Dissertation Fernando bez - An Exploration Into the Impact of Social Media on Marketing Strategy

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An Exploration Into the Impact of Social Media on Marketing Strategy

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Dissertation Fernando bez - An Exploration Into the Impact of Social Media on Marketing Strategy

  1. 1. II An Exploration into the Impact of Social Media on Marketing Strategy Fernando Bez M. Sc. in Strategic Management Dublin Institute of Technology Supervisor: Gerry Mortimer September 2013
  2. 2. II
  3. 3. IIIIII DECLARATION I hereby certify that this material, which I now submit for assessment on the programme of study leading to the award of M. Sc. in Strategic Management is entirely my own work and has not been submitted for assessment for any academic purpose other than in partial fulfilment for that stated above. Signed ............................................................. Date ............................................. (Candidate) Word Count - 19569
  4. 4. IV ACKNOWLEDGEMENTS I wish to express my sincere appreciation and gratitude to the following individuals, without whose assistance, this study would not have been possible. Firstly I would like to thank my supervisor Gerry Mortimer for his valuable support and insight throughout the writing process and for making this dissertation joyful to write. Secondly I would like to thank the interviewees who gave up their time to participate in the interviews. A note of thanks goes to Mrs Sudeshni Fisher for her involvement in this study as she provided input, advice and support. Huge thanks to my classmates Roberto, Michael and Andrea for motivating me, sharing ideas and the constant reminder of the proverb “failure is not an option”. Thank you to both my parents for believing in me and encouraging me throughout this entire study period, it cannot be appreciated enough. Finally I would like to thank my classmate Michael De Korte for his continuous support, patience, dedication and for being a constant source of inspiration.
  5. 5. V TABLE OF CONTENTS DECLARATION ..................................................................................................................................................... III ACKNOWLEDGEMENTS....................................................................................................................................IV LIST OF FIGURES..................................................................................................................................................IX LIST OF TABLES .................................................................................................................................................... X Chapter INTRODUCTION................................................................................................................................1 1.1 Background to the Study.............................................................................................. 2 1.1.1 General Introduction to the Research .................................................................... 2 1.2 Research Problem, Limitations of the Study, Objectives and Report Structure............. 2 1.2.1 The Research Problem.......................................................................................... 2 1.2.2 Purpose of the Study............................................................................................. 3 1.2.3 Structure of the Dissertation.................................................................................. 3 Chapter LITERATURE REVIEW...................................................................................................................5 2.1 Introduction to the Literature Review .......................................................................... 6 2.1.1 Aim of this Literature Review............................................................................... 6 2.2 What is Social Media................................................................................................... 7 2.2.1 Definitions of Social Media .................................................................................. 7 2.2.2 Web 2.0................................................................................................................ 9 2.3 Rise of the Social Media............................................................................................ 11 2.4 Strategy..................................................................................................................... 15 2.4.1 Strategy Definition.............................................................................................. 15 2.4.2 The role of Strategy ............................................................................................ 15 2.5 Social Media Strategy................................................................................................ 16 2.6 What is Marketing Strategy....................................................................................... 19 2.7 Social Media and Marketing...................................................................................... 21 2.8 Value Creation .......................................................................................................... 22
  6. 6. VI 2.9 This is What Social Media Can Do............................................................................ 23 2.9.1 Dell .................................................................................................................... 23 2.9.2 PepsiCo .............................................................................................................. 23 2.10 Conclusion .............................................................................................................. 24 Chapter RESEARCH METHODOLOGY....................................................................................................25 3.1 Introduction............................................................................................................... 26 3.2 The Research Path..................................................................................................... 27 3.3 The Research Question.............................................................................................. 29 3.4 Research Objectives .................................................................................................. 30 3.5 Research Philosophy ................................................................................................. 31 3.5.1. Epistemology..................................................................................................... 32 3.5.2 Positivism........................................................................................................... 32 3.5.3 Interpretivism ..................................................................................................... 33 3.5.4 Realism............................................................................................................... 33 3.5.5 Conclusion.......................................................................................................... 33 3.6 The Research Approach............................................................................................. 34 3.6.1 Deductive Research ............................................................................................ 34 3.6.2 Inductive Research.............................................................................................. 35 3.6.3 Conclusion.......................................................................................................... 36 3.7 Research Design........................................................................................................ 36 3.7.1 Secondary Research............................................................................................ 36 3.7.2Primary Research................................................................................................ 36 3.7.3 Ethnography ....................................................................................................... 37 3.7.4Netnography ....................................................................................................... 37 3.7.5 Qualitative Research........................................................................................... 37 3.7.6 Conclusion.......................................................................................................... 39 3.8 Data collection Method.............................................................................................. 39
  7. 7. VII 3.8.1 Semi Structured Interview Process...................................................................... 40 3.8.2 The Sample......................................................................................................... 41 3.8.3 The Choice of the Companies ............................................................................. 41 3.8.4 Candidate Selection ............................................................................................ 41 3.8.5 Data Required..................................................................................................... 41 3.8.6 Structure of the interviews .................................................................................. 42 3.8.7 Limitations of Methodology................................................................................ 42 3.8.8 The role of the Researcher .................................................................................. 43 3.9Data Preparation and Analysis.................................................................................... 44 3.9.1 Categorization .................................................................................................... 45 3.9.2 Utilising Data ..................................................................................................... 45 3.9.3 Recognizing Relationships and Developing Categories....................................... 45 3.9.4 Developing and Testing Hypothesis.................................................................... 46 3.9.5 Reliability and Validity....................................................................................... 46 3.10 Conclusion .............................................................................................................. 47 Chapter ANALYSIS AND FINDINGS........................................................................................................48 4.1 Introduction............................................................................................................... 49 4.2 Participants................................................................................................................ 50 4.3 Coding....................................................................................................................... 50 4.3.1 Coding Categories .............................................................................................. 50 4.4 Interviewees background on social media channels.................................................... 51 4.4.1 Social Media Channels in a private capacity ....................................................... 51 4.4.2 Social Media Channels in a professional capacity ............................................... 52 4.5 Research Questions ................................................................................................... 53 4.5.1 Research Question One....................................................................................... 53 4.5.2 Research Question Two...................................................................................... 55 4.5.3 Research Question Three .................................................................................... 57
  8. 8. VIII 4.6 New findings............................................................................................................. 58 4.6.1 How to use Social Media .................................................................................... 59 4.6.2 Main reason for using social media within organizations .................................... 63 4.6.3 Brand Awareness................................................................................................ 65 4.6.4 Social Media Risks ............................................................................................. 67 Chapter CONCLUSIONS AND RECOMMENDATIONS .....................................................................68 5.1 Summary of Dissertation ........................................................................................... 69 5.2 Review of the Research Objectives............................................................................ 70 5.2.1 Conclusion – Research Question One ................................................................. 70 5.2.2 Conclusion – Research Question Two................................................................. 70 5.2.3 Conclusion – Research Question Three............................................................... 71 5.3 General Conclusion ................................................................................................... 72 5.4 Research Limitations ................................................................................................. 72 5.5 Recommendations ..................................................................................................... 73 5.5.1 Recommendations for future researchers............................................................. 73 5.5.2 Recommendations for organizations ................................................................... 73 APPENDICES .........................................................................................................................................................75 APPENDIX SAMPLE EMAIL SENT TO INTERVIEWEES IN JUNE 2013...............................76 APPENDIX SAMPLE EMAIL SENT TO THE INTERVIEWEES...................................................77 APPENDIX INTERVIEWEE GUIDE........................................................................................................78 APPENDIX INTERVIEWEES PROFILE...............................................................................................79 APPENDIX -THEME SHEET FOR INTERVIEWS................................................................................80 APPENDIX SAMPLE INTERVIEW TRANSCRIPT ............................................................................82 APPENDIX CODING OF THE THEMES................................................................................................94 BIBLIOGRAPHY.................................................................................................................................................110 ONLINE REFERENCES...................................................................................................................................115
  9. 9. IX LIST OF FIGURES Figure 2.1: Steps in the consumer decision journey 09 Figure 2.2: Web 1.0 and Web 2.0 10 Figure 2.3: Commonly used social media platforms by marketers 13 Figure 2.4: The most important social platform for marketers 14 Figure 3.1: ‘The Research Onion’ 28 Figure 4.1: When and Why to create content 60 Figure 4.2: Tweet activity from the #aima13and 62 Figure 4.3: Example of how KLM uses social media 63 Figure 4.4: Why are companies using social media 64 Figure 4.5: The Marketing Funnel 66
  10. 10. X LIST OF TABLES Table 1.1: Classification of Social Media 19 Table 4.1: Coding Categories 51 Table 4.2: Emerging Themes 59
  11. 11. XI ABSTRACT An Exploration into the Impact of Social Media on Marketing Strategy Student: Fernando Bez The growing usage of social media indicates a new potential platform for marketers. However, little academic research examines the impact social media is having on organizational marketing strategies. This exploratory study uses an interpretivist philosophy to gain a qualitative insight into the marketing strategies currently employed by organizations as opposed to those used prior to their journey into social media. This is achieved through a combination of secondary academic research into the rising of social media and primary research in the form of ethnography and semi-structured in depth interviews. These interviews were conducted on key individuals of organizations who are currently active on social media. The findings confirm that social media has had a significant impact on marketing strategies for the companies interviewed allowing them to interact with customers, support marketing initiatives and create brand awareness. These results offer insight into how social media supports brand proposition, provides the brand a personality and drives traffic. The findings suggest that professionals should consider which social media channels work best for them and how to best utilize social media in their marketing plans. General themes and categories from participants’ responses were evaluated and recommendations regarding the use of social media are proposed by the researcher.
