Thus, this thesis will be analysing strategicmarketing through branding and social media within a local SME, with aparticular emphasis on Gozo Cottage.
Branding and the use of social media nowadayshave vital influence within a company’s marketing strategy. However, as seenabove, within small and medium enterprises, branding and the proper use ofsocial media as a marketing tool provide serious challenges to the company’sdirectors and shareholders since most often SMEs are quite limited in theirfinancial resources and human resources. 2.
5 Conclusion Finally a very important gap which I haveidentified is the manner in which SMEs may make use of branding and socialmedia to surpass the physical borders and handicaps that they experience inremote regions such as Malta and moreover in regions such as Gozo which suffersfrom double insularity. Moreover, another important gap is the factthat there is basically no study which analysis the type of media and brandingwhich SMEs set up locally are making use of. This is very relevant to thecurrent study in that One main gap is quite understandably the lackof studies which focus on the manner in which local (Maltese) SME’s are makinguse of branding and social media. This is quite an important gap given the factthat as analysed above SMEs have a central role in the Maltese economy. Through my current literature I haveencountered what may be referred to as gaps.
My study will thus focus on theseareas so that SMEs may make use of the current study for future reference.2.4.2 Gaps in Current Literature Indeed, Wu et al. 2010retain that through networking which has been made possible by social media andplatforms, consumers around the world are now in a position to share theirvalues which in turn leads to a positive impact on trust. This will lead to theobvious result of enhanced brand popularity and generating increased sales. Socialcommerce is a new stream in e-commerce, which encourages the social interactionof consumers through social media.
As with the case of having a strong brand, Lu et al. (2010) comment that through socialinteraction consumers also increase the level of trust in a particular brand,thus leading to more sales. This is why it is important that SMEs ensure thattheir business model is adapted to social commerce (Liang Turban 2011). Indeed, Hajli (2013) is of theopinion that: Various authors suchas Bagozzi & Dholakia(2002) and Ridings& Gefen (2004) discuss in great detail the way in which such onlinecommunities may attract customers.
Moreover, others like Ridings & Gefen(2004) see this as an opportunity to SMEs to establish an efficient customerrelationship management system and thus improve their own performance. The co-relation of branding and social mediamay thus be easily identifiable especially with the development experienced inmarketing strategies through the creation of online communities. 2.4 SME’s Marketing Strategyusing Branding and Social Media According toher, social media may be effective in that it permits Strabucks to interactwith its own customers mostly by listening to their feedback. The attentiongiven by a company to this feedback results in building a much closer relationshipwith its customers. A veryinteresting fact is that Starbucks has a small social media team composed of onlysix people (ENGAGEMENTdb, 2009) The model above clearly depicts the way inwhich Professor Clarke continue to analyse the way in which Starbucks is using socialmedia as an essential component of its marketing mix.
She argues that the model itself puts a lot of importance on theindividual attention to be afforded to customers which in turn will result incustomer loyalty. ? 32K YouTube subscribers? 160K Pinterest followers? 2.86 million Google+ followers? 2.
98 million Instagram fans? 6.56 million Twitter followers? 37.32 million Facebook likesProfessor Moira Clarke from Henley Business School makes specificreference to the social media marketing model used by Starbucks. This is quietunderstandable since Starbucks has a very impressive presence on social media: This model is of great importance since it clearly depicts the fact thatsocial media marketing, in real terms may be too complex to be effectivelytaken care of and developed by just one person within a company. Indeed, FelixR et al emphasise the importance of a holistic view wherein collaborationacross all the departments is achieved is fundamental to ensure that the foursaspects of social media marketing are given full attention. on a strategic level, social media marketing coversan organization’s decisions about social media marketing scope (ranging fromdefenders to explorers), culture (ranging from conservatism to modernism),structure (ranging from hierarchies to networks), and governance (ranging fromautocracy to anarchy). Indeed, the model above clearly depicts thefact that: The model developed by Felix R et al (2016) may be said to be thefirst of its kind in that it acknowledges the fact that social media marketingis cross-functional and interdisciplinary.
Thus, the holistic view taken by the authors includes within social mediamarketing other issues such as culture, scope, structure and governance. Thisindicates how much social media marketing is complex and requires attention. 2.
