Optimus Template

Small Business and Social Networks Are Yet to Be a Match

Posted by Paul Christ March 16, 2010

Entrepreneurs Question Value of Social Media (Wall Street Journal)

It is virtually impossible to escape the hype surrounding social network websites (a.k.a., social media).  The buzz regarding social networks is so strong that all types of businesses are now seriously considering whether they MUST start incorporating it into how they do business.  In particular, businesses are wondering how social networks can be utilized as part of their marketing strategy.  They have heard about the success some companies have had with marketing through social networks and think the time is now right to jump in with both feet.

Yet, for many small business owners their initial experience with marketing through social networks has not gone well.  As pointed out in this story, many entrepreneurs are in the dark when it comes to understanding how social networks can be used to meet their marketing objectives.  And because of this experience they are questioning whether Facebook, Twitter, MySpace and other services are all talk and no action when it comes to being a valuable marketing tool.

Meanwhile, a separate survey of 500 U.S. small-business owners from the same sponsors found that just 22% made a profit last year from promoting their firms on social media, while 53% said they broke even. What's more, 19% said they actually lost money due to their social-media initiatives.

In addition to what is discussed in this story, what other factors affect whether marketing through social networks is something a small business should consider?

Image by KateMonkey

1 Comment

To Regain Importance MySpace Tries a Repositioning Strategy

Posted by Paul Christ March 11, 2010

Once-Fading MySpace Focuses on Youthful Reincarnation (USA Today)

Five years ago MySpace ruled the social media world.  It was considered the darling of Internet startups and eventually was purchased by News Corp. for nearly $600 million.  But like many fast growing companies, MySpace tried to be everything to too many people.  Trying to appeal to many, diverse market segments with what amounts to being the same product is often difficult unless the product is a true commodity (e.g., milk) that nearly everyone wants.  Unfortunately for MySpace, customers in the social media market were not looking for the same product; they wanted a product that was customizable to their own styles.  MySpace's limited offerings opened the door for other social network sites especially Facebook, which by 2007 surpassed MySpace in web traffic and today is far ahead.

As this story discusses, MySpace is now being forced to reposition itself.  It is altering its marketing strategy and taking a more targeted approach.  By narrowing their focus the company hopes to appeal to the under 35-year-old market, with even more emphasis on the under 25-year-old crowd.  The changes in marketing strategy include a new website design, online gaming, new content and renewed emphasis on music and movies.

More than half of MySpace's estimated 100 million users are 25 and younger, according to market researcher ComScore. The 13-to-34-year-old demographic spends 84% of all user time on the service. MySpace intends to appeal to that demographic with a mantra of "Discover and be discovered," a fancy way of saying it wants to be the online venue to find new friends, movie trailers, little-known bands and social games.

In addition to the changes noted in this story, what else will MySpace need to do to once again gain traction in the social network space?

Image by MySpace

0 Comments

Consumer Ratings of Top Supermarket Brands

Posted by Paul Christ March 09, 2010

America’s Favorite Brands (Stores Magazine)

What are the top brands of frozen food, bath soap and ice cream sold in U.S. supermarkets?  If you are not sure then check out this story which provides a nice ranking of brands in 20 consumer product categories (see this page for listing).  While this story and associated listing are worth reading (including the implications of why branding is becoming so important to retailers), a few additional issues should be considered.

First, it is important to understand that the results show the leading brands by category but do not necessarily indicate the top individual products within a category.  For instance, under the Breakfast Cereal category Kellogg is listed as the top brand but the results do not indicate which of Kellogg’s cereal products (i.e., Raisin Bran, Rice Krispies, Froot Loops, Corn Flakes, etc.) is the top selling individual brand.  In fact, the top individual brand in some categories may come from a company that is not ranked as the number one brand.

Second, the story does not offer much detail on how the information was collected other than indicating that consumer wrote down brand names.  However, the research company behind the numbers, BIGresearch, is known to use large consumer research panels and such panels can be very effective when the research is planned correctly.  By correctly we mean proper controls are in place including using appropriate methods for participant selection, data collection and data analysis.  More details on how the branding information was collected could offer more insight into the real value of these rankings.

Third, while the data collection details are not provided, it does not appear that these rankings reflect actual sales but instead reflect customer's recollection of what they purchased.  If the research design is strong these results should be similar to market share information which typically is based on sales.

Respondents were asked to write in the brand name of the product they purchased most often in each of these categories.

Dish Detergent
Dawn 32%
Palmolive 10
Ajax 4

Paper Towels
Bounty 27%
Store brand/generic 9
Brawny 7

Which of the 20 categories listed in the rankings would appear to be least susceptible to competition from store brands?

Image by iboy_daniel

0 Comments