Social Media: A New Phenomenon

Social media has revolutionized the way people can spend their time. While sitting in class, I can scan the room and see that at least fifty percent of people with laptops are on Facebook or Twitter. It seems like nowadays, everyone has Facebook. What started as a “college students only” social networking site has quickly morphed in to a phenomenon that no one can live without. My mom has a Facebook. My roommate’s cat has a Facebook (Sadly, I’m dead serious). Facebook is a “cool” trend that hasn’t lost its appeal yet. Now that basically everyone in North America (and even the world, for that matter) has a Facebook—animals included—companies are beginning to utilize Facebook’s tools and networking to capture their customer’s insights and to provide them with an experience that is new and “cool.”

The other day, I was sitting on my couch watching TV. Unfortunately it was live TV (you can see by my earlier blogs that I’m obsessed with Tivo), so I had to watch the commercials. A Honda commercial came on. This commercial was nothing out of the ordinary until the end. Honda has created a new slogan—“everybody knows somebody who loves a Honda.” At the end of the commercial the logo flashed, but instead of giving their traditional website (www.honda.com, for anyone who is interested), they gave the link to their Facebook page. Now let’s take a second to analyze their new slogan. Everybody knows somebody who loves a Honda. Honda is trying to capitalize on the social networking craze by connecting people through their brand. By marketing their brand as using Facebook, they are hoping to generate a network of people that love and can talk about their Hondas.

After this commercial, I went to the Honda Facebook page. But first, a little Facebook business page background. In the last couple years or so, Facebook created a way for businesses to make a page to attract “fans.” Anyone who has a Facebook can become a “fan” of the product or brand and can write on their wall talking about their experiences, likes, dislikes, etc. Now back to Honda. Honda’s page comes equipped with over 200,000 “fans,” a wall where people can post whatever they want to about Honda, photos, videos, links to the websites, etc. They also have their slogan in the corner stating, “Can we all really be connected through Honda love? Join our global social experiment and let’s find out together.” By tapping in to this networking site, Honda is able to observe customers and see what they truly like or dislike about Honda. They even have a specific tab for polls where Honda can ask questions about their brand. This helps them gain insights about what their customers want. It’s actually very smart in my opinion. Honda is basically creating an enormous family of people that love their brand. They can utilize Facebook to get out new information about their products, find out what people are looking for, and create an experience for the modern consumer.

I have also noticed a growing trend in non-profit organizations using Facebook to gain awareness. Recently, I have become a fan of Pawsitively Texas, an organization dedicated to finding homes for stray dogs through social networking. On their page, they post pictures of dogs that need a home and people comment on them and say whether or not they can adopt them or if they know someone who can. Here is an organization based solely on the networking that Facebook provides. Organizations and companies are increasingly using these social networking sites to gain insights and awareness for their brands.

My favorite actor is Kevin Spacey. Therefore, I chose to look up Kevin Spacey when using the two tools, zeitgeist and blog search. Zeitgeist was interesting because it told me who all is interested in Kevin Spacey. Apparently, Europe loves him—not that I blame them. On the side of the trends page, it also provides a few articles with Kevin Spacey in them. However, I found that a lot of the articles are outdated (some of them from 2004). I also found that Hungarian people search for him the most besides the US. Although this is kind of interesting to know how popular Kevin Spacey is among the world, I feel like this tool doesn’t provide enough actual substance.

After playing with the zeitgeist, I moved on to Google blog search. I found this tool to be much more substantial. Instead of finding out how many people are searching for Kevin Spacey, I can find out what they are saying about him and his new movies. If people used blog search to identify what bloggers are saying about products or brands, they can gain more information than if they just figured out how many people searched for them.

Social networking and blogging is on the rise and doesn’t seem to be suffering. More and more people are flocking to their computers to tell the world what they are doing, what they are interested in, and how they are feeling about certain products, brands, people, trends, etc. Companies must find a way to use social media to create a valuable experience for their customers and to become more accessible and more attractive to their target markets.

