21 Changing Marketing Practices: Digitalization & Customization

Bhagwan Singh

LEARNING & INSTRUCTIONAL OBJECTIVES

At the end of this chapter, learner should be able to:

Understand & Defining Digitalization
Define Customization
Understand the various Changing marketing practices
Understand E-Marketing and its concept
Gist / Summary of the Module
Review questions

INTRODUCTION

Marketing is not just selling or promoting goods or services in real market but also in virtual market i.e. internet world. This virtual market is digitally connected with the whole world. The digital marketing is the sky under which the target customers are approached with interactive marketing for products and services to promote brands, build performance and increase the reach by converting the leads into customers to retain them. Digital marketing is personified by an extensive selection of brand marketing tactics, which mainly use the Internet as a hub for promotional intermediate, in addition to other media vehicles.

Today we can distinguish between a market place and a market space. The marketplace is physical, as when one goes shopping in a store; market space is digital, as when one goes shopping on the Internet. Digital Marketing has many advantages for both consumers and businesses, including convenience, savings, selection, personalization, and information. For example, on-line shopping is so convenient that 30 percent of the orders generated by the Web site of REI, a recreational equipment retailer, are logged from 10 P.M. to 7 A.M., sparing REI the expense of keeping its stores open late or hiring customer service representatives. However, the digital market space is also bringing pressure from consumers for lower prices and is threatening intermediaries such as travel agents, stockbrokers, insurance agents, and traditional retailers. To succeed in the digital market pace, marketers will need to reorganize and re-define themselves.

DIGITALIZATION

Digitalization is to make available anything regarding products or services available through integration of digital technologies using internet to the customers.

Digital marketing is the tool to promote the products or services produced by the industry to the ultimate customers. It is a broader spectrum that refers to several promotional techniques organized to reach customers through digital technologies. It is also personified by an extensive selection of products or services leading brand marketing tactics, which mainly use Internet as a hub for promotional intermediate, in addition to other media vehicles like TV, Radio and Newspapers.

Fig. 20.1: Evaluation of Digitalization in Marketing (Source: Author Created)

In 1990s the concept of “Digital Marketing” was said to be used. Then it was going under dormant phase and again was active in 2000. From 2000 to 2010 digitalization in marketing became more prominent. The swift evolution of digital media has twisted new prospects and avenues for advertising and marketing.

Digital marketing activities are:

Search Engine Optimization (SEO)
Search Engine Marketing (SEM)
Campaign Marketing
Content Automation
Content Marketing
Display Advertising
E–Books
E-Commerce Marketing
E-Mail Direct Marketing
Influencer Marketing
Optical Disks And Games
Social Media Marketing
Social Media Optimization

It is customer centric approach based on inbounds logistic which is the fundamental concept of digitalization.

CUSTOMIZATION

When any company deals its customer on preference basis or provide individually differentiated products or services on acceptable and affordable prices and delivery channels for each customer, then this is termed to be Customization.

By going online, companies enable consumers to become presumes, self-producing consumers who can essentially design their own goods. Companies have also acquired the capacity to interact individually with each customer by personalizing messages, products, and services.

“The combination of operational customization and marketing customization has been called customerization.”

E-Customization

Market when went to online the customers understanding was more customized than ever. To understand the consumers or customers was fundamentally required as to boost marketing through digitalization. This developed the concept for e-customization.

Good marketers know their target customers inside out and upside down. They are able to put a microscope on their buyers. Understanding internet customers is even more important, as the geographic, demographic and cultural spread is often more spacious. Internet customers also have various attitudes, characteristics and perception to both attaining information and buying online. Above to it, the same person may both think and behave differently on internet than in physical market. Therefore, overall e-marketers have to keep a nice vigil on their internet based customer.

Online customers are changing. Not only do they talk back, they now shout back and even bite back if brands break their promises. Today‟s customers have unlocked „brand control‟ from marketers and set up their own brand discussions. Although they are still time-compressed and information-fatigued, they have found a new energy fuelled by Web 2.0 which allows them to fulfil their age old desire to communicate about what interests or concerns them.

UNDERSTAND THE VARIOUS CHANGING MARKETING PRACTICES IN DIGITAL WORLD

Although digital marketing is similar to traditional marketing, it is helpful to understand the fundamental characteristics that discriminate this scenario from the traditional marketing environment. Digitalization is the ability to characterize a product, or at least some of its benefits, as digital bits of information. Digitalization allows marketers to use the internet to share out, promote and sell those features apart from the physical item itself. India post, for example, has developed web-based software that allows clients and business consumers to track their own packages from starting point to destination.

In addition to providing distribution effect, digitizing part of a product’s features allows new combinations of features and services to be created quickly and inexpensively. For example, a Fortis that keeps a customer history of their patients in database can e-mail that customer when the next meeting with doctor is due. Digital features are easy to mix and match to meet the demands of individual.

