This study will shed light on the objectives of the project. Scopes for the project will be evaluated in the study. In this study, a discussion will be done on the social networking and its impact on the business. Evaluation will be done on the overview of social network on business. This study will make a discussion on what effects social networking has on the businesses in Australia. In this study theories related to the social network in business will be presented on the basis of macro and micro theories. Advantages will be evaluated on the use of the social network as the medium of marketing in any business. This study will also present the disadvantages of using the social network in the branding of the organization in the market.
a To identify the advantages of a social network in a business
b To find out the disadvantages of the social networking system in business
c To critically evaluate the role of social network in a business
d To figure out the drawbacks of the social networking for running a successful business
e To mitigate the challenges of social networking in different business.
The present study would address the advantages and disadvantages of social networking in various types of business. The use of social network to promote or expand a business is becoming a trend these days. Hence there is the number of people accessing the social media through the social network every day. The study would evaluate the disadvantage of using the social network in different business along with that some strategies to overcome the problems. This can help to run the business successfully for the future. The present study would also include the several positive effects of using the social network for starting or continuing any type of small to medium business.
Overview of a Social network in a business
The social networks allow an individual to share, create or interact with each other by the use of the internet. According to the increased demand for the use of internet every day, the users of social media for a different purpose are also enhancing. It has helped to promote different types of business by the use of internet or indirectly by the social network. As stated by Okazaki and Taylor (2013), the different part of the world has shown a maximum 8 hours of internet use per day for the different purpose, mainly the surfing of different social media. The global data of Internet world Penetration has shown that the use of social media for different purposes in North America is 95%, in Europe 85%, in Australia and Ocenia 68.9%, and Asia 48% or Middle East 64.4% and so on in 2017 (build.export.gov, 2018). The use of social media is done by the business owners as within a less time they can promote more business to among a huge number of people. Through the social network, a particular business organization can make a review quickly of their customers to find out the quality of service which they are providing is good enough for the customers or not. According to Burt (2017), this social network can also help to promote a particular brand of a specific organization which can create a uniqueness of that particular business organization in the competitive market. It also helps to evaluate the customers thinking about a particular business organization. According to Burt et al. (2013), the earning of a good number of loyal customers through a quality service can help to get more new customers.
This is helpful to build a good customer organizer relation through the social media. There are several types of social media like Facebook, Instagram, and the other which can help to spread not only the existing business but also for starting a new business. The user of Facebook including the business owners and also the buyers is almost 2167 million in the world and for Instagram, the general users are almost 800 million and for what it is 980 million in the world at the end of 2017 (build.export.gov, 2018). According to the global social media statistics, Facebook has increased 60% penetration among the small to medium chain business. Along with that, it is proven that Facebook is the largest social media accessed by the developed and developing countries. According to Kim and Sherraden (2014), this data is helpful to identify the target population for spreading a business.
Overview of a social network in the business of Australia
The current trend of increased use of internet in the world is also followed by the Australians. According to the demographic data of Australia, almost 8-10 new social media users are increasing every day. The national statistics of Australian data has confirmed that the users are being on the social network for more than 5 times a day. This is very helpful for a start-up business and also for an existing one to reach to a huge number of people with their business products. As stated by Scott (2017), the use of social media helps to make the export and import very easy by reducing the custom cost. This influence number of people to buy products through the use of local Australian websites and also the Australians can get an easy access to any foreign products easily. As mentioned by Carpenter and Jiang (2012), such type of globalization becomes possible for the maximum use of a social network by a huge number of people. The national data of Australia has shown that the age group of 18-29 are having the maximum use of social media access with a 10-12 hour check-in into any one social network. 89% users check their favorite social network for every day. The checking of different feedback is 72-80% by the users (digital360.com.au, 2018). This is a positive side of the use of different social media for a business purpose. This kind of feedback facility helps to get an instant reaction of the customers about the products of the different business organization. This can help to rectify any mistake if committed by the business company. It also helps to adopt a different business strategy to make a perfect business plan for the future. As stated by Tiago and Veríssimo (2014), the results of profits and losses about the different large organization, displayed in different social media help to implement the effective strategy by the new organization for their betterment.
The most popular social media used by the Australians is Facebook, where there have an almost 94% users since 2010 to till today. There is a 15% increased in the Instagram users in 2013 than Facebook. The popularity of Instagram took a very short span in Australia. According to the current scenario, the top 4 social media, used by maximum Australians are Facebook, Instagram, Snapchat and Twitter (digital360.com.au, 2018). Among them, Facebook and Instagram are used more for the business purpose than the other two.
Theories of the social network in the business
several theories for the social network in business which can be categories as macro theories and micro theories. Theories which come under micro theories are Social Exchange Theory and Social penetration theory. The theory which comes under macro theories is McLuhan's Media Theory.
Social Exchange Theory: The social exchange theory is based on the sociology concepts and the factors related to the psychology of the common people. Business depends on the mentality and the needs of the customers. In that section, the branding and the marketing of the organization depend on the psychology of the customers (panb.people.cofc.edu, 2018). In this theory, importance is given on the factors like how people make relations and make groups in social networks. This theory states that engagement of every individual and their behavior effects in marketing and branding of the organizations. In this theory, importance is given on the mutual reinforcement. This theory suggests that in order to capture a market and promote the brand organizations can target the groups or the individuals in every small group which can help in marketing in a cost-effective way.
