1

COLLEGE OF BUSINESS AND ACCOUNTANCY

SOCIAL MEDIA AS AN EFFECTIVE STRATEGY TO PROMOTE SMALL
BUSINESS

As Undergraduate Research
Presented to the
Faculty of College of Business and Accountancy
Wesleyan University-Philippines
Cabanatuan City

In Partial Fulfillment of the Requirements

For the course
Contemporary World

ARLYN KEIKO S. DELOS REYES

BRITNEY ANNE H. PASION
NIKA ELLA S. SABINO

February 2020
Chapter 1
INTRODUCTION

The first chapter shows the overview of the problem and its setting. Included in

this chapter are the background of the study, statement of the problem, hypotheses of the

study, conceptual/theoretical framework, research paradigm, significance of the study,

scope and delimitation of the study, and operational definition of terms.

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Background of the Study

As we have been exposed to technology for a long time, it can be felt that it

brought a great impact to everyone’s daily life, especially social media. Mostly, it has

been seen as a source of entertainment and convenience. But as the generation rapidly

changes, many of them have found other purposes for it to be used in various aspects. In

the field of business, enterprises around the world has used this tool to their advantage.

According to PSA, the 2018 List of Establishments of the Philippine Statistics

Authority (PSA) recorded a total of 1,003,111 business enterprises operating in the

country. Of these, 998,342 (99.52%) are MSMEs and 4,769 (0.48%) are large enterprises.

Micro enterprises constitute 88.45% (887,272) of total MSME establishments, followed

by small enterprises at 10.58% (106,175) and medium enterprises at 0.49% (4,895). Of

all these MSMEs, the Accommodation and Food Service Activities took the 14.48%

(144,535) of it. Without a doubt, some of these business market their products using

social media.

Looking at social media, it was defined by Briscoe (2011) as “the means of

interactions among people in which they create, share, and/or exchange information and

ideas in virtual communities and networks.” Social media platforms became a way for

individuals and organizations use to share information and ideas on their products and

services on online platforms. For the consumers’ point of view, social media became an
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environment in which social networking takes place and has altered the way in gathering

information and make their buying decisions.

Moreover Briscoe (2011) explained that marketers have discovered the great

potential of social media when it comes to reaching potential clients. It is common to find

companies reaching out to their clients using Facebook pages and/or Twitter accounts.

Some companies have even created special accounts for solving customer problems and

handling their complaints. It somehow proves the citation of the website JCsocialmedia

on its article “Social media theory”, wherein social media plays a major role in the scope

of digital marketing. It plays a more or less significant role in the overall marketing

strategy depending on the nature of the business, its sector and its target audience.

The researchers seeks to search the range of interconnectivity a business has with

their current and potential customers from different places and what are the techniques

they use in catching the eyes of consumer nowadays.

Moreover, the researchers conducts the study firstly, because it piques their

interest to know, analyze, and determine the effectiveness of social media for small

enterprises in Cabanatuan City and to also see how business owners of today adapt to the

technological changes of the world. For the possibility of the researchers opening up a

business is likely and could use some tips learned from this study.

Statement of the Problem

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The aim of this study is to find the effectivity of social media, specifically

Facebook, in promoting small businesses. Furthermore, this study seeks to answer the

following:

1. What are the socio-demographic profile (SDP) of the respondents in terms of:

1.1. Years of existence;

1.2. Number of workers;

1.3. Monthly income;

2. Is social media an effective tool in terms of marketing and promoting?

3. Why do business owners choose to use social media in promoting their products?

4. How often it is necessary to maintain and update a social media platform?

Conceptual/Theoretical Framework

The study demonstrates the relationship between the social media and marketing,

between social media and consumers' interest, and the relationship between multiple

intelligences and reading comprehension.

