The School of Business and Law

Question: A research proposal submitted to the School of Business and Law, in fulfillment of the requirements of BUSN20016 (Research in Business) for the degree of Master of Business Administration? Answer: Over the recent years, the population of internet users in Australia has gone up. The advancement in technologies and the marginal reduction of costs associated with telecom companies has occasioned this rise. The theories of marketing and consumer behavior hold that both the internal and external factors influence the purchasing behavior of consumers; this is the basis in which this study is drawn. Previous studies have confirmed that purchasing behaviors have indeed been influenced by social media, which consequently has translated into increased sales. Online social networking has changed the way of communication among different groups, and it has enhanced the ability for interaction. Social networking includes mobile based and web based technologies used to commence communication dialogues between individuals, organizations and even communities. Spreading of information through word-of-mouth was used in the ancient periods even before the internet was introduced. According to Cro ss and Parker (2004), social networking assumes that the means through which people get to know each other is under determinable construction, whether indirect or direct. The use of social media is evolving and rapidly changing the way businesses are conducted. This study will establish the most superior method between social networking and the traditional word-of-mouth. Cheung and Thadani (2010) noted that the electronic word of mouth is a new form of the traditional word of mouth. There are many challenges posed from the implementation of each method, and these challenges will be covered in the research as the problems faced in their applications. Some of the challenges faced with social networking will include controlling the level of social media participation in the workplace while may involve improper usage of work hours. The challenge of traditional word-of-mouth will include factors such as cost and time taken before the information is delivered. The advantages of each method will be noted and the reason why social networking is commonly used as compared to the traditional word-of-mouth. The research will show how important is the information from previous users of a product to the new users. Positive compliment will attract more consumers to purchasing a product while negative comments may discourage the purchasing behavior causing losses to a company. The study will also identify the reason as to why people seek online reviews. At the end of the study, many parties will have benefited from the knowledge of the importance of information spread through social networking. Problem Statement In the workplace, the use of social networks is rising in demand by more and more employees. The crave for this is observed to have grown so much in the current period. In an organizational restructuring world, growing contingent workforce and outsourcing, the traditional communication approaches have become obsolete. This is grounded on the perception of hierarchal development and lifelong employment. In the current era, there is an increased replacement of face to face communication by online social networking. Institutions need to recognize the importance of social media in running a business and disregard the idea of it being a luxury; this is irrespective of whether an institution is employing a policy on social media or not. The use of word-of-mouth whether traditional or electronic involves some employees in its management. The primary perception of marketing is that it involves the selling of goods and services. Its principal goal is creating a high financial gain through obtaining a greater market share. To achieve the objective of raising the demand for these goods and services, it uses the strategy of making people aware of their existence (Kotler et al., 2000). The adoption of marketing principles to solving societal social problems has changed the dimension of marketing. This adoption has been done by the government and other non-profit making organizations. Professional and practitioners have changed from conveyance of information from top-down to listening and learning of the desires and need of the target group, and then using this information to formulate marketing programs. Most employees cannot live without the social media, it's, therefore, becoming a common necessity. Every day, researchers and innovators come with new developments on social media which is rapidly raising its usefulness in marketing and other trading platforms. The modifications of Facebook, Wi-Fi, iPhone and iPad just to name a few, have their use rapidly increased in demand. If a company makes a decision to ban the access to all types of social media, it could run a risk of losing a chance to hiring the best potential employees on their firm. Most employees would never feel comfortable working in such a business environment. These sites have become part of employees life, and therefore such a policy ban would not be effective in limiting their access to the sites as they have to come up with other ways of accessing them. Based on the fact that the traditional word of mouth strategy may create a negative perception on the potential purchasers since the consumers only give information about themselves, organizations have decided to use a guided strategy which is the electronic word of mouth (Koslow, 2000). In order to guide the consumers purchase decisions, consumers are shifting from traditional to the electronic word of mouth (Trusov, Bucklin, Pauwels, 2009). Since the traditional marketing has declined in credibility, the ability of a company to generate electronic words of mouth is becoming the basis in which evaluation of a companys product and service is carried out (Sher Lee, 2009; Shankar Malthouse, 2007). In order to capitalize on the effects of electronic word of mouth, companies are incorporating it into their strategies of business. Keller (2007) noted that electronic word of mouth requires less cost in overcoming consumers resistance as compared to the traditional marketing efforts. It is, therefore, useful for both the consumers and the company. Traditional marketing strategies are more costly and time-consuming as an employee will have to be sent to different places to either collect or deliver information on