Identifying theories and underlying principles of global Marketspace

INB20009Week4Lecture.pdf

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Recap: Few Key words to remember

Global marketspace

Globalisation

Marketplace Vs Marketspace

McLuhan's (1964) framework

Social Media ( Web 2.0, User generated content)

Different business models

Social media

Social presence theory

Social processes

The social as capital

The social as theatre

INB20009 Managing the Global

Marketplace

Global Consumers in the

global marketplace: power of

web 2.0

Source: Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D 2012, Marketing meets

Web 2.0, social media, and creative consumers: Implications for international

marketing strategy. Business Horizons, Vol. 55, pp. 261-271.

Lesson plan

PART 1-2 Concepts and Theory

(1) Effects of Web 2.0

(2) Prosumers; Creative Consumers

(3) Success and disaster in the marketspace (4) Five axioms for using social media in the global marketspace

PART 3 Applications

(5) Recommendations for Global Business Managers

(6) Barriers to the implementation of an international social media strategy

Part 1

Concepts

Effects of Web 2.0 from consumer

perspectives (1) A shift in locus of activity from the

desktop to the Web

(2) A shift in locus of value production from

the firm to the consumer

(3) A shift in the locus of power away from

the firm to the consumer

Prosumers: Creative Consumers

• Participants on Social Media applications have the desire to actively engage and to become both producers and consumers of information, so-called “prosumers”(Toffler, 1980).

• Creative consumers are the new locus of value in Web 2.0. It is they—rather than firms—who produce much of the value-added content in social media, and it is their networks of friends and associates that constitute the social (watch_ prosumers)

http://www.youtube.com/watch?v=hcwWOwPQvwA

Activity 1

• “Working with social media looks easy in the global marketplace. It seems to be as simple as establishing a fan page on Facebook, tweeting regularly, and perhaps placing some of a brand's ads on YouTube”

• Do you agree? Why ?

Social media and Prosumers

• In the marketspace, it is important to distinguish between these two concepts;

1. The media (e.g., YouTube, Facebook, Twitter) are essentially vehicles for carrying content.

2. This content—in the form of words, text, pictures, and videos—is generated by millions of consumers around the world, and from a marketer's perspective can indeed be inspired to create value (Muniz & Schau, 2011)

1 • Informal discussions about products and services via Facebook or

Twitter

2 • Consumers creating structured reviews and evaluations in text or

video

• Consumers become involved in the promotion or demotion of brands through self-created advertising videos (Berthon, Pitt, & Campbell, 2008)

• Consumers become involved in the modification of proprietary products and services and the distribution of these innovations (e.g., Berthon et al., 2007 and Mollick, 2005).

Social media and Prosumers

Success and disaster in the

marketspace

• Dave Carroll and ‘United Breaks

Guitars’

United Airlines’ market capitalization

declined by around 20%—a loss in

value to shareholders of around $180

million at the time (Ayres, 2009)

• The change in locus of value creation

from the firm to the individual or

community (i.e., Shit my Dad Says)

Success and disaster in the

marketspace

• Some smart companies are leveraging social media to good marketing effect.

• Procter & Gamble's Old Spice brand. This veteran brand was almost certainly in the

decline phase of its product lifecycle when an ad was created featuring NFL star

Isaiah Mustafa as the ‘Old Spice Guy.’ The ad won the Golden Lion award at the

Cannes Film Festival in 2010.

• The real success came from its posting on YouTube with millions of downloads, very

successful humorous tweets on Twitter, and the creation of a hugely popular fan page

on Facebook. Sales of Old Spice increased by 55% between April and June 2010

( Pitt et al., 2011)

Activity 2

• Watch How to Be a Social Media Change

Agent • An interview with Josh Bernoff, vice president and principal analyst at

Forrester Research. Over the past thirteen years, Mr. Bernoff has become

one of America's most frequently quoted research analysts. His analysis,

which aims at a deeper understanding of people and how they use

technology (Harvard Business Review)

https://www.youtube.com/watch?v=iB9Npo3qtH0

Part 11

Theory

Five axioms for using social media in the global

marketspace

1.Social media is a function of the technology, culture, and government of a particular country.

2.In the age of social media, local events seldom remain local.

3.In the age of social media, general issues seldom remain general; that is, macro issues tend to be (re)interpreted locally.

4.The actions and creations of creative consumers tend to be a function of the technology, culture, and government of a particular country.

5.Technology tends to be historically dependent; that is, technologies in different countries evolve along unique trajectories due to inertia rather than because they are the optimal solution.

