term report fall 2009

8/7/2019 TERM REPORT fall 2009

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Institute of Business Management 1 Methods in Business Research

TTT EEE RRR MMM RRR EEE PPP OOO RRR TTT SSS PPP RRR III NNN GGG 222 000 111000

USE OF FACEBOOK IN BUSINESS

Methods In Business Research

Submitted to:Ms: SAADIYEH SAID

Submitted by:Prince Kumar

Maliha NaeemMehtab Ahmed


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L ETTER OF TRANSMITTA L

Date: 20 th AP RIL 2010

Ms. Saadiyeh Said

Institute of Business Management

Karachi

Dear Ms. Saadiyeh ,

Following is the Term Report that you had given us as our final project. The project is made on use of Facebook in business and how effectively the Facebook help to get the target market.

All the data used is authentic and real as on. All issues that were relevant to the topichave been covered in this report in great detail. For further details and queriesabout the compilation of this report you may feel free to contact me.

Yours Sincerely,

P rince Kumar

Maliha Naeem 9417

Mehtab Ahmed


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TABL E OF CONTENTS

1. Letter of Authorization . .2 2. Letter of Transmittal .. .3 3. Executive Summary ... ..5 4. Introduction

4.1. P roblem Statement . 6 4.2. Hypotheses . .7 4.3. Research Objective . 8 4.4. Background . ....9

5. Introduction Of FACEBOOK . .10 6. Methodology

6.1. Sample Design ....12 6.2. Research Design ... .13 6.3. Data Collection 16 6.4. Data Analysis .. ..17

7. Findings .. .248. Conclusion .259. Limitations . 25 10. Recommendations .. 25 11. Bibliography .. . .


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Executive Summary

Facebook.com is a comprehensive and encompassing clustering of networks basedon universities and colleges , high schools , work places and companies andgeographic areas. These membership networks are preserved independent of oneanother but based on the same interface and systems of interaction. Facebook ranksas one of the most visited websites on the internet and viewed by both male andfemales. Facebook has become part of daily routine to keep up with current events , colleagues , family and friends. One of the most important things about the site isthat entrepreneurs can use it to help build their businesses. Since the site has somany features , there are endless opportunities for business owners to make it asuccess. Facebook businesses are just like any other business. Your main goal is tocreate a product or service that people will want to buy or use. If you can t do that , you won t make a sale. So , in many ways the product or service comes first.

Facebook is a free service that means funding and revenues comes from advertising , banner ads and sponsored groups. For advertisers , Facebook presents an idealdemographic. Even though all walks of life are on Facebook , the majority representsthe coveted 18 to 35 demographic that advertisers crave. That s why advertising isso important for the site. There are many companies using Facebook to market andseeing success in doing so. By this research we will see how these companies willreach to their target market. The companies use Facebook to gain new clients , stayin touch with current clients and promote new products and sales offers and canalso use it to create buzz and P R that is specific about the business.

Facebook is a valuable tool for businesses today. And it will become more valuableover time. Businesses can use the service to communicate with staff , to market goods and services , and to provide customer service . One huge advantage to usingFacebook for business is that you have access to the profiles and information for alot of users. For a business owner , this will help you target the demographics of those who will be interested in your product or service. Facebook provides businessowners with self-service solutions , market-research solutions and integratedsolutions when it comes to advertising.

The best way to advertise on Facebook is through word of mouth you re your onlinefriends or fans via their actions and News Feed stories. Ads are less effective , but can

help you spread the word even further by reaching a larger audience. WithFacebook Ads , you choose the graphic and text of your ad , and select when Facebook shows it to your target users. A way that you can up your click through rate is byhaving Facebook add information about a viewers friends interactions with yourFacebook Page. This can help you drive customer awareness of your message andproduct.


