Case Study: Facebook
Table of Contents
- Basic Marketing Strategy of Facebook
- PESTLE and SWOT Analyses of Facebook
- The Marketing Mix of Facebook
- The 4 Ps of Marketing used by Facebook
Since 2004, the face of social media has been revolutionalised and amidst a lot of debate there is one unanimous callout to the social media platform known as Facebook, for being solely responsible for this massive upheaval. Facebook has drastically changed the way we view life and the way we interact with our families, friends and acquaintances from 2004 till date. The most popular social media giant of today was born in a small house shared by a group of students of Harvard University, and the mastermind behind it all, being Mark Zuckerberg, the current co-founder and CEO of Facebook. (Johnston, 2020)
The primary source of revenue of this popular social media corporation is selling advertising space on their website. As of 30th April 2020, Facebook has registered over 2.6 billion monthly active users, making it the largest social media network worldwide. Facebook has also recently acquired two other popular social networks, namely Instagram and WhatsApp. Facebook bought Instagram in 2012 for $1 Billion and WhatsApp in 2014 for a whopping $19 Billion. (Clement, 2020) (Shead, 2019)
Facebook has been selected as the organization in this analysis because in the 21st century it has been the noted as one of the top companies generating hefty market value per dollar of physical assets. According sources the business scene of the 21st century is less asset oriented and more software, patents, brands and customer relationship oriented. (Kant, 2016)
Basic Marketing Strategy of Facebook
Facebook bases its marketing strategy off of a unique model that primarily provides this online platform to its users for free. The way this works is not so simple and is so complicated that even US Senators failed to fully grasp the concept when they grilled Mark Zuckerberg about it on his April hearings at the Congress. The marketing model used by Facebook to improve their sales is quite difficult to categorize in the conventional Modern Marketing Mix (MMM) since it is ever so dynamic and constantly shifting with the changing consumer needs and preferences. However, 2 key aspects stand out in the tools used by Facebook to improve their sales – (Scott, 2018)
Advertisements – There’s a misconception that Facebook sells user’s data online to ad companies. The fact is that Facebook simply sells access to you based on your data so that targeted ads can reach you and companies can successfully reach their target customers for which Facebook gets revenue from such companies.
Games & In-App Purchases – Facebook reportedly earned $711 Million in 2017, from several in-app purchases and payment in games that are available on their website free to play for all. There are several highly engaging and immersive games on Facebook that its user play for fee, but are charge with in-app purchases when they need to get a little edge over other players. (Scott, 2018)
PESTLE and SWOT Analyses of Facebook
The PESTLE Analysis of Facebook is as follows –
Political – Facebook has faced certain political regulations leading to a ban in global markets like China, which has made Facebookcase study sample inaccessible to the huge population of China. Facebook has also been known to affiliate with certain political campaigns that are damaging to its reputation.
Economic – Facebook indulges in digital innovations that drive the global economy positively and is known to be a major attracter of advertisement related expenditure.
Social – Facebook has a history of very strong customer retention amidst its vast array of individual as well as business users. Making it one of the most consumer friendly companies.
Technological – Facebook is also actively innovating and investing in futuristic state of the art technology relating to virtual reality and 3D imaging to expand its user experience further.
Legal – Facebook’s embroilment in recent data scandals have marred its reputation a great deal. However it is vigorously working to assure its consumer base for the contrary. Also the European Union’s GDPR is said to increase its data privacy infringement implications which can seriously pose an obstacle to the progress of this company.
Environmental – Facebook has undertaken several operational initiatives and sustainable SOPs to ensure sustainable development help with climate change control. Such corporate responsibility is crucial to the social acceptance of Facebook. (Facebook SWOT & PESTLE Analysis, 2019)
The SWOT Analysis of Facebook is as follows –
Strength – Facebook maintains a record of a healthy balance sheet that showcases strong financial statistics. It has a widely accepted and influential global presence giving it unhindered and unlimited potential in integrating with other companies and platforms. Its captivating user interface offers a vast spectrum of products and high user engagement on multiples avenues.
Weakness – The only major revenue source of Facebook case study sample is advertising and if the case should be that major companies choose not to advertise through Facebook, then the company will face the risks of bankruptcy. Entanglement is user data privacy scandals have generated negative publicity and dented the company’s reputation. Facebook also strictly cracks down on the use of third party applications on their portal.
Opportunity – Facebook is famous for high end innovation in the digital realm and venturing forth in uncharted markets. Mobile advertising markets with user friendly mobile OS based tools is another scope of growth for this company. Investing in augmented reality with its recent venture into the Oculus Rift innovation can also pan out major opportunities for growth. Facebook can also develop its subsidiary companies – Instagram and WhatsApp to capitalize on the recent trends of social media marketing.
