Social Media Opportunities for Market-Driven Firms

Introduction

The advent of social media, “a group of internet-based applications that build on the ideological and technological foundations of Web 2.0 and that allow the creation and exchange of User Generated Content” (Kaplan & Haenlein, 2010, p. 61), has produced new ways to communicate, collaborate and share contents. Social media have been adopted by many firms using them to interact with customers everywhere on the global market. In fact, the accelerating complexity of demand and the increasing competitive rivalry have induced many firms to compete on a global landscape; and the advent of Internet and digital technologies (Chaffrey et al., 2009) have assumed an important role in developing a worldwide presence.

Today every firm, regardless of its geographic location, operates in a dynamic and changing environment and only the firms that are able to quickly recognize the events impacting their business can successfully survive in this kind of competitive arena (Brondoni, 2012).

Market-Driven Management (Ohmae, 1990; Day, 1990, 1999; Narver & Slater, 1990; Kohli & Jaworski, 1990; Webster, 1994; Best, 2009; Lambin, 2007) has emerged as one of the best strategic approaches for competing in current hyper-competitive markets. It is a business philosophy with the main purpose of creating superior customer value in direct and continuous confrontation with the competitors (Brondoni, 2009). In fact, the value perceived by customers of each firm’s offer must be higher, compared to that of competitors’ goods; thus, market-driven firms are involved in continual processes of identification of market changes, which could translate into customer value determinants.

In this context, social media can be very useful for firms. First of all, they can serve as an important inbound marketing channel, by influencing potential customers and empowering past customers to share their experiences (Ang, 2011; Laroche et al., 2013; Sashi, 2012; Stone et al., 2013). Secondly, social media allow for a wide variety of activities, including global information access, discussion groups and file transfer facilities, all of which impact business strategies (Kietzmann et al., 2011; Fill, 2009; Chaffrey et al., 2009; DiStaso et al., 2012; Vuori et al., 2012).

The purpose of this theoretical chapter, primarily based on the literature review, is to examine the role of social media in improving market-driven firms’ competitiveness by attracting new customers, by communicating to a global audience and by monitoring competitor strategies. In fact, despite the growing popularity of social media in the academic literature, there is a relative lack of research on the benefits provided by social media management to the firms that adopt a strategic market orientation. We want to fill this gap by proposing a novel conceptual framework of analysis of social media opportunities for market-driven firms.

The chapter is structured as follows: after the introduction, section 2 analyzes the theoretical background on market-driven management and social media; section 3 describes the proposed framework on the opportunities of social media management for market-driven firms; section 4 provides future research directions; and finally, section 5 draws conclusions with managerial implications.