Zivkov Kristina_Christopher Hooker1

Kristina Zivkov Christopher Hooker MIS 54001 Instructor Johnson 12 September, 2012 Rock Island Chocolate Company, Inc. Building a Social Networking Strategy

History and the Company Background The Rock Island Chocolate Company, Incorporated was founded by Seymour Burris, Jr. in the year of 1997. At the time Seymour was working at the local U.S. Army facility in Rock Island, Illinois. Originally the company ran its operations as a small-sized specialty retail store that was located in the unfilled building in the small strip center placed near downtown. In the beginning, Seymour was a part-time worker at the store while his wife, Lottie, was a full-time employee at the same store. Since the companys early development all the way until the year of 2000, the store was selling chocolates purchased from distributors from Chicago area. Already, in 1998 the Rock Island Chocolate Company found that its costs and sales have reached break-even point on the revenue of $ 568,000. Business revenue gradually continued to grow, and in 1999 it had grown to approximately $700,000. Just a year later, Seymour had found out that he was the successor of a series of recipes for variety of chocolates made in the Belgian style. This episode has set the firm foundations for even further development of the store. A vast growth potential was on sight; consequently, Seymour brought an executive decision to create his own brand of chocolate after he had run a test trial with a baker in Rockford, Illinois.

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Based upon obvious growth potential of the store, Seymour has decided to invest further, renew equipment and expand the manufacturing space. These steps would not be possible to take without the consumption of a 5-year loan that Seymour has obtained. In 2002, the company launched its product lines into the wholesale market throughout the country. Revenue grew continuously in the next seven years when it actualized to two million dollars in profits. The business success was crowned by recipience of an award of the Entrepreneur of the Year.

Figure 1.1. RICC Revenue Growth Chart

Revenues in Thousands of US dollars (RICC)

$12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Year 1998 Year1999 Year 2009 Revenues in Thousands of US dollars

Extensive and nearly perfect pace of success created an atmosphere where Burris thought further investments would just bring more success, that there was no risks associated with the expansion; however, the future events have proven otherwise. The establishment of the brand and consumer loyalty, and the business expansion in general, carry the challenge of attaining customer satisfaction on the highest level. At this point, with the constant company growth pace

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and increase in the customers, the only way that RICC would be able to overcome the challenge is via an outstanding customer service. Yet, this is exactly where the company has failed. Background of a trigger issue Even though, the Rock Island Company developed in a successful business on account of advancements of operating and sales sectors; there still was a major barrier to be exceeded. As a vital element of any business, customer service had to tag along with the other developments, but RICC failed in that area. The culmination of the circumstances caused by a poor customer service was reached when the President and the CEO of the Company, Seymour Burris, discovered from his children that his company has been verbally attacked via blog posted by an unsatisfied customer. Burris wanted to immediately solve this issue because he did not want any bad reputation, but he did not have a clear thought on how to approach to the problem, hence he spoke to his Director of Information Systems, Charlie Tunista, hoping that he would be more competent in finding the appropriate solution. Seymour inquired from Charlie to find out how much negative stuff in regard to the RICC Company is posted online, and asked him to remove it. In addition, the vital question has been raised-should the company begin taking a part in Social Networking area, and increase its internet presence overall. Participants backgrounds Seymour Burris Jr. is the President and CEO of Rock Island Chocolate Company. He is the man responsible for building this company from the ground up. Charlie Tunista is the director of Information Systems at Rock Island Chocolate Company. He was given the task of finding a solution to the negative press and developing a strategy for social network marketing. Russ Nelson is the Information Technology Director at a specialty popcorn Company. He is an undergraduate classmate of Charlie Tunista. Russs opinion on the social networking dilemma at

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hand is to that its not worth investing in. He also takes the position that the disgruntled blogger will die out in a short amount of time if there is no one that supports his or her views or claims. If the blogger does get some wind behind his claims, then he thinks Charlie has a much bigger problem. Will Rush is the Vice President of Marketing at Rock Island Chocolate Company and stresses that RICC should develop a social media presence through Facebook, Twitter, etc. He firmly believes that the dividends that are paid out after investing in a social media networking strategy are significant. Alba, Charlies wife, is a consultant for a regional consulting firm dealing with midsize companies. She claims that social media will improve store traffic and if a website is set up, internet traffic can benefit from it as well. A marketing technique used in the social networking market can inform public of new products and create a buzz to the followers and people that like certain pages. Alba also states that using social media is a tool that, if used properly, can gather business intelligence. Irene Castle is Charlies Information

Technology Management teacher. Irene told the class there are four reasons to develop a social media strategy. Sarah Hayes is one of Charlies classmates in his Information Technology Management class. At her company social networking is used to establish a companys

personality. Sarahs CEO is convinced that they have benefited from this approach, but she does not have an access to supporting evidence at the moment. Main issues Although, the Rock Island Chocolate Company faced an unenviable situation, it was possible for potentially constructive outcomes to follow. RICC confronted an issue of an undesirable reputation due to its poor customer service. The blogger has expressed his dissatisfaction with the RICC service, and Burris was unable to respond to it because of the lack of presence in the world of social media, or Web2 in general. Clearly, two problems are to be

