M.A. Thesis New Media and Digital Culture
Building Online Communities:
Power of Commercial Brands
Student name: Student number: E-mail address: Date: June 26, 2015
Supervisor: Sabrina Sauer Second reader: Karin van Es
STATEMENT:
I hereby give my permission to the library of the University of Amsterdam to archive the digital version of this thesis in a repository and publicize and make it available for consultation.
ABSTRACT:
This thesis is an empirical research of how online communities can be used by commercial brands. The corpus of this thesis is a case study of a commercial brand ROSEFIELD Watches where the author of the thesis worked as an intern. A mixed method of participatory observation and quantitative analysis of the brand’s Instagram community was used in order to answer a question of how does a new brand create and engage with its online community and how it can be shaped based on the brand’s identity. The results revealed that a brand can influence its followers in online communities to help the brand’s cause and a correlation was found between the community activity and brand’s story.
Keywords: Online communities; Instagram; brands; participatory observation; digital tools; new media.
1 INTRODUCTION 4
2 THEORETICAL FRAMEWORK 6
2.1 SOCIAL MEDIA PERSPECTIVE 6
2.1.1 ONLINE COMMUNITIES, BRAND COMMUNITIES AND WEB 2.0 6
2.1.2 SOCIAL NETWORKS AND SOCIAL CAPITAL 11
2.1.3 INSTAGRAM 13
2.2 BUSINESS PERSPECTIVE 16
2.2.1 MARKETING STRATEGY 16
2.2.2 PRODUCT LIFE CYCLE 20
2.3 RESEARCH QUESTION 22
3 METHODOLOGY 23
3.1 DELIMITATION OF CORPUS 24
3.1.1 THE BRAND:ROSEFIELDWATCHES 24
3.1.2 BUILDING COMMUNITY ACTIVITIES 29
3.1.3 TOOLS USED TO BUILD AN ONLINE COMMUNITY 31
3.2 METHODS 34
3.2.1 TOOLS FOR DATA COLLECTION 35
4 FINDINGS 38
4.1 PARTICIPATORY OBSERVATION FINDINGS 38
4.2 INSTAGRAM FINDINGS 43
4.3 INSTAGRAM HASHTAGS EXPLORER 47
5 DISCUSSION 53
5.1 DISCUSSING FINDINGS AND RESULTS 53
5.2 LIMITATIONS 55 5.3 CLOSURE 56 6 CONCLUSION 57 7 APPENDIX 59 7.1 INTRODUCTION 59 7.2 THEORETICAL FRAMEWORK 59 7.3 METHODOLOGY 60 7.4 FINDINGS 72 7.5 DISCUSSION 78 8 WORKS CITED 79
1 Introduction
With the increase of using social media platforms for their commercial purposes, brands have found a way to appeal to consumers online in new ways. Social media users are not only positioned as consumers, but also as a brand’s “friends” because they can literally “friend” a brand on Facebook, follow it on Instagram or Twitter, and communicate with it through the mediation of personal messages and/or comments, to which brands often respond. It is necessary to establish that in this thesis, brands are understood as commercial and profit-seeking entities. If there ever was an invisible wall dividing consumers and merchandizers, who would otherwise be in contact only during marketing activities and purchases, this wall seems to be pulled down by online social media, which allow the creation of a different relationship between these two entities. Even large corporations can now hide behind friendly facades that have been carefully crafted by online marketing experts. Consumers and customers stopped being consumers and customers (on social media), and instead have become a brand’s “friends” and “community”; online community.
The purpose of this thesis is to examine and prove that to a certain extent, a brand can persuade its community into taking actions convenient for the brand, form and shape the community’s opinion of the brand, and disseminate a positive image of the brand. In other words, brands can use their online communities to improve their image and the community inadvertently aids this purpose through online engagement. The main research question that is posed is how does a new brand create, change, and engage with its online community, and what does this imply about current notions about online community formation?
Because the research is concerned with the creation and formation of commercial communities, the case study that is examined is a Dutch startup company called ROSEFIELD Watches. The company was founded in February 2015 and its social media activity began in April of the same year. The brand’s most frequent activity and highest engagement of its new online community was on Instagram, which is why the ROSEFIELD Instagram community was chosen as the object of the study, which will be scrutinized and analyzed in great detail in the following chapters.
The theoretical framework of this thesis covers topics that are necessary to theoretically position and ground the research, starting with the social media
perspective. This chapter explains the origins of online communities and their importance to those who are members. There is a connection with Web 2.0, which is an abstract milestone for Internet users, and with the rise of social media popularity and variety of its usage, Web 2.0 is also an important turning point for brands. Social networking is explored furthermore in the chapter together with social capital, because as it is argued in the chapter, these two aspects are key for community formation – whether online or offline. Instagram is introduced in great detail in this chapter because it is the Instagram community, which is being examined in this research. It is crucial to understand the background and motivations of Instagram users, because these motivations are used by the brand in order to meet their purposes. The second part of the theoretical framework consists of the business perspective. The business perspective cannot be omitted from the chapter because ROSEFIELD as a brand is an economical asset driven by a vision of profit, and the online community is essentially a tool to achieve the goal. It is important because overreaching business goals of a start-up like ROSEFIELD are theoretically grounded in the business perspective of online community formation. I was able to interlock the business and social media perspectives of online community formation; these two sections seek to enrich each other, and provide the theoretical framing required for the analysis. This chapter concludes by explaining and stating the research questions, which were drafted in the beginning of the introduction.
The third chapter consists of the methodology; it explains the corpus of the study, ROSEFIELD, in great detail. Understanding how the brand established itself on the market provides interesting insights into the functioning and “thinking” of the brand as such, which furthermore helps with understanding of its social media activity and online community formation. This chapter describes different tools that the brand uses to meet its goals, but also tools and methods that were used for the research. The Methodology is followed by a chapter that explains the results of the research, which are furthermore discussed in the chapter that succeeds it. The findings and their significance prove that brands have a great power over their communities, and they can use them to meet their own business goals.
