Chapter 1Introduction • Chapter one: 1. Introduction to the Study / Study Framework1.1.
Introduction 1.2. Pilot Study1.
3. Previous Studies 1.4. Research Questions 1.5.
Research Problem 1.6. Research Objectives1.7. Research Hypotheses 1.
8. Conceptual Framework 1.9. Thesis Structure 1.1.
IntroductionThe Word maximize means to get the best of something or to make the most of, or to increase the value of, In this paper we are investigating the use of the social media marketing and its role to maximize the customer equity we are going to explore how social media marketing can make the best of the firm’s current and potential customer Social media marketing is different than traditional methods of marketing; therefore, it requires special attention and strategy building to achieve brand equity. Social media marketing is related to relationship marketing, where the firms need to shift from “trying to sell” to “making connections” with the consumers (Gordhamer, 2009). Companies also need to keep away from “big campaigns” and stick with “small acts” since some small campaigns can easily reach lots of people and accomplish the objectives in a very short period of time (coon, 2010). Social media marketing is also more sincere in its communication with the consumers, trying to show what the brand is rather than trying to control its image. Finally, today’s customers are more powerful and busy; therefore, companies should be reachable and available in every social media communication channel such as Face book, Twitter, Blogs, Forums at any time (Gordhamer, 2009). Thus, it can be said that social media marketing helps firms to increase brand equity through networking, conversation, and community buildingIn world of unstable economic situations and in fluctuated financial situations most of the organizations decrease the marketing budget and the Marketers most frequent hard decisions are related to the marketing mix (Product, price, place & promotion).
In other words how to allocate the budget the most efficient way how to trade off strategic marketing initiatives resources across all the possible ways of reaching and serving potential and existing customers. And how to trade off spending more on new-product marketing or on brand building, investing on customer service improvements and less on sales promotion? Or should all of the above be pared down to fund more interactive-media investment? Intuitively, you know that there’s some optimal combination that would deliver the most impact. On companies, Brands ; Organizations; the value of customers’ base is very important because it is representing the future revenues. The higher the customer equity (CE), the more future revenue in the lifetime of its customers; comparing to other companies with less customer equity Accordingly, a company with higher customer equity is more valuable than one without it. According to Ibrahim 2009, there has been a significant change in the attitudes of researchers and practitioners.
Every job within the organization has a role in maximizing the value of the organization and the shareholders’ rights, turning attention to the level of analysis and evaluation from the level of activities and marketing efforts to the level of customer responses. This change has led to the realization that the relationship between marketing and finance should be managed systematically. It is no longer possible to rely on traditional assumptions that positive marketing activities and efforts at both markets and products will automatically turn into the best financial results. The perspective that considers customers as assets must be developed and enhanced through marketing activities and efforts so that the financial impact of the related decisions can be measured.
The interest in the organization’s assets has become increasingly popular in recent years: Represented in the pressures related to capital markets; until the investment proposals are evaluated accurately, and internal factors, most importantly the optimal allocation of resources and determine the financial impact of investment proposals.However, some organizations that have invested in customer-oriented programs have been frustrated by the fact that the returns from these programs were far less than the efforts made. These programs were generously spent on these programs. Customers were not willing to bear the increase in prices and demand for their products fell, To declare bankruptcy and exit completely from the market and some have abandoned those programs.According to Rust & Lemon in 2004 Customer equity is divided into three main components: The Value Equity, the Brand Equity & the retention equity The social media era was started around ten years ago. It began with LinkedIn, which was launched in, 2003, followed by both MySpace and Facebook in 2004, YouTube in 2005, and Twitter in 2006 (Pradiptarini 2011).
Social media term is a construct from two areas of research, communication science and sociology. In the context of communication, social media is simply a means for interactive connections between customers and brands by sharing information and experiences via the web (Shojaee and Azman, 2013). The ordinary social media definition was developed by Kaplan and Haenlein as a group of Internet-based applications that allow the (creation and exchange of user-generated content (UGC .Kaplan and Haenlein, 2010,). Andzulis et al.