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Facebook in Pakistan has a long way to go. Its revenue and the revenue of businesses from Facebook mainly rely on online financial transactions and virtualgoods , such as gifts and in game goods; which are still a new concept in Pakistan.P ricing as well would need to be revised in order to appeal to the local population.Currently , Facebook is a viable option for marketing and advertising of a business sproducts as it able to approach a wide range of consumers spread throughout thecountry and very low costs.


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P ROBLEM STATEMENT

TO STUDY THE EFFECTIVENESS OFADVERTISEMENT FOR BUSINESS ON

FACEBOOK


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This research is meant to accept or reject the following Hypotheses , constructed by conducting Exploratory Research

y Intensity of Facebook use will be positively associated with individual perceivedbehavior and attitude towards the advertisements publish on Facebook

y The relationship between intensity of Facebook groups and pages will varydepending on the person s interest.

y The consumer preference to pay for Facebook services is less than 60


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RESEARCH OBJECTIVE

The research objective of this market research is to evaluate the usageof the Facebook by the business to reach their target market by the

advertisements. As we have choose this topic and tried to finish thisspecific research project at our best.

BACKGROUND

According to the course conduct now we are completing the Research Methodologyfor Business. Research Methodology for Business is a practical and theoreticalcourse. Beside the theoretical knowledge , practical knowledge is very muchimportant for getting appropriate knowledge about the research procedure. The

main purpose to conduct a research survey is to know how to use Facebook forbusiness and how to market the business on Facebook.

SCOPE OF THE REPORT

This report is an analysis on in which purpose the business can use Facebook toreach to their target market as Facebook is a valuable tool for business today or not.How the companies by using Facebook gain the clients and promote their products.It was not possible for us to study the overall sector with proper information but wehave tried to give it a standard form.

SIGNIFICANCE OF STUDY

As Facebook is not just keeping tabs on friends and filling out quizzes it can also beuse as highly effective business tool. It s great for marketing your products , landinggigs and connecting with your customer


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FACEBOOK INRODUCTION

The Facebook social network has revolutionized keeping in touch over the internet.Friends and family can now connect with each other in a network of relationships ,

sending emails , playing trivia quizzes and games , sharing photos and generallyhaving casual day-to-day contact that is often difficult due to geographical distancesand busy lifestyles.

Facebook isn t just for teens and young adults. It is a wonderful and practical wayfor people of all ages to keep in touch on a regular basis and share information withfriends and family .

Facebook Security

As with all internet applications , it is important to consider security issues beforecompleting the Facebook registration. It is safer to limit "friends" to people who arepersonally known and adjust settings on the site to ensure that only approvedfriends are able to view any photos or information. It is possible to prevent a date of birth or address appearing on a homepage and this is also a practical internet safetyprecaution.

Remember that anything that a user does on Facebook could appear in the friendsupdates sections on their approved friends pages.

Like many sites , Facebook is funded by targeted advertising .

Facebook Homepage

There is the option of providing a photo linked to the name of each user. This doesnot necessarily have to be a photo of the user (it could be a scenery , comical orgroup shot) , but it must not be under copyright. This photo will appear next to theuser's name in different areas of the website.

"Status" allows users to input a sentence to describe what they are doing , how theyare feeling or what they are thinking.

The "search" facility allows users to search by name to find friends who are also onthe network.


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Facebook Applications

There are many applications on Facebook that can be connected to a homepage forregular use. They can facilitate keeping in touch with others or be for theamusement or interest of the user themselves. Several common applications are

listed below , but the range on the site is much more extensive.

Facebook Friendship Applications

y Superpoke send hugs , high five a friend , throw a chicken at someone , or just let them know that someone is thinking of them.

y Funwall. Draw pictures or post photos for others to view.y Internal email send emails to other Facebook membersy P hotos set up photo albums for friends to viewy Superlatives let friends know where you think they excel most likely to

walk the red carpet , most likely to use the word superfluous correctly , most likely to still be in their pajamas at lunchtime.

y Gifts growing gifts , hatching eggs , snow globes. Choose a gift to send and it will slowly reveal itself over 4 days.

