Importance of Information Technology in Marketing - Essay Example

?International Marketing Table of Contents Introduction 3 Importance of Information Technology (IT) in Marketing 5 IT and its Advancement 12 Effect of IT on International Marketing 21 Conclusion 29 Recommendation 32 Introduction International Trade has grown and developed due to the emergence of the globalised world economy. Companies around the world have felt that the requirement to develop knowledge, ability and skill to contend efficiently in the international market. As communication has improved, technology and international transportation have become convenient and faster, the companies are getting access to opportunities which is assisting them to gaze beyond the domestic markets and facilitating them in international operations (Chirapanda, S., 2012). Technology plays an important role in the business environment because it accelerates the pace of communication, transportation, and manufacturing and also assists in formulating major marketing strategies. IT and communication has been identified as the macro factors in the new business trends. The way computers receive and store data is a matter of astonishment in the field of communication. Path breaking applications brought in by companies such as BlackBerry, Apple, etc is taking international marketing to a new level (University of Leicester, 2010, p. 64-65). This study aims at evaluating the affect of technological advancement in the international marketing. The intention is also to discuss the effect of information technology (IT) on creating business opportunities globally and maintaining healthy relationship with the customers around the world. Keeping in mind the aim of the study, the investigation would initiate with an overview on the significance of IT in marketing, which would further discuss the aspects of IT advancement and its effect on global business environment. Further, the consequence of IT on international marketing would be evaluated and recommendations would be stated for rightful and efficient usage of IT in the global environment. Importance of Information Technology (IT) in Marketing Changes have been noticed over the years in the approach related to strategic planning with the help of competitor analysis. This has assisted in identifying the facilities that IT enabled mechanisms are providing for the marketing and organizational change (University of Leicester, 2010, p. 398). Advancement in technology has provided the companies with the capability to collect enormous quantity of information related to the recent and potential market. In order to recognize the marketplace and respond accordingly to the demands, companies nowadays acquire technological linkages which will internally link the operations of the company. A study done in the year 1995 by Ernst & Young revealed that about the 327 firms that were surveyed, about 72 percent of them were already using IT based framework to manage their finance department, 64 percent to manage logistics department, and 49 percent for marketing segment. These companies only expected that the projected usage of IT in the finance department would increase to 81 percent, logistics to 79 percent and marketing to 78 percent in a span of five years. Similar trend were also seen within the business environment of UK (Wierenga, and Bruggen, 2000, p. 5-7). Nowadays IT links the marketing and functional equivalents, so as to offer accessibility to market information. By streamlining the suppliers, customers, and functional department through a single IT network, huge benefits can be derived. This would have been quite complex if IT framework did not existed. The major factor in the shifting marketing background is the emergence of IT based communication network. With the advancement of IT, the demands of the customer are also increasing because they are already receiving augmented products. The emergence of internet and diverse assortment of online tools are accessible by the organization to reach out to the target audiences (Lamb, Hair, Jr., and McDaniel, 2007, p. 19-20). A major transformation that internet or IT has brought in the companies. The companies consider price too, rather than just quality, services or feature in case of global competition. Porter (2001) revealed several findings regarding the effect of IT on marketing. He indicated that IT or increasing usage of internet has reduced the differences among the competitors, rather the differences has shifted to price. The geographic market has become wide and the amounts of competitors have increased. Moreover, the barriers for market entry have decreased and the power has shifted to suppliers. He also illustrated that the bargaining power of the end-users have increased because of decreasing switching cost (Emerald, 2006, p. 23-25). The implementation IT framework was considered to be a costly in the past. However, the companies started viewing IT as an investment which offered better ways of communication and working, with growth and high return prospects. In strategic management, information is considered to be the life blood, and it has been observed that over the past few years the cost of IT has also decreased. For