2 Theoretical Framework
The theoretical framework of this thesis is divided into three main subchapters. The final subchapter is the research question. The subchapters that precede it present two perspectives that are important: the social media perspective and business perspective. The social media perspective is perhaps the most important for this thesis because the focus of the case study is a community on Instagram – which is a social media platform; but the business perspective cannot be omitted due to the object of this thesis, which is a brand – a commercial entity. Furthermore, it is necessary to take account of online and brand communities and their relation to Web 2.0 because they are interlinked with social media activities. Additionally, social networks and social capital are central for communities – whether online or in real life. Lastly, Instagram is discussed in the social media perspective because it is important to be aware of its influence and importance on people’s lives, in order to fully comprehend why it could be a vital tool for brands. Marketing strategy and product life cycle are described in the framework in order to later understand the position of a specific brand and why it is a suitable case study for this research.
2.1 Social Media Perspective
2.1.1 Online communities, brand communities and Web 2.0 Online communities
Online communities date long before Web 2.0. In fact, the first online communities emerged long before the Internet itself on ARPANET and Usenet (Rheingold 6). These two networks can be seen as the predecessors of the Internet, connecting research universities first in the United States and later worldwide, and they were mostly (if not exclusively) used by university researchers (Brunton 23). Among the first communities on ARPANET were players of collaborative games known as MUDs (Multi-User Dungeons) and MOOs (MUD Object-Oriented), text-based fantasy-adventurous, role-oriented games enabling numerous individuals to participate at once (Brunton 14). The most recognized, still popular and widely played
game today is Dungeons and Dragons. These games consisted of a narrator who told the story, and players who responded based on the narration and other players’ actions. Through their communication and common interest, these players created the first online communities.
One of the first Internet-based and currently still operating online community is WELL (Whole Earth 'Lectronic Link) – a system of computer conferencing connecting people all over the world, enabling them to have public conversation as well as send private e-mails (Rheingold 1). Rheingold describes being a part of the WELL community as follows:
“People in virtual communities use words on screens to exchange pleasantries and argue, engage in intellectual discourse, conduct commerce, exchange knowledge, share emotional support, make plans, brainstorm, gossip, feud, fall in love, find friends and lose them, play games, flirt, create a little high art and a lot if idle talk. People in virtual communities do just about everything people do in real life, but we leave our bodies behind. You can't kiss anybody and nobody can punch you in the nose, but a lot can happen within those boundaries. To the millions who have been drawn into it, the richness and vitality of computer-linked cultures is attractive, even addictive” (3).
In his description of what being a part of online community feels like, Rheingold suggests that it is almost as taking part in real relationships. This suggests that to a certain extent, online communities complement and mirror real life engagements. Different brands might seek different relations; brands focusing on lifestyle could produce more personal relations, where the members discuss personal topics – then the brand serves as a platform, but there are other brands which strive to serve as the object of the discussion, which makes the topics less personal and more object-focused (Birkner 23). In the latter case, members are expected to engage with the brand’s content, both on the brand’s Instagram page and on pages of other users who post about the brand.Such users can be fans or bloggers promoting the brand, PR agencies, or customers who share their purchase. Analysis of these behaviors on
Instagram is the key to what this study is about: brand’s creation of, formation and engagement with their online communities.
Brand communities
In this part, online communities associated with brands, as well as their members behavior, will be scrutinized. Hur, Ahn and Kim defined brand community as “a group of people who possess a particular brand or who have a strong interest in a brand, and who are active both online and offline” (1196). Relationships between the brand and community, but also among the members themselves, are important for brands because they make them more competitive and can improve their marketing productivity (1195). However, they are important for the community as well, because they can influence their members’ private lives; for instance, in situations regarding their economic decisions (purchases and consumption), or formation of opinions about the brand or its products (Hagel and Armstrong 1997). If brands manage to increase their customers’ commitment, they are more likely to engage with the brand and at the same time less likely to turn to a competitor (Hur, Ahn and Kim 1197).
There are some managerial implications that brands have to take into consideration. First of all, the community reflects the brand and can be pivotal for its reputation. A brand’s marketing activities have the potential to either strengthen or weaken the relationships with its community members and with the brand. Therefore, according to Hur, Ahn and Kim, brands should actively manage their communities (1207). They suggest that members should have enough space to engage and to participate in the community activities1, and they should provide some kind of insight to the brand in order to improve its marketing (1208). This is why it can be argued that there is a correlation between a brand and its community.
Popular platforms for those engagements are social media sites where the brands provide an online presence. The most popular platform used to be Facebook but the traffic has dramatically shifted to other platforms, particularly to Twitter and Instagram, which is caused by massive “migration” of especially young people (Luckerson, Matthews). Apart from social media, user-generated content is placed on
brands’ online stores (usually their official websites) as well. Sometimes, the customers are invited to write a review for a product they purchased, recommend it to a friend, or share their photography of the product. For instance, in 2013, Nike celebrated the two-year anniversary of its Instagram account by hosting “a 24-hour long community celebration on its @Nike account. Throughout the celebration, Nike shared ten Instagram photos from its fans that inspire the company to ‘push further’ on the platform. Each photo included a motivational caption and highlighted the original fan who created the photo” (Gioglio). One of the factors influencing community participation is the online store’s external images and perceptions of performance because unlike in offline stores, where customers and sellers interact face-to-face, a vast amount of contextual details are lost in the transmission of information (Tsai and Pai, 112). According to van der Heijden and Verhagen, the online store image is under the direct control of the shop owner and/or web designer (609). They claim that several researchers have been able to link store image and intentions to purchase (609).
When an online community is built and managed well, its members will feel comfortable and among like-minded people. In their research, Tsai and Pai tested their hypotheses and found out that: (1) brand prestige was related to community participation in a positive way, with the main attributes being services, products, website features, consumer loyalty or website success; (2) there was a positive relationship of attribute satisfaction and community participation; (3) there was a positive correlation between community participation and relationship investment; (4) there was a significant impact on relationship investment on loyalty intentions; and (5) there was a positive effect on relationship investments in consumer power.
