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Identifying Theories And Underlying Principles Of Global Marketspace

Global marketspace and Virtual networking:
Web 2.0 Revolution
Reading: Shah, N 2008, From global village to global marketplace: Metaphorical descriptions of the global Internet. International Journal of Media & Cultural Politics, Vol. 4. No. 1,pp. 9-26.

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INB 20009 Managing the Global Marketplace
 

 
Lesson plan • From global village to global marketspace
• Social Media, Web 2.0 and User Generated Content • Social presence theory & social processes (self-identity and
self-expression)
• Social media and the global marketspace
• Challenges and opportunities of Social Media platforms in the global marketspace
 

 
From global village to global marketspace
• The Internet has become a powerful symbol of
globalisation.
• There are two of the most prominent metaphors
associated with the internet enabled globalisation;
(1) the global village
(2) the global marketspace
 

 
Global Village
• During 1980-early 1990s, global communication transcended the differences between cultures and societies to create a new global village where people will come together and work towards mutual trust and understanding (Dodge and Kitchin 1998: 33).
• The Internet’s ability to transcend the barriers of space and time and enhance individual interaction was considered the cutting edge of globalisation.
• Shah (2008) argued that the Internet’s contribution to political transformation is not simply a function of its hardware and technical specifications.
 

 
• In a global marketspace, states had to abandon their national economic
autonomy.
• Subsequently, although public management had once been closely tied
to the state, private sector markets, market actors, non-governmental
organisations, multinational actors and other institutions [could] exercise
forms of legitimate authority.
• So that the ‘Internet would grow as a seamless . . . global marketspace
where competition and consumer choice are the main drivers of
economic activity.
Global Marketspace
 

 
Setting the scene • Facebook registered more than 175 million
active users in 2009. This is only slightly less than the population of Brazil (190 million) and over twice the population of Germany (80 million)! As of the third quarter of 2018, Facebook had 2.27 billion monthly active users.
• Every minute, 10 hours of content were uploaded to the video sharing platform YouTube. And, the image hosting site Flickr provided access to over 3 billion photographs. This makes the world-famous Louvre Museum’s collection of 300,000 objects seem tiny in comparison.
• According to Forrester Research, 75% of Internet surfers used “Social Media” in the second quarter of 2008 by joining social networks, reading blogs, or contributing reviews to shopping sites.
•The very first YouTube video was uploaded on 23 April 2005.
•The total number of people who use YouTube – 1,300,000,000.
•300 hours of video are uploaded to YouTube every minute!
•Almost 5 billion videos are watched on Youtube every single
day.
•YouTube gets over 30 million visitors per day
•In an average month, 8 out of 10 18-49 year-olds watch
YouTube.
•By 2025, half of the viewers under 32 will not subscribe to a
pay-TV service.
•6 out of 10 people prefer online video platforms to live TV
•The total number of hours of video watched on YouTube each
month – 3.25 billion.
•10,113 Youtube videos generated over 1 billion views.
•80% of YouTube’s views are from outside of the U.S.
•The average number of mobile YouTube video views per day is
1,000,000,000
•The average mobile viewing session lasts more than 40
minutes. This is up with more than 50% year-over-year.
•Female users are 38% and male users are 62%.
•User Percentage by Age 18-24 – 11%, 25-34 – 23%, 35-44 – 26%,
45-54 – 16%, 50-64 – 8%, 65+ – 3%, unknown age – 14%.
•More than half of YouTube views come from mobile devices.
•YouTube’s mobile revenue is up to 2x y/y.
•YouTube overall and even YouTube on mobile alone reaches
more 18-34 and 18-49 year-olds than any cable network in the
U.S.
•The number of hours people spend watching videos (aka watch
time) on YouTube is up 60% year-over-year, the fastest growth
we’ve seen in 2 years.
•You can navigate YouTube in a total of 76 different languages
(covering 95% of the Internet population).
•YouTube has launched local versions in more than 88
countries.
•9% of U.S small businesses use Youtube
 

https://www.thinkwithgoogle.com/infographics/video-trends-where-audience-watching.html
https://www.thinkwithgoogle.com/infographics/video-trends-where-audience-watching.html
https://www.youtube.com/intl/en-GB/yt/about/press/

 
Evolution of media platforms
(Source: idfive.com, 2011) Clay Shirky: How social media can make history
 

 
Conversation Prism
(Source: Solis and Thomas, 2008)
 

