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This study aims to gain insights into the rise of virtual social media influencers and identify the significant theories governing virtual influencers’ (VIs) interaction with followers on social media platforms. Studies on VI being scarce in marketing literature, the authors attempt to propose a theoretical model to understand the acceptance of VIs by social media users (SMUs).

Using a structured literature review and a case study approach, a conceptual model is developed and propositions are offered.

Parasocial interaction (PSI) between the SMU and VIs builds up source credibility, thereby leading to the acceptance of VIs. Thus, the authors establish that PSI and source credibility theory combine to explain the acceptance of VIs by SMUs. Furthermore, similarity with the VI is another added dimension of source credibility, as suggested by this study. A comparative analysis of the growth of five major VIs elucidates that the fashion, electronic, tourism and health-care industries can use them for promotions and as influencers, especially for luxury products.

VIs are a potent tool to achieve improved brand awareness and to target young consumers (especially Gen Y and Gen Z – millennials).

The emergence of VIs being recent; little is comprehended about their interaction with SMUs. Hence, it becomes important to delineate the foundations of VI–SMU interaction. Thus, this study addresses the gap in identifying the theoretical background and proposes a conceptual model elucidating VI acceptance by SMUs.

After completion of the case study, the students will learn about the blue ocean strategies that are adopted by entrepreneurs when they are entering into a new business territory and be able to perform an industry analysis and understand the competitive advantage that a firm possesses in a new market using Porter’s five forces framework.

This case study is about Sushant, an entrepreneur, who started his entrepreneurial venture in water sports tourism along the coastlines of India. His core business was into offering kayaking and camping activities. However, he planned to scale up his business by expanding its geographical reach. To fulfill this, he was also planning to manufacture his own kayaks, which would increase economies of scale in the long run. This case study investigates the dilemma of whether he should first increase his service offerings before expanding geographically or focus on geographical expansion and then increase service offerings.

This case is designed to be taught at the post-graduate level (Master of Business Administration) for an entrepreneurship course.

Teaching notes are available for educators only.

CSS3: Entrepreneurship.