The Pepsi Refresh Project- The Advantage of Using Social Media Marketing

(As I pursue a Graduate Degree, I find myself desiring to see what others think about some of the research papers I am required to write.  This is the first one I've decided to share.  Let me know what you think.)

Stuart Davis

Dr Lena

Contemporary Business BUS508

Summer Quarter, 2012-08-29

Abstract

It is no longer enough for a business to pay for advertising on traditional mediums with the expectation that it will generate all the traffic their store needs.  Social media is the new method for advertising to larger numbers of potential customers.  It allows individuals to build brand awareness and is a relatively inexpensive way for companies to get their products much needed brand recognition.  Additionally, advertising through social media marketing is a platform for companies to launch a new advertising campaign and is a large part of the future of marketing. 

The Pepsi Refresh Project- The Advantage of Using Social Media Marketing

A company uses a social media outlet to promote a new product.  Another company uses the internet to create a good mood in order to advance their product.  A television network uses social media marketing to get younger viewers to watch the network (IDEO: Five Companies That Mastered Social Media’s Branding Potential).  This innovative use of technology to promote and advertise a company’s products is a growing trend in the world of advertising.  It allows the advertiser to go directly to the customer.  The popularity of social media is growing by leaps and bounds every year and the trend is most likely going to continue its growth for the foreseeable future.  This medium provides an inexpensive way for companies to attract new customers to their brand and keep them coming back. The only limit to the possibilities is the imagination of the marketing department.

Social Media Marketing has become incredibly popular among businesses of all sizes for a number of reasons such as easy access, real-time customer support, product development and the ability to see what the competition is doing (Dodaro, 2012).  Social media is growing in popularity by leaps and bounds.  Facebook has well over 300 million profiles and is still growing. Twitter posts millions of tweets each day.  YouTube is a website dedicated to the amateur video producer, where anyone can upload their videos and anyone can watch them at any time. Marketers are now tapping into these mediums and many more, as they discover the value social media marketing brings to their businesses.

Social Media Marketing provides easy access for advertisers to tap into this pool of potential customers.  Customers are able to look at products they might be interested in without leaving the comfort of their homes.  Since the internet is such a vast place, and since so many people have access to it, the chances of a business getting a boost from social media marketing is going to be very good.  Some companies are using social media to develop ways for other companies to use social sites, making it even easier for businesses to use these mediums.  For instance, SpyderLink has created the SanpTag (About social snaptags, 2011), which enable marketers to convert target consumers to social connections via mass marketing.  This takes social media marketing to the next level.  It makes the use of the medium very easy and it also helps to track the success of the campaign, enabling companies to make changes to their marketing campaign in real time.  Businesses are able to offer online coupons and specials when they use social media to market their products.  Additionally, a popular brand or product is going to be talked about by the customers, creating even more opportunity to get the product seen.  Much like a video that has gone viral, a product with the right marketing, and maybe a cute video attached to it, is going to be talked about by many more people than a magazine or television ad.

Relationship marketing has taken over as the primary way businesses advertise and complete.  They can no longer afford to simply make a good product, post a few advertisements on the television and in magazines and expect to succeed.  Today’s businesses have to go further than they used to.  Now, instead of relying on one or two forms of media to get their message out, they have to utilize every available format.  Consumers expect more from the businesses on which they spend their money.  A company needs to be more personal and the social media is the simplest way for them to achieve this.  They have to build customer loyalty and it is among the simplest ways to communicate with their customers.  Social media marketing allows the customer to participate in the product through the use of videos and online conversations.  Perhaps the biggest reason for businesses to embrace this relationship trend is the personal nature of branding it brings to the market.  Opinions matter these days, and the opinions of the products we use influence those in our social network.  In other words, when we share our favorite brand to our friends, it’s our brand; and our brand is much more important than the opinion of a stranger (Carter, 2012).  

Social Network Marketing has an advantage over traditional business marketing in that it allows for real-time customer support.  A lot of small businesses have no customer service department, yet even a small startup company can utilize the internet and social media by assigning one of its employees the role of updating and monitoring the social media site, handling issues and answering question in real time.  The ability to monitor their website has become an invaluable benefit for the small, growing company, allowing it to inexpensively keep a finger on the pulse of the market and to adjust as necessary to grow or capture a new segment of the market. 

