What are the four P's of marketing mix? Price, Pride, Promotion, Plan. Product, Promotion, Place, Price. People, Promotion, Product, Price. Plan, Promotion, Product, People. The consumer purchase funnel has the 6 steps that begins with the awareness and ends with advocacy. What step is the purchase? There is no purchase step. The last step. The fourth step. The second step. Inbound marketing aims to, Analyze why customers are surfing the internet. Analyze why customers walk out of stores. Attract customers who have an inherent interest in the brand to visit the firm’s website. Outbound marketing aims to, Analyze why customers are surfacing the net. Push the firm’s message to the customers, intercepting them with display ads and paid search ads. Attract customers who have an inherent interest in the brand to visit the firm’s website. In the videos about Digital Marketing, and Omnichannel, we learned about creating multiple touch points to increase the rate of conversion from shoppers to buyers. When you look at the purchase funnel, what would be your best strategy to increase that rate of conversion? Send them an email encouraging them to complete the purchase. Rely on word-of-mouth. Advertise on television. Use targeted display ads and social media. All-Weather Running makes rainproof running shoes and jackets. It has sold its products through traditional brick-and-mortar retail stores and relied on sales-people to push its products to customers. However, with the decline of retail, All-Weather Running has hired you as their digital marketing specialist and wants you to find new ways to connect with customers. Based on internal research, you know that All-Weather Running's customers are mostly women, ages 40-60, who live in the suburbs and in small rural towns. Where would you target your marketing budget, towards inbound or outbound marketing, or a mix of the two? Why? What 3-4 different media sources would you target? Inbound Outbound Search Engine Optimization Email Marketing TV Advertising Blogs, Podcasts (blast versus permission-based) Radio Ads Content Marketing Paid Search Ads Print Ads Websites (relevant to what people search) Direct Mailing Mobile Apps Native Ads Outbound Call Center Social Media Marketing (engaging) Online Display Ads Viral Marketing Social Media Paid Search (blast through Twitter) Affiliate Marketing A Framework for Digital Marketing P. K. Kannan The term “digital marketing” has evolved over time from a specific term describing the marketing of products and services using digital channels -- to an umbrella term describing the process of using digital technologies to acquire customers and build customer preferences, promote brands, retain customers and increase sales (Financial Times, lexicon.ft.com ). Following the American Marketing Association’s firm centric definition (https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx), digital marketing may be seen as activities, institutions, and processes facilitated by digital technologies for creating, communicating and delivering value for customers and other stake-holders. We adopt a more inclusive perspective and define digital marketing as “an adaptive, technology-enabled process by which firms collaborate with customers and partners to jointly create, communicate, deliver, and sustain value for all stakeholders”. The adaptive process enabled by the digital technologies creates value in new ways in new digital environments. Institutions enabled by digital technologies build foundational capabilities to create such value jointly for their customers and for themselves. Processes enabled by digital technologies create value through new customer experiences and through interactions among customers. Digital marketing itself is enabled by a series of adaptive digital touchpoints encompassing the marketing activity, institutions, processes and customers. Significantly, the number of touchpoints is increasing by over 20% annually as more offline customers shift to digital technologies and “younger, digitally oriented consumers enter the ranks of buyers” (Bughin 2015). Figure 1: The Framework for Digital Marketing In view of the above, we identify key touchpoints impacted by digital technologies and propose a research framework that is inspired by the marketing process as well as by the marketing strategy process. The conventional marketing strategy process starts with an analysis of the environment including the five C’s – customers, collaborators, competitors, context, and company (firm). While these elements are presented in our framework (Figure 1), customers emerge as the central focus (in the left box) with other elements such as context, competitors and collaborators making up the environment that the company operates in. Our key objective is to understand how digital technologies (at the bottom in Figure 1) interact with the five C’s as well as the interface among these elements. We specifically identify the concepts, institutions and structures that emerge from these interactions – platforms and two sided markets, search engines, social media and user-generated content, omni-channel options and contextual interactions. This analysis forms the input to the actions of the firm, encompassing all elements of the marketing mix – product/service, price, promotion and place – as well as information gathering through marketing analytics, which informs the marketing strategy of the firm. We focus again on how digital technologies are shaping these actions, information acquisition and analysis, and marketing strategy. Finally, as the outcome of the marketing actions and strategies, we examine the overall impact of digital technologies in value creation – creating value for customers (through value equity, brand equity, relationship equity and customer satisfaction), creating customer equity (through strategies for acquisition, retention and higher margin), and creating firm value (as a functions of sales, profits and growth rate). Our framework, therefore, identifies the key touchpoints in the marketing process and strategies where digital technologies are having or likely to have significant impact. It not only encompasses the elements identified in Figure 1, but also the interfaces among those elements, as shown by the arrows in Figure 1. The framework also highlights our emphasis on uncovering issues in digital marketing that will impact the firm directly or indirectly. Next, we provide an overview of these concepts and elements