India's Tata, U.S.-based Vemma Nutrition, other CPG companies increasingly venturing into social media to connect with consumers in new ways, giving them greater influence over such things as package design; trend expected to continue to grow

Bdebbie Garcia

LOS ANGELES , October 18, 2011 (Industry Intelligence) – Social media websites are increasingly being used by consumer packaged goods companies to connect with their customers in new ways, giving consumers greater input into such things as packaging design, according to experts, reported Packaging World Magazine in its October 2011 issue.

Websites such as Twitter, LinkedIn and Facebook give companies a way to talk to and listen to their customers, which can lead to new product development and new market discovery, said Scott A. Morris, director of the packaging program at the University of Illinois at Urbana-Champaign.

Some companies have used social media to do consumer research leading to new packaging designs, Packaging World reported.

Eight O’Clock Coffee Co., a brand owned by India-based Tata Global Beverages Ltd., used Facebook to ask consumers to rate two bag designs. The winner is “contemporary, more appetite appealing,” said Alisa Jacoby, the Montvale, New Jersey-based company’s senior brand manager.

Media platforms such as Facebook and Twitter were used by Scottsdale, Arizona-based Vemma Nutrition Co. to rebrand its Verve Energy Drink products. A survey asked respondents to vote for five different label concepts, reported Packaging World.

Pictures of the label designs, which applied to the energy drink’s regular and zero-sugar versions, were posted on Facebook for followers to rate and to make comments. Facebook was subsequently used to post winning design and to seek ideas for captions.

Morris said he expects online marketing to continue to change and be different in five years, just as it’s changed in the past five years. He advises companies to become more comfortable with social media or it could stunt their growth, Packaging World reported.

Global companies now spend US$4.26 billion to advertise on social media, up from about $480 million in 2006. Ads on social media account for 7% of all online ad spending, based on Flowtown estimates, reported ragan.com.

To be effective, company websites should keep their visitors interested. Not having a website is usually better than having a bad one, said Morris.

Social media also is changing the retail business as customers are able to comparison shop easily, quickly and inexpensively for better prices and to access customer reviews or alternative products, he said.

This is pushing retailers more into the specialty market, particularly where costs of distribution and inventory are low, said Morris, reported Packaging World.

The primary source of this article is Packaging World Magazine, Chicago, Illinois, in the October 2011 issue.

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