Executive summery
Internet usage is the emerging information technology with increased credibility, stronghold and immediacy. Thus, it globalizes all aspects of communication. Internet communication is more particular, effective and interactive. It has generally revolutionized advertising and brought more advantages over the conventional forms of marketing. Marketing through internet is more precise, interactive, interesting, personal and social.
Companies use different communication strategies while using social networking sites such as the Facebook, MySpace and twitter. Organizations not only use social networking sites to create impact over the audiences, but also to interact with marketing mix that is created.
People become more attached to the social networking brand communications than the usual pop up ads. The reason is that social networking sites offer more interactive communication channels. These sites have become the primary social arena and are targeted by corporations for advertising and marketing. Hence, it is essential to study the communication strategies that organizations use in these social networking sites.
Introduction
TOMS Shoes is a profit making company comprising of two components. These are charitable and profit making components. Blake Mycoskie who started the company was inspired by the extreme poverty which he witnessed in Argentina backwoods villages. Blake was so amazed with the extreme poverty in argentine villages where even a pair of children shoes could not be afforded.
After his visit to Argentina, Mycoskie went back to the United States with a mission. He wanted ways in which the argentine impoverished children could wear shoes. Mycoskie discovered that within the impoverished villages there is a set of shoes that was unique and comfortable with the locals. However they are expensive for the very poor. On his way back, he ensured that he carried over 200 pair of Argentinean shoes with him.
With an aim of selling theses shoes to raise money for that charity, he walked in every retail store selling his business idea. Consequently, few shoe boutiques along the Los Angeles main street offered to sell his shoes. In essence, Mycoskie main business idea was to establish an organization that, for each pair of shoes the organization sells, it would be capable of offering shoes to a needy child.
Because of its uniqueness, the idea was readily singled out by the media particularly Los Angeles Times that agreed to run an article on the business idea. The media coverage resulted in a tremendous increase in sales volume. In that weekend alone Mycoskie garnered orders worth $88,000. After two years, the business has recorded revenue of over 9.6 million.
Therefore this research report will look into the revolutionary business model adopted by Mycoskie. Moreover, the report will examine how the Mycoskie business model has ensured the success of the company.
Background and history
Mycoskie is the chief executive officer and the founder of TOMS shoes. TOMS Shoes is not the only company that Mycoskie had owned. Before, Mycoskie had five firms ranging from laundry services to bill board advertising. To Mycoskie, entering into the shoe business was accidental. Mycoskie decided to visit all the countries he had visited during the reality television show, the amazing race.
It was during one of these visits that Mycoskie made a stopover in Argentina. During the visit Mycoskie had no idea of the extreme poverty affecting thousands in the Argentinean backwoods. Two events in the Argentinean backwoods inspired him to start TOMS.
Mycoskie first noticed that the people around the villages were too poor that they could not even afford a pair of shoes for their children. Secondly, Mycoskie also discovered that within the extreme poverty there exists a unique and comfortable farm shoes that were being won by the locals. With these two discoveries, Mycoskie decided to take an action.
Reaching home Mycoskie decided to sell one of his companies, online drivers education for a half million dollars and invest that money into the new company TOMS shoes. The main idea of Mycoskie, “shoes for tomorrow” is the main concept behind TOMS Shoes. The name TOMS is derived from the idea “tomorrow”.
In May 2006 TOMS began its operation and opened for business. The company also operated its non-profit making subsidiary dubbed the Friends of TOMS. Both the non-profit and profit making branches worked together to achieve the company goals. Since its establishment TOMS has been accepted by the majority of regular individuals as well as the celebrities.
Its products have also been widely accepted by major celebrities such as Keira Knightley and Scarlett Johansson. The non-profit branch forms the major selling point of the company. By the end of 2010 the company already has over one million distribution channels around the world.
Mycoskie adopted a unique business model. Where as many businesses would adopt cause-related marketing, the philanthropic element of TOMS itself a marketing strategy. To the TOMS, the expenses incurred in providing shoes to the needy children are already covered in the sales prices. In this regard, the customer is converted into a real beneficiary of the business.