Engagement of users is beneficial to the brand even outside the community. In some communities, the outcome of their engagement could be an open source software or encyclopedia page, but for most brands, the most important are product reviews, suggestions for product improvements or new product designs (Kraut, Resnick and Kiesler 1-2). Unlike offline interactions, online communities are completely free of time, space, and scale barriers (2).
Kraut, Resnick and Kiesler came up with a strategy for managing online communities and how to overcome certain challenges:
1. Starting a new community: it is important to have a rich inventory of content, which means that the members must have something in common to talk about, whether the topics are cancer survivors, open source development, or in this case a brand.
2. Attracting and socializing new members: brands have to keep looking for new members and encourage and motivate those with potential and skills for contribution
3. Encouraging commitment: all members have to feel encouraged to actively connect with the community in order to feel committed. Commitment is crucial for a member’s willingness to remain part of the community and therefore be more satisfied and less likely to look for alternatives offered by competition. 4. Encouraging contribution: existence of the online community is built on the
members contributing about the relevant subject. In some communities, discussing off-topics is considered spamming and “order” can be reinforced.
5. Regulating behavior: as already mentioned, spammers can be banned from most discussion forums by their (administrators) admins, and if the content of their contribution is in violation with the sites’ rules, they can be banned from online social networks such as Facebook or Twitter as well. Whether they are commercial spammers and bots trying to drive traffic to their websites, or whether the members want to engage in conversation with other members on a more personal level, if these actions are in a conflict of interest for the brand, a regulatory mechanism should be applied (2-4).
The steps listed above can be viewed as a “how-to” for brands management of their communities. These steps will be reviewed in the case study analysis as they may give insight into the issue. However, it is important to first take a closer look at how online community dynamics have changed with the advent of Web 2.0.
Web 2.0
The transition to Web 2.0, according to Tim O’Reilly, dates to the early 2000’s, with the first Web 2.0 conference, taking place in 2004. The shift from Web 1.0 to Web 2.0 was revolutionary. In Web 1.0, the Internet sites were mostly static (contained information but did not motivate visitors to return to the website again), non interactive (visitors could not make any contribution or change on the website,
download software but they could not look into the inner workings or modify them) (Strickland). In Web 2.0, the user is no longer only a passive observer to whom products are marketed – he or she has become an active agent who can easily engage with other users by means of blogging, leaving comments on other users’ profiles, posting pictures, tweeting and re-tweeting, and generally creating instant user-generated content by which he or she can influence other users (Chung et al. 1995). This shift from passive to active user does have its academic critics too. According to Tiziana Terranova, user-generated content is a form of digital labor, is unpaid and its creators “embody a complex relation to labor that is widespread in late capitalist societies” (33). She connects the “digital economy” with “social factory”, a term used by Italian autonomists that can be described as a process where “work processes have shifted from the factory to society, thereby setting in motion a truly complex machine” (Virno and Hardt and Negri quoted in Terranova 33). Terranova claims that from what advertising campaigns and business manuals portray, the Internet is “not only a site of disintermediation, but also the means through which a flexible, collective intelligence has come into being” (Terranova 34). The main subject of this thesis is not whether the members of the community that is being examined in this thesis are somehow being exploited; this research seeks to shed light on the dynamics between a brand and its community and how much of those interactions are influenced by the brand. However, the matter of creative exploitation is directly related to the research question and therefore taken into account later in the thesis and analyzed in chapters 4. Findings and 5. Discussion.
2.1.2 Social networks and Social capital
Building and managing online communities is crucial for creating social capital in the digital economy (Chung et al. 1993). Political scientist Robert Putnam defined that “the central premise of social capital is that social networks have value. Social capital refers to the collective value of all ‘social networks’ [who people know] and the inclinations that arise from these networks to do things for each other” (Bettertogether.org). According to Herrmann-Pillath, “social capital enables agents to entertain relations with other agents, in particular exchange relations” (4). Social capital is crucial to understand the brand-community dynamics in this case study
because without social capital, the brand cannot hope to achieve a successful community. Social networks and relations are fundamental for the online community to even exist.
Compared to only a decade ago, there now exists significantly more accessible platforms in the form of online social networks, where users who are willing to contribute to community building can participate (Chung et al. 1993) whereas before, individuals’ social networks comprised of mostly physical agents such as other people or physical objects (books, newspapers), and only few virtual agents such as broadcasting (but no online journals or forums). However, as much as social networks today might be thought of mostly in terms of online platforms2 (see Figures 2.1 and 2.2), Pots et al. define a social network as a “connected group of individual agents who make production and consumption decisions based on the actions (signals) of other agents on the social network” (172). Potts et al. also state that social networks do not only consist of human agents (family, friends, colleagues) but also non-human agents such as static objects or even reviews (both online or in newspaper). Chung et al. expressed a similar notion, claiming that the actors (agents) exchange resources among each other, such as data, information, goods and services, or social and/or financial support (1994). Because people can influence each other’s decision-making in their social networks, it will be interesting to learn whether and how brands use this knowledge to benefit their purposes. Chung et al. also praise the current Web 2.0 trend where actors are able to engage in multiple modes with other members of their online network, whether by leaving a comment on another member’s profile or underneath a picture, or by liking or (re)tweeting a particular post (1995).
Online social network users often tend to clique with people whom they can relate to; happy users are apt to befriend other happy users, whereas unhappy users primarily connect with unhappy users. These findings were measured by the Subject Well-being (SWB) index in Bollen et al.’s research. The explanation behind these cliques is two-fold, the research states; the first explanation is the phenomena of
2 At least it could seem that way based on the Google search results for the query “social network”,
where the first three results were for three different Wikipedia pages, two of which refer to online social networks; the fourth result leads to “Top 15 Most Popular Social Networking sites”; the fifth result is a link to the International Journal of Structural Analysis; the sixth result refers to an article from Mashable.com where online social networking is explained, albeit the article itself is called simply “Social Networking” instead of “Online Social Networking”; the seventh result is directed to the 2010 film The Social Network on the International Movie Database, and finally, the last result on the first result page of Google search links to ScienceDirect.com where there is a list of academic
“homophily”, when users connect with users with similar SWB values and the second explanation is simply a “mood contagion”, when users adapt similar SWB values over time (14). By this logic, users of one social media platform are likely to start following a newly emerged brand with similar content as other brands/accounts the users already follow. Brands can adjust their content on given platform to attract more followers, hence broaden their community and influence more people.