Product development is much easier on the internet through social media. If a business is interested in creating a new product in its existing line, or if they are seeking to re-invent an existing product, the most logical place to start the process is through social media.  Social media enables companies to gather a lot of information about a new product prior to its launch.  After the launch, it enables the business to develop the product or service even more, through free market research (How To Get Product Development Input From Your Target Market Via Your Social Media Pages, 2012).  Simply by creating a way for customers, or potential customers to provide feedback on your product, a business is getting valuable research for very little cost.

One of the advantages of using social media marketing for a business is the timeliness of it.  Social media is instant.  Update a blog or a Facebook page and it is immediately seen by everyone without raising the cost.  People are going to be talking about the changes on a daily basis, and that is the entire idea behind the marketing: getting people to talk about the product. 

Another advantage is branding ability.  Keeping the brand in front of the customers is powerfully effective.  Since customers have a nearly infinite number of products on which they can spend their money, keeping one product or company in front of them is going to generate a lot more interest. 

Instant feedback is still another advantage of social media marketing.   If there is a problem with the product or service, the customer can let the business know right away, and the business can respond just as quickly.  Resolving problems is a show of good faith for a business and customers generally appreciate honesty and timely fixes to problems.  Also, the word of mouth advertising a business gets from handling problems quickly is immeasurably valuable. 

However, the single biggest advantage in using social media marketing is the cost.  Using several websites and tying them all together by linking them to each other is going to allow the media advertising to work all day, every day and is going to reduce marketing costs.   There is simply no other avenue in which a company can reach so many customers on a daily basis with such low overhead.

Social media marketing has the ability to raise awareness through any number of collaborative projects, such as the Pepsi Refresh Project.  This project invested the brand into community building projects.  Consumers applied for grants ranging between $5,000 and $250,000 in one of six categories.  One thousand applications were accepted monthly via the website refresheverything.com, and consumers voted on the winning projects.  All in all, Pepsi gave out approximately $20 million in grants (Zmuda, 2010).  Of course, people naturally applauded Pepsi’s effort at being socially responsible, but, more importantly, the project kept Pepsi in front of the consumer for the entire year.  Marketing the project meant that Pepsi was able to show a more caring side of itself, and it helped grow consumer awareness for a variety of issues throughout the year. 

Pepsi’s marketing has traditionally been centered on entertainment.  Its advertising was typically a funny video or showed a top entertainer, but was generally enjoyable, even for people who were not fans of the soft drink.  It was also an annual contributor to the Super Bowl ads that most people excitedly looked forward to.  Customer insight for Pepsi as it relates to the Refresh Project was helpful to the company, as it provided valuable feedback to Pepsi’s management team.  People were a bit worried about the future advertising of the soft drink giant, however.

Customer insight leads to decisions in the marketing arena as more feedback is obtained.  The more customer insight that Pepsi receives the more sound its marketing decisions will be.  Customers want to be involved in product development and Pepsi gives them the opportunity to be heard.  The Refresh Project was merely one avenue that Pepsi pursued.   Without the social media presence, Pepsi would likely have been limited to what market research was available, which was probably a massive amount, but not as specific as the insights provided through their websites and Facebook pages.

For PepsiCo, the entire Refresh Project was a substantial plus as they showed a more human side to their massive company.  There is nothing wrong with the noble efforts of a giant corporation attempting to gain the public trust through acts of enormous generosity and charity.  As a matter of fact, doing such things is what the public has begun to expect in the age of relationship building.  Through the Refresh Project, Pepsi has guaranteed a new generation of fans of the soft drink and has opened up a new avenue of potential charity and community involvement that can only have a positive effect on society.  The marketing aspect of the project is evident as well.  Millennials, the generation born between the late 70’s through the early part of this century, overwhelmingly choose to spend money with a charitable company over one that is not, however, 76% of female Baby Boomers say the same thing (Manners, 2010), so it isn’t necessarily limited to the younger crowd.

Understanding what the customer expects and what they are demanding is a critical function of a marketing department.  Customer insights on what the business should be doing, offering or promoting says a lot about the direction in which the company needs to be moving.  Examining the desires of their customers helps the marketing department establish a marketing campaign.  Without those insights, or customer feedback, they cannot anticipate changes in the market with nearly as much accuracy as they can with customers directly telling them how they feel.

Social Media Marketing is a terrific tool for the smaller, startup companies to utilize, as the cost is low and the response is generally very high, given the right amount of exposure in the right areas.  However, some quite large companies are also getting involved in the social media explosion of the last few years.  These corporations have recently realized the value and power of the internet, over and above what they had been using previously.  Ford Motor Company, for instance has integrated social media into its marketing mix through a hub-and-spoke model.  Employees throughout the company are communicating with consumers in their own words (Fletcher, 2011). 

