Foundation Certificate in Marketing Marketing Research

Facebook Case Study

Shady Ramez Nicolas
A00040967

To : Dr. Ayman Etman

Table of Contents

1- Introduction 2- Methodology Decision Research objectives 3- Findings 4- Conclusion 5- Recommendation

1-Introduction:
Facebook is a global social networking website that is operated and privately owned by Facebook, Inc. Users can add friends and send them messages, and update their personal profiles to notify friends about themselves. Additionally, users can join networks organized by city, workplace, school, and region. The website's name stems from the colloquial name of books given at the start of the academic year by university administrations with the intention of helping students get to know each other better.. Mark Zuckerberg founded Facebook with his college roommates and fellow computer science students Eduardo Saverin, Dustin Moskovitz and Chris Hughes while he was a student at Harvard University. The website's membership was initially limited to Harvard students, but was expanded to other colleges in the Boston area, the Ivy League, and Stanford University. It later expanded further to include any university student, then high school students, and, finally, to anyone aged 13 and over. The website currently has more than 300 million active users worldwide. Facebook has met with some controversy. It has been blocked intermittently in several countries including Syria, China and Iran, although Iran later unblocked Facebook in 2009. It has also been banned at many places of work to discourage employees from wasting time using the service. Privacy has also been an issue, and it has been compromised several times. Facebook is also facing several lawsuits from a number of Zuckerberg's former classmates, who claim that Facebook had stolen their source code and other intellectual property. A January 2009 Compete.com study has ranked Facebook as the most used social network by worldwide monthly active users, followed by MySpace. In April 2010 an estimated 41.6% of the U.S. population had a Facebook account. Nevertheless, Facebook's market growth started to stall in some regions, with the site losing 7 million active users in the United States and Canada in May 2011.

2- Methodology
Problem Definition: Launching Facebook In Egypt or Not and choosing suitable features with its culture Research objectives: 1- Demographics population size, and age structure. 2- Communications & Computer Users 3- Legal situation 4- Economical situation 5- Competitive Landscape

Facts & Findings Demographics Population 83,688,164 (July 2011 est.) Age structure: 0-14 years: 32.7% (male 13,725,282/female 13,112,157) 15-64 years: 62.8% (male 26,187,921/female 25,353,947) 65 years and over: 4.5% (male 1,669,313/female 2,031,016) (2011 est.) Literacy definition: age 10 and over can read and write total population: 70.3% -male: 77.6% -female: 62.7% (2006 est.)

Computer & internet usage Internet Usage (2009): 12,568,900 Internet Population Penetration: 15.9% Internet User Growth: 2693.1%

Communications & Internet

Telephones - main lines in use: 9.618 million (2009) Telephones - mobile cellular: 70.661 million (2009)

Broadcast media: Mix of state-run and private broadcast media; state-run TV operates 2 national and 6 regional terrestrial networks as well as a few satellite channels; about 20 private satellite channels and a large number of Arabic satellite channels are available via subscription; state-run radio operates about 70 stations belonging to 8 networks; 2 privately-owned radio stations operational (2008) Internet hosts: 200,336 (2010) Internet users: 20.136 million (2009)

Economy
GDP (purchasing power parity): $515.4 billion (2011 est.) $509.3 billion (2010 est.) $484.3 billion (2009 est.)

GDP (official exchange rate): $231.9 billion (2011 est.) GDP - real growth rate: 1.2% (2011 est.) 5.1% (2010 est.) 4.7% (2009 est.) GDP - per capita (PPP): $6,500 (2011 est.) $6,500 (2010 est.) $6,300 (2009 est.) Current account balance: -$8.609 billion (2011 est.) -$4.435 billion (2010 est.)

Legal Situation
Legal system: mixed legal system based on Napoleonic civil law and Islamic religious law; judicial review by Supreme Court and Council of State (oversees validity of administrative decisions) International law organization participation: accepts compulsory ICJ jurisdiction with reservations; non-party state to the ICCt

Competitive Landscape

Conclusion
KSF People-toPeople interaction Pace of Innovation (features, etc) Network effects Weights MySpace Facebook Orkut Twitter

25%

20% 20%

7.5 6 6 7

9 7 9 8.5 8.5

7 5 6 7 5.95

7 9 3 7 6.8

Applications available 15% User engagement TOTAL 20%

100% 6

Facebook SWOT Analysis

Strengths --Currently the Market Leader in Social Networking --Largest social network Company --A platform for millions of applications, including Zynga. --Has a wide audience - Close to Billion active users --Household brand name --Highest quality of workforce --Has video chat

