Big data for B2B: How the world’s oldest pharmaceutical and chemical company uses social media mining to advance technologies for life

on 08/07/2015

Customer case study showing how the world's oldest pharmaceutical and chemical company uses big data mining to create new business opportunities.

Table of contents

  • Finding new business opportunities with big data insights
  • How the world’s oldest chemical company is shaping the future
  • Solution
  • Result
  • Outlook

Finding new business opportunities with big data insights

Business-to-business (B2B) markets are rapidly evolving: increased competition, shorter product life cycles and changing industry value chains require new business competencies that extend far beyond traditional skill sets.

Merck KGaA, Darmstadt, Germany, a leading science and technology company, faced the challenging questions that many B2B companies are trying to answer:

  • How can we get a faster and more efficient understanding of the end market and its trends?
  • What value can these new insights generate for the company, its customers and for the whole industry?

The company recognized the value of big data insights for an agile R&D department, enhanced product development and critical business competencies that open up new revenue streams.

Leveraging product development and marketing

Powered by Talkwalker technology, Merck KGaA, Darmstadt, Germany has established a fully integrated social media data mining that has helped bridge the gap between end consumers, value chain links and internal development processes.

The following report will detail how Merck KGaA, Darmstadt, Germany is positioning itself as a leading innovation and intelligence partner in the industry, and how it generated tangible results through big data mining.

Key takeaways

  • Real-time market insights and trend scouting generate value for customers as well as internally, and drives innovation.
  • Social data help B2B companies deepen relationships and enhance cooperation with their partners.
  • Lessons learned can be distributed along the value chain to move from a push to a pull-marketing approach.

How the world’s oldest chemical company is shaping the future

Founded in 1668, Merck KGaA, Darmstadt, Germany* is a leading science and technology company that specializes in healthcare, life science and performance materials. The founding family remains the majority owner of the publicly listed corporate group.

As the global market leader for liquid crystals (LC) for displays (LCDs), the company’s innovative specialty chemicals are a core component used by display manufacturers for LCD screens in TVs, smartphones, automotive displays and many other products.

Liquid crystal production facility in Darmstadt

Liquid crystals production facility in Darmstadt. Merck KGaA, Darmstadt, Germany is the technology and market leader in liquid crystals for LCDs.

Anticipating future trends has become a key challenge

However, while its innovations benefit millions billions of people worldwide, as a B2B company, Merck KGaA, Darmstadt, Germany has traditionally been separated from end users in the value chain.

Value chain

Working directly with display manufacturers and leading brands to identify customer needs for smartphone displays in a pilot project, the company was able to swiftly introduce improved display technologies to the market that among other things created the base for today’s more efficient smartphones.

*In the US and Canada, Merck KGaA, Darmstadt, Germany is known as EMD Performance Materials

Dr Markus Czanta describes the challenges of managing product development and innovation as a B2B company:

“For years, a key challenge was the gap in time and information between end users and R&D departments at the beginning of the B2B value chain. We needed a faster and more efficient way to connect with consumers, hear their product feedback, look for trends, scout for new ideas, and distribute these insights into our R&D as well as to the product development of our partners.”
Dr. Markus Czanta, Director of Global Technical Marketing at Merck KGaA, Darmstadt, Germany

Merck KGaA, Darmstadt, Germany established a new competence center in social data mining for gathering social insights, thereby enabling more efficient product development as well as more effective collaborations between the company and its external partners in the future.

The LCD market

 

Challenges - Merck KGaA

But why social media mining?

“The LCD market is so dynamic that we can’t wait for customer feedback to trickle down the industry value chain - if one link delays or breaks, that information might not reach us in time. Effective and efficient product development requires the immediacy of real-time social media mining.”
Dr Markus Czanta, Director of Global Technical Marketing at Merck KGaA, Darmstadt, Germany

Based on this, the company defined objectives it wanted to achieve:

Objectives

  • Enhance R&D and product development with the help of big data insights.
  • Create value for customers and partners by establishing new market research competencies.
  • Understand the market, extract trends and uncover innovation ideas by analyzing online discussions.

The following chapters will detail how Merck KGaA, Darmstadt, Germany was able to achieve these objectives through various social media mining methods and how the company approached and successfully mastered a number of digital transformation challenges in the process.

Use case examples: trend scouting, R&D and product development

Analysing the Pokémon Go hype
Virtual & augmented reality discussions and their impact on headsets and glasses

Digital transformation and industry 4.0
New business drivers and key success factors are changing how B2B works

Sentiment analysis for R&D
Linking smartphone features to consumer perceptions for better products

In-depth analysis of key events
Consumer Electronics Show 2016 insights and trend scouting

Enhancing B2B marketing
Moving from push- to pull-marketing along the value chain

The value of social media mining for Merck KGaA, Darmstadt, Germany

Analyzing the Pokémon Go hype: augmented & virtual reality and their impact on headsets & glasses

Heat map about Pokemon Go

500,000 results in 30 days
Heat map about Pokémon Go. VR/AR and headsets/glasses

Pokémon Go is a location-based augmented reality (AR) mobile game for iOS and Android devices. It enables users to capture, train and fight with virtual creatures, so-called Pokémons, who appear on the screen as if they were in the same physical location as the player.