Ford Social (social.ford.com) is a website where the customer can research a variety of articles, or view pictures of vehicles they may be interested in. On this site, the potential customer can interact with other customers and review stories and articles related to their needs.  By staying in touch with their customers, Ford has opened up a new line of marketing.  They have tapped into the social media market, and are allowing their customers to play an active role in the development of their products, and their advertising.  The site features articles about the new technologies Ford is developing and also contains dozens of testimonials from customers.  The site even has a section where the customer can make idea suggestions and other visitors to the website can talk about them or vote on the ideas. 

Ford has also used social media to avoid public relations problems.  In one example, the social media strategist for Ford Motor Company, Scott Monty, discovered that Ford was threatening to sue the owner of The Ranger Station (TheRangerStation.com) over the website selling counterfeit products using the Ford logo. Instead of using a large company’s normal method of simply covering their own interests, Monty immediately began using social media to interact with the website and they worked out an agreement.  Both parties involved then used social media to talk about the issue.  Ford was able to utilize social media to prevent a public relations nightmare, and may have actually increased their customer loyalty by showing that even a giant corporation can be reasonable (Kapin, 2009).

Starbucks has been called the nation’s most socially engaged company, according to the advertising research firm PhaseOne (Benson, 2012).  Starbucks is a leader in effective social media marketing and has over eighteen million fans on Facebook.  Additionally, mystarbucksidea.force.com provides a platform for Starbucks fans to make suggestions for anything associated with the coffee chain.  For instance, the Starbucks Runner Reward began as a suggestion submitted to the website.  This program offers free coffee to the coffee ‘runner.’  The ‘hero’ who volunteered to make a Starbucks coffee run for his or her coworkers is rewarded a free drink order, when 4 other drinks are purchased (Starbucks Runner Reward, 2012). 

Creating a website for customers to suggest things they would like to see in the stores is a brilliant marketing idea.  First of all, it is going to engage the customers and keep them engaged as others talk about the ideas.  Second, people who are not already customers of the brand are able to see what new items are available and make a more informed decision about choosing a product.  As most people already know, Starbucks is a place for people to hear new music and to sit and socialize, not necessarily just to drink coffee.  People have been using Starbucks free wifi for years, and now they can suggest to the corporation any idea they would like to see implemented in the stores, and get feedback from others.

Starbucks has a tradition of using social media to talk about current events.  During the massive earthquake in Haiti, Starbucks posted videos as part of their Haiti outreach campaign, enabling customers to donate to the Red Cross in the stores (How Starbucks Uses Social Media). Starbucks engages the customer on Twitter, creating an open communication channel.  The company uploads content to their Facebook page, and invites people to events.  Facebook also provides a place for open discussion.  Starbucks allows people to embed its videos anywhere they like on the web, unlike many companies, believing it increases positive exposure of the brand (Noff, 2010). 

Surely, Social Media Marketing is the future of business and advertising, at least for the foreseeable future.  As technology improves on a daily basis, the ease by which a company can take advantage of social media to market it is going to grow as well.  The innovative nature of internet technology, the use of smart phones and tablets, such as the I-pad and Google’s Nexus, is going to provide a continued medium for advertisers to take advantage of in their marketing.  Facial recognition and virtual reality types of programs should be available in the next few years, creating a new generation of marketing potential (King).

The well prepared executive or employee is going to be familiar with the latest technology and able to provide valid and effective support for the company for which they work.  The ability to be competitive in the workplace has always been highly regarded employers and is going to lend itself to promotion and success in the business world.  Failure to stay in touch with technology advances will cause the employee to rely on others to carry them.  Because independence in the workplace is a necessary and admirable trait, failure to display independent thinking is going to slow professional growth in the individual.

Training is a huge expense at most companies and by being trained already, the employee is that much ahead of his or her contemporaries and will help them stand out as the exemplary the company needs.  Also, the advent of new technology has created the need for new positions in the workplace to manage the immense amount of data social media entails.  Larger companies need a dedicated person to fill this position.  Understanding and utilizing social media is going to help thrust the forward thinking company into the future with more success than those without the knowledge and desire to use the available technology.  The future of advertising and marketing is, indeed, very exciting.

 

 

 

Works Cited

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