CUSTOMER

RELATIONSHIP
MANAGEMENT
LECTURE 7
L.MFULA
Marketing strategy in a digital world

E-Business
•Uses electronic means and Platforms to conduct business
E-Commerce
•Facilitates the sale of products and services by electronic means
E-Marketing
•Includes efforts that inform , communicate, promote and sell
products and services over the internet.
•E commerce benefits both buyers and sellers
Buyer benefits of E-Commerce

• Convenience
• Easy & Private
• Greater product access/Selection
• Access to competitive information
• Interactive & immediate
Interactive Media Marketing

What is digital marketing?

•Digital marketing is the promotion of brands using electronic means
across all forms of digital advertising to reach a specific audience.
Digital marketing goes beyond the internet.
•Radio
•Television
•Social media marketing
•Mobile Phone
•Internet
(Notes adapted from, Ferrell (2009).
 What is Digital Marketing?
E-Business
Carrying out the goals of business through use
of the Internet
Digital Media
Electronic media that function using digital codes
Digital Marketing
Using digital media to develop communications
and exchanges with customers
 Growth and Benefits of Digital
Communication

Digital media has created opportunities for businesses

to:
Create relationships with consumers
Target markets more precisely
Reach new markets worldwide
 Digital Marketing

Has five key characteristics

1.Addressability: The ability for a business to identify
consumers before they make a purchase
2.Interactivity: Allows customers to express their needs and
wants directly to the firm in response to its communications
3.Accessibility: Allows consumers to find information about
competing products, prices, and reviews and to become more
informed about a firm and the relative value of its products
4.Connectivity: Keeps customers and businesses connected
with each other
5.Control: Consumers’ ability to regulate the information they
receive via the Internet
Using Digital Media in Business

 Digital media have created new ways of doing

business and shopping
• Fast communication
• More interactive
• Comparison shopping easier
• Easier to conduct marketing research and advertise

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Using Digital Media in Business

 Digital media have lowered the cost of

communication and transactions
 Digital media are more similar to traditional media
than they are different
 Growing problem with controlling employee access to
digital media
• Wasting time at work on personal communications
Digital Media and the Marketing Mix

Some key differences between digital and traditional

media in the marketing mix:
 Communications are richer, faster and more interactive
 Companies can reach target markets more easily, affordably
and quickly
 They help marketers utilize new resources in seeking out and
communicating with customers
Digital Media and the Marketing Mix

Digital media let marketers and consumers

share information
 Websites
 Online social media sites
 Email
 Listservs (an application that distributes messages to
subscribers on an electronic mailing list)
Ways Users Spend Time on the Internet

Rank Sector Global Reach

1 Search 85.9%

2 General Interest Portals 85.2%

3 Software Manufacturers 73.4%

4 Online Communities 66.8%

5 Email 65.1%

Source: Nielson Reports, “Global Faces and Networked Places,” March 2009, p. 3
http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/03/nielsen_globalfaces_mar09.pdf
 Product Considerations

Digital media connectivity creates

opportunities to add services and benefits to
products
 Some products only available digitally
 Internet can make it easier to learn about and anticipate
consumer needs
 Competition makes quality and service offerings more
important than ever
 Distribution Considerations

The Internet is a new distribution channel

 Processing orders electronically can reduce inefficiencies, cost
and redundancies
 Can also increase speed
 Shipping times and costs are important to customers
Promotion Considerations

Promotion is one of the best applications

for digital media

 Consumer consumption patterns are changing

• The products they want to buy
• The way they get information
 Marketers must react and give consumers what
they want
PepsiCo.’s Online Promotions

Online promotions have made Pepsi

the #1 soda in China
Pepsi holds 23% of soda market in China
 Online social media is essential when marketing in China
and other markets with many Internet users
 “Pepsi Creative Challenge” was a massive online
promotion to celebrate the 60th anniversary of the People’s
Republic
Source: “Pepsi’s Web-Smart Thrust into China,” Businessweek, September 28, 2009.
 Price Considerations

 The most flexible element of the marketing mix

 Digital media can enhance a product’s value by
providing service, information, and convenience
• Discounts and sales can be quickly communicated
• Deals websites allow consumers to compare prices
of products
 Price comparison

• Many websites allow consumers to compare prices

to find the best deals
 Online Social Networks

 A web-based meeting place for friends,

family, co-workers and peers that lets users
create a profile and connect with others for
a variety of purposes
Build relationships with customers
Provide product information
Learn about customer needs
Contact new target markets
• Starbucks, Dell, eBay and Google all excel at using
social media for marketing
Types of Consumer-Generated Marketing and
Digital Media

Two factors sparked the increase in consumer-

generated information:
1.Increased tendency for consumers to publish their thoughts,
opinions and reviews of products via blogs and other digital
media
2.Consumers tend to trust other consumers over corporations
 Blogs and Wikis

Blogs (Web-Logs)
 Web-based journals through which authors can
editorialize and interact with other Internet users
 2/3 of Internet users read blogs
 Give consumers power over companies because they
cannot control what bloggers write
Wikis
 Websites where users can add or edit content of posted
articles
 Monitoring wiki sites can give corporations ideas about
how consumers feel about their company or products
 Most Popular Blog