Pokémon Go has generated around 25 million results on social media in the first month, with an increase of 400% within the first week of its release (July 5 – July 12).

Detailed view on VR/AR

5% of all 746,000 results for the last 2 months
Detailed view on VR/AR: results over time 19.06.2016 - 10.08.2016

Using social analytics, Merck KGaA, Darmstadt, Germany studied the impact of Pokémon Go on the virtual and augmented reality discussion in general, as well as its influence on the discussion around VR glasses and headsets.

Results show that both augmented and virtual reality (VR) discussion increased on social media in the wake of the launch. However, while discussions around AR dropped again in the next weeks, VR remained at a higher level.

Social media engagement (per result) has clearly increased for AR, VR and glasses compared to before the Pokémon launch.

While Twitter was the most common media type for all topics, the app has had an impact on the media footprints of AR, VR and headsets, typically by a factor of 2x - 4x.

Glasses vs headsets - Merck KGaA

AR/VR: glasses vs headsets.

The number of documents significantly increased for headsets, but – interestingly - not for glasses (for the period shown).

After this first AR/VR analysis, the value of using real-time social data mining has once again become apparent. Pokémon Go changed the consumer experience and behavior within a few days and the app has been brought augmented reality from an expert-focused technology to the broad consumer market.

This represents an impressive case of the power of combining available technologies (in this instance a camera, GPS, motion sensors and smartphone displays) to change consumer experience and behaviour. Through analyzing and applying vast amounts of data on the subject, Merck KGaA, Darmstadt, Germany can leverage real-time insights and can keep its external partners updated on the dynamic consumer market.

Smartphone displays

New drivers and success factors: the world of B2B is changing

In the wake of global digitalization and consumer discourse on the internet, the pace of innovation cycles has picked up. If companies want to stay ahead of the market, they have to know what the market wants and they need to find ways to anticipate future developments. B2B has to adapt in order to handle a variety of new drivers and key success factors.

New business drivers

  • Faster & shorter product life cycles
  • Increased competition
  • Digitalization & big data are changing business models
  • Strong pressure & competition for innovation

New key success factors

  • Early & holistic trend scouting
  • Fast reaction & flexibility for product development
  • Mastering digitalization & big data
  • Cooperations beyond direct B2B customers

Tomorrow’s essential requirements for B2B companies

  • B2B companies have to master digitalization and big data for their specific business with the aim to become (semi-) software companies at critical competencies.
  • B2B companies have to increasingly think beyond own products with the help of advanced market research and trend scouting.
  • B2B companies have to be proactive beyond direct customers, manage stakeholders along the value chain, and establish focused cooperations.

Sentiment analysis for R&D: linking smartphone features to consumer perceptions

The key product of Merck KGaA, Darmstadt, Germany are the so called liquid crystals (LC), a core component to manage light within a display (LCD). However, the concrete chemical mixture depends on physical properties, which themselves define the performance of the final display product.

The question for smartphone display development

Should Merck KGaA, Darmstadt, Germany focus on chemical products that enable new technologies for a higher resolution, or higher brightness, or on products that improve contrast ratio?

To get insights into which smartphone display feature consumers value most, the company analyzed sentiment around the latest smartphone models with the following results:

comparison of features of high-end smartphones by sentiment

Comparison of features of high-end smartphones by sentiment.

Color reproduction, resolution as well as brightness and battery life are all valued differentiation criteria, while contrast is not critical from a consumer side at these products. Resolution as well as brightness and battery life are all valued differentiation criteria, while contrast is not critical from a consumer side.

The topic of resolution was investigated in greater detail:

Sentiment analysis of resolution of top smartphones

Sentiment analysis of resolution of top smartphones.

As can be seen, there is a clear correlation between positive sentiment and display resolution of the latest high-end smartphones.

Following from this, liquid crystal development should be focused on enhancing resolution and brightness, but less on contrast.

Based on this result, Merck KGaA, Darmstadt, Germany got a direct insight into the end products, and can proactively link its product development with its customers.

Niche insights: social data sentiment analysis

Sentiment analysis works best when applied to niche topics. In this case, Merck KGaA, Darmstadt, Germany had a very specific question and several product characteristics it wanted to examine.

Cross-referencing the data and linking sentiment to specific product features can help companies develop a better understanding of what their customers want and then adapt their product strategy accordingly.

