Marketing in a digital world

The Changed Marketing Concept and Environment

From Harvard Twitter
People Are the New Channel
Externally, empower your customers to be brand advocates
Internally, treat your entire organization as your marketing team
Don't talk, listen
Don't push products, solve problems
Don't stop at 1-to-1, think many-to-many
http://blogs.hbr.org/cs/2013/04/people_are_the_new_channel.html?utm_source=Socialflow&utm_medium=Tweet&utm_campaign=Socialflow

“It’s a disadvantage of the revolution … People used to say that information is power but that’s no longer the case. It’s analysis of the data, use of the data, digging into it – that is the power. You get so much of the stuff and everyone has access to it.” (Sir Martin Sorrell)

“In the old days, you could segment happily. You could put out one message to one segment of the audience, and one to another. That has now gone. You say something to one community and instantly, literally at a click, it’s available to everybody. What it means is that if you’re trying to craft a message, it’s very difficult.” (Sir Martin Sorrell)

WHAT IS MARKETING ?
Selling?
Advertising?
Promotions?
Making products available in stores?
Maintaining inventories?
All of the above, + much more!

DEFINITIONS OF MARKETING
‘… a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others’
Kotler, 1991

DEFINITIONS OF MARKETING
‘The achievement of corporate goals through meeting and exceeding customer needs better than the competition’
Jobber, 1995

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, services to create exchanges that satisfy individual and organizational goals
American Marketing Association
DEFINITIONS OF MARKETING

Disruptive Technology
Quick summary:
A disruptive innovation initially offers a lower performance in relation to the existing market
But the introduction of new disruptive innovation or technology offers new performance attributes which the consumer reacts too
Through time the disruptive technological gadget or innovative product ends up displacing the former dominant technology.

Differences between Traditional and Digital Marketing
In your opinion, what separates traditional marketing and marketing in digital age?

Death of Traditional Marketing
Buyers arechecking out product and service information in their own way, often through the Internet, and often from sources outside the firm such as word-of-mouth or customer reviews.
Restoration of community marketing

Introducing the scope of Internet Marketing
“Achieving marketing objectives through applying digital technologies”
How?
Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably.
Chartered Institute of Marketing
How?
Source: Chaffey

A more in-depth definition
Customer-centric digital marketing involves:
Applying…
Digital technologies which form online channels… (Web, e-mail, databases, mobile, iDTV)
to…
Contribute to marketing activities aimed at achieving
profitable acquisition and retention of customers
(within a multi-channel buying process
and customer lifecycle)
through…
Improving customer knowledge (of their profiles, behaviour, value and loyalty drivers), then delivering integrated targeted communications and online services that match their individual needs
Source: Chaffey

Source Kotler
Forces Shaping the
Internet Age

source: Kotler
Major Forces Shaping the Digital Age
Digitalization & Connectivity
The flow of digital information requires connectivity
Intranets, Extranets and the Internet

Source: Kotler
Major Forces Shaping the Digital Age
The Internet Explosion
Key driver
of the New Economy

3 -
Major Forces Shaping the Digital Age
New Types of Intermediaries Brick-and-mortar firms often face disintermediation from click-only competitors
The click-and-mortar business model has been highly successful

3 -
Major Forces Shaping the Digital Age
Customization and Customerization
Information businesses are at
the heart of the New Economy
Has enhanced marketer’s ability to customize and “customerize” product offerings

Source: Kotler
Marketing Strategy in the Digital Age
E-business:
uses
electronic means and platforms to conduct business.

On-Demand Marketing
What is the changed picture?
On-demand centre to store your business information
Information stored can be retrieved anytime through the internet
Why is it different?
Convenience for your customers and yourself can maximize your sales and save you cost

On-Demand Marketing
What is the changed picture?
Computers through internet can now take care of recurring communications requests
Why is it different?
Saves expenditure by answering your customers’ enquiries once and for all
Keep record of any communication and form a relationship channel

On-Demand Marketing
What is the changed picture?
You can now track customers’ service sessions and purchases
You can record almost anything that they do on your on-demand marketing center
Why is it different
Understand of what your clients need and offer what your clients want.

On-Demand Marketing
Supporting Traditional Marketing

How does the Internet contribute to marketing?
The definition of marketing by the Chartered Institute of Marketing (http://www.cim.co.uk/) is:
Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitability
Give examples of how the Internet (web and e-mail) achieves these?

How the Internet supports marketing
Identifying – the Internet can be used for marketing research to find out customers’ needs and wants
Anticipating – the Internet provides an additional channel by which customers can access information and make purchases – evaluating this demand is key to governing resource allocation to e-marketing
Satisfying – a key success factor in e-marketing is achieving customer satisfaction through the electronic channel, which raises issues such as: is the site easy to use, does it perform adequately, what is the standard of associated customer service and how are physical products dispatched?

