Managing Social Media and Consumerism

The Grapevine Effect in Competitive Markets

. Rajagopal

• Publisher: Palgrave Macmillan
• Year: 2013
• Print ISBN: 9781137281913
• eBook ISBN: 9781137281920
• Topic: Business
• Subtopic: Business General
• Index: Business

Categorically reviews the theories of communication, best practices in social media and previous research, and analyzes the corporate involvement towards strategic and tactical stewardship in serving customer-centric business requirements.

Part I
Evolution of Business Communication

1

Shifts in Marketing Communication

Communication is the process whereby a concept is shared between two living things. It can occur as a gesture, sound, or a visual in the form of pictures or print. Some of the first forms of visual communication came in the form of pictographs. People conveyed stories, histories, or instructions through a series of illustrations, usually drawn on the walls of caves. The second stage of written communication appeared as crude alphabets, which were used to create a written language. Mobility of communication also occurred at this time, with writing being found on clay, wax, and tree bark. The next leap was the printing press during the fifteenth century, followed by the tremendous technological advancement of using air waves and electronic signals such as radio and telephone.

At every stage of communication development, business practices also developed. The advent of common alphabets and a written language meant that craftsmen could order raw materials from previously unattainable sources. Consumers living in one location could order products from businesses located elsewhere, without having to travel there in person. Invoices could be written and paid, and purchase orders could be sent. One could even surmise that international business practices began around this time. Since exploration was taking place, and wonderful new things like spices and fabrics were being brought back home, perhaps now written business communication made it possible for vendors to offer their high-end customers the latest discoveries.

Business communication involves two parties exchanging ideas to advance a commercial enterprise, whether it’s two people on a shop floor making a product or two companies entering a merger. Like any interaction, business communication must deal with disruptions. Technological innovations have presented solutions and obstacles to the communication process. Business communication has evolved in response to overcoming the obstacles, especially as each solution presents the potential for a new set of challenges. Earlier, during the Industrial Revolution, corporate communications typically flew one way, with executive leadership pushing messages down through management layers and eventually to line workers, who were expected to simply comply. Management didn’t even need to directly carry the message: secretaries or stenographers operated the typewriter, and the workforce read the notices posted on bulletin boards. Faster, lower-cost presses and the rise of unions gave low-line labor a voice, which it used to broadcast its feedback to management, whether the leaders wanted to hear it or not.

With innovations in technology, communication methods have improved drastically in recent times. Phone and web conferencing are now extremely effective modes of communication and companies are using them with fruitful results. Malaysia has an array of corporate firms operating across different sectors. Apart from local business entities, there are multinational companies (MNC) like Citibank, Dell, Accenture, and Ernst and Young. Thus, the need for effective communication systems is on the rise. In order to collaborate efficiently with multiple offices globally and locally, these firms rely on phone and web conferencing for effective communication. Conference calls by audio or web are easily accessible and can be conducted regardless of physical location. As travel expenses rise, this method of collaboration is an appropriate choice to save money and time. Moreover, such methods offer the major advantage of working from any location. Professionals can collaborate with team members from anywhere and discuss various projects with the help of this communication tool. By making the switch to audio conferencing, many employees are able to save precious time. Even though there are multiple modes of transportation to get to meeting venues, a considerable amount of traveling time needs to be provisioned for. Along with time spent in traveling to transportation hubs like train stations or airports, there are check-in and immigration formalities, which may be taxable. Thus, online meetings are gaining popularity among companies as they can save a lot of time and money, thereby improving savings and productivity.

The effect of interpersonal communications contributes significantly to business operations and needs to be viewed from a human behavior standpoint. Real communication occurs when one listens to another person’s viewpoint with empathic understanding. It is possible to facilitate the achievement of this communication breakthrough by summarizing the speaker’s thoughts and feelings to his or her satisfaction before presenting a rebuttal. This procedure leads to the reduction of defensiveness and gradual achievement of mutual communication (Rogers and Roethlisberger, 1991). The communication strategies within a firm and with market players outside the corporate business environment need to be clearly distinguished by firms. A single pattern of communication is not fit for communicating with subjects within the firm and outside. Managing internal organizational processes and external market competitiveness often requires a customized communication strategy. The major forces that act as communication drivers for in-house communication within an organization include employee motivation and perceptions, socio-cultural norms, and organizational structures reflecting workforce structure and teams. Firms may develop effective communication strategies to create an organizational culture that supports prohibitions and promotes communication ambassadors in the market for strengthening the social and cultural impacts in a marketplace (Sussman, 2008).