2.1.3 Instagram
Instagram is an online platform designated for sharing pictures from mobile devices. Although it is available in a desktop version as well, its functions there are limited. Users can view and comment on pictures from their computer, they can follow and un-follow users, edit their profiles and change settings. But the most important feature of this platform, that is uploading and sharing pictures, can only be executed from a mobile device such as a smartphone or tablet. Because users can write comments under each picture, Instagram is also a platform that allows (planned or spontaneous) creation of online communities because people can discuss the topic of each photograph and share their opinions and impressions of them. The community which is used as a case study for this thesis is the Instagram community of ROSEFIELD. The application is supported by iOS devices (iPhone, iPad, and iPod Touch), Android OS devices, Windows Phone, and BlackBerry. One of the reasons why Instagram has grown significantly popular is the possibility of adding filters to the pictures taken, and thereby often enhancing their quality3 (Asphari).
The platform launched on the 6th of October 2010 and grew to one million users by the end of the year (Instagram.com/press). By the 3rd of August 2011, 150 million photos were uploaded on Instagram and by May 2013, the platform’s community grew to 100 million monthly active users. In December 2014, Instagram’s user base grew to 300 million and throughout the five years of its existence, the application continuously went on adding new features and filters. In August 2014, Instagram introduced a new feature (downloadable as a separate application) called Hyperlapse. By the time of writing this thesis, the application is only available for iOS. The purpose of this application is capturing video clips with a maximum length of 45 minutes, and consequently accelerating the speed of motion up to 12 times to
create the lapse. The application has built-in image stabilization for creating a more cinematic effect, but does not record any sound.
Some brands have adapted and created Instagram profiles; according to PC Magazine, 40 percent of top brands adopted this platform (Mlot). Among others, the article is based on a 2012 study by Simply Measured. The study confirms that early adoption contributes to engagement and that Instagram’s growth is much faster than growth of Facebook or Twitter in their early years (Shively 1). Not only timeliness, but also (if not primarily) the right Instagram marketing strategy matter. Shively listed the most successful brands on Instagram as of 2012: Burberry, Tiffany & Co., Audi, Hermes, Gucci, Mercedes-Benz, BMW and Armani (all are luxury brands and they were all in the top 15 in total engagement (3). (What is understood by engagement is the total number of likes and comments for each post.) Shively concludes that high quality content is the nr. 1 criteria for high engagement and gives a specific example of Audi, which had over 100,000 followers in 2012 (1.7 million in April 2015), and had higher engagement than brands which had much more followers, such as MTV (813,000 followers) or Starbucks (758,000 followers) (4). Audi’s strategy was not using Instagram as a tool to drive its followers to other social media or their websites, but rather posting high quality pictures with captions conveying excitement (5). Shively describes their method of choosing the pictures as “handpicked” and attributes Audi’s success to the fact it does not use hashtags of vehicle types, but rather popular and exciting hashtags, the most frequently used being “awesome” (5).
Instagram’s most popular feature is its filters, which allow for an instant photo editing in one click. Different filters change the brightness, contrast, warmth, saturation, color, fade, highlights, shadows, vignette, tilt shift and sharpness, and they generally change the perception of given photography. All off the above mentioned aspects of the picture can be changed manually as well, to give user more control of the result. Although Instagram filters may seem like a “quick fix” for otherwise ordinarily looking photographs, there is a whole psychology science behind this phenomenon. This is what one of Instagram critics says about its users:
“[They] look like a poor, tasteless fool who needs to be shown the error of their ways. And unfortunately for the rest of us, they are so proud of their creations (of which they
selecting a filter from a list), that they want to show them to the world at every possible opportunity. Hence the amount of irrelevant and inane photos on any social media site is now growing exponentially” (Escapetone quoted in Willim 353).
Shankland argues, that filters distort and ruin the visual representation, which can make one question the realism of visual representation (quoted in Willim 355). On the other hand, this distortion of image perception might be the very aim of one’s work (Krapp quoted in Willims 355). Filters can both create noise, but by applying color correction, contrast enhancement or polarization, the can, to some extent, reduce what is considered noise (Willims 355). Instagram filters have become a trend and as all trends do, filters too repeat the history. “What used to be a quirky side effects of cheap toy cameras, the so-called ‘lo-fi’ look, has become increasingly fashionable among digital photographers in the past couple of years” (Smith quoted in Willim 354).
There is one other explanation for why the filters have gained so much popularity. In his 2010 TED talk about “Experience vs. Memory”, Daniel Kahneman, a winner of the Nobel Prize in Economic Sciences, talked about happiness. He said that we consider an experience as a happy one, based on the way we remember it. He even used an example of a man who listened to a recording of a beautiful symphony. Towards the very end, the recording was damaged and the man heard a “dreadful screeching sound” instead of the symphony and he considered the whole experience to be ruined. However, according to Kahneman, it was only the memory that was ruined, not the entire experience. Nevertheless, the memory was all the man could keep because the endings of our experiences are dominant and determining as for how we end up remembering the experience. Kahneman therefore differentiates between the “remembering self” and the “experiencing self”, and he claims that the “remembering self” is the one who makes decisions because we do not chose between experiences but between memories of experiences. As the moments pass and are forgotten, we have a chance to capture them in photographs (TED). We can take instant pictures with our smartphones and use a fitting filter that best captures our feelings, mood, and experience. By choosing a filter, it is also possible to distort the real experience and create a new one, because if the picture is then looked back at
after several months or years, the viewer will feel and remember the experience as it was intended at the moment the picture was taken.
A side effect of changing our own memories by using Instagram filters is that we can also distort the whole “story” for other people. If they see a picture with warm-colored filter, they will feel positive emotions and vice versa. Just like individuals, brands can use it to their advantage and shape their image online by using user-generated content.
