Communications in an Internet Environment - Essay Example

Marketing Concept and Marketing Communication Problem Scope The new economy has bought about a new approach to marketing that is no longer product/market driven but customer driven. In today’s competitive economy marketing management eventually rests upon the customers’ behaviour and reactions not only to the 4P’s namely product, price, promotion and place, but also with the additional 3Ps of physical layout, process and people (e.g. Kotler 2001). The additional Ps have been added because today marketing is far more customer oriented than ever before, and because of a growing importance managing long-term relationships with the different stockholders of marketing (Helfert et al. 2002). Thinking of marketing less as a function and more as a set of values and processes (Moorman and Rust 1999) appears as the new vision of marketing. The survival and growth of a company therefore requires accurate knowledge about customers and careful relationship management. In this paper I look for the underlying principles of the new trends in marketing. In doing so, I focus first on exploring the new concept of marketing; then I show an example of new trends in marketing in AstraZeneca (See Appendix). After that, I tackle the concept of marketing communication with the case of Royal Caribbean Cruises (See Appendix). Finally I refer to conclusions. 2. What is Marketing? During the last few decades marketing has been challenged to undertake a paradigm shift away from the view of marketing as an optimization problem with an emphasis on product, price, promotion and distribution and toward a conceptualization of marketing as a set of activities focused on intra-firm and inter-organizational influence processes. As a result marketing has moved away from a focus on transactions as the fundamental unit of analysis and toward a focus on relationships with customers and suppliers (Webster et al. 2003). In addition, in this relationship the customer is no longer just a recipient of goods. The customer is viewed as a co-producer of service and therefore marketing is defined as a process of doing things in interaction with the customer (Vargo and Lusch 2004). Understanding relationship in marketing (RM) requires distinguishing between the discrete transaction, which has a distinct beginning, short duration, and sharp ending by performance, and relational exchange, which traces to previous agreements and is longer in duration, reflecting an ongoing process (Morgan and Hunt 1994). Numerous definitions of RM have been introduced in the literature since the beginning of 1990s reflecting the high attention of researchers of different schools to the topic. What seems to be agreed upon among the authors in the area is that RM constitutes a major shift in the marketing field. What is missing from most of the extant definitions of relationship marketing is the specific recognition that many instances of relationship marketing do not have a “customer” as one of the exchange participants. Conceptualizing relationship marketing, as suggested by Morgan and Hunt (1994), requires a definition that accommodates all forms of relational exchanges. Morgan and Hunt (1994) propose ten discrete forms of relationship marketing categorized with reference to a focal firm and its relational exchanges in supplier, lateral, buyer, and internal partnerships, as Figure 1 shows. To cover all forms of relational exchange and focus on the process of relationship marketing, Morgan and Hunt (1994) propose the following definition: Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges. Figure 1: The relational exchanges in relationship marketing (Source: Morgan and Hunt, 1994) In the process of building and maintaining these relationships the marketing has to focus not only on its traditional stakeholder “buyer partnership” but on internal, supplier and lateral partnerships as well in order to strengthen its process inside the firm. As suggested by Moorman and Rust (1999) marketing should play a role in connecting the customer with 1) the product 2) service delivery and 3) financial accountability. Of those three connections the traditional role of marketing has been to link the customer with the product. Moorman and Rust (1999) explain that marketing’s emphasis in this linkage is on providing knowledge and skills that connect the customer to product design or quality issues. This emphasis underlies many present-day methodologies for new product development as well as for managing the customer-product interface (p. 183). Customer-service delivery refers to the design and delivery of additional actions involved in providing a firm’s goods and services to the customer. The focus of this connection is generally on the frontline employee who facilitates pre or post-purchase aspects of the process. Customer-financial accountability connection captures the efforts for linking customers to financial performance. Unfortunately, “marketing in many firms does not manage this linkage, and the inevitable result is that financial accountability is perceived largely in terms of costs” (Moorman and Rust 1999, p. 184). The actual expectative is to understand the link between marketing and financial performance of firms. 