Many firms have adopted customer-centric marketing strategies to gain competitive advantage in the global marketplace, and accordingly these firms have also modified their communication strategies to appeal to and stimulate all market players, including consumers. However, despite the general consensus that co-creation of communication with customers is beneficial, there is lack of agreement regarding how and why (Witell et al., 2011). Products and services marketing firms contend that co-creating marketing communications with customers for disseminating innovation is a foundational part of modern marketing, and co-creation involves shared observations and values on communication. It has been argued that well-informed, networked, empowered, and active consumers are increasingly co-creating value with the firm. However, the specific actions and behaviors that make up co-creation need to be fully addressed by the emerging firms as the process of communication and socially rich interactions with customers is one of the determinants for product success (Prahalad and Ramaswamy, 2004).

The value of a market communication is always contextually specific and is determined by the customer or the beneficiary. The effects of the market communication depend much on the communicators and responders. Therefore, communication is a perspective of value creation and virtually effective in driving the consumer perceptions of a particular company or business. The customer-centric strategies define co-production and co-creation as phenomena that are key to developing integrated marketing communication. In other words, how companies deal with their customers through customer participation in the joint creation of communication value needs to be understood by the firms (Vargo and Lusch, 2004).

There has been considerable focus on how external communication—advertising, public relations, etc.—helps corporations to build a corporate image to differentiate themselves from competitors in an increasingly crowded marketplace. The corporate image is an important indicator for the stakeholders to perform business transactions with the organization (Schuler, 2004). Internal communication merits close attention as employees may be the most important audience for a company’s organizational communication and corporate branding effort. Indeed, employees are considered one of the most trusted information sources about an organization (Dortok, 2006). This is because they embody the corporate brand and the interactions between them and external stakeholders communicate the brand’s values as much as (if not more than) traditional marketing communications. The synergy between corporate values, employees’ effective enactment of these values, and customers’ appreciation of these is critical to the success of a corporate brand. In fact, it is precisely the interactions between the value-providing behavior of a company’s employees and the value-seeking behavior of customers that sustain ongoing communications between internal and external shareholders (de Chernatony, 2002).

As we move from the simple dyadic case to more complex multi-actor or collective contexts, however, it is not entirely clear that this sort of deep, historical, or “thick” interpersonal trust will necessarily generalize readily or fully to a larger aggregate or collection of interdependent social actors. In such collective contexts, individuals may be just as deeply interdependent with, and dependent on, other people, but they are unlikely to have the requisite detailed, personal knowledge of each other that provides the usual foundation for interpersonal trust. Instead, they must interact with myriad others, often on the basis of scant customized information, transient goals, infrequent contact, and only superficial familiarity (Kramer, 2010). Recognizing this conceptual chasm between interpersonal and collective forms of trust entails a prediction about the behavior of an independent actor (Putnam, 1993). In small, close-knit communities, this prediction is “thick trust”, that is, a belief that rests on intimate familiarity with this individual. The growth of business communication sources over the past has been exhibited in Figure 1.1.

Figure 1.1 Chronology of growth in business communication

In the pre-medieval period interpersonal communication was used as a principal tool to communicate business messages, as illustrated in Figure 1.1. Egyptians used papyrus, a thick paper-like material produced from the pith of the papyrus plant, to make sales messages and wall posters. Commercial messages and political campaign displays have been found in the ruins of Pompeii and ancient Arabia. Wall or rock painting for commercial advertising is another manifestation of an ancient advertising form, which is present to this day in many parts of Asia, Africa, and South America. The towns and cities of the Middle Ages began to grow, but literacy levels remained low. However, as education became more widespread and printing technologies improved, advertising expanded to include handbills. As the economy expanded during the nineteenth century, advertising grew with it. In the United States, this eventually led to the growth of mail-order advertising. Modern advertising was created with the innovative techniques used in tobacco advertising beginning in the 1920s.

