The Benefits of E-Communications in Integrated Marketing Communications - Essay Example

The benefits of e-communications in integrated marketing communications Table of contents 3 Introduction 4 Literature Review 4 Short case study (Tesco) 8 Discussion 9 Conclusion 12 References 14 Abstract In the contemporary environment of competitive business, the technological advancements have brought forth an explosion of information that is easily accessible to public through the internet and other media like television, radio, mobile phones etc. The internet has made it easy for the customers to become aware of the product details including its availability at competitive prices which has precipitated the need to develop a whole new perspective for a new marketing technique. Integrated marketing communication therefore, becomes the most vital part of market strategy for all organizations to maintain a competitive edge over their rivals. The inter-dependence of the various elements within the system has vast potential to establish a market that is sustainable as well as mutually satisfying. IMC, through e-communication greatly facilitates the success of the existing and new products and therefore needs to become intrinsic part of market strategy of the organizations. Introduction The core business strategy of any business heavily relies on the market strategy that facilitates its products and services to meet the needs and requirements of the people at large. According to Shultz, McCarthy’s principles of 4Ps of marketing have outgrown their effectiveness in the present age of information technology. In the past, the 4Ps (product, price, place and promotion) of marketing strategy were highly relevant mainly because of the three reasons: There was lack of variety within the products; people were exposed to limited means of publicity; and promotional activities were more localised (Shultz, 2001). Therefore, under the given restrained parameters, the strategy satisfied both the customers and the retailers. The equation is drastically changed in the contemporary times. Today, the technological advancements have brought forth an explosion of information that is easily accessible to public through the internet and other media like television, radio, mobile phones etc. The internet has made it easy for the customers to become aware of the product details including its availability at competitive prices which has precipitated the need to develop a whole new perspective for a new marketing technique. Integrated marketing communication therefore, becomes the most vital part of market strategy for all organizations to maintain a competitive edge over their rivals. The inter-dependence of the various elements within the system has vast potential to establish a market that is sustainable as well as mutually satisfying. Literature Review Kotler has defined IMC as ‘the concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent and compelling messages about the organisation and its products’ (Kotler et al 1999). Even though the customer base is increasing, it is becoming difficult not only to attract more customers but also to retain them. So, one need to add something ‘more’ on the existing products to make it more attractive without compromising much on the price. In fact, the more innovative the product and fancier the promotional techniques, the higher are its chances of capturing market space. Thereby, asserting that brands, advertising, and promotional techniques are very important tools of marketing. Of all the technological marvels, internet has emerged as one of the most popular medium of communication with its wide range of applications in the ever expanding and highly competitive business environment. “The Internet with its low-cost entry and ease of use quickly changed how information was exchanged and removed the distance barriers for business partners. The idea of trading on the Internet has generated great interest especially among the smallest companies, formerly excluded from EDI1 usage (Gottardi et al. 2004). Internet has redefined the communication with its far reaching implications and has become one of the most important parts of any business strategy and intrinsic part of IMC. Baker and Hart have asserted that ‘putting people into marketing is essential for many reasons’ and not the least being that all businesses fundamentally cater to the needs of the people (Baker & Hart, 2007). Hence, marketing becomes the logical outflow of attracting customers and selling goods. Marketing strategies, especially, marketing mix has become vital in the contemporary environment of competitive business. Moller says that ‘marketing mix involves solving of market segmentation problem, being able to carry out market positioning analysis, and finally being able to differentiate the mix from the competitors’ offer using the target customers’ preferences’ (Moller, 2006, p442). Market segmentation of the market to differentiate elements is vital in the highly competitive business environment. The segmentation helps to create a niche in the market. The mixed segmentation is hugely popular in the contemporary times and gives a big leverage to the companies to plan its market strategy in a more flexible manner and successfully introduce their products in a new market. Brand creation is a major marketing technique that has massive support within and outside the business community and management strategy. de Chernatony and Cottom argue that concept of brand has evolved from the name given to differentiate a firm’s products, to that of a relationship based on trust (de Chernatony & Cottom, 2006). In the rapidly advancing technology and changing socio-economic paradigms, the brands have made a niche in the existing and emerging markets. Products need to maintain an edge over their rivals by incorporating the whole system within which the product is marketed. Kotler also asserts that ‘brand building is needed because products are the same’ (Kotler, 2005). The brand name ensures that the