Chapter 10 Notes

Digital Media
Electronic media that function using digital codes. Digital media refers to media available via computers, cellular phones, smartphones, and other digital devices that have been released in recent years
Digital Marketing
Uses all digital media including the Internet and mobile and interactive channels to develop communication and exchanges with customers
E-Marketing (electronic marketing)
Strategic process of distributing, promoting, pricing products, and discovering the desires of customers using digital media and digital marketing

Also includes mobile phones, banner ads, outdoor digital marketing etc. (goes beyond the internet)

Characteristics of E-Marketing
Addressability, interactivity, accessibility, connectivity, and control

One of the biggest mistakes a marketer can make is to treat e-marketing like a traditional marketing channel

Characteristics of E-Marketing: Addressability
Ability of a marketer to identify customers before they make a purchase

Social networks enhance addressability.

Addressable channel is one in which the marketer knows who the customer is and can specifically address that person, rather that the more generic traditional appeal

Facilitates relationship marketing

Represents the ultimate expression of marketing concept

Allow marketers to track website visits and online buying activity making it easier to accumulate data and enhance future marketing efforts

Social Network
Web based meeting place for friends, family, coworkers, and peers that allow users to create a profile and connect with other users for purposes that range from getting acquainted to keeping in touch, to building a work related network
Characteristics of E-Marketing: Interactivity
Allows customers to express their needs and wants directly to the firm in response to its marketing communications

Traditional marketing is a one way form of communication

Provides the advantages of virtual sales rep with broader market coverage at lower costs

Allows consumers to form relationships with one another was well as between them and the company

Characteristics of E-Marketing: Accessibility
The ability to obtain digital information

Customer can access in depth info about competing products, prices, reviews etc. They are now better informed about products and their value

Also means that the firm can get information. Ex. get ideas for new products etc from customers.

Requires more creativity

Characteristics of E-Marketing: Connectivity
Use of digital networks to provide linkages between information providers and users

Marketers are drawn to social networks bc of the size and diversity of the audience (Ex. FB audience is bigger than that of TV)

Characteristics of E-Marketing: Control
Customer’s ability to regulate the information they view and the rate and sequence of their exposure to that information

Internet is seen as pull medium bc users determine which websites they are going to view; marketer has only limited ability to control the content which users are exposed to and in what sequence

This has given increased power to the consumer

Positive customer feedback is free publicity that often helps more than corporate messages do

Enterprise 2.0
term coined to describe firms efforts to use cutting edge tech associated with social networks and blogs to assists in workplace connections (part of control)
Types of Consumer Generated Marketing and Digital Media
digital media are more consumer driven than traditional media

Two major trends have increased importance of consumer generated info:

1: Increased tendency of customers to publish their own thoughts, opinions, reviews, and product discussions through blogs or digital media

2: Consumer’s tendencies to trust other consumers over corporations. Consumers relay on recommendations of friends, family, and fellow consumers when purchasing

Types of Digital Media
Social Networking, blogs, wikis, video sharing sites, podcasts, virtual reality sites, mobile apps
Social Networks
Facebook: one third of all internet users have visited this site. women 55 and older are the fastest growing group. Free publicity for marketers

Myspace: reputation as more of a dating site than for keeping up with friends . Has a lot of profiles specifically boycotting certain businesses

LinkedIn: social networking site geared toward professionals. 5th largest overall social networking site. More than recruiting, can be used to familiarize people with their business

Twitter: hybrid mix of social networking and microblogging. What’s happening? 140 character limit

Blogs & Wikis
Blogs: Short for weblogs are web based journals in which writers can editorialize and interact with other Internet users

Blogs give consumers power; can post their opinions. Potent threat to corporations or an opportunity. Can be positive; companies can use them to answer business questions and build customer relationships

Wikis: type of software that creates an interface that enables users to add or edit the content of some types of websites

best known is Wikipedia; can be edited and ready by anyone

Less than 20% of Fortune 500 companies use wikis and blogs

Photo Sharing
Flickr (owned by Yahoo!) is the most popular photo sharing site on the internet

Often used by businesses to post pictures and link it to their corporate websites

Video Sharing
Sites allow virtually anybody to upload videos

Most popular is YouTube (20 hours of video uploaded every minute)

Use of amateur filmmakers is gaining ground by businesses-> use consumer generated content to save $

Podcasting
Audio or video file that can be downloaded from the Internet with a subscription that automatically delivers new content to listening devices or personal computers; podcasts offer the benefit of convenience, giving users the ability to listen to or view content when and where they choose

Gaining in popularity

Virtual Realities
Second Life is the most popular

WOW, Sim City etc. are also very important

Changing Digital Behavior of Consumers
E-marketers have taken away market share from brick and mortar stores

Most companies don’t routinely monitor consumer’s postings to online social networking sites. Missed opportunity to gather info

Can use the sites to gain info on the consumers

Online Consumer Behavior
Marketers must constantly adapt to new tech and changing consumer patterns.