In the process the company sustains itself as an organization that is based on philanthropic mission. The company belief is that so long as there is a continuous purchase of shoes from the stores, the needy children will also continue to get a pair of shoes in return.
As a result TOMS is capable of making profit, sustainably support itself, better the livelihood of the needy and educate the consumers on the role of providing to the needy
The decision by Mycoskie to develop the company business model together with products line around shoes was driven by the desire to offer assistance to millions of impoverished children around the world. Mycoskie argue that many impoverished children around the world live in unsafe terrains, unpaved roads as well as other hazards that can easily cause injuries to barefooted children.
Moreover walking bare footed increases the chances of contracting arrange of soil transmitted diseases. In addition, these children require shoes to attend school. According to TOMS, health and education offers these impoverished children a better tomorrow.
Literature review
Social Media networks have become household names among business organization and the society at large. According to Knowledge networks, about 83 percent of the internet users use social media services, with the population consisting of 47 percent of the weekly users (Loechner, 2009).
Nielsen Company reports that consumers globally spent approximately 6 hours on social media sites as of December 2009 which reflected 82 percent increase from the previous year. The most popular site as per that time was Facebook with over 67 percent of users (Nielsen, 2009). This trend was predicted to accelerate in future especially because of technology advancement and internet penetration.
In the United States, people have continued to prefer using social media services over traditional media networks. The total time spent on these sites increases at an average rate of 210 percent year after year. In addition, time spent per individual increases at an average of 143 percent. The leading sites are Facebook and Twitter with an average growth of 200 and 368 percent respectively.
The Pew Research Center study reported that adults comprise of the larger population of users than teens, contrary to how social network surveys appear (Lenhart, 2009). Actually, young adults are the preferred users of social media with about 75 percent compared to 7 percent of older adults.
Facebook which toppled Yahoo as the second most popular site saw its visitors increase from 42 to 103 million as of December 2009 which reflected a growth rate of 144 percent. Still, the adult segment represents a substantial population of users and the population continues to grow (Leinhart, 2009).
Considering these statistics, it is not a wonder that business firms have also started to embrace social networks for their business operations. The 2010 Digital Marketing Outlook reported that 81 percent of business executives surveyed predicted a growth rate in social network projects and business will be investing more into digital schemes and lowering the funds assigned for conventional marketing.
The results of the study also indicated that social media were high in the action list with 45 percent executives reporting that they considered them a top precedence. This is echoed in the recent efforts put by the firms to encourage sensitive departments such as sales and markets to increase their online activities.
If we consider the Fortune 100 firms, we find that 54 percent are on twitter, 32 percent have a blogging site and 29 percent have a Facebook page. A marginal level of 17 percent of these firms is using the three sites simultaneously, with an average of 5,234 followers per social site account.
It is not only the big firms that are increasingly using social media networks. A study by the Local Commerce Monitor reported how small and medium sized enterprises (SME) are increasingly becoming interested in social medial platform.
The study results indicated that 9 percent of SMEs used Twitter and 32 percent had plans to use the social sites in 2010 (Eddy, 2009). Remarkably, entrepreneurs have emerged to be interested in social media especially when conducting market researches.
Other studies have showed that more and more firms in North America see the need to embrace techniques that enable interactive media marketing. The most targeted method is social media networks which offer direct interaction with customers.
The studies further show that firms who do not embrace social media services do miss opportunities to grow and probably lag behind firms that use social media tools. Some of the benefits that users of social media achieve include but not limited to improved feedback, improved customer satisfaction, improved customer support, increased sales and improved public opinion of the firm.
In another perspective, customers are increasingly engaging with brands through social media. A social media study by Cone Business reported that 60% of the US consumers use social networks and of those, half of them interact with organizations on social network sites (Cone, 2008). In addition, 93% of the site users expect a firm to appear in the social networks.
