Facebook Deals, a location based service, and its strategic impact on companies

Abstract

Social networking sites have become a true phenomenon in marketing practices nowadays (Cooke and Buckley, 2008). In the last years with the bundle of mobile technologies and geographic information systems within the web (Li and Longley, 2006) social networks expanded towards a new field: location (Scellato and Mascolo, 2011). Advertising through Location Based Services became an important marketing channel, as it creates a direct link between companies and consumers (Banerjee and Dholakia, 2008). This dissertation studies if Facebook Deals, a location based service application, can have a strategic impact for companies. In order to get a deeper understanding of the item of study literature on Web 2.0, social media and location based services is reviewed. Additionally, the Resource Based View strategic framework and Contextual Marketing, a strategic concept, are approached for theoretical foundation. Primary data was collected through an online survey in order to understand the current usage of LBS, in Lisbon, and the potential use of Facebook Deals and users’ preferences in this context. The customers’ willingness to interact with companies through this application was also analysed. In this context, the research hypotheses are tested. The results are broadened in the strategy area, as they permit the comprehension of several assumptions under which Facebook Deals could have a strategic impact for companies. By applying the Resource Based View framework this dissertation manages to show several factors that may conduct companies to obtain sustained competitive advantage by using location based services, namely Facebook Deals. This dissertation concludes that Facebook Deals can have a strategic impact for companies under the assumptions that networks effects exist and transform customers into critical resources. These can help companies to make use of reach and richness of information which is personalized and contextualized. It was showed that in restaurants, cafes/bars, entertainment and clothing industries these critical resources can help businesses achieve first mover advantage. Companies are able to take advantage of these three effects and perform contextualized marketing creating this way switching costs for their consumers. This study does not claim to show all circumstances where Facebook Deals could be employed strategically, as other/additional strategic uses might be found. It is meant to increase the current knowledge of a contemporary subject.

Date of Award	2012
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Paulo Amaral (Supervisor)