How Small Businesses Use Facebook To Promote Products and Services

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How small businesses use facebook to promote products and services.

Background of the Study


Facebook, one of the largest social networking platforms, has branched out from being a mere
culture sharing hub. Not only limited for communication and sharing opinions, the networking
platform has also provided an arena for businesses across the world, including in Bangladesh.
Small businesses and entrepreneurs are currently using Facebook to promote, advertise and sell
products, and also reach to its preferred customers. Being a very accessible platform for all,
products can be found, accessed and delivered to a vast community of customers. Business on
Facebook is currently reshaping conventional marketing methods, since these businesses do not
require an official space or manpower to operate. Students to housewives can simply open a page
and begin selling their products to known friends and relatives, which further spreads through
colleagues and acquaintances, hence businesses boom.

F-commerce, in simple words, is the use of Facebook as a platform to conduct business. The
primary operations of the business, such as selling products and customer management are done
via Facebook. F-commerce is now a booming sector for entrepreneurs throughout the country.
However, it seems to have benefitted female entrepreneurs the most by letting them be
financially independent through small online ventures.

As a least developed and densely populated country Bangladesh faces the dilemma of providing
adequate employment opportunities which is suitable for her young and educated citizens.
Therefore, effective entrepreneurial efforts and initiatives are required by the youth of the
country to overcome this kind of unemployment crisis. Since, F-Commerce provides the
entrepreneurs an opportunity to market their product in such manner, that it is not possible to
ignore the information of the offerings or even reject in some cases by the target groups; hence,
investigating the practice as well as the prospects of F-Commerce within Bangladeshi context is
very crucial considering its huge potential to alleviate this unemployment crisis.
Research Aim and Objective

The aim of this study is to identify how small businesses use facebook to promote products and
services. According to this aim, there are some specific objectives given below:

 To study the reasons of using facebook by small businesses.


 To study the barrier faces by small businesses.

Methods of data collection

This is an exploratory type of research. The study aims to get an understanding of the use of
facebook by small businesses for promoting in Bangladesh and barriers faces by them.
Therefore, the data collected for the study are primarily based on secondary sources. Information
has been collected by journals, newspaper articles, research papers, websites, online journals and
articles.

Contribution of the Study

The study will motivate the readers especially those are unemployed and wants to do something
along with jobs. Besides this research also help to understand those shop owners who do not
have facebook page and importance of using facebook for their business growth.
Chapter 2: Review of Literature
Introduction

In Bangladesh, as across the world, millions of people log into Facebook every day. But rather
than looking for escape from the stresses of the workplace, for many of those people Facebook is
the workplace. Entrepreneurs using the social media platform to take advantage of the country’s
rapidly growing e-commerce scene. Low start-up costs and an established user base mean that
Facebook is an obvious choice for small, local merchants to reach wider, increasingly
international, consumers beyond their traditional market. Indeed, today, more than 300,000 of
the country’s online retailers, selling clothing to cosmetics, run through Facebook, according to
Facebook’s advertising platform. However, absence of existing literature is a typical
phenomenon for this kind of recent topics and new trends. Research conducted to date has been
inadequate and moreover, very few studies on Bangladesh have been done.

Review of Previous studies

Facebook

Facebook was founded by Mark Zuckerberg and his college roommates in 2004. It has now
become a very powerful and important communication tool. Facebook is no longer limited only
to social networking; it has become a platform for all kinds of businesses. As Mark Zuckerberg
said “If I had to guess, social commerce is the next area to really blow up.”

Small business

A small business is a business that is privately owned and operated, with a small number of
employees and relatively low volume of sales and often all organized by the owner or his family
members. Small businesses are normally privately owned corporations, partnerships, or sole
proprietorships . Small Business refers to business locally owned and managed, often with very
few employees working at a single location (Stoner, Freeman, & Gilbert, 1995).

“Small industry means an industrial establishment or unit which is run mainly by hired labor and
not using mechanical motive power but does not normally employ more than 50 workmen and
whose land, building and machinery does not exceed Tk.150, 00,000 in value in either case.” –
E. Pakistan Small Industries Corporation Act of 1957.

