I think that a good way to define Social Media could be "a new kind of information and communication technology that works on the internet and allow people to build communities, to share what they have in common or simply what they like, what they discover".
It also is a tool to communicate about your own self, to show the people in your "circles" what are your interests, your passions, where you've been and where you'd like to go.
With Social Media, one can communicate with the persons he knows but also with anyone, he can build links by surfing on pages of his concerns, and last but not least, he can give his advice on product and services withtout any moderation from the brand he his talking about.
Why are Social Networks important with the Marketing Mix?
Social Networks are now totally involved in the Marketing Mix.
Let's talk about the "four Ps": Product, Price, Promotion, Place.
Social Networks can help a company being good in each of them: analyzing the needs and wants of your target customers on Social Media helps defining your product, listening to the consumer's perceived value of one type of product or a similar product to yours serves to set a price.
As to the Promotion, Social Media are a an inexhaustible source of possibilities: you can lauch a viral campaign on facebook, contact potential customers or other companies on linkedIn, broadcast a video of your product on Youtube…
Concerning the “Place” where you will sell your product, you can even sell it on the Social Media (MarketPlace for example) or just find where would be the best location to sell it.