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RESEARCH PROPOSAL ON EVALUATION OF SOCIAL NETWORKINGAS A BUSINESS DEVELOPMENT TOOL

Submitted to C.K.SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION Under Gujarat Technological University

UNDER THE GUIDANCE OF Faculty Guide Mr. Nirav Majmudar Faculty of Finance, CKSVIM

Submitted by: Milan Tilva (107050592044) Nikita Soni (107050592118) M.B.A Semester III [Batch: 2010-12]

C.K.SHAH VIJAPURWALA INSTITUTE OF MANAGEMENT M.B.A PROGRAMME Affiliated To Gujarat Technology University Ahmedabad July-2011
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INDEX OF CONTENTS

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PARTICULARS
PART-I GENERAL INFORMATION About Social Networking 1.1 Emerging trend in social networking 1.1.1 Social Networks and Science 1.1.2 Social Networks and education 1.1.3 Social Networks and Grassroots Organizing 1.1.4 Social Networks and Employment 1.1.5 Business Model

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About Facebook 2.1 Reasons for selecting Facebook 2.2 Compare and Contrast Facebook With Other Popular Social Media Part II Introduction Of the Study

Introduction Of the Study 3.1 Literature Review 3.2 Problem Statement 3.3 Objectives of the study Part III Research Methodology

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Research Methodology 4.1 Research Design 4.2 Sources of Data 4.3 Data Collection Method 4.4 Population 4.5 Sampling Frame 4.6 Sampling Method 4.7 Data collection Instrument

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A social networking service is an online service, platform, or site that focuses on building and reflecting of social networks or social relations among people, who, for example, share interests and/or activities.

A social network service consists of a representation of each user (often a profile), his/her social links, and a variety of additional services. Most social network services are web-based and provide means for users to interact over the Internet, such as e-mail and instant messaging. Online community services are sometimes considered as a social network service, though in a broader sense, social network service usually means an individual-centered service whereas online community services are group-centered. Social networking sites allow users to share ideas, activities, events, and interests within their individual networks.

1.1 Emerging trends in social networking

As the increase in popularity of social networking is on a constant rise, new uses for the technology are constantly being observed. At the forefront of emerging trends in social networking sites is the concept of "real-time web" and "location-based." Real-time allows users to contribute content, which is then broadcasted as it is being uploaded - the concept is analogous to live radio and television broadcasts. Twitter set the trend for "real-time" services, wherein users can broadcast to the world what they are doing, or what is on their minds within a 140-character limit. Facebook followed suit with their "Live Feed" where users' activities are streamed as soon as it happens. While Twitter focuses on words, Clixtr, another real-time service, focuses on group photo sharing wherein users can update their photo streams with photos while at an event. Facebook,

however, remains easily the greatest photo sharing site - Facebook application and photo aggregator Pixable estimates that Facebook will have 100 billion photos by Summer 2011.Companies have begun to merge business technologies and solutions, such as cloud computing, with social networking concepts. Instead of connecting individuals based on social interest, companies are developing interactive communities that connect individuals based on shared business needs or experiences. Many provide specialized networking tools and applications that can be accessed via their websites, such as LinkedIn and Monster.com, have been steadily developing a more "socialized" feel to their career center sites to harness some of the power of social networking sites. These more business related sites have their own nomenclature for the most part but the most common naming conventions are "Vocational Networking Sites" or "Vocational Media Networks", with the former more closely tied to individual networking relationships based on social networking principles. Foursquare gained popularity as it allowed for users to "check-in" to places that they are frequenting at that moment. Gowalla is another such service that functions in much the same way that Foursquare does, leveraging the GPS in phones to create a location-based user experience. Clixtr, though in the real-time space, is also a location-based social networking site, since events created by users are automatically geotagged, and users can view events occurring nearby through the Clixtr iPhone app. Recently, Yelp announced its entrance into the location-based social networking space through check-ins with their mobile app; whether or not this becomes detrimental to Foursquare or Gowalla is yet to be seen, as it is still considered a new space in the Internet technology industry. One popular use for this new technology is social networking between businesses. Companies have found that social networking sites such as Facebook and Twitter are great ways to build their brand image. According to Jody Nimetz, author of Marketing Jive,there are five major uses for businesses and social media: to create brand awareness, as an online reputation
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management tool, for recruiting, to learn about new technologies and competitors, and as a lead generation tool to intercept potential prospects. These companies are able to drive traffic to their own online sites while encouraging their consumers and clients to have discussions on how to improve or change products or services.

