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Advertising and Marketing Strategy in Social Media

Breakdown of IMC functions

To meet the IMC strategy 3 specific action plans need to be implemented:

Developing greater brand awareness through Social Networking

This strategy involves putting into action a variety of online marketing campaigns through social networking such as Facebook to increase the number of people that are aware of the HTC brand and what the company’s phones are capable of doing, by implementing such a strategy this in effect allows the company to access millions of internet users thereby resulting in the potential for more sales for the company.

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Create better Consumer-Company Engagement through Online Media Sites

Websites such as YouTube have enabled companies to more easily advertise their services to a wide array of potential consumers through the creation of a variety of viral videos that appeal not only to a consumer’s sense of entertainment but also to their desire to learn more about a product. As such, by creating a significant degree of hype through YouTube and holding various contests challenging consumers to show off their use of their HTC phones, this in effect will create a significant degree of consumer-company engagement which should help to drive up sales.

Utilize online sponsorship agreements to increase knowledge about the brand and its products

The last IMC strategy goal to fulfill the objectives is to utilize online sponsorship agreements with a variety of YouTube stars to increase general public knowledge about HTC. Given the popularity of YouTube stars and the millions of views they garner daily, this means that sponsorships through them can in effect reach millions of people within a relatively short period.

As indicated by Verma, Stock & McCarthy (2012), consumers are increasingly relying on online social media as to how they make their purchasing decisions (Verma, Stock & McCarthy 2012, pp. 183-186). While it may be true that traditional methods of advertising through television commercials and print ads will continue to be a vital attribute of modern-day advertising campaigns, online social media has, as of late, risen to the same level or has even surpassed the impact of traditional advertising as a means of reaching out to consumers (Verma, Stock & McCarthy 2012, pp. 183-186). The reason behind this is quite simple, the internet has in effect provided consumers with a vast array of potential tools from which they can make informed business decisions. As evidenced by the case of product reviews on Amazon.com as well as the plethora of technology review blogs, positive online reviews through online social media is now becoming the main means by which consumers decide on what type of product to purchase (Verma, Stock & McCarthy 2012, pp. 183-186).

Not only that, the level of “hype” generated through online viral marketing campaigns and social media sites such as Facebook and Twitter has in effect enabled companies to more easily reach thousands if not millions of possible consumers. (Schelfhaudt 2012, p. 24) Combined with associated online social media services that are unique to particular smartphone brands, such as Instagram for the iPhone and the Blackberry network for RIM, this shows how a company’s utilization, as well as the provision of online social media services in effect, dictates its success in this increasingly connected world where online social media is becoming the dominant form of advertising and communication. It is based on this that HTC should attempt to develop various forms of viral marketing campaigns and promotions that specifically focus on displaying not only the brand’s greater usability as compared to other smartphones but also its ability to provide the kind of social media connectivity that people are after.

For example, various brands such as Lego and Sony have created their own YouTube channels to create not only a certain degree of hype through a variety of funny and unique videos that went viral but they were also able to create a considerable level of online discourse in which people argued either for or against their brand on the YouTube comment section (Pronschinske 2011, pp. 218-219). Since the videos on their channels have reached several million views at only a fraction of the cost of an average advertising campaign, such a strategy shows a considerable level of potential that HTC could similarly utilize with the company’s line of entertaining videos that are not only entertaining but showcase the technological prowess of the company’s smartphones (Pronschinske 2011, pp. 218-219). Combined with a greater online presence through Facebook and Twitter, it can be expected that through such a strategy HTC will be able to reach its target consumers in an efficient, effective, and above all cost-effective fashion which can easily be incorporated into its current marketing strategy.

Developing greater brand awareness through Social Networking

This strategy involves putting into action a variety of online marketing campaigns through social networking such as Facebook to increase the number of people that are aware of the HTC brand and what the company’s phones are capable of doing, by implementing such a strategy this in effect allows the company to access millions of internet users thereby resulting in the potential for more sales for the company.

Create better Consumer-Company Engagement through Online Media Sites

Websites such as YouTube have enabled companies to more easily advertise their services to a wide array of potential consumers through the creation of a variety of viral videos that appeal not only to a consumer’s sense of entertainment but also to their desire to learn more about a product. As such, by creating a significant degree of hype through YouTube and holding various contests challenging consumers to show off their use of their HTC phones, this in effect will create a significant degree of consumer-company engagement which should help to drive up sales.

Utilize online sponsorship agreements to increase knowledge about the brand and its products

The last IMC strategy goal to fulfill the objectives is to utilize online sponsorship agreements with a variety of YouTube stars to increase general public knowledge about HTC. Given the popularity of YouTube stars and the millions of views they garner daily, this means that sponsorships through them can in effect reach millions of people within a relatively short period.

