Opportunities and Risks Encountered by International Companies When They Use Social Media as a Strategic Marketing Instrument

Opportunities and Risks encountered by international companies when they use Social Media as a strategic marketing instrument

From:

Benedikt Bartels – 24675

Marvin André Bénet – 24422

Written within the lecture

Prof. Dr. Cordes:

BWL-Probleme

Winter-Semester 2017/2018

Address of Author 1:

Street: Lange Rade 26

Zip-code, City: 30627 Hannover

Tel.: 015780366178

Address of Author 2:

Street: Botheler Weg 23

Zip-code, City: 27383 Scheeßel

Tel.: 01717468654

Table of contents

1. Introduction

1. Company communication

1. Definition
2. History and Development

1. Social Media

1. Definition
2. History and Development
3. Platforms
4. Application
5. Strategy

1. What makes a company international
2. Opportunities of Social Media Marketing
3. Risks of Social Media Marketing
4. Best Practice
5. Worst Practice
6. Conclusion
7. List of references

1. Introduction

Over the past decade, Social Media has become one of the most popular modes of communication in Western society. There is still a lot of unused potential for companies when it comes to using Social Media as a marketing tool. However, this can only be accomplished if it is systematically implemented into the company’s communication strategy. Prior to the existence of Social Media, the internet only served as a one-sided medium that purely displayed information. Nowadays, it is significantly more versatile than that. Social Media Platforms offer ways of quick and easy communication between like-minded people all over the world. In addition to that, it vastly enhances the user’s ability to share his experiences which in turn gives other users the opportunity to benefit from them.

As a result of the rise of this technology, a new discipline for companies called Social Media Marketing was created which describes the process of advertising products or services to a broad audience that would be difficult to reach using traditional promotion channels such as the television. These campaigns primarily target collective communities rather than individuals. Communities of any kind and size are present in the social web and therefore Social Media marketers have to adapt their marketing strategies to each of those communities in order to advertise their products and services in an efficient manner. It is therefore necessary to listen to each individual community and build a relationship with it. This not only includes listening, but extends to the consideration of feedback, adequate responses to questions and also involves providing insight into your products or your company itself (Weinberg, 2010, p.4).  If all of these factors are put into practice efficiently, Social Media Marketing offers a numerous amount of opportunities, but also poses certain risks, both of which will be discussed in depth throughout the core of this paper.  

1.1.1 Company Communication - Definition

In order to understand Social Media Marketing, you first have to understand Company Communication, since it is the basis for all communication towards stakeholders. Now, Social Media Marketing is simply an advancement to the traditional Company Communication that existed long before Social Media. The term Company Communication is a multidimensional concept, meaning that its definition varies between perspectives. For instance, Business Sciences define the term in a different way than sociology. Additionally, as with all scientific definitions, it has changed throughout history.

The popular and well-regarded communication scientist Ansgar Zerfaß stated that Company Communication includes all communicative actions of the members of the organization  that contribute to a profit-oriented company (M. Hillmann, 2017).

Communication scientist Dieter Georg Herbst defined the term in more detail: “The term Company Communication stands for the systematic and long-term shaping of communication between the company and its internal and external stakeholders with the goal of being aware and developing a powerful and unique image [...]” (M. Hillmann, 2017,  quoted from Dieter Georg Herbst, 2003).

Another expert understands Company Communication as a mutual relationship: “[...]PR is the art and science of developing meaningful relationships with the public necessary for continuing the work of an organization” (M. Hillmann, 2017, quoted from Rick E. Borchelt & Kristian H. Nielsen, 2014).

Various other definitions of the same concept exist, each emphasizing different aspects. However the core idea remains the same throughout all of them: Company Communication means systematically building a relationship with the stakeholders in order to make them prefer your company over another.

1.1.2 History and Development

Throughout the years, Company Communication has undergone various different developmental stages. From initially being unsystematic and spontaneous, it has now become fully integrated into a company’s organizational structure. Company Communication has its origin in the early 20th century. President Theodore Roosevelt as well as his relative and successor Franklin D. Roosevelt used media attention to publicly cover their actions. For example, F.D. Roosevelt hosted the first presidential press conference in 1933 and thereby entered new communicative territory (L. Steinke, 2015, S.6).

One of the main founders of public relations was Edward Bernays who tried to utilize political propaganda to influence consumer decisions and political opinions. These actions were almost exclusively utilized in emergency situations. Since the term “Propaganda” is very negatively connoted, Bernays used the term “Public Relations” instead, which is still used nowadays. He implemented his work into a couple of different companies, such as, for instance, the American Tobacco Company. During the 1920’s it was socially unacceptable for a woman to smoke. He intended to break that taboo. In order to accomplish this, he hired a group of feminists to smoke during the traditional Easter-Parade and called media attention to it. The following day, photos and news articles of this event were published and as a result of that, the cigarette became a symbol of the emancipated woman and the American Tobacco Company consequently experienced a huge increase in sales (M. Hillmann, 2017, W. Lotter, 2009, S. 20).