CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY  

Portraying a positive image and maintaining a good reputation is arguably an important part of long term planning in every organization. By managing a crisis effectively and efficiently, the positive perceptions of stakeholders and the public are vital to an organization. An important strategy in managing a crisis is the use of various types of social media in order to communicate with the public to convey current information about an issue or crisis in the fastest and easiest way while building and maintaining the trust of and relationships with the stakeholders.

Due to the emergence of social media consumers are increasingly taking an active role in the co-creation of marketing content and their sharing of experiences about companies, their brands and their corresponding products and services. Text messages, tweets, Facebook protest sites, blogs and digital videos enable individuals to create, share and recommend information (Gaines-Ross, 2010). Social media enables firms to engage in a dynamic two-way communication with the customer. However, companies adopting social media as a means of communicating and information exchange must accept that they are losing a part of their control to the consumer (O’Brien, 2011).

As social media represents a huge opportunity for marketers in terms of word-of-mouth referrals, it additionally has to be considered that negative word-of-mouth on the web is a severe phenomenon which has to be prevented by all means. When online complaints or negative online interactions between consumers occur on social networking sites, anti-brand communities or micro blogs, it can have a negative impact on the perception and evaluation of brands and a detrimental effect on the consumer’s decision-making process (Noort & Willemsen, 2011).

Since the rise of the Internet and mobile Internet, worldwide communication has become accessible at nearly no cost, for almost everyone, almost everywhere and at almost all times (Nitzan & Libai, 2011). This technological development was the basis for the establishment and of social media interaction. Social media applications are basic instruments for interpersonal communication, communication from persons to audiences or even communication with institutions. They enable to share experiences with products or services publicly by providing a certain degree of anonymity (Krishnamurthy & Kucuk, 2009).

For the field of reputation management this implicates that stakeholders are able to communicate about issues concerning a particular company nearly effortless by using social media. The importance for businesses of this change becomes clear when they realize that “Anyone can say anything about any topic” (Allemang & Hendler, 2011). As Osswald, Portmann, and

Meier (2011) mention, this means that even if a person does not have explicit knowledge about a topic he talks about online, his word can be spread around the world. Another important, and maybe the most important, change is the shift of control about an organizations’ information that is discussed publicly.

The study of brands has been gaining relevance once the strengthening of brand equity could represent an increase in the productivity of marketing investments (Aaker, 1996a; Keller, 1993). People understand brands by observing their manifestations and the more these are coherent and consistent with their initial proposal, the better the consumer will understand the design of the brand (Semprini, 2010). However, a manifestation that fails to be consistent with the design of the brand could weaken it, as in cases of brand crisis. Brand crisis could be caused by product failure, social responsibility gap, corporate misbehavior, executive misbehavior, poor business results, spokesperson misbehavior and controversy, loss of public support or controversial ownership (Greyser, 2009). Therefore, this study focuses on People’s perception on the Impact of social media in managing brand reputation in crisis, using Agege local government as a case study.

1.2     STATEMENT OF THE PROBLEM

Many businesses and especially marketers still underestimate the tremendous effect of the power and influence social media can have. Although companies recognize the need to be active in social media, they do not truly understand how to do so effectively (Hanna et al, 2011). Companies have been observed to either do nothing, hire a social media manager or to outsource social media communication to an agency (vor dem Esche & Henning-Thurau, 2013).

Nowadays, in crisis situations, technological advances are transforming and disseminating information to the affected communities in the fastest and easiest ways (Veil, Buehner & Palenchar, 2011). These methods include micro blogging, blogs, social networking sites (Facebook, Twitter, LinkedIn, Instagram, YouTube), video sharing, content driven communities as well as professional networks (Walaski, 2013). During a crisis, it is important for an organization to communicate their response regarding the crisis with the organization’s stakeholders (Modeus, Paulsson & Olsson, 2012). These problems make it glaring that there is a need to carry out a study on People’s perception on the Impact of social media in managing brand reputation in crisis.

1.3     OBJECTIVES OF THE STUDY  

The general objective of this study is to examine People’s perception on the Impact of social media in managing brand reputation in crisis. The specific objectives of the study are:

1.     To find out if organizations uses the social media in managing brand reputation in crisis

2.     To investigate the advantages and disadvantages of social media in managing brand reputation in crisis.

3.     To ascertain the credibility of the social media in managing brand reputation in crisis

4.     To determine the impact on the organization’s reputation and image when utilizing social media as a platform during a crisis.

1.4     RESEARCH QUESTIONS

The relevant research questions related to this study are:

1.     Do organizations uses the social media in managing brand reputation in crisis?

2.     What are the advantages and disadvantages of social media in managing brand reputation in crisis?

3.     What is the credibility of the social media in managing brand reputation in crisis?

4.     What is the impact on the organization’s reputation and image when utilizing social media as a platform during a crisis?

1.5     RESEARCH HYPOTHESIS

H1 – organizations utilize the social media in managing brand reputation in crisis.

H0 – organizations do not utilize the social media in managing brand reputation in crisis.

1.6     SIGNIFICANCE OF THE STUDY

This study will be relevant to readers because it will provide the reader with a dense understanding of the research field of reputation management in crisis situations in the age of social media. This understanding will be based on the ‘seven functional building blocks of social media’ as discussed by Kietzmann, Hermkes, McCarthy and Silvestre (2011), which serves as base frame for the understanding how organizations are or can be affected by social media. Through this study, key concepts such as crisis, crisis management, crisis communication and social media will be defined and explored with recent insight and overviews from academic practices in order to clarify the importance of why an organisation should consider social media as a crisis communication platform.