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March 28, 2011

'Like' my page, but don't forget to love my food

Recently owners of a small time fast-food joint filed for bankruptcy. The fast food joint did not have a dedicated FB page. The petition was declined by the magistrate who commented, "One who never existed can never die!" As the word goes, either you exist on FB or you don't exist at all.

With the ever rising popularity of social networking sites like Facebook and My Space, the virtual taste of food is certainly on an upscale. I was reading an article on the invasion of social media in the fast food industry and was amazed to find that almost all known / little known restaurants and fast food chains in US today have a dedicated facebook page which is full of apps and trigger points for drawing customer attention.  An interesting example was of a restaurant called Lenny's sub shop which launched a campaign offering free half pound sub to every new and existing facebook fan for a week and tripled their fan base in 3 days. Meanwhile, it has to be seen if this fan base is converted in footfalls.

Social media sure facilitates a more advanced and far reaching awareness of the brand and is a cheaper and easier tool these days to gain publicity. Let's list down the various advantages of having presence in social media sites:

·         Increased brand awareness

·         Reviews and feedback on regular basis

·         Innovative ideas at times suggested by consumers themselves

·         Easy place holder for promotions and campaigns

As they say, "All that flutters are not eagle wings" we don't know if the presence on social networking sites is quite the winning stroke.

Imagine a scenario where a small fast food chain named "Beans n Dough" develops a dedicated page on FB. The average footfall on weekdays is 500 and on weekends is 1500. It designs a campaign to attract new customers, increase popularity and improve sales. The FB page has a food puzzle game, solving which the user is entitled to a complimentary coffee on a minimum bill of $10.  The puzzle game is a major hit and has everyone on FB going gaga about it. Suddenly it has a fan base of 15000 over a period of a week and has thousands of 'likes' and innumerable 'shares'. One of the user releases the crack of the puzzle and as a result everyone who visits cracks it. The following week there is a sudden surge of customers. The promo team has done its job. Now the store faces the tricky part. The weekday footfall has surged to 1500 and the weekend rush has reached a dizzying 5000. The store doesn't have the capacity to handle such numbers and the customer service starts to get affected. The workflow is not followed to satiate the numbers and the product quality deteriorates. To fulfill the rise in demand, the store has to order raw material at ad-hoc quantities and at non-economical prices. The whiplash effect of the sudden rise in demand sends shockwaves backwards and the buying department orders large stocks of raw material for the following weeks. At the store, customers aren't happy. The existing loyal customers switch on to other fast-food joints to stay away from queues and the new customers don't bother to visit twice owing to the sub-standard product and the service. What started as a superb marketing campaign proved to be a perfect recipe for disaster for the fast food joint.   

What could be the repercussion of such a situation on the fast food chain?  Negative publicity, customer's criticism, blasphemy. What initially sounded a cool marketing strategy, ended up creating a negative impact on sales and brand image.

Since the nature of food industry is such that there is a need of constant marketing / publicity of products to entice the customers with something new, social networking sites serves as the perfect platform for it. Put some cool aaps on your page, let the customer explore what you have to offer through games and contests, gain word of mouth by expanding your fan base and you sure can do a lot of marketing and that too at a price which you would be too foolish to ignore.

But is this publicity translating directly into increased sales or new customers? What the seller should not forget is that campaigning through social media can fetch one time sale or may be a few more times but an elevation in the number of loyal customers can only be achieved of the rest of the P's of marketing are not ignored.

Unless the promotions are supported by solid pillars of product, price and place - and this holds very true in case of fast food industry - the hype of social media will not last long.

Lets take the example of the big players like McDonalds, Sub way etc.

When they promote the product on a face book page, the user is also made sure of the fact that the product will be fresh and of good quality, it will be easily available and the price will be affordable. The item is absolutely fresh, the supply chain and logistics are completely supporting the warehouse - store business and pricing is sensitive to the average customer's pocket.

Any fast food player, when plans to venture into a new media platform, should make sure to get answers to the following questions:

·         Does increasing fan base translate to increase sales?

·         Do the fast food chains make permanent customers via this media?

·         How long lasting is the effect of every campaign launched?

·         Does liking the FB page actually yield in liking the food?

·         Is it just the freebies which attract customers?