Printed communications served both consumers and business owners well, but when the radio came into use at the end of the nineteenth century it revolutionized business communication once again. Now the products and services of every business could be marketed on the basis of mass communication. Once a household had a radio, broadcasts could reach farther than any newspaper or catalog. And it was instant; as soon as the message was spoken on the air, the word was out. Print advertisements could sometimes take weeks or months for a response. Many entrepreneurs who saw the potential in radio became hugely successful.

Once radio took off, the telephone and television were not far behind. Of course, at first the telephone was not used for advertising in business, but it was more of a practical tool. Manufacturers could communicate with raw materials representatives, business owners could communicate with consumers, and investors could communicate with their beneficiaries. It was not until the latter part of the twentieth century that the telephone was used to advertise for businesses, through telemarketing and the facsimile. From its onset, the television was used for marketing purposes. Media broadcasters would recruit local business owners to sponsor their shows, in exchange for a few minutes of airtime to advertise their products. The exchange worked well.

Contemporary communication trends have moved from interpersonal to media—both print and electronic—platforms. With the introduction of new technologies such as satellite, Internet, and cable radio, the concept of local shopping has emerged as a major attraction for shoppers, retailers, and media advertisers in the radio industry. Broadcasting commercials has led to concerns about projecting the local identity as geographical location of viewing billboards, wall advertisements, television commercials, and Internet-based advertisements play an increasingly smaller role compared to radio commercials, which can be easily listened to with mobile audio devices (Torosyan and Munro, 2010). Radio commercials play a significant role in influencing listeners on products and services. Previous studies have revealed that the brand recall as well as the message recall from 30-second commercials are significantly higher than for other modes of electronic media advertisements (Allan, 2007). Digital radio broadcasts are based on improved technology and they prioritize the consumer requirements within the larger platforms of promotions across market outlets (Hallett and Hintz, 2010).

In the recent past (1970–2010) two trends in business communications provide important opportunities to create breakthroughs and customer value in the global marketplace. Increasing innovations in information and communication technologies (ICTs) have led to significant shifts in the pattern of business communications. Emerging new ICT applications have enhanced the capability and competency of firms in global marketplace. In the late 1990s and early 2000s unified messaging applications began to appear, which provided integrated access to non-real-time communication data such as voice mail, e-mail, and faxes across devices. The second important trend was the rise of social networking applications, which made business communications much easier to create, maintain, and understand. The emergence of social networking applications such as MySpace, Twitter, and Facebook has reduced the distance between business firms and their consumers in the business-to-consumer (B2C) as well as in the business-to-business sectors. Most traditional communications media, including telephone, music, film, and television, are reshaped or redefined by the Internet giving birth to new services, such as Voice over Internet Protocol (VoIP) and Internet Protocol Television (IPTV). Newspaper, book, and other print publishing are adapting to website technology, or are reshaped into blogging and web feeds. The Internet has enabled and accelerated new forms of human interactions through instant messaging, Internet forums, and social networking. Online shopping has boomed both for major retail outlets and small artisans and traders. Business-to-business and financial services on the Internet affect supply chains across entire industries.

As the information and telecommunication technology has advanced over the twentieth century, business communications have become more personal than public. One-on-one conversations offer personalized knowledge-sharing platforms that help in developing consumer decisions. These conversations may take the form of voice conversations (face-to-face or over the phone), video conferences, e-mail, instant messages, blogs, micro blogs, wiki updates, and so on. As technological capabilities expand, the number of these conversations in which we are involved seems to grow exponentially.

