Frito-Lay is developing a new potato chip flavor, which, in the old days, would have involved a series of focus groups, research and trend analysis.
Now, it uses Facebook.
Visitors to the new Lay's Facebook app are asked to suggest new flavors and click an "I'd Eat That" button to register their preferences. So far, the results show that a beer-battered onion-ring flavor is popular in California and Ohio, while a churros flavor is a hit in New York.
"It's a new way of getting consumer research," said Ann Mukherjee, chief marketing officer of Frito-Lay North America. "We're going to get a ton of new ideas."
While consumers may think of social media sites like Facebook, Twitter and Foursquare as places to post musings and interact with friends, companies like Wal-Mart and Samuel Adams are turning them into extensions of market research departments. And companies are just beginning to figure out how to use the enormous amount of information available.
When Wal-Mart wanted to know whether to stock lollipop-shaped cake makers in its stores, it studied Twitter chatter. Estee Lauder's MAC Cosmetics brand asked social media users to vote on which discontinued shades to bring back. The stuffed-animal brand Squishable solicited Facebook feedback before settling on the final version of a new toy. And Samuel Adams asked
Wal-Mart acquired the social media company Kosmix last year for an estimated $300 million, chiefly because of Kosmix's ability to extract trends from social media conversations.
The unit, now called (AT)WalmartLabs, looks at Twitter posts, public Facebook posts and search terms on Walmart.com, among other cues, to help Wal-Mart refine what it sells. "There's mountains and mountains of data being created in social media," said Ravi Raj, vice president for products for (AT)WalmartLabs, adding that the company used the data to decide what merchandise to carry where.
Marketers are trying to find a balance between privacy concerns and the rich data available online. Raj said Wal-Mart analyzed only Facebook posts that users made public. On the other hand, apps like Frito-Lay's require access to a user's location, gender, birthday, photos, list of friends and status updates; the products for which he or she has clicked "like"; and more.