As indicated by Verma, Stock & McCarthy (2012), consumers are increasingly relying on online social media as to how they make their purchasing decisions (Verma, Stock & McCarthy 2012, pp. 183-186). While it may be true that traditional methods of advertising through television commercials and print ads will continue to be a vital attribute of modern-day advertising campaigns, online social media has, as of late, risen to the same level or has even surpassed the impact of traditional advertising as a means of reaching out to consumers (Verma, Stock & McCarthy 2012, pp. 183-186). The reason behind this is quite simple, the internet has in effect provided consumers with a vast array of potential tools from which they can make informed business decisions. As evidenced by the case of product reviews on Amazon.com as well as the plethora of technology review blogs, positive online reviews through online social media is now becoming the main means by which consumers decide on what type of product to purchase (Verma, Stock & McCarthy 2012, pp. 183-186).

Not only that, the level of “hype” generated through online viral marketing campaigns and social media sites such as Facebook and Twitter has in effect enabled companies to more easily reach thousands if not millions of possible consumers. (Schelfhaudt 2012, p. 24) Combined with associated online social media services that are unique to particular smartphone brands, such as Instagram for the iPhone and the Blackberry network for RIM, this shows how a company’s utilization, as well as the provision of online social media services in effect, dictates its success in this increasingly connected world where online social media is becoming the dominant form of advertising and communication. It is based on this that HTC should attempt to develop various forms of viral marketing campaigns and promotions that specifically focus on displaying not only the brand’s greater usability as compared to other smartphones but also its ability to provide the kind of social media connectivity that people are after.

For example, various brands such as Lego and Sony have created their own YouTube channels to create not only a certain degree of hype through a variety of funny and unique videos that went viral but they were also able to create a considerable level of online discourse in which people argued either for or against their brand on the YouTube comment section (Pronschinske 2011, pp. 218-219). Since the videos on their channels have reached several million views at only a fraction of the cost of an average advertising campaign, such a strategy shows a considerable level of potential that HTC could similarly utilize with the company’s line of entertaining videos that are not only entertaining but showcase the technological prowess of the company’s smartphones (Pronschinske 2011, pp. 218-219). Combined with a greater online presence through Facebook and Twitter, it can be expected that through such a strategy HTC will be able to reach its target consumers in an efficient, effective, and above all cost-effective fashion which can easily be incorporated into its current marketing strategy.

Not only that, by encouraging the development of a community of viewers towards the company’s YouTube channel by posting weekly videos that showcase a variety of interesting activities utilizing an HTC phone such as traveling to distant locations, being used in exciting events as well as other such memorable experiences that highlight the phone’s use in smart and interesting ways, the company will be able to subsequently take advantage of the development of this community by directly advertising to them through the videos which should result in increased sales. Other strategies involving online social media will take the form of providing popular review sites with models of HTC phones that are about to be released at least 2 weeks before the release date. Having these sites review the phones enables consumers to better understand what they are getting from the perspective of other consumers. Studies such as those by Chung & Austria (2010) have indicated consumer decisions for electronic goods have increasingly started to rely on online reviews as the primary method by which they make buying decisions (Chung & Austria 2010, pp. 581-586).

This is not only due to the increased popularity of online social media but by the sheer fact that consumers wish to know more about a particular product from the perspective of other consumers before purchasing it themselves (Chung & Austria 2010, pp. 581-586). It is based on this that having online review sites examine the products of the company is essential in “spreading the word” so to speak to create significant levels of interest in purchasing the phone. The last strategy involves a distinct focus on creating a more established presence for HTC on various social networking sites such as Facebook and Twitter. Various studies have shown that people increasingly rely on Facebook and Twitter to receive news and information. (Dewan & Ramaprasad 2012, p. 70) As such, by positioning the company in such a way that it is in the direct line of sight of consumers since the company would be within their online social network, this increases the likelihood of product patronage due to constant exposure to the company’s various social networking posts.

Another potential online social networking strategy that will be utilized is to focus on utilizing YouTube stars (i.e. prominent members of the YouTube community). It can already be seen that popular YouTube shows such as the Philip DeFranco Show, Epic Meal Time, as well as FPS Russia all, have considerable advertising deals with various companies such as Netflix. The reason behind this is quite simple; these shows garner millions of views per video and can in effect target a large portion of the online internet population. Not only that, when comparing the amount paid for advertising on a YouTube show as compared to what a company would normally pay if they utilized an advertisement on TV, it can be seen that advertising through YouTube stars is not only cheaper but more effective in reaching the target demographic that a particular company is going after. By combining all the methods that have been elaborated on so far with the regular marketing campaigns of the company, it can be expected that HTC could develop a considerable market advantage over its competitors who are not attempting the same marketing approach.

