Marketing - the Wharton Challenge - Essay Example

?The Wharton Challenge Introduction Technology has been in existence for many years and during that period, it has advanced in a remarkable manner. Inventions such as the steam engine mark the beginning of technology advancement (Downes and Mui 1998, p1). Today, communication has made it possible for individuals to communicate and make business transactions at the comfort of their homes and workplaces. In other words, it has changed the manner in which businesses communicate with their consumers (Jones and Ryan 2009, p4). A remarkable feature in the advancement of technology is the Internet. The Internet has changed both the lifestyle of the people and the business. In order to serve their customers better, businesses have initiated Internet programs that integrate Web users, mobile phone users (the consumers) and the products and services providers (the businesses). Neuroscience has also found its place in marketing and it has been used to study the behaviour of consumers in regard to the technologies they use. Despite the enormous benefits of these technologies, there are risks associated with them such as high cost and difficulty to implement (Anderson and Stang 2000, p7). There are future prospects that these technologies will enhance how consumers and businesses interact. The Wharton Challenge  Wharton challenges marketing and he suggests that marketing closes the gap created by academic marketing; it is also challenged to get more involved with the academic marketing practitioners. Marketing is further challenged deal with the problems of great relevance such as main societal concerns, looking for the best ways for innovation, promoting the worth of marketing in the company, and understand the new marketplace (Day, Reibstein, and Wind 2009). These issues are of great importance since they have emerged with the advancement in technology. Technology has brought both benefits and challenges to marketing and thus, marketing is required to deal with these issues or challenges in the best way. What Marketing can do now that it could not do before The advancement in technology has affected the evolution of advertising (advertising is one of the key components of marketing) and it has considerably changed the manner in which organisations communicate with their clients. However, none of these developments are superior to the ones that existed before. Instead, they enhance these developments and they provide marketers with more diversity. This permits them to connect with a wide variety of consumers in the market. The earliest forms of advertising still exist in today’s complicated age of social networking, keyword-targeted pay-per-click, and paid search placement advertising (Jones and Ryan 2009, p4). For a business to accomplish superior performance, it is supposed to create and sustain a competitive advantage. Previously, competition was based on the structural features such as economies of scales, broad product line, and market power. Presently, the trend has changed to abilities that facilitate consistent delivery of superior value to the consumer by the business. Market orientation is achieved by the business when its culture is systematic and wholly committed to the development of better customer value. There are three main elements of market orientation and they are competitor focus, cross-functional coordination, and customer orientation. The core of market orientation is the consumer focus. In order to develop a better value for the buyers in a continuous manner, the seller is required to understand the buyer’s whole value chain in the present time and as the value chain evolves (Narver and Slater 1994, p22). Focusing on the customers is not the only thing that can create a better customer value; the business must also take note of the competitor. The business ought to know the types of competitors and the technologies they are using (Narver and Slater 1994, p23). Technologies such as viral marketing are beneficial and they offer a way in which products and services can be promoted or campaigned. The strategy (in which an e-mail embedded link is passed to the recipients via a Web interface in a centralized system) gives the manager the ability to examine the progress of the campaign and manage the dynamics of the process. The recipient also benefits from the strategy; the recipient is capable of minimizing wastage such as the generation of unsolicited spam. The manager is also capable of reviving the flagging campaign. An important benefit of using the Web interface is that it can be utilized in the production of an image underlying the social network of the targeted individuals (Bampo et al. 2008, p289). In other words, the benefits of the viral marketing strategy can be used to develop other effective marketing strategies. The Impact of Mobile Technologies, Web, and Database People are living in the age of anxiety and this age is characterized by rapid changes to economic, political, and social systems (shaped by digital technologies), and they have left majority of the business people astonished (Downes and Mui 1998, p6). It is important to state that the history of technology has featured unexpected and dramatic consequences. Some inventions have not yet being conceptualized on the human evolution radar as suggested by the recent research in sleeping disorders. Change has occurred very fast, in big leaps and in a discontinuous manner. The impact of inventions such as the steam engine, Model T, structural steel, moveable type, and the atomic bomb are way beyond the activities for which their developers or creators built them. In the end, their impact on economic, social, and political systems has prevailed over the impact of their intended usage. The investment community has developed around technology centers or institutions such as Silicon Valley. The inventions from centers are called killer applications (or killer apps) (Downes and Mui 1998, p1; Moore 1991). A killer application is a new service or good that sets up an “entirely new category and, by