Innovation in Marketing - Essay Example

Innovation in Marketing Introduction Use of digital marketing in various forms has become an integral part of the marketing strategies of an organization. The desire to provide personalized products to the consumers is the main driving factor for firms to take up digital marketing as a part of their integrated communication mix. Despite the benefits that could be derived from the implementation of the innovative digital marketing, organizations are facing a number of challenges. In the previous study few major problems have been highlighted which are causing difficulty for firms to gain benefits from the use of online strategy. The most important contemporary issue faced by firms is the multiplicity of the digital mode of marketing avenues. It has become a huge challenge for the firms to find the exact type of digital medium that is being used by consumers. The use of multiple devices and medium has made it difficult for firms to determine the way in which they should interact with the consumers. This in turn makes it difficult to locate the exact pattern of taste and preference among consumers which is otherwise the primary motive behind the marketing strategy. It has also been observed that the huge volume of data that is generated by the users is not interpreted by the companies effectively as they often lack the proper analytical tools. This also renders most of the data as unproductive. Additionally, problems like use of fake data on the websites by the consumers also make it difficult for the companies to interpret these data in a productive manner. This study highlights the micro and the macro issues that can be faced by firms when they devise their online marketing strategies. This section will be followed by the one in which the ways of dealing with the above mentioned issues will be explored. Empirical evidences are also going to be discussed to substantiate the points that are being made. Macro analysis Organizations are faced with a number of macro and micro issues when they are developing strategies for online and digital marketing techniques. The most important macro environment factors are demographic and economic factors, political and legal factors, technological factors and social factors. It had been observed that the age, gender, occupation and education of consumers have a direct relation with their use of internet. This implies that it is imperative for marketers to know about the exact demographical segment before they formulate strategies on the extent of using social media in their communication techniques. In an insightful research that was conducted by Parsons, Zeisser and Waitman (1998) it was found that demographic variables can act as a big source of motivation for the usage of internet. This implies that if the population of a region is ageing with little interest in accessing internet then it is unlikely that the use of digital marketing will be successful. The importance of political and legal factors in digital media marketing is also profound. The overall political environment in the country and the vision of the government regarding the use of social media can be major determinants for companies when they are framing their marketing strategies. The research Berthon, et al. (2008) has shown that the political support provided by the government in form of financial aid provides them incentive to take up digital marketing. The overall legal framework of a country in terms of protection of private property and laws enforced in order to protect the internet can determine the effectiveness of digital marketing techniques. For instance, if the level of corruption is very high and the government has a weak legal framework then it is highly unlikely for firms to take up digital marketing strategy. National, cultural and social variables have also been found to be major determinants in determining the strategies of the multinational organization. The research conducted by Ge´naux (2004) had shown that cultural factors like the overall education level of the people in terms of the web literacy formulates their ideas regarding the usage of internet. Information technology is an integral part of development of online marketing strategies. The degree of development of information technology of the country is an indicator of the extent to which a company can adopt online marketing. Micro Analysis A number of micro issues can also be faced by the companies in developing their digital marketing plan. Researchers are of the opinion that factors like types of customers, effectiveness of producers or suppliers, the impact of marketing intermediaries, positive or negative word of mouth advertisement about the product and organizational departments shape the micro environment of marketing (Chaffey and Ellis-Chadwick, 2012). The type of customers for a business enterprise may vary from individual customers to privately owned business customers or government organizations. The works of Holland and Menzel Baker (2001) has shown that customer message should be created according to the type of specific customers in order to make the product or service successful. The influence of information technology has also been found to be profound on the intermediaries. According to the research conducted by Mehra (1999) it was found that role of intermediaries has almost been eliminated after the proliferation of E-commerce as producers had the right to sell the products directly to the consumers. Other functions like logistics and