Organisational Approaches - Essay Example

ORGANISATIONAL APPROACHES A critical analysis of organisational approaches in the B2C sectorfor relationship development in the digital environment TABLE OF CONTENTS 1. Executive Summary................................................................................................ 2. Brand positioning and targeting desirable demographics.................................. 3. Exploring digital relationship management tactics............................................. 4. Conclusion............................................................................................................... 1. Executive Summary Many organisations attempting to market products and services are using digital forums by which to engage with consumers, strengthen their brand relationships from a B2C context and also build brand preference/loyalty over that of competing products and services. This report focuses on such approaches in the digital environment that could theoretically be effective as a viable model of marketing with emphasis on consumers’ role in constructing these relationships, with an emphasis on tactics used in the oil and gas industry. The study finds that effective B2C marketing should incorporate consumer co-creation, utilise communications which recognise customers as powerful, political consumers, and use discourse which illustrates an ethical stance for the firm in the digital environment. 2. Brand positioning and targeting desirable demographics Before a positive B2C engagement can begin, it is necessary to identify relevant target segments. Many companies in the oil and gas industry are seeking lifestyle-related targeting due to the difficulty of differentiation within competitors in an oligopolistic market where products offered are similar and rarely differentiated. Psychographic segmentation is the most viable method, conducting market research (such as online surveys) to identify values, beliefs and lifestyles of consumers and then incorporate communications which emphasise a brand-consumer congruency in terms of these values. The following section describes ethics as a set of lifestyle values of consumers that underpins development of a B2C relationship between buyer segments and customers. 3. Exploring Digital Relationship Management Tactics In the oil and gas industry, there is contemporary emphasis on using environmentally-conscious corporate ideology as a means of differentiating one firm from another. This is due to the fact that there is a growing international trend known as ethical consumption, or the propensity to favour buying products and services from businesses with transparent and well-publicised efforts at environmental responsibility. An empirical study launched by Oh and Yoon (2014) found that consumers maintain much more preference to consume products from businesses with a strong ethical programme; as compared to less ethically-focused businesses. Grande (2007) reinforces this trend, suggesting that many companies are engaging in discourse and promotion on this corporate ethical set of beliefs and values to differentiate their businesses from competitors. Solomon, et al. (2013) sees such a phenomenon as genuine under role theory, with consumers becoming political consumers and actively boycotting products that do not meet with consumers’ expectations for ethical standards. This is an active trend in consumer behaviour, today, as recognised by Globe Scan (2009) which asserts that consumers are actively serving as punishers of firms without strong ethical standards by sanctioning such firms with less consumer purchases of their products. Hence, one effective method of capitalising on opportunities to build strong relationships with a more ethically-focused consumer is utilising digital platforms to build discourse and engagement about the firm’s efforts to be a superior company in terms of environmental responsibility. Placing online videos on a firm’s website, using social media platforms, blogs and other relevant web content allows organisations to speak directly with their desired target segments which have changed the face of public relations dramatically (Scott 2013). Through digital platforms, companies can build virtual communities with common interests and enthusiasm toward a particular cause or environmental concern that allows the business to become more integrated as a member or leader of these ethical considerations influencing consumption (Solomon, et al. 2013). Marketing research indicates that when a company or its brands maintain characteristics or values that are congruent to the consumer self (i.e. their own lifestyle and beliefs), it creates much more potent and positive emotional connections to the brand which underpin the construction of consumer loyalty (Zhang and Chan 2009). To illustrate, one organisation constructed a website to draw attention to alleged or known unethical behaviours related to poor environmental policy of Royal Dutch Shell. This site allows for users to engage in discourse about Shell’s environmental issues, including blogging from previous Shell employees, which enticed more attention by regulators to control unethical environmental policy at this oil and gas leader (Hotten 2009). This website, which boasted two million hits every month, became a valuable information source for international regulators that were instrumental in forcing Shell to divest its multi-billion dollar stake in a gas drilling operation for non-compliance to environmental regulatory instruments. The organisation responsible for building a virtual community of global citizens with shared ethical interests ensured that their ethical agenda was satisfied: exposing an oil and gas industry leader for poor ethical business practice. Today, with the power of digital platforms to expose environmental irresponsibility, Shell now engages in much more