I came across an article recently on Wall Street Journal about "Online Networks" and how companies are utilizing them to perform market research for their products. This article inspired me so much that I decided to write a blog on this topic - Hope you'll find it interesting!!!.Initially, online communities were first launched by tech and video game firms to do their market research, but over the period of time many companies from different industries have started using online communities to understand customer needs. These sites are very similar to any social-networking sites where users interact and socialize. "Del Monte Foods", a food company has created an online community called “I Love My Dog", which consists of nearly 400 members/customers of Del Monte Foods. Market research team is using it actively to interact with customers and share their experiences about the existing products, and also get some insights on what they want in their products. Recently, Del Monte Foods planned to launch a new Breakfast product for dogs, instead of conducting a typical full length survey it sent out a post to the online community on what the dog owners most wanted to feed their pets for Breakfast. Based on their response it developed a product that reflects the needs of the customer.
Many companies are working towards developing online communities, and they are growing at a faster rate. With the help of these communities, marketing team can chat with the customers and get their feedback on newly launched and existing core products. They are creating profiles on well know social-networking sites like Facebook.com and myspace.com, and others like P&G have created their own networking site. These kinds of communities help focus groups to work with the customer directly and also build a strong relationship, which is very important.
One of the common challenges faced by many companies is – consumers in general visit these places to socialize and interact with people but not talk about the brands/products. To ensure that the users participate actively and not lose interest, companies are offering users free coupons, adding online games, sneak peak at new products and many other incentives. They are also working with private firms (MarketTools and Passenger) on how to use Web to assess and shape the way consumers think about the products. For example, Sylvan is planning to launch a new advertising campaign for which it is working with MarketTools to survey a group of mothers.
These kinds of networks reduce the guesswork for marketers, and help them to understand customers better. Companies like Del Monte foods are launching new products by reducing the product-development life cycle (Typically it takes 12months to launch a new product, now it takes 6 months). Apart from that, creating and maintaining online communities requires a small piece of total investment that goes in Market-research spending. According to the firm Inside Research, in the year 2006, the over-all investment to build online network communities by the companies in US was approximately $40 million, and projected to grow $69 million the following year.