The amount of investment

SI Type of Industry (Replacement cost and value of fixed Number of employed workers
assets, excluding land and factory
buildings)
1. Cottage Industry Below 10 lakh number of workers not exceed 15
2. Micro Industry 10 lakh to 75 lakh 16 to 30
Small Manufacturing 75 lakh to 15 crore 31 to 120
3.
Industry Service 10 lakh to 2 crore 16 to 50
Medium Manufacturing 15 crore to 50 crore 121 to 300
4.
Industry Service 2 crore to 30 crore 51 to 120
Large Manufacturing More than 50 crore More than 300
5.
Industry Service More than 30 crore More than 120
Source: National Industrial policy(2016)

Promotion

Business promotion is communicating with the public in an attempt to influence them toward
buying products and services. Promotions refer to the entire set of activities, which communicate
the product, brand or service to the user. The idea is to make people aware, attract and induce to
buy the product, in preference over others. The companies decide upon these promotional
strategies based upon their business nature, product or service, business image as well as the
medium selected for reaching the target customer group (Jeannet and Hennessey, 2005). Sales
promotion can be considered as any strategy or activity intended to increase the business or trade
and thereby boost the sales (Shimp. 2003).

F-Commerce

F-commerce stands for Facebook commerce which refers to overseeing online business activities
through a Facebook page or Facebook application which facilitates the communications for
buying and selling. In simple words, F-commerce is about buying and selling goods on Facebook
which is a new mode of consumption referring to social shopping. Facebook has become a new
platform to facilitate many to become an entrepreneur.
Chapter 3:
Introduction

F-Commerce is one of the newest form of online business versions which got popular among the
young entrepreneurs of many countries because of its wide marketing reach due to better
targeting, greater interaction and higher return on investment. This form of business is really
appreciated by the new generation of people who shop online. This mainly ascribes to the fact
that shopping in Facebook pages is convenient for the young generation. In Bangladesh there is
no difference from the global scenario, and the prospect of F-commerce in Bangladesh is even
better. Growth of F-commerce community is phenomenal considering statistics.

Ease of usage plays a role behind the popularity of F-commerce stores. F-commerce emerge as
one of the solution of unemployment for many as they start a small business through Facebook
page and earn handsomely figure from business. Facebook pages offer diversified products
which encourage customer to visit and purchase more. F-stores are able to setup their online
store for free and they do not have to deal with websites or a physical space, requiring very little
investment.

Globally, F-commerce comes under ‘Social Commerce’ that covers all social media sites
including Whatsapp, Instagram, etc. In India, 79% of e-commerce sales is due to social media
platforms.
F-commerce increasing reasons

Work from home

F-commerce enables women to work from the comfort of their homes. It saves them from the
hassle of travelling or the workplace harassment. It allows them to balance their daily chores and
provide sufficient time to look after their families along with running their business.

Targeted reach

The success of a business in many ways depends on its marketing activities. While many take up
a mass marketing approach, the more precisely a marketing communication reaches its target
audience, the better the results. F-commerce allows entrepreneurs to reach their targeted
customers at a bare minimum cost. The online selling arena is diverse. There are buyers of both
luxury and necessity items.

Low capital requirement

F-commerce businesses require lower capital to start than traditional business ventures.
Conducting business online saves the cost of storing inventory, employing sales staff, renting out
a place, utilities etc. An online business can suffice with a laptop, an internet connection and a
Smartphone.

Economic advantages

F-commerce has enabled women to earn and create employment for women. Women, through
such business ventures, are boosting the economy through more significant income and higher
spending. They are creating employment opportunities not only for other women employed in F-
commerce but also for the entire industry of delivery or courier services. Delivery service is an
essential aspect of customer experience in F-commerce. Businesses are being reshaped and
revamped due to the rise of F-commerce.
Creative scope

F-commerce allow women to follow their heart and enrich the creative work field. Many
customers, who purchase online, demand customized products. A good number of talented
women are taking up this chance to utilize their creative talents. It has also become a way for
many to nurture their artistic skills. F-commerce has made it possible for both the artists and the
customers to make their inner desires come true.

Creating new roles

Due to the vast number of women involved in F-commerce, numerous Facebook groups are
designed to facilitate both buyers and sellers. Women in this field are helping each other,
reaching out each other for queries, customer service, vendor selection, and delivery service etc.
since the F-commerce industry is female-dominated, women are at ease to seek help and advice
from various support platforms consisting of online sellers.