  12. 12. 1 Chapter 1 INTRODUCTION
  13. 13. Introduction 2 “We are what we repeatedly do. Excellence, therefore, is not an act, but a habit.” - Aristotle 1.1 Background to the Study 1.1.1 General Introduction to the Research For billions of people, life without Twitter or Facebook is almost impossible to contemplate. Increasingly the same is true for businesses (Winkler, 2013). The concept of social media is top of the agenda for many executives nowadays. Decision makers, as well as consultants, try to identify ways in which firms can make profitable use of applications such as Wikipedia, YouTube, Facebook, Second Life, and Twitter (Kaplan & Haenlein, 2010, p. 59). Facebook today has one billion user accounts and Twitter has 250 million users, tweeting more than 340 million tweets per day. Social media and the way we use web 2.0 communication technologies have transformed our way of constructing, accessing and disseminating knowledge (Kaplan & Haenlein, 2010). In this report a contribution will be made in understanding the impact of social media on marketing strategy and the influences that are shaping marketing strategy. Consumers are having conversations about brands and its products and brands are often not aware of them. With social media, a negative incident or experience of a consumer with a brand can be shared with millions of people by the press of a button via the internet as Dell found out in 2009 (Jarvis, 2009). The main research question of the thesis is: What is the impact of social media on Marketing Strategy? This will be achieved by examining the strategic use of social media within companies located in Ireland and its consequences on marketing strategies. 1.2 Research Problem, Limitations of the Study, Objectives and Report Structure 1.2.1 The Research Problem Sekaran (2003, p. 69) states that research problem is a precise statement of the question that is to be investigated. The research problem is defined by Blumberg et al. (2008, p. 85) as the
  14. 14. Introduction 3 management question – a restatement of the manager’s dilemma(s) in question. Since social media represents a challenge for marketers, the author decided that social media would be the area of interest for this study. The aim of this study is to investigate the impact of social media on marketing strategy and the research question has been selected as “What is the impact of social media on marketing strategy?” 1.2.2 Purpose of the Study The focus of this dissertation is to answer the research question by exploring how marketing strategy is affected by social media. The author feels that he should make clear what the study is not about. The study is not about the characteristics and benefits of specific social media tools. The aim is not to explore how organisations use social media, or explore the use of each type of social media, but to study the impact of social media on marketing strategies employed by organizations and their influences. Additionally this study is a B2C (Business to Consumer) orientated; therefore no attention is given to B2B (Business to Business) literature. 1.2.3 Structure of the Dissertation This report examines how social media have affected marketing strategies employed by organizations before they embarked on using social media and what is the current strategy with regards to social media and contains the following chapters: Chapter 2 undertakes a review of the existing literature on social media. The literature review begins with various academic and practitioners definitions of social media and the rise of social media is discussed. It is followed by the literature review on strategy, social media strategy and marketing strategy. Furthermore, the chapter will provide an understanding of value creation and analyzes two case studies of the following companies: Dell and PepsiCo. Chapter 3 of the report describes the research methodology that is employed for the research. The research question and sub objectives are also outlined. The various research methods are identified and a selection is made of the most suitable strategy to collect the data. The data collection method of semi-structured interview is outlined along with the practicalities of the data collection and analysis. Finally the researcher outlines the limitations of the methodology.
  15. 15. Introduction 4 Chapter 4 presents the analysis and findings of the research. The researcher reviews the data primary research and examines this in relation to the primary research question and sub- objectives. Chapter 5 contains the conclusion and recommendations following on from the findings of the primary research. It outlines other themes which have emerged from this study, the limitations of the particular research and some areas for possible research.
  16. 16. 5 Chapter 2 LITERATURE REVIEW
  17. 17. Literature Review 6 “If you can’t explain it simply, you don’t understand it well enough.” Albert Einstein 2.1 Introduction to the Literature Review 2.1.1 Aim of this Literature Review (Webster & Watson, 2002) note that a methodological review of past literature is a crucial endeavor for any academic research (as cited in Levy & Ellis 2006, p. 185). The need to uncover what is already known in the body of knowledge prior to initiating any research study should not be underestimated (Hart, 1998). However, it is important to remember that not everything reported in the literature is of equal rigor (Ngai & Wat, 2002). Reviewing the literature critically will provide the foundation on which the research is built. Two major reasons exist for reviewing the literature. The first, the preliminary search that helps to generate and refine research ideas. The second is part of your research project proper (Saunders et al. 2007). Conducting a literature review is a means of demonstrating an author`s knowledge about a particular field of study, including vocabulary, theories, key variables and phenomena. The aim of this literature review is to locate and critique relevant theory related to the research problem, “What is the impact of Social Media on Marketing Strategy” and identify concepts and themes (Ghauri & Grounhaug, 2005). Hart (1998, p. 01) defines the literature review as “the use of ideas in the literature to justify the particular approach to the topic, the selection of methods, and demonstration that this research contributes something new”. Webster and Watson (2002) define an effective literature review as one that “creates a firm foundation for advancing knowledge (as cited in Levy & Ellis 2006, p. 185). (Davison et al., 2005) explain that use of the peer-review process is essential as it ensures that researchers can “use published work with confidence, and use the works of others as stepping stones and corner stones for advancing new concepts and insights” (as cited in Levy & Ellis 2006, p. 185).
  18. 18. Literature Review 7 The objective of this particular chapter is to conduct a review of the existing literature on social media and its impact on marketing strategies. The chapter begins by explaining what social media is and the rise of social media will be discussed. This is followed by an explanation of what strategy is and the literature on social media strategy and marketing strategy is then discussed. The last section of the chapter reviews the literature on successful stories of companies using social media. 2.2 What is Social Media 2.2.1 Definitions of Social Media What is social media? Kaplan and Haenlein (2010, p. 60) define social media as “a group of internet-based applications that build on the ideological and technological foundations of WEB 2.0 and that allow the creation and exchange of user-generated content”. Solis (2007) describe that social media are online tools that people use to share content, insights, opinions, profiles, experiences, perspectives and media itself. Social media facilitates conversations and online interaction between groups of people. Social media is, therefore, forms of electronic communication through which users create online communities to share information, ideas, personal messages, and other content. The terms Social Media and Web 2.0 are often used as interchangeable (Constantinides & Fountain, 2008) furthermore there seem to be confusion among managers and academic researchers alike as to what exactly should be included under this term (Kaplan & Haenlein, 2010, p. 60). Further, it is also a tool for dialogue and conversation “that allows the creation and exchange of user generated content” (Kaplan & Haenlein, 2010, p. 61). Social media can take many different forms, including social networks, internet forums, weblogs, social blogs, micro blogging, wikis, podcasts, pictures, video, rating and social bookmarking (Kaplan & Haenlein, 2010, Weber, 2009) There are a number of other words that suggest a similar meaning for what is understood by social media. These synonyms include the social web (Weber, 2009; Weinberg, 2009), ‘the
  19. 19. Literature Review 8 groundshell’ (Li & Bernoff, 2008), ‘consumer generated media’ (Constantinides & Fountain, 2008). Kaplan and Haenlein (2010, p. 60) note: The era of Social Media as we understand it today probably started about 20 years ago earlier, when Bruce and Susan Abelson founded ‘Open Diary’, an early social networking site that brought together online diary writers into one community. Weber (2009, p. 04) states that the social media web is “the online place where people with a common interest can gather to share thoughts, comments, and opinions”. The groundswell is described by Li and Bernoff (2008, p. 09) as “a social trend in which people use technologies to get the things they need from each other, instead of from companies”. Companies everywhere have been rolling out the red carpet in communities like Facebook, LinkedIn, Twitter, and YouTube to build a fan base and monitor consumer emotions. Social media such as blogging, video and photo sharing, forums, virtual worlds, opinion markets, and collaboration environments present an opportunity to communicate with constituents regarding their place in it. Divol, Edelman and Sarrazin, (2012) have identified social media`s four primary functions as depicted in figure. 2.1 - to monitor, respond, amplify, and lead consumer behavior - and linked them to the journey consumers undertake when making purchasing decisions.