1.1.1 Social networks and science

One other use that is being discussed is the use of social networks in the science communities. Julia Porter Liebeskind et al. have published a study on how new biotechnology firms are using social networking sites to share exchanges in scientific knowledge. They state in their study that by sharing information and knowledge with one another, they are able to "increase both their learning and their flexibility in ways that would not be possible within a self-contained hierarchical organization." Social networking is allowing scientific groups to expand their knowledge base and share ideas, and without these new means of communicating their theories might become "isolated and irrelevant".

1.1.2 Social networks and education

Social networks are also being used by teachers and students as a communication tool. Because many students are already using a wide-range of social networking sites, teachers have begun to familiarize themselves with this trend and are now using it to their advantage. Teachers and professors are doing everything from creating chat-room forums and groups to extend classroom discussion to posting assignments, tests and quizzes, to assisting with homework outside of the classroom setting. Social networks are also being used to foster teacher-parent communication. These sites make it possible and more convenient for parents to ask questions and voice concerns without having to meet face-to-face. The advent of social networking platforms may also be impacting the way(s) in which learners engage with technology in general. For a number of years, Prensky's (2001) dichotomy of Digital Natives and Digital
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Immigrants has been considered a relatively accurate representation of the ease with which people of different ages--in particular those born before and after 1980--use technology. Prensky's theory has been largely disproved not least on account of the burgeoning popularity of social networking sites and other metaphors such as White and Le Cornu's Visitors and Residents (2011) are gaining greater currency. The use of online social networks by libraries is also an increasingly prevalent and growing tool that is being used to communicate with more potential library users, as well as extending the services provided by individual libraries.

1.1.3 Social networks and grassroots organizing

Social networks are being used by activists as a means of low-cost grassroots organizing. Extensive use of an array of social networking sites enabled organizers of the 2009 National Equality March to mobilize an estimated 200,000 participants to march on Washington with a cost savings of up to 85% per participant over previous methods. The August 2011 England riots were similarly considered to have escalated and been fuelled by this type of grassroots organization.

1.1.4 Social networks and employment

A final rise in social network use is being driven by college students using the services to network with professionals for internship and job opportunities. Many studies have been done on the effectiveness of networking online in a college setting, and one notable one is by Phipps Arabie and Yoram Wind published in Advances in Social Network Analysis.

1.1.5 Social network hosting service

A social network hosting service is a web hosting service that specifically hosts the user creation of web-based social networking services, alongside related applications. Such services are also known as vertical social networks due to the creation of SNSes that cater to specific user interests and niches; like larger, interest-agnostic SNSes, such niche networking services may also possess the ability to create increasingly niche groups of users. An example for this is Ning.

1.1.6 Business model

Few social networks currently charge money for membership. In part, this may be because social networking is a relatively new service, and the value of using them has not been firmly established in customers' minds.Companies such as MySpace and Facebook sell online advertising on their site. Their business model is based upon large membership count, and charging for membership would be counterproductive.Some believe that the deeper information that the sites have on each user will allow much better targeted advertising than any other site can currently provide. Social networks operate under an autonomous business model, in which a social network's members serve dual roles as both the suppliers and the consumers of content. This is in contrast to a traditional business model, where the suppliers and consumers are distinct agents. Revenue is typically gained in the autonomous business model via advertisements, but subscription-based revenue is possible when membership and content levels are sufficiently high.