In Chaffey’s theory of social media marketing looks social media marketing from

a sociological standpoint. Chaffey (2012) argued that the one-on-one interactions on

social media platforms between brands and customers helps build long-term relationships

that will in the end be of financial benefit to the business, a view also shared by Ashley

and Tuten (2015). Extending the scope of Chaffey (2012) postulations, Ashley and Tuten

(2015) emphasized that communication is core to any marketing strategy. According to

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this theoretical argument, social media achieves this by actively engaging consumers on

different social media platforms. This appeals to them, and improves their satisfaction

with the business’ services, and ultimately the business’ performance.

Consumers’ Sentiment toward Marketing (CSM) is a factor consider by

researchers to measure how well consumers will perceive social media marketing. CSM

is defined as a concept which refers to the general feelings that consumers have for

marketing and the marketplace (Lawson et al. 2001as cited by Mady 2011). An

individual’s perception of the overall marketplace plays a major role in whether or not

they are motivated to partake in consumption activities (Mady 2011). In order to create a

successful marketing campaign via social media, a consumer must be open to the

technology.

Another theory which is the marketing equities theory, that is originated by Kim

and Kom (2012), postulates that social media marketing activities have proved to have a

positive evident effect on the performance of an organization. The originators of the

theory initially focused on the marketing activities used by luxury fashion brands to

promote their products. They included entertainment in the particular sector of the

industry, customer interaction based on the goals of the business, trendiness,

customization of the products and services offered to the targeted audience for

consumption, recommendation and word of mouth. Their impact on firm performance

was analyzed in terms of brand equity, customer equity, purchase intention, value equity,
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and equity linkages. Furthermore they concluded that this model provides a solid view on

the workings of social media marketing.

Figure 1: The Research Paradigm

Figure 1 illustrates the relationship of the independent and dependent variables.

The independent variables are the socio-demographic data and social media. While the

dependent variable is the marketing and promotion. The factors determined in the socio-

demographic data are the business' years of existence, number of workers and the

approximate monthly income. The social media that would be focused upon is Facebook.

Moreover, these independent variables will determine the how it affects the marketing

and promotion of their enterprises.

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Significance of the Study

The significance of the study is to show how effective social media, specifically

Facebook, in marketing and promoting their business.

Researchers of the study. Throughout the research process, the researchers will gain

new knowledge and experience in the field of business, to future studies they would do

eventually. This can serve as a basis on what approaches should be used on their next

study.

Students. The students, most especially those who are taking programs business related,

will have awareness on how their use of social media affects a business and the

probability of its effectiveness in promoting products.

Future Businessmen. They would gain knowledge from the result of this study since

this research will present feedback from experienced entrepreneurs. This can be their

basis for establishing their business in the future.

Future Researchers. This can serve as a reference for those future researchers who will

likely have a study and might be of the same topic or interest. It can also be a pattern on

how and what they should do when conducting a study.

Scope and Delimitation of the Study

This study focuses on the effectiveness of social media as a promotional tool for

businesses.
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The researchers is limiting the respondent to 30 small enterprises, established in

Cabanatuan City, Nueva Ecija, that are using Facebook as a way to promote their

products,. Specifically, those who are selling beverages.

Definition of Terms

These word are given definition for the readers to have context on what these

words mean in this study. These are the following:

Business. also known as an enterprise, company or a firm is an organizational entity

involved in the provision of goods and services to consumers.

Small Business. a business having fewer than 500 employees

Social Media. are computer-mediated technologies that allow individuals, companies,

NGOs, governments, and other organizations to view, create and share information,

ideas, career interests, and other forms of expression via virtual communities and

networks.
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Chapter 2

REVIEW OF RELATED LITERATURE

This chapter delves on the discussion of literature and studies that are published

coming from local and foreign sources. It guides the researcher to single out studies that

have been completed, related to the current study as this also avoids possible duplication

of similar studies. At the end of this chapter is the summary of the related literature.

Social Media

In its simplest form, social media is a tool or an application that allows users to

create or develop content in the form of articles, blogs, infographics, videos, and images

and share it with their social circle and other users.

