Social Media A New Approach To Product Development

Social Media Offers A New Approach To Past Product Development Techniques


Joseph Molina


Concordia University








As one browses the Internet it is easy to notice that there are many companies today who offer social media links on their company websites. The explosion in popularity of these social media sites in the last few years begs for businesses to exploit all of the features offered by such sites as Facebook, Twitter, LinkedIn, and Digg, as just a few examples, in an attempt to gain advantage in the marketplace. Social media has become a significant vehicle for the transport of large amounts of information to many people and places instantly. Marketers have been very quick to use this outlet to expand their brands into new markets. Of late, research and development teams within companies, entrepreneurs, and innovators have also discovered this new medium and have begun to benefit from its power to reach a large audience quickly. Let’s explore how this new tool adds a twist to past product development techniques and enhances the creation of ideas to developing new products with the support and involvement of a community.





The process of new product development begins with identifying an opportunity from an unmet need in the marketplace. Once this need is identified the concept stage of a product may begin. From the concept stage a new product proceeds onto the development stage. Lastly the product moves to commercialization where it is able to reach consumers.





Identifying an opportunity


Today, social media sites give entrepreneurs and innovators endless amount of information that may have been difficult to gather in the past. With a significant number of people using social sites, loads of information is out there to grab, giving innovators a new form for the discovery of opportunities in the marketplace. Through social sites, marketers are now able to directly connect to a specific consumer, in a much quicker and efficient manner. Marketers still conduct surveys, interviews, and establish focus groups, but in a new way. They are no longer forced to follow techniques from the past. In result you are able to find the "pain" in a customer and close the gap between what they have and what they want in an efficient manner. Eric Von Hippel, an economist and a professor at the MIT Sloan School of Management, offers a strategy called "Lead Users". Hippel has discovered that leading edge companies are able to innovate new product lines by reaching out to user communities for guidance. These users customize existing products and adjust to meet new needs. By tapping into the wealth of knowledge offered by these users, manufactures have the opportunity to develop a new products. Let’s take Starbucks as an example, a company that continually connects with its customers by offering links on their website to other social sites, therefore having a significant amount of data for their marketers to implement into their overall strategy.





The vital question becomes; how can social networking sites and their power to connect many groups of people be used by product development professionals to innovate? It is apparent today that savvy marketers are precisely targeting this new medium, and developing entire social communities to support their business. Not only have companies began to use social media to connect to their customer base, but have even begun to offer their own social intranets to aid collaboration between departments within a company. This tool fosters better communication for the use in product development.





Concept Generation


In the concept generation stage, social media can help better focus on ideas that will add to the scope of a project. By "listening" to certain blogs or communities valuable information can be gathered to assist in idea generation. Joe Hall comments, "If we want to develop a product focused on online video, we might monitor such terms as "video", "video sharing", or "video rating". During this first stage of monitoring, we will want to focus on what aspects of online video people are talking about most." (Hall, 2010) In essence, this new method still follows the traditional concept of using the "voice-of-the customer" in a concept generation stage of product development to narrow your scope and find direction. Now there is an additional way to reach out to a large number of people in the public for ideas. In the past this was much more difficult.





Getting the word out


Once a new product is developed, a producer must decide how to introduce it into the market. How did Ford get the word out about their new product in the U.S.? In 2009 Ford wanted to launch its Fiesta model into the U.S. market. Most would think it would use the traditional media outlets, TV or Radio, for a large blitz. Interestingly enough, it chose one hundred bloggers and gave them the Fiesta car to drive for six months for free. The idea was that they would get these bloggers to drive the car and then add You Tube videos and comments about the Fiesta to their Facebook and Twitter pages once a month. According to the head of Ford’s social media department, Scott Monty, "It's about culture change and adapting to this ongoing way of communicating. The bloggers are fully free to say what they want." (Swartz, 2009) Social media has become a strong tool used to reach out to the public. In fact, this power is demonstrated by statistics to date from Facebook. According to Facebook’s website, so far it has reached over five-hundred million users worldwide, where fifty percent of those users log on once a day, and the average user is connected to eighty community pages, groups or events. There are also more than 3.5 BILLION pieces of content (web links, news stories, blog posts, etc.) shared each week on Facebook.