(2012) defined social media from marketing perception as the technological module of the communication, transaction and relationship building Usage and EffectivenessFunctions of a business, which leverages the network of customers and prospects to promote value co-creation these definitions, entail the following characteristics of social media. It is a software tool that creates user generated content and facilitates the Internet users to ,join, connect, and share ideas, content, views experiences, concepts, and information (Chan and ,Guilllet, 2011; Neiger et al., 2012; Sinclaire and Vogus 2011). User-Generated-Content (UGC) permit Internet users to create comments in different forms, such as photos, videos, ratings, reviews, articles, and blogs (Judson and Rajdevasagayam, 2012; Jussila et al.
, 2014) It is also noted as user-created-content (UCC) or & consumer- generated media (CGM) (Judson Rajdevasagayam, 2012). Social media does not seek to substitute telephones, e-mail communication, or even transactions. Instead, it seeks to complement them or enhance the value of each interaction with the customer. Greenberg (2010) argued that all customers are nowadays “social customers” and every communication is part of a new cooperation between firm and customer: a .(vital part of CRM (customer relationship management Akar and Topcu (2011) indicated that social media to some extent changes customers into marketers and advertisers, and customers can create positive or, negative experience for the firm and its products depending both on how the firm or brand is communicated online and on the products quality presented to the customer.Social media tools include social network (e.
g ,(Facebook, MySpace, LinkedIn), Wikis (e.g., Wikipedia ,.
Podcast (e.g., Apple iTunes), content communities (e.g (YouTube), blogs and microblogs (e.g.
, Twitter Mohammadian and Mohammadreza, 2012). Castronovo) and Huang (2012) stated that a firm chooses from these platforms when formulating a social media strategy.This social media strategy is developed based on the objectives of the strategy and the usage of social media among firm’s target market In relation to social media, social media marketing concept (SMM) is defined as any form of direct, or indirect marketing that is used to build awareness ,recognition, recall, and action for a brand, business product, person, or other entity and is carried out using the tools of the social Web, such as blogging, microblogging, social networking, and content sharing (Gunelius, 2011).Akar and Topcu (2011) described this kind of marketing as an integral part of online marketing activities that integrates with the traditional Web marketing strategies, such as email marketing, webinars, and online advertising, but not equal to online marketing because online channels are static in nature and are just one way communication of which firms used to give out information without interacting with customers. Furthermore, Erdogmus and Cicek (2012) explained the difference between social media marketing and traditional methods of marketing as the social media marketing is related to relationship marketing, where the firms need to shift from “trying to sell” to “making connections” with the customers.
Akar and Topcu (2011) added another difference that traditional marketing applications and their contents are directed or “pushed” from the firm to the customer without a request. On the contrary, Paquette, Holly (2013) stated that social media marketing is participatory; meaning that it consists of multi-directional communication, brands communicate with customers; customers communicate with those brands, and most importantly, customers share with each otherThe Cultural Industries in Egypt are known for their lifelong history in the Arab states. Ranging from being accounted as one of the largest producers of Film Industry in the World, and a well-established Book-Publishing Industry, a thriving Sound Recording Industry to a dynamic Software Industry, the role of Cultural Industries in the Egyptian economy is on a rising trend. The four industries investigated represent an example of the so called “core cultural industries”.
The core of the cultural industries includes book publishing, newspapers, periodicals, printing, advertising, radio and television broadcasting, sound recording, musical and audiovisual works, motion pictures and films and computer software. (Ghoniem 2002)The Cultural Industries suffer from neglect of government. They share weak Institutional and political support. Hence, governmental policies affecting them have been either not effective or counter effective. The demand conditions related to cultural industries are highly vulnerable to the prevailing economic and political conditions. They have a high price and income elasticities.
The cross cutting themes among the Cultural Industries should not lead us to jump to the conclusion that they are identical in everything. On the contrary, every Cultural Industry has its own specificity which makes it impossible to provide “one size fits all” solutions (for a similar argument see UNESCO, 2000). In this research the researcher is focusing on cultural centers as it can be neighborhood community arts organizations, private facilities, government-sponsored, or activist-run and the notion of cultural industries generally includes textual, music, television, and film production and publishing, as well as crafts and design For some countries, architecture, the visual and performing arts, sport, advertising, and cultural tourism may be included as adding value to the content and generating values for individuals and societies. They are knowledge-based and labor concentrated, creating employment and wealth. By nurturing creativity and fostering innovation societies will maintain cultural diversity and enhance economic performance.