a service or a product. Towards this end, business employees in Australia and specifically in the state of Melbourne have embraced the need for using social media sites such as Facebook, MySpace, LinkedIn, Twitter and others for their communication (Coulter Roggeveen, 2012). This is either on matters inside or outside the business or rather line of business. The sites offer the employees some potential benefits. Social sites can be used in enhancing the availability of new great ideas and therefore creating the potential for innovative behavior. A collaborative way of involving customers with business can be facilitated by the use of social networking technology (Whitler, 2014). Social networks despite rendering many benefits to the organizations well-being, they pose threats and challenges to the performance of employees. One of the challenges is that the social life of the employees loses its privacy. Second, the browsing of these pages consumes much time and may lead to employees spending more work time on the same. Finally, its the service terms and conditions which don't allow for comparison and sharing. As highlighted, academics have raised a considerable debate on the value of employees using social networking sites. While some claim that the performance of employees gets reduced, other believe that it has contributed to their improved job performance. In Australia and particularly in the state of Melbourne, social networking use is becoming widespread, and there is a challenge of determining whether the performance of employees gets improved or is affected. This is the major gap that this study is trying to fill. The social networkings direct and mediating effects on the performance of employees will be put under examination. The traditional word of mouth strategy is losing its value in the modern era. In order for both the consumers to benefit from the electronic word of mouth, they must be able to overcome the challenges associated with it. Research Objectives General Objective This studys general objective was to determine the most persuasive method of social marketing. The specific methods under comparison were the traditional word-of-mouth and social networking. Specific Objectives To establish the most persuasive method of social marketing between social networks and the traditional word of mouth in raising a competitive advantage of a marketing firm. To find out what makes social networking more effective and highly demanded as compared to the traditional word of mouth. To establish the various challenges underlying the use of any of the methods. To identify the differences existing between social media and traditional word-of-mouth. Research Questions Between social networking and the traditional word of mouth, which is an efficient strategy for marketing? What makes social networking a better strategy than the traditional word of mouth? What are the challenges the management faces from the implementation of either the social networking strategy or the traditional word of mouth? What differences exist between traditional word-of-mouth and the social media? Justification of the Project The evolving use of social networks has facilitated the elimination of geographical barriers which in turn has increased the availability of new business opportunities. Through social networking, the target group becomes large and easily accessible. Through the traditional word of mouth, it may proof difficult to reach clientele from different cultures, ages, and financial stability; this has been eased by social networking. Social media networks growth has enabled people to access their profiles in work network. It has indeed enabled businesses to be in the midst of the potential customers. The social media networks rely on millions of users every day, therefore creating a profitable and efficient trading platform. The study will, therefore, demonstrate the best method to be used in reaching the potential customers. It will enlighten the management team on why it should incorporate such a method. Since it has been observed that there is an increased participation of employees and consumers on social media; posing greater challenges especially for the management to control their employees for it, this study will give insights for the management team to generate a useful idea out of this instead of trying to ban its use. The management will, therefore, benefit much from this study. Consumers will also benefit in that if the management incorporates the use of electronic word-of-mouth, information about services and products will be readily and easily accessible. Expected Research Outcome Many stakeholders will find out the significance of this study. In the department of human resource, the professionals in charge through the understanding of the association that will be portrayed in this study will gain many benefits. Understanding the relationship existing between the employees job performance and the use of social networking site will help the business managers in unraveling the challenge of whether to allow or disallow social networking sites utilization in the workplace. There is an increased number of young employees whose desire to use social networking sites is very high. Since it will prove difficult for businesses to mobilize them to avoid their use (as noted earlier they will devise other means to access them), it is crucial for businesses to exploit this fact and formulate policies aimed at achieving the organizational goals while allowing their use in the firms. If only some businesses will find it useful in accelerating the performance of employees, it will eventually be embraced by many other businesses. The major challenge, therefore, lies on the part of the management team. Employers should be enlightened on the usefulness of incorporating the use of these sites in business operations. This study will be of much benefit to scholars interested in researching on social networks. The management team will have their challenges of whether to incorporate or not being resolved. Conceptual Framework and Research Hypothesis Social networking and traditional word-of-mouth are some of the channels used in receiving and spreading of information. Word-of-mouth traditionally was perceived as the interpersonal communication between people who initially used some products or services and those that are potential users. When people need to make a decision to purchase either a product or service, they consider so many factors