Side Note: Kevin Spacey is currently working on a movie about the founding of Facebook.

What Walmart Knows About Customer's Habits

Before I start answering these questions and talking about the article I just read, I need to inform you of something. I hate Walmart with an absolute passion. I hate what it does to small businesses, I hate how dirty and gross most of them seem to be, and I hate that my local Walmart just recently was painted brown. Can you think of an uglier color to paint a store? So I am obviously a tad biased against Walmart. That being said, I will try to approach this as if it were a store that I didn’t dislike.

As I was reading this article, I had very mixed feelings. I think that in some cases Walmart uses its “mountain” of customer data in an extremely successful way. By being able to tell that people tend to buy accelerated amounts of pop tarts and beer (and really, who can blame them?) during natural disasters, Walmart was adequately able to fulfill the needs of people during a crisis. That’s very important to me, and it is also the reason I do not shop at HEB anymore. Every time I went there, they would be out of something I needed. You would think that they would figure out that 90% of UT students shop there and they should keep their shelves properly stocked at all times. But no, they haven’t caught on yet. This is where, in my mind, Walmart illustrates its competitive advantage over other stores. As long as they use their customer data to keep the shelves stocked and their customers happy, they are creating a viable competitive advantage over other stores.

Here is where my negative feelings come in to play. Walmart can figure out my social security number, drivers license number, mortgage payment (well, I don’t exactly have a mortgage payment, but that’s not really the point), and other really creepy personal things that I only want my mother knowing??? That is not okay with me. Lee Scott (CEO of Walmart) could sit down, look me straight in the eye, assure me that my personal information would never be used in a harmful way, and I STILL would not be okay with them knowing that much about me. In the article, Ms. Dillman reassures us that Walmart has never used credit card info to find out personal information about people. But how can we really believe her? It’s not only scary that they will use my personal information, but I think it’s creepy that they even have access to it. They say they don’t use it now, but who knows what will happen in the future? Sarah Stansberry, from AccuData America, comments that companies can find extremely personal information using email addresses. Though she says they have never done work for Walmart, how can we be so sure that they won’t in the future?

So far, to the customer’s naked eye, Walmart is using its technology for good. They are benefitting their customers by understanding what we buy, when we buy it, and what we buy it with. Like I said earlier, I hate understocked shelves and I’m sure others do as well. By utilizing their technology to understand their customer’s needs, Walmart can make their customers very happy while asserting their competitive advantage over places like HEB. During the holiday season, I tend to eat a lot of pumpkin based products. Pumpkin pie, pumpkin coffee cream, pumpkin gelato…basically, if it has pumpkin in the name, I’ll eat it. HEB was out of pumpkin pie mix the other day. If they could understand what their customers buy and when they buy it like Walmart can, maybe they could retain more business.

I believe that Walmart is doing a good job with their technology. However, I have a few suggestions. In this economy, more and more people are turning to Walmart for everyday products that they would normally buy at a more expensive place. People are doing anything they can to save some money. Because of this, I believe Walmart should use its technology to create an experience that appeals more to a higher income crowd. In Plano, Walmart opened a “luxury” store. This store has everything that other Walmart stores have, but it also has hardwood floors, a very nice meat counter, an extensive wine selection, and not so harsh lighting. If Walmart opened more of these stores, I guarantee I would stop loathing them as much (I would still hate them, just not as passionately), and I might even occasionally shop there. Here is where Walmart can use people’s personal information for good. If they recognize that people in a certain store are spending more on higher end products, such as expensive electronics, organic vegetables, or imported beer and wine, Walmart could consider opening a “luxury” store in that market. If Walmart could use their data to better understand customer’s wants, and not just their needs, I believe they would be able to create a major competitive advantage over other stores.