example, Morgan Stanley was able to double its market volume within a time span of 18 months due to the integration of IT based marketing framework. Due to the emergence of IT based marketing tools, companies are also moving away from the traditional tools of marketing such as advertising. IT assists in eliminating the barriers related to time zones, language, culture impediments, etc. The major strategic role of IT in marketing is related to the management decision-making functions. IT assists in eliminating the barriers that are faced by the management during implementation of strategic managerial roles. IT influences marketing in various ways, such as it assists in providing improved services, and also save the labour cost of the company, while other tools support in generating new products and innovative organizational structure. A combination of technology and strategy increases the marketing efficiency and enhances the business model of the organization which leads to a development of an effective channel of distribution. IT blurs the traditional strategic boundaries and enables the organizations to develop an assortment of differentiated products. In order to do this marketing is closely woven with the other functions such as sales, research and development and operation functions (Little, 1990, p. 1-27). IT integrated framework is serving the marketers in carrying out various functions such as estimating the sales data, control and manage the stocks, monitor the items sold, gather customer information, manage the financial aspects of the company, etc. Days have passed by when IT was only used to conduct necessary function. Now it is utilized to develop marketing strategies, so as to give the companies a competitive advantage in the era of cut throat competition. It has been noticed that IT has becoming a strong supporter of advanced strategic business structures which includes data mining, e-commerce, multimedia, etc (Gilbert, 2003, p. 338-339). IT and its Advancement Advancement in IT and fast globalization of the businesses are the realities and the prospects of the international business in the 21st century. IT refers to the facilities and the techniques that have been developed to move, store, and process data (Roy, and Sivakumar, 2007, p. 220-227). It not only includes devices like computers, but assists in various services like fax, telephones, mailing services, information centres, online libraries, etc. Internet can definitely be considered as one of the manifestations. The consumer market is growing everyday and brands like McDonald, Coca Cola, or Microsoft are not only well-known in USA but also around the globe (Pispa, J., and Eriksson, I.V., 2003, p. 193-200). The manufacturers and suppliers around the world are now linked. For example Nike manufactures its goods in Thailand, and Sony in China for low cost of production. This has become possible through internet which links the suppliers and the buyers. Internet traffic is increasing everyday due to the exponential growth of e-business (Manardo, 2000, p. 22-27). The usage of IT in the supply chain management plays a significant role in marketing. The supply chain of the company’s involves functions like moving goods faster to different places and also simultaneously reducing the cost to shift the goods from the point of manufacture to the point of usage. The extensive usage of IT is making it possible for the organization to develop the business operations. The managers in the supply chain are enthusiastic about automating their supply chain as this has made their task much easier and assist them in accurate sales forecast. Companies want to implement such IT solutions through which they would be able to see the progress, growth, problem areas of the entire organization at once. This would assist in increasing the customer satisfaction, reducing cost, and smooth flow of goods and services even with lesser human intervention (Ahmed, Qadri, Shahzad, and Khilji, 2011, p. 1100-1106). After analysing the progress of IT in the global business environment, few heavily used technological tools would be discussed to analyse their increasing usage in the global business environment. Technology nowadays is providing an array of marketing tools for allowing marketers to personalise their information or message and deliver maximum result through it. A very obvious reason of utilizing the IT integrated marketing tools is the changing customer groups. It is estimated that 45 percent of the customers after 2015 would be waking up with coffee and newspaper, and the rest would be tuning into technological media for starting their day rather than traditional media. The coming generation is also regarded as the Net generation, as about 97 percent of the customers have access to a computer and about 94 percent use their own cell phones (Zaleon, 2009, p. 1-3). If the customers are so tech-savvy, then the marketers would have to serve the products in the way customers want to receive them. Online presence has become a must for the marketers, so companies develop their own websites. It is a great way to link the potential clients with the customers. Marketers are not only promoting products through their websites