Since then large number of cultural centers have been founded in Egypt Cultural Centers are places where cultural industries mainly been promoted and introduced to its target audience A cultural center or cultural centre is an organization, building or complex that promotes culture and arts. In 2003 Mohamed El Sawy former Minister of culture established El Sawy Culture Wheel , private cultural center, located on Gezira Island in the Zamalek district, central Cairo, Egypt. It is considered one of the most important cultural venues in Egypt the center gets more than 20,000 visitors monthly and its website receives approximately 150,000 visitors/month and its facebook page is liked and followed by more than 600,000 facebook accounts. 1.2.
Previous Studies:Angella J. Kim a,1, Eunju Ko 2011 published a paper titles with Do social media marketing activities enhance customer equity? An empirical study of luxury fashion brand and its abstract stated that In light of a rising attention in the use of social media marketing (SMM) among luxury fashion brands, this study set out to identify attributes of SMM activities and inspect the relationships among those perceived activities, value equity, relationship equity, brand equity, customer equity, and purchase intention through a structural equation model. Five constructs of perceived SSM activities of luxury fashion brands are entertainment, interaction, trendiness, customization, and word of mouth. Their effects on value equity, relationship equity, and brand equity are significantly positive. For the relationship between customer equity drivers and customer equity, brand equity has significant negative effect on customer equity while value equity and relationship equity show no significant effect.
The findings of this study can enable luxury brands to forecast the future purchasing behavior of their customers more accurately and provide a guide to managing their assets and marketing activities as well It is crucial to not only communicate with customers as a brand, but also build relationships and recur customers who will become ambassadors of the brand.Many firms have introduced customer relationship marketing programs to optimize customer communications. Some marketing observers encourage firms to properly define and manage the value of their customers. (Zhang:2011)The concept of customer equity can be useful in that regard.
So the theory of customer equity, including customer equity’s component and calculation, is more and more significant In their paper, they made numerous contributions to marketing theory and practice. First, they provided new opinions about customer equity’s component from the perspective of customer behavior. Second, they offer a set of related formulas to calculate them. But as with any new effort, there is much work yet to be done.Hamed Karamian , Nadoushan ;Nadoushan in 2015 conducted a study to investigate the effects of Social media marketing in brand equity. Data were collected through random questionnaires consumers.
350 questionnaires were distributed in the Hayprastar in Esfahan and 315 questionnaires were collected. To examine each hypotheses of the study, Pearson Correlation test has been employed. The final results indicate that Social media marketing activities are significant in brand equity and also that Social media marketing activities bears on perceived quality, brand awareness and brand loyalty. Then, all research variables are approved Companies can use social media marketing to establish relationships with loyal customers and affect their individual insight of the product, bring out their own information and also learn from and about their customers. So using social media marketing can expand communication with customers and boost customer loyalty.
Customers, categorize social media as a more trustworthy source of Information compared to the traditional marketing communication tools that companies use. On this basis, companies can get response from customers, according to whom they can figure out what the customers’ desire and what products are in demand, and supply them faster than their competitors. Finally, the quality of products and services can be enhanced with the use of social media whose relation to the perceived quality has been approved in this researchPookulangara and Koesler (2011) used the Technology Acceptance Model3 (TAM3) to look at the impact of culture on social media. TAM3 highlights the role and actions connected to perceived usefulness and perceived ease of technology.
TAM3 suggests that the factors that verify perceived usefulness will not influence perceived ease of use and the factors that influence perceived ease of use will not influence perceived usefulness (Pookulangara and Koesler 2011). The researchers used TAM3 to find out if an individual’s cultural background affects perceived ease and perceived usefulness in order to separate users’ behavioral intention towards social media. More in particular, the researchers used TAM3 to determine if an individual’s cultural background influences how they will understand a message, event, or idea offered to them through a social networking site.
