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Social Media Helps You Understand the Price-Quality Formula
Throughout the troubled economy, I observed the impact of the recession in people’s attitudes towards consumer packaged goods, technology, communication, travel and other services. One of the most common themes in social media discussion highlights the fascinating relationship between cost and quality of goods and services. How much is one willing to forego in terms of benefits to achieve savings is a key question. As I listen to these conversations, I begin to glean distinct personas that appear to have a specific threshold when negotiating between cost and quality.
Let me give you an example comparing two personas.
First, bargain hunters. We all know who they are. They are easy to spot and relatively simple enough to convert. Their propensity to buy is driven primarily by a low price point, and this attitude is magnified by the lousy economy. They predictably go for the cheapest available option, thanks to having the lowest expectations on quality and other attributes. In social media, they usually drive the positive favorability towards bargain brands.
A slightly more complex group of consumers are those that appear to be willing to pay more for better quality or better experience (as they have had the opportunity to enjoy premium brands in the past), but are guilt-ridden with the idea of splurging due to the current state of the economy. In conversations, they oscillate between mid-tier and premium brands, weighing the cost-quality benefits. Unlike bargain hunters, their decision-making is more nuanced and less predictable, but discussion in social media does glean an interesting finding about their propensity to buy. A premium brand becomes more attractive than ever to this group when they feel that they are getting the product or service at a lower-than-usual price point, even if, technically, it is more expensive than anything else in the market. A mid-tier brand, however, will not be quite as compelling to them even if the price drop is more significant.
The learning: amidst the recession, there is still opportunity to appeal to what consumers want beyond what they simply need, and social media will tell you how.
Marketers know that the price-quality formula is more important than ever in these economic times, and the resonance of this topic in social media substantiates its influence in purchase decisions. The winning brands – those that generate the strongest sentiment overall – appear to have found the sweet spot in a price-quality structure that appeals to the market majority.
Many reports claim that the economy is getting better. To a degree, social media commentary will reflect this. I look forward to witnessing how the trend in conversations and brand sentiment shift as market conditions (continue to?) improve. This optimist can hope.
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Kind of like the use of Free Social Media Monitoring tools versus ones that actually cost money but provide value?
Posted by: Anon Anon | Feb 2, 2010 10:11:31 AM
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