Wednesday, November 11, 2009

Facebook - A New Customer Experience

I find it amazing at how broadly used Facebook has become. It started as just this social networking site that you could only join if you were in college with an official college email address, and I only originally got one because everyone else had one. Now it is this global network that virtually everyone seems to be a part of. Companies are taking advantage of this opportunity to market themselves through this virtual world.

First, let’s look at how these companies are utilizing Facebook to gain insights about the consumer market. Companies make pages and Facebook users then become fans of the page. I’m not positive, but I’m pretty sure that if you are a fan of a page then that company can then see your profile (which is usually restricted to only your friends or networks). Therefore, any given company can see the profiles of the people who are interested in their company. These people are a good representation of the people shopping at their stores or somehow spending money with this company.

This information can be very valuable to a company if they use it right. They have a lot of information about their consumer market – their likes, dislikes, favorite TV shows, favorite music, interests, basic background information, and more. They can compile all this and find trends and what is common among everyone who has become a fan of the page. They can then use this information to market consumers.

For example, let’s pretend Blockbuster has a fan page. Maybe they look through the profiles of all of their fans and discover that a large number of people have listed Couples Retreat (or another movie in theater that has yet to come out on DVD) as one of their favorite movies. Blockbuster can use this information by advertising Couples Retreat before it comes out on DVD, telling people to come rent it on the day it comes out. They can use posters and other advertising campaigns within the store to draw people in. Once they are inside, there’s a good chance they will rent more than one movie, leading to higher profits for Blockbuster.

Now let’s take a look at how companies are utilizing Facebook to create customer experiences. As mentioned in class, many companies simply copy and paste their website onto a fan page. This is kind of boring and pointless. If I wanted to see what a product was about, I’d go to their website, not search for their Facebook site. When companies do this I never become a fan of their page unless I like their product so much that I do it anyway. Other than that, I like to look at more interactive pages. I like when companies will have updates on their pages, and fans will comment on new uses for the product or something similar.

If a company can be successful at this, they can draw in a lot of potential customers. I’m pretty sure fan pages can have games on their pages, so maybe if one person really likes a product and becomes a fan, and then thinks what’s on the fan page is really cool, they’ll tell their friends. Because word of mouth is a very useful tool, these people will trust their friend’s advice and take a look at the page. Hopefully they will find it really cool and fun too. Even if they didn’t have an interest in the product before, they may now consider buying it.

Facebook really is a useful site for companies. To be honest, I mostly just use it for the pictures – I love to take pictures so I can share all those by tagging my friends and see others’ pictures of me when they tag me. I never search for companies to become a fan. So, if a company is successful in finding me and gauging enough interest that I become a fan, I would definitely consider that a job well done.

Tuesday, November 3, 2009

Monopoly is More Than Just A Game

Wal-Mart is quite an incredible company. The fact that they have grown into such a giant monopoly obviously must have taken an extremely smart (or lucky) mastermind. Now that they have such large control over the economy, the vast amount of information they have is almost overwhelming.

With all the information this company has been able to gather, I think they have done a great job of turning this into a competitive advantage. Like with the knowledge that the sale of pop-tarts and beer shoots up during a natural disaster, they can use this information to predict what the consumers want, possibly even before they know themselves. This data greatly helps with what the article calls a “retailer’s twin nightmares: too much inventory or not enough.” This also helps to position themselves above other retailers like grocery stores. If they know a hurricane is on its way, they can heavily advertise pop-tarts and beer.

Although this information provides a great benefit for the company, I think Wal-Mart is using it quite selfishly. In the natural disaster example, they are using this information to make sure they have enough inventory to meet the demand. This helps them out, but it doesn’t really provide the consumer with any benefits; they would have bought these products anyway. Sure, lower prices, but Wal-Mart is supposed to provide that anyway. They are not providing any additionally benefit to their customers; just reaping in the benefits of this data themselves. Additionally, they are hording all this knowledge to themselves. They stopped selling this valuable, profitable information to other retailers to ensure that they are top of the game. Although this is beneficial for Wal-Mart’s profit, they are increasing their monopolization and decreasing any chance any potential competitor may have to succeed.