  20. 20. Literature Review 9 Figure 2.1: Steps in the consumer decision journey Source: Divol, Edelman, and Sarrazin, (2012) Demystifying Social Media, McKinsey Quarterly, Marketing and Sales Practice. [Online] Social media is offering numerous opportunities to influence consumers, consequently many chief marketing officers say that they wanted to increase their social media budget which was an average of 7.4 percent in 2012 of their overall marketing budget. The main obstacle to increase that share is the perception that the return on investment (ROI) from such initiatives is uncertain (Hanna et al. 2011). Chiu et al. (2012) analyse that China has the world’s most active environment for social media. More than 300 million people use it, from blogs to social-networking sites to micro blogs and other online communities. Divol et al. (2012) argue that without a clear sense of the value social media creates, it is perhaps not surprising that so many CEOs and other senior executives do not feel comfortable when their companies go beyond mere “experiments” with social-media strategy. 2.2.2 Web 2.0 Web 2.0 is a collection of open-source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes (Constantinides & Fountain, 2008, p. 232).
  21. 21. Literature Review 10 Web 2.0 is the term given to describe a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online. Other improved functionality of Web 2.0 includes open communication with an emphasis on Web-based communities of users, and more open sharing of information. Web 2.0 has been used over time more as a marketing term than a computer-science-based term. Blogs, wikis, and Web services are all seen as components of Web 2.0. Web 2.0 focuses on all forms of networking, how applications are being shared, how the users integrate, link and communicate on the web creating online activities. The more data and service are shared on the web the better the platform gets (O’Reilly, 2005). Figure 2.2: Web 1.0 and Web 2.0 Source: O’Reilly (2005) As depicted in figure 2.2 O’Reilly (2005) defines Web 2.0 as a collection of open-source, interactive and user-controlled online applications expanding the experiences, knowledge and market power of the users as participants in business and social processes. Social media is a powerful tool that allows us to go where our existing and potential customers are already engaged in conversation and connect with people we might not otherwise reach. However, the challenge facing many companies is that although they recognize the need to be active in social media, they do not truly understand how to do it effectively, what performance indicators they should be measuring, and how they should measure them. (Hanna et al. 2011, p.1).
  22. 22. Literature Review 11 Harris and Rae (2010, p. 04) note that the internet has become known as ‘‘Web 2.0’’. In many ways it represents a return to its roots; the Internet started life as a peer-to-peer communication tool to exchange data among a number of users, allowing members of the scientific community to collaborate and share information easily. Today community sites such as TripAdvisor encourage users to review services that they have experienced for the benefit of other users who are considering their own possible purchases. Many people in the UK now buy a product or service directly because of comments posted on a community by other consumers. This trend is fundamentally changing the relationship between businesses and their customers, particularly as the information (which may of course be positive or negative) is displayed in a very public – indeed global – forum (Harris & Rae, 2010, p. 04) 2.2.2.1 Web 2.0 Competencies O’Reilly (2005) summarizes what he believes to be the core competencies of Web 2.0 companies: Services, not packaged software, with cost-effective scalability Control over unique, hard-to-recreate data sources that get richer as more people use them Trusting users as co-developers Harnessing collective intelligence Leveraging the long tail through customer self-service Software above the level of a single device Lightweight user interfaces, development models, and business models 2.3 Rise of the Social Media Divol et al. (2012) observe that social media is a relatively new topic, as a consequence the vast majority of executives have no idea how to harness social media`s power. Businesses are getting involved in social media in an attempt to increase sales, create brand awareness and or attempt to reach new customers.
  23. 23. Literature Review 12 Divol et al. (2012) highlight that executives certainly know what social media is. After all, if Facebook users constituted a country, it would be the world’s third largest, behind China and India. Executives can even claim to know what makes social media so potent: its ability to amplify word-of-mouth effects. Companies diligently establish Twitter feeds and branded Facebook pages, but few have a deep understanding of exactly how social media interacts with consumers to expand product and brand recognition, drive sales and profitability, and engender loyalty. Harris and Rae (2010) argue that online communities will play a key role in the future of marketing because they replace customer annoyance with engagement, and control of the content with collaboration. Harris and Rae also claim that prosperous businesses of the future will be those who embrace the social media and who see change as an opportunity. As social media usage has become an increasingly influential factor in our everyday life companies also see it as an attractive area to take advantage of. It is no secret that consumers increasingly go on line to discuss products and brands, seek advice and offer guidance. Yet it is often difficult to see where and how to influence these conversations, which take place across an ever-growing variety of platforms, among diverse and dispersed communities, and may occur either with lightning speed or over the course of months. (Divol et al. 2012) Social media is growing due to the advantages they offer consumers such as transparency, referrals, and ease of communication, and the empowerment they bring (Urban, 2004). This has left marketers scratching their heads as to how to react (Mangold & Faulds, 2009). The growing popularity of websites such as YouTube and Facebook demonstrates how the Internet is changing; users are no longer simply downloading static data, but are increasingly uploading and sharing content among themselves, leading to a proliferation of social networks and other user-generated content sites. Li and Bernoff (2008) refer to this fundamental transfer of power from institutions to individuals and communities as ‘‘the groundswell’’ and it forms the title of their thoughtful and thoroughly researched book on the topic. The authors’ predictions of significant change in marketing practice are supported by a number of respected authors such as Weber (2009).
  24. 24. Literature Review 13 The use of social media and other electronic communication is growing quickly with increasing numbers of social media platforms and applications, including blogs, social networking sites, video sites, and forums. Marketers are increasing their social media budgets. Marketers planned to allocate an average of 7.4% of their overall marketing budgets to social media in 2012 and expect this amount to increase to 19.5% by 2017, according to Business Poll carried out by the Duke University’ Fuqua School of Business poll of CMOs taken in February. This is a sign that social media continues to mature. As it does so, it is time for marketers to start using social media as a key marketing tool. Figure 2.3: Commonly used social media platforms by marketers Source: Stelzner (2013, p. 23) Social Media Marketing Industry Report. How marketers are using social media to grow their businesses As illustrated in figure. 2.3, Stelzner (2013, p. 23) reveals that Facebook, Twitter, LinkedIn, blogging and YouTube were the top five platforms used by marketers, with Facebook leading the pack. The top six have remained virtually the same since 2012. Shih and Shalett (2013) divulge that there are conversations taking place about companies or brands 24 hours a day, seven days a week in social media. Are you a part of these
  25. 25. Literature Review 14 conversations? Or are you hoping that if you don't hear them, they don't exist? Social media offers a variety of opportunities for brands to understand and participate in those conversations. While participating in social media is not without risk, not participating might prove to be the greater risk — especially to reputations. Figure 2.4: The most important social platform for marketers Source: Stelzner (2013, p. 23) Social Media Marketing Industry Report. How marketers are using social media to grow their businesses As illustrated in figure 2.4, nearly half of marketers (49%) chose Facebook as their most important platform, followed by LinkedIn (16%), blogging (14%) and then Twitter (12%). This chart clearly reveals Facebook is the powerhouse platform for marketers. Hanna et al. (2011) highlight what was noted by Reid Hoffman, co-founder of LinkedIn “the ability to leverage relationships embodied in social networks will become one of the most transformative uses of the Internet.” Hanna et al. (2011, p. 08) note that technology has transformed the traditional model of marketing communications. The rise in interactive digital media has catapulted company and consumer contact from a Web 1.0 passive model, to a Web 2.0 interactive model where consumers are simultaneously the initiators and recipients of information exchanges. The combination of both traditional and social mediums allows companies to develop integrated communication strategies to reach consumers on a myriad of platforms, enabling a wide sphere of influence.
  26. 26. Literature Review 15 2.4 Strategy 2.4.1 Strategy Definition Chandler (1962, p. 15) referred to strategy`s generic purpose as the “determination of the basic long-term goals of an enterprise and the adoption of courses of actions and the allocation of resources necessary to carry out these goals. Mintzberg (1978, p. 934) defines strategy as “a pattern in a stream of decisions”, Grant (1991, p. 114) states that strategy has been defined as “the match an organization makes between its internal resources and skills…and the opportunities and risks created by its external environment” while more recently McKeown (2013) argues that “strategy is about shaping the future as the attempt to provide the organization with a direction. More specifically within strategy content research, the individual organization approach defines the purpose of strategy as the matching of external market opportunities with internal firm competencies (Porter, 1991) At first one may think about strategy as a general concept surrounding all the company and as being controlled by the CEO. The most common way of thinking is to imagine the chief executive as the one deciding over what to do and then let employees do it. Strategy is a little bit more subtle and has to be seen as a tool enabling the firm to adapt to changes (Grant, 1991). 2.4.2 The role of Strategy Porter (1991, p. 95) argues that the reason why firms succeed or fail is perhaps the central question in strategy. It has preoccupied the strategy field since its inception four decades ago. (Porter, 1996, p. 62) points out that a company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both. Porter also affirms that competitive strategy is about being different. It means deliberately choosing a different set of activities does deliver a unique mix of value.
