INB20009 Global & Digital Marketplace

Global Consumers in the Global

Marketplace: Power Of Web 2.0

Source: Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D 2012, Marketing
meets Web 2.0, social media, and creative consumers: Implications for
international marketing strategy. Business Horizons, Vol. 55, pp. 261-271.
Recap: Few Key words to remember

Global marketspace
Globalisation
Marketplace Vs Marketspace
McLuhan's (1964) framework
Social Media ( Web 2.0, User generated content)
Different business models
Social media
Social presence theory
Social processes
The social as capital
The social as theatre
 Lesson plan
PART 1-2 Concepts and Theory
(1)Prosumers; Creative Consumers
(2)Success and disaster in the marketspace
(3)Five axioms for using social media in the global marketspace

PART 3 Applications
(5)Recommendations for Global Business Managers
(6)Barriers to the implementation of an international social
media strategy
 Part 1
Concepts
1- How do Consumers Consume Social Media?

2- How do Businesses Make Use of Social

Media to engage with Consumers?
Web 2.0, Social Media, and Creative Consumers
➢ Web 2.0, social media, and creative consumers are often used
interchangeably largely because they are closely related and
interdependent
➢ There are many opportunities and challenges that Web 2.0, social media,
and creative consumers present and the resulting respective shifts in loci of
activity, power, and value.
Web 2.0, Social Media, and Creative Consumers

▪ Web 2.0 - technical infrastructure that enables the social

phenomenon of collective media and facilitates consumer-
generated content.

▪ Social media – Platform for contents, communication,

community-based input, interaction, content-sharing and
collaboration to interact with friends, family and various
communities.

▪ Creative Consumer – Creators & Consumers of that

content
Effects of Web 2.0 from consumer
perspectives

➢ Web 2.0 enables the creation and distribution of the content that
is social media.
➢ Web 2.0 technologies have caused three effects:
(1) A shift in locus of activity from the desktop to the Web
(2) A shift in locus of value production from the firm to the
consumer
(3) A shift in the locus of power away from the firm to the consumer
Today, that video has been viewed over 22
million times, and DSC has grown to include
a team of about 45 full-time employees, 1.1
million subscribers, a whopping $615
million valuation in 2015, and most recently
a $1 Billion all-cash acqusition by Unilever.

But how did they do it?

#1 Offering a Real Solution
Name-brand razors sold in drug and retail stores cost too much,
but with DSC you’ll have -
Quality generic alternatives automatically delivered to your
door for as little as $3.00 a month!
No contracts, no hidden fees, or as they say “no BS.”

• It’s a perfect example of product-market fit. Founder and CEO,

Michael Dubin didn’t reinvent the wheel.
• He simply created an affordable solution to a real, relatable
problem shared by men (and even women) everywhere.
• By selling something people actually want and need (in an
industry that has not seen much innovation in decades,) Dubin
set the stage for both marketing and overall organizational
success.
 The Experience
& “Delight”
Shortly after order, your first shipment
arrives with:

• A beautifully branded box

• Another playful welcome note (see
above)
• Your shaving products
• An explanation of the upgrade process
• Occasionally free samples, and
• “The Bathroom Minutes,” Dollar Shave
Club's monthly lifestyle newsletter
(including a note from the chairman,
monthly quotes, member spotlights,
trivia, and club news amongst other
things.)
Locus of Activity, Power, and Value Production
Effects of Web 2.0 from consumer perspectives

➢ Web 2.0 is a series of technological innovations that

➢ Facilitate inexpensive content creation, interaction, and
interoperability,
➢ Put the lay user rather than the firm (Business) in the center stage in
terms of design, collaboration, and community on the World Wide
Web.
➢ Richer context & user friendly interfaces for consumers to both create and
consume information.
➢ Web 2.0 has two main consequences of importance to global marketers.
▪ First, it has given rise to what has been termed ‘social media,’ and
▪ Second, it has allowed ‘creative consumers’ to flourish
Interoperability

• The ability of computer systems or software to exchange and make

use of information.
What has happened to Consumers?
Prosumers: Creative Consumers
(Production+ Consumers)

A consumer who becomes involved with designing

or customizing products for their own needs.