This was done through a conceptual framework in which the researchers created a research model using TAM3. Based on the research model, Pookulangara and Koesler (2011) conclude that culture does in fact influence how individuals act and perceive an event on technology based applications, such as social media. This means that an individual’s cultural or ethnic background will influence how they will understand social media and its content. “Social networking has permitted the development of new culture where it is no longer shaped by just individual values and ideologies, but also by new rituals and communication tools in the social space of Web 2.0” (Pookulangara and Koesler ,2011)Chu (2011) examined the link between Facebook brand related group contribution, advertising responses, and the psychological factors of self-disclosure and attitudes among members and nonmembers of Facebook groups.
The study determined that users who are members of groups on Facebook are more likely to disclose their personal data than nonmembers are. Chu explains group contribution and engagement with online ads requires a higher level of personal information because users explicitly disclose their connections with Facebook groups and promote brands or products when they pass on ads to their friends. “Facebook groups offer channels that customers think useful when looking for self-status in a product category, as does passing on viral content about brands to their social friends” (Chu 2011). Chu (2011) also found that users who are Facebook group members continue a more positive attitude toward social media and advertising. Users who have more positive attitudes toward advertising are more likely to join a brand or a retailer’s Facebook group to receive promotional messages. Based on this result, Chu (2011) suggests that a link exists between consumers’ use of and engagement in group applications on a social media sites.
The relationship between customers’ use of and engagement with group applications influences the rate and effectiveness of advertising on social media, particularly Facebook. Generally, as Chu(2011) notes, Facebook’s Teenage users have the most positive attitudes toward social media advertising and are the major growing demographic, which suggests that social media sites are a potentially rich platform for online advertising campaigns, especially for companies with a younger target market.Cox (2010) also investigated the correlation between age and attitude and found that social network user attitude toward online advertising formats (i.e. blogs, video, and brand channel or page) differed to some extent across age groups.
She explains that users who fall in the 18-28 age groups had strong positive attitudes towards blogs, video, and brand channel ad formats. This was because users’ found these ad formats to be attractive, informative, and entertaining. The 35-54 age groups preferred ad formats on video and brand channels because they found them to be more attractive, informative, and had better placement within the online page layout. Overall, online advertising formats with positive attributes are welcomed by users; however, ads that are disturbing or interfere with online social networking activities, such as pop-up, expandable online banners, or floating formatted ads were not accepted by network users (Cox 2010).
According to Chi (2011) users perceive advertising in a different way depending on the social network, which suggests user motivations for online social networking may play a crucial role in defining customer’s responses to social media marketing. Harris and Dennis (2011), however, used TAM as a loose framework that combined trust and the factors associated with TAM (i.e.
perceived enjoyment, ease of use, and usefulness). Di Pietro and Pantano (2012) conducted research using the TAM to distinguish that enjoyment is the main factor that influences customers to use social networks as a platform for supporting in their buying decisions. They found that the fun provided by Facebook, as well as the opportunity it provides users to ask for suggestions in an easy and entertaining way, motivates individuals to pay more attention to the products promoted on Facebook. “Facebook promotes a customer to customer approach, exploited by customers to share their experiences and create a general knowledge on products and services; on the other, it provides marketers a direct communication with their customers through a business to customer approach” ( Di Pietro and Pantano 2012). Retailers can improve their Facebook page appeal by adding games, contests, and engaging applications, which can attract more customers (Di Pietro and Pantano 2012).However, retailers also need to be knowledgeable on customer’s attitudes when it comes to social media marketing.
A deeper perceptive of how customers perceive social marketing will help ensure marketing strategies are useful.Customer activities of spending, participation, and production are not related to just one stimulus according to Heinonen (2011), who concluded that customer activities are a mixture of a range of motivations. Awareness of customer’s motives is significant because it provides a deeper interpretation of what encourages customers to produce content about a brand or product.
Customer generated content produces social currency for marketers because it helps define a brand. Customer generated content describes “the sum of all ways in which people make use of social media, generally useful to explain the variety of forms of media content that are publicly available and created by customers” (Kaplan and Haenlein 2010). An individual’s connections can potentially aid in developing brands into an essential part of customers’ social interactions via social networking. There are six components of social currency: affiliation, conversation, utility, advocacy, information, and indemnity (Zinnbauer and Honer 2011). Social currencies come from interactions between consumers and are usually beyond the direct control of a firm (Zinnbauer and Honer 2011).
