Foundations of Business: Exploring Social Media and e-Business
Chapter 14: Exploring Social Media and e-Business
Learning Objectives
14-1 Examine why it is important for a business to use social media.
14-2 Discuss how businesses use social media tools.
14-3 Explain the business objectives for using social media.
14-4 Describe how businesses develop a social media plan.
14-5 Explain the meaning of e-business.
14-6 Define the fundamental models of e-business.
14-7 Identify the factors that will affect the future of the internet, social media, and e-business.
14-1 Why Is Social Media Important?
What Is Social Media and How Popular Is It?
Social media: Online interactions that allow people and businesses to communicate and share ideas, personal information, and information about products and services.
Popularity statistics from a Pew Internet Research study:
70% of Facebook users visit each day.
Instagram, Snapchat, YouTube, and Twitter also have a significant percentage of daily users.
Approximate user figures:
Facebook: 2.7 billion users.
YouTube: 2 billion users.
Instagram: 1 billion users.
User numbers are increasing daily.
14-1 Why Is Social Media Important? (Continued)
Why Businesses Use Social Media
Connect with customers and stakeholders.
Provide valuable information to customers.
Offer an additional means of customer service.
Learn about customers’ preferences.
Promote specific products.
Hashtag: A word or short phrase, preceded by the pound sign (#), to identify different topics.
14-2 Social Media Tools for Business Use
Social Content Sites
Social content sites: Websites that allow companies to create and share information about their products and services.
Business Use of Blogs
Blog: A platform that allows a company to share information to enhance customer understanding of products/services and build trust.
Develop better customer relationships.
Attract new customers.
Share stories about products/services.
Provide a forum for testing new ideas.
Photos, Videos, and Podcasts
Media sharing sites: Platforms that enable users to upload photos, videos, and podcasts.
Influencer: A notable social media figure with significant follower influence.
Podcasts: Digital audio or video files available for online listening or viewing on various devices.
Social Media Ratings
Sites for reviews and ratings capitalize on consumer trust in peer opinions about products/services.
14-3 Achieving Business Objectives Through Social Media
Social Media Communities
Social media communities: Groups sharing common interests that utilize technology to connect with like-minded individuals.
Forum: An interactive version of a bulletin board focused on threaded discussions.
Wiki: A collaborative online space for members to contribute and share content.
Social media community manager: Executive responsible for overseeing all social media activities in a company.
Crisis and Reputation Management
Social media aids companies in crisis recovery through:
Answering questions with well-crafted responses.
Reassuring the public.
Presenting positive content to restore reputations.
Listening to Stakeholders
Critical first step in developing a social media strategy involves monitoring social channels to gauge customer opinions on products/services.
Targeting Customers
Many companies leverage social media to build awareness and brand loyalty, particularly among Millennials.
Targeting based on demographics like age increases effectiveness.
Social Media Marketing for Consumers and Businesses
Social media marketing: Utilization of internet technologies/software to promote a company’s products/services and enhance customer service.
Shift of advertising budget from traditional media to digital platforms.
Inbound marketing: Strategy focused on creating attractive website content to draw customers in.
Firms utilize social media marketing for:
Generating sales leads and raising sales.
Soliciting customer feedback.
Reinforcing positive brand perception.
Generating New Product Ideas
Crowdsourcing: Assigning tasks to a group to tap into collective ideas, enabling companies to innovate based on consumer input.
Recruiting Employees
Social media proves advantageous for recruitment across diverse organizations, including corporations, nonprofits, and governmental entities.
14-4 Developing a Social Media Plan
Steps to Build a Social Media Plan
Listen to Determine Opportunities:
Use social media to assess customer preferences and competitor strategies.
Establish Social Media Objectives:
Analyze collected information to create specific goals.
Segment and Target the Social Media Customer:
Understand customer demographics, buying habits, and social media usage.
Select Social Media Tools:
Choose appropriate platforms for reaching current and potential customers.
Implement and Integrate the Plan:
Execute plans considering both short-term and long-term strategies.
Measuring and Adapting a Social Media Plan
Quantitative social media measurement: Analysis via numerical metrics (e.g., website visits, fan counts, leads).
Key performance indicators (KPIs): Define and measure progress towards achieving organizational goals.
Qualitative social media measurement: Evaluating sentiments related to a brand.
Sentiment analysis: Technology-driven assessment of mood and attitudes from social media interactions.
The Cost of Maintaining a Social Media Plan
Social media management incurs time and financial costs.
Regular assessments against established benchmarks are necessary for optimizing the plan’s effectiveness.
Future plans should be informed by past results.
14-5 Defining e-Business
E-business (or electronic business): Organized efforts to produce and sell goods and services online to satisfy societal needs for profit.
E-commerce: A subset of e-business focused on online buying and selling.
Mobile marketing: Engagements conducted with customers via mobile devices, enhancing transaction speed through apps.
Organizing e-Business Resources
E-business operations often require more specialized resources compared to traditional business.
Outsourcing: Sourcing professional help or materials from external vendors, which can reduce costs for specialized resources.
Satisfying Needs Online
Benefits of e-business:
Saves time and avoids inconveniences (e.g., checkouts).
User-selected information and real-time customer service interactions are available online.
Creating e-Business Profit
Revenue stream: Various sources contributing to a firm’s income (e.g., selling merchandise, ads).
Reducing expenses: Providing online information can lower customer service costs.
14-6 Fundamental Models of e-Business
Business Model Overview
Business model: System of common characteristics and methods for sales generation and cost reduction.
Business-to-Business (B2B) Model
B2B model: Firms conducting business transactions with other businesses.
