Product/ service companies are finding it increasingly challenging to create a strong pipeline of new offerings because of a variety of reasons including:
• Product / service life span is shrinking
• Constraints of reduced time to market
• Increased cost of new product/ service development
• Stronger competition, especially in a globalized environment
In this scenario, social media could provide a strong strategic lever in delivering successful new offerings.
Social media has become an integral part of GenX and GenY. People are leveraging this platform to endorse opinions or experiences on various products/ services or life events like politics, culture, economics, lifestyle, habits, etc. proactively. This generates humongous amount of data which, if leveraged, can provide corporates actionable insight to re-align their offerings with respect to market demands.
The opinions and real life experiences of social media users could be leveraged in every process of product/service development-enhancement such as idea generation, concept screening, business case, product development, market testing, etc.
Social Media Trends
• (1)According to a Gartner study, the consumer Spotify Streams kopen market is increasingly turning to social networks for news and information and tuning out of mainstream media news feeds. Increasingly, consumers are turning to social networks to get their daily fix of news and information about the wider world, as well as sharing their views and posting their commentaries.
• (2)Forrester expects that Enterprise Social Software (ESS) products will grow at an annual compound rate of 61% over the next five years, with the market exceeding $6.4 billion by 2016.
• (3)IDC states that with the emergence of embedded access to social media, more number of organizations will begin to explore social platforms for collaboration in 2013.
• (4)According to an eMarketer report nearly one in four people worldwide will use social networks in 2013. The number of social network users around the world will rise from 1.47 billion in 2012 to 1.73 billion this year, an 18% increase. By 2017, the global social network audience will total 2.55 billion.
Product/Service Development Challenges
Globalization has created opportunities as well as challenges for global companies. Although globalization has enabled organizations to expand their business in various markets to generate additional revenue, companies often lack the intelligence about the new market. Companies need to keep track of competition offerings and customer needs before investing in new offerings. For success of new offerings in an alien market, it’s very important to understand the culture, customer needs and shortfalls in already present products. Also due to globalization, companies are forced to introduce new product/services in quick succession because if they don’t, competition will eat their market share.
Customers’ unmet needs
Customers’ unmet needs are key inputs in the first step of new product development process, i.e. idea generation. Since success of the product in a target market depends upon how new product meets the customer expectations, assessing customer needs in a realistic manner becomes critical. Understanding how features of new offerings would be desirable, how customer is going to use it and how it would provide better customer experience helps companies to develop new offerings to meet market needs thereby insuring success in the market.
Before starting the product development, companies should assess what is the right time to introduce the product/services in a specific target market. For success and adoption of products in a designated target market, companies need to understand competitions’ new product development programs who are developing products/ services to meet the same market need. This helps companies to better understand the entry barriers thereby reducing the risk of product failure.
Traditionally, companies do market research to understand the market potential of certain products/ services in the target market. Many times companies outsource this activity to expert market research companies. Output of such survey is based on audience sample selected from the pool of customer data. Authenticity of inputs provided by the sample population cannot be validated as companies don’t have control over the behavior of the survey participants and findings could be misleading.
Strategies to Leverage Social Media for Product/Service Development
Consumers who purchase and use the products /services of companies decide its success or failure. But in most of the cases, customer involvement in product/ service development process is negligible or limited. Since success of the products/ services is mainly dependent on its customer acceptance, it’s highly logical to involve them in each process of development when creating offerings for them.
Social media has made it easy to access the loyal customers/ prospects and it is imperative for companies to leverage this platform while developing offerings. Following are some strategies that can help companies develop offerings using social media.