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Monday, May 3, 2010

Social networking forces companies to be alert

New Delhi: Social networking sites forces companies to rethink strategies due to reasons like a customer from Jammu & Kashmir wrote about the delayed delivery of a Mahindra Scorpio on M&M Vice Chairman and Managing Director Anand Mahindra's Twitter page. Mahindra replied with just two words "Arun, Vivek?" referring to his senior executives Arun Malhotra and Vivek Nayer. The effect was instantaneous, reports Neha Dewan & Ravi Teja Sharma of Economic Times.



As online social networks become an integral part of our lives, it is also changing consumer behavior like never before, and making marketers sit up. Blogging, Facebook, Orkut, Twitter and the like, people have begun making choices based on interactions and feedback from friends who also visit the online world. They are also generating content, using it to get information on purchase plans and, of course, air grievances to a truly large and spread out audience.

Social media has provided the perfect powerful medium to express positive or negative feedback. The statistics reveals its growing significance. According to marketing research firm comScore, the social networking category is growing faster (37 plus percent) than the Internet overall (14 plus percent), with some sites experiencing particularly dramatic growth. Facebook, for instance, with 14.5 million unique visitors is inching closer to market leader Orkut's 18.1 million visitors in March 2010. Given that the demographic profile of many of these websites is young people with impressionable minds and long friend-lists, companies can?t ignore the multiplier effect that engaging with them provides.

So static advertising has been put on the backburner and companies are going all out for interactivity on this medium. So the strategy is now to interact or make consumers interact with each other via clever calls to action. For most companies, the mode has been to create fan pages, communities or blogs that give consumers a chance to interact with the brand.

"Traditional product management doesn't apply to social network/media since the primary relationship is no longer user-to-platform, but user-to-user. Therefore companies need to think about themselves as a market regulator, setting the rules and users creating whatever they want within those limits," said,Jennifer L Aaker, General Atlantic professor of marketing at the Graduate School of Business, Stanford University

Internationally, Dell has been improving its revenues and generating sales through Twitter. People following Dell on Twitter get messages when discounted products are available the company?s stores. Dell also uses Twitter to service its customer requests and support queries. Closer home, there's Slumdog Millionaire, which was promoted 90 percent on social media.

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