being first, dominates it, returning several hundred percent on the initial investment” (Downes and Mui 1998, p1). Examples of killer applications include electronic funds transfer, first word procession program, and the personal computer. The Internet is an example of a killer application and almost all the digital strategies and killer apps are connected with it. This is because it is the closest environment that we possess in the present world. The initiation of new technologies, new business models, and missing components occurs through the Internet (Downes and Mui 1998, p16). As information technology (IT) evolves, the manner in which companies conduct their business is also changing. The Internet is a business avenue and its emergence has led to the growth of the number of people (the consumers) accessing the Web, and the growing number of households possessing a personal computer (PC) or other devices that can access Web. This has increased the speed of the IT’s rate of change. In the past decade, ERP (enterprise resource planning) vendors assisted their clients to act in response to the promise of Web containing products that offer virtual storefronts, self-service applications, and Web-enabled technology. Currently, a typical business enterprise has almost all the following elements: a data warehouse, business intelligence solution, a Web site with potential consumers visiting on a daily basis, and an ERP system (Anderson and Stang 2000, p1). CRM (Customer Relationship Management) is a business strategy developed to assist an enterprise or a business to understand and predict the needs of its current and potential customers. Consumer data is collected from different sections of the enterprise, stored in the central database, evaluated, and distributed to the touch points (or the key points). These touch points entail inbound and outbound call centers, mobile sales force, direct marketing channels, point-of-sale, Web Sites and other sections of the enterprise that network with the customer. The intention of the distributed data is to assist in fostering effective personal experiences between the customer and the company or enterprise (Anderson and Stang 2000, p1; Peppers and Rogers 1993). Relationship marketing has been enabled by technologies such as the Internet and other management information systems within the enterprise. Internet has enabled the businesses and consumers to interact with each other at a low cost. Management information systems within the business or the enterprise have permitted the business to have a broad view of the consumers across its functional areas. These two systems have permitted the customization of communication with the consumers. The rise of the enterprise-wide systems was instigated by the fears of the effect of Y2K problems. There were concerns that the information systems would be destroyed. The companies sought for solutions that required low cost of operation and those that improved their relationship with the suppliers. These two things were considered as they improved their information infrastructure (Sorce 2002, p21). Other than Web and database technologies, mobile technology has found its place in the business world. The emergence of mobile and wireless technology has posed both new obstacles and opportunities for the business world. It has had a profound effect on the relationship between the business people and the consumers. Currently, M-commerce is seen to have found its foundation from the Internet-based E-commerce. M-commerce features a different form of network and it integrates a number of end users features. There are prospects that mobile and wireless computing will control the Internet industry and if this becomes true, then both M-commerce and E-commerce would become a single entity. M-commerce is described as the performing of commercial or business transactions through the mobile telecommunication platform using a communication device such as palmtop or a mobile phone. In other words, M-commerce can be simply defined as the exchange of ideologies, products, and services between the providers and the mobile users (International Resources Management Association 2002, p305). SOSTAC is a tool that is used by many professionals to create all forms of plans (e-marketing plans, advertising plans, corporate plans, and marketing plans). The planning stages of SOSTAC (Situation, Objectives and Strategy, Tactics, Action and Control) are situation analysis, objectives, strategy, tactics, actions, and control. Situation analysis looks at the current position of the business. It also entails changes in the market place and the examples of bad and good e-marketing. Objectives entails where the business wants to be. The stage looks at the benefits and demerits of going online. Strategy looks at the methods the business can use to achieve its objectives. It also looks at the e-tools that the business can select and it is important to note that e-strategy is an important part in this stage (Chaffey and Smith 2002, p3). The tactics involves the reviewing of the tactical e-tools. Actions describe the project management skills and the action plans. Control checks if the business e-efforts are viable and working (Chaffey and Smith 2002, p4). In summary, SOSTAC offers a basic plan that can be used by a business for its e-marketing plans. Potential Insights from Advances in the Digital Neurosciences Neuroscience has been able to elucidate what goes on in the brains or the minds of the consumers as they think about brands or as they watch commercials. Some of the research done in this aspect offers surprising and fascinating results concerning the behaviour of the consumers. The Buyology researchers were able to find the following; the cigarette health warnings printed on the cigarette product package stimulated smoking. It is widely accepted that the effects of smoking behaviour is not large when the health warnings are printed on any tobacco product packages. However, the researchers concluded that these warnings had no impact on the smoker’s cravings. The case was