This is the basic idea of social networking platforms like Instagram, Facebook,

Reddit, Pinterest, and so on. The important thing to remember, when it comes to social

media, is the word “share.” Social media has advanced from simply providing a platform

for individuals to stay in touch with their family and friends. As a business person, you

are aware that the main purpose of any marketing strategy is to attract the attention of as

many potential customers as possible. Now it is a place where consumers can learn more

about their favorite companies and the products they sell. Marketers and retailers are

utilizing these sites as another way to reach consumers and provide a new way to shop.

“Technology related developments such as the rise of powerful search engines, advanced

mobile devices and interfaces, peer-to-peer communication vehicles, and online social
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networks have extended marketers’ ability to reach shoppers through new touch points”

(Shankar.2011,30)

According to Shankar et al. (2011), shopper marketing can join forces with shoppers

to improve products, create clear messages, identify promoters, and serve as a connection

to in-store activities, thus demonstrating the importance of social media within a retailer’s

marketing plan. Advancements within social media sites have created consumer

communities that are defining new ways in which companies and customers can interact

with one another to share information on brand products. For example, virtual brand

communities are creating a computer-generated space for consumers and retailers to

connect with one another via marketing.

Social Media Marketing

Kannan and Li (2017) define digital marketing as “an adaptive, technology-

enabled process by which firms collaborate with customers and partners to jointly create,

communicate, deliver, and sustain value for all stakeholders”. In the study of Kumar et. al

(2019), it is said that digital mediation in business-to-business marketing is becoming

increasingly important to firms, due to customer needs and evolving technological

environments.

According to Taylor et al. (2011), social media advertising is a general term

referring to all forms of advertising, whether explicit or implicit, that are distributed

through social network sites. Nielsen (2010) classifies Facebook advertising as

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“homepage ads” that are located on the sidebar of the Facebook page that contains brand

content but that also allow users to engage with the brand. There are three distinct

classes: first, paid advertising refers primarily to “homepage ads”. Second, free

advertising refers to “organic impressions” that often blur the lines for users because

these are “social stories” that appear on friends’ newsfeeds as a result of friends’

engagement with a brand. Lastly, “social impressions” refer to a combination of paid and

organic advertising.

Tactics in Facebook Marketing

It is vital for retailers and marketers to be aware of the factors that affect

consumer

attitudes and motives because consumers are increasingly creating content about brands,

something previously controlled solely companies (Heinonen 2011). As a result, current

research has examined what aspects of social media sites affect consumer attitudes and

motives. Chu (2011) examined the link between Facebook brand related group

participation, advertising responses, and the psychological factors of self-disclosure and

attitudes among members and nonmembers of Facebook groups. The study determined

that users who are members of groups on Facebook are more likely to disclose their

personal data than nonmembers are. Chu (2011). explains group participation and

engagement with online ads requires a higher level of personal information because users

openly reveal their connections with Facebook groups and promote brands or products
 12

when they pass on ads to their friends. “Facebook groups provide channels that

consumers deem useful when seeking self-status in a product category, as does passing

on viral content about brands to their social contacts.” Chu (2011)

Chu (2011) also found that users who are Facebook group members maintain a

more favorable attitude toward social media and advertising. Users who have more

positive attitudes toward advertising are more likely to join a brand or a retailer’s

Facebook group to receive promotional messages. Based on this result, Chu (2011)

suggests that a link exists between consumers’ use of and engagement in group

applications on a social media sites. The relationship between consumers’ use of and

engagement with group applications influences the rate and effectiveness of advertising

on social media, particularly Facebook. Generally, as Chu (2011) notes, Facebook’s

college-aged users have the most favorable attitudes toward social media advertising and

are the largest growing demographic, which suggests that social media sites are a

potentially rich platform for online advertising campaigns, especially for companies with

a younger target market.