eco-discourse in digital media which has constitutive impact in how this company restores its reputation for poor environmentalism and builds more effective relationships with ethical consumers with the power to serve as political consumers (Livesey 2014). Shell has established a blog known as Shell Global which maintains discourse about its efforts at environmentalism associated with its international oil exploration activities (Nwagbara 2013). Solomon, et al. (2013) asserts that 40 percent of consumers actively buy products because they promote an emphasis on ethical causes. Therefore, digital forums capable of building discourse with consumers sharing ethically-based values improve Shell’s competitive position in a market saturated with oil and gas competition. Shell has expanded its ethical discourse to include construction of a social media network known as Women Adding Value Everywhere (WAVE) which further builds discourse and relationships with consumers and adding brand value related to consumer expectations for corporate social responsibility (Beeke 2015). Shell as a company uses various digital marketing strategies that include posting video slides and advertising photos on Twitter and Facebook where they are viewed and liked. Shell Company has about 5,588,379 likes on Facebook and 1,728,752 followers on LinkedIn professional marketing that is increasing day after day. Shell Company has done an organizational change to transform to digital marketing and increase their revenue. It has adopted a smarter way of dealing with data to target its audience and also build a community of consumers (Webb 2015). Additionally, it works with publishers to create information and build online communities. Despite its establishment on digital marketing, Shell Company has competitors, namely, BP. P.L.C, Exxon Mobil Corporation and Chevron Corporation. These competitors tend to do better than shell because they take full advantage of technology when marketing their products online. For instance, Exxon Mobil Corporation is the industry leader in creating and applying a High-Impact Technology. The technology enables comprehensive application of high operational standards. However, Shell Company can improve their digital presence and marketing by promoting necessary skills and culture to make use of the opportunity that presents and, therefore, bringing the marketing technology to a competitive advantage (Inkpen & Moffett 2011). With this, Shell Company will take over the market and become a huge brand. The AIDA model is one of the best marketing models and identifies the stages consumers undergo during the purchasing process of a product or service (Behm 2006). Shell Company uses this model in that it creates awareness for its products, generates interest in the buyer, brings in an emotional connection to achieve desire and moves the buyer to interact with the company by downloading items and making calls. The diagram below shows the AIDA model. Shell uses The AIDA model in market planning as a communication strategy at each point of interaction with consumers. This turns out useful because it has been used consciously and subconsciously hence making the marketing communications effective (Behm 2006).With the increasing proliferation of the marketing channels, Shell has achieved to get the target of its audience that increases information, sales and revenue collection. This model can be promoted by attaching various gain for consumers in it such as winning prizes for free consultations This ensures retention of consumers who will increase their loyalty. The Mckinsey model helps companies make effective transformations in marketing strategy and operations for growth and development towards the digital advantage. The diagram below shows the Mckinsey model. There are several ways on how Shell Company uses the Mckinsey model. The first one is reviewing the effectiveness of its marketing operations. The second one is determining the best ways of realigning itself in order to support an emerging strategic direction. Lastly, reviewing the changes required to encourage the integration of any digital transformation. For instance, when introducing social platforms such as facebook or twitter into its marketing strategy. However, the “Mckinsey consumer decision journey model” is better than “The AIDA model” because it is current and goes as far as post-purchase experience. Also, it defines new roles and responsibilities for businesses helping them bring out their full potential. Shell Company can benefit from Mckinsey model because it can help transform its marketing strategy to become an effective online marketing that optimizes the customer experience across all the channels (Kotler & Armstrong 2006). The model can also assist the company develop and implement new growth models by combining integrated customer approach and insights from the digital world. This would design new customer experiences that would drive more desire and demand for their products. Several consumers have adopted the rational decision-making model in identifying problems and ascertaining which steps are worthwhile. This process should be precise and analytical to make the best out of it. This process is best applied in the organizational environment and business oriented companies to maximize their profits (Kotler & Armstrong 2006). The first step is problem recognition, which means defining the issue at hand. For example, if a company makes a little profit and the best solution is how to increase the profits. The next process in rational decision-making model is information search. This step involves choosing facts and variables that will help in making the outcome of decision (Brooks 2002). The information should be relevant to the companys problem and also mind others who might be affected. Considering potential solutions and alternatives is needed. This is followed by