CORE MARKETING CONCEPTS

CORE CONCEPTS OF MARKETING
Based on :
Needs, Wants, Desires / demand
Products, Utility, Value & Satisfaction
Exchange, Transactions & Relationships
Markets, Marketing & Marketers.

What are Consumers’ Needs, Wants, Demands and Desire?
Needs - state of felt deprivation including physical, social, and individual needs i.e hunger
Wants - form that a human need takes as shaped by culture and individual personality i.e. bread
Demands - human wants backed by buying power i.e. money
Desire- Have a Burger in a five star hotel

Dynamic yet Unreceptive
Aggressive or Dynamic
People can’t turn it off even if they don’t wish to see it anymore
Passive or Unreceptive
People have to wait for the AD even if they want to see it

Paucity of Traditional Marketing
Dynamic yet unreceptive
Delivery of information sometimes untimely
Expenditure of marketing media is high

Un-Timely Information
After delivery, you cannot change/update the information
After development, you cannot modify your contents
Your customers may not receive the most timely information as a result……..

Un-Timely Information
On-Demand Solution:
Always provide the latest contents for your customers to access
Only have to update your information at one place

Expenditure of Marketing Media
Billboard Advertisement: $5000-$7000/month
Yellow Pages : $2000/yr for smallest Ad
Flyer: 70 cents per flyer, $2000/campaign
Newspaper Ad: $2000/week minimum
TV Commercial: $$$$$$$..... a lot
Radio Commercial: $1/sec $3000-$4000/campaign
All info provided are for reference only

Cost of Marketing Media
On-Demand Solution:
Smaller ad space
Single page flyer
Minimize mailing expenses
Minimize reprints of catalogues or brochures

On-Demand Marketing
Satisfying your customers in digital age

Why is a digital strategy needed?
To set clear goals for digital channels
To align with business strategy (avoid ad-hoc approaches)
Create a specific online value proposition (OVP)
Specify communications tools to drive visitors
Integrate digital and traditional channels
Manage customer lifecycle (e.g. through email marketing)
Source Chaffey

Applications of digital marketing
An advertising medium
A direct-response medium
A platform for sales transactions
A lead-generation method
A distribution channel
A customer service mechanism
A relationship-building medium
Source Chaffey

3 -
Marketing Strategy in the Digital Age
E-marketing:
Includes efforts that inform, communicate, promote, and sell products and services over the Internet.

SOSTAC – a generic framework
for e-marketing planning

Competition in Digital Age
The Internet is changing customers’ expectations about convenience, price, quality, and service.
As a result a new model--the “network organization” or “e-corporation”--is evolving as a new form of competition.
These firms combine computer, the Web, and software to change everything about they way they operate.

7 S Framework

A Product is any offering that can satisfy a need or want, while a brand is a specific offering from a known source.
When offerings deliver value and satisfaction to the buyer, they are successful.
WHAT IS A PRODUCT ?

A SIMPLE MARKETING SYSTEM
Goods/services
Money
Information

TRADITIONAL MARKETING
●Marketing is the sum of all activities that take you to a sales outlet. After that sales takes over.
● Marketing is all about creating a pull, sales is all about push.
● Marketing is all about managing the four P’s –
product
price
place
promotion
DEAD

THE 4 Ps & 4 Cs
Marketing
Mix
Customer
Solution
Customer
Cost
Communication
Convenience

MARKETING TRIANGLE

WHO IS A CUSTOMER ?
Anyone who is in the market looking at a product / service for attention, acquisition, use or consumption that satisfies a want or a need
CUSTOMER IS . . .

CUSTOMER
CUSTOMER has needs, wants, demands and desires
Understanding these needs is starting point of the entire marketing
These needs, wants …… arise within a framework or an ecosystem
Understanding both the needs and the ecosystem is the starting point of a long term relationship

HOW DO CONSUMERS CHOOSE AMONG PRODUCTS & SERVICES?
Value - The value or benefits the customers gain from using the product versus the cost of obtaining the product.
Satisfaction - Based on a comparison of performance and expectations.
Performance >Expectations => Delighted customer
Performance < Expectations => Dissatisfied customer
Performance = Expectations => Satisfied customer

Value = Benefit / Cost
Benefit = Functional Benefit + Emotional Benefit
Cost = Monetary Cost + Time Cost + Energy Cost + Psychic Cost
CUSTOMER FOR VALUE

Marketing Funnel

RACE MODEL
Source: Smart Insights (2010)

Manage our identity
Open to new ideas
Greater control
Digital Etiquette

STORM IN A D
Do you know the business story here?
adapted:www.ashcombe.surrey.sch.uk