What is a prosumer in social media?

Seizing the opportunity to affect the attitudes of peers, many

social customers serve as prosumers who act as influencing
agents that propagate highly salient information about products
and services via social channels.
Prosumers: Creative Consumers
(Production+ Consumers)

➢ Users of Social Media applications have the desire to

actively engage and to become both producers and
consumers of information, so-called “prosumers” (Toffler,
1980).

➢ Creative consumers are the new locus of value in Web 2.0. It

is ‘Consumers'—rather than firms— who produce much of
the value-added content in social media, and it is their
networks of friends and associates that constitute the social
(watch_prosumers)
 Social media and Prosumers
• In the marketspace, it is important to
distinguish between these two concepts;

1. The media (e.g., YouTube, Facebook,

Twitter) are essentially vehicles for
carrying content.

2. The content—in the form of words, text,

pictures, and videos—is generated by
millions of consumers around the world,
(Muniz & Schau, 2011)
Social media and Prosumers
• Informal discussions about products and services via Facebook
or Twitter
1

• Consumers creating structured reviews and evaluations in text

or video
2

• Consumers become involved in the promotion or demotion of

brands through self-created advertising videos
3

• Consumers become involved in the modification of

proprietary products and services and the distribution of
4 these innovations (e.g., Berthon et al., 2007 and Mollick,
2005).
Impact: Success and disaster in
the marketspace
➢ Dave Carroll and ‘United Breaks Guitars’
Within five days of Canadian musician Dave Carroll posting a video
for a song called “United Breaks Guitars” on YouTube back in July
2009, United Airlines’ sales declined by around 20%, costing
shareholders roughly $180 million dollars (Ayres, 2009)

• There are many success stories in social media that illustrate the
change in locus of value creation from the firm to the individual or
community (i.e., Shit my Dad Says )
United Breaks Guitars

https://www.youtube.com/watch?v=5YGc4zOqozo
Some smart companies are leveraging
social media for good marketing effect.
Old Spice
• The campaign was launched in 2010 and
immediately went viral
• It featured actor Isaiah Mustafa, who spoke
directly to the camera in a humorous and
over-the-top manner.
• The message was clear: Old Spice was not
just the choice for older men, but was also a
product for young, modern, and adventurous
men.
• The success of the campaign was due in large
part to its humor, which was relatable to a
broad spectrum of consumers.
Success and disaster in the marketspace
➢ Procter & Gamble's Old Spice brand. This veteran brand was
almost certainly in the decline phase of its product lifecycle
when an ad was created featuring NFL star Isaiah Mustafa as
the ‘Old Spice Guy.’ The ad won the Golden Lion award at the
Cannes Film Festival in 2010.
➢ The real success came from its posting on YouTube with millions
of downloads, very successful humorous tweets on Twitter, and
the creation of a hugely popular fan page on Facebook.
➢ Sales of Old Spice increased by 55% between April and June
2010 ( Pitt et al., 2011)
Part 2
Theory
Five axioms for using social media in the global
marketspace

1. Social media is a function of the technology, culture, and government

of a particular country.

2. In the age of social media, local events seldom remain local.

3. In the age of social media, general issues seldom remain general;

that is, macro issues tend to be (re)interpreted locally.

4. The actions and creations of creative consumers tend to be a function

of the technology, culture, and government of a particular country.

5. Technology tends to be historically dependent; that is, technologies in

different countries evolve along unique trajectories due to inertia
rather than because they are the optimal solution.
 Axiom

a statement or proposition which is regarded as

being established, accepted, or self-evidently true.

1.Social media is a function of the technology, culture,
and government of a particular country
The social media profile of a particular country is to be determined by
three factors:

(1) Technology (the infrastructure enabling social media)

▪ For instance, the country’s level of technological advancement,
such as the average bandwidth and speed will make some
media more or less prominent than others.

(2) Culture (shared values)

▪ The choice and popularity of social media is also determined
by cultural norms and values.

(3) Government (institutional rules and regulations).