Wal-Mart does have a great amount of information about their shoppers but I have never really been concerned with that. Maybe it’s just because I generally pay with cash. I do use my debit card on occasion, but I’ve never really seen that as a threat. The fact that Wal-Mart can get my information from my bank is a little disturbing, but I highly doubt they’d go through that much trouble when I only use my debit card there maybe twice a year. If anything they’d go for the heavier shoppers. It is still unsettling that Wal-Mart has that much influence over a bank. Anyway, even if they did go to the trouble of getting every single shopper’s credit history and mortgage rate, what are they going to do with it? That’s not very helpful. They’re more concerned with trends, like what items tend to be sold together in a cart (which they can track with my cash purchases too) and what items are sold seasonally. They don’t have much use for my background check.

On the topic of Wal-Mart’s suppliers, I think they are driving them way too hard. Wal-Mart has the information to better these suppliers by making them send products at a very close to accurate rate to which they are being sold in store which is better in the long run, but the suppliers have no say whatsoever in all this. Additionally, the article stated that there is a good chance that in the future the suppliers will own the products on the shelf until they are sold. This benefits Wal-Mart greatly, but now the suppliers must bear the cost of those unsold items. And it’s not like the suppliers can say no – Wal-Mart is so big and a large (or entire) portion of their business. What Wal-Mart wants, Wal-Mart gets. End of story.

Tuesday, October 13, 2009

The Innovation of Innovation

When thinking of a creative brand, Apple comes to mind. It has innovation written all over it. From reconstructing the way we see MP3 players to a whole new format for computers, Apple seems to have the golden touch.

First, let’s talk about the innovation aspect. Until maybe about 7 or 8 years ago, Apple wasn’t close to what it’s become today, or at least in my eyes it wasn’t. When I was in elementary and middle school I absolutely despised working on Apple computers. They were slow, they were set up weird, and I didn’t understand them. Dell computers were so much better. Besides computers, nothing else Apple made existed to me. I had never heard of any other products.

Then sometime in high school the iPod became huge. The closest thing I had to an MP3 player at the time was a CD player that could play CDs with MP3 files on it. Only a few of my friends had MP3 players anyway, most of us just stuck to the good ol’ CD player. Within a few months EVERYONE had an iPod. And when I say everyone, I mean everyone. Apple somehow managed to innovate the idea of a somewhat popular MP3 player into a must-have item with the iPod. They completely took the MP3 player industry by storm and left competitors without the slightest chance.

After the iPod took off it seemed Apple was everywhere. They seemed to come out with a new version of the iPod every few months, with the mini, the nano, the video, etc, that I couldn’t keep up. Before I knew it my pretty blue iPod was about four times the size of the new ones, so I gave in and bought another one. At least one of my reasons for buying was for the better battery life and not so completely vain. This leads back to the article, “The New, Faster Face of Innovation.” With the fact that testing new ideas has become so cheap and easy, Apple seems to be spitting out new products (or new versions of current products) like there’s no tomorrow. It seems like every other person I bump into has an iPhone, which I still refuse to blow that much money on. Yet.

The creativity side of Apple has a big impact on the company’s success. Every product they come out with has the same sort of idea of a clean, easy-to-use look. When you see one of their products, you usually know it’s by Apple just by the style. They use the same simple patterns which helps make their products easily identifiable. And they seem to have a way to customize just about every product. They’ve got a million different designed covers for their macbooks, cool covers for iPods (along with the fact that they come in different colors anyway), and so much more. This company has creativity wrapped around its finger.

Although I used to hate those slow, confusing Apple computers, I’ll definitely admit that that has changed. I’ve got my iPod that I probably use on a daily basis (a necessity for working out), and my macbook that I absolutely love (Dell is not nearly as cool anymore). I even used to have a pink cover for my laptop until it pretty much turned black from dirt and broke during an accidental dropping of my computer (oops). At least my laptop is fixed now, thanks to the amazing Genius Bar Apple so creatively came up with and my awesome warranty that has come in handy more often than I could have hoped for. So are innovation and creativity a key aspect for success? Absolutely.

