How Social Media Can Benefit Marketers

The trends feature on Google Zeitgeist is a really useful tool for scoping out competitors in the marketplace. By comparing the popularity trend line of different firms, you can sometimes observe how one company’s growth affects another company’s decline. For example, when I searched facebook.com, the trend line indicated the site grew in popularity at a steady fast rate between July 2007 and October 2009. Myspace.com showed the opposite—a steady decline in popularity between those same two dates, which would reasonably indicate the extent to which the emergence of facebook stole its marketshare.
When I searched “The Killers,” the trend looked almost seasonal—spiking in a regular manner. To help explain some of the points on the line, Google labels them and indicates an explanatory news story or press release (e.g. The Killers Beat Guns ‘N Roses to the Top of the UK Charts), which can be useful. However, the site would be even more effective if it included a similar explanatory citation for every large peak and dip in the trend instead of arbitrarily noting some points while leaving out other, more prominent ones. These explanations would be useful for a marketer to understand what types of events may be influencing a product/service—or in this case, band’s—popularity.

Upon using the Zeitgeist’s hot trends feature to see the top 100 fastest-rising search queries in the U.S., I was surprised that I had never even heard of most of them! Although a lot of the queries listed look like nothing more than a bunch of lame celebrity gossip, it does list some businesses (e.g. Fran’s Chocolates)…which may or may not be relevant/useful if the business you’re in has some stake in chocolates or food in general.

The best way for a company to use social media to gain consumer insights depends on the type of information it’s trying to understand. If the company is trying to understand what college girls’ biggest frustrations about their current cosmetics are, it can host an online chatroom or forum that allows these girls to not only express their frustrations, but also how they mitigate them. Conversations like these can help marketing firms develop or communicate products that better satisfy their prime prospects. P&G uses this technique—“consumer council chats”—to gain consumer insights. When I was working on Downy, I organized one of these chats to better understand the reasons why consumers were or were not purchasing and using the brand. This chat revealed a lot of interesting information. Oftentimes some of the most surprising and useful insights to be gained from such media are ones that indicate that your consumers are misinformed about the product or has current irrational behavior that can be easily modified with proper marketing communication.

Also, social websites like Facebook are really useful to marketers whose target market is high school/college students. The number of different applications on Facebook amazes me. You’re able to view the different websites other users are visiting, their interests, etc. Perhaps more importantly than the information these features directly suggest (e.g. Favorite celebrity) is seeing which applications are being used most often and understanding the appeal of these applications. This information can be useful to companies like Amazon, Ebay, and Google in further personalizing their own services.

In addition, if the firm is trying to understand how much personal information college students are willing to publicly disclose, it can observe these students’ facebook profiles. By understanding how “open” these prospects are (which, we know, is pretty open), the company can further realize how to design their services. (For example, I’m assuming that there was a time it seemed strange for people to be able to see that you were online on AIM before instant messaging became popular. There might have been some key insight from observing people’s habits on other sites that led instant messaging services to allow you to display certain information and not others.)

Walmart and Data

I believe that Walmart has definitely used its enormous database to successfully create a meaningful experience for a certain group of consumers. As the article quoted, “Shoppers might buy cold medicine along with chicken soup and orange soup during flu season, but not all of those products need to be priced at rock-bottom…the other items in the basket might not be the lowest price in town, but the entire basket will be 10 to 20 percent less.” Walmart not only uses the information to offers consumers cheap products at the right time, but more importantly, it offers many people—particularly moms—a sense of pride in being smart shoppers: taking care of their family while saving money. I think that this sentiment fosters a sense of loyalty that many people overlook…usually the obvious advantages of shopping at Walmart is that it sells “cheap” products. However, there’s a significant difference between “cheap” and “good value.” The loyal consumers consider Walmart “baskets” to be a good value.
Although I think Walmart has created a distinct shopping experience, I still believe the company can do more to further refine this experience. As the article notes, Walmart has historically focused on their products, not their target consumers—although the latter kind of fell into place. This strategy probably has to do with the high costs of obtaining such rich information. However, perhaps Walmart can leverage the information they already have…or maybe the information their suppliers already have. For example, P&G supplies a lot of Walmart’s products, and the basis of P&G’s competitive edge is linked to its immense investment in consumer market research. Therefore, perhaps Walmart can obtain information from such suppliers. In fact, I remember reading an article about how P&G already discloses information about the consumers of its products because doing so benefits both parties. In any case, Walmart should strive to use the information it has to develop an even stronger, more conscious sense of loyalty within its most regular consumers. Compared to Walmart shoppers, Target shoppers seem to be much more enthusiastic and expressive about the fact that they shop at Target.
There’s a fine line between exerting “positive pressure” on your suppliers and taking advantage of them. To answer the question, I believe that Walmart is doing both: reducing their suppliers’ profitability in the short run and making them more efficient and competitive in the long run. If Walmart has the ability to track purchases in real time, it only makes sense for them to order merchandise immediately—order shortages and excesses are expensive. In fact, if these suppliers are able to stay on their feet when it comes to Walmart, this means that they will be equally efficient when it comes to other retailers who aren’t as strict. Ultimately, the pressure these suppliers receive from Walmart make them more competitive against other suppliers competing for shelf space in other retail stores.
However, it might be a bit unreasonable for Walmart to punish suppliers who miss sales goals with future tough negotiations if the reasons for those missed goals were not feasibly preventable. Normally, enacting such stringent “take it or leave it” conditions would deteriorate business relations and ultimately hurt Walmart, but of course, due to Walmart’s size and prominence in the marketplace, there’s a lot of “bullying” involved.