Facebook
Facebook is a social networking service and Web site launched in February 2004, operated and privately owned by Facebook, Inc. As of July 2011, Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as friends, and exchange messages, including automatic notifications when they update their profile. Additionally, users may join commoninterest user groups, organized by workplace, school or college, or other characteristics, and categorize their friends into lists such as "People From Work" or "Close Friends". Facebook allows any users who declare themselves to be at least 13 years old to become registered users of the site Facebook was founded by Mark Zuckerberg with his college roommates and fellow computer science students Eduardo Saverin, Dustin Moskovitz and Chris Hughes. The Web site's membership was initially limited by the founders to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It gradually added support for students at various other universities before opening to high school students, and eventually to anyone aged 13 and over. However, based on ConsumersReports.org on May 2011, there are 7.5 million children under 13 with accounts, violating the site's terms of service.

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2.1 Reasons for selecting Facebook

With well over 800 million active Facebook accounts used to communicate with friends or to extend the network there are many reasons for companies to use Facebook as an advertising and promotional platform. Based on the definition on what it means to be a successful business too and the judgment of Facebook as a social media promotional tool we were able collate information from various interviews, research from the Internet, academic books, journals and case studies to provide a respectable answer.

Easy networking and communication tool First of all, Facebook is an easy networking and communication tool for everyone. Compared with other social media platforms, Facebook is more userfriendly communication tool. According to some statistics from Gigya a company can share widgets on more than 5,000 content sites; people can click a share button on these sites and send an article link, photo, or video via a menu of different services including Facebook, Twitter, MySpace. There are also some statistics about items that people share. Facebook dominate with about three quarters of all shared items between different social media website such as Twitter, MySpace and Yahoo. That means Facebook is a service that allows sharing information to be easy. People can update his or her recent life easily by just uploading photos, videos, status, and links. In additional, they can communicate with each other by using wall, inbox message and pop-up chat box. There is a function called News Feed which provides updated information that includes profile changes, upcoming events, and birthdays, among other updates. Also, there is a function for Facebook Page which is Facebook Insight. According to Facebook Help Centre, it will measure reach (e.g., impressions, clicks), viral impact (e.g., fan adds), responder insights (e.g., gender and age), and engagement (e.g., video plays and wall posts) of visitors to the Page. The benefit of using Facebook Insights is
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free, regular, detailed updates on the growth of the page. Therefore, business companies can know detailed analytic about the demographics of their fans and amount of the fans interacting with the page.

User popularity Due to Facebook being user-friendly, there are many people utilizing it as their communication tool with their friends. According to a Google release on Web Traffic data on 28 May 2010 Facebook is the King when it comes to online visitors despite its criticism about privacy within the social media sphere. Currently there are around 1000 million accounts (active and non-active), which is slightly more than 25 percent of the Internet population. Within these 1000 million accounts, there are 800 million active users. In a research report from Nielsen Scan done in October 2009, the number if Australians accessing social media sites has continued to grow in the past year, with unique audience for Australias most popular social media site, Facebook, surpassing eight million for the first time August 2009. According to Melanie Ingrey who is Director of Market Research of Nielsen, social media was always going to be success story, but the range of that success has made many people by surprise. Ingrey states, To see a category double its time online numbers in a year, off what was already a considerable base, is truly phenomenal and the mind boggles at where we can go from here. And as customer demand for social media continues to increase advertising and PR agencies are looking for ways to help their clients stay in touch with online customers. Based on Top 50 Australian Websites June/July 2009, Facebook was ranked fourth as the one of Top 50 Australian websites. Due to many users of Facebook, there is a huge opportunity for businesses to market their products and services to their customers and also attract new customers.

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 Instant customer engagement Facebook can provide instant customer engagement for companies. Businesses can interact with customers by setting up a Page. Facebook provides a platform to present multi-media information to their customers such as photos, video, latest updates and events. Therefore, customers are able to know the details of the products and services straight from the source. Moreover, companies can set Fan permission to let people post some relevant pictures or video of their products. In addition, companies can engage community members by tapping into social capital within friend groups. Therefore, companies can comment back to people commenting, it helps build trusting relationships with customers and gives a competitive advantage. It is because they can adjust marketing and business services to reach customers needs and improve their products and services. When people Like business companies Pages, they will get updates from Pages immediately. Therefore, people will know the companies information updated and can link to the Page of the business by clicking the posts. Not only is there instant customer engagement for business companies, but they can also engage with in business partnerships, clients and potential clients. It is because all of the potential partnerships, clients can know the feedbacks and companies

Information immediacy and fast feedback Traditionally, when a business wanted to get feedback on their products or opinion for services from customers, they need to run a voting poll or conduct call surveys. Now with social media, Facebook provides an active line with their customers. Therefore, companies just need to post a question on their wall or status and it is here where hundreds of people can respond within minutes. It can be good research for companies and their products and brand image. Time is money; if businesses can get different kinds of feedback as soon as possible they can improve their products and services.