Sunday, September 27, 2009

Predictably Irrational

While reading the chapter “Predictably Irrational,” I found the experiments and outcomes quite interesting. It is amazing how expectations can have such a profound impact on preferences. However, I don’t feel like this is a huge surprise.

I think the primary lesson from this chapter is that brand image is more often than not strong enough to either improve or detract from the likeability of a product. Like the chapter noted with the Coke and Pepsi experiment, Coke received a better critique when the subjects were shown the Coke symbol. Because people tend to associate a positive image with the Coke brand, subjects enjoyed the beverage more than Pepsi when seeing the red swirls. However, there wasn’t much of a difference between the two products when put up to a blind taste test.

I think another underlying lesson is that stereotypes and biases exist everywhere and are unavoidable. The numerous experiments proved this. There is always a preconceived notion about a product or a brand or just about anything, and this notion affects the likeliness of the product or brand. There is no way around this; it is just a fact of life.

This information can be very valuable to gaining insights and creating valuable experiences for our customers. If we know our customers value something in particular, we can associate whatever that may be with our product. Based on the experiments in this chapter, our customers are likely to carry over these positive feelings to our product.

Ariely provides quite a few examples throughout the chapter, but the main one is vinegar-laced beer. He added vinegar to one beer and left the other untainted then let his subjects taste each and decide which one was better. When given as a blind taste test, most people chose the vinegar-laced beer. However, when informed beforehand that vinegar was added to the beer, most chose the regular beer. This is because most people associate negative feelings with mixing vinegar and beer since it is not a normal combination. Additionally, when the subjects were told to taste each beer before being told that one had vinegar, their responses were similar to the blind taste-test: most chose the beer with the vinegar.

It’s amazing how different the reactions were when either being informed of the presence of vinegar before or after the tasting. This is undoubtedly because of expectations. In one instance, the subjects had an expectation of the vinegar in the beer tasting bad, and the other instance no expectations existed to alter the outcome. They were told about the vinegar afterward, but because they were already able to make their own decision about the taste of the beer, this did not alter the answer they gave.

A real life example of this concept exists with Apple. I feel like Apple hasn’t been nearly as prominent as it is today until maybe five years ago when the iPod became a big deal. They managed to reshape the idea of an mp3 player into a product no one could effectively compete against. They continued to create new products and become a well-known and highly respectable company. When they came out with the iPhone, it seems like everyone swarmed to buy one and didn’t even think twice about blowing $600 on a phone. If Apple had come out with this product five years ago before gaining such a strong reputation I highly doubt the iPhone would be as well known and as widely used as it currently is.

Wednesday, September 9, 2009

Persona

When trying to determine ten characteristics of myself to help a marketer create a persona, I decided the best way would be to lead them through a short-version story of my life. That way the marketer can really get to know who I am from the core by learning where I come from. By understanding my past it is much easier to predict my future product purchasing decisions. Here we go!


The Basics
When describing myself to a marketer to attempt at an in-depth persona of myself the basics are crucial. I am a 21-year-old Caucasian student coming from an upper-middle class typical family: two parents and two brothers. I’ve been raised a Christian since before I can remember. This information can be useful to a marketer because it can easily place me into a target market.

Across the Country
I was born in a tiny no-one-has-ever-heard-of-it town up in Massachusetts. I never really considered my family as big travelers besides our annual visits to Texas where my parents are both from. And of course the occasional trip to Disney World every kid dreams of. When I was 12, we moved to Houston to get closer to family. I say I’m a Texan who got here as fast as I could. We stayed in Houston where I went to high school, and at the end of that my parents moved to Virginia and I came to Austin for school. In the meantime, my older brother by two years moved to California for seminary. Soon enough my other brother, who’s a year younger than me, moved to New York City to go to school at Columbia. And then my parents moved to South Carolina for my dad’s job. Our family is now spread all of the US, and the farthest west I’ve ever been is Colorado. That’s right, my brother lives right outside LA and I have yet to visit. I told you we weren’t much of travelers.