trust in the partners could also be improved with the help of internet technology. Dissemination of information is one of the most important functions that is performed by intermediaries and this function is heavily influenced by interent. Trust has also been found to be a major determinant of the micro environment of firms when they are formulating their decision making strategies. Consumers value trust greatly in the online transactions because they have to pay for their products by disclosing personal information. It is the responsibility of the company to create a trustworthy website which can be relied upon by the customers. According to the research conducted by Flavia´n, Guinalı´u, and Gurrea (2005) the ease of operating the website, simplicity and speed of navigation has been found to be important micro variables in influencing consumers. If customers have high trust over a website then it is most likely that the online marketing strategies of the firms would be successful. Finally, coordination between departments of the company like finance, marketing and manufacturing is really important for ensuring a robust framework of online marketing strategies. It has been observed that companies can easily improve the level of effectiveness of their online marketing strategies through coordination between the various departments. Overcoming the issues In order to improve the issues faced by the contemporary organizations a series of concerted efforts need to be taken. It has been assumed that it is not particularly possible for companies to collect the right set of information from the customers. Companies can definitely improve the existing problem by harvesting the social media in an aggressive manner. It has been observed that e-mail matching technologies are a proven way to capture the status of public social accounts of consumers (Walter, 2014). It is relatively easier for companies to track the type of devices that are used by consumers. It is important to collate information about the customers from their existing profile. This can be easily done by noting the positive and negative comments, the extent of activeness of the consumers and the type of devises that they use in accessing the internet. Following these procedures can be a good way to understand the hobbies and interests of the consumers. This can serve as a good mechanism to understand the tastes and preferences (Walter, 2014). In the age of digital marketing it can be argued that creation of brand is of utmost importance of companies. It is imperative to understand the brand image promoted by the company is irrelevant as consumers are highly empowered in the age of social media. This means that they have a strong opinion about the brand which they like to propagate (Walter, 2014). Social media profiles can be viewed to understand the perception of the customers regarding the brands (Bruhn, Schoenmueller and Schäfer, 2012). Based on this understanding, the company can easily overcome the existing weakness of the brands. This can act as an important strategy to compete with other brands in particular. Research has also shown that companies can make a great deal of improvement in understanding the taste and preference of customers by selecting the right mode of segmentation and targeting of customers (Bruhn, Schoenmueller and Schäfer, 2012). The first step of achieving this is to follow the traditional approaches of marketing and segment the demographic profile of customers. Once the marketer obtains an understanding about the segments then it is important to locate the most lucrative segment and devise their actual taste and preferences. In a research that was conducted by Parise, Iyer and Vesset (2012) it has been revealed that that there are four main ways in which the data interpretation by customers can be improved namely performance management, exploration of data, analysis of social data and decision science. Performance management can be improved by business intelligence tools allowing marketers to spot the recent trends. This type of an approach allows companies to generate leads and act on them. In order to tackle the problem of interpreting the data in a better manner it will be mandatory for companies to use predictive statistical modelling techniques to forecast the behaviour of the customers. Cluster analysis is one of the effective statistical modelling techniques that can be used by companies to segment the customers in an effective manner based on similar taste and preferences of consumers. After obtaining the data in an effective manner it will be mandatory for organizations to check the effectiveness of the websites. This can be done by conducting events such as webinars, designing forms for leads and creating landing pages (Parise, Iyer and Vesset, 2012). In this way organizations can find which techniques are most effective in creating maximum interaction with the customers. Hiring of experienced statisticians and maintaining the security of the data are extremely important precursors in ensuring robust statistical framework for data interpretation can be established. Over the past few years there has been an increasing instance of the importance of the online branding community in capturing the interest of the marketers. It has been observed that the use of online brand communities is slowly becoming a very popular idea among marketers. Studies of researchers like Dholakia, Bagozzi and Pearo (2004) has shown that online brand communities can be very useful in creating brand loyalty. Online