2.2 Business Perspective
The business perspective is important because the brand ROSEFIELD Watches is a commercial asset. The brand is the most important asset for any company, followed by its human resources. However, employees can be replaced while replacing the brand (brand name) is rather complicated. Customers know and learn to trust a brand and when they do, it is more difficult for competition to win them over. Because the product is heavily marketed in the brand’s Instagram community, the community is closely affiliated with the business and marketing strategy of the brand.
2.2.1 Marketing strategy
This subchapter of Marketing Strategy is for a large part supported by the book Principles of Marketing written by one of the world’s leading authorities on marketing (vii), Philip Kotler from the Northwestern University in the United States and Gary Armstrong from the University of North Carolina in the United States. The theory is applied to the brand’s actual marketing strategy where the brand story is the key (see chapter 3.2.1. The brand: ROSEFIELD Watches.) Marketing is important for start up companies in order to build a brand. Due to the common scarce of financial resources in start-ups, it is often more efficient to focus on online and social media marketing, rather than traditional tools such as billboards, radio or television.
First, it is important to define what marketing is. Marketing as a discipline has been defined in a countless number of definitions in different textbooks or websites. Kotler and Armstrong defined it as following: “Marketing [is] the process by which companies create value for customers and build strong customer relationships in order
looking watches for lower prices than competitors) and captures value from customers (pictures on Instagram and positive evaluation on social media platforms). The goal of marketing is twofold: to attract new customers, and to keep customers satisfied and grow the their base (4). Marketing has been omnipresent for a long time now (in the form of TV, magazine or mailbox advertisements) but in recent years, marketers have taken on people’s phones, websites and online social networks (5). These new approaches allow marketers to not only reach masses, but also reach potential customers directly and personally; they become part of their lives because they want the customers to live their brand (5). This again applies to ROSEFIELD, when the company encourages its customers to share their experience through posting lifestyle pictures on Instagram, which are supposed to motivate others to buy the product and become new customers, because as Peter Drucker, a said management guru, wrote: “The aim of marketing is to make selling unnecessary” (quoted in Kotler and Armstrong 5). This quote refers to the brand activity of posting good-looking pictures with lifestyle captions instead of harsh advertising.
Customer value and satisfaction is one of the highlights for marketing. Satisfied customers not only return to buy more products but they tell others about their positive experience, whereas dissatisfied customers might turn to competition and discourage others from buying the product (7). Word of mouth is one of the most powerful marketing tools, but at the same time it’s the one they have the least control over – unless they pay people to spread good word. “A recent study revealed that consumers find sources of user-generated content—discussion forums, blogs, online review sites, and social networking sites—three times more influential when making a purchase decision than conventional marketing methods such as TV advertising” (Chen and Xie quoted in Kotler and Armstrong 153). Satisfied customers of ROSEFIELD are expected to buy an additional strap for their watch or a new watch from the new collection, should the company launch one. Simultaneously, they are expected to spread a good word about the brand both orally to their friends and on social media channels. With the growth of customers and retaining loyal customers, the business itself grows (7).
The concept of market is essential in marketing and can be defined as “the set of actual and potential buyers of a product or service,” (7) (more about the company’s
markets in subchapter 2.2.2. Product life cycle). This is what Kotler and Armstrong write about creating relationships in order to manage markets:
“Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Activities such as consumer research, product development, communication, distribution, pricing, and service are core marketing activities.”
Buyers carry out marketing as much as sellers. While searching for products, they are often in contact with the company, which, especially in the age of digital technologies, has made marketing rather interactive (7-8). Marketers no longer ask only how they can reach the customer, but how the customers can reach them and each other (8).
One of the key steps in creating a marketing strategy is the segmentation of market and selecting which segment is the one that the company will market to. It would not be reasonable to target all segments because very broad marketing might actually not serve any customer well (8). The targeted audience might be specified by gender, age, demography, economic situation and other factors. In case of ROSEFIELD, the audience that is being targeted are women of young age, belonging to middle or higher middle economic class from all over the world, and who are looking for good value for affordable price. The product is less expensive than that of the competition and offers free worldwide shipping, hence affordability and availability. That is the concept of production, which assumes that customers favor available and affordable products (9). On the other hand, the product concept should attract customers by its quality, performance, and innovative features (9). Finally, the marketing concept requires good knowledge of the needs and wants of the targeted markets and fulfilling these desires better than its competition (10).
Probably the most important concept of modern marketing for most companies is the customer relationship management (12). As Kotler and Armstrong wrote: “The key to building lasting customer relationships is to create superior customer value and satisfaction. Satisfied customers are more likely to be loyal customers and give the company a larger share of their business” (12). Customers
customers are often not very objective and accurate judges of values, especially when to some customers, affordable prices are a key factor in the aftermath of the recent recession. Although, to some customers, value might mean, “paying more to get more” (12-13).
Whether the customer is satisfied “depends on the product’s perceived performance relative to a buyer’s expectations” (13). In other words, if the product meets or exceeds the buyer’s expectation, he or she is satisfied or delighted; if not, the customer is dissatisfied (13). Not only will satisfied and delighted customers repeat purchases but they are also more likely to carry out the marketing task by telling others about their great experience (13). That is why ROSEFIELD offers free and fast shipping and almost luxurious (sometimes even personal) packaging (see more about this topic in subchapter 3.1.1. The brand: ROSEFIELD Watches).
The last part of the marketing strategy mentioned in this subchapter is perhaps the most important for this thesis and online communities: customer relationships. Customer relationships have different forms and strengths: basic relationships (usually through websites); full partnership (one brand accepts another brand as its customer – a third party re-seller; for example, Nike sells its shoes in Foot Locker); frequency marketing programs (rewarding customers who make frequent purchases with discounts or free products or samples); or club marketing programs (special benefits for members) (15). The nature of the relationships has changed in the past years; companies no longer try to target as many people as possible, but rather they prefer building deeper, direct, and long lasting relationships with customers who are carefully selected (16). The depth of these relations can be influenced by shifting from one-way communication to two-way, and interactive one (17). Kotler and Armstrong write that: “The new communications approaches let marketers create deeper customer involvement and a sense of community surrounding a brand—to make the brand a meaningful part of consumers’ conversations and lives” (17). It is important to note that while the relationship-building opportunities often have a positive influence on the brand’s life, they can also create challenges. Among these challenges is the fact that consumers are much more informed about the product than they used to be and they have enough platforms on the Internet where they can share their experience - even the negative ones (17). That is something ROSEFIELD is aware of and it will be analyzed in subchapter 3.1.2.3. Controlling social media.