In particular, the study showed that 85% believed that a firm should increase its interaction with customers to develop strong connection and improve customer service. This study is reinforced by consumer behavior statistics which show that approximately 10,000 visits are made on the US retail websites. More and more shoppers are using the common social sites to complete transaction with firms that have presence in them.
A common question is whether the large user-base of the social sites visits them to get assistance on buying decisions. Despite 83 percent of the internet users participating in social media, the study by Loechner (2009) revealed that less than 5 percent of the population visits the websites for information on buying decisions.
Further, the study showed that 16 percent of the population was likely to purchase from firms that advertise on the social sites. Most of the users however visit the sites for personal networking through their online profiles. This population comprise of both men and women whose purchasing decisions are slightly influenced by the firm’s presence in the social media.
Nonetheless, with respect to the impact of social media services on buying decision, it is observed that customers depend differently on the social media websites, as much as the firm’s site for product information. Firms that use social network sites in a manner that engages the customer are likely to influence them to make purchases.
More than half of the users pass along information they get online and most of the users who get recommendation from friends are influenced to make buying decisions. In addition, communicating with a firm representative online has proved to have strong consequences on the buying decision.
Organizations that use social media networks have reported returns on investments from the use. Dell who made their presence on Twitter in 2007 has continuously claimed to have acquired more revenue from the site followers who visited the website and completed a purchase.
The Atlanta aquarium has also reported revenue increase from using the social media to send information and tickets. Naked Pizza has also created a positive ROI through social media projects.
While social media has lived as a construct since the invention of the internet, the growth trend of Social sites observed in the recent past has popularized the concept. It is argued that social media is a platform in its own right (Murdough, 2009). Therefore, it is apparent that the successful commercial use of the medium necessitates the creation of a new business model.
The internet is increasingly becoming socially-friendly, with the creation of different social software offering users a pleasing browsing experience. Web 2.0 is a good example of the phenomenon with applications that make the most of the inherent advantages of the structure.
According to Murdough (2009), social media is a distinct medium in the sense that a passive audience has been changed into producers and suppliers of media. Social networking through a marketing lens has allowed users to become a vital part of the product/brand communication processes and initiatives.
Social media users comprise of voiced and engaged persons who wish to say and see that they can influence on what is presented to the society. The medium introduces novel platforms of value creation and brings about the understanding that the traditional media has developed from interactive to social networking.
Although the media development started with broadcast media where audience interaction is defined as one-to-many, it has developed to befall completely interactive as social platforms such as facebook allow followers to rate, market and comment, and sometimes discuss business issues in forums.
With the online market growing and consumes time, the social media emerges to be the popular medium through which people share information.
Indeed, conversion describes the center of social media, enhancing the popular belief that markets are formed by conversations that comprise of people, not demographic segments. The social sites are enabling and in fact, enhancing conversation between people that were initially impossible.
Understandably, social media is the materialization of the internet and is evidently a social instrument that permits media sharing among people. This technology medium has paved way for people to share content and interact instantly. As the name social media suggests, it includes the creation of networks and social communities, enhancing participation and engagement.
These manifestations are evident in social sites like You Tube, Facebook, MySpace, Wikipedia, Second Life Flickr and many others that support a variety of activities including video sharing, photo sharing, virtual reality, game sharing, encyclopedia and social networking. In fact, the internet offers a worldwide social system which is developed by and for people.
Murdough (2009) positively believes on the potential of social media, yet like any other marketing instrument it is hard to determine the kind of effect that it places on the masses. The researcher explains that social media sites like Twitter, MySpace and Facebook are associated with astonishing tactics of communicating with others.
Other scholars have researched the use of social sites in career development of learners and also developing employee-employer relationship where they concluded on some improved understanding of incentives as an effective function of these platforms on business.
The usage pattern in adoption of social sites such as Twitter and Smartphone on students has been investigated by Backer (2010) who revealed that such functions build a sense of enticement and responsibility as well as enriching the learning experience.