  27. 27. Literature Review 16 (Porter, 1996, p. 62) suggests that ultimately, all differences between companies in cost or price derive from the hundreds of activities required to create, produce, sell, and deliver their products or services, such as calling on new customers, assembling final products, and training employees. Martin (2013) insists that strategy is not planning – it is the making of an integrated set of choices that collectively position the firm in its industry so as to create sustainable advantage relative to competition and deliver superior financial returns. Grant (1991) specifies that numerous entrepreneurs can be pushed by the quest for creativity and not only the quest for profits. There are multitudes of ways to develop strategies; it is a dynamic process that changes and adapts itself as the external environment changes (Grant, 2010). The main role of strategy is to set directions for it to sail cohesively in its environment. As strategy sets directions it can also blind the company to potential threats and dangers (Mintzberg et al. 1998). Companies without a clear strategy are doomed to bankruptcy. It is like diving in a pool without making sure there is water in it. In our daily society where the product life cycle has been sharply shortened and where innovation governs companies a well-implemented strategy can lead to success. The quest for productivity, quality and speed has overtaken the management tools. The business environment has become unstable as well as more unpredictable which has led to a continuous quest for success (Grant, 1991). 2.5 Social Media Strategy A study conducted by The SMB Group found that one in five small businesses have no social media strategy. Without strategy or goals, a business is unable to determine whether or not they are gaining anything through their efforts, or simply wasting time. Those businesses without a strategy also reported being less satisfied with social media’s ability to generate new leads (SMB Group, 2012). Wilson et al. (2011, p. 23) point us that a global bank executive recently described a challenge for our times. It turns out that a customer who normally would qualify for the lowest level of service has an impressive 100,000 followers on Twitter. The bank is not doing much yet with social media and has no formula for adapting it to particular customers,
  28. 28. Literature Review 17 but the executive still wondered whether the customer’s “influence” might merit special treatment. It is the kind of perplexing question many companies face as they formulate their thinking about social media. To understand how businesses are approaching the challenge, Wilson et al. (2011, p. 23) analysed strategies and practices at more than 1,100 companies across several industries and continents, and conducted in-depth interviews with 70 executives who were leading social media initiatives. Their research revealed four distinct social media strategies, which depend on a company’s tolerance for uncertain outcomes and the level of results sought and they argue that organizations would be better served by focusing on one. These individual strategies are; the predictive practitioner, the creative experimenter, the social media champion and the social media transformer. The predictive practitioner - This approach confines usage to a specific area, such as customer service. It works well for businesses seeking to avoid uncertainty and to deliver results that can be measured with established tools. Wilson et al. (2011) describe the example of Clorox that to increase its virtual R&D capabilities, the social media team created Clorox Connects - a website that enables brainstorming with customers and suppliers. A typical query posted there: “We’re working on X product idea. What features would you like to see included?” To encourage participation, Clorox uses incentives borrowed from gaming The creative experimenter - Companies taking this approach embrace uncertainty, using small-scale tests to find ways to improve discrete functions and practices. They aim to learn by listening to customers and employees on platforms such as Twitter and Facebook. Sometimes they use proprietary technologies to conduct internal tests. The IT services giant EMC is a creative experimenter. It pays particular attention to how its 40,000 global employees use internal social media to locate needed expertise within the company. In an effort reduce the use of outside contractors, it created a test platform, called EMC/ONE, that helped employees network and connect on projects The social media champion - This involves large initiatives designed for predictable results. It may depend on close collaboration across multiple functions and levels and include external parties. Consider Ford’s 2009 Fiesta Movement Campaign, used to prepare for the car’s reintroduction in the U.S. It required joint efforts among marketing, communications,
  29. 29. Literature Review 18 and the C-suite. Wilson et al. (2011, p. 24) describe the example of how the company Ford decided to lend 100 Fiestas for six months, with the requirement that they had to write in social media about how they used the car. Within six months the drivers had posted more than 60,000 items, which garnered millions of clicks, including more than 4.3 million YouTube views, the $5 million campaign created a prelaunch brand awareness rate of 37% and generated 50,000 sales leads to new customers The social media transformer - This approach enables large-scale interactions that extend to external stakeholders, allowing companies to use the unexpected to improve the way they do business. In 2010 Cisco launched Integrated Workforce Experience (IWE), a social business platform designed to facilitate internal and external collaboration and decentralize decision making. It functions much like a Facebook “wall”: A real-time news feed provides updates on employees’ status and activities as well as information about relevant communities, business projects, and customer and partner interactions. Wilson et al. (2011) argue that with the clarification of social media strategies, companies and organizations can choose the social media approach that suits their business and which will help them to reach their objectives. It is also important that the employees can use the same social media platforms as the company does for its activities, however it is necessary to give the same message in all the social media used by the company (Kaplan & Haenlein, 2010). Mintzberg et al. (1998) underline the importance of planning and analysing for different strategy formation schools. The strategist bases his strategy on calculations and analysis of external and internal factors leading to possible disconnections between theory and reality. The difficulty for companies can be to accept social media as part of daily life. Martin (2013) highlights that there are still executives who do not understand the meaning of social media. Considering these problems, companies may encounter some difficulties while developing strategy with traditional methods that are formal analysis. Kaplan and Haenlein (2010) call attention to the importance for the company to have a social media strategy that remains flexible.
  30. 30. Literature Review 19 Kaplan and Haenlein (2010) present a classification system for Social Media in the article Users of the World, Unite! The Challenges and Opportunities of Social Media. The combination of two dimensions (self-presentation and self-disclosure) are shown in the table 1.1. Table 1.1 – Classification of Social Media Source: Kaplan’s and Haenlein (2010, p. 62) Article – Users of the World Connected Kaplan’s and Haenlein (2010, p. 62) suggest that with respect to social presence and media richness, applications such as collaborative projects (e.g., Wikipedia) and blogs score lowest, as they are often text-based and hence only allow for a relatively simple exchange. On the next level are content communities (e.g., YouTube) and social networking sites (e.g., Facebook) which, in addition to text-based communication, enable the sharing of pictures, videos, and other forms of media. On the highest level are virtual game and social worlds (e.g., World of Warcraft, Second Life), which try to replicate all dimensions of face-to-face interactions in a virtual environment. Kaplan and Haenlein (2010) propose that companies need a social media strategy before they start using social media since with a strategy they will be able to appraise what they need to take into account with their activity, and where companies should put their focus in social media. The company needs to carefully choose which social media platforms it wants to use to reach the right market segments. 2.6 What is Marketing Strategy The management guru Peter Drucker (2006) states “because the purpose of business is to create a customer, the business enterprise has two and only two basic functions: marketing and innovation.
  31. 31. Literature Review 20 There are a wide range of definitions of marketing strategy. Dibb et al. (2005) state that it is the selection of which marketing opportunities to pursue, analysis of target market(s) and the creation and maintenance of an appropriate marketing mix that will satisfy those people in the target market(s). The definition of Webster (1997) cited in Hooley et al. (2008, p. 08) is similar to the above: Marketing strategy seeks to develop effective response to changing market environments by defining market segments and developing and positioning product offerings for those target markets Cravens and Piercy (2009, p. 13) include value for the customer: Marketing strategy seeks to deliver superior customer value by combining the customer-influencing strategies of the business into a coordinated set of marketing actions Kotler (2008) explains that in the beginning, marketing was a fancy word for selling. Then came the "four Ps" of product, price, place and promotion, which got us to think about "integrating the marketing mix". The third stage of marketing's evolution was about segmentation, targeting and positioning. Previously, we thought we could mass-market to everyone, like Coca-Cola. Next came customer relationship management (CRM), where the ultimate aim was to "own the customer" rather than simply to make a sale. Now, we've entered the era of "co-marketing," in which we invite the customer to join us in designing our products and promotions. Lego has boosted its sales significantly by recruiting fans into its innovation effort; Dell has created popular products thanks to a dedicated website that corrals customer suggestions. Instead of saying 'We manage our customers,' now we co-manage with our customers," Every organization needs to set clear marketing objectives, and the major route to achieving organizational goals will depend on strategy.