evaluation, which means evaluating the alternative chosen considering its least costs. After the evaluation has been done with the information at hand, the next step is decision making. It comprises a final solution and strategies on how to implement it on the site is considered. The preferred policy is taken, which is then followed by buying after comparing prices, and the object that provides the greatest reward at a low cost is often chosen. After buying, the consumer expects effectiveness of the assets and policies that have been adopted (Bampo et al 2008). The post purchasing experience is also considered where most consumers go for the products that will offer the best services available and get spares after damage. Finally, the digital marketing trend should be adopted by most companies due to the increasing technology to reach most consumers while making more use of opportunities at hand. The steps for rational decisional making are vital and should be followed by consumers and companies to excel and get the best services (Zook & Smith 2011). However, for Shell Company to improve their digital marketing it need to come up with a captivating customer experience with regard to its brand, services and oil products. The customers need to acquire a good perception about the company based on preferences and its actions. However, this can be attained if the company provides best channels that can reach the customers. For instance, they can utilize mobile phone, especially, smartphone to reach online customers. Websites such as the aforementioned that allow for consumer co-creation is yet another example of why digital forums are superior for improving customer relationship quality. Deuze (2007) asserts that having opportunity to be participatory in digital discourse builds more interest in brands that provide for such opportunities. The organisation which maintained a mission of exposing poor environmental policy at Royal Dutch Shell provided forums by which to post data and other consumer co-created content which, from a psychological perspective, fulfils a need for participatory corporate relationship development. This was reinforced by Solomon, et al. (2013) in a situation involving ESPN Zone in Chicago where giving consumers creative control built a positive relationship between this brand and the consumer. Furthermore, digital promotion provides a platform which customises discourse relevant to specific target markets, thus personalising the brand experience (Fill 2013). This personalisation effect has significant, positive emotional implications from a psychological perspective, as consumers want to be communicated with directly by brands which instils a sense of esteem and social belonging toward the brand providing this customisation (Laudonand Traver 2009). The personalisation effect is a significant influence in what drives consumption behaviour and intention toward particular brands engaging in this strategy in digital forums (Hajli 2015). Chevron is another oil and gas leader that uses customised discourse targeting the Nigerian consumer which emphasise the firm’s environmental sustainability focus in this country (Nwagbara 2013). This digital platform reduces the volume of Nigerian consumer clamour and chastisement by giving them a personalised forum to offer consumer opinion and attitude about Chevron’s sustainability focus, making Nigerian consumers feel as though they are active and respected partners in what drives business activity and influencing corporate responsibility. As Blanchard (2011) asserts, a social media campaign of similar capacity and scope serves as an alert system for a company to recognise trends in consumer angst to be more instantly responsive in alleviating such concerns. A timely responsiveness toward the evolving needs of consumers strongly influences their consumption intention toward the company or its distributed product brands (Pickton and Broderick 2005). Hence, real-time communication in social media (as one example of a digital platform) can be proactive in alleviating potential negative sentiment about the company or its brands whilst also fulfilling socio-psychological needs of consumers to be responded to for their concerns and opinion. Companies also use technologies capable of monitoring the discussion about their products or services that are occurring online and gather important data about how consumers perceive their experiences with the brand (Greene and Kesselheim 2010). If angst or negative brand experience sentiment pervades the digital media environment, organisations have opportunities to upload content that alleviates such concerns or engage directly with the consumers that have posted this negative opinion. These real-time, direct conversation capabilities provided by digital forums enhance consumer perceptions of customer service quality for the organisation which underpins more brand preference as a matter of customer satisfaction enhancement. This ability changes promotion policy from a distanced, traditional advertising campaign to one which enables more productive online discussion regarding a firm’s products and helps to influence consumer responses in favour of the brand (Edwin, et al. 2015). Another activity involves engaging with customers in the digital environment by promoting its special offers and promotions online such as providing links to Shell’s in-store promotions. Price promotions are often popular in the digital environment as they serve as a symbol of quality to many consumer demographics (Dawes 2004). 