Another study by Donna and Fodor (2010) went further and found that instead of employing investment measure of ROI firms must evaluate customer incentives for using social sites and calculate customer’s investments.
The impact of technology advancement and how it has changed the conventional business guidelines in communicating with target consumers has also been analyzed. It is believed that materialism and social comparison are paramount concerns among young adults. This is because social comparison with peers and with media figures has positive forecaster of materialism.
Research Methodology
To effectively analyze how Toms Company uses social media networking sites as its marketing communication platform and find the extend at which effective communication strategy helps this corporation to develop its product brands, the researchers used survey method to gather suitable study data.
Besides, to critically analyze the collected research data on how Toms Company uses social networking sites to reach its target audience, content analysis was drawn on.
Data collection methods
This study used two techniques to collect and analyze research data namely content analysis technique and survey method. The survey method facilitated the identification of the way Toms Company brands reached the targeted audience.
It also helped to ascertain how the audience used the company’s social networking sites, the manner in which it impacted Toms’ product marketing and the availability of this kind of communication to the clients.
However, content analysis technique was used in analyzing various social networking sites that Toms Company uses at its communication strategy. The analysis takes into consideration some parameters that are common to each social networking site as presented in the research outcomes.
Research design and survey method
Content analysis technique and survey method were adopted in this particular study so as to ascertain the impact and effectiveness of communication in branding Toms Company’s services and products amongst the targeted markets.
Of great significance was the gauging of impact of marketing strategies that incorporates social networking sites such as Twitter, Facebook, video and photo sharing, MySpace, YouTube as well as business blogging.
Random survey was conducted amongst Twitter, business blog, video and photo sharing as well as Facebook user communities and Toms Company marketing department. The survey was performed online through sending research questionnaires to gather individual respondents’ opinions.
Sampling strategy
To realize the study objectives, sampling strategy dubbed as non-probability sampling technique was used in collecting online respondents’ opinions. The study population incorporated all Toms Company social networking communities.
However, to gather effective and unbiased research data, the strategic sampling was limited to target the population of both young and old adults who fall within the age bracket of twenty to fifty years.
The size of the survey sample was one hundred and each respondent a maximum of twenty minutes to respond to the survey questionnaire. A total of twelve research questions were asked in the research questionnaire (see appendix for the survey questionnaire).
The effectiveness of the marketing communication channels
Content Analysis
Three most common social networking sites that companies such as Toms Company use to market product brands were chosen to gauge the level of brand communication effectiveness amongst their users. These included MySpace, Twitter and Facebook.
Results and discussions
Internet usage
The results indicate that 39% of the total audience accesses the internet more than three hours daily, 30% of the participants use it one or two hours daily, 19% use it two to three days weekly while 12% use the internet only once a week. The results show that the technology and this new media is an emerging communication trend that entices most individuals who are equipped with computer knowledge.
Thus, table one shows that digital media as a communication channel grasp the attention of more participants and the internet has become an essential component of communication across different age groups (Shih, 2009).
Table one: What is the frequency of your internet usage?
Social networking sites awareness
The results indicate that almost 98% of the total internet consumers are well conversant with the accessible social networking sites, but just two percent appear to be unaware. This implies that, whereas the computer based society traces back its roots to the early computer network days, merely specific years subsequent to the arrival of the wired internet social network have met the commercial as well as the public in a succeeding way.
According to Donath and Boyd (2004), the online social network at the most elementary level relates to the internet society where people often interact by means of profiles which symbolize themselves to the others. Indeed, the growth of social networks has been very rapid. For instance, Facebook, MySpace and Twitter have attained and infiltrated a larger part of the global market in a short while ever since they were launched.
The applications of these social networks have positively invaded the users through utilizing various strategies to ensure that individuals and groups freely interact as table two results shows.
Table two: Are you aware of the different social networking sites that Companies uses?
