2010:239 BACHELOR THESIS Social Media and the Impact on Marketing Communication Benedikt Frey Stefan Rudloff Luleå University of Technology Bachelor thesis Marketing Department of Business Administration and Social Sciences Division of Industrial marketing and e-commerce 2010:239 - ISSN: 1402-1773 - ISRN: LTU-CUPP--10/239--SE Social Media and the impact on Marketing Communication Stefan Rudloff & Benedikt Frey Department of Business Administration and Social Sciences Division of Industrial Marketing & e-Commerce International Management Program Luleå University of Technology – University of Applied Sciences Augsburg Supervisor: Lars Bäckström Date: 4th June 2010 Abstract Since Internet usage has been increasing so much in the last 15 years, and particularly in the last 10 years, many companies have found new possibilities to promote their products. These new approaches are mainly used as a communication tool and are called social media. The purpose of this thesis has been to study how social media influence the marketing communication of companies . The methodology behind this research, in order to ensure a suitable and viable data collection, was personal interviews with two manufacturing companies, one social network platform and one marketing agency. The method was a qualitative research approach combining different case studies in the research strategy. The diverse interview partners were each given a specific interview guide synchronized to their field of business and afterwards these four cases were analyzed using the data collected from the personal interviews and the mentioned interview guides. The overall result of this thesis was that the communication via social media is still in the early stages of its development. Basically companies approve social media as an effective tool to exceed and support marketing communication. Furthermore social media monitoring is an important component, but is still in the early stages. Generally companies approve social media as an effective tool to exceed and support marketing communication. Social media still has huge growth potentials regarding the differentiation and specification of different platforms, because not all of them are suitable for every company. ii Acknowledgement The topic we chose was very interesting to work with, due to its contemporary nature and its connection with our daily life. During the research we gained a deeper understanding and knowledge about many marketing communication approaches and it has been an instructive and nice ending to our studies here at Luleå University of Technology. This work results from very hard work and two stressful months of research, but also a lot of fun during interviews and while working together. It was difficult for us to find companies, which were suitable for our topic and therefore we had to search a long time for interview partners, but in the end we succeeded and we want to thank Audi, Ericsson, XING and Visual Acting. All of them have been open and have contributed to a high degree in creating this extensive thesis. Furthermore we want to thank our supervisor from Luleå University of Technology Lars Bäckström for his support, help and critical considerations. Finally we want to thank our friends here in Luleå, who supported us through these stressful last months and of course we want to thank each other for managing the daily work and the good working atmosphere throughout. Luleå 9 th of June 2010 Stefan Rudloff & Benedikt Frey iii Table of Content 1. INTRODUCTION ....................................................................................................................... 1 1.1 Background................................................................................................................................. 1 1.1.1 Marketing Communication..................................................................................................... 3 1.1.1.1 Advertising ...................................................................................................................... 4 1.1.1.2 Personal selling .............................................................................................................. 4 1.1.1.3 Public relations ............................................................................................................... 4 1.1.1.4 Direct marketing ............................................................................................................. 5 1.1.1.5 Sales promotion ............................................................................................................. 6 1.1.2 Marketing Communication Strategies ................................................................................... 6 1.1.3 Social Media .......................................................................................................................... 7 1.1.3.1 Wikis ............................................................................................................................... 9 1.1.3.2 Social bookmarking ........................................................................................................ 9 1.1.3.3 Social networking ........................................................................................................... 9 1.1.3.4 Social news .................................................................................................................. 10 1.1.3.5 Social photo and video sharing .................................................................................... 10 1.2 Research Problem .................................................................................................................... 11 1.2.1 Research Questions ............................................................................................................ 14 1.2.1.1 Research Question 1 .................................................................................................... 14 1.2.1.2 Research Question 2 .................................................................................................... 14 1.2.1.3 Research Question 3 .................................................................................................... 14 1.2.1.4 Research Question 4 .................................................................................................... 15 2. LITERATURE REVIEW ......................................................................................................... 16 2.1 Framework of Communication................................................................................................ 16 2.2 Reasons to communicate ........................................................................................................ 16 2.3 The communication model ...................................................................................................... 17 2.3.1 How is a communication model designed? ......................................................................... 17 2.3.2 Objectives ............................................................................................................................ 19 2.3.3 Target group ........................................................................................................................ 21 2.3.3.1 Segmentation ............................................................................................................... 21 2.3.3.2 Positioning .................................................................................................................... 22 2.3.3.3 Targeting ...................................................................................................................... 22 2.3.3.4 Push vs. Pull strategy ................................................................................................... 24 iv 2.3.4 Offline Marketing Communication Mix ................................................................................ 24 2.3.4.1 Public Relations ............................................................................................................ 25 2.3.4.2 Direct Marketing ........................................................................................................... 27 2.3.4.3 Personal Selling (Exhibitions/ Conventions/ Fairs) ...................................................... 27 2.3.4.4 Product Placement ....................................................................................................... 27 2.3.4.5 Advertisement .............................................................................................................. 28 2.3.5 Online Marketing Communication Mix ................................................................................ 28 2.3.5.1 Search Engine Marketing ............................................................................................. 28 2.3.5.2 Online PR ..................................................................................................................... 32 2.3.5.3 Online Partnership ........................................................................................................ 34 2.3.5.4 Interactive Ads (Advertisements) ................................................................................. 36 2.3.5.5 Opt-in-email marketing ................................................................................................. 37 2.3.5.6 Viral Marketing ............................................................................................................. 38 2.3.5.7 Summary