Product Differentiation
product differentiation refers to how products differ among sellers. Social media
firm differ in terms of the types of content offered on their sites, but what really
makes social media unique in comparison to other forms of media is that it h largely consumer-driven. Users review and post content that is of interest to them and
members of their networks. This enables social media to create market trends and
awareness of news and other events quickly. We often hear terms like "buzz" and
"viral" used to describe how content becomes widespread via social media. This
is particularly useful to those engaged in marketing, advertising, and public
relations, as detailed by Miller in Chapter 5 in this volume. Further, social media
has become just as critical a tool in political communication and elections in
promoting candidates and their positions to voters.
The social media industries are known for creating platforms that appeal to users
in different ways. Early in their development, the social media industries are not
known for creating specific content products that consumers access as with
traditional media like broadcasting and print. Yet, we have seen traditional media
embrace social media, allowing users to "share" content by reposting, linking,
tweeting, and other tools.
Barriers to Entry
Barriers to entry are obstacles new sellers must overcome in A
market. Often barriers to entry consist of capital re uTr t0 enter a
regulatory hurdles. The social media industries have ve^T^t and/or
regards to both of these areas. While it does cost mone^toT " * in
mobile applications for a new social media startup, these are 1 ^ Websites and
other forms of media. No significant regulatory barriers exist ^ ^ C�mParis�n to
United States), as no permits or licenses are required from th^ ^ ^ leaSt in the
must adhere to existing laws and regulations involving any ^�Vernment. Firms
there are no unique requirements for social media firms. Usiness activity, but
The lack of significant barriers to entry makes it possible for
size entity to set up social media accounts/profiles quickly and $maIJest
daily valuable for new startups, as social media provides T f' ^ esPe-
marketing and branding without inclining significant costs It �*POm,ni*es fQr
there are so many social media platforms in existence early in the??^ ^hy
While it is easy to enter the market a new startup must still achieve
and interest among consumers in order to survive.