Marketing Practice on Facebook
Marketing is the practice that is required for each and every business so as to promote products and services at market place. The present research study has been made on Facebook which is an adequate example of contemporary social media tools. As per the demographic pattern, all the customers presently exist on Facebook since it is a social networking service founded by Mark Zuckerberg (Facebook, 2014). The subsequent study has thus analyzed SWOT analysis of Facebook along with the external forces which have been impacting the service from diverse grounds. Furthermore, the study has briefly discussed about the history of Facebook and how the founder initiated the concept. In February 2004, Mark Zuckerberg launched “The Facebook” and the network was promptly extended to other universities. Usually, the site remains free to join and it has been making profits through advertising revenue. But focus group interview suggest that teens' relationship with Facebook is complicated and may be evolving. Facebook has been facilitating many changes in profiles and this is also not common on any other tool of social media (A brief history of Facebook, 2007). In the year 2013, Facebook has acquired revenue of more than US$7.87 million which is also increased to 12% in last year.
Popularity of Facebook
Facebook became popular when people came to know about social networking sites as that is the best source of developing social contacts. Facebook is an exclusive social networking website that allows people to create their appealing identity at social place. Initially Facebook was introduced to a few neighboring universities and institutions. Facebook became popular afterwards Twitter which most of the people were already using. Twitter has different characters and symbols; however Facebook does not have any of them and after easy review, millions of people have embraced Facebook. It came in limelight as it is easy to use due to easy design. Facebook user interface has changed repeatedly over the years such as recently it has added cover photo and timeline on all profiles. Further, in the year 2005, Facebook became populous, hence the network extended beyond educational institutions to anyone with a registered email address. From several research reports, it is being identified that 64% of Facebook users visit the site on daily basis; however the remaining are not abandoning the site.
Briefly describe Facebook
Facebook is the most apparent instance of social media networking and this has also captured attention of all aged people which is being evident from their presence on this site. Facebook has been adopting many alterations so as to meet the changing needs and preferences of customers. Facebook is also the most widely used technique where people can find all sources of information and alongside this also provides general information to the public about different facets. Nonetheless, the major competitors of Facebook are Twitter, flickr, Linked in and etc. Facebook is useful since that aids people to interact socially and through this, information about any topic can be derived. One can share video, pictures and other things on Facebook so as to keep in touch with those people who are far away from them.
The chief competitors of Facebook are Twitter, Yahoo, flickr, Linked in and all are directly involved in social networking. Apart from this, Google is also one of the biggest competitors of Facebook and in order to become an appealing identity, Google has added several new options in the list such as for knowledge, education and entertainment. Meanwhile a study also explored that specifies that Facebook and Twitter may be the dominant social media platforms but the pool of competitors is even growing in size and number. Hence it can be said that all the social networking tools are populous only due to messaging applications.
Women and men often have varied reasons for using Facebook as this enables them to share each and everything about their personal stuffs. Moreover adults are using Facebook for the purpose of entertainment and thus they appeal to a more modest audience of users; however on the other side, there are some aspects related to Facebook that does not specify its credibility.
Research Facebook and conduct PEST
PEST analysis is useful for the purpose of analyzing all those factors that has been changing the business aspects and thus in the present research report, PEST analysis of Facebook is being conducted. Through this the situation of current market place can also be identified and this is probably useful in safeguarding the service from external forces.
Political factors are basically those forces that are directly integrated with norms and policies of ruling bodies and along with this, some sorts of tax and subsidies policies are also there in the list that impacts business environment. Ruling bodies are thus entitled to come across with several norms and regulatory frameworks so as to make the entity legal. This basically takes into account the level of government intervention in the economy. Political factors for Facebook are always been supportive in nature; thus political condition is quite stable for Facebook (Analyse PESTEL for Monitoring your Business or Organization, 2014). Policies, laws, taxes and regulations are stable in the country thus it helps Facebook to expand its presence in several other countries. The ratio of revenue has been increasing continuously, hence government is not interfering to the functions which Facebook conducts while managing their services. Nonetheless users and government have been expressing privacy concerns which could harm company's strategy to use user information to deliver effective advertisement.
Social forces are typically engaged with customer's beliefs and norms and this even has direct impact on business functions. The main aspect here is to consider custoemr interest so that successful operations can be facilitated. Facebook is quite concerned about social factors which further it to get attention of customers on larger extent. On the other hand Facebook has made several changes in service aspect due to social beliefs, values and norms. Facebook forayed into mobile application market with the launch of App Center and thereby the step into monetizing use base (Pest Analysis on Facebook, 2015). In order to safeguard information about people, Facebook has launched many changes in the service aspect which also reports spam and any additional constraint related to use of social media tool. It is the concern for adults only that Facebook has made many changes in service provision with additional attributes.
Economic factors include economic growth, interest rates, exchange rates and inflation rates. These factors have major influence on how businesses operate and make decisions. This also affects firm's cost of capital. Facebook has recorded strong growth as compared to other social networking sites and the revenue grew by 88% from past many years. The revenue grew at a CAGR of 1195% during 2009 to 2011; however apart from this, the revenue ratio of Google is being increased by 30% in the year 2011 (Social Networking Fact Sheet, 2014). This showcases that the company is able to derive growth opportunities. Hence this can be presumed that company will be well positioned to sustain low advertising rates which can further also result to competitive advantage. Crisis in economy can impact Facebook badly because during the period of recession, people lose their purchasing power, so similarly they will not be able to access internet sources. But due to indifferent types of advertisement, Facebook can generate money as little bit awareness is required.