Through their empirical study, Zinnbauer and Honer (2011) establish that although social currency consists of six different components, brands do not rely on all of them to facilitate brand loyalty among users. Important factor that made a brand successful is being an essential part of people’s daily lives. When a brand becomes integrated into a customer’s daily life, it enables customers to connect, interact, and benefit from like-minded brand customers, and thus, the likelihood of customer generated advertising for a brand increases (Zinnbauer and Honer 2011).
Consumer Generated Advertising (CGA) is a form of social media user-generated content, which refers to specific instances where customers create the brand, focused messages with the purpose of informing, persuading, or reminding others (Campbell et al. 2011). Muñiz and Jensen Schau (2007) and Pehlivan, Sarican, and Berthon (2011) use the term vigilante marketing to describe Consumer Generated Advertising CGA. Vigilante marketing is defined as “voluntary advertising and marketing activities, including one to one, one to many, and many to many commercially oriented communications, undertaken by brand loyal customers on behalf of the brand” (Muñiz and Jensen Schau 2007). Campbell et al.
(2011) state that today, traditional marketing is synchronized with CGA. So Marketers need to be aware of this because CGA can certainly support traditional marketing or it can harmfully impact and damage it. Cheong and Morrison’s (2010) research supports the previous statement by explaining how the lack of research on the credibility of both positive and negative Consumer generated content (CGC) highlights the need for marketers to be aware and study CGC to completely recognize its power. Customers are taking part in a diverse array of activities such as consuming content, participating in discussions, and sharing knowledge with other customers, to contributing to other customers’ activities (Heinonen 2011). 1.3.
The Pilot Study Throughout this research we are exploring the role of social media marketing activities on maximizing and enhancing customer equity and how the this virtual communication increase brand awareness and engage more customers and raise awareness about the value of the product and services through the online word of mouth, reviews and ratings.The researcher conducted several meetings and in-depth interviews with several Cultural industries Stockholders asking them a set of questions in this regard.We conducted these meeting with two groups: cultural centers managers, artists, Theater Managers, Artists managers & Designers which we call Cultural Industries Associates & Practitioners.
In addition to asking a set of questions for university students and general cultural activities attendees which we call the Audience. The Researcher Asked the Audience (Egyptians interested in Cultural Events):• What are the most important Cultural Centers / Cultural Activities (Describing what it is) in Egypt?The Answer of these questions shows that the word cultural industries is not familiar that why we used cultural centers in stead and most of the majority of the audience referred to El Sawy Cultural wheel and the other answers was scattered about other cultural centers like (Room Art Space – Bedayat – Emad EL Din Studio ..etc)During our Discussion we expanded our scope to include the wider cultural scene to includes other centers like Cairo Opera House – Darb 1718 – Beit El Sennari in addition to other cultural activities like D-CAF (Down Town Contemporary Art Festival) and Independent (Underground) Music and Art Bands • How do you know about it?Most of Audience answered with friends, referrals, Facebook, Internet and few answered with Newspapers or by coincidence. Another important answer was that we know the place because of the band or the activity itself and another answered with: I love it and I searched for it (Music, Design, Gallery .
..etc) • How do you receive their updates?They answered with: we receive the updates by chance or sometimes I look for the updates and usually this is happening through the website or facebook page• How do you know about the price/Fees?Yes for sure prices make it easy and support my decision to go or join, few answered with that it doesn’t matter because we know that most of this places is affordable• Do You Recommend it to friendsSometimes we share these activities with friends to motivate me to go. Others answered with, I (tag/mention) any of my friends I know he/She are interestedThe Researcher Asked Cultural Industries/Centers practitionerso How did you build your customer base?o Do you have social Media Accounts?o Do you actively use these accounts?o What is the main promotion channel that you use to promote your product/Service?o Do you think social media marketing activities are effective marketing tools?We attended different cultural (Theater – Book Signing – Seminars – Acting Workshops – Music) events and communicated directly and electronically with those who manage, organize, market ; perform in this events and we asked them a set of questions aiming to explore the role of social media marketing in their activities and the relationship between them and their target audience that they call them fans, members or customersWe asked Cultural Industries/Centers practitioners: How did you build your customer/Fan/Membership base?We concluded the following Answer:Most of them started with their friends, colleagues and friends of friends in addition to family members and relatives and their word of mouth• Do you have social Media Accounts?Yes Sure• Do you actively use these accounts?Almost Daily• What is the main promotion channel that you use to promote your product/Service?Our social Media posts ; Ads and our social ; professional networks, also we usually print out a monthly calendar and our loyal fans usually check our website from time to time• Do you think social media marketing activities are effective marketing tools?Social Media is very important tool especially facebook but you cannot depend only on it and the content is the most important thing.
