Digital Marketing: Opportunities and Challenges - Assignment Example

Digital Marketing: Opportunities and Challenges Your Full Your I.D. # Unit and Lecturer Assignment # Due A lot of companies are discovering the opportunities and challenges of digital marketing. Digital marketing is expected to totally transform marketing for a lot of companies for it gives marketers the opportunity to provide immediate, individualised information and services. Digital marketing control the one-of-a-kind and dynamic features of interactive media: shopping and purchases can be carried out online; services can be customized or personalized to suit individual customer; it facilitates communication; and through interactive media each customer can be recognised and focused on individually (Meadows-Klue 2005, p. 198). Yet, to obtain the advantages of digital marketing, organisations should add interactive media into their current marketing and business strategies, which is not easy to accomplish. Many companies are having difficulties developing their digital marketing strategies. Studies are being carried out to identify new marketing tools that will contribute to the development and implementation of digital marketing tools. The intention of this discussion is to describe the opportunities and challenges presented by digital marketing to today’s companies by using two concrete examples, Amazon and American Airlines’s SABRE. Various scholars and researchers have identified and described the opportunities and challenges of digital marketing. Digital marketing has created new means or outlets for advertising, selling, and buying. It allows the customer to access an incredible amount of information in an accessible and convenient way. Customers have the chance to look at products and/or services based on their wanted features, such as price, quality, functionality, and others. Customers can use it to get product reviews, or to know about the experiences, opinions, and/or ideas of other users (Urban 2004, 18). Digital marketing has given the end user some control, bringing about an enormous change in marketing processes. By using digital marketing companies can gain competitive advantage through greater customer satisfaction. In addition, digital marketing could be a simple tool for companies since the ‘digital’ feature of marketing allows further technology advances. Because the Internet facilitates two-way communication directly and quickly, implementing digital marketing strategy can occur faster than earlier marketing tools and are at times less costly. The best feature of digital marketing is its ‘instantaneousness’, hence allowing quick response from customers (Morris 2002, p. 205). On the other hand, digital marketing also has several challenges. While planning in a traditional or low-risk environment requires thoroughly designed strategy, developing a digital marketing strategy needs continuous trials, adaptability, and correct timing. The environment is evolving very fast and all of a sudden that by the moment the best possible strategy is created, it is usually out of date. Flexibility and quickness are needed. The challenge to companies is to be able to manage selections of products/services and design an organizational structure able to respond quickly to shifting situations and faster evaluation of innovative approaches (Matheison 2010, p. 243); another challenge is the absence of a single marketing process. Every unit in a company performs its own digital process. Thus, companies should satisfy the different requirements of different units (Bird 2007, p. 128). Applying digital marketing has become quite challenging for companies, and strategy development is becoming crucial. Even though digital marketing has many challenges, there are still useful ways companies can use to plan and implement digital marketing tools. Scott Klososky (2012) introduces five components to assist in understanding and using digital marketing tools. These are (1) building productive websites, (2) providing social technologies, (3) mobile tools, (4) driving online traffic, and (5) measurement systems. First, companies can build a system for digital interaction or communication. This system may contain e-mails, websites, and tie-up with social media. This system should be accessible, user-friendly, updated, and informative (Klososky 2012, p. 42; Mouncey 2005, p. 292). Second, companies could create interactive activities or options for their customers. Some of the tools included here are customer service expansion, customer satisfaction, combination of social media and mobile, and creation of search engines (Wertime & Fenwick 2011, p. 83; Martin & Todorov 2010, p. 63). Third, companies should guarantee the accessibility of their services or related information for customer use and interaction. Customers should have unlimited and continuous access to the company’s website. Customers are always on the lookout for new product offerings, promos, and others, thus it is important for companies to make sure they are accessible to their customers (Persons et al. 1996, p. 186). Fourth, companies should try to establish itself or its reputation online. Driving online traffic creates greater opportunity for the company to reach a bigger customer base thus increased profitability. Reliability and accessibility of a company’s website help increase online traffic, as well as the application of traditional marketing tools (Klososky 2012, p. 43). Fifth, companies should implement measurement systems to determine the effectiveness or benefits of digital marketing. Some of the key measurement systems used by companies are increase in sales, monitoring online purchases, and online traffic or number of visits to their website (Klososky 2012, p. 43; Morris 2009, p. 385). Afterward, through these measure systems, companies can initiate the necessary changes to improve the outcomes of digital marketing. Two of the companies that have used digital marketing successfully are American Airlines and Amazon. American Airlines created the SABRE system in order to acquire information about their passengers. The company secured the loyalty of their regular customers