3. What is Marketing Communication? The role of integrated marketing communications As suggested by Morgan and Hunt (1994) and according to Ruth and Simonin (1995), there are stakeholders who can affect and be affected by a company’s marketing program. In that sense, it is important to manage relationship with the set of stakeholders by integrated marketing communications (IMC) (Kitchen and Schultz 1999; Kitchen et al. 2005). Kitchen et al. (2005) claim that all communication activities of today’s business corporation need to be integrated in order for the business to survive and prosper in a globalised world. As Kitchen and Schultz formulate: “It seems evident that raising a corporate umbrella over all communication activities is the face of the future” (1999, p.235). The increasing importance of communication in marketing is demonstrated by its ability to differentiate new marketing approaches from traditional ones. Each approach emphasizes two-way communication through better listening to customers and interactivity (Fill 2002), and the idea that communication before, during, and after transactions can build or destroy important brand relationships (Duncan and Moriarty 1997). This is because the net sum of brand relationships is a major determinant of brand value. A communication-based model of relationship marketing (Fill 2002) underlines the importance of managing all brand communications as they collectively create, maintain, or weaken the profitable stakeholder relationships that drive brand value (Duncan and Moriarty 1998). At the marketing communication level, a basic premise of relationship marketing is the need for executional consistency among all marketing communication messages, so that trust can be built and there is coherence in stakeholder perceptions. Strategic consistency means the messages are appropriate for their audiences; however, there is consistency in the way corporate values are presented, how products perform, and how the brand is identified and positioned. At this level, IMC generally has one voice and one look for each target audience, regardless of the marketing communication function (e.g., advertising, public relations, and sales promotion) or media being used. (Duncan and Moriarty 1998). Because a communication-based model of relationship marketing recognizes that everything a company does (and sometimes does not do) sends a message that can strengthen or weaken relationships, it has several managerial implications (Duncan and Moriarty 1998). Integrated marketing communications have been used in e-business. In that sense, E-business objectives need to link closely with corporate objectives, vision and mission statements, and appropriate functional area objectives, such as those relating to marketing and information systems development (Rowley 2001). In the digital world, marketing communications is concerned with creating presence, creating relationships, and creating mutual value. Creating presence is concerned with the awareness building phase of marketing communications in which the organisation seeks to ensure visibility for its product offering. Creating relationships occurs when customers and organisations work together. The relationship is built as interactions increase. Businesses may use customer information to customise or personalise marketing communications, so that on the basis of past purchases they might draw customers attention to new items. Creating mutual value occurs when customers and organisations work together to create value in a way that is beneficial to both parties (Rowley 2004). The role of communication in marketing is associated with the relationship paradigm in marketing. As suggested by relationship marketing, firms have to focus in establish long-term relationship with customers and with others stakeholders. However, at the moment of establishing bonds with stakeholders, firms have to be consistent. In that sense, integrated marketing communications appears as a way to generate and make marketing communications more effective. 4. Summary and Conclusions Summing up, the new paradigm shift in marketing suggests that marketing is inherently linked to relationship processes with different stakeholders; however the customer remains at focus. The value for a company is viewed as arising out of relational exchanges with customers. Marketing is a constant process fed by relational and intellectual assets. The search for relationships among firms and customers as well as internal, supplier and lateral partners, is not enough. The search for intellectual assets complements the relationship focus. Knowing the needs of the different stakeholders firms can create strong relationships through. In the process of relationship building, the role of integrated marketing communications is crucial in order to provide a consistent company image. Moreover, the use of Internet in creating presence, relationships, and value for customers is consistently becoming a strategic tool in marketing communications. Appendixes: How companies creatively use marketing and marketing communications concepts in practice 1. Relationships with stakeholders: The case of AstraZeneca Suppliers At AstraZeneca one of the core responsibilities is to encourage the suppliers to embrace corporate responsibility standards similar to their own, and to work with them to share best practice and stimulate improved performance where needed, thus building long-term relationships. This applies across the full range of the purchasing activities, from promotional items to pharmaceutical ingredients, and includes any specialised work for which AstraZeneca uses external contractors to complement the in-house effort, such as animal research. Because of the huge number