Month: March 2011

Facebook on March 23, 2011 has announced a new approach into advertising in which it will be able to reach its target markets efficiently. Even with all the media and the issues facebook has encountered regarding its privacy policies, Facebook is still coming up with different ways it can connect consumers with advertisers. This time, Facebook is testing a new approach in which it mines real-time conversations to target ads. The delivery model is said to being tested on 1% or 6 million of facebook users worldwide

Facebook has been delivering targeted ads based on wall posts and status updates for a while now, but never have they delivered on a real time basis. An example of how facebook will deliver their ads is such that users who update their status with “Summer is coming!!” could get ads or offers from touring companies, hotels, or vacation destinations. By simply typing in “Keywords” for specific categories will immediately turn the user a marketer’s target of interest. This is an effective approach in which facebook can expand their methods of reaching target audiences beyond the usual targeting methods such as through “likes” and interests.

Gap recently promoted a new website, www.gapmyprice.com, which allows consumers to name their own price for a pair of men’s khakis. This approach really stands out as it brings a completely new strategy to the market in response to the changing market demands for cheap and “good deal” products. This seems to bring a brand new experience to online shopping for customers.

Gap’s solution in satisfying the consumer surplus of the market seems effective. Not only will it maximize the company’s profits, but it will also satisfy consumers into thinking they got a good deal. This new pricing strategy allows consumers to take the haggling experience online while they shop. This pricing strategy price discriminates as it tailors its prices to each individual. Therefore, it allows the company to maximize the amount a consumer will be willing to pay.

The only downside to this marketing strategy is the nature of the product. Pants in general are one of the hardest clothing items to buy without trying on. Thus, even with a successful promotion, this would result with a lot of product returns. Although a good idea, the success of this promotion seems unpredictable.