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addressed. The first one is the poor performance of RICCs customer service that cost the company of its reputation, which could still be restored if acted on it in a timely manner. In addition another problem in this case is the fact that the blogger stated that, I wrote the CEO of RICC and he said hed investigate but never responded further. As the CEO, we do not know if he got the email directly, but if someone somewhere complains you are supposed to do something. One could argue that it is in the best interest of the companys image and to the credibility of CEO to keep his word. The second problem is a lack of social media presence. Consequently, a customer service and social network presence with the web site establishment were the issues that RICC has decided to focus on. Perhaps, there was a chance for a blogger incident to be avoided, and put in the shade of the strong brand loyalty and customer satisfaction; however, these business elements were just passively established via word of mouth, and not actively and globally via social networks and Internet presence, overall. With the information technologies held up to date, and with the market research on other companies that are practicing social networking strategy, it would be attainable to keep up with the industry pace. However, as an IT director Charlie failed to complete those tasks and now RICC is facing issues. On the other hand, these issues are solvable with the application of the appropriate solutions. Still, it is vital for Charlie to be aware of the riskiness of every choice he makes in order to solve current issues and help further development of the company. Possible solution and implementation As an answer to a negative criticism expressed through the blog, one could argue that RICC needs to contact the blogger offline, and offer a compensation for the low performing customer service in return for the blog removal. Even though, this is the most immediate and the

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least expensive solution, it still deals just with the issue on a micro platform. But what if the same or similar incident was to occur again sometime in the future? The answer to this question lays in a vast opportunity for RICC marketability improvement. The company could become actively involved in social networks such as Facebook, LinkedIn, and Twitter and create an online-profile or/and a page on each of them. It would also assist in forming subscriber and follower groups that could be prospective or current customers. Simultaneously, RICC could build its online personality and brand loyalty. Besides, the research has shown that RICC Company does not currently own a website; therefore, the next optional solution would be to build a strong website page in order to establish the highest quality customer service available throughout the entire day, and keep the customers informed on new and existing product promotion and gain a valuable feedback from the customers. In addition, the feedback is crucial when it comes to a product development cycle. The first alternative of directly contacting the blogger and finding a mutual compromise, in order for the post to be removed, is risk-less; on the other hand, the risk itself is a major deficiency of a second alternative that would require extensive initial investments. An implementation of the disputable long-term optional solution where RICC would try to establish a presence in social networking area, while potentially very beneficial, carries a large amount of risk related to the loss of initial investments. While current employees would have to be trained, also new employees and technology would have to be financed. This would be financially exhausting for human resource and informational technology departments. In the variety of markets, companies involvement with social network area is still a work in progress, and is considered to be avant-garde marketing strategy; hence, if RICC would choose to get engaged in

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this risky activity that would have two potential outcomes, acceleration of companys capital growth or the company collapse. Recommendations A short-term solution of a blog removal should most definitely be applied because its riskless character, and because it ultimately just represents the restoration of an original reputation. In addition, RICC should attempt to satisfy the furious and unpleased customer to the highest extent, so that the blogger would maybe, not just remove the original post, but act beyond it by commending the current customer service that took the responsibility of solving the situation. Upon completion of that, the trickle down effect starts. The best mode of marketing is word of mouth, and once that unpleased customer turns his mood around about the Rock Island Chocolate Company, you have changed an unpleased, unpleasant customer, to a happy, satisfied customer. And since they took the time to gripe about how bad your customer service was, they will likely take the time to commend you on fixing your goof-up. The second alternative, even though attributed with the risk of a financial loss in the case of the strategy failure, is an enormous opportunity for RICC to reach out to the wider market, and promote itself. For the previously mentioned costs, in HR and IT departments, Rock Island Chocolate Company would gain a bundle composed of a product promotion, customers satisfaction and brand loyalty following the steps of its competitors such as Nestle and Milka Chocolate producers who have gained from the social networking strategy. A solution that would have prevented this problem is having a service set up where people can track their purchases online, perhaps with the use of smart-phone mobile applications. The negative publicity blog referred to the lack of communication between the Rock Island Chocolate Company and the importer and the customer. This is a large business to business and

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business to consumer strategy problem. With a tracking number the customers could have seen exactly where their shipment was, when it was supposed to arrive and finally been there for the delivery. This could be achieved through m-commerce applications. Even if there was a problem between RICC and the importer, the customer would have at least has access to know that the shipment was going to be later than anticipated. The potential for success in the e-commerce market greatly outweighs the financial woes that come with the implementation of a social networking strategy, and this is why RICC should incorporate these feasible solutions and keep its successful business trend going.

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Work Cited
Brown, Carol V. Managing Information Technology. Upper Saddle River, NJ: Pearson Prentice Hall, 2012. Print.