but also selling them too. Flash-based technology is being used by the marketers to even allow the customers design their own customized products, as we can see in websites of jewellers, furnishing, house fittings, etc. The industry professionals are utilizing internet as a crucial selling tool. Marketers around the world are considering internet based selling tool to be an innovative, cost effective and user friendly revenue channel which was not heard off, few years ago. For example, site like eBay is generating huge revenue just by doing online business. There are more than thousands of eBay customers around the world and they have access to an array of products at their fingertips. Apart from simple internet based marketing techniques, the Web 2.0 platform is also the latest tool in IT. It is nothing but a changed and advanced face of World Wide Web technology. It’s an interactive platform which not only allows the marketers to market their product and sell them online, but also allows the customers or users to present their viewpoints, ideas, and feedbacks for the same. The social networking media is absolutely based on Web 2.0 platform, which makes it more interactive, popular and realistic. It assists the companies to popularize their products faster than any form of media (Zaleon, 2009, p. 1-3). The advancement of IT in the business environment has been proved already by stating examples of the marketing tools which are assisting the marketers by providing an extensive interactive platform for reaching out to the suppliers, customers and managing their operations around the world on real time basis. It is assisting in maintaining customer relation through laying effective network of communication, which is establishing strong relationship with the suppliers and the customers. This is not only increasing revenue but also enhancing the brand equity, brand image and goodwill of the company. The business operations of the company can be effectively managed through innovative IT integrated tools such as customised Enterprise Resource Planning (ERP) solutions. Performance of the employees and the product can be monitored or scrutinised accurately through electronic balanced scorecards. IT can be even helpful for firms to deal with internal issues too. The multinational firms are pool of diversity in terms of cultural background, country, or language. Due to such reasons several barriers related to language, culture or approach can arise. These can be easily eliminated with the help of a centralized IT integrated system of communication. Even technological tools for virtual mapping are utilised to analyse projects and situations which are not easily accessible. Companies in the oil and gas industry utilise these technological tools to analyse problems in those places which are not easily accessible by human beings. Technologically integrated marketing process also offers security to the companies because there is less threat of data loss.. The system of bar coding the products assists in monitoring and tracking the products or inventory. Effect of IT on International Marketing IT plays a significant role for the companies as decisions regarding various global marketing strategies, such as issues related to adaptation or adjustment in the overseas markets has to be taken. Through the linkage of environmental factors, successful strategies can be developed with regards to export performance. The domestic market can be analysed, so as to identify the factors which stimulates export market for the company. This would assist the multinational companies to adopt more standardized approach. Technological advancement is an important issue which assist the companies to formulate strategies in International business. It accelerates communication, transportation, manufacturing, and operational functions of the business globally. For example, cost of resources, availability, reliability, etc are important factors that are considered in case of exports in international trade. Transportation facilities and communicational channels are two major areas where IT has penetrated extensively. So decision regarding the selection of right IT tools and the level of its usage are the vital decisions that has to be taken in international marketing environment. While analysing the effect of IT on the International market, it is significant to keep in mind that IT not only assist in information sharing but also commerce. The consequence of instantaneous information can be equally powerful as reaching to the audience globally. IT has a major role to play in international marketing for development of new products, exchange of information, marketing the products, and monitoring the feedback. Nowadays, the ideas get generated in different countries, spare parts are manufactured in different countries, and assembled products are sold round the world. This co-ordination and integration of several processes is only possible because companies have access to IT integrated marketing tools and communication medium. The sales reports, inventory information, financial statements, legal documents are shared by different offices of the same company in different countries. The volume of data transfer