SOCIAL MEDIA PLATFORMS FOR MARKET DEVELOPMENT: A STUDY AMONG MSME ENTERPRISES IN COIMBATORE

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1 SOCIAL MEDIA PLATFORMS FOR MARKET DEVELOPMENT: A STUDY AMONG MSME ENTERPRISES IN COIMBATORE V.Kaarthiekheyan 1, T.A. Sarasvathi 2 1 Associate Professor, 2 Assistant Professor, KCT Business School, Kumaraguru College of Technology, Coimbatore, (India) ABSTRACT The rapid growth of ICT technologies during recent times has redefined the veracity of business practices. While big corporate houses embark on their own legacy of developing their businesses in unique ways, the Micro Small and Medium Enterprises [MSME] sector has to look out to rehabilitate their business models using cost effective avenues. Customer engagement through social media platforms can be of immensely useful for bridging this gap. Apparently, social media has manifested itself as an effective mechanism for leveraging business development and sustenance in both traditional and digital market places. Many organizations have initiated market assessments, customer interactions and acquisition through social media platforms. This paper addresses and analyzes the gap about how MSME organizations in Coimbatore predominantly utilize social media platforms for interactive and related marketing programmes. Key words: MSME, Business Development, Social Networking Platforms I. INTRODUCTION Social media is global in nature. It is the world largest referral programme enabling customers to stay connected to corporates, products and services either to source the products or to be kept informed [1]. It helps to augment online marketing, customer need assessment and feedback instantaneously. Having understood its significance, social media has emerged as a priority portfolio to customize businesses and products for customers. Almost all industries have been using social media platforms to build their brands, generate leads, or to sell products online. However, in spite of its explosive popularity and friendly usage, the benefits of using social media platforms are seldom explored by Micro Small and Medium Industry [MSME] sectors. Therefore a study on Leveraging Social Media Platforms for Market Development has been undertaken with reference to MSME enterprises in Coimbatore. This paper encompasses an appropriate literature review on the existing usage of social media among businesses and the relevant methodology adopted for the study. Research results have substantiated that MSME enterprises are currently using and had formidably leveraged social media platforms for developing markets for their businesses. II. EXISTING STUDIES ON IMPACT OF SOCIAL MEDIA IN BUSINESS Of recent times, the relevance of social media has become a crucial component for business development which also symbolizes the transformative impacts of information technology on business, both within and outside the firm boundaries [2]. According to Harvard Business review [3] with the right data on interactions, organizations 61 P a g e

2 can mathematically analyze and visually depict the locations of people within their social networks. Organizations can see who s connected to whom. And if organizations can gather and overlay data on who uses its product and how both product use and network structure are changing over time, it can even reveal which potential customers would be the most valuable ones to approach. Fig.1 The New Communication Paradigm W.Glynn Mangold, David J.Faulds Social Media: The new hybrid element of promotion mix, Business Horizons (2009) 52, W.Glynn, etal., had redefined the new communication paradigm. For business, social media is fundamentally changing the way how we communicate, collaborate, consume, and hence engenders radical interaction of customers with quick and reliable results. Obviously, it has changed the approach for organizations to develop business over other forms of conventional marketing practices. With its own alluring nature of reaching the target audience at large, customers are just a click away and interact directly. Social media platforms such as Twitter and Facebook enable the creation of virtual customer environments (VCEs) with specific firms, brands, or products. [4]. Companies have now penetrated the online social networking scene, offering direct links from their corporate websites to Facebook and Twitter, and use these tools to promote brands and support the creation of brand communities[5]. Thus social media encourages open communication and conversation through the combined use of data analytics and social influence methodologies, to possibly engage and change consumer perception to develop one s business in their win and unique way [6]. Research has shown that exposure to electronic word of mouth (ewom) messages can generate more interest in a product category than exposure to information produced by marketers [7]. However, to date there is a paucity of systematic research on how social media is effectively used by companies, particularly with reference to MSME sector. The current study provides the momentum how MSME s use to social media platforms to leverage their respective brands III. PROPOSED WORK According to the profiling analysis, the Directorate of MSME have only 76 registered units in Coimbatore. Upon conducting the preliminary survey, information was feasibly available with only 62 units and due to other reasons the study was confined to 60 units. Having realized the magnitude of futuristics of social media, these organizations have engaged themselves into digital and social media either directly or indirectly during recent years.. Since our study is purposive in nature, the study has considered all the 60 units which were involved either with manufacturing, industrial processing or other service activities. Thus the study has been suitably 62 P a g e