Social penetration theory: This theory is mainly based on the human psychology. According to the human psychological factors it is seen that human likes to make the close relationship and likes to get attached to others. In social networking, it is observed that people have the craziness to know about someone or something in details (panb.people.cofc.edu, 2018). It is seen in the social networking sites that people have the tendency for disclosing his/ her information through self-disclosure such as peeling of the layers in an onion. Conversations and shearing the views engage people in a close relationship. This mentality can help the organizations in getting attached to the customers such as craze for in order to know more and more which can engage people towards the products of the organizations.
McLuhan’s Media Theory: McLuhan is a philosopher and also an educator who gave his valuable theory in "the media is the message"(web.mit.edu, 2018). In his theory, he has discussed on the adoption of changes form the media well as from the social media also. Social networking is a media which connects millions of people in a single platform. News or a data in the media can be carried forward by a person in between others. It is seen that there is a tendency in the people trance form according to the actual context of the data in the social network. In the recent trend, people follow the idols through the social networking. Stars like any sportsman or ant film star can influence the life and the behavior of the society or an individual through a social network. Organizations can take the advantages of these kinds of a mentality of the customers.
Figure: McLuhan’s Media Theory
(Source: web.mit.edu, 2018)
Advantages of a Social network in the branding of a business
There are several advantages of using the social network in the branding of the business or the organizations. As suggested by Hudson et al. (2016), advantages of using the social network in business can be categorized in some factors which are, Increased Brand Awareness, More Inbound Traffic, Improved Search Engine Rankings, Higher Conversion Rates, Better Customer Satisfaction, Improved Brand Loyalty, and Cost-Effectiveness.
Increased Brand Awareness: These days almost 90% people are found to be seriously active over the social networks. As suggested by Parveen et al. (2015), the social network is used as the platform where an organization or a company can get in touch with millions of people without any barrier. Promoting concepts, designs and the products views by the organizations can get noticed by the people who are using these platforms. Continuous engagement of the organizations can create awareness in between the users about the brand and the products of the organizations.
More Inbound Traffic: The inbound traffic is limited for any organization or any business in a certain location. A business can promote the business in limited areas which depends on the reach of the organization and the policies are taken into account to do the marketing for the organization. Depending on that the inbound traffic varies. While the organizations are using the social networking as the platform of marketing there is no limitation in order to reach the people which can increase the inbound traffic.
Better Customer Satisfaction: The social networking sites have the feedback systems where the customers can share their opinions about their experience with products and the organizations. This helps the other customers to get a clear view of the products or the business organizations.
Cost-Effectiveness: The Social network is a platform where the organizations can get attached to millions of customers at a single time at a single place which reduces the cost of marketing and reaches the customers in minimum
Disadvantages of the social network in the branding of a business
There are several disadvantages of using the social network as the medium for branding a business. As mentioned by Ainin et al. (2015), disadvantages can be categorized in some factors which are Brand Transparency, Time Consuming, and Data interrupting and Misleading.
Brand Transparency: In order to do the marketing of any organization brand transparency has become one of the greatest issues. With the advancement of technology and availability of the internet, it has become easy for the customers to gather knowledge about the company and the products in detail. As mentioned by Sekaran and Bougie (2016), clear transparency can work as the positive side in order to make a place in the mind of the customers.
Data interrupting and Misleading: Data interrupting and misleading with wrong information can be the biggest disadvantage for the companies. As mentioned by Tuten and Solomon (2017), in social networking sites hackers can interrupt the data used by the organizations and the companies which can mislead the customer against the company and the products which can affect the reputation of an organization. Sometimes it is seen that in the customer review sections or the feedback systems unknown sources or the fake people give wrong information which misleads both the company and the customers.
Recommendation for further branding practice
There are several disadvantages of using the social network in the different business. It can be related to misreading of the information about the particular business organization about a product. Such as the company posts a picture of a product that may not be genuine. This can create a negative impact on the organization to the customer. This negative reputation could lead to reducing the number of loyal customer for that organization. The feedback facility in the social networks can be helpful to avoid this type of misleading or negative impact of the company. Sometimes the users who review the company or its product may not be original which can create another misunderstanding among the other users who may access the media for the future. The faulty brand promotion of a product by the company can also be considered another drawback of using social media for purchasing a product. This can bring a negative economic growth of the company. Apart from that the data security through the use of different social media can be proven another issue of mismanagement in the business. If the organization would not be taken care properly about the data security then this type of problem can bring a diminished growth for the organization.
This study has shaded light on the objectives of the project. Scopes for the project is evaluated in the study. This study has discussed on the social networking and how it leaves an impact on the business. This study has evaluated the overview of social network on business. A discussion is done on what effects social networking has on the businesses in Australia. In this study theories related to the social network in business is presented on the basis of macro and micro theories. Advantages have been evaluated on the use of the social network as the medium of marketing in any business.
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