Threats – The high level of uncertainty in their user loyalty is indeed a threat. Governments placing ban on usage of Facebook due to several issues like spreading of fake news and user data privacy breaches also act as significant threats to the company’s model. (Facebook SWOT & PESTLE Analysis, 2019)
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The Marketing Mix of Facebook
A marketing mix, in academic terms is a combination of strategies and techniques used by any company to sell its product or achieve significant success in its marketing plans. Facebook uses a unique set of marketing mix that capitalises mainly on the popularity of the platform. Facebook formulates its generic as well as intensive marketing strategies based on the social behaviours of its user base. When critically analysed, Facebook’s marketing mix reveals the benefits of the online and social behavioural pattern based characteristic of the entire business model of Facebook. For instance, Facebook often measures its business performances with those of its competitors like Google LLC, Twitter Inc., Snap Inc. and Amazon.com, by analysis the user responses to certain communication tools on its competitor’s platforms. The strategic marketing management of Facebook supports its business development at the same time looking into target market demands. (Kissinger, 2018)
The 4 Ps of Marketing used by Facebook
Marketing mix in the broad subject of product and services marketing is a wheel of tools used by all major and successful businesses to grow their business and at the same time keep with the constantly dynamic market demands in the 21st century. The Marketing Mix is generally consisting of 4Ps, which are Product, Place, Price and Promotion. However an extended 7P system has also emerged wherein the additional 3Ps pertain to People, Processes and Physical Evidence. According to the performance of Facebook over the past 16 years, 4 Ps of marketing strategized by Facebook are as follows –
Product – Products being advertised should meet the expectations of the consumers and it should be utilitarian as well as uphold the specifications of the advertisement and the reputation of the company. In this regard, Facebook has 5 major products to offer to its consumer base, that is, Facebook, Instagram, WhatsApp and Oculus. Facebook actively harvests its popularity as a means of earning ad revenues from online and digital display advertising on its websites like Facebook and Instagram case study sample.
Place – Facebook Inc. is not a physical asset intensive company. As such it does not have any major place of operation or region of operation because it is a worldwide product available in any country save the ones that have banned it due to several reasons already discussed above. However it is significant to note that the place for Facebook is essentially on websites, mobile apps and retail stores. Hence Facebook encourages digital technologies to enable effective availability of their product on a worldwide scale.
Promotion – Facebook incorporates 4 major tracks of promotion that are strictly pertaining to the digital arena and not the physical world in ways on conventional promotion and advertising. It utilizes Viral Marketing, Direct Marketing, Advertising and Public Relations for indulging its promotions. Advocating corporate social responsibility by the means of users being able to donate to charities through Facebook and also donate blood to donors who need it are all part of Facebook’s promotional activities.
Price – This is a one of a kind strategy used by Facebook since the price of their product is absolutely zero. It is completely free for the consumers. However, the other side of the coin, that is the other consumers of Facebook, are the companies advertising through the Facebook website and mobile app. For them, Facebook has set competitive rates for display advertising. (Kissinger, 2018)
The research methodology used here is more quantitative than qualitative. Several data have been gathered from online sources by means of secondary research using search engines. A few articles and online forums have also been referred for the formulation of this article. Information from archives of online newspapers has also been referenced to complete this work. IT has been meticulously complied to cover all topics and subtopics as stipulated. And such work can be referenced for future use in preparing similar marketing plans for other organizations as well.
The prima facie of Facebook is centered on openness as said my Mark Zuckerberg himself that he wishes to create a world that is more open to each other and doesn’t hesitate to share experiences and moments of emotion. The recent data privacy breach scandals faced by Facebook case study sample has driven the company to tread on thinner roads, actively trying to make the world a smaller place and bringing together people and positive movements for the betterment of the world, and at the same time taking care of its user data and preventing its misuse by malicious parties. That was and always has been the whole point of such a social network, to bring together lives and enable wider forums of communication among its users. Secure data storage and end to end encryption on its various platforms have gone a long way in repairing the damaged reputation of Facebook and has brought it back into the good books of many of its users.
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Clement, J. (2020, April 30). Number of monthly active Facebook users worldwide as of 1st quarter 2020. Retrieved June 13, 2020, from Statista.com: https://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/
Facebook SWOT & PESTLE Analysis. (2019, April). Retrieved June 13, 2020, from Swot and Pestle: https://www.swotandpestle.com/facebook/
Johnston, M. (2020, January 21). How Facebook Makes Money. Retrieved June 13, 2020, from Investopedia: https://www.investopedia.com/ask/answers/120114/how-does-facebook-fb-make-money.asp
Kant, K. (2016, February 10). 21st Century Businesses. Retrieved June 13, 2020, from Business Standard: https://www.business-standard.com/article/companies/21st-century-businesses-116021000045_1.html
Kissinger, D. (2018, June 18). Facebook Inc.’s Marketing Mix (4Ps) Analysis. Retrieved June 13, 2020, from Panmore Institute: http://panmore.com/facebook-inc-marketing-mix-4ps-analysis
Scott, G. L. (2018, October 5). How Does Facebook Make Money? Here Are 4 Big Ways. Retrieved June 13, 2020, from Inverse.com: https://www.inverse.com/article/44566-how-does-facebook-make-money-mark-zuckerberg
Shead, S. (2019, December 18). Facebook owns the four most downloaded apps of the decade. Retrieved June 13, 2020, from BBC.com: https://www.bbc.com/news/technology-50838013#:~:text=Facebook%20bought%20Instagram%20in%202012,in%202014%20for%20%2419bn.
This Is A Sample Case Study On Facebook From Our Experts Get Your Report Right Now1
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