of suppliers the company already has under contract, it is taking the pragmatic approach of prioritising those that are most important to ensuring the continuity of the business, and discussing corporate relationship standards with these companies before reviewing the rest. Customers The day-to-day business activities include regular contact in the company’s local markets with physicians and other healthcare professionals, and those who pay for healthcare. The communications focus on providing information about company’s medicines, the diseases they treat and the benefits and risks associated with their use. As buyers of healthcare, national governments are often also customers as well as being regulators, and access to medicines that offer therapeutic and economic benefits is an important part of the dialogues with these groups. In addition, AstraZeneca encourages constructive dialogue with all stakeholders and others who have an interest in the company’s activities to make sure the company is staying in tune with their changing expectations and to give the opportunity to make AstraZeneca’s position understood. Shareholders AstraZeneca encourages feedback from shareholders on its reputation both informally at face-to-face meetings, as well as the more formal assessments provided by surveys such as the Dow Jones Sustainability Indexes. Government The pharmaceutical industry is one of the most highly regulated of all industries. Almost every aspect of the business is subject to regulation or ethical overview. It is therefore essential that AstraZeneca participates in public policy dialogue with governments and other public bodies to exchange views on issues that impact the business. Local communities AstraZeneca’s site-based community liaison teams aim to ensure that the company maintains open dialogue with the local communities, keeping them informed of the business activities and plans, and giving the opportunity to raise any concerns. 2. Use of Integrated Marketing Communication: The case of Royal Caribbean Cruises One of the most important marketing activities that Royal Caribbean Cruises (RCCL) is employing is electronic customer relationship marketing (eCRM). They are trying to generate interactivity between the firm and stakeholders, specifically customers. Traditionally, at the marketing communication level, interactivity is generated through a combination of one-way (e.g., mass media advertising, publicity) and two-way communication (e.g., personal selling, customer service). Direct marketing, sales promotion, and event marketing use both one- and two-way communications. Even packaging can be a mix of both if the package contains a customer service number or other response device. More efforts also are being made to introduce response devices in traditional one-way forms, such as 800 numbers and e-mail addresses in mass media advertising. Nowadays, they are employing internet support in order to establish better relationship with customers: e-CRM. eCRM permits RCCL to understand about its customers’ wants, and how and when they want its service. Besides, eCRM can make informed decisions to drive business strategy, build brand awareness and attract and retain their most profitable customers. Through eCRM, RCCL will keep in touch directly to its consumers without the posterior intervention of suppliers. Additionally, the communication level interactivity is generated through a combination of two-way communication, different from the classical mix based on mass advertising. Customer data needs to be collected, cleaned, stored in a format that makes it easily accessible for analysis and then analyzed by statisticians so that meaningful information regarding customer behavior, trends and attitudes can be extracted. It is this ability to transform raw data into actionable customer understanding that defines eCRM. References Duncan, T. and Sandra Moriarty. (1997). Driving Brand Value: Using Integrated Marketing to Drive Stakeholder Relationships. New York: McGraw-Hill. Duncan, T. and Susan Moriarty. (1998). “A Communication Based-Marketing Model for Managing relationships”. Journal of Marketing, 62 (April): 1-13 Fill, C. (2002). Marketing Communications (4th edition). London, Prentice Hall. Helfert, G., Ritter, T., and Walter, A. (2002). Redefining market orientation from a relationship perspective: Theoretical considerations and empirical results. European Journal of Marketing, 36 (9/10): 1119-1139. Kitchen P.J., de Pelsmacker, P., Eagle, L., and Schultz, D.E. (2005) A Reader in Marketing Communications, London: Routledge. Kitchen, P.J., and Schultz, D.E. (1999). A Multi country comparison of the drive for integrated marketing communications. Journal of Advertising Research, 39 (1): 1-17. Kotler P., and Armstrong G. (2001). Marketing Management: Analysis, Implementation and Control, (3rd edition). London, Prentice Moorman, C., and Rust, R.T. (1999). The Role of Marketing. Journal of Marketing, 63 (Special Issue): 180-197. Morgan, R.M. and Hunt, S.D. (1994). The Commitment-Trust Theory of Relationship Marketing, Journal of Marketing, Vol. 58 (July): 20-38. Rowley, J. (2001). Remodelling Marketing Communications in an Internet Environment. Internet Research: Electronic Networking, Applications and Policy, 11 (3): 203-212. Rowley, J. (2004). Just another channel? Marketing Communications in e-business. Marketing Intelligence & Planning, 22 (1): 22-41. Ruth, Julie A. and Bernard L. 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