3.3 Models relating to Social Media In fact, the advances related to internet have increaseinterconnectivity to new dimensions wherein individuals from different parts ofthe world are now in a position to interact simultaneously. Molly McLure & Samer (2005)also make reference to this recent development and emergence of onlinecommunities and web networks of consumers who share information on socialmedia. As Füller et al. (2009)continue to argue, this also provides SMEs and customers the opportunity tocollaborate. This is the reason why Lu & Hsiao (2010) feel that Online communitiesand social networking sites (SNSs) are nowadays a very important tool forsocial interaction and sharing information. Various authors such as Fue et al. (2009) and Mueller et al.
(2011) in fact concur thate-commerce through social media is nowadays gaining central importance forconsumers worldwide. This is the reason why Do-Hyung et al. (2007) are of the opinionthat in today’s day and age marketing is largely dependent upon customerinvolvement through social media. Another significant issue within social media is that those individualswho are members of these platforms can co-relate interdependently. Indeed, as Füller et al.
(2009) aptly comment, consumers nowadays are in a position to create contentand offer advice to each other through the use of social media. Social media is definitely a very important tool intoday’s world which has greatly aided SMEs in their marketing campaigns. Indeed, it is saidthat with the rise of social media andonline communities, individuals can easily share and access information(Chen et al.
2011a). Such social platforms include Facebook andWikipedia wherein individuals may easily access information and share their ownexperiences. Thus, social media nowadays provides a clear opportunity for SMEsto become known and more attractive universally (Chen et al. 2011b). Social media is often employed as a tool to affectconsumers’ trust. By increasing their trust, social media can affect consumers’intention to purchase a particular product and/or service from a determinedcompany (M. Nick Hajli Birkbeck,University of London International Journal of Market Research Vol. 5 6Issue 3) connection between brands and consumers, whileoffering a personal channel and currency for user centered networking andsocial interaction.
(2011)Chi definessocial media marketing as a:2.3.2 Effectiveness of Social Media Results show that positioning thebrand post on top of the brand fan page enhances brand post popularity. Social media outlets constitute excellentvehicles for fostering relationships with customers. One specific way to dothis is to create brand fan pages on social networking sites.Social media is assuming an evermore central role during recent years. Indeed, the Journal ofInteractive Marketing (Volume 26Issue 2, May 2012 Pages 83-91) specifically statesthat: Thegeneral availability of the internet has given individuals the opportunity touse social media, from email to Twitter and Facebook, and to interact withoutthe need for physical meetings. (2011)Gruzd et al.
further add that:Theadvancements in the internet in recent years have made new systems available tobusiness: social media such as online communities being a good example. (2010)Indeed,Social media such as Facebook, Twitter and Instagram are nowadays a very strongmarketing tool for SMEs. As Lu et al aptly comment: “Web 2.0 has evolved from simple informationretrieval to interactivity, interoperability, and collaboration”Similarly, Campbell et al. (2011) opinethat: is much more todo with what people are doing with the technology than the technology itself,for rather than merely retrieving information, users are now creating andconsuming it, and hence adding value to the websites that permit them to do so.Moreover, Kaplanand Haenlein (2010) further add that Web 2.0: social media is a broad term that describessoftware tools that create user generated content that can be shared.
Meanwhile Sinclaire and Vogus (2011) statethat: a group of Internet based applications thatbuild on the ideological and technological foundations of Web 2.0, and allowthe creation and exchange of user generated content.” Kaplan and Haenlein (2010) describe social media as:2.3 Social Media Kapferer thus argues that a holisticperspective of the brand has to be kept in mind and it is only in this manner –by satisfying all the six constitutive elements – that a strong brand may bedeveloped. Physique Personality Culture Relationship Reflection Self-imageKapferer argues that all brands needan identity.
The prism developed by him provides what he refers to as sixunique elements which are needed in order to affect the brand in a way whichwill create a perception and image in the consumers’ minds. Kapfereridenitifies these six elements as follows:– (Kapferer, 2012: 153) Kapferer’s also makes reference to four essentialcomponents so as to provide customers with the attributes and values they arelooking for. These stepsdepend on six building blocks which build upon each other so that one may be ina position to reach the highest end of the pyramid and develop a strong andsuccessful brand.
Stepsmeaning the 6 of them 4. forging brand relationships with the potentialconsumers so that an active participation is achieved.3. eliciting positive and accessible brandresponses; and2. creating the appropriate brand so that it isassociated with positive, unique and favourable perceptions;1. establishing a proper brand identity whereinproper awareness of the brand itself is created;Keller arguesthat the four steps represented by his pyramid depict the four questions thatcustomers will necessarily ask – at times without them even knowing – about aparticular brand. The steps are quiet understandable and reachable: This factor is extremely important for SMEsthat are new in the market. Indeed, start-ups often find themselves with havinga restricted number of clients and therefore even the feedback collated by themis scarce, sporadic and often incomplete.
