Fundamentals of Digital Marketing

Assignment-1

Gujarat Technological University

Ahmedabad
QUESTION 1: WHAT IS DIGITAL MARKETING? EXPLAIN ITS
TYPES WITH SUITABLE EXAMPLE.

ANSWER:

What is digital marketing?

Creation of consumer demand with help of interconnected and interactive web is
called digital marketing. Thus, digital marketing is marketing online via web sites,
online ads, opt-in email, mobile apps or emerging platforms (Chaffey Dave, Smith P
R, 2017). It generates exchange of attention for value as well as currency exchange.
Thus, in simple words it is a process of achieving marketing objectives through digital
technologies and media.

Types of digital marketing:

Digital marketing is classified into six types.

 Television Advertisements:

It is a promotion of product or service on television.

 Radio Advertisements:

It is a promotion of product or service on Radio.

 Email Marketing:

A type of direct marketing where commercial and content based messages are
delivered to an audience is called Email marketing. It is used to build
relationships with existing as well as potential customers.

Example: News letters, Transaction emails, sponsorship email

 Social Media Marketing:

It is a process of encouraging positive engagement with a company through

monitoring and facilitating customer to customer interaction and participation
on the web. It is used for brand building, value creation and participation.

Example: facebook, twitter, blogs, forum

 Mobile Marketing:

It is a promotion of products or services for mobile phones or handheld

devices.

Example:

Mobile apps, SMS, QR code, Mobile website marketing

 Internet Marketing:

It is a promotion of products or services on world wide web.

Example:

Search engine optimization, Pay per click, Content marketing

QUESTION 2: WRITE A NOTE ON TRADITIONAL V/S
DIGITAL MARKETING WITH EXAMPLES.

ANSWER:

Marketing is defined by Dr. Philip Kotler as follows, “Marketing is that function of

the organisation that can keep in constant touch with the organisation’s consumers,
read their needs, develop products that meet these needs, and build a programme of
communications to express the organisation’s purposes “ .

While Digital marketing is creation of consumer demand with help of interconnected

and interactive web.

Basically, the ‘traditional’ marketing and digital marketing are same. Their ultimate
aim is to retain customers and stimulate sales in the future. However, the Digital
marketing is more accountable than traditional marketing. The key difference between
traditional marketing and digital marketing is as follows.

Traditional Marketing: Digital Marketing:

It is a conventional marketing approach. It is a connected marketing approach.

Strategic Segmentation and Targeting: Customer Community Confirmation:

 Customers are divided into  Customers are socially connected

homogeneous groups based on
their geographic, demographic,
psychographic, and behavioural
profiles.
 Marketers determine the variables
that define the segments.
with one another in horizontal
webs of communities.
 Communities are naturally formed
by customers within the
boundaries that they themselves
define.

 There is a vertical relationship  There is a horizontal relationship

between a brand and its between a brand and its customer
customers. community.

 Customers often feel intruded  Customer communities are

upon and annoyed by irrelevant immune to spamming and
messages aimed toward them. irrelevant advertising.
Brand Positioning and Differentiation: Brand Clarification of Character and
Codification:
 The success depends on
consistently communicating  The success depends on brand’s
brand identity and positioning in dynamic nature with consistent
a repetitive manner. characters and codes.

 To establish strong equity, a  Companies can position

brand must have a clear and
consistent positioning as well as
an authentic set of differentiation
to support the positioning.
 Brands can make false,
unverifiable promises.
themselves as anything, but
without a community-driven
consensus the positioning amounts
to nothing more than corporate
posturing.
 Brands cannot make false,
unverifiable promises.

Tactical Marketing Mix and Selling Connected Marketing Mix:

Approach:
 In digital marketing the marketing
 Marketing mix is designed based mix accommodate more customer
on 4P’s (Product, Price, Place, participation, so 4P’s are redefined
and Promotion) where companies as the 4C’s (Co-creation,
control the majority of decisions. Currency, Communal activation,
and Conversation).

Value creating services and processes Collaborative customer care:

 Customers are treated as targets  Customers are treated as equals.

prior to purchase.

 Personnel are responsible for  Companies invite customers to

performing specific roles and participate in the process by using
processes according to strict self-service facilities.
guidelines and standard operating
procedures.

Hence, Digital marketing is not intended to replace traditional marketing but to

coexist. The role of Traditional marketing is crucial at the beginning level of
communication between companies and customers to build awareness and interest.
But as the communication progresses digital marketing is more helpful to create
closer relationship with customers.
QUESTION 3: EVERY TECHNOLOGY HAS ITS POSITIVE AND
NEGATIVE IMPACT ON HUMAN LIFE, EXPLAIN IT IN
REFERENCE OF DIGITAL MARKETING.

ANSWER:

The Internet is an interactive medium of communication that changed the working

field, and language, for marketers everywhere. The benefits of internet based
marketing are as following.

 It increases an organisation’s geographic coverage beyond its traditional

heartland
 New customers can be reached
 It provides a low cost, effective way of transacting with customers compared
to traditional selling costs.
 A website can be open for business all day everyday providing customer
convenience.
 Communications can be tailored to customer needs based on account histories
and other data.
 The internet provides vital measurement of events and accountability
providing marketers with ammunition to secure budget increases.
 The internet’s global reach also provides opportunities to source new suppliers
and distributors to maintain competitive advantage.
 The internet provides marketers with a rich source of marketing data for
decision-making purposes.
 Online marketing research supported with appropriate software provides real
time data analysis to streamline the research process.