Childhood Memories
My childhood was quite simple. At least compared to life now. Because our town was so small, everyone knew who everyone else was and all about them, and at my young, naïve age I thought that was a good thing. So I had lots of friends and school came easy. How hard is elementary school anyway? Summers were great; we had a lake house about 30 minutes away and we would stay there the whole summer. My three half-brothers from my dad’s first marriage would come live with us, so the season was spent with my parents, five brothers, and golden retriever pretty much living in the water. Those were the good ol’ days.

Olympics?
The one word that could describe many hours of my childhood is gymnastics. Of course all my gymnast friends and I thought we’d go to the Olympics but you can see how that turned out. I started when I was just three years old, spending hours upon hours at my dance and gymnastics studio. I danced too, but gymnastics was my passion. I was never really good in gym meets, but I sure had a lot of fun. However, when I moved to Texas, I quit dance and focused on gym. I started at a gym with a very promising reputation and that’s when I realized how awful my technique was. Saying the gymnasts there were really good is an understatement. So I worked hard and had some amazing coaches and before I knew it, I became the state champion on floor and second on bars. Ah, the glory days. But then I realized that I pretty much had no life besides my calloused hands and my permanently damaged ankle, so I quit a week before I started high school.

High School Glory Days
Okay, they weren’t that glorious. As soon as I got to high school I realized I needed to do something because my life before now consumed by gymnastics was gone. So I decided to start dancing again. Nothing else seemed to interest me. So I tried out for our drill team and became a Fabulous Falcon Flair. I absolutely loved it my first year, but by senior year I was miserable. As soon as I realized how political everything was and how your parents involvement in the booster club pretty much determined how “good” you were, I stopped caring. I managed to make it through without quitting, but while everyone was crying after our last spring show a couple of my friends and I were celebrating. Besides all that, I kept my self quite busy in high school – AP classes, a part-time job that usually ended up being about 30 hours a week, and other random extra-curriculars that I didn’t put much effort into. I didn’t have time with dance and work taking up so much time. By the time I graduated I was burnt out.

Best Days of My Life?
College, the next stage of my life. After being so ridiculously busy without an ounce of free time in high school, I decided to do the opposite in college. I still worked part time, about 20 hours a week, and took a normal course load. So I wasn’t doing nothing, just not as much as in high school. Well I got bored pretty quick, so I decided to join Alpha Kappa Psi in the spring of my freshman year. Pledging definitely took up a lot of time, and was undoubtedly my favorite semester in college. Ever since I’ve kept myself quite busy.

Makin’ Money
The part time jobs I had in high school and college are the same. I started working at Texas Roadhouse three months after I turned 16 and have stuck with the company since. I started as a hostess and became a server when I turned 18, and when I came to Austin I transferred to one of the Roadhouses here. I am currently a bartender, which probably has to be one of the most fun jobs. I get paid to talk to people while mixing drinks.

Current Mid-life Crisis
At the time being, I pretty much have no idea what I’m going to do when I graduate. I already hate being a senior. I don’t know if I want to go straight to grad school to get my MBA or try to find a job. I love marketing but don’t really know what I want to do with it so I guess I’m keeping my options open. And I’ve always assumed I’d go straight to grad school but now I may want to work for a little first. Decisions, decisions, decisions.

When I Grow Up
My future goals are pretty simple and probably predictable. I see myself getting married and having two to four children – see my current family. I plan on continuing my career but my family comes first. My mother never worked until I got to high school, and it was nice having a mom who stayed involved in my life. I don’t plan to do anything that extreme, like not working for at least 15 years, but I definitely want to give my family the same amount of care. That’s all I’ve really got for my long-term goals. The future is unknown.

Random Traits
I’ll go ahead and make an attempt at describing my personality. I’ve always found that quite difficult – the whole describe-yourself-in-three-words thing. Well I was pretty shy as a kid. I got along with everyone but only came out of my shell when I knew everyone pretty well. I was really shy when I moved to Texas; not knowing anyone is quite intimidating. I didn’t really become outgoing until high school, and I would say that could describe me now for the most part. I am extremely upbeat and optimistic, although sometimes a little too much to the point of being naïve. I’ve gotten better, but I always like the think the best of things. I tend to trust people, and once again sometimes a little too much. I’d rather take chances and enjoy life than be left wondering what if.