2.2.2 Product life cycle
When a new product is introduced to the market, its life can be easily traced and measured by what is called a “product life cycle”. The Product life cycle can be defined as the following: “The idea that products, like people, have a birth, a life and a death, and that they should be financed and marketed with this in mind” (The Economist). There are five stages of the product’s life: the first stage is development, when a new product is “invented”. It does not necessarily have to be an invention of a completely new device, but can be an innovation or an improvement of an already existing product (The Economist). During this stage, the company makes no profit but needs to invest a large amount of money (Kotler and Armstrong 273). The second stage is the introduction, when the product has to be marketed and advertised, which is very costly; however, the product also gains its first customers (The Economist). The third stage is growth, which is when the company starts making profits because the number of customers has increased (The Economist). The fourth stage is maturity, in this stage the product is widely accepted and competition appears (The Economist). The sales growth slows down because most potential buyers already have the product, similarly the profits are not increasing because now the company has to invest in marketing again, to fight off the competitors (Kotler and Armstrong 273). The final stage is decline, which happens when the company can no longer fight the competition or adapt to new trends and desires of customers, which makes the product redundant (The Economist). However, as Kotler and Armstrong note, “Not all products follow all five stages of the PLC. Some products are introduced and die quickly; others stay in the mature stage for a long, long time.” Some products are returned to the growth stage of the cycle once they reach the decline through strong promotion or repositioning of the product on the market (273-274).
Product life cycle is often measured together with the adaptation process. This mental process through which consumers passes from the moment they first heard about it until final adoption has several stages as well: awareness (consumers become aware of the new product but do not know much about it); interest (consumers actively look for information about the new product); evaluation (considering whether or not to try the new product); trial (consumer tries the new product just enough to determine its value); and finally adoption (consumer buys the product and uses it regularly) (Kotler and Armstrong 156). However, looking at the adoption process not
from the consumer’s point of view but rather from the product perspective, we are looking at something called the “adoption curve”.
There are five adopter’s groups with different values (see curve below): innovators take the risk and try new ideas; early adopters are viewed as opinion leaders for their communities because even though they adopt new ideas, they are careful about it; early majority are rarely viewed as leaders, but they still adopt new ideas before the average person; the late majority only adopts new ideas after the majority of people have done it because they are skeptical; and finally laggards are doubtful about innovations and changes and only adopt when it is no longer considered an innovation (Kotler and Armstrong 157).
Figure 2.3: Adoption Curve
Source: Kotler and Armstron, page 158, Figure 5.7
Figure 2.4: Product Life Cycle and Adoption Process represents the
combination of the product life cycle and adoption process and how these two concepts blend together. It shows how, in theory, consumers adapt to the product in each stage of its life cycle; or looking from the opposite perspective, it shows how the
product life cycle develops and grows as the consumers adapt to it. The most important stage of adoption for the brand is late majority because that is when the company starts making profits. It is usually around the maturity stage of the product life cycle and it is the preferred position for most brands, since it is followed by the peak of sales after which a decline inevitably follows. However, it is often impossible to determine where the product is currently situated on the curve and in its life cycle, because it can be relative to the markets in which the product is marketed.
Figure 2.4: Product Life Cycle and Adoption Process
2.3 Research question
Even though brands cannot change the content other users post about the brand, they still have power to influence their online image and perception. For instance, by using online software to filter all pictures posted online with a particular
hash tag and consequently selectively reposting those pictures that are aesthetically pleasing to the eye, represent free-spiritedness, or show the product or brand in a positive manner – these are just some of the ways in which the brand can manipulate the reality of social media to its advantage. Of course, the brand cannot eliminate unflattering pictures tagged with its hashtag and prevent other users from seeing them when they look for the specific hashtag. However, the way the brand presents itself is often the way most users see it.
Rheingold wrote that the future of the Internet is connected to the future of “community, democracy, education, science, and intellectual life” (5). The transparency and democracy of online communities might not be as transparent and democratic as it is presented. That can be for different reasons; one possible reason is the community administrator’s censorship of what is being communicated within the community. This censorship might either only target hateful comments, or it can also prevent members from discussing off-topics. One of the goals of this thesis is to determine how the online community is shaped based on the brand identity. Another key question is whether an online community can serve as a tool to enhance the brand’s image and last but not least, it is pivotal to examine which aspects of the brand's online presence are beyond its control. However, the main research question this thesis will attempt to answer is the following:
How does a new brand create, change, and engage with its online community, and what does this imply about current notions of online
community formation?
3 Methodology
Being the author of this thesis and an intern currently working for the brand that is studied in this thesis, I will be applying a combination of participant observation and quantitative research methods in my research. Apart from on its main website, the brand operates on the following social media channels: Facebook, Twitter, Instagram and Pinterest. The research focuses only on the online community on Instagram for
two reasons: first, as this chapter will show in section 31.3.1. Instagram, Instagram has proven to be the most efficient channel for user’s engagement and interactions between both, the brand and the members, and among the members themselves. Second, the results from Instagram are relatively easily measurable and clear for further analysis and interpretation of the community.
This research aims to empirically study the interactions between a brand (ROSEFIELD Watches) and its online community during the process of the community building. Such interactions take place mostly on online social networks and occasionally via e-mail. Online social networks and social media sites are the focus of this study because that is where most of the community’s interaction happens. Results of monitoring of the back-and-forth communication between the brand and the community members, as well as the communication among the members themselves, will be analyzed in chapter 4. Findings.
