Social Media Marketing and Value Co-Creation: A System Dynamics Approach

Introduction

Nowadays digital social media such as blogs, social networks, online discussion forums and brand communities have rapidly become one of the component parts of hundreds of millions of Internet users’ everyday lives all over the world (Akar & Topçu, 2011; Greenberg, 2010). Social media employ web-based technologies and interactive platforms where billions of people create trillions of connections (Hansen, Shneiderman, & Smith, 2011, p. 3) and communicate with the other people about products and services, giving rise to user-generated contents that in turn are shared and discussed by other consumers (Kietzmann, Hermkens, McCarthy, & Silvestre, 2011).

These new media has modified the sense of consumers-firms interaction from being unidirectional to bidirectional (Onishi & Manchanda, 2012), shifting from the Web 1.0 model to the world of Web 2.0 world, more interactive and based on consumers’ dictations about the nature, extent, and context of market’s exchanges (Hanna, Rohm, & Crittenden, 2011). Each social media is a platform permitting the consumers to share their opinions on the purchased products and results in an easier word-of-mouth communication about brands (Chena, Scott, & Wang, 2011) flowing out of business control (Kietzmann et al., 2011) and sometimes with higher credibility and trust than traditional media (Blackshaw & Nazzaro, 2006).

There currently exist many kinds of consumer-generated media, varying according to scope and functions. Due to the dramatic and global growth of social media like Facebook (550 million users) and Twitter (more than 100 million users), companies operating in several industries are willing to include social media marketing within their marketing strategy (Berthon, Pitt., Plangger, & Shapiro, 2012). In addition, blogs have registered a widespread diffusion in the recent years since they comprise a highly dynamic, temporal community structure (Kumar, Novak, Raghavan, & Tomkins, 2005). The resulting ‘blogosphere’, authored both by everyday people and professional writers and celebrities, accounts for more than 100 million blogs and it can be viewed as a relevant source of public opinion (Kietzmann et al. 2011). Brand community practices, including those fostering consumer word-of-mouth, or ‘word of mouse’ (Breazeale, 2009), confer cultural capital to the members, generate consumption, evince brand community vitality and create value (Schau, Muñiz, & Arnould, 2009). Since most of the content and connections in an online community are created by users, not by the brand (Akar & Topçu, 2011), consumers can now be seen as active producers of business value, thereby reducing the influence of traditional marketing strategies and tactics (Heinonen, 2011).

Value co-creation is a complex and multi-dimensional concept depicting the relationships between company and consumer, whereby consumers collaborate with companies and with other consumers in order to satisfy their individual and social goals of life. In this regard, although scholars (Cova & Dalli, 2009; Grönroos, 2008; Prahalad & Ramaswamy, 2004; Schau et al., 2009; Vargo & Lusch 2004; Zwick, Bonsu, & Darmody, 2008) have studied the active role of consumers and social interaction in value co-creation, they do not fully address the process of value co-creation in the context of social media. Social media can yield information on consumers’ intentions and provide real-time consumers’ feedback, a key business component hard to collect before social media marketing era (Gonzalez, 2012). Consequently, Mangold and Faulds (2009) recommend a blended traditional-new media approach, where social media are regarded as an integral part of an organization’s marketing strategy, given that it can significantly impact a firm’s reputation, sales, and even survival at time of crisis (Kirtis & Karahan, 2011).