Using Social Media for Marketing Research

I came across this Frito Lay page this weekend, where they are asking fans to create the next Lay’s chip flavor via a social contest on Facebook.  Pretty innovative idea if you ask me.  Will it work?  Time will tell.  Companies today are getting closer and closer to their customers,  and I see this as an exciting evolution in Marketing Research.  Companies are now getting almost immediate customer feedback and immediate results on consumers tests.  What once took months is now available in days.

In product development before social media, managers would have looked at trend reports (secondary data for my BGMT 311 class), focus groups (qualitative study again for BGMT 311), and other research before launching a new flavor.  New flavors are still risky, even with all of the research done, with the failure rate estimated by some experts on new flavors or extensions at 50%.  While the chosen Lay chip may also fail, the amount of spending will probably be far less than the older traditional methods.

New products and flavors are risky.  There is a lot of research done up front, and then a lot of marketing support is needed at launch to create awareness and demand.  With Frito Lay using social media to help pick their next flavor, what they are really doing is developing a “Virtual Test Market” – running the ideas past thousands of consumers before they make a large investment on product formulation, package design, etc.  I expect to see a lot more of this as social media use continues to grow.

Another great example of a company leveraging social media is Walmart.  Using their new internal social team they brought in, @walmartlabs, they monitor social trends around the clock.  When they discovered a very large amount of people talking about cake pops on Twiiter and other social media outlets, they informed their merchandisers to get them into their stores on a test basis.  The results were so successful, they plan on bringing them back in the future.  

The example above with cake pops is a great example of using social secondary data to one’s advantage – because Walmart was able to react to a market trend almost immediately.  If they would have waited, they may have missed out on the trend and an opportunity for incremental sales.  In the past, this trend would have been reported, at earliest, a quarter after it was established, and it may have just been too late.  Just like technology, food trends are becoming lighting fast (are gourmet marshmallows even a thing anymore?)

I am not a fan of Walmart – but they seem to be really leading the way when it comes to leveraging social marketing research into their overall business model.  Their “Get It On the Shelf” campaign generated over 4,000 product ideas and a million votes.  Walmart announced the first products from this initiative featured recently here.

I have to figure out how to get pies trending on twitter – I have been waiting for that trend for years.


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