Download Digital Media

FERRELL | HIRT | FERRELL
3e
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
PART
5
•
Chapter 11 Customer-Driven Marketing
•
Chapter 12 Dimensions of Marketing Strategy
•
Chapter 13 Digital Marketing and Social Networking
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What is Digital Marketing?
E-Business
Carrying out the goals of business through use
of the Internet
Digital Media
Electronic media that function using digital
codes
Digital Marketing
Using digital media to develop communications
and exchanges with customers
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Growth and Benefits of Digital
Communication
Digital media has created opportunities for
businesses to:
 Create relationships with consumers
 Target markets more precisely
 Reach new markets worldwide
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Digital Marketing
Has five key characteristics
1. Addressability: The ability for a business to identify
consumers before they make a purchase
2. Interactivity: Allows customers to express their needs and
wants directly to the firm in response to its communications
3. Accessibility: Allows consumers to find information about
competing products, prices, and reviews and to become
more informed about a firm and the relative value of its
products
4. Connectivity: Keeps customers and businesses connected
with each other
5. Control: Consumers’ ability to regulate the information
they receive via the Internet
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Using Digital Media in Business
 Digital media have created new ways of doing
business and shopping
• Fast communication
• More interactive
• Comparison shopping easier
• Easier to conduct marketing research and advertise
…continued on next page
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Using Digital Media in Business
 Digital media have lowered the cost of
communication and transactions
 Digital media are more similar to traditional
media
than they are different
 Growing problem with controlling employee
access to digital media
• Wasting time at work on personal communications
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Digital Media and the Marketing Mix
Some key differences between digital and traditional
media in the marketing mix:
 Communications are richer, faster and more interactive
 Companies can reach target markets more easily, affordably
and quickly
 They help marketers utilize new resources in seeking out
and communicating with customers
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Digital Media and the Marketing Mix
Digital media let marketers and consumers
share information
 Websites
 Online social media sites
 Email
 Listservs
…continued on next page
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Ways Users Spend Time on the Internet
Rank
Sector
Global Reach
1
Search
85.9%
2
General Interest Portals
85.2%
3
Software Manufacturers
73.4%
4
Online Communities
66.8%
5
Email
65.1%
Source: Nielson Reports, “Global Faces and Networked Places,” March 2009, p. 3
http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/03/nielsen_globalfaces_mar09.pdf
13-10
Product Considerations
Digital media connectivity creates
opportunities to add services and benefits to
products
 Some products only available digitally
 Internet can make it easier to learn about and
anticipate consumer needs
 Competition makes quality and service offerings
more important than ever
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Distribution Considerations
The Internet is a new distribution channel
 Processing orders electronically can reduce inefficiencies,
cost and redundancies
 Can also increase speed
 Shipping times and costs are important to customers
13-12
Promotion Considerations
Promotion is one of the best applications
for digital media
 Consumer consumption patterns are changing
• The products they want to buy
• The way they get information
 Marketers must react and give consumers what
they want
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PepsiCo.’s Online Promotions
Online promotions have made Pepsi
the #1 soda in China
 Pepsi holds 23% of soda market in China
 Online social media is essential when marketing in China
and other markets with many Internet users
 “Pepsi Creative Challenge” was a massive online
promotion to celebrate the 60th anniversary of the
People’s Republic
Source: “Pepsi’s Web-Smart Thrust into China,” Businessweek, September 28, 2009.
13-14
Price Considerations
 The most flexible element of the marketing mix
 Digital media can enhance a product’s value by
providing service, information, and convenience
• Discounts and sales can be quickly
communicated
• Deals websites allow consumers to compare
prices of products
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Price comparison
Many websites allow consumers to compare
prices to find the best deals
13-16
Online Social Networks
 A web-based meeting place for friends,
family, co-workers and peers that lets users
create a profile and connect with others for
a variety of purposes
Build relationships with customers
Provide product information
Learn about customer needs
Contact new target markets
• Starbucks, Dell, eBay and Google all excel at using
social media for marketing
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Types of Consumer-Generated Marketing
and Digital Media
Two factors sparked the increase in consumergenerated information:
1. Increased tendency for consumers to publish their
thoughts, opinions and reviews of products via blogs and
other digital media
2. Consumers tend to trust other consumers over
corporations
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Blogs and Wikis
Blogs (Web-Logs)
 Web-based journals through which authors can
editorialize and interact with other Internet users
 2/3 of Internet users read blogs
 Give consumers power over companies because they
cannot control what bloggers write
Wikis
 Websites where users can add or edit content of posted
articles
 Monitoring wiki sites can give corporations ideas about
how consumers feel about their company or products
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Most Popular Blog
•A liberal conglomeration news website
•Mostly links to stories on other sites
•Launched in 2005 by former conservative
commentator Arianna Huffington
•Over 3,000 bloggers contribute, 60
employees
•Also utilizes vlogging (video blogging)
•More than 28 million visitors a month
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Video and Photo Sharing
Video Sharing
 Lets users upload videos to the Internet
 Viral Marketing: Using video sharing and online social
networking sites to spread an advertisement or message
about a product
 Companies increasingly use consumer-generated content
for ads rather than professional ad agencies
Photo Sharing
 Similar to video sharing sites, but allow users to upload,
edit and share photos instead
 Businesses use photo sharing to display images of
products
13-21
Podcasting
Podcasts
 Audio or video files that can be downloaded form the
Internet via a program that delivers content to listening
devices or personal computers
 Convenient
 Can listen on an Mp3 player or other portable device
 Popular with the 18-29 demographic
13-22
Social Networks
 2/3 of consumers have visited online social
networking sites
 There are many different sites and the number is
growing
• MySpace
• Facebook
• LinkedIn
• Twitter
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