Facebook
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According to a local article by Madarang (2019), Filipinos spend an average of 4

hours and 5 minutes on the social networking site. The rest of the world, meanwhile, only

spends an average of 2 hours and 23 minutes per day. About 50 million of these users,

Rubio said, are connected to MSMEs based in the Philippines. Rayport (2011) had three

viewpoints on Facebook. First, Facebook is not really a website anymore. Rather, it’s a

vast, branded utility. It’s like another World Wide Web, but with a profit motive. It’s a

kind of Wikipedia, but built on a corporate, not a cooperative, model. As a

communications technology, it has radically changed the ways we connect with one

another. Second, Facebook is preternaturally addictive. Conjure up yesteryear images of

teens and telephones, or teens and texting today. We humans are junkies for updates and

information — gossip, news, hearsay, chat. Curiosity about what’s going on now is a

natural human attribute. Of course, times have changed. Telephones have become cell

phones; cell phones have become smart phones; smart phones have become gateways to

the mobile Web and major app platforms. Third, Facebook is magnetic as a function of

its social engagement. People are drawn to it, because people are drawn to people.

Facebook Marketing

Wiese (2020) stated that the use of Facebook is huge in developed and developing

economies, yet the immense marketing potential of Facebook’s full range of advertising

tools (paid and free/organic) has been under-researched. Bajpai and Pandey (2012)

quoted “A large and growing portion of some of the most valuable demographics is
 14

spending more of their time and attention on Facebook and less on other channels and

media”. According to their study, not only are college students and teenagers the ones

fully engaged in Facebook, but also adults, professionals, and people from around the

world now constitute a substantial portion of the Facebook userbase as well. They've

examined how viral marketing as a concept marks its place through social networking

sites. They have taken Facebook for their analysis. They have clearly put forward that

those direct marketers with intelligent strategies for Facebook environment will definitely

taste success. They also highlight upon the offers provided by Facebook for brand

marketers and conclude that there are many things left to learn and marketers are still in

the early stages.

Moreover, above study showed how Facebook offers many ways to get the word

out and bring the people in. Firstly, it became a tool for guerilla marketers through Profile

Page, Facebook Groups, Facebook Pages, Facebook Events, Facebook Notes and Photos,

Facebook Messages, Facebook Marketplace, Facebook Share / Posted Items, Facebook

Network, and Mini Feed and News Feed. Next is that Facebook also served as a tool for

advertisers through putting their Social Ads, Beacon, Polls, Facebook Platform and

Networks, Facebook Platform Application Sponsorships, and Sponsored Facebook

Groups. Lastly, it is a tool for application developers through channels like Profile Box,

Mini Feed, News Feed, Invitations, Facebook Notifications, Email notifications, and

Application Directory.
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In another study by Bajpai et al. (2012) social media marketing: strategies and its

impact highlights on the various social media marketing strategies for small businesses

that can take this viral marketing form beyond the present social media to build the

community powerful enough to make an initiative buying and marketing effective. They

also compare it with the implications of traditional means of marketing.

Social networking site in the field of Business

The study made by Bhagwat and Goutam (2013) is in line with the study done by

Jati and Mohanty (2012) where they assert the need for social networking sites in a

business. They highlight that social technology is connecting people in ways to share

information and other things to each other. From their study they found Facebook to be

the leading Social media networking site. They have also provided with statistical data

which shows that social media sites are growing and providing facilities to both business

organizations and the people. Their reputation in short time is in lieu of their requirement

in society for communication and also for business as well.

Social media offer different values to firms, such as enhanced brand popularity

(de Vries, Gensler &c Leeflang 2012), facilitating word-of-mouth communication (Chen

et al. 2011b), increasing sales (Agnihotri et al.2012), sharing information in a business

context (Lu & Hsiao 2010) and generating social support for consumers (Ali 2011;

Ballantine & Stephenson 2011). In addition, the networking of individuals through social

media provides shared values, leading to a positive impact on trust (Wu et al. 2010).
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Today, with the expansion of social media and SNSs, a study of consumer behaviour on

these platforms is a research agenda (Liang & Turban 2011) because social media are

likely to develop marketing strategies in firms through trust-building mechanisms and

affecting customers’ intention to buy products.