The Newer, Faster Face of Innovation

The Oxford American Dictionary defines the word ‘innovative’ as introducing new ideas that are original and creative in thinking. Frankly, I think this is a very vague definition. This definition makes it sound like even bad ideas are innovative because they are original and new, such as a robotic vacuum or edible clothing. Just because these ideas were original and semi-creative, I don’t believe that made them necessarily innovative. (Maybe the robotic vacuum, but they don’t really work like I would want them to.) When I think of the word ‘innovative’ I think of a product or service that is so cool, I just can’t live without it. Something that will change my life. Something that everybody wants. This something is Tivo.

Tivo (THE original digital video recorder, in case you didn’t know), in my opinion, is the greatest invention ever to be invented. When Tivo first came out with DirecTV, no one had ever even heard of a DVR before. This makes it new. Before then, the only way to record something on television was with a VCR (and really, who even owns those anymore??). This makes it original. And if you don’t think that Tivo is creative, there is something wrong with you. Not only does Tivo diminish the need for those clunky, annoying videotapes, it completely changes the way to watch television. Sure, you can record whatever you want, whenever you want. But, you can also look up shows in advance to see when you should record them. For example, if I love the show CSI—which I do, who doesn’t?—I can use Tivo to search all the upcoming CSI shows in the next two weeks. Well, since CSI comes on every Thursday night on CBS, I can even go ahead and set a “season pass,” so that Tivo knows to record CSI every Thursday night at 8:00 without me having to remind it each week. Yes, Tivo is that smart.

Not only is Tivo original, new, creative, and any other synonym you can find for innovative, it is easy to use. As Erik Brynjolfsson and Michael Schrage point out in their article, “The Newer, Faster Face of Innovation,” companies are finding rapid ways to test out new products. Prices of experimentation are also decreasing, so many more “innovations” are being tested and put in to markets. The increase in inventions means products and services need to possess a competitive advantage over other products and services. Tivo has all of the great qualities I previously rattled off, plus it’s easy to use. I have to say, I never really mastered the art of recording TV shows on videotapes—partly because I was too young, and partly because it was a major pain. Anyone can use and master the art of Tivo, even my grandparents (which trust me, is saying a lot). All the remote buttons are very self-explanatory, and Tivo even has a help page!

With all of these new forms of digital video recorders coming out in to the market, Tivo needs to distinguish itself from the pack. At my apartment in Austin, I actually have AT&T Uverse with DVR. I have to say, I much rather prefer Tivo. Uverse only lets you see a shows a couple days before they are on live, so if I am going out of town for the weekend, and there is something I want to record while I’m gone, there is a good possibility that I will be screwed because Uverse can’t see that far into the future. Tivo can see two weeks in to the television future. The only problem with Tivo, compared to Uverse, is that is significantly more expensive. This is the price Tivo pays for coming out first. With innovations becoming cheaper and cheaper to produce, they are also becoming cheaper to purchase. Basically, all of these new DVR manufacturers, such as AT&T, Verizon, and DISH, are reaping the benefits of the “improving economics of digital technologies.” They don’t need to cost as much to consumers because they don’t cost as much to make. They didn’t need to simulate test markets, because Tivo was already a huge success.

As it is so glaringly obvious, I love Tivo. I think it is the greatest invention ever made (besides that whole electricity thing….and maybe cars, too). It makes TV watching a completely new experience. Imagine this: you’re lying on the couch watching the new episode of Survivor. Jeff Probst (love him) is about to read the votes off to see which cast member is being booted off the island. He’s reading the votes aloud. You’re on the edge of your seat. Then, your mom calls. You have two options: answer, and watch the replay on YouTube, or ignore the phone call, and hear incessant whining from your mom about how you never answer the phone, blah, blah, blah. Tivo gives you a third option: pause live TV. I mean seriously, can you think of anything more creative and innovative than pausing live TV? That has never been done before. Tivo is a great, innovative product in the marketplace right now, but is facing some competition from its newer, cheaper competitors. I’m eager to see how Tivo handles itself in the future, and to see which DVR will prevail in the end. (GO TIVO!)

