With growing use of internet across the nation and a macbook or laptop in almost all households, things are getting more and more accessible and this in increasing intense competition in the market for consumer goods and products. Marketers earlier had to worry about their advertisements on television, newspaper and magazines (lately google and other search engines) but now they are more concerned about their advertisements on social media websites such as Facebook, twitter and MySpace. If you go to any company’s website, you might notice small icons on the webpage showing their presence on different social media websites. They might even prompt you to like or tweet a particular product or brand name if you make a purchase of the same. This is true for companies across all industrial verticals, all sizes and all businesses; examples include that of Ford, Strabucks, McDonalds, REI, Barnes and Noble, Macys and so on. This social media presence is becoming a norm in the advertisement area where the presence of a company on any of the social media website marks its popularity.
Why is it becoming so? Wasn’t facebook a website to just chat with friends and share personal stuff? Then why are the companies so eager to mark their presence on such websites?
The answer lies in the studies conducted by market researchers in the US. And according to the findings, approximately more than 875 million consumers buy products online. And about 75% of the nation’s shoppers use internet to research about their products before making a purchase (in-store or online) and 67% of the consumers depend upon customer reviews and opinions/recommendations of friends to decide upon purchasing a product. These customer reviews are nothing but the likes and dislikes expressed on the Facebook page, tweets of fans and friends about their experience after using a product and also the company’s website displaying customer ratings of products they had purchased!
There is a method in market research known as obersational research. Marketers observe how the consumers are responding to their products in an environment where consumers have the freedom to express themselves freely without any obligations thus making the response completely unbiased and honest. Moreover, consumers tend to trust these responses and statistics more than that shown on the company’s website. This is because they might know the people responding to the product and therefore tend to trust the network on which they are expressing themselves. The social media websites are therefore a very good method of knowing about one’s product performance in the market once it has been introduced in it. Especially so with consumers becoming more knowledgable about the market and their desire to learn more about the products has led to an increase in the need of customization in marketing services and to maintain or create brand loyalty. Studies have found that the chances of customers being brand loyal for a longer period of time is greatly increased with their association of the brand on the social media fan pages. Such customers are 5 times more likely to be evangelists of the products and can take active participation in being a customer, thus making the brand popular on a whole new level. This type of strategy is very useful in the market where the brand loyalty shifts rapidly and is not long-term connection. Industries such as Airlines, Hotel/restaurants and Retail can benefit (are benefitting) a lot through the social media as they are better able to understand consumer needs and can therefore adapt to it quicker. As seen in the case of Ford when it introduced it’s new automobile, it used a pre-launch promotion on Facebook which prompted consumers to talk about it’s Ford Explorer and Ford Focus cars which was not even introduced in the market at that time and according to Scott Monty, Head of Social Media Marketing of Ford, the response of consumers on Facebook after the launch of Ford Explorer in the market was greater than that to the SuperBowl Event!
What does this tell us? That social media is a great way to anticipate the market performance of a particular product provided that they are shown and delivered in an efficient way. Ford used it’s resources to create the ‘Ford Focus Rally America’ which is currently driving their optimization on brand awareness and creating customers which has seemed to have worked effectively! It also is a cost-beneficial process as it saves a lot of time and energy spent on focus groups in primary research which serve the same purpose. Starbucks uses coupons and other marketing strategies on social media to know more about their products. For instance, when it introduced the ‘Dark Cherry Mocha’ coffee it asked the customers on Facebook to review the taste of the beverage and if or not they would buy it and since the response was majorly ‘disliked’ on Facebook, Starbucks called off on adding the beverage to their fixed menu.
Ina country like USA, where social media websites are part of a daily activity and a major communication network, social media is a dependable source of inexpensive information available to the companies. Also, no matter what the industry is, market research is the first step for increasing the chances of achieving success and this is greatly accelerated with the use of social media which is the most convenient method to know about products for both consumers and marketers. As the social media effects are seemingly proving to be efficient to analyze market or shift in market trends, this method of advertising is becoming popular even the most social media shy countries such as Germany and Japan.