  32. 32. Literature Review 21 2.7 Social Media and Marketing Weber (2009) notes that instead of continuing as broadcasters, marketers should become aggregators of customer communities. It is not about broadcasting marketing messages to an increasingly indifferent audience. Instead, when marketing to the social web marketers should participate in, organize and encourage social networks to which people want to belong, rather than talking at customers, marketers should talk with them. The task of aggregating customers is done in two ways: by providing compelling content on your web site and creating retail environments that customers want to visit, and by going out and participating in the public arena (Weber, 2009). Marketing to the social web is not only for the largest multinational corporations, it may be easier and more effective, for a relatively small or medium-size company to take maximum advantages of social media (Weber, 2009). Harris and Rae (2010) have looked at the role of social networking in establishing an integrated marketing strategy. They argue that online communities have evolved considerably since the early days of news groups and chat rooms and that businesses are recognising the potential of generic online social networking such as Facebook and MySpace for the development of their brands and to build relationships with key customers, but this a very recent trend and it is difficult at this stage to draw conclusions on how successful companies have been in using social networks in marketing. Harris and Rae (2010) conclude in their article ‘The online connection: transforming marketing strategy for small businesses’ that social networks will play a key role in the future of marketing; externally they can replace customer annoyance with engagement, and internally they help to transform the traditional focus on control with an open and collaborative approach that is more conducive to success in the modern business environment.
  33. 33. Literature Review 22 2.8 Value Creation Drucker (2006) argues that today, when top management is surveyed, their priorities in order are: finance, sales, production, management, legal and people. Missing from the list: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Aligned to Peter Drucker’s advice, (Sheth and Uslay, 2007) consider that the marketing goal is to deliver value for the organization. Prahalad and Ramaswamy (2004) conclude in their article “Co-creating unique value with customers” that the role of the customer in the industrial system has changed from isolated to connected, from unaware to informed, from passive to active. The impact of the connected, informed, and active consumer is manifested in the following ways: Information Access: With access to unprecedented amounts of information, knowledgeable consumer can make more informed decisions Global view: Consumers can also access information on firms, products, technologies, performance, prices, from around the world Networking: Individuals share ideas and feelings without regard of geographic or social barriers, Experimentation: Consumers can also use the internet to experiment with and develop products, especially digital ones Activism: As people learn, they can better discriminate when making choices, and, as they network, they embolden each other to act and speak out Prahalad and Ramaswamy (2004, p. 04) note that consumers have more choices that yield less satisfaction. Top management has more strategic options that yield less value. Companies can no longer act autonomously, designing products, developing production processes, crafting marketing message, and controlling sales channels with little or no interference from consumers. Consumers now seek to exercise their influence in every part of the business system.
  34. 34. Literature Review 23 2.9 This is What Social Media Can Do 2.9.1 Dell This situation shows the extent to which social media can be your best friend, or your enemy, depending on how corporations use social media. Jeff Jarvis is the owner of one of the most respected blogs about the internet and media. Dell sold to Mr Jarvis a faulty laptop and despite having paid for home service insurance, Mr Jarvis had to send his laptop back several times to fix it. Each time the laptop returned it had a new problem. Mr Jarvis contacted Dell several times and each time he had to start from the scratch and he never made progress. “It drove me mad” (Jarvis, 2009). On June 2005 Mr Jarvis decided to post on his blog; 'The machine is a lemon and the service is a lie', and 'Dell Sucks, Dell Lies. Put that in your Google and smoke it, Dell’ (Jarvis, 2009). Mr Jarvis blog received a lot of comments all regarding Dell and it did not take long before these negative comments appeared in front of the Dell homepage on Google search. Mr Jarvis wrote a letter directly to Michael George, Dell`s Chief Marketing Officer and Vice President for US Consumer Business, outlining what happened. Mr Jarvis received a call from the customer service offering him a full refund which he accepted. Once it happened, Dell started approaching social media differently, creating IdeaStorm, a site where customers could vote and discuss new concepts for the company based on what people wanted. Dell started making decisions based on what their online community felt was right. This actions resulted in happy customers that felt they were actually part of Dell`s brand. 2.9.2 PepsiCo PepsiCo has used social networks to gather customer insights via its promotions, which have led to the creation of new varieties of its Mountain Dew brand. Since 2008, the company has sold more than 36 million cases of them (Divol et al. 2012)
  35. 35. Literature Review 24 Consumers are adopting increasingly active roles in co-creating marketing content with companies and their respective brands. In turn, companies and organizations are looking to online social marketing programs and campaigns in an effort to reach consumers where they ‘live’ online. (Hanna et al. 2011, p. 1) 2.10 Conclusion This chapter began by outlining that the advances in web technologies have helped to make social media more accessible to internet users. The collaborative nature of these sites have attracted many businesses as they can engage with their consumer and use input to collect user generated content to help improve their products (Schenckerber, 2009). Companies diligently start using social media, but few have a deeper understanding of exactly how social media interacts with consumers to expand product and brand recognition, drive sales and profitability (Divol, et al. 2012). Web 2.0 has given businesses and ideal platform where they can increase brand awareness and build lasting relationships by using a pull medium rather than a traditional push marketing medium. The literature on social media strategy and marketing strategy was analyzed. The last part of the chapter focused on assessing literature on successful stories of organizations that have embarked on using social media.
  36. 36. 25 Chapter 3 RESEARCH METHODOLOGY
  37. 37. Research Methodology 26 ‘I keep six honest serving men, (they taught me all I knew) their names were, what, and why, and when, and how, and where and who’. - Rudyard Kipling 3.1 Introduction The purpose of this chapter is to identify the methodologies available to the researcher for this dissertation, outline the particular rationale to conduct primary research and to indicate the researcher’s awareness and consideration of all of the issues relating to the methodology and its relationship to the research question (Saunders et al, 2007). The real challenge in any research project is to turn data into a rigorous, theoretically informed analysis of a well-defined question or problem. Travers (2002) states that this challenge is underpinned by the fact that many researchers fail to distinguish properly between the terms ‘method’ and ‘methodology’. Methods are techniques used in collecting data, these will be discussed further in this chapter. Methodology however refers to ‘the assumptions you have as a researcher, which can be epistemological or political in character, or mean that you support the view of the world promoted by a particular tradition’ (Travers, 2002) Birley and Moreland (1998) suggest that it is helpful to look at the research methodology as a decision making process that is predicated upon sets of background assumptions or paradigms. Research philosophy is the way through which the researcher generates knowledge in the context of the research. The purpose of this chapter is to: Discuss the research philosophy in relation to other philosophies; Expound the research strategy, including the research methodologies adopted; Introduce the research instruments that I have developed and utilised in the pursuit to investigate of the research question. Saunders et al. (2007) outline a logical process for conducting research. They portray this visually in the form of a ‘Research Process Onion’ which can be seen in figure 3.1. This
  38. 38. Research Methodology 27 chapter will follow Saunders et al. (2007) research process which addresses four key stages, research philosophy, research approaches, research strategies and data collection methods. Following on from these areas, the chapter will then detail the research paradigm, specific area of research being studied and the subsequent methodology used in the study. Finally issues regarding the data collection and implementation of the research and the analysis will then be discussed. This chapter will outline the approach I used in the dissertation. The research question is then outlined followed by the sub-objectives and the context of the research. A number of research strategies are then discussed and the most suitable is then selected. This is followed by a discussion on deductive / inductive research, and qualitative / quantitative research approaches. The possible data collection method of semi structured interviews is then described along with the different choices that can be made through the research regarding selection of the companies and interviewees. Finally, the chapter discusses the limitations of the research approach, the issues of reliability, validity and the role of the researcher. 3.2 The Research Path The author adopted the ‘the research onion’ model of Saunders et al. (2007). Its structure is a useful metaphor for the research process as illustrated in figure 3.1.
  39. 39. Research Methodology 28 Figure 3.1: ‘The Research Onion’ Source: The Research Onion (Saunders et al. p. 102) The figure above shows the research process which was adopted to carry out the research. Each layer of the ‘onion’ is a stage in the process at which important decisions must be made. The research process consists of many layers, each linked to the successor in linear fashion. Saunders et al. (2007) outlined that the research decisions are made based on: Philosophies Approaches Strategies Choices Time Horizons Techniques and procedure.
  40. 40. Research Methodology 29 3.3 The Research Question A researcher spends a great deal of time refining a research idea. An initial definition of the research question is important in building theory from case studies according to Eisenhardt (1989) and that without a research question it is easy to become overwhelmed by the volumes of data. Saunders et al. (2007) insist on the need to identify a feasible research question and Sekaran (2003) states that the research question is a precise statement of the question that is to be investigated. The author selected the following research question based on his earlier reading for the research proposal: An Exploration into the impact of Social Media on Marketing Strategy The researcher has done the following: 1. Defined the specific question area 2. Reviewed the relevant literature 3. Pragmatically examined the feasibility to answer the question. The author ensured the research question did not lack feasibility regardless of how significant or researchable a question may be. The following considerations were taken into account: Time Availability of literature Facilities Experience of the researcher Lack of ability to conduct the research
  41. 41. Research Methodology 30 3.4 Research Objectives The Researcher has outlined three research objectives below. These objectives are explored in order to gain a better understanding of the research question which is outlined in the section 3.3. 1. Exploring how social media have affected marketing strategies employed by organizations Rationale: The objective is to establish whether or not the involvement of social media has had an effect in terms of marketing strategies. The researcher’s aim is to find what strategy was employed by organizations before the organization embarked on using social media and what is the current strategy with regards to social media. In order to explore the effect of social media on marketing strategy, it is crucial to first define what social media and strategy are and how social media strategists are using them. The literature review examines the technological advances that have given rise to these social media websites as well as how organizations are using them. In order to find out the impact of social media on marketing strategy, primary research in the form of semi-structured interviews will be conducted in which respondents will be questioned on these subjects. 2. Exploring how social media can add value to the marketing strategies Rationale: The objective is to explore how social media can add value to the marketing strategies. The researcher’s aim is to find out if the organizations have experienced significant increase in market share, growth or financial impact since they started using social media. In order to explore how social media can add value, the literature available was examined to find out how organizations use this form of media. Primary research in the form of semi- structured interviews will be conducted in which respondents will be questioned how their organisations add value to the marketing strategy with the use of social media.