4. Conclusion As illustrated, companies in the oil and gas industry, such as Shell and Chevron, have changed their promotional policies to include more presence and B2C discourse on their environmental commitments and other elements related to corporate social responsibility as a matter of capitalising on significant growth in the trend of ethical consumption. Providing opportunities for consumer co-creation of content and involvement in virtual communities enhance the relationship development capabilities of a brand as consumer behaviour dictates a psychological need for this participatory, two-way relationship using digital channels for content and discourse. References Bampo, M, Ewing MT, Mather, DR, Stewart, D & Wallace, M 2008, ‘The Effects of the Social Structure of Digital Networks on Viral Marketing Performance’, Information Systems Research, vol. 19, no.3, pp. 273-290. Behm, J 2006, The AIDA model - Wrong spelling in advertisements as an attention-seeking device, GRIN Verlag GmbH, Boston. Brooks, M 2002, Planning theory for practitioners. Planners Press, American Planning Association, Chicago. Inkpen, A & Moffett MH 2011, The global oil & gas industry: management, strategy and finance. PennWell Corp, New York. Kimbrough, SO & Lee, R M 1997, ‘Systems for Computer-Mediated Digital Commerce’, International Journal of Electronic Commerce, vol. 1, no.4, pp. 3-10. Kotler, P & Armstrong, G 2006, Principles of marketing, Pearson Prentice Hall, Upper Saddle River. Webb, R 2015, Agency: starting a creative firm in the age of digital marketing, Palgrave Macmillan, New York. Zook, Z & Smith, PR 2011, Marketing communications: integrating offline and online with social media, Kogan Page. Philadelphia. Beeke, B.C. (2015). Not using social media? Then even energy companies have you beat, Houston Business Journal [online] Available at: http://www.bizjournals.com/houston/morning_call/2015/05/not-using-social-media-then-even-energy-companies.html (accessed 23 October 2015). Blanchard, O. (2011). Social media: managing and measuring social media efforts in your organisation. Pearson Education. Dawes, J. (2004). Assessing the impact of a very successful price promotion on brand, category and competitor sales, Journal of Product and Brand Management, 13(5), pp.303-314. Deuze, M. (2007). Convergence culture in the creative industries, International Journal of Cultural Studies, 10, pp.243-263. Edwin, T., Chandramohan, A., Shenbagavalli, R. and Senthilkumar, S. (2015). Social media: the new hybrid factor of the promotion policy for the pharmaceutical industries, International Journal of Pharmaceutical Sciences Review, 32(1), pp.112-116. Fill, C. (2013). Marketing communications: interactivity, communities and content, 6thedn. Harlow: Pearson Education. GlobeScan. (2009). CSR in the economic crisis. [online] Available at: http://www.globescan.com/news_archives/salon_lon-0109/ (accessed 23 October 2015). Grande, C. (2007). Ethical consumption makes mark on branding, The Financial Times. [online] Available at: http://www.ft.com/cms/s/2/d54c45ec-c086-11db-995a-000b5df10621.html#axzz2kT95cwFY (accessed 23 October 2015). Greene, J.A. and Kesselheim, A.S. (2010). Pharmaceutical marketing and the new social media, New England Journal of Medicine, 363, pp.2087-2089. Hajli, N. (2015). Handbook of research on integrating social media into strategic marketing. Newcastle: Business Science Reference. Hotten, R. (2009). 92 year-old’s website leaves oil giant Shell-shocked: how online protestors are using ‘gripe site’ as the focus for their complaints about big business, The Guardian. [online] Available at: http://www.guardian.co.uk/media/2009/oct/26/shell-gripe-site-trafigura (accessed 24 October 2015). Laudon, K. and Traver, C. (2009). E-commerce: business, technology, society, 5thedn. Upper Saddle River: Prentice Hall. Livesey, S.M. (2014). Eco-identity as discursive struggle: Royal/Dutch Shell, Brent Spar and Nigeria, International Journal of Business Communication, 38(1), pp.58-91. Nwagbara, U. (2013). The effects of social media on environmental sustainability activities of oil and gas multi-nationals in Nigeria, Thunderbird International Business Review, 55(6), pp.689-697. Oh, J. and Yoon, S. (2014). Theory-based approach to factors affecting ethical consumption, International Journal of Consumer Studies, 38(3), pp.278-288. Pickton, D. and Broderick, A. (2005). Integrated marketing communications, 2nd ed. Harlow: Pearson Education Limited. Scott, D.M. (2013). The new rules of marketing & PR: how to use social media, online video, mobile applications, blogs, news releases and viral marketing to reach buyers directly. Hoboken: John Wiley & Sons. Solomon, M., Bamossy, G., Askegaard, S. and Hogg, M.K. (2013). Consumer behaviour: a European perspective, 5thedn. Harlow: Pearson Education. Zhang, H. and Chan, D. (2009). Self-esteem as a source of evaluative conditioning, European Journal of Social Psychology, 39, pp.1065-1074. Annotated Bibliography Blanchard, O. (2011). Social media ROI: managing and measuring social media efforts in your organisation. Pearson Education. This resource was highly valuable as it provided a foundation of knowledge about how consumers rely on social media to make informed judgments about a brand. The author is a brand strategist sustaining 15 years of B2C marketing experience and facilitates corporate social media training throughout the world. It provides unique case studies of social media failure and successes to illustrate best practice in digital marketing and what strategies to avoid in terms of consumer behaviours. Oh, J. and Yoon, S. (2014). Theory-based approach to factors affecting ethical consumption, International Journal of Consumer Studies, 38(3), pp.278-288. This article provides scientifically-valid evidence of trends in ethical consumption as gleaned by data collected from 343 different real-world consumers of various demographic backgrounds. The study employs survey instruments which focus on issues of corporate ethical obligation and altruism as potential determinants for what drives consumption behaviour toward highly-ethical firms. It provides a relevant framework for justifying ethical consumption trends driving attitude toward corporate