Negative Impact of internet marketing:

There are also many problems associated with the Internet that marketers must
understand and respond to. These are outlined below:

 Customer resistance to change, especially older and disadvantaged people

 Public concerns over privacy issues, such as SPAM and chat-rooms.
 Lingering security doubts over fraud and phishing and network security and
stability
 Lack of trust with unknown virtual traders
 The internet’s sensory boundaries limiting of senses like taste and touch which
influence buyer decisions
 Limited access for low income groups and those in rural area
 Social impact of the internet such as debts generated from online gambling.
QUESTION 4: WRITE SHORT NOTE ON CRM PROCESS.

ANSWER:

Customer relation management processes are classified in five categories.

The strategy development process:

It focuses on the organisation’s business strategy as well as its customer strategy.

The value chain creation process:

It transforms the results of the strategy development process into programme that
extract and deliver value. The key elements of value creation process are as follows.

 Determining what value the company can provide to its customer

 Determining what value the company can receive from its customers
 Maximising the lifetime value of desirable customer segments by managing
the value exchange that involves a process of co-creation or co-production.

The multichannel integration process:

It translates the outputs of business strategy and value creation processes into value-
adding activities with customers.

The information management process:

It deals with the collection, collation , and use of customer data and information from
all customer contact points and generate customer insight and appropriate marketing
response.

The performance assessment process:

The performance assessment process covers the essential task of ensuring that the
organisation’s strategic aims in terms of CRM are being delivered to and appropriate
and acceptable standard.
QUESTION 5: DISCUSS CONSUMER SEGMENTATION BASED
ON THE FOLLOWING

A. DIGITAL EXPERIENCE
B. BEHAVIOUR TARGETING V/S CONTEXTUAL
TARGETING

ANSWER:
Behaviour Targeting v/s Contextual Targeting:

Similar to different aspects of digital marketing, target marketing professionals are

also adapting, adopting and creating the rules. As a result the industry has various
system vendors using different variety of technologies that are all promoted and sold
as ‘behavioural targeting’ tools. These vendors use number of criteria to determine the
‘behaviour’ of users. Some prefer user’s clickstream while others prefer IP address,
personal information, or frequency of online activity. Thus, online target marketing is
classified into two types, behavioural and contextual.

Contextual targeting:

It is the less complex compared to behaviour targeting. In simple words adverts are
placed where the adverts are in context with the content of the host web site or page.
For example Hotel ads on a tourist information portal.

Behavioural targeting:

Behavioural segmentation might be based on such elements as:

 Benefit sought – eg. Convenience or status

 Purchase occasion – a gift perhaps
 Usage frequency – occasional or frequent
 Usage status – non-user, user, lapsed user

Behavioural targeting requires more information about user before they can be truly
targeted. The data cannot be collected ad hoc, it must gathered in a formal, structured
manner and it must then be stored in such a way that it is easily extracted and
analysed. This practice is more accurately called database marketing.
QUESTION 6: WHAT ARE THE 8PS OF MARKETING MIX
ANALYSIS? NAME THE 8PS AND EXPLAIN FIVE OF THEM IN
DETAIL.

ANSWER:
In 1960, Jerome McCarthy proposed the concept of marketing mix –widely referred
to as the 4Ps (Product, Price, Place, and Promotion). In 1980, the 4Ps was challenged
for not mentioning the importance of customer service. Hence, marketing mix was
extended to 7ps by including People, Process, and Physical evidence. In 2001,
Chaffey and Smith proposed to add ‘partnership’ as the eighth element of marketing
mix.

Product:

It involves researching customer’s needs and developing appropriate products. A

good product is the cornerstone of all successful marketing, but in digital economy it
is more crucial. The key consideration is that weather the product can/will sell online?
What are the channels that are open for your product? What are the opportunities to
make it flexible for the online or mobile audience? The internet helps companies to
sell a wide range of products. In digital economy, the user’s experience of finding and
purchasing is also considered a part of the product. Thus, understanding the different
motivations and usage habits for products is crucial in digital marketing.

Price:

It involves defining product prices and pricing models. On internet the search engines
and shopping comparison websites helps the customers to compare product prices
across many retailers. Thus, internet becomes a near-perfect competition market.
Introduction of voucher and cashback have changed the consumer behaviours online.
Through affiliated marketing companies can take advantage of it. In affiliated
marketing, companies promote their products through third party websites by paying a
commission or fee.

Place:

It involves distributing products to customers in line with demand and minimalising

cost of inventory, transport and storage. In digital economy, it is crucial that
customers feel it easy to navigate and find the product.

Promotion:

It involves communication with customers and other stakeholders to inform them

about the product and the organisation. One of the biggest challenges of digital market
is the limited space or time to communicate the product promotion. Thus there is a
need for impact messaging.
People:

It involves the delivery of service to customers during interactions with customers.

Process:

It involves the methods and procedures companies use to achieve all marketing
functions.

Physical evidence:

It involves tangible expression of a product and how it is purchased and used.

QUESTION 7: DISCUSS THE ONLINE PROMOTIONAL MIX
WITH ITS ELEMENTS IN BRIEF.

ANSWER:
Digital promotion is becoming more and more important now a days. Its share in
marketers’ budgets and efforts is increasing day by day. The promotional mix that can
be used to promote online are as follows.

Promotional mix Online Execution

Advertising Interactive display ads, pay per click
search advertising

Selling Virtual sales staff and chat and affiliate

marketing

Sales Promotion Incentives, rewards, online loyalty

schemes

PR Online editorial, e-zines, newsletters,

social networks, links and virals

Sponsorship Sponsoring an online event, site or

service

Direct mail Opt-in e-mail using e-newsletters and e-

blasts plus web response

Exhibitions Virtual exhibitions and whitepaper

distribution

Merchandizing Promotional ad serving on retail sites,

personalized recommendations and e-
alerts

Packaging Virtual tours, real packaging is displayed

online

Word-of-mouth Viral, affiliate marketing, email a friend,

links