Weaknesses --Liabilities regarding bugs and problems that users face when operating the website --Don't get real answers to your problems, have to figure out problems based on FAQs --Lack of ability to customize page --Flash animation banners are distracting and need to be positioned differently so it won't get in the way of the user Local Markets Not the leader in key markets like China, Germany,

--Corporate Business Partners --Free Communications --Global (NOT IN CHINA) --Diverse sources of Revenue Design Ease of use, Attractiveness etc. Target Market Some sites target niches, some target goegraphies Activity Focus Target market can be connecting people over relationships, or over shared interests User Engagement Site needs to retain user minutes Transactions Innovative features like applications, people you may know, pokes, comments, likes etc., serve to increase user transactions.

Japan, India User Engagement There are early reports of Facebook fatigue. Not everyone is a fan of their new design Applications FB users frequently complain about the clutter brought about by applications Infrastructure Costs FB has been EBIT positive for 5 quarters but is not turning a profit because of (theorized) huge depreciation expenses for data centers etc. It is not being able to monetize itself in keeping with the growth trajectory Keeping the user base intact Much of the recent growth has come from older people (and not the early tech-savvy adopters like earlier). The challenge is to not alienate the original FB users. Threats

Opportunities --Become a default address book --Advertising impact will be an opportunistic approach in reaching target markets globally --Way of showing consumer behavior for businesses --A way of drawing people into stores by offering promotions etc. to them via the facebook page --Businesses can collect user data through polls and surveys --Buy/sell via Facebook marketplace Privacy privacy filters and controls Entry Barriers Easy sign ups Trust Different outlooks to Trust. Localization Local content, languages etc.

--Copycats include Companies like Google --New entrants into the industry --Privacy settings- leak millions of photos a year --Spamming --Users get bored easily when using applications and programs(one time usage) --Other competitors- twitter

Recommendation
Focus on monetization to improve valuations when it needs to go in for further funding. Use the Status Updates to deliver targeted advertisements Deliver Local advertising based on user locations.

Monetization

Applications (rules & controls)

The display of updates from applications annoys users & results in comparisons with MySpace. This should be controlled Privacy concerns from Apps to be addressed Clutter forces users to miss out on news about the people they are interested in

Communications

Improvement in storage, archival and search in the email and chat functions. (challenge is for FB to become the users primary email and chat client.) Solve the problem of how businesses can contact customer looking for services in a manner that does not infringe privacy

TOWS Matrix

STRENGTH 1. Huge active user base. 2. Popular Platform for application development 3. Present in all geographies 4. Translated in over 40

WEAKNESSES 1. Weak at monetizing the user base and delivering a high number of ads per user 2. Inability to manage application feeds leading to

languages 5. Email and Chat are integrated

clutter on the website & reactions from users

OPPORTUNITY 1. Advertising is moving towards Targeted ads and not blanked advertising. FB is perfectly positioned for this since it has a huge amt. of personal user information and preferences. 2. Improve Email and Chat THREATS 1. Social networking audience is fickle and thy frequently shift providers 2. People may grow tired of the highly structured FB and move to MySpace 3. People have privacy concern

S-O 1. Increase targeted advertisements and develop local ads A way of showing products relevant to the users location. 2. Improve quality of the integrated email and chat apps.

O-W 1. Work on ways to reduce the increasing amount of clutter on FB homepages 2. Create more monetization opportunities

S-T 1. Try to deliver localized content and ads (i.e. move beyond the language translations) 2. Improve development platform on aspects like security, privacy, monetization and

T-W 1. Always keep enhancing and innovating features to keep users coming back to the website. 2. Increase opportunities to customize pages without

with Facebook 4. Risk of losing young, hip image

limit clutter.

ruining design

Marketing Mix (4Ps)

PRODUCT The first P is the product, social network has products like friendster, myspace, twitter, linkedln, facebook etc which satisfies many social need because it enable friends and relatives as well as loved ones to interact electronically without physical meeting PROMOTIONS Many organizations, groups, and individuals use social network to inform, persuade and remind consumers about the organizations product or services. It has to do with communicating about the product to the final consumer. It is made up of activities such as advertising, sales promotions, personal selling, public relations and publicity. PLACE Social network can also be used as the gate way for individuals, organizations and group to sell their offerings to the general public. It also directs users to a website where goods and services have been posted for sale. Production is said not to have been completed until the goods and services have gotten to the final consumer. PRICE Price is very important and sensitive in the mix because, when price is high, all things been equal consumers will shift their demand from the product in question to the competitors product and the product will fail.