Predictably Irrational: The Effect of Expectations

In “Predictably Irrational,” Dan Ariely explains the importance and impact of expectations. Put simply, everyone’s experiences are shaped by their prior expectations of that experience. If I go to a movie that has gotten rave reviews, there is a good chance I will like it more than if it had gotten bad reviews. Everyone is affected by expectations in every day of their lives. Ariely also explores the effects of image on a consumer’s experience when he does his coffee experiment. Though no one actually used the odd additions to their coffee, more people were likely to spend more money on the coffee when the additions were in a fancy container. I believe the same exact thing is true for Starbucks. How much is a cup of coffee really worth? Well, that depends on who is selling it. I am an avid coffee drinker, though I am not a snob about it. I drink my Folgers every morning and put regular Coffee Mate in it. Yet, if I skip coffee at my apartment and have to buy some at another place, I will always choose Starbucks or Coffee Bean and Tea Leaf over 7-11. This is completely irrational because I will end up spending about $3 more than necessary. Even though the coffee might not be any better (in fact, Starbucks tends to burn a good sized hole in my stomach), it still seems better because of where it is coming from.

This is extremely important for marketers to understand. They aren’t only selling a product; they are selling the packaging, the store, and the experience that comes with buying the product or entering the store. If a retailer can make you spend more money on a product by making it more visually appealing, or by adding an ingredient that appeals to a majority (for example, making something sugar free might appeal to mothers), then they have done a pretty good job marketing that product. Consumers also will buy what they know. If marketers can make a brand salient in a consumer’s mind, then more and more people will tend to buy that product. The Coke example conveys this perfectly. More people like Coke over Pepsi when they know they are drinking Coke. Coca Cola has employed extremely effective marketing to get people to enjoy their drink just because of the name.

Ariely uses the MIT beer experience as his main example to illustrate his point. By using two different beers—one with vinegar, and one without—Ariely observes how people react to the beers when they know about the vinegar and when they don’t know about the vinegar. Because vinegar carries a negative connotation in most people’s heads (doesn’t pretty much everyone cringe at the smell of vinegar?), they tended to not only dislike the vinegar-laced beer, but they even winced when sipping the beer. However, people who were not informed that vinegar was an ingredient ended up liking that beer more than the regular beer. This is a glaring example of how connotations or expectations can shape one’s perception of a product.

A perfect example involves my best friend in high school and her mom’s homemade meatballs. My friend had been talking up these meatballs to me, so I just had to have some. She went on and on about how they are homemade (which I think always carries a positive connotation and raises one’s expectations…at least, my expectations rise when I hear ‘homemade’). So I sit down and eat a meatball. Sure enough, those were some really good meatballs. So good, in fact, I made sure her mom knew a couple days in advance every time I came over so she could make me some delicious meatballs. One day, my friend was hosting a soccer party and her mom made the meatballs. Before anyone had eaten them, we were sitting around waiting on food, and I kept talking about how good they were. Naturally, all of my friends were anxious (we tend to get very excited about the prospect of good food). As she is serving them, I asked her how she made them. She quickly responded, “Oh you just get some meatballs and mix in ketchup and jelly.” My jaw unhinged itself a little. Ketchup and jelly??? That’s disgusting. At least, it sounds disgusting. Everyone at the party heard this. Some people wouldn’t even eat the meatballs after that. Some people took one bite, made a face, and quietly pushed their bowl aside. These wonderful meatballs were ruined when people find out their true ingredients. This example just goes to show how powerful expectations can be, and how they can affect one’s behavior or experience.

This article is definitely something I will always consider when pursuing my future marketing career. How can I make my brand have a positive connotation? How can I increase consumer’s expectations of my brand?

Understanding Me

There are many times I walk into a store and am tempted to purchase almost every product displayed. There are other times where something, or even someone, turns me off to buying their product. I tend to believe I am a fairly average 21-year-old female consumer. I don’t have extraordinary tastes, I’m not cheap, and I enjoy quality products. But I would probably buy more if marketers knew these ten insights about me and my purchasing habits.

Friendliness among employees goes a long way.