In addition Madarang (2019) stated that group chats, live streams and polling

stickers are among the free tools that small local entrepreneurs can use to expand their

customer base and grow their businesses and with proper training in the use of these

tools, micro, small and medium enterprises can even make social impact and build

communities besides boosting their sales.

According to a blog in Squarefish (2019), in the world of TV advertising,

marketers who have done their research know exactly when the perfect time is to buy a

TV spot in order to maximize viewership and make sure that they’re showing their ads to

the right audience. This principle works with social media marketing. You want your

content to attract the right audience and you want them to share your content to as many

people as possible. The main difference between the social media marketing from

traditional marketing, such as flyers and TV ads, is that you don’t have to spend hundreds

of thousands, or even millions, in order to implement a sound marketing strategy on

social media. And that is why social media marketing is one of the most practical

marketing avenues for small business owners. You get to establish your brand and market
 17

your products and services for little cost, but you can expect comparable results for your

efforts.

Summary of Related Literature

The studies supports that because of the development of social media, a strong

connection has been established between the consumers and businesses. Businessman

became a content generator on social media, they get to introduce their business, products

and the things that they can offer to people. In this case consumers has been encouraged

by social media to have an intention to buy and consume. According to the studies that

we've discovered, out of all the social media that we have, It has been proved that the

most commonly used social media platform is Facebook. It is also clearly stated in the

studies that Social media is really an effective strategy to promote businesses because

through this, customers could be more aware on what your business is all about and how

it appeals to them. Social media is also one of the most cost-effective ways to introduce

business out in the market. This is great for small businesses who wants to broaden their

audience reach. Through social media, it is cheap and easy to reach customers anywhere

in the world.
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Chapter 3

RESEARCH METHODOLOGY

In this chapter, it presents the methodology employed in our research. In particular,

we will describe how the researchers acquired the raw data, evaluated the data, and also

how they statistically analyzed the data to answer our research questions to know the

effectivity of social media, specifically Facebook, in promoting small businesses.

Furthermore, the researchers outline the research design, sample and sampling procedure,

data gathering procedure, data analysis, and the locale of the study that is imperative to

fulfill and accomplish the aim of the study.

Research Design

The researchers used the Descriptive Research as its research design. Of all the methods

in descriptive research, the researchers decided to utilize the Descriptive Survey Research

Design. According to Bhat (2020), the Descriptive Survey Research Design is where

respondents answer through surveys or questionnaires, or polls.

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The researcher decides to use this kind of research design due to the concepts of the study

used. Furthermore, it offers richly descriptive reports of individuals’ perceptions,

attitudes, beliefs, views and feelings to business as well as the meanings and

interpretations given into frameworks which make sense of their experiences.

Sample and Sampling Procedure

This research is based on Convenience sampling technique wherein the researcher will

make contact with the proprietors as the respondents with the use of interview for the

participation in this case study research. Based on Lewis and Thornhill (2012), this

sampling method involves getting participants wherever you can find them and typically

wherever is convenient.

Instrumentation

For effective and flawless data collection, survey and interview methods were used.

Survey method is the most extensive used technique for data collection, especially in

behavioural sciences, while interviews are an appropriate method to use when exploring

practioner's perspectives due to the qualitative nature of information.

Thus, these methods have been widely used to extract the most relevant information and

help in better analysis of data. In order to efficiently use the survey method, a

questionnaire was being developed taking all the objectives and hypothesis into

consideration

Data Gathering Procedures

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After the interview questions have been validated, the researchers asked for the approval

of the subject teacher in order to make an interview with the selected businessmen

respondents who own small and medium-sized enterprises around Cabanatuan City. After

the approval, the researchers began giving questionnaires, interviewing and recording all

the answers of the respondents. For the purposes of this research, in depth interviews

were used. Some certain questions were prepared, so as for the researcher to guide the

interview towards the satisfaction of research objectives, but additional questions were

made encountered during the interviews.

1. Data Gathering Instruments

Data gathering instrument refers to the device that is being used to collect data, such as a

paper questionnaire or computer assisted interviewing system.