brands. Deuze, M. (2007). Convergence culture in the creative industries, International Journal of Cultural Studies, 10, pp.243-263. This particular article explores the benefits of participatory media that allows for consumer co-creation. It performs a literature review of existing empirical studies reflecting how participatory media influences positive consumer sentiment, citing case studies of organisations that have found marketing and reputational success by providing co-creation opportunities. The reliability of this is enhanced with the extensiveness of its literature review indicating the socio-psychological impact of participatory involvement in brand strategy. Scott, D.M. (2013). The new rules of marketing & PR: how to use social media, online video, mobile applications, blogs, news releases and viral marketing to reach buyers directly. Hoboken: John Wiley & Sons. This text is instrumental in understanding best practices in using various digital marketing platforms to better engage with buyers in direct fashion. For a novice without experience of certain digital channels, it is excellent in understanding their concept and relationship to the end user experience. Credibility of the author is somewhat debatable as the author maintains no career-related experience in brand building, but has only published a handful of books on marketing know-how and best-practice. It was chosen primarily as a resource indicating these channels’ impact on public relations. Nwagbara, U. (2013). The effects of social media on environmental sustainability activities of oil and gas multi-nationals in Nigeria, Thunderbird International Business Review, 55(6), pp.689-697. This article provides an interesting knowledge of the challenges that multi-national oil and gas industry players maintain as it relates to consumer power to challenge environmental policy and corporate social responsibility. The author has been published with authorship of 70 different papers in peer-reviewed journals and maintains direct experience with the oil and gas industry as well as holding a doctorate in corporate social responsibility. Hence, knowledge from the author is irrefutable and should be deemed an expert resource for the oil and gas industry. Zhang, H. and Chan, D. (2009). Self-esteem as a source of evaluative conditioning, European Journal of Social Psychology, 39, pp.1065-1074. This is an interesting and credible article which sees consumer behaviour as a product of esteem created through marketing strategies which make a brand appear congruent in values or beliefs to the consumer herself. It conducted an experiment with real-world consumer study participants, thus providing empirical evidence of how consumers become conditioned for more favourable brand assessments when linked with their own inherent values and personality types. Livesey, S.M. (2014). Eco-identity as discursive struggle: Royal/Dutch Shell, Brent Spar and Nigeria, International Journal of Business Communication, 38(1), pp.58-91. This article illustrates how eco-identity of a major oil and gas player is impacted negatively by not using discourse which paints its environmental policies in a favourable light. By ignoring consumer sentiment and backlash against allegations of improper environmentalism, a firm experiences significant negative opinion about the brand. The article illustrates through the case study of Shell how having discourse with real-time capabilities to engage with buyer segments can have long-term benefits for sustaining a positive corporate identity in the markets it operates. Fill, C. (2013). Marketing communications: interactivity, communities and content, 6thedn. Harlow: Pearson Education. This text is invaluable in understanding the role of virtual communities influencing marketing strategy of businesses and how companies can develop discourse and other communications that are aligned with consumer sentiment. Communities and co-creation are discussed and the socio-psychological impact (positive) that assists in making social media and other digital channels viable sources for relationship development. It assists in understanding what drives emotional responses to various digital communications and is written by an expert with considerable experience in the domain of marketing. Edwin, T., Chandramohan, A., Shenbagavalli, R. and Senthilkumar, S. (2015). Social media: the new hybrid factor of the promotion policy for the pharmaceutical industries, International Journal of Pharmaceutical Sciences Revew, 32(1), pp.112-116. This article was highlighted for providing empirical evidence about what might constitute best practice for using social media as a means of improving engagement with consumers and building a positive reputation for the business. 150 different professionals in the pharma market provided real-world evidence that digital media allows for better consumer engagement, the need for routine updating of digital communications, and measuring brand success by collecting metrics in social media. The four authors are all university professors and assistant professors, thus having experience in business management and marketing. Pickton, D. and Broderick, A. (2005). Integrated marketing communications, 2nd ed. Harlow: Pearson Education Limited. This text was selected as it provides potential best practice methods for integrated various types of discourse and communications with target consumers. How consumers might respond to digital discussion is explored and how best to facilitate positive responses using social media and other digital platforms. The authors maintain credentials as head lecturers in marketing at a business school and another is the head of a marketing department at Leicester Business School. The article provides unique approaches to building positive, real-time discourse with consumers based on known consumer behaviour tendencies and profiles. Read More