3.1 Delimitation of Corpus
3.1.1 The brand: ROSEFIELD Watches
ROSEFIELD Watches (from this moment on, it will be referred to only as ROSEFIELD) is an Amsterdam-based start-up company specializing in watches for women. The company was founded in early 2015 (online store was launched in April) by Pauline Goderie and Christiaan Bekker. The brand’s story is central for the online community creation and management. It is based on the founding principles of two cities, Amsterdam and New York City, both of which were founded by the Dutch. New York City, formerly called New Amsterdam, is known for its modernity and fashion (Florida and Johnson). Amsterdam, on the other hand, is associated with liberty, history (Shorto) and according to the brand, with minimalist design (Rosefieldwatches.com). Their common grounds are (apart from the historical connection) liberty and freedom. ROSEFIELD as a brand wants to be associated with free-spirited individuals (women), to whom it advertises. The brand combines classic and modern, function and fashion; the Dutch minimalist design and contemporary New York fashion aesthetics (Rosefieldwatches.com).
ROSEFIELD encourages its customers to join and follow the brand on their social media platforms in the hope that they will become members of their online community. Customers are invited to follow the social media channels on various places on the website, in registration e-mails, newsletters, and in the box in which their ordered product arrives (see Figures 3.1, 3.2 and 3.3). The fact that the vast majority of the brand’s marketing takes place online, promoting itself through social media (namely Instagram, Twitter, Facebook and Pinterest) and its website, makes the goal more achievable. Traditional (offline) marketing would be more expensive but less effective because when individuals see the invitation on an online media source, it usually requires them to make one or two clicks to become members; if they see the invitation in an offline media source (e.g. magazine), they are required to get a device connected to the Internet, search for the brand and then “follow”4. Since it requires more effort from the customer/potential member and is therefore expected to be much less effective, the company opted for online marketing. The customers are encouraged to join the brand’s social networks and contribute by sharing a picture of the product they purchased. The expectation is that the users’ engagement will exceed simply sharing their product but that they will also like, share, re-tweet, re-pin and comment on other user-generated content.
A large part of selling the product is selling the brand, and the experience that goes with it. Because the product is intended for free-spirited individuals, it is expected that the customer either is free-spirited, or she5 considers herself to be, or at least she wants to be perceived that way, according to the brand. One way for the user to exhibit her free-spiritedness through the watch is via social media. It is assumed that if she posts a picture of herself, wearing the watch of a brand that is associated with free thinking, it immediately affiliates her with the brand’s ideology. And this is where the mutually beneficial relationship is supposed to be born: the brand provides a certain social status or sense of belonging to the customer, who in return shares her experience with the product and provides free advertising to the company. Appealing to the social status (on social media) has got another form than simply the user posting her picture. The brand selects best pictures posted not only by the bloggers, but also by the customers, that becomes promoted by ROSEFIELD on the brand’s
4 Follow = subscribe
5 The female pronoun “she” is used to refer to the customers/users/community members instead of the
commonly used male pronoun “he”. The reason is that the target audiences of the brand are women, and most of the customers/users/community members are also women.
social channels and therefore brings a lot of attention to the original poster6, because the post gets views by all the brand’s followers and the original poster is tagged in the picture.
One of the important aspects for the brand is the packaging of the product. The fact that the company offers free and fast delivery is already an enticement for customers however, instead of receiving the watch in a simple, cheap case, ROSEFIELD decided to invest in elegant, black leather pouches with the brand’s name imprinted on it, for protection of the watch. This pouch is packed, together with a certificate of authenticity, information leaflet and instructions, in a small black box and wrapped with a thin, elegant black ribbon. The whole packaging, in spite of being black, gives a very feminine, elegant and minimalist impression; the same impression the watches are supposed to give (see Figures 3.4 and 3.5).
ROSEFIELD does not expect to attract new members and customers solely by its story and ideology; the watches it produces have to be precisely designed and good looking. Customers can chose from four collections (see Figures 3.6 – 3.9), each has different design and its own story and purpose:
− THE GRAMERCY: “Named after a prime location in Manhattan, home to fashion designers from all over the world, the GRAMERCY collection combines a clean watch face with clean-cut leather straps to create a modern and alluring fashion accessory” (Rosefieldwatches.com).
− THE BOWERY: “Inspired by an iconic NYC neighborhood and caught between boho-chic and classic, the BOWERY collection combines a minimalist, ultra-thin watchcase with elegantly stitched leather straps” (Rosefieldwatches.com).
− THE MERCER: “Paying tribute to an exciting street in one of NYC’s signature shopping destinations, the MERCER collection features stainless steel mesh straps for an exquisite look that suits this fashionable neighborhood” (Rosefieldwatches.com).
− THE NOLITA: “Inspired by the trendiest little neighborhood in NYC, the NOLITA combines a full black watch face with bold colored straps, for a quirky style with a sporty twist” (Rosefieldwatches.com).
Each collection has a specific description and is “predestined” to a specific style: elegant, bohemian, chic or sporty. Buyers are free to ignore the specifications, but some might find it easy to identify with their own style. All collections, with the exception of Mercer, have interchangeable leather straps. Customers can buy additional straps with their watches to change their look and customize the watch according to their daily outfits. The objective behind this feature is to promote the idea of individualism and self-expression, and to give the users the opportunity to express themselves. Furthermore, they themselves are expected to be enthusiastic about sharing their own “way” with other members of the community on Instagram.
The actual website, www.Rosefieldwatches.com, was unofficially launched on the 15th of April 2015. However, there were still some malfunctions which is why the website was not being promoted and the launch was not announced until the 20th of April. Nevertheless, the social media activity begun even earlier: the first post on Instagram took place on the 5th of March, 2015, first Pinterest pins were created on the 3rd of April, first Facebook post was posted on the 5th of April, and the first Tweet was sent out on the 10th of April. Since then (5th of March), the followers’ base has
grown rapidly. ROSEFIELD reached 500 followers on Instagram by April 22 and 1,000 followers by May 2. The average activity on each post is 94.0 likes per post and 5.2 comments per post. The high engagement of users (measured by liking, commenting, tagging, following and sharing) in the days preceding the launching of the website was an indicator of future positive engagement.