Marketing through social media surely has a lot of advantages these days, given the kind of penetration it has amongst the consumers. But a player has to carefully play his cards to ensure that the visibility it attains through campaigning fetches more and permanent customers instead of shoving them away.

Going back to the stated illustration on "Beans n Dough", can we have ways to control how a viral promotion is limited like a nuclear reaction to harness its unlimited energy to good use? Your suggestions are welcome to be a part of the next blog in this series.

Co authors: Sneha Tarang (sneh_tarang@infosys.com) &

                     Harshad Deshpande  (harshadhanumant_d@infosys.com)

Sports Marketing benefited through Digital Marketing platforms and Digital Value Asset chain

Sports Marketing has always been one of the biggest verticals in any of the world's leading sporting goods industry. It's by far the biggest unit within Brand Marketing for any leading sporting goods industry.

                                                                                                                                 

  • Have you ever wondered why sporting goods companies use professional athletes as their brand ambassadors?
  • What a professional athlete (or asset) would mean to the brand that has contracted him / her?
  • What does the brand mean to the contracted athlete (or asset)?

 

There is a complete value chain behind contracting the asset to realizing its value (ROI). In today's world this value chain is further augmented and supported by various Digital Marketing platforms and its realization complemented as a Digital Asset Value chain.

 

Let's start at the basics - why would someone want to contract a David Beckham and show case him as a brand ambassador?

The answer is simple - he is a huge icon, with a great fan following and people like to follow his trends and products he supports. Companies like to target this audience with major digital marketing campaigns and ad campaigns to enhance the volume of sales of their products. This could tie in with a major sporting tournament or a product launch.

 

So, how does one get contracted by a company? And how is his contracted period lived? This is the "life cycle of a contracted asset"; which is augmented by a digital value chain.

 

                                 Life Cycle of a contracted Asset

 

Life cycle of an Asset.jpg  

  • Today, many sporting goods companies are on the look out for partnering with professional athletes. They are particularly interested in capturing young talented professional athletes; seeing potential in the athletes in the long run and contract then cheap for a longer period of time. This is the term known as "Scouting". Many agencies provide custom built solutions to manage and track fresh talent. This is also used by Global companies that operate on Global and Local (subsidiary) levels (centralized or decentralized).

 

  • The identified assets are then contracted by the companies. Many companies buy off the shelf products to manage their contract and workflow for the contract approval. Other companies hire agencies to build custom solutions to mange their contracts and approval workflow. This could be used heavily by marketing and controlling teams. Based on the fame of the athlete, different strategies and contract levels are tied to the asset.

 

  • Based on the contract, the asset is then serviced with customized products. These products are created to enhance the performance of the athletes or cater to the specific needs of the athlete. There are many custom built solutions that provide customization features possible on products. Digital Marketing platforms are huge in product customization these days. Custom built systems also track the asset specific product order management from creation of the product to delivery to the asset. Different service levels are driven by contract values and significance of the asset. This also helps in targeting audience for niche products Vs mass products.

 

  • Major companies also tie in new product launches with major sporting events and manage huge campaigns over digital media (social media - blogs, facebook, networking sites, youtube etc.) supporting the product launch. This can be associated with a niche athlete or a sponsored team. This is then followed up by social analytics. The companies are increasingly interested in knowing the success of their campaigns, in knowing the increased following of the people and the impact on product sales due to that campaign.

 

  • Many companies track the growth of their assets, and renew or re-negotiate contracts based on the increasing or decreasing popularity of the assets. Many agencies provide custom built solutions to help aid in tracking the athlete's growth and worth.

 

  • Finally, as a last step in the "Life Cycle management of an asset" - the companies are interested in the ROI of their contract. Many agencies provide custom built solutions to track the investment as per the contract (and bonuses based on performance) and also the value of the athlete. Companies would normally term the value of an asset as Strategic or Brand Marketing specific to volume of sales generated by the endorsed product. This determines contract renewal or termination.

 

The complete life cycle "asset centric" is now tracked by companies in various solutions which are Portal like. These solutions provide a comprehensive 360 degree view of the asset, his / her financial info, servicing info, major campaigns and product launches along with contractual info. Digital Marketing platforms and Digital Asset Value chain has increasingly over the years helped sporting goods companies transform their Sports Marketing vertical and enhance brand marketing; taking it to a next level which is getting closer to the asset and the trusted consumer increasing sales volume.