The number of social networking sites profiles possessed
The research indicate that 62% of the research respondents have profiles on Twitter, 88% are connected through MySpace, all respondents (100%) have profiles on Facebook while 37% possess social networking accounts on other communication sites. Each user can freely create different accounts in other social networking channels.
However, Facebook emerges as the most valuable channel for searching the missed out friends or mates, for learning about the friends communities, for self-promotion and communication.
Peers, business entities and corporations use Twitter, MySpace and Facebook to communicate and equally share pertinent information. As a result, when compared to other social networking sites, Twitter, MySpace and Facebook materialize to be very popular amongst the youthful populace (See table three).
Table three: How many social networking sites profiles do you have?
Status of different advertisements posted on diverse social networking channels
Data indicates that, users’ equivalent to 45% claim that Facebook properly communicates ads. This social network site promotes different product brands through well-articulated advertisements which give information concerning services and products that are beneficial to the user community.
Facebook communicates such information in an interactive manner that enables the target audience to learn about any given product brand. 12% of the respondents suggested that Twitter has a distinct pattern which it pursues to effectively communicate ads.
The words used in Twitter are significantly small yet effective. In contrast, 28% of the respondents assert that MySpace is the second best to communicate company brands ads (see table four).
Table Four: Which social networking sites do you find advertisements communicated properly?
Advertisements sites encountered
The data indicates that 32% of the people interviewed have seen the web banner ads across the social networking sites including twitter, MySpace and face book. Also, 8% of the correspondents have come across the flash ads and pop up ads on other various sites. 31% of the interviewees have come across video ads on YouTube and other related sites.
Web search engines such as Google and yahoo have also ensured a space in the social networking arena through diverse communication strategies that improves their innovative appearance in both display and content (Shih, 2009). Though there is a difference on the detailed rationale on these acquisitions, all these sites have the essential success as a general theme to these sites huge audience (table five).
Table five: Which types of advertisements have encountered in such sites.
Communication create trust on adverts
It is clearly indicated from the survey data that 38% of the social networking users are contented with ads that emerge in the social networking sites while 11% of the respondents felt unsatisfied with some information being communicated. 51% of those interviewed could not ascertain whether they agree or disagree.
Basically the web has proved to be viable mechanism carrying forward the changes and augmenting the degree of trustworthiness (table six).
Table six: Do you agree with ads which appear in the social networking sites.
Advertisements accessibility
While they browse the internet to communicate, 8% of the entire population sample claims that they hardly show any interest or accesses advertisements that such social networking sites display. 21% claim that they only access ads on the social networking sites depending on the manner in which the communication appears. This is because ads information can be accessed differently based on the type of brand communication format.
For instance, the brand promotion might be in form of interactive games, interactive feedback forms or the display ads form. 36% of the participants often access social networking sites and have interests in listening to various brands ads. Only 35% of all the users avow that they pay attention to brand communication while yearning to connect with other brands sites so as to collect additional information.
It is worth mentioning that there is an evolution in the social networking sites given that the current clients require different engagement in comparison to the past years.
In fact, most traditional brand marketing strategies and schemes cannot work any longer Scott (2009) states that, social media brand marketing has emerged as a revolutionary strategy of building firm associations with clients prior to making initial contacts with attractive messages, funs as well as interactions (See table seven).
Table seven: Do you normally access advertisements that come on your way?
Brand communication that users find attractive
According to the survey, 28% of the respondents are attracted by the updates of the latest information, quiz and games. Only 26% are attracted by posts and fun pages while 26% of the respondents are attracted by flash ads interests. Also 14% of the internet users are listened to by video ads while the rest 12% of the users are majorly attracted by the traditional banner ads.
It has been found that the social networking is enabling brands to have engagement with right audience at the appropriate time. Currently, the social networking communication on branding has become more personal. Mover it has become controversial, captivating and persuasive.
Table eight: What types of Toms Company’s brand communication tends to attract you in the social networking sites.