I am way more tempted to purchase something if the sales people are friendly. Just yesterday, I walked in to Banana Republic at the mall…a store I frequent very often. (I was even upgraded to LUXE member status for spending over $800 there last year). I wanted to try on a pair of pants I found, so I headed back to the fitting room. There, I was greeted (or, actually, not greeted) by the rudest employee. After about two minutes of heavy awkward sighing as I attempted to gain her attention, she looks at me and asks me what I want. Here I am, standing in a fitting room holding a pair of pants, and she asks me what I want. So I ask for a fitting room and she rudely and abrasively points out an open one to me, as if I was the stupidest human being on Earth. Long story short, the pants fit great, but I left the store empty handed because I refused to buy something from that horrendous woman. I am more likely to buy something if the employees are nice.

It annoys me to no end when I can’t find something that is displayed in the front window

When I am window shopping, and I see a great shirt displayed on the mannequin in the front window, I tend to wander into that store. When I can’t immediately find the shirt in the store without asking for assistance, I leave. Managers need to understand that window displays go a long way. But what’s the point of having great outfits in the window if people can’t easily find them once they get inside? Merchandise displayed in the window needs to be placed in the front of the store.

I enjoy buying products that complement each other

One thing that iTunes does very well, in my opinion, is match up your music tastes using your library. In their new “Genius Bar” located on the right side of the music library, Apple has created a way to suggest new songs or albums based on you listen to most often. This truly is “genius.” I have frequently been listening to a song that I love when I glance over to see new suggestions from the Genius Bar. I then listen to the 30 second sample, and sometimes end up buying that suggested song. Same thing applies at clothing stores. I am more likely to buy a scarf with a shirt if they are displayed together.

You can pretty much get me to buy anything if I can sample it first

Part of the reason I love shopping at Costco is because of the endless amounts of samples. I will buy things I have never even heard of because of those samples.

I HATE unorganized stores

If I walk into a store that is cluttered or unorganized, I will quickly turn the other way and walk out. Shopping is supposed to a fun experience. Sifting through ugly dress after ugly dress while trying to locate a hidden gem is a waste of time. Stores need to realize that cleanliness is very important. You can make ugly products look so much more appealing if they are organized. I refuse to spend half my time in a store searching through crap just to find something I want. Clean up your store, and I will probably buy something from you.

I love free trials

I think the invention of two-week free trials is brilliant. Consider Netflix: I tried their two week free trial last year because my friend recommended it to me. It was free, so why not? To sign up, you have to give them your credit card information. They don’t charge you for anything, but if you want to buy the service after the free trial, they will automatically just charge you. So my two week trial is nearing its end, and I totally forgot to cancel it. So my card is charged, and I get a whole other month of constant DVDs. Now, I am glad I didn’t cancel it. I look forward to getting my Netflix in the mail every week, and I probably wouldn’t have tried it if it weren’t for that free trial.

I am a poor college student always looking for deals

This applies mainly to grocery stores. HEB usually has a deal where if you buy a big product (like a turkey for Thanksgiving), you get a list of other complementary products for free. Last Thanksgiving, I got free stuffing, mashed potatoes, cranberry sauce and rolls for free when I bought a turkey. Also, I use that student discount book all the time. I will try restaurants I was never interested in if I can find a coupon for it.

I enjoy eating healthy foods

Though I am not a complete stickler for all things healthy or organic, I do enjoy low fat options to my usual favorite foods. Low-fat salad dressing, low-fat cheese, low-fat bread, etc. Make something low-fat and I will be more tempted to purchase it.

I love sports…playing, watching, etc

Guys aren’t the only ones who enjoy sports. I am fairly obsessed with all teams Dallas. And the Longhorns, of course. But just because I am a girl doesn’t mean I can’t be interested in sports.

I am willing to spend more when buying electronics

I am way more willing to spend large amounts of money when buying a computer or a TV or a blu ray player than I am on groceries. I believe in a product like that, quality is much more important that price.

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