similar even on health warnings that displayed frightening disease photos. The results also indicated that the subject’s nucleus accumbens (this is a region associated with cravings) was stimulated by the health warnings (Dooley 2008, p1; Lindstrom 2008). The researchers were able to conclude that the health warnings did not help and they stimulated a stronger craving for the tobacco products. These warnings projected to minimize smoking seem to be an effective marketing method for the tobacco products manufactures (Dooley 2008, p1; Lindstrom 2008). The Buyology researchers also found that brain activity predicted the failure of a TV program. With the help of EEG (electroencephalograph) technology, the researchers evaluated the subject’s brain activity while showing three new television programs: Quizmania, How Clean Is Your House, and The Swan. How Clean Is Your House was the most involving and The Swan was the least. The same shows were aired in the United Kingdom and they produced the same results. This form of research indicates the appropriate application of neuromarketing can help in the reduction of the number of products that fail after their first introduction. The method is also reliable than the traditional market research methods such as focus groups and surveys (Dooley 2008, p1). Viral marketing is defined as a type of peer-to-communication in which the individuals are persuaded to distribute within the social networks promotional messages (Bampo et al. 2008, p273; Rosen 2000). In other words, viral marketing defines any strategy that persuades people to spread a message, thus developing the probability for exponential development through the message’s influence and exposure. The evolution from the traditional networks to digital networks has largely expanded bidirectional communication opportunities. Thus, in the process, it has developed an intriguing and pervasive phenomenon. There are two streams in digital networks, the behavioural stream, which incorporates marketing and advertising, and the management science stream, which entails operations research and information systems (Bampo et al. 2008, p274). The behavioural stream focuses on the motivations, reported behaviours, and the characteristics of the consumers and the level in which they can influence the effectiveness of the viral marketing promotions (Bampo et al. 2008, p274). Behavioural stream is generally focused on the practising managers who are seeking to use online word of mouth and digital social networks in a successful manner. On the other hand, management science stream focuses on the design features of the specific mechanisms and the possibility of manipulating performance through intentional design and structural manipulation (Bampo et al. 2008, p275). The effect of viral marketing promotion is determined by the campaign design, intervention strategies, and the message attractiveness. The perceived worth or the attractiveness of the message plays a crucial role in establishing the recipient’s probability of forwarding “the communication as well as which communication links to activate from within their digital network connections” (Bampo et al. 2008, p278). Once the promotion is in progress, the manager can keep track of the promotion or campaign progress in various ways. For instance, if the promotion utilizes a Web interface as the process of registration or it entails a call to action like an online coupon, it is probable to determine the signs of a failing campaign or a promotion and take the necessary action to correct it (Bampo et al. 2008, p278). Disadvantages and Challenges of the Digital Information Technologies There are potential risks and problems associated with the advancement in technology, and their implementation and use in the business world. For instance, the enterprise-level CRM solutions are hard to implement and their cost is relatively expensive. This is because of various reasons such as inaccuracy, missing and widely distributed data, and underestimation of the technology infrastructure requirements (Anderson and Stang 2000, p7). When the company relies on the Web site, it must consider scalability; the business must have the appropriate infrastructure to support the Web site. The transactions that are supported on a daily basis by the commercial web applications are many than the ones supported by the traditional applications. If the company relies heavily on the Web, a system or a network break down can bring significant loses to the company. Customer satisfaction can go down rapidly. Thus, there is need for the company to strike a balance when using Web technology in the CRM and to invest in a wise manner in order to minimize the risks (Anderson and Stang 2000, p8). There is a significant gap between the standards, the priorities, and the interests of the “academic marketers and the needs of marketing executives operating in an ambiguous, uncertain, fast-changing, and complex marketspace” (Day, Reibstein, and Wind 2009, p1). The marketing academicians do not have much to say about the emerging issues and critical strategic marketing problems. These issues include the effect of networked companies or organizations, the effect and marketing of the emerging technology, the worth of open innovation, the declining value chains, the purpose of brands in the international market, unethical marketing practices, and the function of marketing when the consumers get empowered (Day, Reibstein, and Wind 2009, p1). These are among the issues that the marketing academicians have failed to offer valid solutions. Some of the issues are technology based and they are as a result of the advancement in technology. Implication of evolution of marketing theory There are various tools available in the digital marketing world that show the business what is working for them and what is not working for them. The best thing that digital marketing has offered is that the business can learn from its results or outcomes (Jones and Ryan 2009, p105). Digital marketing has alleviated two major obstacles that were faced in the