This is why within this ambit, Dibb et al emphasise the fact that marketing has to be a process of creating an image for a productin the minds of the target customers (2013). In order to achieve this, thebrand needs to be conveyed in line with Keller’s BrandEquity Model or as also known the Customer-Based Brand Equity (CBBE) Model.This model developed by Keller highlights four essential steps to beaccomplished so as to build a strong brand. Although marketingand branding should work in symbiosis, various authors such as Ahonen M. (2008) comment that a lotof SMEs neglect the importance of branding. Marketing is the channel orchannels through which a company actively promotes the product or service thatit provides.
However, as Burnett (2008) states, every marketing campaign whichaims at being effective has not only to get the short term result of increasingsales but also that of sub-consciously inducing customers to get to know andtrust a brand. This will lead to repeat sales which indeed are the key to everybusinesses’ success.2.2.5 Models relating to Branding This might notalways be easy within small companies since as Opoku et al (2007) highlight intheir studies, the lack of financial resources which normally characterisesSMEs leads the same companies to abandon any real branding exercise.
It followsthat as Berthon et al. (2008) aptly comment, within SMEs branding has to takeplace with reduced budgets and therefore crucial decisions as to those brandmanagement principles to be adopted are of the essence. This is the caseeven though nowadays the importance of branding also within SMEs has beenrecognised and established also by various authors such as Abimbola (2001) andWong & Merrilees (2005). However, as Boyle (2003) opines, in the case ofSMEs, businesses need to take an innovative unconventional approach if they areto succeed in having a strong brand. Furthermore,although business is largely conduced and characterized by SMEs, Krake (2005)and other authors such as Berthon et al (2008) highlight the fact that theconcept of branding lacks an SME perspective.
Krake (2005) also laments as tothe little attention afforded to brand management by SMEs. However, otherauthors such as Kollmann & Suckow (2007) emphasise the fact that brandingis an essential exercise also for SMEs especially nowadays in where due toglobalisation SMEs are experiencing an ever more competitive environment. Branding, especially corporate branding, isoften a radically new concept for people in small and medium sized enterprises(SMEs) (2004). However, thecurrent thesis represents what may be considered to be an ‘innovative’ conceptwithin branding since as Merrilees (2007) points out, branding is mostlyassociated with large companies. Indeed, as Inskip aptly opines: “Brands are symbols around which socialactors, including firms, suppliers, supplementary organizations, the public,and customers construct identities. Branding is a critical issue in the SMEsector because brands allow actors, such as organizations, to say things aboutthemselves in ways that every-day language cannot convey.
Opoku et al.(2007, p. 362) argue that:2.2.4 Effectiveness of Branding for SMEs Another huge advantage identified by Burnett is that companieswhich can boast of a strong brand are the introduction of new products.
Indeed,the study Core Concepts of Marketing by the same author concludes that a strongbrand permits companies to expand on their offer to customers and to exploreother markets since customers who have already experienced the brand would beprone to try new products from the same company. Thus, also in line with Burnett’s (2008) views, astrong brand will also permit a company to offer a competing product at abetter price. Loyalty of repeat customers and the demand from new customerswill permit a company having a strong brand to keep a good price sincecustomers will not easily switch to another similar product from an unknownbrand. This will result in year-end profits and a good market share coupledwith prestige for companies with a strong brand. Abimbola T (2001) argues thata strong brand will lead and aid customers in choosing a particular productinstead of a competing one. Thus, according to the same author companies whichhave over the years established a strong brand which is well-established on aparticular market will benefit from a good reputation within that market. AbimbolaT (2001) argue that although globalisation has brought many changes especiallywith regards to pricing policy, the same study concludes that it is anestablished fact that customers tend to trust those brands which they know welland tend to purchase from brands which they know. A strong brand,what is very often also referred to as a superbrand is indeed one of the mostimportant single intangible asset for a company.
Indeed, Chernatony et al.,(2011) opine that a strong brand is equivalent to at least twenty per cent(20%) of a company’s intangible value. The same authors continue to argue thatthis factor is very important since on its own a brand makes a particularproduct recognizable with the customers. They believe that this will eventuallylead the same company to be able to reap economic results from premium pricingand savings from hefty and aggressive marketing campaigns. Moreover, accordingto the same Chernatony et al., (2011) loyalty to the company – both by the endconsumers and also by the employees themselves tends to increase. Therefore, theyconclude that a brand is the added value for a company which will provide acompetitive advantage to the same company over its competitors.