Facebook L ist Applications

y Books list books that have been read and rate them as well as keeping a

want to read record.y Movies Watch them , rate them , and add them to a wish list.y Music record favorite bands and albums

Facebook Quote Applications

y Shakespearey The Bibley Famous Christian Quotesy Mark Twainy The Simpsony Einstein


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Facebook Games Applications

y Smarty pants (Trivia)y Never-ending Movie Quizy P etrol head gain points to trade your current car in for a better model.y Sudokuy Traveller IQ Challengey Smarter Mind (Master Mind)y Rock Paper Scissorsy Hangman

Facebook Groups

y School , work or social groupsy Common interest groups

Facebook is a great way for friends and family to stay in touch easily from anywherein the world.


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SAMP LING DESIGN

For the research carried out , the target samples were the students at IoBM , both

men and women between the ages of 16 and 30 years of age. All people surveyed

were well aware of Facebook and its usage today. Our target populations were

university students which were then selected through random sampling. In order to

get valid results within a reasonable time frame , the sample size was determined at

150 participants whose data was collected through the use of a self administered

questionnaire dealing with business activity on Facebook and peoples impression of

Facebook from a business and customer point of view. Convenience sampling was

also employed on occasion due to time constraints.


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RESEARCH DESIGN

Our research design was a self administered survey consisting of 17 questions. This

survey was conducted over a period of two weeks. Secondary data from Facebook s

investors website and multiple online sources was also taken into account when

analyzing the data.

Sampling Units

Sampling unit for this research are university students with the condition appliedthat they must use Facebook.

Fieldwork

Fieldwork actually refers to inquiring the chosen sampling units out of the samplingframe. Survey will be conducted with a questionnaire including 17 questions asmentioned earlier. All the 150 respondents will be surveyed through thisquestionnaire. In conducting the fieldwork , the researchers are familiar with eachand every type of question and all the possible queries about the questionnaire andassistance will be provided , if required.

KEY INSIGHTS INTO FACEBOOK

Key Insights:1. Historically , Facebook s user base in the United States has grown from 42 million , 2007 to 103 million , 2010. A whopping 144% growth rate2. The 35+ age demographic now represents more than 30% of the entire user base.3. The 55+ age audience grew a whopping 922.7% in 2009.4. Worldwide major hub locations grew by over 267% including; Atlanta , New York , Dallas , Denver , Portland , Seattle , Boston , Los Angeles , Miami , Washington D.C., Chicago , Detroit , Toronto , Sydney , Dublin , London and Milan.

5. Over 100 million active users currently accessing Facebook through their mobiledevices6. Over one million developers and entrepreneurs from more than 180 countries

Facebook Consumer Figures

More than 400 million active users 50% of our active users log on to Facebook in any given day


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More than 35 million users update their status each day More than 60 million status updates posted each day More than 3 billion photos uploaded to the site each month More than 5 billion pieces of content (web links , news stories , blog posts , notes ,

photo albums , etc.) shared each week More than 3.5 million events created each month More than 3 million active P ages on Facebook More than 1.5 million local businesses have active Pages on Facebook More than 20 million people become fans of P ages each dayP ages have created more than 5.3 billion fans

Mobile Cell Users

There are more than 100 million active users currently accessing Facebook through their mobile devices.

People that use Facebook on their mobile devices are twice more active onFacebook than non-mobile users.

There are more than 200 mobile operators in 60 countries working to deploy andpromote Facebook mobile products

Average User Figures

Average user has 130 friends on the site Average user sends 8 friend requests per month Average user spends more than 55 minutes per day on Facebook Average user clicks the Like button on 9 pieces of content each month Average user writes 25 comments on Facebook content each month Average user becomes a fan of 4 P ages each month Average user is invited to 3 events per month Average user is a member of 13 groups

International Growth

More than 70 translations available on the site About 70% of Facebook users are outside the United States Over 300 ,000 users helped translate the site through the translations application