Budget Evaluation

Year 1 estimate along with costs for an online marketing plan

Summary of Financial plan
Annual unit sales 16,000,000 or more
Average Price Per Product $ 200.00
Variable cost P/Unit (production and sales) $ 0.97
Fixed costs (machine rent, maintenance, etc.) $ 20,000
One-time start-up costs for filming studio (equipment, marketing, legal, etc.) $ 300,000
Working capital required (receivables, inventory, etc.) $ 20,000
Estimated Annual Gross Revenues and Income:
Annual Costs $ 300,000
Annual variable costs $ 6,000
Annual contribution margin $ 12,124
Break-Even Point
Contribution margin per unit $.10
Annual break-even quantity 10,000,000 items sold
The ratio of break-even to expected quantities 5%
Starting-up the business:
Total up-front funds required for promotion $300,000
Additional units to cover up-front funds $30,000
Break-even quantity with up-front funds 10,000,000
Financial Performance
The payback period for start-up funds (in days) 375
Annual return on start-up investment 30%
The variable cost to price ratio 35.3%
Contribution margin ratio 58.0%

The basis of the budget created is that at an annual cost of $300,000 and an initial upfront cost of $300,000 as well for the construction of a studio, filming equipment, and the hiring of personnel necessary for the YouTube videos, the result should be a considerable contribution towards the sale of 16 million handsets on an annual basis. After a brief calculation, it was estimated that a marketing cost of 10 cents added to the price of the phone should be more than enough to meet the budget necessary to create a constant stream of videos and online social media marketing campaigns. The contingency amount necessary for this amount is $300,000 with an initial fixed cost of $20,000 for the office equipment and computers with the remaining cash going into salaries, fees, and miscellaneous costs. All in all, $300,000 a year is a relatively modest sum when compared to the nearly $1 billion a year that companies such as Apple and Samsung have for their marketing budgets. This is indicative of the level of efficiency of online marketing campaigns that focus on the use of social media since not only can such campaigns operate with relatively few staff but they can function on a low budget allotment.

To determine whether the IMC plan and objective was a success it would be important to determine 3 specific aspects:

degree of market penetration

This aspect refers to the target market that the marketing campaign attempted to penetrate. As such, to determine how well a market was penetrated, it would be important to examine the brand knowledge, and the overall outlook consumers have towards the HTC brand.

product sales

This aspect refers to an increase in sales as a direct result of marketing efforts to increase the level of brand awareness for the company’s products.

examining demographic data

It is quite interesting to note that when it comes to online social media-based methods of marketing you can determine the level of success of a particular campaign by merely examining the number of views, re-tweets, and shares a particular video has. It is usually the case that the more views a video has, the more likely it is that it was able to reach the target demographic that the company was attempting to penetrate.

Reference List

Chena, Y, Fay, S, & Qi, W 2011, ‘The Role of Marketing in Social Media: How Online Consumer Reviews Evolve’, Journal Of Interactive Marketing (Mergent, Inc.), 25, 2, pp. 85-94, Business Source Premier, EBSCOhost.

Chung, C, & Austria, K 2010, ‘Social Media Gratification and Attitude toward Social Media Marketing Messages: A Study of the Effect of Social Media Marketing Messages on Online Shopping Value’, Proceedings Of The Northeast Business & Economics Association, pp. 581-586, Business Source Premier, EBSCOhost.

Dewan, S, & Ramaprasad, J 2012, ‘Music Blogging, Online Sampling, and the Long Tail’, Information Systems Research, 23, 3, pp. 1056-1067, Business Source Premier, EBSCOhost.

Greengard, S 2012, ‘Hot topics’, Entrepreneur, 40, 6, p. 70, Business Source Premier, EBSCOhost.

Hanna, R, Rohm, A, & Crittenden, V 2011, ‘We’re all connected: The power of the social media ecosystem’, Business Horizons, 54, 3, pp. 265-273, Business Source Premier, EBSCOhost.

Mainwaring, S 2011, We First: How Brands And Consumers Use Social Media To Build A Better World, n.p.: Palgrave Macmillan, Public Library Core Collection: Nonfiction (H.W. Wilson), EBSCOhost.

Pronschinske, M 2011, ‘Understanding online and offline consumer behavior: conversations to cause change: a proposed typology of consumers utilizing Facebook to enact consumer boycotts’, AMA Summer Educators’ Conference Proceedings, 22, pp. 218-219, Business Source Premier, EBSCOhost.

Schelfhaudt, C 2012, ‘Social Media Policy: What NOT to Do’, ABA Bank Marketing, 44, 9, p. 24, MasterFILE Premier, EBSCOhost.

Shu-Chuan, C, & Yoojung, K 2011, ‘Determinants of consumer engagement in electronic word-of-mouth (eWOM) in social networking sites’, International Journal Of Advertising, 30, 1, pp. 47-75, Business Source Premier, EBSCOhost.

Verma, R, Stock, D, & McCarthy, L 2012, ‘Customer Preferences for Online, Social Media, and Mobile Innovations in the Hospitality Industry’, Cornell Hospitality Quarterly, 53, 3, pp. 183-186, Business Source Premier, EBSCOhost.