through electronic medium is enormous and safe. The Web 2.0 platform has provided a common interactive platform to the marketers to address to the customers around the world. Even small marketers can promote their products in a cost effective manner and can cater to world class clients because the most popular form of media vehicle that is the social media, in the 21st century is almost free or highly affordable. IT framework also offers scope for surveillance of products, information or data, which are confidential for the company. Real-time data is transferred by multinational companies from one continent to another at the click of a button (Doole, and Lowe, 2008, p. 429-435). The IT framework of the company assists the marketers in production, promotion and other managerial duties. However, the task of connecting the customers to the marketer is done by the internet. Internet benefits the marketers and the customers to exchange information across the national boundaries. Internet offers cheaper access to global market in less time. The global reach of internet is high enough to amplify the diversity of products that are available in the domestic markets. IT has increased the international competitiveness of the different companies from the developing countries. It is noticed that the increasing popularity of the companies online is automatically augmenting the status of a domestic company into a multinational. Companies are serving international customers online even without setting up international establishments. Internet and IT framework has redesign international marketing in extraordinary ways (Krishnamurthy, 2006, p. 216-225). If judgement is done from the demand side, it can be said that IT has provided opportunities to new markets and firms to do business and serve customers around the world. On the other hand supply has been also maximised with the help of cost reduction of operations, communication, and improvement in productivity. The two most important functions that IT has in the global business environment is firstly information sharing. IT serves as a vital medium for conducting market research without even visiting the country, so it saves huge cost of survey or research. Secondly, it conveys the value proposition of the brand and position as a brand or products effectively among the target customer group. Advertisements of online shopping websites for clothes, accessories, etc on Facebook are one the best examples of positioning products online to the target customers. Companies have to take several decisions such as on international product and brand, pricing, communication and promotion, distribution, internet strategy, market share, profits, sales and shareholder values, when they integrate an IT based international marketing framework for internationalization. The international marketing mix and the performance of the company or the products directly get affected by the IT integrated marketing strategy of the company. So firms must critically decide and focus on the internet strategy and the internal IT framework. It has been observed that the success of the IT integrated international strategy of the firm succeed due to five specific reasons, namely, factors related to global dimensions, website , marketing strategy, external factors and internal factors. The marketing strategy factors include the support of the top-level management, well defined strategic goals, effective internet strategy for the international market and close relationship with the stakeholders of the company. The factors related to global dimension includes right assessment of the international market, availability of the resources to compete in the global marketplace, smooth flow of communication through IT framework, and IT integrated distribution network. The internet factors would include a strong online presence, having a user-friendly website through with clients, suppliers and even customers can interact with the marketer, and effective customer care facilities. The external factors include the political, social, economical, technological, and legal and environment aspects, while internal factors involve the operational functions of the companies (Kotabe, and Helsen, 2009, p. 451-460). Conclusion It goes without saying that IT has become an integral part of business. Marketers dealing in products in the domestic markets are utilising IT powered marketing tools to its fullest. So it is obvious that international marketers are also making good use of IT along with effective marketing strategies to compete effectively in the global market. This study was conducted to assess the significance of information and information technology in marketing. It was found that communication forms an integral part of marketing because communicating information of the products and services to the target customer group is one of the primary functions in marketing. IT provides cost effective ways for information sharing and grabbing customer attention. Moving on to the advancement of IT since its advent, it can be said that the World Wide Web though effective, yet was a one sided platform which allowed marketers to promote and communicate their message, but did not allow the