by providing further information beyond those accessible through their online system. By using digital marketing, the company was able to gain information about their customers, giving them the chance to personalise their services. American Airlines outwitted its rivals through digital marketing. The SABRE system acquired information which may be used to boost the outcomes of its online operations. Through digital marketing, the company was able to translate customer information into valuable corporate knowledge. In order to improve its online success, the company redesigned the system into an online reservation site. This move was another success for the company (Ryan & Jones 2011, p. 64). Similarly, Amazon evolved from being an online bookstore into a website that offers a wide array of products. The success of Amazon is due to its productive use of digital marketing. Besides plainly offering a wide selection of products online, the company decided to add several online activities for its customers such as the chance to write book and product reviews. Because of these added ‘values’ the company became known as an online community. Recently, Amazon has made public that it will begin to add display promotions in intermediary or third-party websites (Bird 2007, p. 19). For years the company has been collecting information about their customers and the capacity to add display promotion to these regular and loyal customers will generate well-designed marketing campaigns. So what are the similarities and differences between American Airlines’s SABRE and Amazon. There are several similarities between the two such as their early adoption of digital marketing and their application of various digital marketing tools such as websites, e-mails, etc. Both companies effectively designed their online reservation sites to provide convenience and ease of access to their customers. The online system of both companies is diversified. American Airlines offers online reservation for various services such as movie tickets, hotel reservations, train fares, and car and limousine rentals. Similarly, Amazon continuously improves the variety of its product offerings which now includes home improvement equipment, toys, electronics, and software. Moreover, both companies obtain information about their customers and use these sets of information to personalise their products/services or cater to the specific needs of their customers. More importantly, both companies were able to ward off their competitors through digital marketing. Still, there are some differences between the two. American Airlines has slowed down in developing its digital marketing tools. After the success of the online reservation site, the company’s digital marketing has somehow stagnated. On the other hand, Amazon continues to update its websites and other digital marketing channels. This difference could be explained by the different business nature of the two companies: American Airlines does not solely focus on digital marketing, unlike Amazon. In addition, the digital marketing strategy of American Airlines has a smaller target market base, whereas Amazon has a larger customer base. However, in spite of these differences, one thing is for sure: digital marketing has been remarkably productive and profitable for both companies. In conclusion, the strategic value of digital marketing rests on its potential to create ‘value’ for customers. Digital marketing revolutionises corporate operations and the actual features and processes of a product and/or service either through cost reduction or product differentiation. Furthermore, a company using digital marketing can gain greater competitive advantage, cost-effectiveness, innovation, and product differentiation. In a similar way, digital marketing enhances flow and accessibility of information, communication, customer satisfaction, and the relationship between the company and its customers. These features could increase the competitiveness of companies within a particularly technological environment. As discussed, digital marketing presents various opportunities and challenges to companies nowadays. These opportunities range from building customer satisfaction to acquiring competitive advantage. But these opportunities are accompanied by challenges. There are several difficult tasks that companies should go through in order to successfully apply digital marketing tools. American Airlines and Amazon are just two of the companies attesting to the power and challenges of digital marketing. Therefore, in this writer’s opinion, digital marketing is a risk worth taking. Applying digital marketing will generate challenging problems but the return will go beyond any of these challenges. References Bird, D 2007, Commonsense Direct & Digital Marketing, Kogan Page Publishers, UK. Klososky, S 2012, ‘Social technology: the next frontier’, Financial Executive, vol. 28, no. 4, pp. 40-45. Martin, K & Todorov, I 2010, How will digital platforms be harnessed in 2010, and how Will they change the way people interact with brands?, Journal of Interactive Advertising,  Vol. 10 No 2, (Spring 2010), pp. 61‐66. Matheison, R 2010,The On-Demand Brand: 10 Rules for Digital Marketing Success in an Anytime, Everywhere World, AMACOM Div American Mgmt Assn, New York. Meadows-Klue, D 2005, Mobile Marketing, Journal of Direct Data and Digital Marketing Practice, Issue 7, pp. 198-199. Morris, N 2002, The Future of Marketing: Practical Strategies for Marketers in the Post-Internet Age, Interactive Marketing, Issue 4, pp. 205-206. Morris, N 2009, Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation, Journal of Direct, Data, and Digital Marketing Practice, Issue 10, pp. 384-387. Mouncey, P 2005, Market Intelligence, Interactive Marketing, Issue 6, pp. 291-294. Ryan, D & Jones, C 2011, The Best Digital Marketing Campaigns in the World: Mastering the Art of Customer Engagement, Kogan Page Publishers, UK. Urban, G 2004, Digital Marketing Strategy: Text and Cases, Pearson Prentice Hall, New Jersey. Wertime, K & Fenwick, I 2011, DigiMarketing: The Essential Guide to New Media and Digital Marketing, John Wiley & Sons, New York. Read More