  42. 42. Research Methodology 31 3. Exploring what is the impact of social media on marketing expenses Rationale: This objective is to explore what is the impact of social media on marketing expenses. The researcher’s aim is to find out whether or not the involvement of social media has had an effect in terms of reducing marketing expenses and to find out if the overall investment pays for itself. The internet has enabled companies to reach out worldwide, targeting consumers that they would not previously have been able to reach (Weber, 2010). 3.5 Research Philosophy A research philosophy is a belief about the way in which data about a phenomenon should be gathered, questioned and used. The term epistemology (what is known to be true) as opposed to doxology (what is believed to be true) encompasses the various philosophies of research approach. Research is important in both business and academic fields. However, misunderstandings arise and there is no general consensus as to how ‘research’ should actually be defined. Amaratunga et al. (2002) offer one reason for this, explaining that research means different things to different people. They also propose several features that appear to be consistent amongst the many definitions of research as follows: - Is a process of enquiry and investigation; - Is systematic and methodical; and - Research increases knowledge. Taking the above research process into account, it is then important to understand where the process of research should be initiated. Saunders et al. (2007) note that the first stage to be discussed is the research philosophy. To understand research philosophy and how it applies to the research study at hand, firstly the origins of knowledge development itself must be discussed. A philosophy is important because it “contains important assumptions about the way in which you view the world” (Saunders et al. 2007, p. 108) and these assumptions can define the research strategy and its methods.
  43. 43. Research Methodology 32 Bryman and Bell (2007, p. 30) argue: Values reflect either the personal beliefs or the feelings of a researcher. On the face of it, we would expect that social scientists should be value free and objective in. The research that simply reflected the personal biases of its practitioners could not be considered valid and scientific because it was bound up with the subjectivities of its practitioners. 3.5.1. Epistemology Epistemology is the study of knowledge. Epistemology concerns what constitutes acceptable knowledge in a field of study (Saunders et al. 2007; Bryman & Bell, 2007). Epistemology refers to how a researcher considers knowledge, or how a researcher can know reality or truth (Hogan et al. 2009). Within the Epistemology there are two opposing schools of thought on the philosophy of research, these being positivism and Interpretivism (Saunders et al. 2007) A central question in epistemology is: what must be added to true beliefs to convert them into knowledge? Epistemology usually restricts itself to questions about how we can ensure we are obtaining the special kind of knowledge called truth. A brief comparison between positivism and interpretivism follows in order to justify the chosen philosophy for this particular study which is interpretivism. 3.5.2 Positivism Saunders et al. (2007) note that researches that tend to favour the philosophical stance of the natural scientist will prefer “working with an observable social reality and that the end product of such research can be law-like generalisations similar to those produced by the physical and natural scientists”. They state that to generate a research strategy the researcher can use existing theory to develop hypotheses. These hypotheses will then be tested and confirmed as a whole part of it, or it will be refused which in turn will lead to the need to further development of the theory which then may be tested by further research. Around the end of the nineteenth century, social scientists began to adopt the positivist approach because it had been used with much success previously in many of the natural sciences (Hussey & Hussey, 1997, p. 52). One of the main components of the positivist approach is that research that is conducted is undertaken, as far as possible, in a value free
  44. 44. Research Methodology 33 way, as a result the research does not affect or alternatively get affected by the subject of the research being conducted (Hogan, et al. 2009). 3.5.3 Interpretivism Interpretivism is derived from epistemology and the emphasis is on conducting research among humans rather than objects (Fisher, 2007; Blumberg et al. 2008). Saunders et al. (2007, p. 106) agree with the statement above pointing out that interpretivism is an epistemology that advocates that it is necessary for the researcher to understand differences between humans in our role as social actors. This emphasises the difference between conducting research among people rather than objects such as trucks and computers. Saunders et al. (2007) explain that the term ‘social actors’ is quite significant in the interpretivism approach. The metaphor of the theatre suggests that as humans we play a part on the stage of human life. In theatrical productions, actors play a part which they interpret in a particular way (which may be their own or that of the director) and act out their part in accordance with this interpretation. In the same way we interpret our everyday social roles in accordance with the meaning we give to these roles. 3.5.4 Realism Realism is an epistemological position which relates to the essence that what the senses show us as reality is the truth: that objects have an existence independent of the human mind. The theory of realism is that there is a reality quite independent of the mind. In this sense, realism is opposed to idealism, the theory that only the mind and its contents exist. (Saunders et al. 2007). 3.5.5 Conclusion Saunders et al. (2007) argue that an interprevist perspective is highly appropriate in the case of business and management research, particularly in such fields as organisational behaviour, marketing and human resource management. For this reason, as the dissertation topic is related to business and management research, the author chose the interpretivism approach in his research process for the purpose of answering the research problem.
  45. 45. Research Methodology 34 The research conducted will seek to provide subjective data in order to gain some sort of meaning rather than trying to measure something. 3.6 The Research Approach It is necessary to examine the different research methods that are available when conducting research at this point. These approaches occupy the second layer of the ‘onion’ (Saunders et al. 2007). The research approach is concerned with trying to identify any characteristics that can and will influence the research design in some way (Hogan, et al. 2009). Saunders et al (2007) note that the research approach can either be deductive, where a theory is developed and hypothesis (or hypotheses) and design a research strategy to rest the hypothesis, or the approach may be inductive, where data needs to be collected and develop theory as a result of the data analysis. 3.6.1 Deductive Research Deduction refers to scientific testing of hypothesis, from which, information can be deduced. Saunders et al. (2007, p. 117) state that deduction involves the development of theory that is subjected to a rigorous test. Amaratunga et al. (2002) state that deduction is fundamental to the positivist tradition which centres upon atomist – that is, objects of experience are atomic, independent events. In addition, a further key factor of deduction is the ability to generalise findings that is, generalisation. Saunders et al. (2007, p. 117) reference Robson (2002) who describes a sequential list of five stages through which deductive research should follow: 1. deducing a hypothesis (a testable proposition about the relationship between two or more concepts or variables) from the theory;
  46. 46. Research Methodology 35 2. expressing the hypothesis in operational terms (that is, indicating exactly how the concepts or variables are to be measured), which propose a relationship between two specific concepts or variables; 3. testing this operational hypothesis (this will involve one or more of the strategies detailed in Chapter 5); 4. examining the specific outcome of the inquiry (it will either tend to confirm the theory or indicate the need for its modification); 5. if necessary, modifying the theory in the light of the findings. 3.6.2 Inductive Research The alternative to a deductive research approach is an inductive approach which relates to qualitative approaches. It differs from deduction in that theory is induced and is developed from primary data, rather than the opposite, where data is extracted from existing theory and then tested. In contrast with deduction, causation does not refer to regularity between separate things or events ‘but about what an object is likely to do and what it can do, and only derivatively what it will do in any particular situation’ (Amaratunga et al, 2002, p. 19). The data collected would need to be analysed by the researcher in order to make sense of it, and the subsequent results would form the basis of a theory. The concept of induction fundamentally centres upon understanding how humans interpret their social world (Saunders et al, 2007). Developing greater understanding and gaining insight into human behaviour using techniques other than those with numerical tendencies can prove beneficial for theory production and development. Saunders et al. (2007, p. 119) believe that induction places an emphasis on: Its tendency to construct a rigid methodology that does not permit alternative explanations of what is going wrong Research using an inductive approach is likely to be particularly concerned with the context in which such events were taking place.