There are many other social networking sites as well. Twitter, for example, is a mico-blogging website, which has over one hundred million users worldwide. The website defines their purpose as, "Twitter asks, "what’s happening" and makes the answer spread across the globe to millions, immediately." LinkedIn, a popular professional networking site, now has over fifty million members worldwide. As you can see, social media culture and social networking platforms are having a major impact on business communication, practices and processes. According to Shel Israel, author of the forthcoming Twitterville: How Businesses Can Thrive in the New Global Neighborhoods "Companies have no choice. This is where their customers are going." (USA Today, 2009)





Community Product Development


Quirky, a social product development service, has a fascinating website. The company was started by Ken Kaufman, a young entrepreneur in 2009, after graduating from High School. He has been able to offer a place where innovators can go to pitch their ideas, get help taking their idea through the product development process, and ultimately commercializing the product into the marketplace. The concept involves getting people together as a community online to contribute to all aspects of product development. If a product is successful, each contributor is recognized and ensured a compensation for support provided. A success story is one from Jeff Scholen who submitted his idea for a way to clean up cords for the Apple power adapter. Within twenty-four hours the Quirky team was able to help design and develop the product. The product was named the PowerCurl, a clip-on cord wrap for Apple’s power adapter. Quirky, Jeff and all the contributors continue to make money from great sales revenue after successfully getting the product commercialized into the marketplace. Quirky has demonstrated that social media in product development is a reality today, and gives credibility to the new method of "Social Product Development".





Social media in product development is not all perfect. There are some challenges in adapting this new process. Some manufacturers have begun to use "crowdsourcing", the act of outsourcing engineering tasks to large outside groups or communities. This technique is different than Social Product Development because the community defines the project rather than the research and development department making the decisions of what to do with the information. Although the idea has given companies a new source of information, the value is still in question. First, company engineers continue to offer the greatest skills and contribute hands on experience. Research and development teams are still extremely important to any company’s future product strategies. Secondly, as Erin Sheehan Daly mentions, "Crowds on their own aren’t always the best drivers of innovation. Henry Ford once famously said, "If I had asked people what they wanted, they would have said faster horses." The crowd tends to think at a compartmentalized feature/function level – but responding on the feature/function level risks commoditizing your product and potentially strapping you with a hypothetical car that looks like it was designed by Homer, not Henry." (Sheehan, 2010) Crowdsourcing has yet to be fully defined and is still being tested by companies with reference to its validity towards innovation. One of the biggest concerns for many companies who are using social media is how to control the information that is being circulated online. In the past, from a marketing standpoint, customers were controlled. A marketing department regulated information in and out of the company and ensured its strategy was being broadcasted correctly. Therefore, the customer only knew what the company wanted them to know. In social media today, online communities like twitter allow for any information, facts, opinions, thoughts, experiences, etc., to be available to anyone. Another challenge social media faces is how to hold onto proprietary information in a community setting. If ideas are being generated from a large number of people, then who holds the rights of ownership to a concept or product?





In the exploration of social media I have discovered that it has now progressed beyond just a marketing tool. Innovators, entrepreneurs, and large corporations are using social media for many aspects of their business. Customers are now being engaged in business strategy more than ever. Graeme Harvey Managing director HuzuTech huzutech.com states, "Social media communities are now places where customers can share experiences, be among the first to hear about releases, get exclusive content and offers, review products, get instant advice from the brand or from each other, and even get involved with R&D." (Graeme, 2010) The product development process is being enhanced by the large amount of information being provided to research and development departments. For those companies who are at the forefront of innovation, social media will continue to be a vital tool in delivering clearly defined products and services to customers.





Challenges to using social media will eventually be solved by creating the right balance between ideas from a "crowd" versus companies. Proprietary discrepancies will eventually be settled by our legal system with knowledgeable patent or trademark lawyers. Overall, social media will give the public power over information. It is what they do with this information that will enable innovation and successful products in the marketplace.





References





Facebook. www.facebook.com





Graeme, H. (2010, September 16). Social Media. Revolution, p. 35





Hall, J. (2010, April 20). How To Use Social Media Monitoring Tools To Aid Product Development. [web log comment]. Retrieved from http://searchengineland.com/how-to-use-social-media-monitoring-tools-to-aid-product-development-39978





Quirky www.quirky.com





Sheehan, E. (2010, August 10). The crowd: Who are they and what does it mean? [web log comment]. Retrieved from http://social-product-development.blogspot.com/





Swartz, J. (2009, August 28). More marketers sign on to social media;


They're going where many of their customers hang out. USA Today, p. 5A.





Twitter. www.twitter.com





von Hippel, E. (1986). Lead Users: A Source of Novel Product Concepts. Management Science, 32(7), 791-805. Retrieved from http://www. http://web.mit.edu/evhippel/www/index.html








By: Joseph Molina 2011