 
What is Social Media—And what is it not?
• How Social Media differ from the seemingly-interchangeable related concepts of Web 2.0 and User Generated Content?
• Web 2.0 is a term that was first used in 2004 to describe a new way in which software developers and end-users started to utilize the World Wide Web.
• Applications such as personal and company web pages (content publishing) belong to the era of Web 1.0.
• Web 2.0 is a platform whereby content and applications are no longer created and published by individuals, but instead are continuously modified by all users in a participatory and collaborative fashion (e.g., blogs, wikis, and collaborative projects in Web 2.0).
• User Generated Content (UGC) can be seen as the sum of all ways in which people make use of Social Media
“Open Diary/weblog” (Bruce and Susan
Abelson)
Blog/weblog MySpace(2003)
Facebook(2004) Social Media
 

 
Web 2.0…contd • Technologies contributing to a socially connected Web where
everyone is able to add to and edit content.
 

 
Concepts and theory bridge
Concepts Description Theoretical
underpinnings
Social Media
(Web 2.0, User
Generated Content
(UGC))
A group of Internet-
based applications that
build on the ideological
and technological
foundations of Web 2.0,
and that allow the
creation and exchange
of User Generated
Content.
A set of theories in the
field of media research;
Social presence
&
Social processes;
self-identity
self-expression
 

 
A business can create its own profile in a
business directory known as “Pages”.
Facebook Page, users can become a “fan” of
your business
From Web 1.0 to Web 2.0: Evolving global marketspace
 

 
From Web 1.0 to Web 2.0: Evolving global marketspace
..contd
• Relative comparisons
that were largely
dependent on
information provided
by manufacturers.
• User-generated
reviews and people’s
tendency to consult
social media friends
about purchases,
buyers have other
options.
 

 
PART 2
(THEORY)PART 2
THEORY
 

 
Making sense of social media
These are instances when social media results in unintended consequences. How do we make sense of these incidents? How do we understand social media?
 

 
The global marketspace and few theoretical
underpinnings
A set of theories in the field of media research;
(1) Social presence theory
(2) Social processes (self-identity and self-expression)
These theories can be used to understand how individuals
operate in the the global marketspace
 

 
Social Presence Theory (Short, Williams, &
Christie, 1976)
• The theory suggests that a medium’s social effects are principally
caused by the degree of social presence which it affords to its users.
• Social presence- sense of awareness of the presence of interactive
persons ; know and think about other persons, their characteristics,
qualities and inner states (Short et al., 1976).
• Thus, increased presence leads to a better perception.
Source: Short, J.A., Williams, E., & Christie, B. (1976). The social psychology of telecommunications. New York: John Wiley & Sons.
 

 
Social Presence Theory (Short, Williams, &
Christie, 1976)…contd
• Media differ in the degree of “social presence”—defined as the
acoustic, visual, and physical contact that can be achieved—they
allow to emerge between two communication partners.
• Social presence is influenced by the intimacy (interpersonal vs.
mediated) and immediacy (asynchronous vs. synchronous) of the
medium.
• Social presence is to be lower for mediated (e.g., telephone
conversation) than interpersonal (e.g., face-to-face discussion) and
for asynchronous (e.g., e-mail) than synchronous (e.g., live chat)
communications.
Source: Short, J.A., Williams, E., & Christie, B. (1976). The social psychology of telecommunications. New York: John Wiley & Sons.
 

 
Social Presence in the context of social
media….
Source:Litvin, S. W., Goldsmith, R. E. & Pan, B. 2008. Electronic word-of-mouth in hospitality and tourism management. Tourism management, 29, 458-468.
 

 
Social processes (Self-identity and self-expression)
• What am I?’
 

 
Social processes (Self-identity and self-expression)
• Self-identity states that in any type of social interaction people have,
the desire to control the impressions other people form of them
(Goffman, 1959).
• This is done with the objective of influencing others to gain rewards
(e.g., make a positive impression on your partner); on the other
hand, it is driven by a wish to create an image that is consistent with
one’s personal identity (e.g., wearing a fashionable outfit in order to
be perceived as young and trendy).
 

 
Self-expression • Self-expression is the conscious or unconscious revelation of
personal information (e.g., thoughts, feelings, likes, dislikes) that is
consistent with the image one would like to give.
• Self-expression is a critical step in the development of close
relationships (e.g., during dating) but can also occur between
complete strangers; for example, when speaking about personal
problems with the person seated next to you on an airplane.
 