Emerges in two types:
Facilitation of sales transactions between entities.
Complex arrangements involving suppliers.
Business-to-Consumer (B2C) Model
B2C model: Firms focusing on transactions with individual consumers.
Key questions for B2C businesses include:
Product/service selection for online purchasing.
Online comparison shopping efficiency.
Consumer willingness for online purchases and shipping options.
Table: Other Business Models
Advertising model: Fees in exchange for ad displays on websites (e.g., pop-ups).
Brokerage model: Online marketplaces where buyers and sellers meet (e.g., Craigslist).
Consumer-to-Consumer model: Peer-to-peer platforms facilitating user-led exchanges (e.g., Craigslist).
Consumer-to-Business model: Influencers promoting businesses for compensation.
Subscription model: Paid access to exclusive content or services.
14-7 The Future of the Internet, Social Media, and e-Business
Internet Growth Potential
User Statistics: 5.1 billion out of 7.9 billion globally connected to the internet; 90% of the U.S. populating using the internet.
Key usage reasons: Connectivity, information access, and purchasing.
Growing trend towards businesses utilizing e-business for revenue and cost efficiency.
Ethical and Legal Concerns
Ethics: Issues include unauthorized tracking through cookies and employee monitoring.
Data mining: Searching through records for helpful insights.
Internet crime: Includes malware, identity theft, and fraud.
Future Challenges
Costs: Investment in information technology and cloud computing for efficacy and accessibility.
Green IT: Sustainable operational practices to support environmental health.
Internal and external environmental forces impacting business operations form part of a comprehensive strategy.
Chapter 14: Exploring Social Media and e-Business
14-1 Why Is Social Media Important?
Social media: Online interactions for communicating and sharing information about products and services.
High popularity: Billions of users daily on platforms like Facebook, YouTube, and Instagram.
Why Businesses Use Social Media: Connect with customers, provide information, offer customer service, learn preferences, and promote products.
Hashtag: A word or phrase preceded by
#to identify topics.
14-2 Social Media Tools for Business Use
Social content sites: Websites for companies to create and share product information.
Blogs: Platforms for sharing information, building trust, attracting customers, and testing ideas.
Media sharing sites: Platforms for uploading photos, videos, and podcasts.
Influencer: A notable social media figure with significant follower influence.
Podcasts: Digital audio/video files for online listening/viewing.
Social Media Ratings: Sites capitalizing on consumer trust in peer reviews.
14-3 Achieving Business Objectives Through Social Media
Social media communities: Groups sharing common interests via technology.
Forum: Interactive bulletin board for threaded discussions.
Wiki: Collaborative online space for content contribution.
Social media community manager: Oversees company social media activities.
Crisis and Reputation Management: Social media aids in answering questions, reassuring the public, and restoring reputations.
Listening to Stakeholders: Monitoring social channels is crucial for understanding customer opinions.
Targeting Customers: Building awareness and brand loyalty, especially among Millennials, through targeted demographics.
Social Media Marketing: Using internet technologies to promote products/services and enhance customer service.
Shift in advertising budget towards digital platforms.
Inbound marketing: Creating attractive website content to draw customers in.
Used for generating sales leads, feedback, and reinforcing positive brand perception.
Generating New Product Ideas: Crowdsourcing tasks to groups for collective ideas and consumer-driven innovation.
Recruiting Employees: Effective tool for recruitment across various organizations.
14-4 Developing a Social Media Plan
Listen to Determine Opportunities: Assess customer preferences and competitor strategies.
Establish Social Media Objectives: Create specific goals from collected information.
Segment and Target the Social Media Customer: Understand demographics, buying habits, and social media usage.
Select Social Media Tools: Choose appropriate platforms.
Implement and Integrate the Plan: Execute short-term and long-term strategies.
Measuring and Adapting:
Quantitative measurement: Numerical metrics (, website visits, fan counts).
Key performance indicators (KPIs): Measures progress towards goals.
Qualitative measurement: Evaluating brand sentiments.
Sentiment analysis: Technology-driven assessment of mood from social media interactions.
Cost of Maintaining: Incurs time and financial costs, requiring regular assessment against benchmarks.
14-5 Defining e-Business
E-business (electronic business): Organized efforts to produce and sell goods/services online for profit.
E-commerce: Subset of e-business focused on online buying and selling.
Mobile marketing: Engagements with customers via mobile devices, enhancing transaction speed.
Organizing e-Business Resources: Often requires specialized resources, with outsourcing reducing costs.
Satisfying Needs Online: Saves time, avoids inconveniences, provides user-selected information and real-time customer service.
Creating e-Business Profit: Diverse revenue streams (, merchandise, ads) and reducing expenses through online information.
14-6 Fundamental Models of e-Business
Business model: System for sales generation and cost reduction.
Business-to-Business (B2B) Model: Firms conducting transactions with other businesses.
Business-to-Consumer (B2C) Model: Firms focusing on transactions with individual consumers.
Other Business Models:
Advertising model: Fees for ad displays.
Brokerage model: Online marketplaces (, Craigslist).
Consumer-to-Consumer model: Peer-to-peer platforms.
Subscription model: Paid access to exclusive content.
14-7 The Future of the Internet, Social Media, and e-Business
Internet Growth Potential: High global and U.S. internet usage for connectivity, information, and purchasing.
Ethical and Legal Concerns: Unauthorized tracking (), employee monitoring, data mining, internet crime (malware, identity theft, fraud).
Future Challenges: Costs for IT and cloud computing, and Green IT (sustainable operational practices).