Bringing ‘Market’ into MarketingMarket Changes, Value Creation, and Social Media

Raj Agnihotri, Ph. D.Assistant Professor of Marketing Director of Research at the Schey Sales Centrewww.Agnihotri-Raj.com

Brazil Executive Education Program

3

2

1Understanding the current market environment

Exploring social media as a business tool

Outlining a social media startegy

Discussiontopics

Today’s Agenda

Let’s Do Some Thinking!

Discuss within your group/table and come up with one of the ‘marketing trends’ that can be perceived as new and innovative!

What Would You Do?

“A global bank executive recently described to us 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 isn’t doing much yet with social media and has no formula for adapting it to particular customers, but the executive still wondered whether the customer’s “influence” might merit special treatment.”

From: What’s Your Social Media Strategy?Wilson and colleagues (2011), Harvard Business Review

So, the question becomes…~How can we summarize

the market changes?

-The answer is...

“connected, informed, empowered, and active consumers” (Prahalad and Ramaswamy 2004)

market3.0

Organization ConsumerProductt

Organization Productt+1Consumer

Value Co-Creation

Value Co-Creation

Market Evolution

CollaboratorCollaborator

Collaborator Collaborator

(Agnihotri and Hu 2009)

What’s Happening Out There?

How It’s Being Done?

http://cloroxconnects.com/pages/home

Lead the Change

http://chapter1.fiestamovement.com/agents/

• Ford Fiesta Movement, a campaign to promote the Fiesta model

• Giving cars to 100 social “agents” and let them promote vehicle through Social Media

• All without spending a dollar on traditional media

Results of six month campaign - 4.3 million YouTube views - 500,000+ Flickr views- 3 million+ Twitter impression- 50,000 interested potential customers, 97% of

which don’t own a Ford currently.

How Firms are Using SM: twitter example

Customer service/ tech support/warranties/PR/ marketingArray of twitter accounts

Marketing/customer service

Two different accounts

Marketing/reservations/customer service/billings

Separate accounts for activities at an individual hotel or resort

(Rick Webb, Why Some Social Media Experts Are Good, May 31, 2011)

http://twitter.com/MarriottIntl

https://twitter.com/FallsMarriott

How Firms are Using SM(Wilson, Guinan, Parise, and Weinberg 2011, Harvard Business Review)

• 40,000 global employees• Internal social media use: a test platform,

called EMC/ONE, that helped employees reduce the use of outside contractors

• Generated more than $40 million in savings overall

CustomerValue

Organization’sSocial Capital

Social Capital… What?

Structural DimensionInteractions to maintainSocial Structure

Relational DimensionInteractions to Build & Maintain Trust/Trustworthiness

Cognitive DimensionInteractions focused toward Vision Sharing

Social MediaUse

(Kothandaraman, Agnihotri, and Kashyap 2011) A Social Capital Perspective

A Social Media Framework for Sales Organizations

Developing/Assessing Business Specific Social Strategy Elements

Formulating/Assessing Business Specific Value Drivers

Establishing/Assessing Business Specific Performance Metrics

Social-StrategyElements

ValueDrivers

PerformanceMetrics

Social Media

Organization

Customers

A Strategic Approach

ELEMENTS

Goals Delineation

Information Communication

Competitive Orientation

Performance Evaluation

CHANNELS

Social Content BlogsAudio, video & photo sharingMicroblogging (Twitter)

Social NetworksSocial networks (facebook, LinkedIn, etc.)Discussion/review forumsWikis

Social InteractionSocial media and eventsSocial media case studies

CHALLENGES

Technology Reluctance

Marketing process Interruption

Undisciplined Participation

Unrealistic Metrics

Is It Really That Simple?(From: Agnihotri et al. 2012)

Finding a Fit(From: Agnihotri et al. 2012)

InformationSharing

CustomerService

TrustBuilding

SOCIAL CONTENT ENABLER[Blogs, Micro-blogging (Twitter), Etc.]

SOCIAL NETWORK ENABLER[Networking Websites (Facebook, LinkedIn),

Online communities/ Discussion forums]

ORGANIZATION ACTIONS

Customer Perceived

Value

OrganizationPerceived

Value

Fit between Social Media Use & Service Actions to “Pull’ Customers towards Firm Generated Content

Fit between Social Media Use & Actions to “Push” Information through Expanding Networks of Connections

VALUE CREATION

ROI: commonly used metrics*

73%Customer Acquisition rate

*Gleansight: social media marketing, November 2010

Organizations can set milestones in terms of –i) Marketing efforts (e.g., number of tweets posted per week,

number of blogs written and followed, etc.) ii) Outcomes (e.g., number of leads generated through blogs)

Performance evaluation should include -iii) Objective (e.g., changes in service support costs) iv) Subjective criteria (e.g., number of referrals and/or positive

recommendations by existing customers through social networks)

86%Audience growth rate

-e.g., # of facebook fans, twitter followers, etc., per

week

77%Volume of relevant

posts/comments

81%Customer engagement rate

-e.g., # of click-thrus, registrations, etc., per week

73%Customer Acquisition rate

• Do your research before investing in SM

• Remember the ‘Market’ in marketing strategy

• Create value

….and finally

• Connect with people because nothing can replace

the - personal touch

Tips to Remember

Thank You and Good Luck!