traditional marketing media. Purchasing advertising space and testing it to see whether it was the preferred choice, was relatively expensive. The businesses were never sure which marketing mix brought results. All this has been changed by the Internet. Businesses have shifted to performance-based advertising and they have used models such as pay-per-acquisition and pay-per-click model. Using these models, the business pays only for the traffic achieved through “a particular advertising channel. That makes it easy and relatively cheap for you to test different ad combinations to see what works best for you, without your costs spiralling out of control” (Jones and Ryan 2009, p106). It is very clear that the society is developing new methods of communicating, distributing information and new means of its participation in its various societal activities. Businesses are now selling behaviour unlike in the past in which they sold audience. As stated earlier, the main trend in advertising is the emergence of performance-based advertising. This indicates a change in the mode of advertising from selling the audience to trading behaviour. Selling audience is dominant in the traditional method of advertising. The advertising rates in the broadcast and print media are entirely dependent on the number of individuals exposed to the advertisement. Performance-based advertising entails putting an advertisement on the user’s computer screen in a method that is the same as putting an advertisement on a magazine’s page. The main emphasis of performance-based advertising is on the actions rather than the viewing of the ad by the user. Instead of the business paying the advertising agency for delivering their advertisement, they pay them for delivering people. An example of performance-based advertising is Google AdWords. Google is paid for the individuals it forwards to the site of the advertisers (Jones and Ryan 2009, p107). Conclusion Organizations and the marketing world are faced with challenges described by Wharton. These challenges have been attributed to the advancement in technology. The advancement of technology has been significant in the past years and in the business world, it has affected the way the consumers and the businesses interact. These technologies have improved customer experience and as a result, the businesses have gained significantly. Neuroscience has brought in a new dimension of marketing and it has studied the behaviour of the consumers in regard to the technologies they use. It has also helped businesses to serve better the consumers. A major setback of these technologies is that some are costly and difficult to implement. There are predictions that in the future, these technologies will improve the way the consumers and the businesses interact. References Anderson, R. & Stang, D. B. (2000) Customer Relationship Management (CRM): Perspective. Gartner Research, pp1-11. Bampo, M., Ewing, M. T., Mather, D. R., Stewart, D. & Wallace, M. (2008) The effects of the social structure of digital networks on viral marketing performance. Information Systems Research, 19(3), pp273-290. Capon, N. & Hulbert, J. M. (2007) Managing marketing in the twenty-first century, New York, NY: Wessex Publishers. Chaffey, D. & Smith, P. R. (2002) eMarketing eXcellence (Emarketing essentials), Oxford, UK: Butterworth-Heinemann. Day, G., Reibstein, D. J. & Wind, J. (2009) Guest editorial: Is marketing academia losing its way? Journal of Marketing, 73, pp1-3. Dooley, R. (2008) Buyology by Martin Lindstrom [online], Neuromarketing. Available from: [accessed 14 Nov. 2011]. Dooley, R. (2011) Brainfluence: 100 ways to persuade and convince consumers with neuromarketing, Oxford, UK: Wiley-Blackwell. Downes, L. & Mui, C. (1998) Unleashing the killer app: Digital strategies for market dominance, Boston, MA: Harvard Business Press. Hodgson, R. & Pollock, J. T. (2004) Adaptive information: Improving business through semantic interoperability, grid computing, and enterprise integration, Hoboken, NJ: John Wiley and Sons. Information Resources Management Association. (2002) Issues & trends of information technology management in contemporary organizations, London, UK: Idea Group Inc. Jones, C. & Ryan, D. (2009) Understanding digital marketing: Marketing strategies for engaging the digital generation, London, UK: Kogan Page Publishers. Lindstrom, M. (2008) Buy.ology, Random House. McKenna, R. (1993) Relationship marketing: Successful strategies for the age of the customer, Perseus Books. Moore, G. A. (1991) Crossing the chasm. Harper Business Essentials. Moore, G. A. (2002) Crossing the chasm: Marketing and selling high-tech products to mainstream customers, Harper Business Essentials. Narver, J. C. & Slater, S. F. (1994) Market orientation, customer value, and superior performance, Business Horizons, pp22-28. Peppers, D. & Rogers, M. (1993) The one to one future, Doubleday. Peppers, D. & Rogers, M. (1997) The one to one future: Building relationships one customer at a time, Currency Doubleday. Pillay, S. S. (2011) Your brain and business: The neuroscience of great leaders, Upper Saddle River, NJ: FT Press. Rosen, E. (2000) The anatomy of buzz, Doubleday. Rosen, E. (2003) Anatomy of buzz, Profile Books. Sorce, P. (2002) Relationship marketing strategy, Rochester, NY: Printing Industry Center. Treacy, M. & Wiersema, F. (1993) Customer intimacy and other value disciplines. Harvard Business Review, pp84-93. Treacy, M. & Wiersema, F. (1997) The discipline of market leaders: Choose your customers, narrow your focus, dominate your market, Cambridge, MA: Basic Books. Bibliography Godin, S. (2009) Meatball Sundae: How new marketing is transforming the business world (and how to thrive in it), Piatkus, Judy Publishers. Hill, D. (2008) Emotionomics: Leveraging emotions for business success, London, UK: Kogan Page Publishers. Lindstrom, M. & Underhill, P. (2010) Buyology: Truth and lies about why we buy, Broadway Books. Lindstrom, M. (2011) Brandwashed: Tricks companies use to manipulate our minds and persuade us to buy, London, UK: Crown Business. Read More