  47. 47. Research Methodology 36 3.6.3 Conclusion Social media is a relatively new topic and according to Creswell (2003) if there is not much existing literature on a topic because it is a relatively new phenomenon, it is more appropriate to work inductively in order to reflect upon what theoretical themes the data is suggesting. Due to the recent nature of social media, the author decided that the inductive approach would be more appropriate to explore the research question. 3.7 Research Design The following section outlines the design process undertaken. 3.7.1 Secondary Research Secondary data is information that has already been collected and is usually available in published or electronic form. Secondary data has often been collected, analysed, and organized with a specific purpose in mind, so it may have limited applications to specific market research. 3.7.2 Primary Research Primary research involves gathering data for a specific research task. It is based on data that has not been gathered beforehand. Primary research can be either qualitative or quantitative. Primary research can be used to explore a market and can help develop the hypotheses or research questions that must be answered by further research. Primary data can be either in the form of quantitative data or qualitative data, depending on which is most suitable form for the research question concerned (Hanson & Grimmer, 2007). Saunders et al (2007) argue that the advantage of primary research is that the researcher can address specific research issues as well as having a high degree of control over how the information is collected. The disadvantages are that it can be time consuming in preparing
  48. 48. Research Methodology 37 and analysing the data and in some cases it could be out of date by the time the research is concluded. 3.7.3 Ethnography Saunders et al. (2007, p. 142) note that ethnography is rooted firmly in the inductive approach. It emanates from the field of anthropology. The purpose is to describe and explain the social world the research subjects inhabit in the way in which they would describe and explain it. This is very time consuming research and it takes place over an extensive period as the researcher needs to immerse in the social world being researched as completely as possible. Ethnography is not a prevailing research strategy in business, however it can be very helpful to get a better understanding of those involved in the research or of a particular context. 3.7.4 Netnography Netnography is a branch of Ethnography that analyses the free behaviour of individuals on the internet (O’Donohoe, 2010). Jiyao and Reynolds (2010) argue that it is the application of ethnography to a computer-mediated environment with the epistemological remit largely unchanged. Netnography is faster, simpler, timelier and much less expensive than traditional ethnography because it is unelicited, it is more naturalistic and unobtrusive than focus groups, surveys, or interviews (Kozinets, 2006). Netnography provides information on the symbolism, meanings, and consumption patterns or online communities consumption unrelated but online sociability based on the exchange of information 3.7.5 Qualitative Research According to Porter (1996), some authors have been reluctant to define the term ‘qualitative’. Generally however, it is accepted that the qualitative paradigm is primarily concerned with understanding. Qualitative methodologies are shaped in order to encapsulate a view of the phenomenon within its own context. The goal is to gain insight and further understanding from a humanistic perspective, of the phenomenon being studied.
  49. 49. Research Methodology 38 Porter (1996) argues however, that the distinction between the two approaches is not clear and to simplify them would be to ignore specifically the complexity of the qualitative approach. He states that there are two types of qualitative scholars. One type rejects the scientific approach as a means for studying human behaviour, the other accepts the basic goals of science but rejects some of its procedures. Qualitative research is primarily concerned with gaining direct experience with a setting and is intrinsically an exploratory endeavor (May, 2002). Qualitative data refers to all non- numeric data or data that have not been quantified and can be product of all research strategies (Hogan et al. 2009). Qualitative research includes in-depth and semi-structured interview, focus groups and participant observations to explore the research question. Qualitative research is an exploratory study as it aims to seek new insights and ask questions to assess phenomena. (Saunders et al. 2007). Kvale (1996) also notes that a qualitative research interview seeks to cover both factual and a meaning level, though it is usually more difficult to interview on a meaning level. The author has selected qualitative analysis by means of in-depth interviews to carry out the research methodology. This method will enable the researcher to develop own thoughts and interpretations. The author wanted to be able to interpret the answers collected during the interviews and found the qualitative approach most suitable to the study. (Kozinets, 2002) explains that qualitative methods are particularly useful for revealing the rich symbolic world that underlies needs, desires, meanings and choice. Interviews when conducted in comfortable ways are likely to be more personal as well as fruitful. Saunders et al. (2007, p. 472) describe qualitative data as: Based on meanings expressed through words Collection results in non-standardised data requiring classification into categories Analysis conducted through the use of conceptualisation
  50. 50. Research Methodology 39 3.7.6 Conclusion Qualitative research was chosen as the most suitable form of research design for the exploration of the impact of social media on marketing strategy as the research was exploratory in nature as well as there being time constraints involved. The interview approach takes seriously that the notion that people are experts on their own experience and so best able to report how they experienced a particular event or phenomenon. If a range of people are interviewed about the same phenomenon there will inevitably be a range of perspectives (Darlington & Scott, 2002). 3.8 Data collection Method Data collection is an important aspect of any type of research study. Inaccurate data collection can impact the outcome of a study and as a consequence lead to invalid results When searching for information to solve a problem, some kind of data collection needs to be done. Questionnaires, interviews, sampling, survey, case studies etc., are some of the data collection methods that can be used by a researcher, other methods such as observation, focus groups and secondary data are indeed used but perhaps to a lesser degree (Saunders et al, 2007). This section will briefly review the methods available to the researcher, subsequently justification will be given for the specific method chosen and this will then be discussed in detail. The author rejected group interviews and focus groups because he was not exploring a single theme or collective attitude (Lancaster, 2005). One to one interviews were selected as it offered the best way of accomplishing the research objectives. They can be formal and structured or informal and unstructured, or they can be halfway between (Saunders et al. 2007)
  51. 51. Research Methodology 40 3.8.1 Semi Structured Interview Process Face-to-face interviews have the strength that researchers can ask follow-up questions and individuals are able to say much more in a face-to-face interview than in an email, so researchers will get more information from a face-to-face interview. The author used semi-structured interviews, as the author wanted the interviews to follow a framework and at the same time being able to adapt the questions. In semi-structured interviews the researcher will have a list of themes and questions to be covered. It was also the most appropriate collection tool to assess the opinion of managers on this process which is an important objective of this research project. In addition to this, the questions in this research project are open ended and qualitative interviews are best suited to open ended questions (Saunters et al, 2007). One of the strengths of the qualitative interview process is that it allows the researcher to probe answers, and where it is required, to get the interviewee to explain, or build on their responses (Saunders et al, 2007). Four interviews were conducted face-to-face and each interview was transcribed as shown in appendix F and analysed later on. Each of the interviews was developed to last not more than 30 minutes considering the difficulty to reach the respondents during office hours. 3.8.1.1 Depth Interviews Depth interviews are used when it is important that there is no ‘contamination’ of respondents’ views, as can happen in a focus group scenario (Lehmann et al, 1998). The depth interview is also unstructured; there is a guide or ‘theme sheet’ but no structured questions as in a questionnaire. Unlike a focus group there is also enough freedom for the respondent to steer the conversation. According to Hague (2002), the most important element for the researcher in a depth interview is listening, ‘to listen carefully to a respondent is to show interest and this is encouragement to say more. Furthermore, only through listening will an understanding be built up from which there could be a deeper line of questioning – the very substance of depth interviewing’.
  52. 52. Research Methodology 41 3.8.2 The Sample The research samples are companies currently active in social media located in Ireland. The interviewees were contacted through LinkedIn as illustrated in appendix A, based on their area of responsibility which is related to the researcher’s topic. Participants held prominent positions in their respective organizations and therefore were informed to answer any questions. 3.8.3 The Choice of the Companies The author selection was based on the criteria of companies being active on social media. The person in charge of social media and or marketing strategy was targeted as illustrated in appendix D. 3.8.4 Candidate Selection According to Yin (1984), the basis of selection of people for interview should be done so on the theoretical underpinning of the study. The primary source of interview data must be people in roles that are actively involved with, and have direct experience of the phenomenon being studied (Blaike, 1993). For the purpose of this study there was a need to identify managers that have experience in social media and marketing. The focus on the candidate selection was to identify candidates with extensive knowledge and experience in their roles. The researcher approached 15 potential candidates and got the confirmation of four of them. All candidates were located in Ireland spread across a number of different industry sectors. In order to prevent a bias on the part of the interviewees only the broad topic of the research was mentioned rather than the specific details. As requested by two of the interviewees, their respective company name have been kept confidential. 3.8.5 Data Required An interview guide was developed for the interviews in order to guide them and ensure that every topic was covered in each separate interview. The four candidates identified as
  53. 53. Research Methodology 42 interviewees for the semi structured interview process were provided by email with an outline of themes in the research to be asked prior to the interviews as illustrated in appendix C. As the interviews were semi-structured in nature it allowed the interviewee to be probed on responses given to provide a greater understanding of their meaning. The following topics were covered during the interviews: Social Media Strategy Marketing Strategy Social Media Marketing Expenses Value of Social Media 3.8.6 Structure of the interviews The interviews started by explaining to the interviewee the purpose of the interview, format and how long the interview would approximately take. The author allowed the interviewee to clarify any doubts they had, meantime laptop and IPhone were prepared to record the interviews. The main concern of the researcher was to understand the real meaning of what the interviewee said. Kvale (1996) notes: The qualitative research interview seeks to describe and get the meanings of the central themes in the life of the world of the subjects. The main task in interviewing is to understand the meaning of what the interviews say. In order to conduct the interviews the researcher prepared a questionnaire as shown in appendix E, based on the research question and semi structure interview was use as the author wanted the interviewees to follow a framework and at the same time being able to adapt the questions to their answers. 3.8.7 Limitations of Methodology Chapter three outlined the research process and the questions that need to be accessed when deciding on research questions, objectives, deciding on a research method and the forms of
  54. 54. Research Methodology 43 the research to be conducted. The approach using qualitative data through interviews was selected. Four organizations were identified for interviews which will be analysed using comparative analysis in the next chapter It is important for the researcher to acknowledge the limitations of the methodology being employed in this study. There are a number of weaknesses associated with a qualitative approach and interviews in particular as a method of data collection. These include flexibility where the respondent provided the answer which they believe the interviewer is seeking, bias resulting from poor questions or in relation to the respondents answer, poor respondent recall, possible respondent discomfort in sharing sensitive information, the possible underestimation and the dangers of becoming over dependent on one respondent (Darlington & Scott, 2002; Yin, 2003). In order to overcome these weaknesses, the researcher circulated the key themes of the interview questions in advance to the interviewees to give them an opportunity to familiarize themselves with the research. The researcher had also reviewed a considerable amount of literature prior to the interviews, to ensure focus on the research question and the other key points in the interview. There also weaknesses due to the small number of interviewees in the research. This was due to time constraints and the difficulty of access. Considering the limited time and the resources available to this study, it was decided that semi structured interviewees was the most appropriate approach. 3.8.8 The role of the Researcher The researcher biases are prejudices and value judgments which the researcher holds but tends not to be aware of. Researchers may, unknown to themselves, impose their own belief or frame of reference on the research process and this can be lead to distortions in the research (Holloway, 1997). It is very difficult for the researcher to avoid or eliminate researcher bias completely especially in qualitative research. Interviews are a subjective technique and therefore the risk of bias is quite high (Darlington & Scott, 2002).