▪ For instance, the attitude of that country’s government about
the particular social medium. Chinese government has banned
the social networking site Facebook.
 1.Social media is a function of the technology, culture, and
government of a particular country
➢ Studies showed that the relative interest in particular social media differs
markedly across countries.
▪ For example, Facebook, Instagram, and LinkedIn attract high interest
in the United States, India, and South Africa, while interest in LINE &
Mixi are almost exclusive to Japan where there is little interest in
Facebook or LinkedIn.
Which social media are used in these
countries?
1. China
2. India, Hong Kong
3. Korea, Taiwan

4. South Africa
5. Turkey, Iran, Lebanon
6. Russia
7. France, Germany, Italy

8. Venzuela, peru
9. Brazil, Columbia,
10. Coasta Rica
• Weibo, WeChat, Baidu and Taobao
 1.Social media is a function of the technology, culture, and
government of a particular country
1. From an international marketing strategy perspective, this
means that firms cannot follow a one-size-fits-all or
standardized approach when it comes to social media usage.
2. A company will need to customize the social media aspects of
its global marketing strategy to fit and accommodate national
differences.
2. In the age of social media, local events
seldom remain local.
➢ In pre-social media times, the risk of a MNCs having its marketing operations
affected globally by an occurrence in one country was much less likely than it
is today.
▪ For example, a leak of methyl isocyanate gas occurred in December
1984 at the Union Carbide India Limited pesticide plant in Bhopal, India.
Severe as the tragedy was, it did not have a considerably adverse effect
on the company’s brands internationally.
 2. In the age of social media, local events
seldom remain local.
➢ In this age of social media, what is local becomes global.

▪ For example: Nestlé and its well-known Kit Kat brand. Greenpeace
targeted the brand because Nestlé is a major purchaser of palm oil.
▪ Palm oil is grown in rainforest areas, mainly in Indonesia and Malaysia,
where natural forests are often destroyed in order to plant oil palms.

Greenpeace created an ad
that featured an individual
consuming a Kit Kat only to
have the tasty chocolate bar
turn into bleeding
orangutan fingers when the
consumer bit into it.
2. In the age of social media, local events
seldom remain local.
➢ From an international marketing strategy perspective, a
company executives must continually monitor local news
concerning a firm’s product offerings and brands, and
gauge the impact of seemingly local events on overall
strategy.
3. In the age of social media, general issues seldom remain general;
that is, macro issues tend to be (re)interpreted locally.

➢ Just as local events become global, global phenomena are often

(re)interpreted locally.
➢ Social media has sped up this process dramatically and added an
increased element of unpredictability.
➢ Global issues—such as global warming, the financial crisis, and
democracy (Arab Spring)—are viewed and processed in very different
ways by different countries, states, and regions.
➢ For instance, ‘Arab Spring’ the democracy movement was interpreted
and acted upon in very different ways in disparate parts of the Arab
world. Some communities, such as Libya, chose violent insurrection,
while others, such as Egypt, chose peaceful protest.
3. In the age of social media, general issues seldom remain general

➢ Fashion is a popular topic in social media; however, an analysis of

European social media reveals that while Zara and H&M are the two
most blogged, tweeted, and discussed brands in all three countries, the
Spanish are differentially obsessed by Benetton, the French by Promod,
and the British by Mango (Aramendia 2010).

➢ Social media perform a number of different

functions in the international context:
▪ they facilitate the rapid dissemination of
information
▪ they allow the accelerated spread and
coalescence of interpretive frameworks
that make sense of that information;
and
▪ they allow the swift coordination of
action or, inter-action.
4.The actions and creations of creative consumers tend to be a
function of the technology, culture, and government of a
particular country.

➢ The ‘creative consumer’ phenomenon refers to consumers

worldwide who adapt, modify, or transform firms’ proprietary
offerings
➢ The modifications and adaptations range from the very simple, such
as creating a whole home's furniture out of FedEx boxes (Morrisey
2005), to modifying entire automobiles, as Ron Gremban did with
his Toyota Prius (Molloy 2005).
➢ Creative consumers tend to mess with products and they can be a
gold mine of ideas and business prospects, as they identify
opportunities that become sources of revenue and growth for the
firm.
4.The actions and creations of creative consumers tend to be a
function of the technology, culture, and government of a
particular country.