The website’s official launch was on the 20th of April and it was announced on
Instagram using different posts featuring the watches (see Figure 3.10). It is available in four languages: English, Dutch, German and Spanish. There are multiple “stores” to choose from; Australian, Canadian, EU, Global, US and UK stores are available in English; Belgian and Dutch stores are available in Dutch; Austrian and German stores are available in German and Mexican and Spanish stores were available in Spanish. Users are able to switch between the stores based on their language and location, and the website changes the currency accordingly (e.g. Australian, Canadian, or US Dollar, Euro, Mexican Peso, etc.).
As far as the product life cycle is concerned (see 2.2.2. Product Life Cycle), ROSEFIELD Watches currently operates on three local markets: Amsterdam, The Netherlands and the world market. The same graph (see Figure 3.11: ROSEFIELD Watches position on its markets) of the product life cycle can be used for all three
markets because the same products are sold on all of them. As of May 29, 2015 the company sells its watches in several stores7 in Amsterdam (they are not official
ROSEFIELD stores but instead they are stores that sell various products of different brands, among them ROSEFIELD watches) and their sales are rather high considering that these customers buy them without knowing about the brand from advertising. This means that the Amsterdam market is so far the most successful one because the company sells both in its online store and in its physical stores. In the Netherlands market, the product is in the early growth stage of its life cycle and has started being adopted by the early majority. Lastly, because the company offers shipping to the whole world, the whole world is considered a local market. Considering the sizes, populations and competition, the product is only in the introduction stage under these circumstances.
Figure 3.11: ROSEFIELD Watches position on its markets
3.1.2 Building community activities
It is highly unlikely that a whole online community could be built within a couple of weeks from introducing a new brand. However, this research monitors the process of building the community, setting its “tone” and topic, and creating its boundaries. In the subchapters below, the main means and tools of building the community are described in detail.
3.1.2.1 Fashion bloggers
Contacting fashion bloggers in the Netherlands was one of the most important aspects of the promotion. The company contacted the 15 most influential fashion bloggers (see Figure 3.12) in the country through the PR agency Ganbaroo PR PR B.V. and sent them a personal package of three watches – each blogger received a different combination and a personal, handwritten letter in white pen on a black background (see Figure 3.13). Some of the bloggers posted pictures of the package on their Instagram accounts almost immediately, some others waited a bit longer, and a few did not post any pictures. However, in combination with ROSEFIELD posting pictures on Instagram on its own behalf, the followers’ base was growing rather rapidly. Within a few days, other bloggers (both from in and outside of the Netherlands) were approaching the brand with requests for collaboration. One of the criteria for bloggers with whom the brand would start collaboration was minimum of 10,000 followers on Instagram, because the brand wanted as big exposure as possible. Another criterion, and perhaps the most important, is the quality of the pictures the given blogger posts. High quality pictures and good sense of composition are essential for the creation of appealing pictures that would make people want to buy the watch.
Within two weeks from the day the website launched, the company was regularly being approached by bloggers with over 30,000 followers, once by an Instagram personality8 with more than half a million followers. The agreement with the bloggers who approached the brand themselves was the following: the brand sent the blogger a watch of her choice in exchange for posting a couple of close-up
8 An Instagram personality in this case is someone who has neither blog nor website, yet maintains a
pictures on Instagram and a full blog post, where the blogger is expected to highlight the watch among other parts of her outfit and to write something about the brand. The brand also asks the bloggers to share the content on their social media. In a few cases, a second watch (sometimes it was the same watch, in other cases it was a different watch from either the same or different collection) is sent for the blogger as a free giveaway. The blogger is free to decide the rules of the competition and choose winner under one condition – in order to take part in the competition, the users had to follow the brand on Instagram and use either its tag #rosefield or mention @rosefieldwatches (or both). This giveaway is a form of promotion because not only will the bloggers post attractive pictures on their Instagram and blog, the winners of their giveaways are also expected to share their “victory” on Instagram. However, that is beyond the brand’s control, as there is no way to enforce it.
In the first week of the brand’s active communication with the bloggers, two watches were sent to a blogger in Canada and two watches to a blogger in Portugal. This move was very important for the brand’s exposure in North America and among the Portuguese-speaking market. Other fashion bloggers approached the brand with requests for collaboration and they were either accepted or declined based on the criteria mentioned above. The brand also selected the most influential fashion bloggers in the USA, UK, Belgium, Spain, Germany, Italy and France, whom the brand approached for collaboration itself. In this case, the brand primarily tries to offer a free watch in exchange for promotion and is only willing to pay for promotion of bloggers whose follower-base and content quality can guarantee wide exposure for ROSEFIELD.
3.1.2.2 NYC photo-shoot
As a part of the promotion of the brand story, the brand contacted friends of an employee who lives in New York City and offered them free watches in exchange for them sending back pictures of themselves, wearing ROSEFIELD watches in renowned NYC locales. The objective of this amateur photo-shoot was to have user-generated pictures from NYC to accompany the many pictures from Amsterdam. The promotion was expected to have a double meaning: firstly to promote the brand (the
watches were clearly visible on the photos), and secondly, to promote the brand story and ideology. An important factor was that a professional photographer did not take the pictures but instead seemingly “random customers” did, who just happened to share their pictures with the brand, which makes the pictures more credible in the eyes of other users and potential customers.
3.1.2.3 Controlling social media
ROSEFIELD operations team controls the activity on all four social media channels it uses. All comments on Facebook, Twitter, Instagram and Pinterest are monitored and stripped of negative comments suggesting the design was copied from a competition. Negative comments regarding the visual aspect of the watches (i.e. “These watches are ugly”) are not submitted to this kind of censorship, but comments from “haters” and/or “internet trolls” (i.e. “You copied this design from brand X!”) are deleted and the accounts are banned from future activities on ROSEFIELD social media. There is a possibility that somebody will want to lead a constructive dialogue about whether the design was copied or not (the brand can prove that it was not by providing designer’s sketches and pointing out the differences in the individual designs), and all such conversations should be handled via private e-mail exchanges. The reason for this censorship is to not deter potential customers from purchases based on negative impressions caused by hateful comments. It needs to be mentioned that until the date of submitting this thesis, no such hateful comments had been made.
3.1.3 Tools used to build an online community
The tools ROSEFIELD uses to build and shape its online community are listed bellow.