  55. 55. Research Methodology 44 3.9 Data Preparation and Analysis For analysis of the data in this study the researcher has approached the process from an inductive position. The researcher has used existing theory to shape the approach to the qualitative research process and to aspects of the data analysis (Saunders et al, 2007). The author followed Yin’s (2003) idea where existing theory was used to formulate the research question and objectives and these theoretical propositions were used to create a rough framework to analyze the data. Therefore the research analysis follows an inductive approach. Data preparation includes the editing and transcription of all data collected during the semi- structured interview process. The preparation is a similar process for both qualitative and quantitative data. As the researcher chose qualitative data to answer the research question, it needed to be collected in a non-standardized way to capture the richness and fullness associated with it (Saunders et al. 2007). All interviews conducted were recorded and additional notes were taken on any key points mentioned. The recording of the interview was played back to be able to carry out further analysis. The data was analyzed in order to get meaning from the information collected. The activities listed below detailed by Saunders et al. (2007, p. 479) were followed in order to perform a qualitative analysis: Categorisation - It involves classifying data into meaningful categories, these categories are in effect codes or labels that the researcher will use to group the data ‘Unitising’ data – It is the process to attach relevant portions of data to the appropriate categories that have been advised. Recognising relationships and developing the categories - Reorganising data searching for key themes and patterns or relationships. Developing and testing theories to reach conclusions. Firstly patterns and relationships are established, hypotheses are developed with the aim of testing them against the data
  56. 56. Research Methodology 45 3.9.1 Categorization Once the transcribing was finalised the author conducted the first activity of classifying the data into meaningful categories. These categories are in effect codes or labels that were used to group the data. Categories provide the researcher with an emergent structure that is relevant to the research project to organise and analyse the data further. The identification of these categories will be guided by the purpose of the research as expressed through the research question and objectives. Strauss and Corbin (1998) are mentioned by Saunders et al. (2007, p. 480) who suggest that there are three main sources to derive names for these categories: Utilise terms that emerge from the data collected Base them on the actual terms used by the researcher participants Base them on terms used in existing theory and the literature. 3.9.2 Utilising Data Following the development of the categories, the author attached relevant portions of data to the appropriate category. For this research, the data was mainly words, a line of a transcript or a complete paragraph of a transcript. The researcher followed Saunders et al. (2007, p. 480) transferring and field to end up with piles of related units of data, it was essential to label each unit of data carefully to know its precise source. 3.9.3 Recognizing Relationships and Developing Categories As the researcher continued to analyse the data key themes and relationships in the rearranged data began to developed (Saunders et al. 2007). The author decided to subdivide and integrate categories as way to focus on the analysis.
  57. 57. Research Methodology 46 3.9.4 Developing and Testing Hypothesis Saunders et al (2007) note that as the researcher seeks to reveal patterns within the data and to recognise relationships between categories, you will be able to develop hypotheses in order to test these. Hypothesis is defined as ‘a testable proposition’. The appearance of an apparent relationship or connection between categories will need to be tested to be able to conclude that there is an actual relationship. 3.9.5 Reliability and Validity The concept of reliability has to do with how well the research project has been carried out (Blaxter et al. 2006). Easterby-Smith et al. (2002, p. 53) refers reliability to the extent to which data collection techniques or analysis procedures will yield consistent findings. It can be assessed by posing the following three questions (as cited in Saunders et al. (2007) Will the measures yield the same results on other occasions? Will similar observations be reached by other observers? Is there transparency in how sense was made from the raw data? Creswell (2003) describes reliability as the attempts to minimize errors in the research. In this study all of the interviews were conducted using the same framework, the same theme and a consistent interview technique to ensure consistency and dependability. Since the primary data is based on interviews the researcher is fully aware about the subjective answers being possibly interpreted in several ways. The researcher has been trying therefore to interpret the answers as they have been written and not adjust them to his own thesis. Saunders et al (2007, p. 150) note that validity is concerned with whether the findings are really about what they appear to be about. Is the relationship between two variables a causal relationship? Validity has to do with whether the methods, approaches, and techniques actually relate to, or measure, the issues that are being explored in the research (Blaxter et al, 2006).
  58. 58. Research Methodology 47 3.10 Conclusion The objective of this chapter was to indicate that the researcher has understood the issues regarding the methodology and its relationship to the research objectives. This chapter began with a review of the most appropriate philosophical paradigms to do this research, and subsequently continued by detailing the chosen methodology of interpretivism. The following penultimate chapter will present the main analysis and findings.
  59. 59. 48 Chapter 4 ANALYSIS AND FINDINGS
  60. 60. Analysis and Findings 49 Data analysis is not an end in itself…its purpose is to produce information that will help address the problem at hand’. - Malhotra 1999, p.434 4.1 Introduction The next step in the study is the task of analyzing the data that has been collected from the primary research, during the course of the semi-structured interviews as well as the ethnography research. In this chapter the analysis and findings will be presented. It reports on the facts that the researcher has discovered (Saunders et al. 2007). In order to explore the themes that emerged from both the literature review and industry reviews, the author asked questions revolving around their use of social media. While it must be stated that the sample used could not be considered representative of the population as a whole, the following insights have been gained. The interviews were semi-structured in nature, the questions were varied depending on each participant`s responses. According to Malhotra (1999), data analysis and preparation is the penultimate stage in the market research process. It is important that meaningful conclusions can be drawn from the data in order for appropriate decisions to be made. Aaker et al. (2001) note that the purpose of data collection and analysis is to convert the data into ‘defensible, actionable sets of conclusions and reports’. The analysis will be broken into sections. The first section will list the research questions and the interviewee`s point of view for that specific question and linkages will be made between the findings and the literature review. The results from the interviews will be analyzed and the data is presented herein and organized around three research questions, followed by the presentation of additional thematic material. This will be followed by new findings that emerged during the four interviews. The new findings will be presented as emergent themes which constitute new knowledge outside the main research objectives.
  61. 61. Analysis and Findings 50 4.2 Participants Four people were interviewed ranging from Managers to Senior Directors. Interviewees represented males and females populations. Interviews were conducted in the months of July and August of 2013 and they lasted between 25 and 50 minutes. 4.3 Coding Gorden (1992) states that interviews have some specific purpose, so it is necessary to store the responses in a relevant, usable, and accessible form to fulfill this purpose. Everyone who uses the results of interviews needs some way to code the results so that they can be used without listening to the whole recording or reading the whole transcript. As explained in section 3.9 a coding was created and applied by classifying data into meaningful categories, these categories are in effect codes or labels that the author used to group the data. It was followed by the process of attaching relevant portions of data to the appropriate category and reorganizing the data for key themes and patterns relationships. 4.3.1 Coding Categories Gorden (1992) notes that to perform the task of summarizing, condensing, and storing a concrete example that falls into a certain coding category, we assign an abstract symbol to represent any case in that category. Thus, each category has its own symbolic label, or code. This label may be an abbreviation, a number, a letter or anything else that is convenient for the process of summarizing, analyzing, storing or retrieving the information. The coding categories were defined as stated by Saunders et al. (2007, p. 479). It can be seen in table 4.1 which shows the coding categories defined and assigned to every research objective. Appendix G shows the coding category applied for all four interviews.

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