,
2019). In this situation if they implement data protection act in effective manner within their
working then they will able to gain trust of users again in better manner.
The Outcome/Solution
There are several theoretical frameworks as well as regulation which Facebook have to
implement within their working so that their activities will conduct in better manner and no such
negative practices take place. Thus, PESTEL analysis will provide assistance to business firm in
analysing Macro environmental factors in effective manner as well as their impact also on
working of company. Moreover, in relation to this conducting PESTEL analysis has provided
assistance to Facebook in analysing the factors in effective manner as well as their impact at
different level of company. It includes political, economic, social, technological, environmental
and legal. These are macro environmental factors which have impact on working of company in
both negative as well as positive manner so it is essential to analyse these factors in effective
manner and gain positive impact as well as minimise negative effect. Apart from this, business
environment is competitive for every company so it is important for them to analyse level of
competition in effective manner. Because it will provide them assistance in designing their
strategies as pe the requirement and also provide assistance in gaining competitive advantages.
Conclusion
From overall discussion it has been summarised that, it is important for an organisation
take care of customers personal information as theft of data will give bad impact on brand image
of company (Galloway, 2017). In addition to this, government of every nation designed data
protection act which have several rules and regulation related to the protecting data of customers.
This act was developed for controlling how personal or customer information is utilising by
business firm or government bodies. Along with this, it protects people as well as lays down the
rules which are related to that how data and information related to people can be utilise. Apart
from this, data protection act is important because it gives guidance and best practices rule for
company as well as government to follow for using personal data such as regulating processing if
personal data, holding organisation liable to fines within event of breach rules, enabling data
protection authority for enforcing rules as well as protecting rights if data subject.

Thus, implementation of respective act and every policy related to this will provide
assistance to Facebook in managing personal information as well as data their users in better
manner (de Hingh, 2018). As no other will theft because such practices gives negative impact on
brand image within market area as so longer any business firm will use Facebook as their digital
promotion or marketing tool because they also have fear of loosing personal information of them
or their customers. Moreover, in relation to this conducting PESTEL analysis has provided
assistance to Facebook in analysing the factors in effective manner as well as their impact at
different level of company. It includes political, economic, social, technological, environmental
and legal. These are macro environmental factors which have impact on working of company in
both negative as well as positive manner so it is essential to analyse these factors in effective
manner and gain positive impact as well as minimise negative effect. Apart from this, business
environment is competitive for every company so it is important for them to analyse level of
competition in effective manner. Because it will provide them assistance in designing their
strategies as per the requirement and also provide assistance in gaining competitive advantages.

ASSESSMENT 2
INTRODUCTION
Companies these days, are increasingly focused on marketing their products as well as
services online. It can be said that digital marketing has become the new form of marketing
because it enables organizations to reach wider segments of customers (Armstrong and et. al.,
2018). There are many benefits of marketing in the digital world like the overall conversion rates
of the company improve and also, it is very cost effective as compared to traditional marketing.
Organization chosen for this report is Facebook, which is an American social media company
based in California. This report explains how marketing and markets in the digital age are
influenced by current technological issues.
MAIN REPORT
Marketing is among the important components within an organization and helps it in
achieving its goals and objectives. Marketing involves various activities like promoting,
advertising, market research, identifying and satisfying the needs of customers. With the increase
in digitization, companies are increasingly adopting various digital measures in order to promote
their products and reach out to a larger customer base. This further leads to an increase in the
overall profitability as well as revenues of the firm. Facebook is a widely known social media
giant that is nearly recognized by everyone cross the world. There are a lot of technological tools
and techniques that are available today in order to market and promote the products. There are
many benefits of marketing in the digital age which includes global reach, low costs,
personalization, measurable results etc. This is because if an organization has an online website,
it provides an access to new markets and therefore, trade globally (Bala and Verma, 2018). Also,
if an online marketing campaign is planned effectively, it can reach the right customers and that
too at very low costs as compared to traditional methods. This can significantly contribute to the
overall profits and revenues of the firm.
Marketing in the digital age has provides an equal access to opportunities for various
businesses. This is because even small and medium businesses today can effectively use different
digital platforms in order to market and advertise their products. It is also more-cost-effective as
compared to traditional ways that involve a lot of time as well as money. With digital marketing,