Such platforms also work as an online catalogue to display their products or to engage with
customers -- activities, which are crucial, yet difficult for online businesses. Such support
platforms of Facebook groups have also given rise to Facebook Influencers, who in turn act as
marketing agents of online sellers.
Reasons behind small businesses using facebook

Low start-up costs and an established user base mean that Facebook is an obvious choice for
small, local merchants to reach wider, increasingly international, consumers beyond their
traditional market.

One reason is that it is the biggest social media platform to connect with all three types of
socioeconomic classes of users starting from the bottom to the middle to the upper rich class.

Another major reason is low or no investment costs to establish an online business page on
facebook.

The third reason is the simplicity of developing a facebook business page by anyone who can
login and operate the basics of facebook.

As a result of almost 0 BDT investment requirement to open and operating a business page on
facebook, except for the data pack costs, many female students choose this platform to start a
business to earn and attain financial support and independence while also gaining entrepreneurial
experience and knowledge.

Through this venture, they not only contribute to their own earning, but also contribute to the
overall employment in the economy through increasing the demand for other businesses in the e-
commerce ecosystem such as product sourcing, operations management, digital marketing, and
delivering jobs.
Promotion strategy of small businesses by using facebook

Use pictures and videos

Pictures and videos are a major element of Facebook's appeal. Use them frequently to keep
customers engaged and entertained. For example:

 a clothing retailer could post photos of new stock as it arrives


 an architect or builder could post day-by-day pictures of a house under renovation
 a personal trainer could post an instructional video of how to do a particular exercise.

Facebook Live

Now Facebook is getting involved with Facebook Live – and most likely it’s this platform that is
going to ensure the format really takes off. If video is a personal way to communicate with
clients, Facebook Live takes it to the next level. Like no other platform, Facebook Live allows
for real-time conversations, with users commenting on the video and hosts answering their
questions live on air. Facebook live allows to tell a story about products and engage potential
customers in a unique way. Videos bring products to life.

Facebook live benefits are

 Explain how to use the products


 Describe all of the features and functionality
 Create a story around the product
 Helps the potential customers become more comfortable about the product. They can see
with their own eyes the quality of the product.
 It also makes it easy for users to share live content to different facebook groups,
increasing brand awareness and broadening reach.
 Compare their product to their competitors
 Instill more confidence in potential customers

For the context of Bangladesh facebook live is the most important and effective promotion tool
to attract customers. Facebook live ensure customer about business existence and product
quality.

Post regularly
Facebook works in a way where they have to make sure to post relevant content everyday to
keep engagement up.

Offer a trial policy

where if the customers don’t like the product upon delivery, they can send it back without any
charge.

Get Tagged by Customers

After a product has been delivered to customer and ask them to tag owner when they post their
photos. People often share their products on facebook and getting tagged by customers can help
to get more Facebook followers and more sales. The audience pull will be smaller, but this word
of mouth marketing is more impactful since it’s authentic.

Offering festival discount

By offering discount at the time of festival for example eid, puja, pahela baishak.

Free or prompt home delivery

After confirming order products will be delivered within 24hour – 72hour or get free home
delivery inside Dhaka city.

Photo contests
These type of contests mainly held by clothing and photography pages. Who gets maximum likes
on their photo will be the winner.

Random contests drawings

Whoever shares the business pages more in different groups in facebook lucky 3 or 2 get every
week either cash or products from the owner.

Special discount offers

Like bundle offer, buy 3 get 1 free, by tagging more friends and discount upon second time
purchase etc. offer by owner to attract more customers.

Creating facebook polls

Creating polls is a good way to generate interactions with customers. Through facebook polls
owner ask customer questions about what types of products they want at what prices, whether
they want discount or not, how many days they want discount offer etc. This types of polls helps
owner to easily trace down customers’ demands.

Thank customers for their great reviews

Screenshots of customer review posts on their business pages for thanking customers. Customer
reviews encourages potential customers to buy their products and it also leaves a positive impact
on customers mind about the business.

Go behind the scenes


Show the audience things the owner haven’t been able to share before. Give them a “day in the
life” glimpse into their world, showcase how the products are made, introduce
employees/business partners, or take them with the owner to an event is attending. This is the
perfect opportunity for the customers to get to know and gain a better understanding of what the
business is all about.