Furthermore, it is methodologies used to identify information sources and collect

information during an evaluation.

1.1 Surveys

Surveys, specifically questionnaire surveys, were used to acquire all the

information that contains the answer needed in the study. According to ASQ

(2020), “... is defined as the act of examining a process or questioning a selected

sample of individuals to obtain data about a service, product, or process.” In

addition, a questionnaire survey is a very well-known and widely-used research

 21

technique for quickly and efficiently gathering and analyzing data from a

population under study. (Hewitt R. et. Al, 2017)

1.2 Structured Interview

The structured interview was utilized in this study to validate and verify the

information that were gathered from the respondents. The questions are arranged

in advance and are placed in a similar request to every respondent. The point of

this approach is to guarantee that each respondent is given the same questions in

the same order. This assures that the researchers can easily compare and analyze

the response of the respondents.

1.3 Documentation

The research has to have accurate documentation of data to achieve the desired

results. Moreover, It is one of the most important part of data gathering procedure

in terms of what research paper means and it serves as an evidence of the

information from the other that can help to the study.

2. Administration of the Instruments

It is necessary in this study to organize the data collected into a suitable format analysis.

The researchers gathered information from businessmen through social media, personal

interaction, casual observation and documentations.

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The researchers interviewed a total of 30 respondents. Researchers can actually gather

raw and reliable data direct from the respondents by survey questionnaires and

interviewing.

Each selected respondent was contacted for the unstructured interview. Face-to-face

interviews were conducted at a time and in each selected respondents’ own business

establishment or online. The unstructured interviews were congregating and guided by an

interview.

Data Analysis

Statistical Treatment

To get the percentage of the answers, below formula is used

n
P= x 100
N

Where:
P= percentage
n= total number of answers
N= total number of respondents

For the interpretation of the respondent’s sentiment to a certain item, the Likert Scale is

used. Likert scale is a five (or seven) point scale which is used to allow the individual to

express how much they agree or disagree with a particular statement.

 23

Scale Mean Range Interpretation

5 4.21-5.00 Strongly Agree
4 3.41-4.20 Agree
3 2.61-3.40 Neutral
2 1.81-2.60 Disagree
1 1.00-1.80 Strongly Disagree

Locale of the Study

The research was conducted in the city of Cabantuan, Nueva Ecija. Nueva Ecija is a

province that can be found in Central Luzon Region, which is often called as the Rice

Bowl of the Philippines since it is the biggest rice producer of Central Luzon and the

Philippines. Its principal crops are mainly rice, but corn and onion are produced in

quantity. In June 2008, it received the title "Milk Capital of the Philippines" because

Nueva Ecija gathers more milk from cows and carabaos (water buffaloes) than any other

place in the Philippines

There are five (5) component cities in Nueva Ecija with twenty-seven (27) municipalities

established and Palayan was known for being its capital. According to the 2015

Philippine Census, it has a total population of 2,151,461 people.

Cabanatuan, Nueva Ecija prides itself as the "Tricycle Capital of the Philippines" which

more than 30,000 tricycles can be found in this city. Cabanatuan remained as Nueva

Ecija's capital until 1965 when the government created Palayan City as the new

provincial capital. According to Philippine Census (2015), There are 302,301 people
 24

living in this city and subdivided into 89 barangays wherein the total respondents of 30

enterprises may be found.

The city is a vital financial center housing numerous banks, non-bank financial

institutions and headquarters of some of the largest rural banks in Central Luzon and It is

the economic heart of Nueva Ecija with more than 640,000 people live in its metropolitan

area comprising the city and its adjacent municipalities. Cabanatuan is also a distribution

and logistics center for goods and commodities. A number of distribution warehouses and

sales offices in the city serve the whole of Nueva Ecija and parts of neighboring

provinces. The NFA warehouses in the city play an important role in regulating Nueva

Ecija's burgeoning rice industry.

Figure 2. Map of Cabanatuan City

 25

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