The aim of this chapter is to present an introduction to the thesis. First, the background of the research will be explained followed by the company description and the problem analysis. Finally, the main research question will be given followed by the organization of the report.
1.1 Research Background
This thesis is part of the fourth year of International Business and Management Studies bachelor's degree program given at the Amsterdam School of International Business of the Amsterdam University of Applied Sciences. The purpose of the thesis is to:
• carry out an analysis of a business opportunity;
• formulate a SMART research question to achieve the business opportunity;
• describe relevant theories to the research questions;
• and finding research methodologies that are in line with the theories to execute the research.
To achieve all the goals mentioned research will be carried out on how companies like Chill Haus could benefit from the use social influencers as a marketing tool. In order to execute this successfully relevant theories and models regarding social influencers will be researched and described to justify the research questions. By presenting SMART questions and answers using relevant theories the potential business opportunity will arise.
By presenting the results of the research Chill Haus will have a greater understanding regarding the advantages social influencers when implemented into its marketing strategy.
1.2 Company Description
Chill Haus, located in Las Vegas, Nevada, is a sweets shop specialized in tea. Not just any tea but milk tea, popularly known in the United States of America (USA) as boba. Mr. Noc Lovejoy started the business in January 2018 after realizing that, while he was occupied with working 60 hours a week to make someone else successful, he barely had any time left for himself or family and friends. Mr. Lovejoy´s motivation was to work less, while still generating enough income, and being able to spend time with family and travelling (Lovejoy, 2018).
After six months of brainstorming and interviewing people on what they loved to do on the weekends Mr. Lovejoy found out that the majority enjoyed to gather with friends and family while enjoying a beverage (Lovejoy, 2018). This formed the foundation of the concept behind Chill Haus, which is bringing tea lovers together in a place where they can get together and hang out in a comfortable environment. For Mr. Lovejoy it was important that Chill Haus would be “a self-efficient business in which it did not require me to be on site fulltime” (Lovejoy, 2018).
As regards to the decision of opening Chill Haus in Las Vegas was mainly based upon personal reasons as an opportunity arose for Mr. Lovejoy to purchase a house in Las Vegas under the market value and therefore relocated to Las Vegas (Lovejoy, 2018). While living in Las Vegas Mr. Lovejoy learned that the Las Vegas economy has been picking up since the recession and the community has been growing from what it was in 2008 and “took the risk and start a business whether it succeeds or fails” (Lovejoy, 2018).
Chill Haus specifically caters to the locals of Centennial Hills in the northwest area of Las Vegas Valley where it is the only boba shop. Regarding to Mr. Lovejoy there is no pressure of having to compete with other boba shops as all of their direct competitors are ten miles away (Lovejoy, 2018). “Our customers in Centennial Hills rather come to us instead of having to drive twenty minutes out of town to get boba and ice cream. This is currently a great advantage for us, as I mentioned before, Las Vegas is growing and Chill Haus is part of the movement.” (Lovejoy, 2018).
Currently Chill Haus is run by a small team consisting of six employees including Mr. Lovejoy. Chill Haus has the desire to achieve a long-term, if not permanent, status within the Las Vegas area with its flavored drinks and soft serve ice cream before expanding.
Chill Haus has been approached for this paper due to previous contact between the author and Mr. Lovejoy for a previous research. The newness of the brand, its products and the owner's determination initiated the author's interest in Chill Haus for this thesis.
1.3 Problem Analysis
As a new company Chill Haus is facing the same challenges as most start-ups, which are how to attract customers and create revenue. In order to compete with established businesses, it is important to be recognized by consumers and to be considered within their buying decision-making behaviour (Keller, 2003).
Without a real marketing plan and little marketing budget in the first year, Chill Haus considered social media as their top marketing opportunity to introduce Chill Haus to consumers (Lovejoy, 2018). Chill Haus currently uses free social media platforms, like Instagram, Facebook and Yelp reviews to promote its products (Lovejoy, 2018). In addition, customers have referred family and friends to Chill Haus through word of mouth and Chill Haus actively participate in fundraisers with schools in the area (Lovejoy, 2018).