so as to choose that which maximizes their utility. Most of the times they rely on ads available on the internet and other times, they rely on the confession of utility derived by others (Charlton, 2015 and Wang, Uesugi, Ting, Okuhara, Wang, 2015). The annual local consumer survey by Anderson (2014), DeMers (2015) and Rudolph (2015) confirmed that the highest proportion of the consumers interviewed had looked for online reviews (specifically, it was noted that the proportion was 88 %). When someone is new to a product, it is difficult to decide which the best quality is (Eaton, n.d.). Cheung and Thadani (2010) noted that the electronic word of mouth is a new form of the traditional word of mouth. This somehow confirms the allegation of its superiority to the traditional word-of-mouth. Advancements in technology have led to a creating of a trading platform where people can buy and sell goods online. These online shoppers are the most interested party in the products reviews and evaluations posted in social Medias. The creation of products and communication of service information is being taken charge by the consumers in the media landscape of today. The sharing of experience and opinions on certain products and services among a multitude of consumers is facilitated by social media such as consumer forums, blogs, review sites and communities (Hennig-Thurau, Gwinner, Walsh, Gremler, 2004). Consumers all over the world are seizing this opportunity. Many studies done on consumers from different countries has confirmed that more than a third of them post information on social media concerning products and services (Insites Consulting, 2011). The information provided by consumers regarding a product or a service is dependent on the level of satisfaction derived. This information could, therefore, take either a positive or a negative form. Bickart Schindler (2001); Nielsen (2012) Ha (2002) noted that the information provided by the previous consumers of products and services on the social Medias influences the purchasing decisions better than the messages provided in traditional marketing. Anderson also noted that higher purchases resulted from positive reviews. Word-of-mouth plays an important role in influencing the consumers purchasing behavior (Cheung and Thadani, 2012). Consumers have the awareness that at times ads are deceptive; they always describe a product to be of high standard and that consumers will derive more utility (Berger, 2016). Due to this fact, consumers always doubt the usefulness of a product or how satisfactory a service is. Their doubts are only cleared when they get information that another consumer enjoyed the use of the product aimed to be purchased or service that was rendered before (Tagrin, 2014). This information could be obtained through the traditional word-of-mouth. This is however not always the case that the people surrounding a potential consumer have used the product or service before. This therefore makes the traditional word-of-mouth less effective. This posed the rationale for the social networking. Every product introduced in the market, may not be new in some other parts of the world, so the inform ation on this product can only be obtained from people where the product was initially introduced. Social networking has facilitated the ability to meet these initial users at lower costs. Social networking sites such as Facebook, Twitter and many other are frequented by millions of users every day. The users are situated in different geographical locations in all countries in the whole world. Most citizens from all over the world rely on social media for socializing. Therefore, social networking increases the coverage of information spread (Dellarocas, 2003; Schindler Bickart, 2005; Hennig-Thurau et al., 2004). The hypothesis for this study will be carried out from the stated problems and the objectives of the research. The research hypothesis to be tested will be as follows. H1: Social networking is not as more persuasive as traditional word of mouth is. HA: Social networking is more persuasive than the traditional word of mouth. Decision Criterion If H1 rejected, meaning that HA is true, we shall conclude that social networking is more persuasive than the traditional word-of-mouth. If it is not rejected, we shall conclude that social networking may be less persuasive than the traditional word-of-mouth. Methodology The collection of data will involve picking off a number of customers and then pick a common business, product or a service. Then, an interview will be carried out to find out how many have searched for a review on the chosen item, and where they obtained the review from if they had already searched for one. The interview will also include the number of reviews that consumers read before they get convinced. The consumers will also be interviewed on whether they trust personal recommendations. A random sample of customers will be picked in Melbourne. This is the state in which am situated and therefore will be time and cost saving. Secondary data will be obtained so as to provide the basis for the literature review. The effects of provision of such information on the purchasing behavior will be carried out. Regression analysis will be done on the collected data to find out the level in which this information influences the purchasing decisions. Organization of the Study This project will be divided into four chapters. This project proposal is the first chapter of the project. It contains information on; the statement of the problem, research objectives/questions, justification of the project, expected research output/outcome, conceptual framework and research hypothesis, and the methodology. The next chapter will be on literature review where both the theoretical and empirical literature on social and traditional word-of-mouth will be considered. The third chapter will be on the research methodology where information provided will be on the research design, study location, population and sample size, sampling strategies, data collection procedure, and the analysis of the collected data. The last chapter will cover the actual data collection, analysis, and interpretation of findings. Conclusions will be drawn and recommendations will be made. The whole process is expected to take six weeks. Bibliography Anderson, M. (2014). 88% of Consumers Trust Online Reviews as much as Personal Recommendations. [Online] Search Engine Land. 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