In-depth analysis of key events: Consumer Electronics Show 2016

Major industry events have always held a great potential for B2B companies. The Consumer Electronics Show (CES) in Las Vegas is one of the key events for the technology industry, and a barometer for which trends will dominate the sector.

As a producer of performance materials (specialty chemicals) for display screens, it is crucial for Merck KGaA, Darmstadt, Germany to evaluate and quantify the online discussion around CES. The following graph highlights some key findings the company was able to extract using data mining methods.

Infographics on display applications and brands

Merck KGaA, Darmstadt, Germany distributes in-depth reports on key events to its partners. They do not only serve as a trend analysis for the company itself, but also give crucial information to R&D departments of partners who may not have been present at the event, thereby adding value internally and for partners.

Enhancing B2B marketing: moving from push- to pull-marketing along the value chain

With the early identification and market introduction of a new technology for smartphones, Merck KGaA, Darmstadt, Germany has recently shown the impact and large business potential that cooperation beyond direct customers can create.

Through the close cooperation with a leading brand, Merck KGaA, Darmstadt, Germany has re-allocated its R&D resources at an early stage and has now become the technology leader in this field. To built on this, the company targets further cooperation along the whole B2B value chain. For this, the new competence of social media mining plays a key role, as it enables the company to understand the end market and consumers’ opinions.

The company can thus work with players along the value chain, and align consumer needs faster and more effectively with technological possibilities, which are often not known in detail in the value chain closer to the consumer.

B2B marketing - from push- to pull-marketing along the whole value chain

B2B marketing: from push- to pull-marketing along the whole value chain.

Using social data this way, all players in an industry can benefit from and use these insights to improve their workflows, products and time to market, which ultimately will benefit the company’s bottom line.

The value of social media mining for B2V companies

Aside from planned use cases, Merck KGaA, Darmstadt, Germany was able to apply social media insights to other areas within and outside of the company. At present, many different departments benefit from the advanced market research techniques as the graphic below shows.

Value of social media mining

Value of social media mining.

Merck KGaA, Darmstadt, Germany has also emphasized the need to share knowledge gained through social media analytics with its partners and other players, thus positioning itself as a thought and innovation leader within the industry.

The company is distributing insights in a variety of ways, including:

  • Sending a dedicated weekly industry newsletter
  • Studies of key events such as CES or Mobile World Congress for partners
  • Customized studies for clients upon request

Conclusion

In the wake of global digitalization and consumer discourse on the internet, the pace of innovation cycles has picked up. B2B has to adapt in order to handle a variety of new drivers and key success factors. If companies want to stay ahead of the market, they have to know what the market wants and they need to find ways to anticipate future developments.

Merck KGaA, Darmstadt, Germany has identified big data mining as a tool that helped the company to position itself as an industry driver of innovation and enabled it to operate at the pulse of time with enhanced market research.

Today, the company...

  • Analyzes key fairs of the industry (e.g. CES), monitors trends (e.g. the impact of Pokémon on new VR/AR products like headsets and glasses)
  • Studies the relevance of product features for the direction of product development (e.g. importance of resolution and brightness for smartphones)
  • Screens the internet for new ideas (idea scouting)
  • Supports its customers with newsletters on latest consumer trends
  • Creates customized in-depth studies for its customers and partners

With social media mining, Merck KGaA, Darmstadt, Germany understands the consumer world better, speaks the language of the consumer, and can combine it with its technological expertise and development capabilities:

  • Cooperation beyond direct customers have turned out to be a significant new source of value for B2B businesses
    Case: the alignment with a leading brand enabled an improved display technology, which is now used in latest smartphone models

  • The new consumer insights allow for an even better alignment in the B2B value chain and industry
    Motivated by social media insights, the alignment of brands and large retailers with the technological know-how of Merck KGaA Darmstadt, Germany enables the early identification, efficient development and faster market introduction of new product

In sum, social media mining represents a new key competency, which enables Merck KGaA, Darmstadt, Germany to meet the challenges of today’s B2B companies, to enhance its product development and to more effectively align with partners in the whole industry.

The company has successfully created new opportunities through social data mining and was able to improve performance by

  • Speaking the language of consumers, retailers and brands
  • Developing new and improved products with a shorter time to market
  • Creating a closer link between what consumers want and technological possibilities
  • Combining the expertise and know-how of key parties along the B2B value chain

About Dr Markus Czanta

Markus Czanta started working for Merck KGaA, Darmstadt, Germany in 2002 after achieving a PhD in physics. Since then, he has completed an Executive MBA program at Ashridge Business School and has lead various units in the areas of research and development (R&D) as well as marketing and sales (M&S). Since 2015, he oversees the Global Technical Marketing unit in the Display Materials division, where he is responsible for trend scouting, industry networks, product roadmaps, market introduction of new technologies and business development. He spearheads strategic projects in digitalization and value generation through big data at Performance Materials as well as at a corporate level.

Dr Markus Czanta

 

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