Attrition rate for digital media is very high due to so many new ones emerging

There are 6 different groups that describe how people interact with new digital media

Creators:
Consumers who create their own media outlets, such as blogs, wikis, upload videos, write artciles etc.

Becoming more important to online marketers as a conduit for addressing consumers directly

Critics
people who comment on blogs or post ratings and reviews

Need to be an important part of a digital marketing strategy bc the majority of online shoppers use these reviews to aid their purchasing decisions

Collectors
most newly recognized group. Gather information and organize content generated by Critics and Creators

ex. RSS feeds, Add tags to photos etc.

Smaller portion of the pop. They are active members

Joiners
Growing dramatically. Anyone who becomes a member of a social networking site is a joiner
Spectators
Read blogs, watch video from other users, listen to podcasts,

Largest group in most countries. Consume but don’t produce
Make up the majority of the online population

Power of the consumer in the online world should not be underestimated

Inactives
online users who don’t participate in any digital online media. Their numbers are dwindling
E-Marketing Strategy
Businesses must learn how to effectively use new digital media

Need digital marketing to maintain or grab market share

If used well, this can streamline the orgs and offer new benefits and convenience to consumers

Product Considerations
Must anticipate consumer needs and preferences and tailor to meet them

Digital media provides an opportunity to add a service dimension to traditional products and create new products only accessible via the Internet

Distribution Considerations
Role of distribution is to make products available at the right time, right place, and in right quantities

Digital marketing can be viewed as a new distribution channel that helps businesses increase efficiency

Order electronically and communicate via internet, reduces inefficiencies, costs, and redundancies while increasing speed

Site-to-store systems: free shipping to store and customer picks it up. Added benefit the possibility of “add-on purchases”

Push-Pull Dynamic at play here. Firm provides a provides a product will push it while connectivity allows consumers to find it (pull side)

Promotion Considerations
Social networking sites allow marketers to approach promotion in an entirely creative new way

Online promotions allow consumers to be more informed, read consumer generated content before purchasing and increasingly shopping at internet stores

Almost any traditional promotional event can be enhanced or replaced by digital media

Pricing Considerations
Pricing relates to perceptions of value and is the most flexible of the marketing mix.

Digital online marketing facilitates both price and non price competition

New access to price information benefits the consumer but places new pressures on the seller to be competitive and differentiate their product so that consumers focus on attribute and benefits other than price

Using Digital Media in Marketing Research
Digital media is very good for gathering useful information to use for marketing decisions
Crowdsourcing:
Refers to the way digital media can be used to outsource tasks to a large group of people

Often used to obtain the opinion of a large group of people

Can also have people help design logos, products etc.

Companies with marketing or advertising campaigns have the advantage of engaging people from across the world to work on their projects

Questions to Ask to See if an Online Promotional Campaign Worked
Did the online promotional campaign generate more business for the company? Compares sales before and after

Did the campaign create more interest in the company? Monitor web traffic, increased?

Is this increase in demand significant? Company should set a goal concerning how much it wants demand to increase. Will help co. decide if the effort is worth the resources

Are there any extraneous variables that could account for an increase in sales? ex. seasonality

Ethical and Legal Issues
Internet grew so quickly, and global regulatory systems have been unable to keep up
Privacy
One of most significant issues is the use of personal information that companies collect from website visitors in their efforts to foster long term relationships with customers

Many companies attempt online self regulation so as to keep the government out which could make it more difficult to advertise online effectively

Online Fraud
any attempt to conduct fraudulent activities online, including deceiving consumers into releasing personal information

Ex. cyber criminals create fake online profiles for corporations

Intellectual Property
Internet has created a lot issues with this

Copyrighted or trademarked ideas and created materials are often stolen online. Big problem for social networking sites

Consumer rationalize pirating software etc for many reasons
– Consumers feel they just dont have the money to pay for what they want
-Friends engage in piracy and feel influenced to engage in it too
-The attraction for some is the thrill of getting away with it with slim risk of consequences
-There are people who think they are smarter than others and pirating allows them to show this off (tech savvy)