Empowering consumers through communication

The free flow of information is essential to well-functioning democracies and consumer marketplaces, since both politicians and marketers need a communication system that has long outreach. It is not always simple—there are privacy issues, government regulations, and lack of access for many people. However, many see the democratization of information as offering possibilities for new forms of citizen engagement and empowerment that will give people a greater voice in government and markets (Quelch and Jocz, 2007). The basic claim is that consumer education needs to become empowering or emancipatory, and that this can be achieved through emphasizing the futures aspect and skills concerning everyday futures work. The functions of traditional consumer education can be described as socializative, preventive, and corrective. This is not enough in a rapidly changing world in which consumers face completely new challenges (Jarva, 2011). Consumer empowerment is a psychological construct related to the individual’s perception of the extent to which he/she can control the distribution and use of his/her personally identifying information. It has been argued to have an impact on consumers’ privacy concerns and trust in e-commerce. However, very little is known about the difference in male and female perceptions of this control. This investigation is focused on examining how perceptions of consumer empowerment and privacy concerns differ between the genders, and how consumer empowerment results in perceptions of trust and decreases in privacy concerns (Midha, 2012).

In a bid to combine the two major perspectives (strategic communications and strategic brand management) of integrated marketing communications (IMCs), firms need to develop a dynamic communication management framework based on the holistic consumer experience. According to the framework, the key mission of IMC is to manage effectively the mediated impression of and direct encounter with the brand so that synergism ensues among all the interrelated elements of IMC, including research and development, manufacturing, price formulation, channel arrangement, consumer service management, marketing message construction, and communication program execution. As such, IMC is capable of enhancing the holistic consumer experience and creating a holistic brand value structure, which can unite the consumer’s sensory, emotional, social, and intellectual experiences in a new and positive way (Tsai, 2005).

A conceptual framework on communication attributes is exhibited in Figure 1.2, which argues that communication process is based on the foundation of two fundamental premises, AIDA and ACCA. The variable of Attention, Interest, Desire, and Action constitutes the AIDA concept while Awareness, Comprehension, Conviction, and Action are integrated in the ACCA paradigm of consumer behavior. The main AIDA influence is the ability of advertisements to hold attention and drive the subject into action. Factors of AIDA also help retailing firms and brands sustain the market competition, and make advertisements more memorable, as well as enhancing brand awareness, particularly for desired products (Premeaux, 2006). The AIDA model provides insight into how a consumer moves through the steps of Attention, Interest, Desire, and Action. Marketers can gain the attention of consumers by product samples, large visual signs, and other sensory techniques. Once the marketer has the consumer’s attention, it must keep their interest through product information and consumer communications.

Figure 1.2 Cognitive factors driving consumer communication

ACCA paradigm of consumer behavior argues that awareness of the sales promotions in convergence with the contents of advertisements generates conviction among consumers, which leans toward action resulting in store choices and buying decisions (Rajagopal, 2009a). It is believed by consumers that a strong conviction toward a buying decision can be effectively brought into action provided it is based on accurate and acceptable information (Callen-Marchione and Ownbey, 2008).

Given the great potential of marketing campaigns delivered via mobile devices and the evolution of near-field communication technologies, this study examines factors influencing consumers’ acceptance of untethered, or mobile, marketing across three influential markets: the United States, China, and Europe. It is necessary for firms to examine the extent to which the usefulness of mobile information/programs and individual characteristics—such as innovativeness, personal attachment, and risk avoidance—influence consumer attitudes toward mobile marketing. It has been observed that perceived usefulness, consumer innovativeness, and personal attachment directly influence attitudes toward mobile marketing in all three markets. In China and Europe, risk avoidance also negatively influences attitudes toward mobile marketing. Marketers seeking to build and maintain customer relationships via mobile platforms should pay close attention to these individual characteristics in order to increase consumers’ acceptance of mobile marketing (Rohm et al., 2012).

Compared to offline media communications, B2C websites possess unique characteristics that affect the likelihood of generating emotional reactions to the web experience itself, the brand, fellow customers, and employees of the firm. The emotion-causing antecedents elucidated in this article are the website’s vividness, interactivity, challenge, interaction speed, machine memory, and allowable social interactions. Depending on how a websit...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Tables and Figures
• Foreword
• Preface
• Acknowledgments
• About the Author
• Part I Evolution of Business Communication
• Part II Analysis of Social Media Effects
• Part III The Synthesis
• Notes
• References
• Index