DEAL OR NO DEAL

In this digital world where businesses work at speed of thought Companies are finding new ways to sell their products and improve their revenues. The revolution in Internet and e -commerce has also helped companies immensely. Companies look at social networking websites like Facebook, Twitter, My Space and orkut to promote their products and services. There are other online companies like Priceline, E-bay, and Hotwire, kayak which collaborate with medium and large businesses and sell their products and services and take commission on the sales. Their profit margin is based on revenue sharing and number of people buying products from their sites. Groupon is one such Company founded by Mr. Andrew Mason in, November 2008.

The Name Groupon is derived from ‘Group’ and ‘Coupon’.  It’s an online website which works with local vendors in 150 cities across United States. There mode of operation is very simple. They will first negotiate a deal with local businesses primarily small and medium sized businesses.  Groupon will then post the deals on Groupon.com.  You will get the deal only if certain number of buyers takes the deal on same day. This mode of operation has helped many small vendors to target new customers who find these deals highly lucrative and well under their budget.  This way its win wins situation for everyone   vendors, customers and Groupon.  

There is also an argument that Groupon takes 50 percent of revenue and takes out the profit margin from the vendors. For example if the vendor negotiate a deal for dinner at $14 on Tuesdays. Once Groupon find 2000 customers for the vendor and deal gets through successfully. The Vendor needs break even with Groupon. This makes it very difficult for vendor to earn or recover cost.  I would argue that it’s something vendors need to calculate and decide before posting the deal. They cannot just post the deal for the sake of getting new customers.  Moreover they should also decide on the volume of customers and adequate services in place for this number of customers.

I believe Groupon is a great way for local vendors to gain new customers and improve businesses. It’s also successful business for Groupon too. Groupon earned $500 Million last year and they are going strong.  There are Rumors in market that many big companies have offered their interest in Groupon like Facebook, Yahoo, and Microsoft. Most recent of all is Google who wants to buy Groupon to strengthen their advertising business and have a local presence with local markets. Google also fears that if they won’t buy Groupon their competitors like Microsoft and Amazon can buy it.  They valued Groupon $6 billion. But Groupon rejected the offer and wants to grow independently.  They are also planning   to go public with an initial public offer. I think this horse is running strong and fast. It would be great for customers and local vendors to take advantage of it and bring businesses back on right track. Meet The Fastest Growing Company Ever

Social Media Marketing: Driving Growth for Small Industries

Today when we talk about social media marketing the first thing which strikes us is Facebook. I need not explain what Facebook is. This social networking website has over 500 million active users worldwide in over 180 countries. Everyday atleast 50 percent of user’s login to this website at least once to make new friends, update status, post pictures or post comments on wall. The Small businesses realized the importance of social network. Small companies now use this network to drive their businesses and market their products.

In the past Large businesses had advantage over small businesses because of the large marketing budgets and marketing teams. Large businesses used their money in outbound marketing techniques TV commercials, Market Research, Promotions and Print media and Advertising. Small business cannot compete with these large businesses and need some alternate business strategy. With Social media they found a new tool which can help small businesses to promote their products and goods. Small business can use this tool for inbound marketing techniques and decrease usage of outbound advertising  like Newspapers , yellow pages, Ad campaigns and promotional videos on cable TVs.

Social media marketing if used effectively can have more penetration and reach wide array of audience with no marketing cost. Small companies are leveraging this tool to create their marketing strategy. They have dedicated teams which post their products on social networks. Companies can Interact with customers on one to one basis and understand their needs. Small companies also use this network to gather information and data for market analysis. They conduct anonymous polls and surveys to gather information. Customers can post their concerns and companies respond to these concerns with appropriate solution. This marketing medium is more effective than conventional medium where companies just post their products on websites, magazines or make ad campaigns with hot celebrities bragging about the products.  Some companies for example Triumvirate Environmental which works with clients to deal with environmental issues like waste management and disposal. Triumvirate Environmental were able to generate 1.2 million dollars using social media. They used social media like twitter, Google ad word and LinkedIn to support their generation efforts. They also used variety business blog for their diverse portfolios. Each blog was for different topic and different purpose. This helped Triumvirate Environmental to generate search traffic and gain large market share in their domain. Another good example would be River Pool Spa which took advantage of social media marketing to become market leaders in pools and spas.

Finally, as said by Mr. Mark Suborn "Your success in life isn't based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business". I believe Social media networking has potential to become a next generation marketing medium. The sooner you realize it better it is for you and your firm.

Reference : Small Business Social Media

 

NueroMarketing a Consumer’s Paradigm

Every new product launch campaign requires adequate market research, advertising, product design and pricing. But not all products launch campaigns are successful in grabbing consumer attention. Guess work plays a very important factor in determining product’s success. Removing this guesswork can be dream of every marketing firm. However with NeuroMarketing this dream has become a reality. This new field of marketing extends well beyond traditional marketing technique.

NeuroMarketing is a new field in marketing which applies   human brain mapping, eye tracking and skin conductance mechanism to understand human behavior. This new brain mapping techniques can help understand human subconscious mind and how it influences your buying decisions.  Companies are using this technology to determine the consumer’s reaction to their product and trying improving their products accordingly.  For example one of the major publishing house “New Scientist magazines” used this technology to compare three different magazine cover. They wanted to find out the subconscious response of human brain to theses covers. They also used eye tracking to determine which part of magazine cover grabs maximum attention of consumers and engage consumers to their magazine. This data helped “New Scientist magazine” to redesign their cover and improve their market share significantly. Can Neuromarketing Research Increase Sales?

Many people argue that NeuroMarketing is unethical. It subjugate human mind and manipulate it for personal l benefits. It will violate personal privacy and influence human decision process. Secondly it favors big corporation like Nike, Reebok, Coke, and Pepsi which can afford this technology and help them to market their product. This will curtail competition and small players in market would not be able to compete their products even though they products have better or same quality and price. Personally I don’t buy any of these arguments against NueroMarketing but I do feel it make inroads into our personal space and influence our decisions. 

I strongly feel that we still have long way to go to truly understand the potential of neuroscience and NueroMarketing. How this can benefit people and society as a whole? The scope of this new technology is not just limited to marketing but can be extended to so many new verticals for both profit and nonprofit organizations. For example it can help governments to engage people and convey valuable information. It can also be used in Designing health campaigns or public information campaign to engage local public. Understanding the Potential of NeuroMarketing.

Maybe, I am in favor of this technology and trying to influence your decision but it’s totally up to you to decide and comments ;)