customers to show their feedbacks for the same. Then enters the Web 2.0 platform, which is absolutely interactive and allowed a two was communication platform to marketers. Social marketing network is the result of advancement of IT framework. Marketers are not only marketing their brands through social media, but also developing their own website on the same platform for facilitating online sales and promotional events too. This reveals IT framework is being infused in the international marketing mix by the firms in order to get an edge in the global business environment. It is cost effective, links every corner of the world in minutes and allows easy flow of information and commerce from one part of the world to another. Recommendation IT has become a driving force for international trade and commerce development and taking the different domestic marketing towards the global market place. IT is reducing the cultural and market barriers and increasing the pace of data transmission, communication, and information. However, the temporary advantages that are gained from the IT based framework does not represent that it would be helpful in providing competitive advantage even in the future. This is the reason why certain recommendations can be put forward for good usage of IT in international marketing. Companies must utilise the latest IT based marketing tools, and at the same time focus on maintaining the other resources such as human resources, etc too. The organisational structure should be designed in such a way so that it is flexible enough to adapt changing technology and systems. Security of important information and online documents of the company, which are confidential, must be protected. Attention should be paid regard legal and lawful usage of technology. The cyber laws of different countries should be followed in case of international marketing. Fair business should be done because in the IT integrated business environment it has become easy to hack into others network illegally. Mutual trust and treaties should not be broken in global business environment. References Ahmed, I., Qadri, A. S., Shahzad, R. K., and Khilji, B. A., 2011. Information Technology - Its Impact on Global Management. World Applied Sciences Journal. [e-journal] 12(7), Available through: IDOSI Publications < http://libres.uncg.edu/ir/uncg/f/P_Paliva_Measuring_2005.pdf> [Accessed 9 January 2013]. Chirapanda, S., 2012. Technological Environment - International Marketing Strategy Relationship. World Academy of Science, Engineering and Technology, [e-journal] Available through: Waset.org < https://www.waset.org/journals/waset/v64/v64-210.pdf> [Accessed 9 January 2013]. Doole, I., and Lowe, R., 2008. International Marketing Strategy: Analysis, Development and Implementation. 5th ed. Connecticut: Cengage Learning EMEA. Emerald, 2006. The Importance of Marketing Strategy: Gaining the Competitive Edge with Integrated Marketing Communications (IMC). Strategic Direction, [e-journal] 22(8), Available through: Emerald Group Publishing Limited < http://www.emeraldinsight.com.lcproxy.shu.ac.uk/journals.htm?articleid=1558744&show=abstract> [Accessed 9 January 2013]. Gilbert, D., 2003. Retail Marketing Management. 2nd ed. New Delhi: Pearson Education India. Kotabe, M., and Helsen, K., 2009. International Marketing. California: SAGE. Krishnamurthy, S., 2006. Contemporary Research in E-Marketing. Pennsylvania: Idea Group Inc (IGI). Lamb, C. W., Hair, Jr., J. F., and McDaniel, C., 2007. Marketing. 9th ed. Connecticut: Cengage Learning. Little, J. D. C., 1990. Information Technology In Marketing. Management Project Papers, [e-journal] Available through: M.I.T. Sloan School < http://dspace.mit.edu/bitstream/handle/1721.1/2160/SWP-1860-21311107.pdf> [Accessed 9 January 2013]. Manardo, J., 2000. Globalization at Internet speed. Strategy & Leadership, [e-journal] 28(3), Available through: Emerald Group Publishing Limited < http://www.emeraldinsight.com/journals.htm?articleid=872782> [Accessed 9 January 2013]. Pispa, J., and Eriksson, I.V., 2003. Aligning Organizations and their Information Technology Infrastructure: How to Make Information Technology Support Business. Production Planning & Control, [e-journal] 14(2), Available through: Taylor and Francis Group < http://www.tandfonline.com/doi/abs/10.1080/0953728031000107617> [Accessed 9 January 2013]. Roy, S. and Sivakumar, K., 2007. The Role of Information Technology in the Globalization of Business Buying Behavior: A Conceptual Model and Research Propositions. Journal of Business & Industrial Marketing, [e-journal] 22(22/4), Available through: Emerald Group Publishing Limited < http://www.emeraldinsight.com/journals.htm?issn=0885-8624> [Accessed 9 January 2013]. University of Leicester, 2010. International Marketing. Cheltenham: University of Leicester. Wierenga, B. A., and Bruggen, G. H. V., 2000. Marketing Management Support Systems: Principles, Tools, and Implementation. Massachusetts: Kluwer Academic Publisher. Zaleon, P., 2009. Marketing by Technology. Kitchen and Bath Design News, [e-journal] Available through: ProQuest < http://search.proquest.com.lcproxy.shu.ac.uk/docview/223119257/fulltextPDF?accountid=13827> [Accessed 9 January 2013]. Read More