1.Social media is a function of the technology,

culture, and government of a particular country.

The social media profile of a particular country is to be

determined by three factors:

(1) Technology (the infrastructure enabling social media)

(2) Culture (shared values)

(3) Government (institutional rules and regulations).

2.In the age of social media, local

events seldom remain local.

• Nestlé and its well-known Kit Kat brand. Greenpeace targeted the brand because Nestlé is a major purchaser of palm oil.

• Palm oil is grown in rainforest areas, mainly in Indonesia and Malaysia, where natural forests are often destroyed in order to plant oil palms.

3.In the age of social media, general issues seldom remain

general; that is, macro issues tend to be (re)interpreted

locally.

• Global issues—such as global warming, the financial crisis, and

democracy (Arab Spring)—are viewed and processed in very different

ways by different countries, states, and regions.

• An analysis of European social media reveals that while Zara and H&M

are the two most blogged, tweeted, and discussed brands in all three

countries, the Spanish are differentially obsessed by Benetton, the

French by Promod, and the British by Mango (Aramendia 2010).

4.The actions and creations of creative consumers tend to

be a function of the technology, culture, and government of

a particular country.

• These actions range from the very simple, such as creating a whole home's

furniture out of FedEx boxes (Morrisey 2005), to modifying entire

automobiles, as Ron Gremban did with his Toyota Prius (Molloy 2005).

• Creative consumers tend to mess with products.

• Site memberships devoted to hacking the iPhone or Sony's PlayStation 3

outnumber many countries’ Facebook membership.

• While Japanese consumers

loved Sony's AiboPet

robotic dog and cared for

and nurtured it, Americans

just did not ‘get it.

• A number of owners,

disappointed that a $3,000

toy could do so little,

hacked the dog's software

and made it do things Sony

never intended, such as

jiving and dancing (Kohler,

2005).

4.The actions and creations of creative consumers tend to

be a function of the technology, culture, and government of

a particular country…contd.

5.Technology tends to be historically

dependent

1. The state of both current and previously deployed technologies in

that country

2. The country's culture

3. The legislation enacted by government in that country.

E.g., Mxit in South Africa

Part 111

Application

Recommendations for Global

Business Managers

1. Understand the technology that underpins

social media and creative consumers

2. Understand the consumer: enticing customers

to participate in value creation

3. Understand social media

Understand the consumer: enticing customers to

participate in value creation

1) Facilitate users in generating content

2) Focus on building a community

3) Ensure authenticity of the message

4) Look for business opportunities through

experimentation.

Source: Parise, S. & Guinan, P. J. Marketing using web 2.0. Proceedings of the 41st Hawaii International Conference on System Sciences, 2008 Hawaii IEEE, 281-281.

Understand the consumer: enticing

customers to participate in value creation

Source: Simonson, I. & Rosen, E. 2014. What Marketers Misunderstand About Online Reviews. HARVARD BUSINESS REVIEW, 23-25.

Understand the consumer: Weak

Ties & Strong Ties

Understand the consumer: enticing customers to

participate in value creation…contd

eWOM

• Communication through Web 2.0 applications such as online

discussion forums, electronic bulletin board systems,

newsgroups, blogs, review sites, and social networking sites.

• Unlike in traditional WOM, through eWOM communication,

consumers receive information related to goods and services

from a vast, geographically dispersed group of people who

have experience with relevant products or services.

Barriers to the implementation of a

successful international social media

strategy

1. The attitude and language of engagement is one major

barrier.

Learn to engage, (not bully customers) and to take a

personal, not an officious, tone in conversations with

consumers.

2. Attempting to engage stakeholders by means of social

media, while at the same time prohibiting their own

employees from using social networking tools at work!

Barriers to the implementation of a

successful international social media

strategy…contd 3. Bureaucracy is an impediment to the implementation of

social media plans

4. Lack of IT and communication skills among employees

5. ‘digital divide,’ a situation in which many parts of the population—even in developed countries—do not have access to basic computing tools, such as desktops and broadband Internet access, let alone more sophisticated social networking tools.

6. Senior decision makers in some organizations see social media as the wasteful pastime of teenagers

Making sense of social media: The

consumer decision journey • https://www.youtube.com/watch?v=eNGS5

8T96eM

• David Edelman: Mastering Digital

Marketing; What companies get wrong

http://www.mckinsey.com/insights/business_technology/managing_beyond_web_20

https://www.youtube.com/watch?v=eNGS58T96eM

https://www.youtube.com/watch?v=amzh3k0ubUk

http://www.mckinsey.com/insights/business_technology/managing_beyond_web_20