highlighted in our framework. Key Concepts and Elements Digital technologies are rapidly changing the environment (Left Section 1 in Figure 1) within which firms operate. Digital technologies are reducing information asymmetries between customers and sellers in significant ways. Analysis of interactions of digital technologies and the elements of the environment starts with the examination of how omnichannel consumer behavior is changing as a result of access to a variety of technologies and devices both in the online and mobile contexts. We focus on how this affects information acquisition with regard to quality and price, the search process, customer expectations, and the resulting implications for firms. Next, we examine digital technologies’ facilitation of customer-customer interactions through online media – word-of-mouth, online reviews and ratings, and social media interactions (social media & UGC). The emergence of platforms – institutions created through digital innovations that facilitate customer-to-customer interactions for ideation in new product/service development, those that connect customers and sellers in platform-based markets and those that leverage two-sided markets for their revenue generation – is also examined as collaboration enablers that connect a firm to its market using digital technologies. In the same way, firms have to contend with search engines as both collaborators and platforms on which they compete with other firms in acquiring customers. Thus, we also review the research on search engines and the interactions among customers, search engines and firms. Finally, we examine the interactions of digital technologies with different contexts of geography, privacy and security, regulation and piracy, and their implications for digital marketing (contextual interactions). Within the company (Middle Section in Figure 1), digital technologies are changing the concept of product in three ways to provide customers with new value propositions – augmenting the core product with digital services, networking of products using digital technologies to release the dormant value inherent in the products, and finally, morphing products into digital services. We examine these trends and the opportunities they create for customizing and personalizing customer offerings, by varying the core product/service and augmented digital services. The developments in digital product lines and customized customer offerings lead to pricing challenges for firms. The reduction in menu costs associated with digital technologies also leads to opportunities for dynamic pricing and yield management in product and service categories traditionally sold with list prices. These developments along with the use of online auctions for products/services, search keywords, display ads, and name-your-own-price strategies, have given rise to interesting research questions that we review. In addition, the interface between pricing and channels (both offline and online) is becoming an important issue as more firms adopt online and mobile channels to target and transact business with customers. Over and above traditional means of communication such as print, radio, and television, the digital environment provides new means to reach customers and promote products and services via e-mails, display advertisements, and social media (promotion). There has been much focus on the effectiveness of such new media and its incremental contribution over traditional media in building brands and affecting outcome variables of interest. Newer forms of promotional tools such as location-based mobile promotions and personalized promotions are increasingly used and we explore the implications of their use for firms as well as for customers. We also focus on the rise of new channels for customer communications and promotions, not only online and mobile, but also sub-channels within each of these environments such as social channels, search engines, and e-mail that help firms to provide significant value to customers as well as acquire the right customers and increase customer value. The impact of digital technologies on outcomes (Right Section 3 in Figure 1) could span across different dimensions – in creating value for customers and in extracting the value for the firm. The outcomes are a reflection of how the firm has been able to benefit from the opportunity provided by digital technologies to create value for their customers and also create value for themselves. As Figure 1 suggests, firms can leverage the interactions of digital technologies with the environment and with its own strategic and tactical actions in leading to the outcomes. We focus on research that models this relationship across various dimensions of outcomes – value equity, brand equity and relationship equity (Rust et al. 2004), customer satisfaction, customer value as a function of acquisition, retention and profitability of customers, and at a more aggregate level, firm value as a function of sales, profits and growth rate. Research on understanding how different channels and media contribute to these outcome measures and how this understanding affects marketing actions will also be discussed. Marketing analytics (Middle Section in Figure 1) focuses on the acquisition and processing of information generated as a result of the use of digital technologies to understand the specific elements of the environment, actions and outcomes and inform the marketing strategies of the firm. Examples include understanding the browsing behavior of customers at websites and mobile sites, their search behavior in online environment versus mobile environment, using online reviews, social interactions, or social tags to understand how a firm/brand is being perceived by the market, and so on. While the substantive issues are discussed in the context of the environment and the company, all such research involves the development of specific methodologies and/or metrics. Within this section we highlight the managerial questions that could be answered using data within the firm and environment, however, we do not focus on the methodological aspects as these issues are well covered in extant research (see, for example, Wedel and Kannan 2016). There are issues related to marketing strategy (Middle Section in Figure 1) that are partly captured in one or more of the elements or interfaces. We do not track the developments in digital technologies per se, but in discussing the impact on the customer