The growth of the Internet presents exciting opportunities for marketing products to both consumers and organizations. Computers and computer peripherals, industrial supplies, and packaged software are the leading business purchases online. Consumer products account for a small but growing percentage of Internet transactions, with books/music/video, toys/video games, and consumer electronics among the fastest-growing online consumer purchases.

Through e-marketing, companies can provide products, including goods, services, and ideas, that offer unique benefits and improve customer satisfaction.

The online marketing of goods such as computer hardware and software, books, DVDs, CDs, toys, automobiles, and even groceries is accelerating rapidly. Dell Computer sells more than $56 billion worth of computers and related software and hardware, about half of that amount through its website. Flipkart has established an effective model for online auto sales by helping consumers find the best price on their preferred models and then arranging for local delivery. However, low profit margins owing to customized deliveries have challenged the ability of firms to deliver tangible goods.

Services may have the greatest potential for online marketing success. Many websites offer or enhance services ranging from home and car buying assistance to travel reservations and stock trading. At Century 21’s website, consumers can search for the home of their dreams anywhere in India, get information about mortgages and credit and tips on buying real estate, and learn about the company’s relocation services. Indian Railways are increasingly booking Train Ticket via their websites. IRCTC, for example, now books 70 percent of its passenger revenue online.

Besides the public relations from the perspective of the legacy media such as radio and print media, today‟s publicity is before anything digital. The digital publicity is sensitive to emotions and consists of an audience that is constantly emerging together with the technologies that are facilitating the connections. Digital publicity is multifaceted ill that the organization communicates with its audiences and the audiences interact among themselves.”

This has given rise to the concept of public unmanageability due to the difficulty of controlling the social media conversations and the treatment of the organization by the same media. As a result, organizations have devised new strategies to tackle these control difficulties in order to form and maintain relationships with the public. These strategies are embedded in the communication practices of the organization. Additionally, it is now not clear where the boundary between the environment and the organization lies. The organization’s belief in its interaction with public and other stakeholders has changed significantly.

Previously there were clear boundaries between what was considered private and what was considered public. It was possible to hide from publicity. Things have changed. No one knows any longer where privacy ends and where publicity begins when it comes to organizations. Companies must submit to the assumption that whatever they do, any thought, movement, or intention can be public the very same day. On the other hand, publicity itself never ends. Companies themselves cannot dictate what local publicity is and what broader publicity is. As the border between public and private blurs, all business activities are potentially public. Companies themselves cannot decide what activities will be publicized. Organizations live in glass cubes, and they have lost control forever. Publicity has become a continuum.

E-MARKETING

E-marketing is where one company can satisfy customer needs by anticipating, identifying and customizing in proper manner. The process to market through intern is e-marketing. It is more personalised than to be general.

ONLINE VALUE PROPOSITION (OVP)

The value proposition which is termed to be online value proposition is actually which has certain advantage of being online. It includes convenience, interactivity, immediacy, swiftness, easygoing as well as cheapest to purchase, quicker to buy and better online experiences. It is more informative and explorable.

Six Cs of customer motivation to help define the OVP (Chaffey, 2004):

Here are a few OVPs that appear to match the strap lines:

Autotrader – The biggest and best car site on the planet – www.autotrader.com
Boosey and Hawkes – A world of music – www.boosey.com
EasyJet – The web ‟ s favourite airline (which suggests cheapest tickets) –www.easyJet.com
Flickr – Share your photos. Watch the world. – www.flickr.com
Kelkoo – Compare. Buy. Save. – www.kelkoo.com
MUtv – The television channel dedicated to Manchester United – www.mutv.com
WordTracker.com Find the keywords you need to succeed online ww.wordtracker.com/
YouTube – Broadcast yourself – www.youtube.com
Interestingly, Amazon use the line „Top Seller ‟ instead of their previous „ Earth ‟ s biggest selection at competitive prices ‟ – www.amazon.com

Digital marketing strategy

Marketing strategy is to penetrate the products or services in the consumers mind through various media vehicles. It is after sale concept to motivate the customer to re use the company product or services through fitting the positive image of the company in customers mind. For that internet based strategy has to be followed for digitalization and customization. Digital marketing strategy generates leads based on principles of traditional marketing, using the opportunities and challenges offered by technology and the digital medium.

Customer-centric thinking to facilitate the flooded information through user friendly websites is a successful digital marketing strategy. The advent of new technologies means the digital marketing strategist of today is offered not only a plethora of new tactical possibilities, but also unprecedented ways of measuring the effectiveness of chosen strategies and tactics.