MAIN ISSUES
M&S introduced a policy of price discrimination in the lingerie department; they charge an extra £2 for bras sized over a DD cup.
a pressure group ‘Busts 4 Justice’ has been set up on Facebook and had over 16,000 members who were campaigning for this surcharge to be removed.
The group’s founder, Beckie Williams, has bought a £3.40 share in the company to allow her to confront chairman Sir Stuart Rose at the next annual meeting in July.
On Friday, M&S apologised & Saturday started a promotional campaign!
www.ashcombe.surrey.sch.uk

WE BOOBED!
On Friday M&S backed down, saying "we boobed".
Miss Williams, 26, met chairman Sir Stuart Rose, who revealed the company's response of cutting the charge has cost £3million.
www.ashcombe.surrey.sch.uk

M&S Comment…
"We've heard what our customers are telling us - that they are unhappy with the pricing on our DD-plus bras and that basically we've boobed.
So from Saturday May 9 no matter what size you buy, the price is going to be the same. We're not going to cut the quality though - they'll still be made to the same high standards so you get the best support on the high street.
From Saturday, the chain is also offering 25% off the price of any bra in any size. The promotion will last until May 25.”

Raising benefits.
Reducing costs.
Raising benefits while lowering costs.
Raising benefits by more than the increase in costs.
Lowering benefits by less than the reduction in costs.
ENHANCING VALUE

Exchanges
Transactions
Relationships
Building a Marketing
Network by Adding:
Financial Benefits
Social Benefits
Structural Ties
Profitable Customers
HOW DO CONSUMERS OBTAIN PRODUCTS & SERVICES?

Exchange involves obtaining a desired product from someone by offering something in return.
Transaction involves at least two things of value, agreed-upon conditions, a time of agreement, and a place of agreement.
Relationships are built through delivering value and satisfaction
EXCHANGE TRANSACTION RELATIONSHIPS

MARKET
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable

Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
Customer-Driven
MARKETING MANAGEMENT PHILOSOPHIES

THE PRODUCTION CONCEPT
Available and affordable products
Improving production and distribution efficiency
Two situations wherein it's still useful philosphy (Henry Ford's model T)

Henry Ford said of the model T vehicle :
"I will build a car for the great multitude. It will be large enough for the family, but small enough for the individual to run and care for. It will be constructed of the best materials, by the best men to be hired, after the simplest designs that modern engineering can devise. But it will be so low in price that no man making a good salary will be unable to own one—and enjoy with his family the blessing of hours of pleasure in God's great open spaces."

THE PRODUCT CONCEPT
The most quality, performance and features
A solution to a consumer problem (eg: mouse trap, vaccum cleaner etc)
Marketing myopia

THE SELLING CONCEPT
Unsought goods, overcapacity
A wrong approach and high risks
Dissatisfied customer

THE MARKETING CONCEPT
Customer focus and value, the paths to sales and profit

THE SOCIETAL MARKETING CONCEPT
Organization determines the needs and wants of the target market delivering the desired satisfaction in a way that it maintains or improves the consumer's and society's well being.
Pure marketing and societal marketing (Eg: fast food industry- Mac Donalds)

AT A GLANCE
Short-term profit
(selling concept)
Long term profit
(marketing concept)
Long-term welfare
(societal marketing)

THE MARKETING ENVIRONMENT
MICRO-ENVIRONMENT (Internal environment): Forces close to the company that affect its ability to serve its customers. May have some influence on these.
MACRO-ENVIRONMENT (External environment): Larger societal forces that affect the whole micro-environment. Company very unlikely to be able to influence these.

MICROENVIRONMENTAL FORCES
Company
Customers
Intermediaries
Suppliers
Competitors
Publics
MACROENVIRONMENTAL FORCES
Political
Cultural
Economic
Demographic
Technological
Natural

INTERNAL AUDIT SWOT ANALYSIS
STRENGTHS
eg Brand name
USP
OPPORTUNITIES
New markets
New products
Technology
WEAKNESSES
eg Levels of awareness
Absence of competitive advantage
THREATS
Competition
Technology
Demographics

EXTERNAL AUDIT PEST ANALYSIS
POLITICAL
Laws
Pollution control
Product safety
Lobbies
ECONOMIC
Changes to income, prices, savings etc
Market health
SOCIAL
Demographics
Cultural
Attitudes
Lifestyles
TECHNOLOGICAL
Advances
Replacements

IMPACT OF CULTURE
CULTURE
LANGUAGE
RELIGION
VALUES AND ATTITUDES
LAW
EDUCATION
POLITICS
TECHNOLOGY
SOCIAL ORGANISATIONS

Explanation of tools