touchpoints they are implicitly taken into account. In the various sections, we also outline the descriptions and capabilities of new technologies that lead to new opportunities – for example mobile technologies, virtual reality, wearable computing and IoT, etc. The COVID-19 Pandemic has been devastating on many firms and industries, but Domino’s Pizza is "one of several companies thriving in a time of touchless transactions, robotics, online commerce and decentralized offices. Their successes may define the business world for a long time to come." This is according to a recent Wall Street Journal article. Read the following article and then analyze and discuss within the context of the digital marketing framework we have developed in this module. Domino’s Delivered Early in 2020, Domino’s Pizza Inc. began testing a new service to help their customers pick up a pizza without entering the store. The customers would arrive, text, or use the app on their phone and an employee would deliver the pizza to the trunk of their car. So when the pandemic hit and most people were avoiding stores, the pizza giant began their “Carside Delivery”. This has helped Domino's thrive, even during the pandemic, with increased sales of 16%. The technology to offer touchless transactions was expanded to allow Domino's to serve their customers who did not want to walk into the store. Domino's has been working to automate and digitize their operations for a decade, and while they still made the pizza by hand, everything before and after that stage has undergone relentless innovation. They developed numerous ways to enable customers to order pizza through desktop, mobile apps, Twitter, Amazon Echo, and all the ways to “zero-click ordering”. All of this was to make it easier for the customer to order and get faster delivery in more convenient ways. Unlike Domino’s, the healthcare industry was initially resistant to adopt technology-enabled avenues to help patients see doctors. One of the reasons or the most important reason was financial as most insurance companies would not approve billing for telehealth. But when COVID-19 hit and the in-person visits to the doctors became difficult, the healthcare industry was forced to look to telehealth. The federal government also relaxed restrictions on billing for telehealth. The Kaiser Permanente, an Oakland, California-based nonprofit that is both insurer and provider, has been offering telehealth for years. They had begun investing in technology since the 1990s. In the early 2000s they implemented electronic medical records throughout the organization. While before the pandemic their video visits were less than 1% and telephone were about 16%, they had the technology ready when COVID-19 hit and saw a dramatic increase to 74% via telephone visits and 7% via video visits. Kaiser also found that offering patients resources for remote monitoring not only improved their numbers but also the patients’ health. For example, they found that 85% of patients completed cardiac rehabilitation with remote monitoring compared with 50% when they had to go in-person to the clinics for checkups. One advantage of using machines on factory floors and in companies is that they “the robots” don’t get or spread the virus. Stanley Black & Decker Inc. had been investing in robots, which they labeled as “cobots” because they work along-side the workers. The company was planning to roll out multiple systems in its plant in South Carolina. The goal for the cobalt was to cut costs and boost output to better compete with the market. While many manufacturing industries had to shut down and reorganize, the South Carolina plant was able to continue working at the height of the outbreak. It also allowed the company to respond to the demands of hand-held power tools, as many people now home with extra time on their hands wanted to get these home projects done. The company hit an all-time high sales in the second quarter and it is on track to beat its best-case scenario for 2020. Other companies forced to turn to telecommuting by necessity during the pandemic discovered there are many advantages to employees working from home. One of the most important discoveries by some companies is that they can hire employees regardless of their geographical location. While the IT industry has long relied on talents outside its geographical area, other industries were less willing to adopt this practice. Most IT companies were only mildly affected by COVID-19 restrictions on travel and in-office working. Most were already working remotely and have a workforce that is spread through several countries. So the new restriction on physical presence and travel they easily converted to remote employment without risking diminished productivity. Adapted from: Loten, Greg Ip and Angus. “Most Businesses Were Unprepared for COVID-19. Domino’s Delivered.” Wall Street Journal, September 4, 2020, sec. Business. https://www.wsj.com/articles/most-businesses-were-unprepared-for-covid-19-dominos-delivered-11599234424. Digital Marketing During COVID-19 Question 1 Which companies mentioned in the article have succeeded in the midst of the pandemic? Check all that apply. Amazon Apple Domino’s Kaiser Permanente Pizza Hut Samsung Stanley Black & Decker Zoom Domino's Delivered: Lessons Other Companies Can Learn What is an example of a lesson that other companies can learn from this article to help them be more successful both during and after the pandemic? Understand the financial burdens their customers are under and reduce prices to meet demand. Understand the customer journey/patient journey and quickly determine which touchpoints could be moved to online instead of being in person. Understand and invest in the latest technology to improve their customer's experience. Explanation: It does not have to be investment intensive technology, such low-tech options like curbside contactless pickup, call center-based service and pizza pedestal can all help. What is an example of a lesson that other companies can learn from this article to help them be more successful both during and after the pandemic? Know their market and price competitively. Know their brand and build awareness because customers trust brands they know in times of crisis. Know their customer and be customer-centric. Explanation: In the case of Domino’s, one of the by-products of online ordering is knowing the preferences of their regular customers and using it to personalize offerings and services.