brand communities have been positively correlated with enhancement of the brand penetration. Brand communities have also been associated with generating a positive word of mouth advertisement which is useful for marketers. This sentiment have also been echoed in the works of Bickart and Shindler (2001) that focused on the information that can be collected from the online brand communities. It has been observed particularly in case of goods like cosmetics, entertainment and leisure products, online brand communities acts as a major node for marketers to collect information about the clients. There is a growing consensus among researchers that online discussion forums are an innovative way of gathering information about the expectations of consumers about a particular company (Bickart and Shindler, 2001)). It has also been found that companies often ask customers to provide ideas about a product which they think would be best. Once the best idea is selected, companies would eventually implement these ideas for improving their product or service quality. For instance, Whirlpool, a manufacturer of home appliance had devised a strategy to find the opinion about their products by hiring the services of Attensity360 to monitor the behaviour of the customers on facebook, twitter and Youtube. As a result of this process, Whirlpool had been able to improve its overall customer satisfaction and sales (Parise, Iyer and Vesset, 2012). Empirical Evidence Companies like Starbucks and Apple have created a special position for themselves in the market by using strategies based on social media. The former is a coffeehouse chain that has gained immense popularity over time and the later is an electronics giant that has experienced meteoric rise over the past decade. Both of these companies have acquired an extensive understanding about their customers and they have hugely utilized social media for this purpose. For instance, Starbucks have interacts with their customers by allowing them to submit ideas regarding innovative ways in which they can improve their product and services (Wong, 2009). Apple on the other hand has created a brand that is so strong, that it has created branding communities out of loyalty and passion among the consumers. The communities not only provide information regarding the products but also act as a medium where consumers can seek support from the peers. This has effectively enhanced the trust of the consumers allowing them to treat the online communities as a platform of problem-serving (Füller, Matzler and Hoppe, 2008). Apple has gained the expertise of understanding the taste and preference of the consumers. The use of social media is also rampant among retailers. For instance, Wal-Mart the retailing giant has successfully used social media for promoting its products. Use of blogging and social media like Facebook allows the company to obtain feedbacks about their products and improve on the suggestions made by the consumers (Biznology, 2014). The company has also employed social media to project demand forecasts. Conclusion Pursuing an innovative online marketing strategy has become a crucial factor for marketers in communicating their product message. Despite the benefits that can be achieved by following online marketing techniques it has been observed that majority of the companies are facing a difficulty in collecting and interpreting data. Problems like multiple points of interface, inability of compatible statistical tools and trail of unauthentic data are making it difficult for companies to trace the taste and preferences of consumers. In order to overcome these challenges it will be mandatory for companies to appoint business intelligence tools to locate the group of customers who provide maximum potential. This requires a series of chronological sequence like following online communities, appointing consultants to track the behaviour of consumers on different social platforms. This helps in collecting authentic data about consumers based on which correct marketing strategies can be formulated. It is also important that companies hire statistical experts who have the expertise to interpret the data. Methods like cluster analysis have been found to be quite effective in finding out proper customer segments that can be pursued. Hiring of consultants can also be quite successful in spotting the major customer trends. It has been found that firms across multiple industries have applied these techniques to compete with their rivals. Brands have also been using online brand communities to collect information about their products. Companies like Starbucks and Apple have successfully employed online communities to engage customers strongly. Reference List Berthon, P., Pitt, L., Cyr, D. and Campbell, C., 2008. E-readiness and trust: macro and micro dualities for e-commerce in a global environment. International Marketing Review, 25(6), pp.700-714. Bickart, B. and Schindler, R.M., 2001. Internet forums as influential sources of consumer information. Journal of interactive marketing, 15(3), pp.31-40. Biznology, 2014. 10 lessons on Walmart’s social media strategy. [online] Available at: [Accessed 11 January 2014]. Bruhn, M., Schoenmueller, V. and Schäfer, D.B., 2012. Are social media replacing traditional media in terms of brand equity creation? Management Research Review, 35(9), pp.770-790. Chaffey, D. and Ellis-Chadwick, F., 2012. Digital marketing: strategy, implementation and practice. New York: Pearson. 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