Challenges of online small businesses

However, there are four major challenges, one of which is to gain trust of customers because of
the absence of face to face interactions and personal touch of the seller. It is challenging for the
sellers to identify the genuine customers in social media as there are fraud customers who order
through facebook but when the product is sent to them, they reject it for trivial or illogical
reasons such as change of mind, lack of money to pay, spending the allocated money somewhere
else, etc. This results in unnecessary hassle for both the seller and the delivery company while
also adding operational costs.

The second major challenge is to reach customers and establish a unique relationship by
suggesting them the right product at reasonable price and delivering it at the right time so that the
customers are happy about the product and the service.
Factor Description
Unavailability of Internet “No Net, No Business
Access Modems and broadband speeds are not fast enough in some area.
Also when electricity goes off, unable to access online.
Absence of ‘touch-feel- This is a big challenge. Customers prefer to see the product before
try’ Experience buying.

Timely Delivery of Deliver products within time is a big challenge.


Products
Lack of Trust between Sometimes people order a dress but they do not pick it later.
Buyer and Seller Since the buyer cannot see her, often the buyer doesn’t trust about
the product quality.

Dealing with Delivery Company is the third major challenge as they are often unable to send
customer’s product within the promised or expected time while also at times losing or damaging
customer’s products. On top, some delivery companies take time to hand over the accumulated
money, earned from cash on delivery from the customers, resulting in delays for the
entrepreneurs to pay off many bills.

There fourth major challenge is to satisfy the customer on their purchase through delivering the
exact look, feel and quality of the product.

Other challenges of F commerce industry

Increased tariff on imports:


High tariff rate is felt in the F-commerce industry in Bangladesh because most of the
stores are resellers or import materials which restrict the group from achieving economy
of scale.
Logistics:
When it comes to the delivering products outside Dhaka it become tough for these small
stores because outside Dhaka delivery service is poor and mostly dependent on local
courier services.
No legal framework:
No surveillance on the F-commerce sites and no legal structure make this sector
unorganized and defamation of the business is a big issue.
Insufficient business knowledge:

In this large pool of stores, majority of them fail to create a sustainable business in the
long run due to lack of basic business knowledge such as customer management.

Access to financial funds:

Many of the Facebook stores are not registered and have no trade license, while others
fail to maintain proper financial statements. Thus, banks are often hesitant to provide
them with loans due to the high risk of defaulting involved. Loans available to them are
subject to high interest rates.

Future of F-commerce

There is room to make the ecosystem of F-Commerce better. It very easy for anyone and
everyone to start their business over Facebook but maintaining authenticity is tough because this
is an issue that can end up affecting other stores. It has been identified as one of the key reasons
for the stumped growth of F-commerce in the country even though this industry has great
potential ShopUp can enforce that these business should at least fulfill certain criteria before
starting their operations. Fraudulent activities and lack of business professionalism are causing
the customers to lose their trust in e-businesses. Change or revision in a few of the regulations
has been called for. To state an example, a passport and proof of citizenship can be considered
enough for allowing someone to run the business with a trade license. Additionally, the FinTech
platforms could enable businesses to make a merchant account that will help facilitate the
payment mechanism. This is currently not possible because they require a physical store or a
‘signboard’ for proof of business.

Conclusions

F-Commerce provides the entrepreneurs an opportunity to market their product in such manner,
that it is not possible to ignore the information of the offerings or even reject in some cases by
the target groups; hence, investigating the practice as well as the prospects of F-Commerce
within Bangladeshi context is very crucial considering its huge potential to alleviate this
unemployment crisis.

Even though Facebook business pages are at a rapid surge, risks of being cheated ensues as well.
There is a fear of being deceived. While some pages may display a picture of the product, but
once delivered, the product purchased bears no similarity to the displayed photo. “If there were
any sort of monitoring or complaint-filing system, it would help ensure quality products being
delivered to the customers. If Facebook-based businesses can be brought under a legal system,
for instance through the mandatory use of a trade license or any other document, for both
customers and entrepreneurs, it may improve the scenario. However, there is still no mechanism
to bring such businesses under a legal system, since the government cannot control Facebook.
No government enforcing body can control Facebook or its contents, which includes the
businesses conducted on the platform. Though, due to accessibility and feasibility, more people
are interested to invest and run a business at a small cost on this platform.

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