Technological factor includes technological aspects such as research and development activity, automation, technological incentives and rate of technological change. They can also determine barriers and entry and hence is related to innovation and development. Facebook is entirely integrated with technological concerns and the introduction of Facebook is also the result of technological innovation. It also involves several sorts of apps so that people can know about alternative facets.
Using SWOT analysis identify opportunities and threats
SWOT analysis can be defined as a tool that aids in identifying the strength, weakness, opportunity and threats. With the help of it, company is able to develop strategy which aids in boosting the efficiency of the firm. Based on it, decisions are incorporated for the betterment of situation and also to attain opportunities which lies in external environment.
|Brand name and its integration with websites and applications||Some sources of promotion|
|More than a billion active monthly users||Concern towards security aspects|
|Excellent user experience||Lack of website customization|
|Understanding needs and preferences of customers||Weak protection of service users|
|Increasing number of users||Increasing number of mobile internet users|
|Expansion to China||Weak business models|
|Diversify sources of revenue||Threat from several competitors|
|Open Facebook marketplace||Slow growth rate of online advertising|
From the table presented above, it is clear that Facebook has numerous strengths, weaknesses, opportunities and threats that provides varied opportunities for successful business management. Hence the present section of the research report is being stating detailed description about the SWOT analysis of Facebook.
Strengths: As compared to other social media tools, Facebook is the only brand name that has yet acquired attention of customers on higher extent and the credit should be switched to marketing tools and techniques. The major strength of Facebook is that the site is useful for all aged of people and that provides information on different grounds. It is also the biggest brand name in social networking with presence in over 70 languages. Facebook has unique and popular games and apps which persuades huge customer base.
Weaknesses: The major weaknesses of Facebook is the security issues that makes people highly restricted to generate profile on such site. On the other side, to avoid such thing, the facility of spam is being added on Facebook which helps people to report about such cases (Millennials in Adulthood, 2014).
Opportunities: Facebook has variety of growth opportunities and the business is also tapping in emerging economies. Apart from this, Facebook also integrates with more telecom operators so as to facilitate changes and development in the scenario. Facebook has exceeded its expectations in mobile advertisement in last year; therefore it is possible for Facebook to generate more cash flow revenue in future (FACEBOOK SWOT ANALYSIS, 2015).
Threats: Instead of being a strong brand name; the emergence of competitors might be a threat to Facebook. Google has also launched its own social networking service “Google Plus” which could take away the attention of customers.
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From SWOT and PEST analysis, make recommendations
From the entire discussion, it is clear that Facebook has been managing all the operations in adequate manner as that is the only reason that generates many opportunities for further expansion and diversification.
- Therefore it is being realized that security issues are being raising while working with social media tools, thus there should be adequate arrangement for the same from people security point of view (Facebook, 2014).
- On the other side, issues related to social forces are also increasing, therefore it is must for Facebook to consider this and for that there should be protective ids and passwords. People should always protect their data through strong passwords and keywords as this is the only way of enhancing customer attention.
- This is also suggested to Facebook to work upon some brands so that companies can publicize their products and services at market place.
- Apart from such suggestions, it is also necessary for Facebook to deal with technological aspects wherein each and every aspect should be particularly concerned with innovative and developed attributes. All such recommendations would probably assist Facebook to manage growth in coming 5 years (6 new facts about Facebook, 2014).
Based on this study, it can be state that Facebook possess high capabilities and competencies of boosting the efficiency of the firm. It can implement above mentioned recommendation in order to attain an edge over the rivals and can also sustain in an effectual manner for longer.
You may also like to read:
- 6 new facts about Facebook. 2014. [Online]. Available through:< http://www.pewresearch.org/fact-tank/2014/02/03/6-new-facts-about-facebook/> [Accessed on 17 February 2015].
- A brief history of Facebook. 2007. [Online]. Available through:< http://www.theguardian.com/technology/2007/jul/25/media.newmedia> [Accessed on 17 February 2015].
- Analyse PESTEL for Monitoring your Business or Organization. 2014. [Online]. Available through:<http://pestleanalysis.com/analyse-pestel//> [Accessed on 17 February 2015].
- At Last -- The Full Story Of How Facebook Was Founded. 2015. [Online]. Available through:< http://www.businessinsider.com/how-facebook-was-founded-2010-3?IR=T> [Accessed on 17 February 2015].
- FACEBOOK SWOT ANALYSIS. 2015. [Online]. Available through:< http://www.academia.edu/7370176/FACEBOOK_SWOT_ANALYSIS/> [Accessed on 17 February 2015].
- Facebook. 2014. [Online]. Available through:<http://www.mbaskool.com/brandguide/media-and-entertainment/1220-facebook.html> [Accessed on 17 February 2015].
- Millennials in Adulthood. 2014. [Online]. Available through:< http://www.pewsocialtrends.org/2014/03/07/millennials-in-adulthood/> [Accessed on 17 February 2015].
- Pest Analysis on Facebook. 2015. [Online]. Available through:<http://www.scribd.com/doc/128424393/Pest-Analysis-on-Facebook#scribd/> [Accessed on 17 February 2015].
- Social Networking Fact Sheet. 2014. [Online]. Available through:< http://www.pewinternet.org/fact-sheets/social-networking-fact-sheet/> [Accessed on 17 February 2015].
- SWOT analysis of Facebook. 2013. [Online]. Available through:< http://www.strategicmanagementinsight.com/swot-analyses/facebook-swot-analysis.html/> [Accessed on 17 February 2015].