2.2.3 Branding · can become a valuable asset as itfunctions as a legal device.· can communicate overtly (e.g., Rentokil) or subconsciously; and· allows brands to become part ofeveryday life by enabling consumers to specify, reject or recommend brands;Kapferer (2000) observes that thebrand’s name is often revealing of the brand’s intentions. Moreover, Ries and Trout (1980) arguethat the brand name is a significant tool to identify a product and helps toportray the product in a way as to project it better that competing productsthus positioning it highly in the consumer’s minds. On the same lines, Susannah Hart (1998)identifies what according to her are key attributes of a brand name: Any word, device (design, sound, shape or color), orcombination of these used to distinguish a seller’s good and services (2009)A brand name istherefore as Kerin et al opine:2.
2.2 Brand Name A distinguishing name and/ or symbol(such as logo, trademark, or package design) intended to identify the goods orservices of either one seller or a group of sellers, and to differentiate thosegoods or services from those of competitors.MeanwhileAaker (1991), defined a brand as Cluster of functional and emotionalvalues that enables organizations to make a promise about a unique and welcomedexperience. (2011)Chernatony,McDonald, & Wallace, refer to a brand as a: Brand issaid to be about building emotional relationship and its results fromfavourable perceptions, associations, and satisfaction with the brandexperience at every touch points (2010)Branding involves a whole process wherein distinctiveand durable perceptions are created in the minds of consumers. AsFauziah Sh. Ahmad & Baharun opine: Indeed, thesame authors argue that branding is a multidimensional platform whichmay be employed to emphasise the company’s performance as opposed to that ofits competitors. Suhaini Binti Mat Daudet al (2013) continue to arguethat branding has to take a dual approach based on the rational andemotional connection to the consumers and the way in which their behaviour andpurchasing patterns will be affected. Although branding is very often linked tologos, tagline or even an advertising campaign, SuhainiBinti Mat Daud et al (2013)aptly point out that this is a very limited and narrow interpretation of thebranding.
2.2 Branding One has toidentify how SMEs nowadays may use branding and social media within theirmarketing campaign since as various authors such as Salman Sheikh 2014 remark, SMEs very often donot possess the required tools, including financial and human resources, toembark upon a fully fledged traditional marketing campaign. Smalland medium-sized enterprises (SMEs) are a focal point in shaping enterprisepolicy in the EuropeanUnion (EU). The EuropeanCommission considers SMEs andentrepreneurship as key to ensuring economic growth, innovation, jobcreation, and social integration in the EU.SMEs, that isSmall and Medium Enterprises are those enterprises wherein less than 250employees are employed.
The European Union identifies SMEs as the backbone of Europe’seconomy. This is quite understandably since it has been established by Eurostatthat around 99 % of all enterprises within the EU are actually SMEs whichprovide employment to millions of persons within the EU Member States. Eurostat(http://ec.europa.eu/eurostat/statistics-explained/index.php/Statistics_on_small_and_medium-sized_enterprises)states in fact that: In order to fullycomprehend the importance of branding and marketing for SMEs, one necessarilyhas to identify the importance of SMEs within the EU’s economy. This is alsothe case of the Maltese economy where the country’s economy- even according toofficial statistics issued annually by the National Statistics Office- show theheavy dependence of our economy on SMEs. 2.
1 Small and MediumEnterprises (SMEs) A customer – led company recognises that its only true assets aresatisfied customers. Without satisfied customers the balance sheet’s assets aremerely scrap. (2002)This study will therefore befocusing on how SMEs like Gozo Cottage view branding and the use of socialmedia for their marketing strategy within a super competitive market and aglobalised world.
SMEs are nowadays able to reach the whole world through theuse of internet. However, it is of the essence that SMEs such as Gozo Cottagefocus on their customers’ needs since as Doyle holds: Thus, SMEs have to identify theshift from selling to marketing. Selling tries to get the customer to want what the company has, marketingon the other hand, tries to get the company to produce what the customer wants. (1960)This is a very interesting exercise due to thefact that various marketing strategies may beemployed by SMEs so as to reach and affect consumer behaviour. This is due tothe fact that as Levitt opines: Gozo Cottage is an SME operating in the islandregion of Gozo which is most often considered to be a peripherical zonesuffering from double insularity. The current study will be focusing uponbranding and social media as tools for marketing within SMEs and will take intoconsideration the issues affecting SMEs like Gozo Cottage which are operatingin remote regions.
Chapter 2: Literature Review