product maintains a high standard of excellence at a price that a customer is willing to pay for. Therefore, the brand provides the customer with a quality product which satisfies his needs, making it as one of the key reasons that brands still enjoy the popularity amongst its customers and at the same time, attract fresh clientele. The differentiating elements within the brand must be exploited to gain competitive edge over their rivals and create unique positioning in the target customer base. Porter argues that a ‘company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both’ (Porter, 1996). Internet has revolutionalized communication, thereby considerably affecting the various aspects of a business activity. It greatly facilitates interactive communication between the client and the business house and helps to utilize it to develop a professional relationship between the two, that not only provides opportunity to improve and improvise the quality as per customer’s requirements and demands, but at the same time, customer gets the best deal because of the competitive nature of internet. Hence e-communication becomes the most vital factor in the IMC. The internet has made dissemination of information a very pertinent aspect of internet marketing. The website facilitates easy access to information that has brightened the scope of retaining the old customers. Indeed, “we realized that the ‘objects’ of strategy – such as business units, industries, supply chains, customer relationships, organizational structure, and so forth – are held together by a ‘glue’, and that glue is essentially information” (Evans & Wurster, 2000). With so much choice in the open market, the website gives the unique advantages of the products and their usefulness to draw in new customers while keeping the old. As per an article ‘E-commerce is an economic solvent. It dissolves old business models and changes the cost structure, and rearranges links among buyers, sellers, and everyone in between. The impact of e-commerce is happening in phases’ (Kalakota, Robinson, 2002). The e-commerce thus, becomes a vital factor in IMC which heavily relies in influencing the buying decisions of the customers. Short case study (Tesco) Tesco Plc, a leading supermarket chain has adopted technology as an intrinsic part of its operation and caters to the system as a whole while meeting the changing preferences of its customers. The company makes effort tap the growing demand from the new market segment that has come up with the advent of new technologies through creative market strategy. The inter-dependence of the various elements within the system with its inherent capacity to complement each other has vast potential to establish a market that is sustainable as well as mutually satisfying. During 1996-97 Tesco became the first store in Europe to offer online delivery and took home delivery orders through phone, fax and internet. Technology thus became an integral part of Tesco strategy that was vigorously followed by later CEOs2 of Tesco. By 2001 Tesco had become one of three leading online stores with more than 50% grocery online sale in UK and today it has around 7,50,000 registered users and processes 70,000 orders a week! It has a huge network in Europe and has made its presence in America by tying up with its leading supermarket chain Safeway. The amazing turnaround by Tesco in late 1990s, to become the largest chain of superstores not only in UK but in Europe, is not only extremely praiseworthy but a very rare feat by any retailer as yet. Building customer relationship is the priority area of Tesco management. Using technology as intrinsic part of integrated marketing communication, Tesco was able to maintain a competitive edge over its rivals. The CEOs of Tesco were highly professional and had the foresight to envisage a highly potential online market which they created by developing a website which was not only aesthetically appealing but efforts were made to make it simple and user friendly so that even a novice could use it without any difficulty. Concerted efforts were made by Tesco to get feedback by the online and offline customers and public so that appropriate improvements and improvisation in the site could be made. Interestingly, Tesco went so far as to employ a housewife on its payroll just so that it could get first hand point of view of the changes from a person who represents its customers. Lynn Pullum, the housewife, became the guiding factor for the major changes on the Tesco website which were solely designed to attract more customers to use online shopping. Increasing revenue proves that building customer relationship is important factor of the success of Tesco (Tesco). Tesco has been able to exploit the potential of internet to suit its market strategy. The technology and e-business played a vital part in rejuvenating the core business activities of Tesco and helped it to rebuild the trust amongst its customers using various tools of integrated marketing communication like building effective and customer friendly website, brand building through segmented marketing techniques and advertisements that were designed to impact the changing preferences of the people. This was reflected on its continuously changing website which became increasingly people-centric. The huge success of Tesco website could be gauged from the fact that it has maintained its positions of being one of the four major ecommerce site and the top online grocery store in UK for the last ten years, in a row. Discussion Viral marketing and mixed marketing techniques are the most prolific example of integrated marketing communication. Viral marketing can be broadly classified as the unorthodox techniques of emerging new marketing strategies that are low cost and have potential to reach to a larger audience. It has great potential of exponential growth through diversity of new approaches and initiatives in its market strategies. Using posters, balloons, pamphlets, sponsorship, use various distribution channels