 
Social processes in the context of social
media…. • Applied to the context of social media, different degrees
of self-expression and presentation can be seen.
• The consumers of the digital era are argued to be unpredictable, individualistic, expressive and also highly competent in their spending patterns.
• The key reason why individual decide to create a personal webpage is, for example, the wish to present themselves in cyberspace (Schau & Gilly, 2003).
 

 
Classification of Social Media by social presence/media
richness and self-identity/self-expression.
Self- identity/self- expression
Social Presence
Low
Medium
High
High
Blogs
Social networking sites (e.g., Facebook)
Vitural social world (e.g., Second Life)
Low
Collaborative projects ( e.g., Wikipedia)
Content communities (e.g., YouTube)
Virtual game world (e.g., World of Warcraft)
 
 

 
Most often used forms of Social media in the
global marketspace 1. Social networking (34%)
2. Blogging (30%)
3. Online video uploading (13%)
4. Microblogging (12%)
Source: TopRank, 2011; http://www.toprankblog.com/2010/07/seo-tops-digital-marketing-2011. Gilfoil, D. M. 2011. MIND THE GAP: A GLOBAL ANALYSIS OF THE NUMBER OF BUYERS TO SELLERS USING BLOGGING, SOCIAL NETWORKING, ONLINE VIDEO, AND MICROBLOGGING PLATFORMS. International Journal of Business Research, 11.
 

SEO Tops Digital Marketing Tactics for 2011

 
Features of Web 2.0 – Interactivity – Information sharing – Collaboration – Community – Content co-creation – User-centered design
– Why social media ‘ likes’ say more than you might think?
 

 
• Global firms now need to shift their business strategies to account
for the rising power exerted on future customers by the opinions of
existing customers.
• They should actively get involved in online consumer communities
and provide all relevant and complete information about their
operations (Jalilvand, Esfanani, and Samiei 2011)
Social media and the global marketspace
 

 
Advantages of using social media
• Volkswagen’s ‘The Force’ commercial for the 2011 Passat model has been viewed nearly 53 million times on YouTube.
 

 
Businesses can use
LinkedIn as a
powerful recruitment
tool, finding potential
employees with the
exact talent and skills
they require
 

 
Companies can use
YouTube to share
video content. This
includes webcasts,
keynote speeches,
corporate
presentations, video-
based training and
e-learning, video
tutorials
 

 
Twitter, a
microblogging
service that
allows its users
to update their
status in a
maximum of
140 characters
per update.
 

 
The IBM LotusLive suite
includes, among other
Web 2.0 features, a
social networking
platform that is targeted
at large organisations,
allowing them to create
in-house social
networks and giving
employees a method of
connecting with co-
workers around the
globe
Source: Utilizing Web 2.0 in business, accssed on 28th March 2014 from <http://www.ibm.com/developerworks/library/wa-web20business/>
 

 
Benefits of Social Media for Brand Building
1. Increase brand awareness
2. Humanize your brand
3. Establish your brand as a thought leader
4. Stay top of mind
Benefits of Social Media for Growth
5. Increase website traffic
6. Generate leads
7. Boost sales
8. Partner with influencers
Benefits of Social Media for Content Creation & Distribution
9. Promote content
10. Go viral
11. Source content
Benefits of Social Media for Communication
12. Reputation management
13. Crisis communication
14. Customer and audience engagement
15. Customer service and customer support

 

Social Media for Business: A Practical Guide

 
• Social media are a function of the technology,
culture, and government of a particular country or
context.
• Local events rarely remain local
• Global events are likely to be (re)interpreted
locally
• Creative consumers’ actions and creations are
also dependent on technology
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, 55, 261-271.
(e.g., prosumers)
Key implications of social media in the
global marketspace
 

 
Challenges and opportunities of Social
Media platforms in the global
marketspace 1.Collaborative projects
• Collaborative projects enable the joint and simultaneous creation of content by many end-users and are, in this sense, probably the most democratic manifestation of UGC
• Within collaborative projects allow users to add, remove, and change text-based content—and social bookmarking applications— which enable the group-based collection and rating of Internet links or media content.
• Exemplary applications within this category include the online encyclopaedia Wikipedia, a wiki currently available in more than 230 different languages, and the social bookmarking web service Delicious,
 

 
• The main idea underlying collaborative projects is that
the joint effort of many actors leads to a better outcome
than any actor could achieve individually
• International firms must be aware that collaborative
projects are trending toward becoming the main source
of information for many consumers.
• As such, although not everything written on Wikipedia
may actually be true, it is believed to be true by more
and more Internet users.
 

