Importance of Social Networks for Businesses

Introduction:
Companies after ever increasing the speed of utilization of internet and social networks by individuals decided to use social networks to become more and more popular in terms of their banding strategies, positioning, marketing activities, customers services and feedbacks, implementation of e-CRM and alike. People use social networks in order to communicate, share their ideas, and use the flow of information and other means of publishing information about themselves.

Although since 1990s, utilization of internet, many social networks and internet tools had emerged, it was not popular. Recently, through the development of social network in friendly atmosphere and with less complexity in terms of functioning for individuals, this service (social network service) has become part of people’s lives.

In terms of clarification of analysis on customer satisfaction, customer retention, and customer relationship management and customer feedbacks, social networks play a pivotal role. As a result companies have tried to utilize Social network services in order to better serve customers and obtain other various objectives. Most companies recognized that social network sites (SNSs) like Napster, Facebook, and Twitter and so on are the best places to them in order to highlight their brand image through which they can increase their market share, and sustainability.

What is a Social Network?
It is considered as a platform through which social relations will be built among people and information sharing will be facilitated. Through social networks sites personal information and relationships can be shared and users can stay in touch.

Most of SNSs provide a personal page for posting, ability to search for friends and other issues like updating profile and personal data and have the ability to restrict and/or conceal the mentioned information by page owner from the eyes of public or specific people.

These Online facilities (SNSs) have improved the movements of individuals on online tasks, especially in the mentioned social networks for the purpose of maintaining friendships regardless of distance (geographical limitation). Not only that but also it enables people to find better jobs and partners.

Regarding the acceptance of these sites by people, companies have become interested to get involved in this process through which they can sell their products and services and better serve customer ‘s needs and wants and through analysis of consumer buying patterns and their feedbacks they can fine tune their decision making process as well as their strategies.

Below information reveals the fact that how rapidly number of social networks increase since 1997.

1997: SixDegrees.com

1998: —

1999: Asian Avenue, Live Journal, Black Planet

2000: LunarStorm (SNS relaunch), Migente

2001: Cyworld, Ryze

2002: Fotolog, Friendster, SkyBlog

2003: CouchSurfing, LinkedIn, MySpace, HI5, Tribe.net,

2004: Orkut, Dogster, Flicker, Facebook (Harward only), Mixi, Piczo, Hyves, Catster

2005: YouTube, Zanga, Yahoo.360, Facebook (Highschool networks), Bebo, Ning, Asian Avenue & BlackPlanet (relaunched)

2006 till now: QQ, Windows Live Space, Facebook (Corporate Networks), Twitter, MyChurch, and then Facebook (Everyone)

Many companies during previous decade as a result of increasing the use of these networks have decided to penetrate into SNSs in order to find the relevant information of people, elicit information and analyze them in order to make appropriate decision based on market moves; not only in terms of customers but also in terms of competitors and rules and regulations. They aim at finding useful information in order to do external (Scanning, monitoring, forecasting, assessing), and industry analysis (5 forces of porter) as well as competitor analysis.

Usefulness of Social Networks:

Considering SNSs as a marketing tool, they help companies to interact with customers and create online communities and pages,

Updating latest activity of companies, advertisements and providing customers with applications necessary or useful in order to increase the traffic of their page, blog or community,

Facilitate the process of being aware of the company, and promote ideas, products and services,

Skipping search engine optimizations rankings,

It helps to get feedback from customers and to better implement the concept o electronic customer relationship management (e-CRM) and to classify valuable customers in order to serve them with value creating activities,

Focus on market, global reach, limitless number of customers who can be served, to better segment the market and customers,

Enables different model of advertising such word of mouth, suggestions for specific group or niche and so on.

Fastest way to get information and finding opportunities,
Social Networking Sites and E-commerce Businesses:
Although other methods of communication exist, they are to some extent different comparing to SNSs. Social network is a place in which individuals become fan of a page, they see each other and based on their mutual interest they become capable of interacting with each other and make a community on their own.

The mentioned issue is the result of shifting the power through utilization of SNSs from company to consumers. More social networks get popular, the tougher is the implementation of business based on traditional procedures therefore; companies must consider market moves in this case. Besides, by digging up the information available on these networks identification of valuable customers would be easier and a business can serve its valuable customers much better in this regard.

Regarding the accessibility of individuals to internet, companies moved from Brick and Mortar to Click and Mortar or to virtual one which resulted in operational efficiency improvement as well as generating revenue.

As companies are moving toward the above mentioned issue (adaptation of EC), they utilize several strategies to achieve success. They used various strategies in business and corporate level to reduce costs of transaction, reducing delivery time, to better serve the customers and to better manage them, and to better inform them about the current activities performing by the business especially for service companies. Accordingly, due to massive passion of individuals in case of using social networks like Facebook, twitter and so on, companies decided to reduce the gap between themselves and consumers by following consumers passion therefore, they started to make use of social networks and possibly other web 2.0 applications on extend their businesses.

In this era, almost all companies have websites and among them, some have social network to better communicate with customers which is linked to a website by the use of social plugins. Consequently, it is highly suggested to businesses that if they are not being first mover in Social networks, at least do never miss the chance of being late mover.

Impact of Social Networks on Marketing:
As it is mentioned above, individuals will be attracted to join famous social networks in order to create a profile and connect with existing members or pages or businesses. Once a profile created, users can interact with each other; send invitation for others to join. By the time a link shaped, communication to a friend, group members become easy because users tend to organize themselves by affinity, life stage, and psychographics which would be an excellent chance for targeted marketing.

Impact of Social Networks on Purchase Intention:
Through the use of social network as mentioned before members share their ideas, they may talk about different thing even including the recent product they bought or a particular type of service given to them or offered by a company. Many people around the world believe in talking to other consumers in order to get the required information before purchasing for a good or service (a matter of trust factor-word of mouth). And nowadays consumers due to availability of information on the internet they prefer to search online and when going online they more like to go to social networks in order to find more information from other customers, and what have been shared on social network pages of a particular company about certain type of good or service.

Form the eyes of marketers the information shared is vital for compa

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