Is Social Media Helping A Company's Bottom Line?

The emergence of Social media has played a huge role on improving communication and public relations (Al-Deen & Hendricks, 2011). It has changed the way information is exchanged across societies in the whole world (Mayfield, 2008). Nowadays, many businesses have realized the importance of using social media to build strong relationships with their customers and promote their products. However, Cespedes (2015) argued in his article that social media has no influence on a company's sales; it just helps to create brand awareness among customers.

A survey conducted by Gallup ( cited in Cespedes, 2015) in US shows that more than 50% of adults who use social media feel that an organization accounts and websites doesn't influence people purchasing decisions. In addition, many organizations tend to buy fake accounts, followers, likes and reviews to capture the eyes of real users (Cespedes, 2015). Another study conducted by Forrester indicates that only 2% of well-known brand companies' followers see a company's posts and less than 0.5% interact with the posts considering the fact that not all the followers are customers to that particular brand (Cespedes, 2015). Although many researchers argued that social media is not a selling tool, others believe in the power of social media on boosting companies sales and many evidences prove their claim.

Many well-known companies succeed on increasing their profits by taking advantage of using social media. For instance, Sony succeed on raising its income by 1.5 million dollars by offering competitive offers to its customers through twitter (Fisher, 2010). In addition, Instagram has become one of the most effective applications to generate profits for businesses. Jeremy (2015) stated in his blog that Instagram helped him to increase sales of his t-shirts business successfully. Moreover, companies can implement mass selling promotion by using social media that will increase its sales indirectly since social media contributes on achieving word-of-mouth marketing and as a result helping companies' bottom line (Mangold & Faulds, 2009).

References

Al-Deen, H. S. N., & Hendricks, J. A. (2011). Social media: usage and impact. Lanham, Maryland, Lexington Books

Cespedes, F.V. (2015). Harvard Business Review. Retrieved from https://hbr.org/2015/03/is-social-media-actually-helping-your-companys-bottom-line

Fisher, L. (2010). Evidence that Social Media Really Does Drive Sales. Retrieved from http://thenextweb.com/socialmedia/2010/09/21/evidence-that-social-media-really-does-drive-sales/

Jeremy. (2013, March 2). I used Instagram for Business and Doubled my Sales in One Month [ web log post]. Retrieved from http://www.firepolemarketing.com/instagram/

Mangold, W. G., & Faulds, D. J. (2009). Social media: The new hybrid element of the promotion mix. Business horizons, 52(4), 357-365.

Mayfield, T.D., 2011. A commander’s strategy for social media. JFQ, 60, pp.79-128.

A Country is Not A Company !

"A country is not a company" this is how Krugman (1996) described the fact that being an entrepreneur by running a business successfully is totally different than analyzing an economy and setting economic rules and regulations, and the opposite is true! Understanding economic theories doesn't make a person a successful entrepreneur. This fact has created arguments between economists and businesspeople regarding many economics issues. Krugman (1996) highlighted two of these issues.

The first issue as mentioned in Krugman's (1996) article is the relationship between export and employment. Businesspeople think that specialization in production of a particular good and then exporting it will create jobs and reduce unemployment rates. In contrast, economists believe that exporting will create only export-related jobs and in contrast reduces jobs in other industries. In addition, exporting firms tend to demand for foreign expert labor to increase productivity and leaving citizens jobless (Hill, n.d). The second issue is the effect of foreign investment in the trade balance. Entrepreneurs think that foreign investments lead to trade surplus since foreign firms will operate domestically to feed local needs and export the excess inventory. On the other hand, economists believe that attracting foreign investments will appreciate the host country's currency and as a result increasing the purchasing power of consumers who will start to demand more imported goods. These arguments raise an interesting question: Who is right? Economists or entrepreneurs?

The answer is: both of them are right! In fact, each of them is analyzing economic issues from different aspects based on their critical mind-set. Therefore, developing economies and solving economic problems need collaboration between economists, government and entrepreneurs to ensure having strategic and effective results that will create a well organized government and boost the economy of countries (Schneider, 2013).

References

  Schneider, B. R. (2013). Institutions for Effective Business-Government Collaboration: Micro Mechanisms and Macro Politics in Latin America.

Hill, C. (n.d). International business: Competing in the global marketplace (8th ed.). New York, McGRAW.Hill

Krugman,P. (1996). Harvard Business Review. Retrieved from https://hbr.org/1996/01/a-country-is-not-a-company