 
Collaborative projects can be particularly crucial in corporate crises.
Challenges • Amazon’s pricing strategy
• When online book retailer Amazon started to test the idea of dynamic pricing, comments declaring such a practice as unfair showed up instantaneously under the Wikipedia entry on “time-based pricing.”
Opportunities • Finnish handset manufacturer
Nokia uses internal wikis to update employees on project status and to trade ideas, which are used by about 20% of its 68,000 staff members.
Likewise, American computer software company Adobe Systems maintains a list of bookmarks to company-related websites and
conversations on Delicious.
 

 
Challenges and opportunities of Social
Media platforms in the global
marketspace….contd
2.Blogs
They are the Social Media equivalent of personal web
pages and can come in a multitude of different
variations, from personal diaries describing the author’s
life to summaries of all relevant information in one
specific content area.
 

 
Blogs; Challenges and opportunities of Social Media in the
global marketspace…contd
Opportunities Many companies are already using
blogs to update employees,
customers, and shareholders on
developments they consider to be
important. Jonathan Schwartz,
CEO of Sun Microsystems,
maintains a personal blog to
improve the transparency of his
company; so does automotive
giant General Motors.
Challenges Microsoft’s former “technical
evangelist” Robert Scoble, for
example, had a tendency to
fiercely criticize the products of his
employer—before he decided to
leave the Redmond-based
software company in 2006.
 

 
Challenges and opportunities of Social Media
platforms in the global marketspace…contd
3. Content communities
• The main objective of content communities is the sharing of media
content between users.
• Content communities exist for a wide range of different media types
• Examples, including text (e.g., BookCrossing, via which 750,000+
people from over 130 countries share books), photos (e.g., Flickr),
videos (e.g., YouTube), and PowerPoint presentations (e.g.,
Slideshare).
 

 
Content communities: Challenges and
opportunities of Social Media in the global
marketspace…contd • The high popularity of content communities makes them a very attractive contact
channel for many firms
• Almost 5 billion videos are watched on Youtube every single day
• In 2007, Procter & Gamble organised a contest for its over-the-counter drug Pepto-
Bismol, whereby users were encouraged to upload to YouTube 1-minute videos of
themselves singing about the ailments Pepto-Bismol counteracts, including heartburn
and nausea.
• In a similar spirit, kitchen appliances manufacturer Blendtec became popular for its
bevy of inexpensive “Will it blend?” videos, which have been watched by millions of
people.
• Other firms, such as Cisco and Google, rely on content communities to share
recruiting videos, as well as keynote speeches and press announcements, with their
employees and investors.
 

 
Challenges and opportunities of Social Media
platforms in the global marketspace…contd
4. Social networking sites
Applications that enable users to connect by creating personal
information profiles, inviting friends and colleagues to have access
to those profiles, and sending e-mails and instant messages
between each other.
These personal profiles can include any type of information, including
photos, video, audio files, and blogs. The largest social networking
sites are U.S.-based Facebook (initially founded by Mark
Zuckerberg to stay in touch with his fellow students from Harvard
University) and MySpace (with 1,500 employees and more than 250
million registered users).
 

 
Social networking sites • Several companies are already using social networking sites to support the
creation of brand communities (Muniz & O’Guinn, 2001) or for marketing research in the context of netnography (Kozinets, 2002).
• To promote the movie “Fred Claus,” a 2007 Christmas comedy film, Warner Brothers created a Facebook profile via which visitors could watch trailers, download graphics, and play games.
• The Adidas custom soccer community on MySpace allows visitors to associate themselves with one of two brands of elite soccer cleats produced by the German sports apparel manufacturer, and to access product reviews and information on professional soccer players who play using “their” shoes.
• Some firms even go one step further and use Facebook as a distribution channel. Consider U.S.-based florist 1-800-Flowers.com, which offers a widget on Facebook called “Gimme Love” whereby users can send “virtual bouquets” to friends or, with a click of the mouse, be directly transferred to the company’s website to send real flowers.
 
http://www.sciencedirect.com.ezproxy.lib.swin.edu.au/science/article/pii/S0007681309001232
http://www.sciencedirect.com.ezproxy.lib.swin.edu.au/science/article/pii/S0007681309001232

 
Summary: Challenges in using social media
in the global business context….contd
• Lack of expertise and experience. – There is a lack of knowledge, evidence and research on:
• How companies should use social media. • How consumers actually use social media.
• Difficulty of measuring effectiveness. – Return on investment (ROI) and promotional effectiveness are
difficult to measure. Current claims of miraculous results may be over-stated.
• Costs – While potentially cheaper than traditional media, there are costs
associated with social media which include: • Regular creation of content
• Platform development (website, accounts, pages)
• Monitoring, reporting
• Opportunity cost of promotional spend on marketing communication budget.
 

