The Rise of Relationship Marketing with Social Media

The Rise of Relationship Marketing with Social Media

Ana Margarida Barreto (New University of Lisbon, Portugal)
Copyright: © 2015 |Pages: 18
DOI: 10.4018/978-1-4666-8459-1.ch010
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Abstract

The mission and concern of the proposed chapter is to contribute to the improvement of market performance through marketing, specifically relationship marketing, by taking into consideration the brand perspective and the consumer perspective. In addition, the proposed chapter aims to describe how social media has brought big challenges to brands, especially the strong ones, with repercussions on their brand image and consequently their brand equity, and how relationship marketing can be the answer to these new challenges.
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Introduction

New information and communication technologies (ICT) in general, and the Internet in particular, continue to grow in importance and to affect buying habits, entertainment, and user relationships. This phenomenon is not exclusive to one generation, but to all, with greater or lesser incidence. To illustrate, let’s consider the following data: from 2000 to 2012 the Internet grew 566.4% (data from internetworldstats.com), in 2010 there were 2.4 billion Internet users (idem), corresponding to 34.3% world penetration. With regard to the popular SNS Facebook, in March 2013 there were 665 million daily active users. Also, in May 2013, there were more than 554.000.000 Twitter users, and in the year 2010, 25 billion tweets were sent (Twitter).

Neglecting these facts may undermine the success of any organization, whether private or public, from the services industry, or consumer goods, a political party, or nongovernmental organization. This is because the Internet is not only a digital space where a growing world population joins, but it is also an easy tool for communication or business purposes. In addition, the adoption of e-business is positively related to four measures of performance: business efficiency, sales performance, customer satisfaction, and relationship development (Wu et al., 2003).

Effectively and efficiently using the Internet as a strategic channel requires a combined domain of various marketing practices. First, given the interactive nature of the channel, the Internet allows the establishment of interactive relations with different audiences, large-scale, synchronous, or diachronic, individualized and personalized (interactive marketing). Organizations committed to talking with and listening to the public can enjoy the constant enrichment of their databases (database marketing) and may later, based on the collected information, target their audience and customize their future messages (direct marketing) and take advantage of various resources (like text, sound, video, and image) at low cost. These messages, along with a set of actions that aim at sharing and collaborative construction of the brand or its products/services with their audiences, will help to foster a sense of closeness between the brand and customer (impacting the trustworthiness of the latter). In addition, they also provide the ability for the brand to immediately detect and act upon situations of crisis or discontent, avoiding the powerfully negative word of mouth (WOM) (relational strategy).

The perception that the future of marketing walks hand-in-hand with the evolution of ICT has aroused the interest of scholars worldwide who seek to explain this symbiotic relationship and to come out with new marketing concepts.

In 2001, Coviello, Milley & Marcolin added a fifth element to the theoretical classification of empirically validated marketing practices (transactional marketing, marketing database, interaction marketing and network marketing), made by the study group's “Contemporary Marketing Practices”, in 1997. The concept introduced was e-Marketing (eM), defined as using the Internet and other interactive technologies to create and mediate dialogues between a company and its customers.

The designation of eM has been used deliberately in order to avoid the term “interactive,” so that there was no confusion with the concept of interaction marketing. eM includes and is based on interactive technologies related with the management of customer relationships, sales activity, research, analysis and planning (see Brady, Saren, Tzokas, 2002). Using the words of Reedy, Schull & Zimmerman: “They are all online or electronic activities that facilitate [the] production and marketing of products or services to meet the desires and needs of the consumer. The electronic marketing improves the overall marketing program that, in turn, enables the company's objectives in e-commerce “(2001, pg. 26).

The eM concept combines within itself the practice of different types of marketing, such as database marketing, networking, and interaction marketing (Coviello et al., 2001), or, according to Rublescki (2009), the tools of traditional marketing with electronic resources.

Other denominations have been advanced to explain this phenomenon, like: cyber-marketing, digital marketing, communication and online marketing, web marketing (marketing done in a Web environment, according to Rublescki, 2009), and “one to one marketing”. Some have even suggested that the word marketing be altered to “markITing” so that could reflect the widespread use of ICT in contemporary marketing practice (Brady et al., 2002).

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