Sunday, February 27, 2011

Facebok Pages: Branding and the Buying Decision Process

Up until now, companies would market to consumers through commercials, magazine ads, newspapers etc in the hopes of standing out amongst the sea of competitors in the hopes that their prpoduct would be the one you would end up purchasing. With social media, that has all changed. It seems that companies are using sites like Facebook to create more of a community or culture surrounding their products. The approach companies with major brands such as Tide, Victoria Secret, Coca Cola and Starbucks are taking is by creating pages for their product on Facebook where users can go in and "Like" the page. In terms of the consumer and buying decision process, this can be beneficial in two ways:

1. Companies are building brand loyalty as consumers may feel that they have a more personal connection with their brand by "liking" them on Facebook. Most users have their entire lives in Facebook and adding their favorite products or brands is just an extension of that.

2. There is some impact that is made on the consumer's buying decision process. Although most people don't shop around on Facebook for new furniture or that weekend's outfit, a brand's "Fan Page" popularity may somewhat have an effect on the brand that is chosen.


Companies are also integrating added benefits such as coupons (especially for new product launches) on their pages. For example, when Starbucks came out with their ice cream, fans were able to send a pint to themselves or download a coupon. This was a great way for Starbucks to get the word out to their consumers and many of them probably decided to purchase the ice cream for that week.

When a consumer is going through the motions of making a purchase decision, it would seem that thr Facebook page would have an impact on the following steps (let's use the Starbucks Fan Page as en example):

1. Problem Recognition: consumer is thinking that they would like to try out a new ice cream when they go to the supermarket that week. In the meantime they come across the Starbucks Fanpage on Facebook and see that they are coming out with an icecream.
2. Purchase Decision: while on the page, they notice that they are able to download a coupon and then decide that they would try out the new product.
3. Post-Purchase Behavior: depending on whether they liked the product or not or if it met their expectations, they would either purchase the product again or not. With the Facebook Fanpage, they are able to go on and post about the product (good or bad). Then word of mouth begins.

Overall, Facebook has become another marketing avenue that companies can use in order to strenghten their brand in the market. So go ahead and "Like" your favorite brands, their may be some added benefits for the both of you down the line.

Sunday, February 13, 2011

Starbucks Mobile Card App Major Flaw

Starbucks has taken another step further into the smartphone technology universe by creating a new app that allows users to pay for their coffee with their smartphone device. For iPhone users like myself, my life is in my phone from email to photos to music and apps that make my life easier. Why not throw my wallet in there too? According to the coffee-giant, users can download an app that works similarly to the Starbucks Card. The app can be loaded with funds that are linked to an account (i.e. debit card) and when it comes time it pay, they just pull up a barcode image on their phone and scan it. TRANSACTION COMPLETE!



At first thought, this idea seems pretty impressive. No need to fumble through my HUGE purse looking for my wallet to pay for my morning coffee. Convenient right? But after looking further into this new app it has become very clear that this new technology has a major design flaw. In the time it takes for you to come back from the bathroom, a hacker can compromise your Starbucks. This can be done due to the fact that your Starbucks account is not password protected and there is no identity verification at the time of purchase. Within minutes your account is depleted with something as simple as a screen shot of your barcode.

CONVENIENCE VS. SAEFTY

This brings about another concern. If it is so easy to gain access to deplete my funds, how easy will it be for hackers to compromise the account that is linked to the Starbucks account. Although you can link your Starbucks account with PayPal, many users will most likely opt to use their debit and credit cards which can make hem sitting ducks for hackers that prey on that type of information.

So question is: Are you willing to compromise your finanicial safety in order to get out of Starbucks a bit quicker or carry around less?

Sources:
http://www.mobilecommercedaily.com/2011/02/09/how-to-compromise-the-starbucks-rewards-card-app-in-90-seconds
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/05/investopedia49861.DTL

http://www.wired.com/epicenter/2011/01/stabucks-mobile-app-goes-national-digital-wallet-advances/#