The initial target group for Chill Haus were the high school students, especially from two well-known high schools in the 1-2 miles radius from Chill Haus. The reasoning for targeting this specific group for Chill Haus' beverages is because high school students love to have a place to hang out, to do their homework, play board games and gossip (Lovejoy, 2018). Nevertheless Mr. Lovejoy says “everyone who has a sweet tooth and loves tea and ice cream is a customer” (Lovejoy, 2018).
Due to the history of boba tea, which is originally from Taiwan, the beverage is more well-known in the Asian community. Because of this Chill Haus wants to focus and reach the people in the community who are from different cultures and are not familiar with these kinds of beverages to increase its sales (Lovejoy, 2018).
To achieve this goal Chill Haus wants to participate in food events and, more importantly, to make efficient use of its online accounts to increase awareness for Chill Haus and its products as “everyone and everything is on the internet nowadays” (Lovejoy, 2018). To improve Chill Haus' current online activities first a better understanding of the concept of social media as a marketing tool for brand awareness is needed.
With this thesis Chill Haus will gain a better understanding of the concept of social media marketing, specifically in the Las Vegas area, to generate opportunities for the company and reach its goal. Finally, the aim is to provide efficient and feasible recommendations for Chill Haus.
1.4 Research Question
The purpose of the research is to discover how Chill Haus can benefit as a company from the use of social influencers as the main marketing tool. Therefore, the research question is:
How could Chill Haus use social media to realize brand awareness in order to increased their 2019 sales by 250%?
1.5 Report Organization
The thesis starts with an introduction in which background information is given on the topic and research, the problem definition and research questions. Followed is the theoretical framework which will focus on specific theories that act as preparations for the primary research; the interviews and survey. The third chapter entails the methodology, presenting the tools that are being used for the secondary and primary research. Chapter four covers the research findings followed by the analysis of the findings in chapter five. The last chapters will present the conclusion and recommendations for Chill Haus. At the end of the thesis a reference list is provided and the appendices.
2 | THEORETICAL FRAMEWORK
The developments in media and technology has created new opportunities for both consumers and companies when it comes to creating awareness for your brand. A popular trend in marketing in recent years is ‘influencer marketing'. According to Forbes (2018), influencer marketing is a form of marketing in which companies put the focus on social media influencers with a strong reputation and large following to market the brand and its products or services (DeMers, 2018).
This theoretical framework chapter presents a review of relevant existing theories related to the research that serves as a foundation for the outcome of the research. As the thesis is focused on the opportunities of increasing brand awareness for Chill Haus, the concept of influencer marketing will be critically discussed together with other theories that are relevant to brand awareness.
2.1 Social Behaviour
To understand the purpose of influencer marketing in branding better it is important to create an idea of what it is about and where it is linked to.
Before mass media was common information one received from friends and relatives through word of mouth was perceived to be the most honest and trustworthy. Information spread by brands and marketers was not, as consumers understood very well that marketers are compensated to advertise about a brand or promote it (Medium, 2017). In 1957 during elections Elihu Katz and Paul Lazarsfeld (1957) researched how people's decision-making was being influenced resulting in the two-step-flow communication theory. It explained early on how people's decision-making is being influenced by means of an opinion leader and mass media (Katz & Lazarsfeld, 1957). They state that in decision-making there is always an effect of personal influence, or preference, and a so-called ‘flow of influence' (Medium, 2017).
Moving on looking at the key idea of influencer marketing it will become clear that influencer marketing stems from word of mouth communication (Solomon, 2013). Brown and Hayes (2008) define it as “a movement that directly enables sales forces by directly focusing on key individuals who could advise potential customers and influence their buying decision to turn them into buyers of your service or products” (Brown & Hayes, 2008)
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