The impact of communication
According to the findings 67% agree that strategies used in brand communication effectively have significant effect on certain brands and is useful in interactions. 24% of the users agree that the impact it creates is partial and communication traffic resulting in confusion in the mind of the users. Only 9% agree that it does not have much impact on the ads but is effective in charting, sharing and other communication purposes (table nine)
Table nine: Do you think that Toms Company’s ads had significant impacts in you.
Content analysis of the results
Several brand communication dynamics tend to incorporate social media ads and everyday brand competition increases. The communicators usually come up with more interesting, interactive and innovative brand messages to communicate and attract the target audience.
Such enticing product statements make users to advance their close brand communication strategies in order to access the social media sites that have attractive services and names. To realize the research outcomes, content analysis included three social networking sites that Toms Company commonly uses to place its marketing ads namely MySpace, Twitter and Facebook. The results show that:
- The targeted audience responds less the traditional advertisements as compared to the interactive marketing and internet ads.
- Most social network sites appear to communicate to all groups of people.
- Almost seventy percent of the total targeted audiences have significant impacts thru advertisements that are placed on the social networking sites and only 50% of the audiences access the advertisements including the events, quizzes and games.
- Social networking sites have emerged as the basic ground for companies that target high advertising and marketing. The sites such as Facebook, MySpace and Twitter provide consummate opportunity for any company such Toms to effectively build their product brands.
- Users recall company brands based on the way they are advertised and respond to novel kinds of ads that interest them.
- MySpace and Facebook are often used by similar age groups while Twitter users show less interest since this social networking site is more of a micro blogging site.
- The targeted audiences can build their advertisements in Facebook and MySpace.
- The social networking sites users expect brands to be communicated in such sites than the marketing of brands.
- Brand communication can easily be accessed in Facebook in comparison to any other social networking sites. Texts are only given much significance in Twitter.
- Customization is common in both Twitter and MySpace whereas Facebook tends to pursue text and default backdrop.
- User interaction and strategies for communicating seems to be inimitable in each site. For example, MySpace markets products through promotional brand pages and click advertisements; Twitter often feed posts concerning products brands and Facebook allows as well as promote the interactions of social networking sites users.
- Facebook and MySpace allow for interactions through display banners ads and each social networking site has its private web page space to promote advertisements (Shih, 2009).
Conclusion
Product or service communications contributes majorly to the brand competition in the market. Not only do such communication promotes creativity and innovation but also offer the essential information about the product or service. Moreover the social media advertising increases the consumer satisfaction.
The idea behind this fact is that brand cannot prosper if effective communication to attract users or clients is lacking. Currently, large and small brand rely heavily on social networking sites to be recognized and attract their target market.
Users of social networking sites such as face book, MySpace and twitter personalized their products and corporate branding in today’s digital era. All the brands that are being advertised in the social media have similar benefits and basic features that include the capability of adding multimedia, creating a page and share resources. Social media targets mainly the young users.
The young users spend much of their time in the social networking sites because of entertainment, social gathering and heavy commercial content. Therefore companies such as TOMS put their ads with increased interactive and fascinating factors in these social sites so as to increase their brand identity.
Social networking sites have been used by TOMS as a major resource to promote and develop its brand identity within the focused market.
Recommendations
For Toms Company to continue being successful, it should pursue two marketing strategies namely communication and promotion. In fact, the best way to advertise its brands is through promotion. Often, the traditional pop-up ads and banners make the target audience to overlook product brand.
Thus, the marketing strategy should be innovative, promotional and interactive to attract and hold the target audience. The target audience must be the individuals and not a group. Mass ads do not always deliver definite information. If Toms Company incorporates additional multimedia elements that enhance interactions on its fun pages, the targeted brand users would deprive some benefits out of it.
Conversely, communication should be given more preference than the ads. Basically, individuals are unlikely to purchase brands via social networking sites. When the communication of brand is properly done, the target audiences are likely to remember the product. This will be the greatest Toms Company success since the social media promotion will attract and retain more clients.
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