Few points to consider before stepping into digital world of marketing

Technology Strategy

Here are some questions to consider:

Are there existing tools that you can build on top of to save time/money?
Do you have root-level access to install software?
Do you need any additional tools for production management and testing?
How will any of the answers to these questions affect user engagement?
If so, how will you manage that process? What tools will you use?
What administrative tools does your host offer to help manage your domain?
What are the hardware/software specs for that server?
What are the technology requirements for the chosen CMS?
What language is the CMS written in? Does your server support it?
What server platform will the site be hosted on?
Which content management system (CMS) will you use (or will you build one)?
Will you have a staging server and a production server?
Will you pull/share data from other sources using an API?

User Strategy

You may want to consider polling a target sample of your audience to help answer some of the following questions:

How familiar are they with social tools, blogs, web apps, and the like?
How much are they willing to spend (if applicable)?
How old are the visitors to your site?
How technically proficientally are they?
What are their preferences for interacting with your brand?
What is their age, race, socioeconomic background, and so on?
What is their reading level?
What specific are they looking for from your site?
Who (again, specifically) does your site serve?
Will they visit once or repeatedly?

Content Strategy and Architecture:

Good information architecture can help ensure that everyone‟s objectives are met.

Source: Frick, T. (2010). Return on engagement: Content, strategy, and design techniques for digital marketing. Taylor & Francis.

Designing an Attractive Web Site

Creativity: the most crucial aspect for digitalization
Context: the designing and layout
Content: the part which makes the website more attractive and informative. It includes all matter of print, audio and audio-visual like text, videos, pictures, animation etc.
Community: user to user communication facilitation
Customization: making different users to personalize themselves in a very user friendly manner
Communicative: Two way communication from site to user and user to website
Connection: Degree to which the website is linked to other websites
Commerce: trade and finance composition in very user friendly manner

Building a Revenue and Profit Model

Dot-com companies need a viable revenue and profit model, a business model that specifies the main revenue sources, and the projected revenue, costs, and income the firm expects to achieve. Revenues may come from several sources:

Advertising income
Sponsorship income
Alliance income
Membership and subscription income
Profile income
Product and service sales income
Transaction commissions and fees
Market research/information
Referral income

Online executions of different communications tools

	Promotional mix	Online executions
1.	Advertising	Interactive display ads, pay per click search advertising
2.	Selling	Virtual sales staff and chat and affiliate marketing
3.	Sales promotion	Incentives, rewards, online loyalty schemes
4.	Personal Relationship	Online editorial, e-zines, newsletters, social networks, links and virals
5.	Sponsorship	Sponsoring an online event, site or service
6.	Direct mail	Opt-in e-mail using e-newsletters and e-blasts plus web response
7.	Exhibitions	Virtual exhibitions and whitepaper distribution
8.	Merchandizing	Promotional ad serving on retail sites, personalized recommendations and e-alerts
9.	Packaging	Virtual tours, real packaging is displayed online
10.	Word-of-mouth	Viral, affiliate marketing, e-mail a friend, links

SUMMARY OF THE CHAPTER

Introduction

Digitalization

Digitalization is to make available anything regarding products or services available through integration of digital technologies using internet to the customers.

Digital marketing activities are:

Search Engine Optimization (SEO)
Search Engine Marketing (SEM)
Campaign Marketing
Content Automation
Content Marketing
Display Advertising
E–Books
E-Commerce Marketing
E-Mail Direct Marketing
Influencer Marketing
Optical Disks And Games
Social Media Marketing
Social Media Optimization

Customization

E-Customization

Understand the Various Changing Marketing Practices in Digital World

E-Marketing

Online Value Proposition (OVP)

Six Cs of customer motivation to help define the OVP (Chaffey, 2004):

Digital marketing strategy

Few points to consider before stepping into digital world of marketing

Technology Strategy
User Strategy
Content Strategy and Architecture
Designing an Attractive Web Site
Building a Revenue and Profit Model
Online executions of different communications tools

Fig. 20.3: Promotional Mix (Source: Author Created)

REVIEW QUESTIONS:

Q1. What is Digital Marketing?

Ans: Digital marketing is an umbrella term for the targeted, measurable, and interactive marketing of products or services using digital technologies to reach and convert leads into customers and retain them.The key objective is to promote brands, build preference and increase sales through various digital marketing techniques. It is embodied by an extensive selection of service, product and brand marketing tactics, which mainly use the Internet as a core promotional medium, in addition to mobile and traditional TV and radio.

According to the Digital Marketing Institute “Digital Marketing is the use of digital channels to promote or market products and services to consumers and businesses.”

Q2. What is Customization?

Ans: When any company deals its customer on preference basis or provide individually differentiated products or services on acceptable and affordable prices and delivery channels for each customer, then this is termed to be customization.

Q3. Define online value proposition with 6Cs of customer motivation.