Platform More than one million developers and entrepreneurs from more than 180

countries Every month , more than 70% of Facebook users engage with P latform applications More than 500 ,000 active applications currently on Facebook P latform More than 250 applications have more than one million monthly active users


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More than 80 ,000 websites have implemented Facebook Connect since its generalavailability in December 2008

More than 60 million Facebook users engage with Facebook Connect on externalwebsites every month

Two-thirds of the U.S. Top 100 websites and half of Global Top 100 websites haveimplemented Facebook Connect

RESEARCH ANALYSIS

Our research design was a self administered survey consisting of 17According to our research , 55.76% of Facebook users were Male , while 44.24%were female. Total sample sizes of 153 samples were taken into account.


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The usage frequency according to age is as follows:Age Group

Frequency P ercent Valid

P ercent Cumulative

Percent

Valid 15-19 11 7.1 7.2 7.2

20-25 125 80.6 81.7 88.9

26-30 14 9.0 9.2 98.0

31 andabove

3 1.9 2.0 100.0

Total 153 98.7 100.0

Missing System 2 1.3

Total 155 100.0

How often do you use Facebook in a day?


P ercent Cumulative

P ercent

Valid One 62 40.0 40.5 40.5

Two 35 22.6 22.9 63.4

Three 14 9.0 9.2 72.5

More than3

42 27.1 27.5 100.0

Total 153 98.7 100.0


Total 155 100.0

By viewing the data given above , it can be seen that Facebook is used by 40% onceper day while 27.5% of users access Facebook over 3 times a day. This shows that Facebook has a high traffic flow which can be viewed as beneficial for Businessestrying to target a certain market as businesses would have a number of opportunities to get the attention of Facebook users.


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Advertisements as well play a huge role is Facebook revenue and business revenueinternationally , but locally , advertisements are not as effective. In our sample size , auser clicked on an advertisement an average of 4.96 times a day. This means that advertisements are not clicked on frequently and users are not bothered by the adsthat pop up on their pages and Facebook sites opened.

W hat attracts you to the particular advertisement-Product


Percent Cumulative

Percent

Valid No 109 70.3 71.2 71.2

Yes 44 28.4 28.8 100.0

Total 153 98.7 100.0


Total 155 100.0W

hat attracts you to the particular advertisement-Brand


Percent Cumulative

Percent

Valid No 99 63.9 64.7 64.7

Yes 54 34.8 35.3 100.0

Total 153 98.7 100.0


Total 155 100.0

W hat attracts you to the particular advertisement-Design


Percent Cumulative

Percent

Valid No 102 65.8 66.7 66.7

Yes 51 32.9 33.3 100.0

Total 153 98.7 100.0


Total 155 100.0W hat attracts you to the particular advertisement-Curiosity


Percent Cumulative

Percent

Valid No 125 80.6 81.7 81.7

Yes 28 18.1 18.3 100.0


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Total 153 98.7 100.0


Total 155 100.0

Advertisements , in our sample survey are severely lacking in potential sue to which , they are unable to attract users. Out of 153 samples , only 28.4% were attracted toan ad because of the P roduct itself , 34.8% were attracted to it because of the brandit represented , 32.9% were attracted to the ads because of its design and only 18.1%were attracted to the advertisement because of curiosity. It should be noted herethat Facebook s major source of revenue are the businesses operating in Facebook and the ad space bought by them.

The potential for businesses on Facebook is vast. A majority of people agree on that conducting business activity on Facebook is a good idea but they are not willing topay for the paid services that Facebook offers.


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Do you agree with the statement that Facebook can helpbusinesses attract their target markets/people?

Gender

Do you agree with thestatement that Facebook can helpbusinesses attract theirtarget markets/people? Mean N Std. Deviation

Agree 1.47 121 .501

D isagree 1.34 32 .483Total 1.44 153 .499

According to the Key Facts , Facebook s largest market is Asia , accounting for 65%of its total users. About 1.5 million businesses have their pages on Facebook and agrowing number of Businesses are fast joining their figure. With Pakistan turninginto one of the top ten internet-using countries in Asia , there is a huge potential for


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Business Opportunity on the website. Majority of the users that use Facebook morethan 2 times are day , support business activity on Facebook.

