The impact of social media marketing capabilities on new firm performance

Purpose of the article To recognize the increasing role of social media marketing for new firms, the purpose of this research is to investigate the impact of social media marketing capabilities on new firm performance. The emergence of social media has significantly changed the tools and strategies for communicating with customers (Mangold & Faulds, 2009) and enabled customers to interact with their business counterparts (Berthon et al., 2012; Hanna et al., 2011). Social media marketing capabilities are therefore defined as firm’s competences to use social media in order to support marketing functions and to achieve competitive advantage against other firms. According to Kaplan and Haenlein (2010), social media enable firms to engage in contact with end customers at lower costs and higher efficiency compared to traditional media, which allows supposing that social media marketing capabilities are extremely important for new firms with limited resources. Methodology/methods The multi-item scales were adapted from past research studies. Social media marketing capabilities were operationalized using an adapted scale from Trainor et al. (2013), which views social media as a system to acquire, disseminate and respond to customer information. Social media marketing performance was measured using an adapted scale from Bruhn et al. (2012) and overall new firm performance was operationalized using an adapted scale of Lusch and Laczniak (1989). Quantitative research method was chosen to test the proposed hypotheses of the study. Data was collected using online surveys and took place in the first half of the year 2017. The research sample consisted of 248 newly established firms that have been founded in the last six years. Structural equation modelling (SEM) was used to analyse to test the proposed hypotheses. Scientific aim The scientific aim of the research is to examine the impact of social media marketing capabilities on new firm performance. A conceptual model is based upon resource-based view (RBV) theory, where capabilities are considered to play the critical role in a firm’s effort to achieve competitive advantage and superior performance (Day, 1994). Findings Research results show that social media marketing capabilities have a significant impact on overall new firm performance through a mediating effect of social media marketing performance. Additionally, one sample t-Test was applied to test the differences between new B2C and B2B firms regarding social media marketing capabilities. Results indicate that social media marketing capabilities of new B2C firms are significantly higher than those of new B2B firms. Conclusions To sum up, the research confirms the supposition that social media marketing capabilities are essential for new firms with limited resources and should be deployed in order to improve performance.