➢ The Internet and social media permit connections between creative

consumers and the dissemination of their ideas. For example, site
memberships devoted to hacking the iPhone or Sony's PlayStation 3
outnumber many countries’ Facebook membership.
➢ The phenomenon is boosted by the programmability and malleability of
software and components that have evolved in the last two decades, as
well as an overall cultural shift toward customization and individualization
(Franke & Schreier, 2010).
➢ When it comes to creative consumers, international marketers need to
realize that consumers in some countries will hack and modify offerings
4. The actions and creations of creative consumers tend to be a
function of the technology, culture, and government of a
particular country…contd.

• While Japanese consumers loved

Sony's AiboPet robotic dog and
cared for and nurtured it,
Americans just did not ‘get it.

• A number of owners, disappointed

that a $3,000 toy could do so little,
hacked the dog's software and
made it do things Sony never
intended, such as jiving and
dancing (Kohler, 2005).
5. Technology tends to be historically dependent
➢ The technologies that become incumbents in different countries and
contexts are the result of existing infrastructure, culture, and
government
1. The state of both current and past technologies in that country
2. The country's culture
3. The legislation enacted by government in that country.

E.g., Mxit in South Africa. MXit has more than 27 million subscribers, making it
the largest social network in Africa with 40,000 new subscribers joining every
day.
Video: Social Media Marketing
 Part 3
Application
Recommendations for Global Business
Managers

1. Understand the technology that underpins

social media and creative consumers
2. Understand the consumer: Enticing
customers to participate in value creation
3. Understand social media
 Understand the Consumer: Enticing customers to
participate in value creation
➢ Marketers can benefit from incorporating Web 2.0 tools to:
▪ Get real-time feedback on existing products or new product
ideas/concepts
▪ Build “community” among consumers around their goods, services
or brand
▪ Leverage customer self-service
▪ Have consumers collaborate on developing future product
strategies
➢ The basic core of Web 2.0, that users can generate and share their
own content, often regarding company brands and products, provides
both potential value and challenges to marketing practitioners.

Source: Parise, S. & Guinan, P. J. Marketing using web 2.0. Proceedings of the 41st Hawaii International Conference on System Sciences, 2008 Hawaii
IEEE, 281-281.
 Understand the Consumer: Enticing customers to
participate in value creation

There are four principles which guided managers’ marketing actions:

1) Facilitate users in generating content

2) Focus on building a community, for instance

▪ Community members were engaged throughout the product

development cycle: participating in ad hoc brainstorming sessions,
completing online surveys and so forth.

3) Ensure authenticity of the message

▪ The message was more authentic to consumers when it came

from other consumers.

.
Source: Parise, S. & Guinan, P. J. Marketing using web 2.0. Proceedings of the 41st Hawaii International Conference on System Sciences, 2008 Hawaii
IEEE, 281-281.
 • With the growing availability of opinions from experts and
users, the importance of a brand name had diminished.

• Do you agree with the above statement? Why ?

What Marketers Misunderstand About Online
Reviews
• Example:
• Asustek had been founded in 1989 in Taiwan, it was a successful
manufacturer of other companies’ computers and video game consoles. But
it had virtually no name recognition among consumers. When Jonney Shih
(current chairman) told his colleagues that he wanted to develop and sell
laptops under its own brand name, Asus, most of them thought he was nuts
because how could it compete with players such as Dell and HP?

• Shih ignored the doubters, and in 2007 an Asus-branded product, the Eee
PC, got stellar reviews and became a hit. By 2012 Asus was the world’s
fifth-best-selling brand of PC, and by early 2013 its tablets were the third-
best-selling brand.

• Asus is not an anomaly. Companies as varied as HTC (smartphones),

Hyundai (automobiles) have all benefited from a shift in the way many
consumers obtain and process product information
What Marketers Misunderstand About Online
Reviews
➢ Many companies need to dramatically shift their marketing
strategies to account for the rising power exerted on future
customers by the opinions of existing customers
➢ Customers’ purchase decisions are typically affected by a
combination of three things:
1. Their prior preferences, beliefs, and experiences (refer to as
P),
2. Information from marketers (M), and
3. Input from other people and from information services (O).
➢ The greater the reliance on one source, the lower the need for the
others.
➢ If the impact of O on a purchase decision about a food processor
goes up, the influence of M or P, or both, goes down.
What Marketers Misunderstand About Online
Reviews
➢ The closer your product is to the O-dependent end, the greater the
shift in how consumers gather and evaluate information about it.

