How does the social media affects the pricing strategies of big companies?

Social media has revolutionized how we communicate and interact with each
other. It has also become a powerful tool for businesses to connect with customers and
promote their products. This has led to an increasing impact on big companies' pricing
strategies. Companies can monitor and respond to customer feedback through social
media, track competitor pricing, and adjust their pricing strategies accordingly.

According to Chokhany, One significant way social media can affect pricing strategies is
by providing valuable customer feedback that helps companies gauge customer
sentiment about their pricing strategy. Companies can then adjust pricing in response to
customer demand or make pricing more competitive. Social media also allows
companies to track competitors' pricing strategies in real-time, allowing them to adjust
their pricing strategies to remain competitive and attract customers. This real-time
information can help companies to remain agile and quickly adapt to changes in the
market. In addition to monitoring feedback and tracking competitors, companies can use
social media to promote products and pricing strategies to a broader audience. This
helps to increase sales and drive revenue. Social media can create a sense of urgency
among customers to purchase products by promoting limited-time offers or discounts,
which can lead to impulsive purchases. This can be a powerful tool for companies to
drive sales and revenue quickly.

Schoenberger's recent study has found that companies can use social media
networks to set prices and determine optimal buyers. The study suggests that
companies can selectively promote a product based on the model's insights into which
customers are most likely to buy it and tell their social media network about it. They can
also use coupons to target the most likely customers. The study considers the three
stages of a product launch - development, launch, and post-launch - and develops a
mathematical model to represent a set of customers, capture their social media
connections, and track whether they buy the product when it is launched. The
researchers found that a company can determine whether to launch a product and
determine the optimal buyers based on their social media friends, allowing them to sell
their products with mathematical precision. This suggests that social media networks
have become a critical source of information for companies looking to optimize their
pricing strategies and target their most likely customers. 
 However, social media also has its downsides when it comes to pricing
strategies. Negative feedback or comments about pricing can quickly spread on social
media and damage a company's reputation. This means that companies must carefully
monitor social media channels and respond promptly to any negative feedback.

Moreover, relying solely on social media for pricing strategies can be risky, as it
may not provide a complete picture of market trends and customer behavior. Therefore,
companies must combine social media insights with other data sources to develop
comprehensive pricing strategies that reflect the complexities of the market.

In conclusion, social media has become an essential tool for companies and
helps to monitor customer feedback, track competitors, promote products, and drive
revenue through targeted pricing strategies. With the continued growth of social media,
companies will likely become even more reliant on these platforms to optimize their
pricing strategies and connect with customers.

References:

Chokhany, P. (2016). Pricing Strategy - Social Media Marketing. 

https://www.linkedin.com/pulse/pricing-strategy-social-media-marketing-
pallavi-chokhany

Schoenberger, C. (2018, December 6). How Companies Can Use Social Media
Networks to Set Prices. The University of Chicago Booth School of Business.
https://www.chicagobooth.edu/review/how-companies-can-use-social-media-
networks-set-prices