The influence of Social Media on the shifting power from enterprise to consumer

The shift in power from enterprises to consumer has been seen during the exploding use of the internet as information can be spread over the globe in seconds control is now very much in the hands of the consumer. According to Jarvis (2009):

“Previously, the powerful enterprises, institutions and governments believed they were in control, and they were. Now the internet allows us to speak to the world, to organize ourselves, to find and spread information, to challenge old paradigms and to retake control”

What makes the internet so interesting for all involved parties is the creation of a total new marketplace – a virtual place where products, services and information exist in a digital version and can be delivered in the same digital version through all channels (Rayport and Svikola, 1994)

Companies and consumers have been quickly to adopt the new marketplace for their own benefits. The new interactive channels allowed companies to reach new markets or even expand the influence on the existing ones and the consumers had suddenly the opportunity to save time and money in gathering information when buying products and services online. The interaction approach has been researched in marketing literature and particularly in Sweden at Uppsala University in 1960s the thesis’s has been developed about interaction” Between the parties in a network various interactions take place where exchange and adaptations to each other occur.” A flow of goods and information as well as financial and social exchanges takes place in the network (Håkansson, 1982 and Johanson and Mattsson 1985 and Kock 1991).

The interactive dialog between the exchanging parties has increased with the commercial internet (Peters, 1998). The new market space described in figure 2.2 has changed the behaviour and the value creation and communication models. 

(Source: The managed innovation Group LLC, 2005) (Figure 2.2)

The shift has gone from One (company)-to-Many (consumers) model, where the value for the user comes from a high content of quality and reliability and authority of the company to the Many-to-Many model where the value for the user comes from an infrastructure for active participation in

content creation and a community of trusted co-creators. This means that the contribution to the medium and the message will come from both directions (Hoffman and Novak, 1996). The opportunity for the company in the one-to-many model comes from developing high content, understanding the needs of advertisers and building stronger relationships with these. When the model shift to the many-to-many model the opportunity for the company comes from building communities of reader/writer/editors with very high levels of participation and loyalty; reduced content creation/acquisition costs, increased audience size by creating viral groups of creator /marketers, improved content quality by providing tools for trust, credibility and reliability, and quality using technologies such as collaborative editing, reputation managers, public profiles, social networks and recommendations based on friends and contacts. The argumentation from Chaffey (Dave Chaffey et al 2007) is that the kind of communication mentioned above allows messages send through the internet to be targeted more effectively.

The consumer can go all the way from awareness to interest to desire to action all in the same medium at the same time. The popular way of expressing this new communication style is mentioned in figure 2.3. According to Peters (1998) there are 4 changes in the new “social media communications model” compared with the old media “Broadcast model”.

Social media communications changes	Contents
The communications style	– tend to have a little or no time lag between the giving, receiving and responding aspects of communication between parties.
Social presence	-or perceived personalness, the feeling that communication exchanges are sociable warm, personal, sensitive and active.
Control of contact	-early research into willingness of consumers to utilize technology I shopping behaviour concludes that the ability to control the pace and presentation of product information has the strongest influence on willingness to engage in computer mediated marketing activity (Carson et al 1996)
Content	-The content can be customised either by users or by senders. Where users are able to control the content, or presentation of the message it is said to be interactive

Table: 2.2 Peters (1998) Social media communication model compared with the old Broadcast model

The emergence of new digital technologies signals a radical shift of who is in control of information, experience and resources (Shapiro, 1999). A key feature of the new Social media working in the digital technology is how it is value creating towards the users. The value for the consumer is that an infrastructure for active participation and even control in contact and content creation has been made possible (Peters, 1998) According to Normann and Ramirez (1994) a community of co-creators/ producers has been created for the consumers as interaction is possible among different players, hereunder suppliers, costumers, employees and managers. A result for the marketer and the enterprise company is they are loosing control over the communication which is delivered to their consumers.

According to Gatarski and Lundkvist (1998) communication is interactive when we are talking of the meaning of sharing information and creating simple messages for two way conversations. These conversations can be applied in production when generating mutual ideas creating new products and services.

Conclusion

When enterprises recognize this paradigm shift in control is when they can stop grapping on to what is lost, and start investing in what is really going to engage consumers. If the enterprises business objectives can be reached, engagement means supplying engaging content which is a way and a place to talk about the product and services. The control can be seeded out to the consumer, and it is possible that the word which is spread about an enterprise and its products and services can have a positive impact on the enterprises business. To reach a positive word of mouth it has been stated in the literature review that if you respect the consumers and their community they will respect you as an enterprise. This is a simple rule which can be summed up that enterprises have to behave in a way that is suitable to the environment they are in. Enterprises are in a community inhabited by humans, and these humans may be online, but that makes them no less human and may choose to engage or ignore an enterprise on these premises.