Regarding one of my classmate, Khalil, has recently updated a blog post on Social media, I agree with how he explains the old ways of transferring information is becoming obsolete and ineffective, especially when social media kicks into our everyday lives allowing communication to be highly accessible.
As LinkedIn has recently goes initially for public offerings in the stocks market, it has generated a lot of positive attention, allowing its shares to double its price on the first day of trading. Now worth $8 million, LinkedIn has generated enormous revenue just by putting itself into the public.
How does that relate to marketing?
Well, social media is a product that I’d like to analyze through a PLC. Currently, it is going through the growth stage, where I see that many types of social media are generating rapid revenue. Seeing Facebook being valued at $60 billion, Groupon’s currently worth of $25 billion, prices are going up because of increased number of users. The network effects of social networking companies are proven to be a success! Social media companies are strengthening its features, and competition is becoming intensively competitive. Each person deciding to make an profile in a social media website adds value to the product, thus resulting in this madness on expanding the social media market base.
Social media is a product because it is a platform that puts up different organizations’ integrated marketing communication plans. Organizations often need to connect with their target market. Previously, companies need to spend tons of resources and efforts to make integrated marketing communication plans. (Handing out coupons, spending money on recruiting, direct marketing in sending mails, etc…) Now, they can implement all promotional mixes: advertising, personal selling, public relations, publicity, direct marketing and sales promotion with simply efforts on a social media platform!