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Chapter 1

Introduction

1.1 Background of the research

In order to sustain in the highly competitive business environment, the companies are required to adapt effective strategies. 4Ps such as product, place, price and promotion are considered as one of the most effective components by which the firms intend to create competitive advantage over the rivals (Broockman and Green, 2014). Promotional strategies are one of the most crucial aspects that enable the companies to connect with the consumers (Chaudhuri and Holbrook, 2011). A lot of studies have been conducted to analyse the role of promotional strategies adapted by the companies to attract the customers (Broockman and Green, 2014). With the increased level of competition, the firms have also modified promotional strategies. The management of the companies have started to invest more in the promotional activities.

In order to modify the promotional activities, the firms have focused on attractive promotional tools. In addition, the managers have focused on implementing the promotional tools that are not only efficient, but also cost effective. However, in order to select the promotional tools, the companies have also considered the changing trends of the customers (Karuga et al. 2011). In earlier days, printing and television media were considered as the effective promotional tools. In addition, companies have also used public relation (PR) campaigns to communicate with the consumers. However, increased availability and usage of internet has compelled the consumers to change the pattern of promotional activities. Hence, online advertising has come up as an attractive promotional tool for the companies. In addition, social media tools like Facebook, Twitter etc. have also gained popularity among the consumers, particularly among young professionals. In this situation, most of the firms have identified that for connecting with the consumers, social media tools can used as effective tools (Doh and Hwang, 2009). On the other hand, most of the marketers have also identified that with the help of social media tools, a wide range of customers can be addressed within a short period of time. Moreover, the cost of using social media is also quite low compared to that of the other promotional tools.Electronic word of mouth has become an effective option for the companies to enhance the brand image of the firms (Doh and Hwang, 2009).

On the other hand, it has also been found that brand awareness has played a pivotal role in stimulating sales figure for the companies.  Awad and Ragowsky (2008) also suggested that, lack of awareness among the customers about the products and services offered by the brands can prevent them to take decisions. A lot of researches have been conducted to understand the pattern of consumer behaviour (Vargo and Lusch, 2009). Additionally, the scholars have also developed different models related to consumers’ buying pattern (Mirabi, Akbariyeh and Tahmasebifard, 2015). In order to develop the business strategies, the marketers have mainly focused on identifying the external stimuli that can affect the purchase intentions of the customers. Thus, for maximising revenues and ensuring long-term sustainability of the organisations, the marketing concepts such as brand awareness, purchase intention and brand loyalty have become common among the marketers. Marketing strategies have been formulated to influence these factors for the growth of the company. Hence, the marketers have started to connect the promotional tools with these marketing principles.

In this research, the researcher has conducted an in-depth study to investigate the role of social media tools in influencing the loyalty factors and purchase intention of the consumers.

1.2 Significance of the paper

In the context of globalisation, the level of competition among the firms has increased significantly (Ukpere andSlabbert, 2009). Therefore, the companies have focused on implementing effective business strategies. Apart from the conventional marketing style, the marketers have emphasised on understanding the perception of the customers. It has enabled the companies to the cater demand of the customers in a better manner. In other words, more concentration has been provided on maximising the level of customer satisfaction. In order to connect with the customer in a better manner, the role of promotional tools cannot be ignored (Dick and Basu, 2009). The main purpose of such promotional tools is to communicate the information of the firm’s products and services in a better manner (Erics, Unaland Candan, 2012). On the other hand, it is also vital for the marketers to determine the effectiveness of the promotional tools. Most of the firms invest a significant portion of funds in their promotional activities. Hence, the marketers are required to determine whether these promotional tools have been offering competitive edge to the companies or not.

This research has provided the opportunity to analyse the impacts of social media tools for increasing brand loyalty and purchase intention of the consumers. As, these factors are directly related to the bottom line of the company, it is important from the point of view of the managers to boost up the factors. Moreover, the research has also identified the pitfalls of social media tools in promoting a brand.Also, the marketers also provide enough attention on creating brand awareness and loyalty factors on the targeted consumers to create competitive advantages (Erics, Unaland Candan, 2012). The main intention in such cases is to stimulate purchase intention of the customers (Dhar and Jha, 2014). As discussed earlier, in order to sustain in the highly competitive market environment, investment in brand awareness and promotional activities are required. Therefore, identifying the ideal tool for the promotional campaigns is important. This research has established the contact of social media on brand awareness, customer loyalty and purchase intention.

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