The researcher also tracked several cultural center and cultural industries event’s organizers on socal media see Appendix (1)1.4. Research Problem Technological development has had its effect on marketing activities. Traditional marketing still exists but social media marketing has clearly taken its place.
The research problem is to assess the role of social media marketing activities on maximizing customer equity in cultural industries and cultural centers in Egypt.1.5. Research Question:o Is there a significant relationship between Social Media Marketing activities and Customer Equity?o What is the role of Social Media Marketing Activities on Value equityo What is the role of Social Media Marketing Activities on Brand equityo What is the role of Social Media Marketing Activities on Relationship Equity?1.
6. Research Objective• Evaluate the influence of perceived social media activities on customer equity1.7. Research Hypothesis• H.
There is a significant relationship between Perceived social media marketing activities and customer equity.• H.a. Perceived social media marketing activities have positive effect on Brand equity.
• H.b. Perceived social media marketing activities have positive effect on Value equity.• H.c.
Perceived social media marketing activities have positive effect on Relationship equity1.8. Conceptual Framework Research VariablesResearch Title: Maximization of Customer Equity through Social media marketing(Applied Study on Cultural Industries / Cultural Centers in Egypt)Independent Variable: Social Media Marketing Activities Dependent Variable: Customer Equity According to the Pilot research we are planning to conduct our applied study with following tools: According to (Lemon et al., 2001Vogel et al., 2008 Kim et al., 2008).
Measuring perceived SMM activities were gathered from previous studies on brand’s social media marketing, attributes of two-way communication media, influence of mobile advertising, and characteristics of mobile shopping related researches and modified to fit for this research (Chung ; Lee, 2008; Han ; Shu, 2010; Kim, 2010; Kim ; Chung, 2009; Lee, 2007).Measurements of value equity were developed in accordance with Berry (1995), Gagliano and Hathcote (1994), Rust et al. (2000), and Wiedmann et al. (2009). Constructs of value equity measures included price, product quality, service quality, convenience, and the tangible environment of the retailer, individual value, and social value. Measurements of relationship equity were developed from Hennig-Thurau et al.
(2002) and Ju and Chung (2002). Items assessed preferred treatment customer service, coincidence of image with brand, and overall affection. Measurements of brand equity included brand awareness, perceived value, brand personality, brand association, and perceived uniqueness aspects. Measuring brand equity was developed from Aaker (1991) and Yun (2006). Brand equity: Customers’ subjective and intangible assessment of the brand, above and beyond its objectively perceived value. Key Drivers:• Customer brand awareness.
• Customer brand attitudes.• Customer perception of brand ethics.?Value equity: Customers’ objective assessment of the utility of a brand based on perceptionsKey Drivers:• Quality• Price• Convenience.?Relationship equity: Customers’ tendency to stick with the brand, above and beyond objective and subjective assessments of the brand. Key Drivers:• Loyalty programs, • Special recognition and treatment programs.• Community-building programs.
• Knowledge building programs.Methodology: This thesis involved two types of research for data gathering; secondary research and primary research. Secondary research was discussed in a form of literature review and primary data was collected in a form of questionnaire and researchers observations through social media platforms. Secondary researchThe research for this thesis started with secondary research, more specifically with a literature review.
Literature review provided a discussion and analysis concerning the existing literature about customer equity and its drivers, social media marketing and Cultural Industries. Considering the topic, the key sources for this thesis are scholarly articles in academic journals in the field of marketing. The work of Kim and Ko (2011) and many other researchers we mentioned in previous studies section. This study used online questionnaire to conduct primary data. Primary data was used to test hypotheses, and for this study it was quantitative in nature. Regarding choosing the data collection method, online questionnaire was chosen because of the accessibility and time limitations.