tickets, carry-bags to advertise its products, blogs, internet messaging and various other gizmos for its promotion. In the recessive trends, this type of marketing becomes highly relevant for companies and Tesco has made it an intrinsic part of its market strategy. The marketing mix primarily relies on myriad media to promote goods and services. One needs to be more open when Shultz say that it is the end-users who now control the markets rather than the marketers (2001). Tesco understood the compulsions of the contemporary times and has adopted innovative and mix market strategy for its products and services to meet the challenges from its rival companies in the regional and global market. It had realized early that technological advancements have brought forth an explosion of information that is easily accessible to public through the internet and other media like television, radio, mobile phones etc. The internet has made it easy for the customers to become aware of the product details including its availability at competitive prices which has precipitated the need to develop a whole new perspective for a new marketing technique. It is true that increased awareness among the customers has put more pressure on the marketers. Even though the customer base is increasing, it is becoming difficult not only to attract more customers but also to retain them. So, one need to add something ‘more’ on the existing products to make it more attractive without compromising much on the price. In fact, the more innovative the product and fancier the promotional techniques, the higher are its chances of capturing market space. Thereby, asserting that brands, advertising, and promotional techniques become very important tools of IMC. Indeed with IMC as a major marketing tool, the multifaceted benefits greatly facilitate business performance. The IMC helps to create huge database of customers which is analyzed for factors that influence their buying decisions. At the same time, the feedbacks from the customers for the level of customer satisfaction and follow-up processes, not only help to maintain the existing customers but create conducive environment for new customers. It also helps a firm to gain leverage against their rival. E-communication is important part of IMC primarily because it helps the organizations to evaluate and assess the changing preferences of its customers. The customer is always interested in the end result of his purchase so he needs to be shown the extra benefits that he would be getting on the purchase! The feedbacks give the company opportunity to keep up with the constantly changing requirements of the consumers, while at the same time, using integrated approach to market its products, it also becomes an invaluable source of asset for the consumers at large. Marketers excel in influencing the self concept and personality traits and behavior by developing market strategies of the products, keeping in mind the prevailing lifestyles of the people. Hence, different market strategy is adopted for different group of people. Advertisements are the most prolific example of segmented marketing where the contents of advertisements are decided by the target group. Consumers are the mainstay of any business and therefore, efforts must be made to develop better understanding with customers with regard to consumer demands and correlate it with the product so that appropriate advertisement strategy could be developed. In the present market scenario a more aggressive approach to advertise its goods and services need to be adopted to meet the challenges of the changing time. Conclusion In the contemporary times, the customer has become much more informed and technology has provided him with more options within the similar product lines, but produced by different companies. The e-communication has further widened the scope of business across the globe and greatly facilitated incorporation of strategic goals to meet the challenges of the changing demands of the customers. At the same time, emerging markets have become crucial in the era of globalization and can be defined as the new area with high income and where the demand for the product can be created with relative success. With vast diversity in values and ideologies within the social fabric in the global business environment, the company needs to formulate marketing and communication strategy in a way that would not only uphold a high standard of corporate ethics but it must be able to ensure and exhibit understanding of the cross cultural values and handle issues with sensitivity. Any strategy that is formed needs to be localized to suit the local conditions. The advertisements should conform to the format that promotes fair and ethical practices. Indeed, one can conclude that the compulsions of the emerging new dynamics in the global businesses have necessitated for people-centric policies and plans that would meet the challenges of the changing social patterns and its changing demands. Levitt says that the marketing takes into account the preferences of the customers and thereby builds a solid customer loyalty that result in sustainable customer base that has potential for growth because it continues to satisfy the changing requirements of their needs (Levitt, 1960). Tesco has used effective communication to overcome the barrier of socio-psychological paradigms that is increasingly becoming a major factor in the sales and market strategy. (2581) Reference Baker, M.J. and Hart S.J. (eds) (2007). The Marketing Book 6th edition, Butterworth-Heinemann. de Chernatony, L. and Cottam, S. (2006). Internal brand factors driving successful finance service brands. European Journal of Marketing, Vol. 40, no. 5/6, pp 611-633. Evans, Philip & Wurster, Thomas S. (2000). Blown to Bits: How the New Economics of Information Transforms Strategy. HBS Press. Gottardi G., Bolisani, E. and M. Di Biagi. (2004) Electronic commerce and open communities: An assessment of Internet EDI. 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