The largest social networking site in the world




Good resource for marketers
Appeals to a broad demographic
Fastest-growing demographic is women over 55
Encourages consumer interaction with
companies and products
Market research
Low-cost means of advertising
Reach new markets
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 A social network for professionals
 A profile resembles a résumé
 Facilitates professional networking, job searches
and recruiting
 Companies use the site to familiarize people
with their business
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 Twitter is a hybrid social networking and
micro-blogging site
 140 characters or less
 Companies announce sales, promotions and
product updates via tweets
 Can help (re)build customer relationships
13-26
Virtual Worlds
 Allow users to select an avatar and live out an
alternative life online
• Many virtual worlds allow users to buy and sell goods, services,
even real estate
• Big business: Nearly $300 million on advertising in virtual
worlds annually
13-27
Virtual Worlds Have a Downside
 Although they can be lucrative, some
companies may choose to avoid virtual-worlds and
similar systems
• Negative publicity when gamers claim addiction
• A Hawaii resident sued the creator of virtual-world game
Lineage II
• Claimed game rendered him unable to function normally
• Played for 20,000 hours over five years
(or 833 24-hour days)
13-28
Advertising in Virtual Worlds
 Search engine Bing advertised on the social
game FarmVille and generated 400,000 Facebook
fans in a day
• Users gained virtual currency in FarmVille
by becoming a Bing Facebook fan
• FarmVille is a virtual world farming game
available through Facebook
13-29
Mobile Marketing
 Consumers increasingly do their business and
shopping from mobile devices and smartphones
• Marketers can use digital media to their
advantage
• Requires adapting to new technologies
and consumption patterns
13-30
More Adults Use Cell Phones as Primary
Phone
Source: USA Today Snapshot, March 7, 2009, A1.
13-31
What kind of digital technology
user are you?
 Creators: Create their own media outlets (e.g. blogs,
podcasts, videos)
 Critics: People who comment on blogs or post ratings
and reviews
 Collectors: Collect and organize content generated by creators
and critics
 Joiners: Includes anyone who becomes a user of social
networking sites or other online communities to connect and
network
 Spectators: Read online information but to not join communities
or post anywhere
 Inactives: Do not participate in online digital media; numbers are
dwindling
Developed by Charlene Li and Josh Bernoff of Forrester Research
13-32
Using Digital Media to
Learn About Consumers
 Digital media is a great learning tool
 Market research
• Gathering data on consumers
• Asking consumers about preferences
 Crowdsourcing involves using communities if
interested consumers to gather input and
feedback for marketing purposes
 Can help small businesses on limited budgets
compete with large businesses
13-33
Legal Issues in Internet
Marketing: Privacy
 Shopping on the Internet allows companies
to better track consumers
• Cookies are often used for tracking
 Laws and regulations cannot keep up with the
rapidly-changing Internet
• Federal Trade Commission considering creating
legislation that limits information companies can gather
online
 The Better Business Bureau and other organizations
can help organizations develop privacy policies
13-34
Legal Issues in Internet
Marketing: Identity Theft
 Occurs when criminals obtain personal
information that allows them to impersonate
someone else in order to access financial
accounts and make purchases
• Security breaches are serious threat to organizations
and individuals
• Phishing is using a familiar website to deceive people
into divulging private information
13-35
Main Sources of Identity Theft
Source: “Consumer Sentinel Network Databook, 2009,” The Federal Trade
Commission,
February 3, 2010, p. 3, http://www.ftc.gov/sentinel/reports/sentinel-annualreports/sentinel-cy2009.pdf
(accessed May 12, 2010).
13-36
Legal Issues in Internet
Marketing: Online Fraud
 Includes any attempt to conduct fraudulent
activities online
 Cybercriminals are increasingly using online social
networking sites and other digital media to commit
fraud
• They sometimes use social networking sites to pose as
charities and collect donations
 Always be careful what information you give out
when online; and used trusted sites whenever
possible
13-37
Legal Issues in Internet Marketing:
Intellectual Property
 Intellectual property can include songs, movies,
books, electronics, software, etc.
 It is generally protected by patents and
copyrights, but these can be difficult to enforce
globally
 Piracy and illegal sharing costs global industries
billions annually
 90% of illegal software copying is done by
businesses
13-38
Digital Media and how They are Changing
Marketing
 Digital media can make your company
more efficient and productive
• Transition to digital media can be challenging
• Correct blend of traditional and digital media
in marketing mix takes time and consideration
• Future marketing opportunities will require a
knowledge of digital media and how to use
them
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