3 framed to 1) to identify the choice and mode of using social media 2) to explore the preference of their usage of social media sites 3) to study the respective objectives and purpose of using such social media sites. IV. RESEARCH METHODOLOGY The research exercise was descriptive in nature and the study adopted a survey methodology through online. Websites of target MSME s was obtained from Directorate of MSME. Focus groups were identified with persons heading the marketing and EDP departments predominantly. They were approached individually through phone and a survey instrument was sent across through E Mail to elicit possible information. V. ANALYSIS AND INTERPRETATION Usage of social media by MSME industries in Coimbatore is just on its anvil. No special infrastructure is ploughed or utilized for the purpose. Inhibited by several factors these MSME make use of their existing devices to login into the social media websites. It was observed that majority 33(55%) companies utilize their respective desktop computers to login into the social media websites. 20 (33%) companies surveyed use their company owned digital tablet for this purpose and only 7(12%) companies opt for using mobile apps for using social media. Exhibit No: 2 Devices Used to login into Social Media The format of marketing and promotional elements adopted by the companies seems to be conventional. 26 (44.4%) companies execute their promotional plans through video formats, advertisement clippings or pop up messages. 20 (33.3%) companies use info graphics for explicitly indicating their competitive edge over competitors thus facilitating viewers for easy product comparison. In particular, out of the total mass, 14 (13%) companies predominantly use E brochure for customer acquisition and networking. Exhibit No: 3 Usage of Different Promotional Elements by MSME s 63 P a g e

4 In spite of rampant usage of social media by the large companies, the MSME are operating the social media programme sparsely. Traditional market space is still utilized to a major extent and the time spent upon in networking is minimal among most of the companies. A maximum of two hours only is contributed by a majority of 38 respondents. (64%) of the MSME s prefer social media for promotion and networking. 17 (28%) of the companies prolong their usage upto 4-5 per day and only 5(8%) companies utilize social media platforms for more than 9 hours per day. Exhibit No: 4 Time Spent in Social Media by MSME s Although, the companies have taken up promotion through social media; the choice of media availed by these units is very limited and narrow. Majority of the 40(66.6%) companies mostly use Face book and Twitter. They have either subscribed exclusively or combined Face book or Twitter for networking with their customers. 13 companies (22.22%) rely mostly on Linked In page, where individuals and product specific queries are to be solicited. 7 (11.6%) MSME s had a mixed bag of social media applications depending upon their needs. Exhibit No: 5 Choice of Social Media Platforms On account of exploring the effectiveness of social media, 38(64%) of the MSME s found that social media marketing had been very effective in clinching customer response either for closing a sale or for a prospective query. 17(29%) respondents felt that social media platforms serve as a reliable source for market and business development to a larger extent. Only 5(7%) of the respondents doubted the credibility of the intervening social media for business development. 64 P a g e

5 Exhibit No: 6 Impact of Social Media Platforms While an attempt was made to understand on the different avenues for developing their business sketched out by MSME s, it was found that 28 (46%) respondents utilize social media platforms to post their advertisements about new products and services. 23 respondents (38.6%) of the respondents use social media platforms to communicate about their current and upcoming discounts and offers to the customers. Information about upcoming new products and services are communicated by 9 (15.4%) companies as an initiative to maintain relationships with the existing customers. Exhibit No: 7 Purpose of Social Media Usage Further the data was tested statistically. For testing the fit of association between types of MSME s and the product promoted by them with the type of social media platforms used, the R squared should a high level of association (0.825). The value of Chi square test also indicated a high degree of association (0.027) between the personal profile of the staff and their relative usage of social media platforms. It was also evident from the categorical loadings given by the principal component analysis which indicated clearly the choice of social media platforms, purpose and impact of using social media to leverage market and business development VI. CONCLUSION As per available statistics (4 th Census of MSME Sector), the sector accommodates 261 lakh enterprises with an estimated employment for 597 lakh persons at a given point of time in terms of value, MSME sector accounts for about 45% of the manufacturing output and constitutes to around 40% of the total export of the country. As a result, MSMEs are today exposed to greater opportunities. Thanks to ICT applications that led considerable MSME units to realize the importance of social media for their business development. Though there are various social networking platforms like Facebook, Twitter, google+, etc., organisations predominantly use Face book as their preferred platform for their user friendliness to connect and engage with customers. Most of the promotion themes via social media have largely resurrected towards product promotion and information dissemination. Most of the companies that widely use social media platforms have agreed that social media is a proven application for an viable business development. Unfortunately most of the companies thrive only on traditional promotional patterns and are less exposed to contemporary and cost effective social media 65 P a g e

6 applications. Effective awareness programmes can be launched via various government skill development agencies to bridge the gap as MSME s share a major portfolio in nation s economic development. REFERENCES [1] Erik Qualman (2010) - Socialnomics: How social media transforms the way we live and do business, Wiley publications, pp. 5-8] [2] Sinan Aral, Chrysanthos Dellarocas, and David Godes (2013) Introduction to the Special Issue Social media and business transformation: A framework for research information systems :1,3-13. [3] Lawrence, Nicholas (2011),Tapping the Power of Social Networks, Harvard Business Review, September Issue. [4] Mary J.Culnan, Patrick J.McHugh, Jesus I. Zubilga (2010) MIS Quartely Executive Vol 9.4/December, University of Minnosota, pp [5] Michaelidou, n., Siamagka, n.t. and Christodoulides, g.,(2011). Usage, barriers and measurement of social media marketing: an exploratory investigation of small and medium B2B brands. Industrial Marketing Management, 40(7), pp [6] Fisher, Mike (2011), Engagement Strategy Just as a Sales Tool. Marketing Week, 34, 8 February 24, www. marketing week.co.uk/engagement-strategy-just-a-sales tool/ article [7] Zhang, Jansen and Chowdry (2011) Determinants of consumer engagement in electronic word- of mouth (ewom) in social networking sites. 66 P a g e