 
Summary: Challenges in using social media
in the global business context….contd
• Social media are used differently across and within countries. – Understanding country usage patterns is
important.
– Avoid making assumptions about ‘typical users’.
• Of FaceBook’s 400 million active users, a study by the New York Times (2010) revealed 50% are thought to be over 35, with only 27% aged under 24.
• A study of Twitter users revealed 70% were over 25, 57% had an income over $60,000, and 52% were tertiary educated (Quantcast, 2010).
Vs
 

 
Challenges in using social media in the
global business context: China
• FaceBook, YouTube and Twitter are blocked in China.
• However, China has the largest number of internet users in the world. – From the CNNIC 24th Statistical Report of Chinese
internet usage (2009): • 338 million Chinese ‘netizens’ in 2009 (25.5% of population)
• 46% of Chinese ‘netizens’ access the internet via mobile phone; 35.5% access the web through internet cafes.
• More than 100 million Chinese netizens use online forums (bulletin board system – BBS), spending at least 1 hour per day on these sites.
 

 
Challenges in using social media in the
global business context: China
• Local websites and social media dominate: – Search engine usage: Baidu (64%),
Google (25%), Yahoo China (8%) (Comscore, 2008).
– Top social media sites: • Renren.com (Launched 2005. Similar to
FaceBook. 31 million active users by April 2011)
• Kaixin001.com (Launched 2008. 8 million+ active users after first year.)
• Sina Weibo (Launched 2008. Similar to Twitter. 250 million users, 25 million messages a day at October 2011).
 
http://www.chinahush.com/2010/04/05/why-renren-is-better-than-facebook/
http://www.chinahush.com/2010/04/05/why-renren-is-better-than-facebook/

 
Challenges in using social media in the
global business context
• Limited control and the potential for
negative publicity and brand damage.
– ‘Hate’ sites and pages.
– Boycott groups.
– Trolling behaviour on social media.
– Low popularity and usage.
– Poor public relations handling of incidents.
– Inappropriate consumer-created content.
 

 
Challenges of Web 2.0 channels
 

 
Challenges of Web 2.0 channels
 

 
Using Social media : Good outcomes
• In 2009, the Facebook page
for Ferrero’s Nutella brand
united 4.9 million fans of the
chocolate and hazelnut
spread who gather together
to share their brand
experiences. Nutella’s page
was originally created by a
fan, and Ferrero’s hands-off
approach to site
management helps keep
authenticity strong.
The Facebook page for Coca- Cola’s was originally built by aficionados who united 14 million fans. Coca-Cola boldly share ownership with its fan base. The site’s originators now co-manage the site alongside Coca-Cola, which plays a decidedly backseat role.
 

 
Using Social media : Bad outcomes
• Apple had a lawsuit against one of the many rumor websites
dedicated to the company.
• The facebook for Wal-Mart was overrun by protesters. One poster
wrote: ‘Facebook should take the number of negative comments on
this page as a note that we don’t support this company [for] its use
of a space for social networking. This space is for people talking to
other people’
 

 
Take away note and lesson summary
• Tim O’Reilly urges Web 2.0 firms to solve real-world problems
• From global village to global marketspace
• Social Media, Web 2.0 and User Generated Content • Social presence theory & social processes (self-
identity and self-expression) • Features of Web 2.0 • Social media and the global markespace • Challenges and opportunities of Social Media
platforms in the global marketspace
 

 
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Gilfoil, D. M., & Jobs, C. G. (2011). MIND THE GAP: A GLOBAL ANALYSIS OF THE NUMBER OF BUYERS TO SELLERS
USING BLOGGING, SOCIAL NETWORKING, ONLINE VIDEO, AND MICROBLOGGING PLATFORMS. International
Journal of Business Research, 11(5), 86-98.
Jalilvanda, M. R., Esfahani, S. S. & Samiei, N. 2011. Electronic word-of-mouth: Challenges and opportunities. Procedia Computer
Science, Vol. 3, no., pp. 42-46.
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Parise, S. & Guinan, P. J. Marketing using web 2.0. Proceedings of the 41st Hawaii International Conference on System
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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
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Shah, N. 2008) From global village to global marketplace: Metaphorical descriptions of the global Internet. International Journal of
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