Ravi Raj, standing, of @WalmartLabs examined social media data. Peter Dasilva for The New York Times

 

After Wal-Mart started carrying a spicy chip called Takis, @WalmartLabs found that most of the positive chatter about it was coming from California and the Southwest.

The merchants, judging that they could sell additional products in those states, commissioned a similar spicy chip from Wal-Mart's private-label brand and introduced another, called Dinamita, from Doritos. Wal-Mart began selling both lines in California and the Southwest earlier this year, and is now adding them to other stores. For Frito-Lay, seeking product ideas on Facebook, via the Lay's Do Us a Flavor app, has a few advantages.

Once the company sees what is popular and where, it can tailor its products to specific areas of the country. While Frito-Lay will produce three of the flavors from its contest and give a $1 million prize to the creator of one of those flavors, Ms. Mukherjee said the company would also study other suggestions. "This is a real competitive edge for us," she said.

The social media approach also attracts younger customers. People who sign up for focus groups or consumer panels are generally not young fad followers, but Facebook users often are, so adding social media to the mix lets Frito-Lay get a wide range of consumer feedback.

Marketers are trying to find a balance between privacy concerns and the rich data available online. Mr. 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.

For the most part, when someone uses a brand's Facebook app, the brand can obtain a range of personal information, said Mark LaRow, the senior vice president for products at the software company MicroStrategy. Microstrategy has built its own app, Wisdom Network, that can gain access to about 13 million private Facebook profiles once a user gives it permission.

The app gathers information about users and their friends. Marketers might use the data to see what current or potential customers do and like, or what rich customers prefer versus poorer ones.

"This is like the biggest focus group someone could ever imagine," Mr. LaRow said.

The New York Times