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 Achieve higher search engine ranking For all the Pages, they will have their own unique URL. For example, here is some of the Pages links: ABC: http://www.facebook.com/abc RMIT: http://www.facebook.com/RMITuniversity Lady Gaga:http://www.facebook.com/ladygaga Therefore, when people search on Google by using key words, for example ABC and Facebook, they can get the Facebook Page link easily. Therefore, companies can increase their exposure to the public by setting up their own Facebook Page. In addition, Facebook Pages can increase in product or brand visibility because a Pages updates show in the News Feeds of Facebook users who is friends or fans steadily.

Free/ low price One of most important reasons why Facebook is helpful is because it is free or low price for people setting up their business Page on Facebook. Pages and Groups are free for everyone to promote their business. On the other hand, advertising is another good choice for the business. Facebook will help the business set target audiences by their demographics, psychographics, and techno-graphics of their profile. And the minimum budget is US$1 per day. Therefore, Facebook can reduce the marketing expense and businesses can use that money on other elements of development for their business.

New technologies Advance development of new technologies is also an important reason for using Facebook as a business tool. Nowadays, smartphone is immensely popular as it enables people to use the Internet whenever and wherever due to well developed mobile Internet networks. For example, there are many mobile caps including
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unlimited social media surfing usage. These particular deals offered by many mobile companies, such as Optus, 3 and Telstra, attract mobile phone users to incorporate social media in their daily lives; creating an interaction between businesses and customers much stronger. This advancement in mobile technology enables companies to promote their products and services while they are on the go and not be stuck at a desk; in addition as customer feedback can be expressed while they are up and about therefore giving another dimension of immediacy.

Customer psychology Besides the different advantages for businesses, there is also the other spectrum; customers and clients. Pages have many functions and applications engage with and close the gap between business and client; therefore it is more interesting and intimate than a companys official homepage. In addition to this, customers want to be heard, they want to express what they want and share their opinions on particular products within their social networks. Moreover, with evidence proving that customers want to show their friends what their favorite products or companies are with a simple Like it is imperative that there is an advantage for business because Fans will share their Pages to their friends.

Strong connection with other website Businesses can show their companys detail in the Info of the Page. They can post their official homepage of the companies, Twitter, blog, YouTube channel, etc. Therefore, when people Like their Page and look at their Info, people will know other information of the company. In addition to this, there is a function called Badge for businesses to post on their homepage or blog, this enables their customers to observe and link back to the companys Facebook Page. Also, some of the social media can sync the updated status to Facebook such as Twitter.

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2.2 Compare and Contrast Facebook with other popular Social media

According to 2010 Social Media Marketing Industry Report, Facebook, Twitter and LinkedIn are the top three social media tools used by businesses. Although Facebook and Twitter are almost same percent of the interviewees using it as a business tool most of the companies use Facebook for starting their social media marketing. Actually Facebook and Twitter are both popular for businesses marketing, but Facebook is more multi-functional than Twitter. Here is a table comparison between Facebook and Twitter Facebook
Target for potential Stand-alone website that allows clients in the B2C for the inclusion of photos,

detailed information, videos, and other business applications. Target for potential Only allow people get the clients in the B2B information who have Facebook account

monitor what people are saying

Same feature as Twitter but not user friendly

Internal Viral Greater internal reach because Marketing benefits Wall feature is much more External Viral Marketing benefits