➢ A firm need to determine where a product falls on the O continuum.

For instance, in domains where customers depend mainly on O,
branding takes on less importance, and newcomers find relatively
low barriers to entry.

➢ Companies in O-dependent markets can also diversify more easily

than others, because new peer-to-peer information can overcome
long-held conceptions about what a company is (and isn’t) good at.
➢ Example: LG and Samsung have taken full advantage of this
capacity, moving beyond their original core products (electronics)
into a broad array of tech goods and home appliances.
 Understand the consumer: Enticing customers
to participate in value creation

Source: Simonson, I. & Rosen, E. 2014. What Marketers Misunderstand About Online Reviews. HARVARD BUSINESS REVIEW, 23-25.
Understand the Consumer: Weak Ties &
Strong Ties
➢ Strong ties exist between close-knit members with
frequent interactions, such as family and close
friends.
➢ Weak ties are typified by distant social relationships
and infrequent interactions.
➢ Research showed that weak ties have a greater
impact on the market-level spread of WOM, even
though strong ties have a greater interpersonal
influence.
➢ Weak ties are important because they are
particularly helpful for spreading information for
instance, advertising has exactly the same function
– disseminating information globally – as weak ties.

Source: Hu, H. H., Wang, L., Jiang, L., & Yang, W. (2019). Strong ties versus weak ties in word-of-mouth marketing.
BRQ Business Research Quarterly, 22(4), 245-256.
Understand the consumer: Enticing customers to
participate in value creation…contd

eWOM

➢ Communication through Web 2.0 applications such as online

discussion forums, electronic bulletin board systems,
newsgroups, blogs, review sites, and social networking sites.

➢ Unlike in traditional WOM, through eWOM communication,

consumers receive information related to goods and services
from a vast, geographically dispersed group of people who
have experience with relevant products or services.
 Tutorials (Individual with name)

1) Find a company that become successful or failed in using social

media for marketing their products.

2) Which digital platforms did they use?

3) What kind of marketing or promotion did they use?

4) Why are they successful/failed?

 Making sense of social media: The
consumer decision journey
• https://www.youtube.com/watch?v=eNG
S58T96eM

• David Edelman: Mastering Digital

Marketing; What companies get wrong

http://www.mckinsey.com/insights/business_technology/managing_beyond_web_20
More readings
Managing beyond Web 2.0
http://www.mckinsey.com/insights/business_technology/managing_
beyond_web_20

Business and Web 2.0: An interactive feature

http://www.mckinsey.com/insights/business_technology/business_a
nd_web_20_an_interactive_feature

How companies are benefiting from Web 2.0: McKinsey Global

Survey results
http://www.mckinsey.com/insights/business_technology/how_comp
anies_are_benefiting_from_web_20_mckinsey_global_survey_res
ults
 References
• Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D 2012, Marketing meets
Web 2.0, social media, and creative consumers: Implications for
international marketing strategy. Business Horizons, Vol. 55, pp. 261-271.
Simonson, I. & Rosen, E. 2014. What Marketers Misunderstand About
Online Reviews. HARVARD BUSINESS REVIEW, 23-25.
• O‘Reilly, T. 2009. What is web 2.0, O'Reilly Media, Inc.
• Andersen, P. 2007. What is Web 2.0?: ideas, technologies and implications
for education, JISC Bristol, UK.
• Ellison, N. B. 2007. Social network sites: Definition, history, and scholarship.
Journal of Computer‐Mediated Communication, 13, 210-230.
• Litvin, S. W., Goldsmith, R. E. & Pan, B. 2008. Electronic word-of-mouth in
hospitality and tourism management. Tourism management, 29, 458-468.
• Parise, S. & Guinan, P. J. Marketing using web 2.0. Proceedings of the 41st
Hawaii International Conference on System Sciences, 2008 Hawaii IEEE,
281-281.