•A liberal conglomeration news website

•Mostly links to stories on other sites
•Launched in 2005 by former conservative
commentator Arianna Huffington
•Over 3,000 bloggers contribute, 60
employees
•Also utilizes vlogging (video blogging)
•More than 28 million visitors a month
 Video and Photo Sharing

Video Sharing
 Lets users upload videos to the Internet
 Viral Marketing: Using video sharing and online social
networking sites to spread an advertisement or message
about a product
 Companies increasingly use consumer-generated content
for ads rather than professional ad agencies
Photo Sharing
 Similar to video sharing sites, but allow users to upload,
edit and share photos instead
 Businesses use photo sharing to display images of products
 Podcasting

Podcasts
 Audio or video files that can be downloaded from the
Internet via a program that delivers content to listening
devices or personal computers
 Convenient
 Can listen on an Mp3 player or other portable device
 Popular with the 18-29 demographic
 Social Networks

 2/3 of consumers have visited online social

networking sites
 There are many different sites and the number is
growing
• MySpace
• Facebook
• LinkedIn
• Twitter
 The largest social networking site in the world
 Appeals to a broad demographic
 Fastest-growing demographic is women over 55
 Encourages consumer interaction with companies
and products
 Good resource for marketers
 Market research
 Low-cost means of advertising
 Reach new markets
 A social network for professionals
 A profile resembles a résumé
 Facilitates professional networking, job searches and
recruiting
 Companies use the site to familiarize people with
their business
 Twitter is a hybrid social networking and micro-
blogging site
 140 characters or less
 Companies announce sales, promotions and
product updates via tweets
 Can help (re)build customer relationships
 Virtual Worlds

 Allow users to select an avatar and live out an

alternative life online
• Many virtual worlds allow users to buy and sell goods, services, even real
estate
• Big business: Nearly $300 million on advertising in virtual worlds
annually
 Virtual Worlds Have a Downside

 Although they can be lucrative, some

companies may choose to avoid virtual-worlds and
similar systems
• Negative publicity when gamers claim addiction
• A Hawaii resident sued the creator of virtual-world game Lineage II
• Claimed game rendered him unable to function normally
• Played for 20,000 hours over five years
(or 833 24-hour days)
Advertising in Virtual Worlds

 Search engine Bing advertised on the social

game FarmVille and generated 400,000 Facebook
fans in a day
• Users gained virtual currency in FarmVille
by becoming a Bing Facebook fan
• FarmVille is a virtual world farming game
available through Facebook
 Mobile Marketing

 Consumers increasingly do their business and

shopping from mobile devices and smartphones
• Marketers can use digital media to their
advantage
• Requires adapting to new technologies
and consumption patterns
More Adults Use Cell Phones as Primary
Phone

Source: USA Today Snapshot, March 7, 2009, A1.

 What kind of digital technology
user are you?
 Creators: Create their own media outlets (e.g. blogs,
podcasts, videos)
 Critics: People who comment on blogs or post ratings
and reviews
 Collectors: Collect and organize content generated by creators and
critics
 Joiners: Includes anyone who becomes a user of social networking
sites or other online communities to connect and network
 Spectators: Read online information but to not join communities or
post anywhere
 Inactives: Do not participate in online digital media; numbers are
dwindling
Developed by Charlene Li and Josh Bernoff of Forrester Research
 Using Digital Media to
Learn About Consumers

 Digital media is a great learning tool

 Market research
• Gathering data on consumers
• Asking consumers about preferences
 Crowdsourcing involves using communities if
interested consumers to gather input and feedback
for marketing purposes
 Can help small businesses on limited budgets
compete with large businesses
 Legal Issues in Internet
Marketing: Privacy

 Shopping on the Internet allows companies

to better track consumers
• Cookies are often used for tracking
 Laws and regulations cannot keep up with the rapidly-
changing Internet
• Federal Trade Commission considering creating
legislation that limits information companies can gather
online
 The Better Business Bureau and other organizations can
help organizations develop privacy policies
 Legal Issues in Internet
Marketing: Identity Theft

 Occurs when criminals obtain personal

information that allows them to impersonate
someone else in order to access financial accounts
and make purchases
• Security breaches are serious threat to organizations and
individuals
• Phishing is using a familiar website to deceive people into
divulging private information
Main Sources of Identity Theft

Source: “Consumer Sentinel Network Databook, 2009,” The Federal Trade

Commission,
February 3, 2010, p. 3, http://www.ftc.gov/sentinel/reports/sentinel-annual-
reports/sentinel-cy2009.pdf
(accessed May 12, 2010).
 Legal Issues in Internet
Marketing: Online Fraud

 Includes any attempt to conduct fraudulent

activities online
 Cybercriminals are increasingly using online social
networking sites and other digital media to commit fraud
• They sometimes use social networking sites to pose as
charities and collect donations
 Always be careful what information you give out when
online; and used trusted sites whenever possible
 Legal Issues in Internet Marketing:
Intellectual Property

 Intellectual property can include songs, movies,

books, electronics, software, etc.
 It is generally protected by patents and copyrights,
but these can be difficult to enforce globally
 Piracy and illegal sharing costs global industries
billions annually
 90% of illegal software copying is done by
businesses
Digital Media and how They are Changing
Marketing

 Digital media can make your company

more efficient and productive
• Transition to digital media can be challenging
• Correct blend of traditional and digital media in
marketing mix takes time and consideration
• Future marketing opportunities will require a
knowledge of digital media and how to use them
•Q&A

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