CHAPTER ONE

BACKGROUND TO THE STUDY

1.0       INTRODUCTION

“Marketing and marketing communications mix is changing. New insights, new tools, new opportunities and new challenges are emerging as the 21st century progresses. The world’s 61/4 billion consumers and almost 400 million business customers are becoming increasingly accessible” (Smith and Taylor, 2004, p 4) which makes them ready targets for new global competitors.

“Marketing has moved from ‘customer acquisition’ (winning new customers) through ‘customer retention’ (keeping customers for life) through customer selection (dumping unprofitable customers while selectively seeking and keeping the more profitable ones)” (Smith and Taylor 2004, pg 4) towards ‘customer relationship’ (interacting with customers, gathering and analysing data on them and forecasting customer trends and/or behaviours to enhance customer experience). This fact is further buttressed by Arens, Weigold and Arens, (2008, p. 307), in this statement “the key to building brand equity in the twenty-first century is the development of interdependent, mutually satisfying relationships with customers and other stakeholders.” Today’s marketers must therefore embrace continual change and the opportunities and challenges that come with marketing.

One of the areas of marketing in which this continual change is currently being experienced is in the area of the marketing communications mix and brand managers need to have “a basic understanding of the communication tools available to them and how they can best be used in the overall communication mix” (Arens, Weigold and Arens, 2008, p 307). One of the new communication tools available to brands now is social media marketing which is a subset of digital marketing.

Social media, although a relatively recent phenomenon, is becoming an increasingly important part of any business’ marketing and client base development platform. Social media provides a unique opportunity for brands to foster their relationships with customers but “the dynamic, ubiquitous, and often real-time interaction enabled by social media significantly changes the landscape for brand management” (Gensler, Völckner, Liu-Thompkins and Wiertz, p. 1). Brands on the other hand are highly valuable assets for businesses and brand managers aim to “create strong brands with a rich and clear knowledge structure in consumer memory by authoring compelling brand stories” (Keller 1993; Srivastava, Shervani, and Fahey 1998). However, today, “a brand is no longer what we tell the consumer it is - it is what consumers tell each other it is” (Cook, 2012).

“Consumer-generated brand stories told through social media are much more impactful than stories spread through traditional channels because they utilize social networks, are digital, visible, ubiquitous, available in real-time, and dynamic” (Hennig-Thurau et al. 2010 p. 12). This has led to the blend of social media and customer relationship management (CRM) with the end result being “Social CRM” a means of enabling brands listen, engage and successfully coordinate or integrate consumer-generated and firm-generated brand stories on social media into their communication mix to create compelling brand stories that strengthen customer relationship and move them further into the sales funnel.

Of all the marketing promotional tools, digital marketing has experienced the most changes within a short period of time with more and more marketers embracing the many opportunities it presents. Digital marketing is simply marketing online: “identifying, anticipating and satisfying customers’ needs online” (Smith and Taylor 2004, p. 620). This is split into several areas such as Search Engine Marketing, Search Engine Optimization, social media marketing, mobile media marketing, interactive out of home (OOH) as well as digital TV and radio with social media marketing being one of the most important and ubiquitous types.

Social media marketing can be said to be a hybrid element of the marketing promotional mix. This is so because in a traditional sense it enables brands to talk to their customers, while in a non-traditional sense it enables customers to talk directly to one another and to the brand in real time. For instance, it is now possible for one customer to communicate with hundreds or even thousands of other people about products/services and the companies that provide them. This stands in contrast to the traditional marketing communications paradigm where communication is usually one-sided.

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