Ans: The value proposition which is termed to be online value proposition is actually which has certain advantage of being online. It includes convenience, interactivity, immediacy, swiftness, easygoing as well as cheapest to purchase, quicker to buy and better online experiences. It is more informative and explorable.

Six Cs of customer motivation to help define the OVP (Chaffey, 2004):

Q4. Give model for online execution of different execution tools?

Ans:

Q5. Explain what you understand about the various changing marketing practices in digital world

Ans: Although digital marketing is similar to traditional marketing, it is helpful to understand the fundamental characteristics that discriminate this scenario from the traditional marketing environment. Digitalization is the ability to characterize a product, or at least some of its benefits, as digital bits of information. Digitalization allows marketers to use the internet to share out, promote and sell those features apart from the physical item itself. India post, for example, has developed web-based software that allows clients and business consumers to track their own packages from starting point to destination.

Distributed over the Web at very low cost, the online tracking system adds value to post office delivery services. Distribution can be enhanced for users who have broadband access to the internet, because broad band‟s faster connections allow streaming audio and video and other new technologies. In addition to providing distribution effect, digitizing part of a product’s features allows new combinations of features and services to be created quickly and inexpensively. For example, a Fortis that keeps a customer history of their patients in database can e-mail that customer when the next meeting with doctor is due. Digital features are easy to mix and match to meet the demands of individual.

Through e-marketing, companies can provide products, including goods, services, and ideas, that offer unique benefits and improve customer satisfaction.

References:

Barich, H., & Kotler, P. (1991). A framework for marketing image management.Sloan management review, 32(2), 94-104.
Bird, D. (2007). Commonsense direct and digital marketing. Kogan Page Publishers.
Chaffey, D., Smith, P. R., & Smith, P. R. (2012). eMarketing eXcellence: Planning and optimizing your digital marketing. Routledge.
Frick, T. (2010). Return on engagement: Content, strategy, and design techniques for digital marketing. Taylor & Francis.
Harden, L., & Heyman, B. (2009). Digital engagement: Internet marketing that captures customers and builds intense brand loyalty. AMACOM Div American Mgmt Assn.
Kotler, P. (2009). Marketing management: A south Asian perspective. Pearson Education India.
Rowan, W. (2002). Digital Marketing: using new technologies to get closer to your customers. Kogan Page Publishers.
Ryan, D. (2014). Understanding digital marketing: marketing strategies for engaging the digital generation. Kogan Page Publishers.
Stokes, R. (2011). E-Marketing: The Essential Guide to Digital Marketing. Quirk Education: Cape Town, South Africa.

Websites referred:

http://www.ukessays.com/essays/marketing/digitalization-in-marketing-and-its-pharmaceutical-perspective-marketing-essay.php#ixzz3s15FoK3V
http://www.businessdictionary.com/definition/digitalization.html#ixzz3s155qzZB
http://lexicon.ft.com/Term?term=digital-marketing
https://www.techopedia.com/definition/27110/digital-marketing
http://creative.sulekha.com/customization-the-marketing-strategy_313971_blog
https://en.wikipedia.org/wiki/Digital_marketing
“Definition of digital marketing”. Financial Times. Retrieved 22 August 2015.
“Digital Marketing”. Techopedia. Retrieved 22 August 2015.
Clark, Dorie (11 November 2012), The End of the Expert: Why No One in Marketing Knows What They’re Doing, Forbes, archived from the original on 4 November 2013
“Ad agency joins up with AOL for marketing surveys”. Retrieved 2015-03-11.
Kates, Matthew (17 April 2013), Making digital and traditional marketing work together, Econsultancy, archived from the original on 25 November 2013
“Digital Marketing Communication”. iccwbo.org. Retrieved 17 October 2015.
Brinkley, Claire (18 October 2012), Digital marketing is growing in Australia, but so is the skills gap, Econsultancy, archived from the original on 21 October 2012
eMarketer (25 September 2013), Worldwide Ad Growth Buoyed by Digital, Mobile Adoption, eMarketer, archived from the original on 12 November 2013
Google, Trends. “Google Trends”. Google Inc. Retrieved 9 February 2014.
http://www.codescentre.com/media/1010/654-oba-resource-guide_-final.pdf
http://www.hcltech.com/sites/default/files/whitepaper_-_collaborating_with_digital_agency_0.pdf
Pratik Dholakiya (14 April 2015). “3 Digital Marketing Channels That Work for Every Advertiser”. Entrepreneur. Retrieved 17 October 2015.
“4 Important Digital Marketing Channels You Should Know About”. Digital Doughnut. Retrieved 17 October 2015.
“ICC Code, Digital Interactive Media – ICC Codes Centre”. codescentre.com. Retrieved 17 October 2015.