Twitter Limited in this area. Need to related Twitter accounts link to a website or Blog to gain this kind of flexibility Viral Marketing flexibility and create a greater domino effect even do not have many followers and it can distribute to everyone even who have no Twitter account Provide search feature that allows you to enter a subject and good for tracking increasing or declining trends Less internal reach of internal communication devices Greater external reach, because Re-tweets are externally measurable and their broad based Internet search impact is stronger

interactive Less external reach

Ability to build a large network

Best platform for direct Internet communication

Able to build a large network of qualified followers in the shortest amount of time to help brand and market a product or service. Instant message feature that Direct message component that allows you to communicate allows you to alert or update a globally select follower but it much slower than email

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After comparing these two social media platforms, it is evident that they have their own advantages to better a business. Although Facebook seems like a successful business tool, the platform needs to be engaged with other social media platforms in order to be used to its full extent. Therefore, there is a Facebook application called Twitter; an application that Sync Facebook together with Twitter. That means people do not need to write the same status separately, every status on Twitter will be also posted on Facebook and vice versa.

In addition to Twitter, LinkedIn is used as another popular social media platform for marketing. The services of LinkedIn provides more professional for businesses such as job seeking, InMail service (contact friends of friend services, not free). Unlike LinkedIn, having a Facebook account is a free for membership and can be a business oriented form of social media while also being, well, social. Therefore, the use of LinkedIn is not very cost effective, does not offer broad socialising and does not provide a large range of the customers for businesses. Also, LinkedIns advertising service is not as user-friendly as Facebook. Linkedin is not bad for the marketing, but it does not cover both B2B and B2C marketing.

In conclusion, according to different research reports, articles and case studies, it is no doubt that Facebook is a successful business for companies. Facebook can generate exposure for their business within a short period. People think it is able to look for new business partnership within few months using Facebook as marketing tool. And they thought social media can be achieved selling to other businesses and their customers. And one important reason is that they all though social media can be reduced marketing cost both on selling to businesses or customers. However, facebook is not totally perfect and it still has some of the disadvantages as a business tool. Therefore business companies should use other different social media website to support and connect with Facebook. It is sure that making Facebook be more powerful business tool.
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3.1 Literature Review There is a research study called 2010 Social Media Marketing Industry Report done by Michael A. Stelzner who is Founder, SocialMediaExaminer.com. This study is about how social media is a tool for marketing. In terms of the results of this report, most of the people think that social media can generate exposure for their businesses and reduce the marketing expenses. On the other hand, they think social media can help in building new partnerships and rise in research rankings. Almost all interviewees agreed that Facebook can generate exposure for their business within such a short period. Half of the interviewees were able to look for new business partnership within few months using Facebook as marketing tool. Moreover, they thought social media can achieve selling to other businesses more than to their customers. Furthermore, they all thought social media can reduce marketing cost both on selling to businesses or customers.

3.2 Problem Statement Can social networking be used for business? 3.3 Objectives of the study Primary Objective: To Evaluate Facebook as a business development tool Secondary Objectives:

To understand the application of Facebook and explores its applicability in the business

To identify which type of products best suited for same purpose

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Research Methodology is the systematic design, collection, analysis and reporting of data and findings, relevant to appraisal specific personnel situation facing the company. Research Methodology describes the research procedure. This research procedure covers the following points: 4.1 Research Design

A research design is an overall framework of project that indicates what information to be collected from which sources and by which procedures. A research design is the plan, structure, and strategy of investigation conceived so as to obtain answers to research questions and to control variance. In this project, exploratory and descriptive both research designs will be used. 4.2 Sources of Data

There will be two sources for collecting the data for the project: (A) Primary Data (B) Secondary Data
Primary Data will be collected by using the Survey method of data collection. Secondary Data will be collected from websites and other literatures.

4.3 Data Collection Method Survey method will be used for collecting the data.

4.4 Population Our population will be the people who use Facebook and also the business people.
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4.5 Sampling Frame Facebook users of Gujarat will come under our sampling frame.

4.6 Sampling Method

Non-probability convenience sampling method will be used. Convenience sampling attempts to obtain a sample of convenient elements. The selection of sampling units will be left primarily to the researcher. Often respondents will be selected because they happen to be in the right place at the right time. Sample Size: 200 Facebook users and 50 business people

4.7 Data collection Instrument Questionnaire Structured undisguised questionnaire will be prepared for study purpose only for collecting the primary data.

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