Gender

Male Female

Count Count

Do you agree with thestatement that conducting businessactivity on Facebook isbeneficial?

Strongly Agree 12 18

Agree 61 36

Disagree 10 14

Strongly Disagree 2 0

Do you agree with thestatement that Facebook can help businessesattract their target markets/people?

Missing 0 0

Agree 64 57

Disagree 21 11

Ultimately , Facebook is viewed as a good source of promotion of products , a way tokeep customer relationships and add a personal touch to an otherwise mechanizedbusiness model being followed. Business on Facebook can be used to approachpreviously inaccessible markets and gather inputs form the consumers at a lowercost. While businesses involving direct financial transactions may not be feasible , promotion of businesses on Facebook is highly thought of. In P akistan , even

Facebook games,

as long as they are free,

are in demand,

but its paid versions arenot successful. People are unwilling to pay for paid Facebook applications.

Do You play Facebook games?


Percent Cumulative

P ercent

Valid Yes 98 63.2 64.1 64.1

No 55 35.5 35.9 100.0

Total 153 98.7 100.0


Total 155 100.0

Have you ever paid for Facebook services


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Percent Cumulative

P ercent

Valid Yes 8 5.2 5.2 5.2

No 145 93.5 94.8 100.0

Total 153 98.7 100.0Missing System 2 1.3

Total 155 100.0

W ould you be willing to pay for in game goods and gifts onFacebook?


Percent Cumulative

P ercent

Valid Yes 28 18.1 18.3 18.3No 125 80.6 81.7 100.0

Total 153 98.7 100.0


Total 155 100.0

While over 63% of Facebook users play games on Facebook , they are unwilling topay for those games (80.6%). Only 5.2% have paid for Facebook services whichshow that direct financial transactions on Facebook are not in demand and will not be for the foreseeable future.

Gender

Male Female

Count Count

Rate the following Least P referred 9 12


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factors of Facebook according to yourpreferences-Community

Low P reference 17 8

Neutral 22 22

ModerateP reference

20 18

Highly P referred 17 8Rate the followingfactors of Facebook according to yourpreferences-Blog

Least P referred 17 12


Neutral 23 24

ModerateP reference

23 11

Highly P referred 5 4

Rate the following

factors of Facebook according to yourpreferences-Networking


Low P reference 7 4Neutral 11 16

ModerateP reference

18 20


Rate the followingfactors of Facebook according to yourpreferences-

Advertisements



Neutral 27 17

ModerateP reference 13 11


Rate the followingfactors of Facebook according to yourpreferences- Games



Neutral 20 15

ModerateP reference

17 17



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LIMITATIONS

Our research design was a self administered survey consisting of 17

The limitations to our study were time constraints , financial constraints and head

count constraints. We had to conduct a large study within a short time period and

analyze those findings using various statistical packages.

RECOMMENDATIONS

By analyzing the data gathered , it is recommended that Businesses start usingFacebook as a means to approach customers and raise awareness regarding theirproducts. They should start advertising as well after considering the factors whichdrive a user into clicking a Facebook advertisement. The brand , Tag line , design andproduct all play a huge role in the advertisements appeal. Also , since a majority of Facebook users are in the age bracket of 20-25 years (80.6%) , businesses cateringto that age group should specifically utilize Facebook as a means of marketing theirproducts.

CONCLUSION

Facebook in Pakistan has a long way to go. Its revenue and the revenue of businesses from Facebook mainly rely on online financial transactions and virtualgoods , such as gifts and in game goods; which are still a new concept in Pakistan.P ricing as well would need to be revised in order to appeal to the local population.Currently , Facebook is a viable option for marketing and advertising of a business sproducts as it able to approach a wide range of consumers spread throughout thecountry and very low costs.

term report fall 2009

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