Part 5
Marketing:
Developing
Relationships
© 2015 McGraw-Hill Education.
13-2
CHAPTER 11
Customer-Driven Marketing
CHAPTER 12
Dimensions of Marketing Strategy
CHAPTER 13
Digital Marketing and Social Networking
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Learning Objectives
LO 13-1 Define digital media and digital marketing and
recognize their increasing value in strategic planning.
LO 13-2 Demonstrate the role of digital marketing and social
networking in today’s business environment.
LO 13-3 Show how digital media affects the marketing mix.
LO 13-4 Define social networking and illustrate how businesses
can use different types of social networking media.
LO 13-5 Identify legal and ethical considerations in digital media.
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Growth and Benefits of Digital
Communication
E-Business
• Carrying out the goals of business through utilization
of the Internet
Digital Media
• Electronic media that function using digital codes via
computers, cellular phones, smart phones, 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
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Growth and Benefits of Digital
Communication
• Forge relationships with
consumers and business
customers
Digital media
has created
• Target markets more
tremendous
precisely
opportunities
for businesses • Reach previously
to:
inaccessible markets at
home and around the world
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Using Digital Media in Business
• Fast and inexpensive
communication
Digital media
have created • More interactive
new ways of • Easier comparison
doing business
shopping
and shopping • Easier to conduct marketing
research and advertise
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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

They help marketers utilize new resources in seeking
out and communicating with customers
Companies can reach target markets more easily,
affordably, and quickly
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Digital Media and the Marketing Mix
To coordinate activities and communicate
with employees, customers, and suppliers,
marketers use:
• E-mail
• Mobile phones
• Social networking
• Wikis
• Media sharing
• Blogs
• Video conferencing
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Product Considerations
Digital media connectivity creates opportunities to
add services and benefits to products
• Some products only available digitally
• Businesses can offer more items online than they could in
a retail store
• Internet can make it easier to learn about and anticipate
consumer needs
• Fierce competition makes quality product and service
offerings more important than ever
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Distribution Considerations
 The Internet is a new distribution channel for making
products available at the right time, at the right place,
and in the right quantities
 Processing orders electronically can reduce
inefficiencies, cost, and redundancies
 Can also increase speed throughout the marketing
channel
 Shipping times and costs are important to customers
 Many companies offer low shipping costs or next-day
delivery
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Promotion Considerations
Promotion is one of the best applications for digital
media:
• Increasing brand awareness
• Connecting with consumers
• Taking advantage of social networks or virtual worlds to
form relationships and generate positive publicity about
products
• Online promotion allows consumers to read customergenerated content before making purchasing decisions
• Consumer consumption patterns are changing and
marketers must adapt their promotional efforts to meet
them
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Pricing Considerations
 The most flexible element of the marketing mix
 Digital marketing 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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Social Networking
Social Network
• A web-based meeting place for friends, family, coworkers, and peers that lets users create a profile and
connect with other users for a wide range of purposes
 Build relationships with customers
 Provide product information
 Learn about customer needs
 Contact new target markets
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Types of Consumer-Generated
Marketing and Digital Media
 Two factors sparked the increase in consumer
generated information:
1. Increased tendency for consumers to publish their
thoughts, opinions, reviews, and product discussion
via blogs or digital media
2. Consumers’ tendencies to trust other consumers
over corporations
o
Consumers often rely on the recommendations of
friends, family, and fellow consumers when making
purchasing decisions
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Social Networks
 Increase in social networking across the world is


exponential
It is estimated that adults spend one of every five
online minutes on social networking sites
As social networks evolve both marketers and the
owners of social networking sites are realizing the
opportunities such networks offer
o Large reach for the advertiser
o Influx of advertising of advertising dollars for site
owners
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Myspace
 Offers users the chance to create a profile and


connect with other Myspace members across the
world
Emerging musicians are using Myspace to record
and share their music and users can create social
playlists of music from famous artists
For businesses, Myspace can be a creative means
of marketing through the use of profiles,
advertising, music, videos, and other forms of
online media
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Facebook
 The most popular social networking site in the





world
Appeals to a broad demographic
Fastest-growing demographic is consumers 55 and
over
Encourages consumer interaction with companies
and products
Low-cost means of advertising
Useful for the creation of relationships that mutually
benefit the marketing business and the customer
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Twitter

Twitter is a hybrid social networking and microblogging site that asks users one simple questions:
o “What are you doing?”
 Allows 140 characters or less
 Approximately 23% of users report that they follow



businesses on Twitter
Companies announce sales, promotions, and product
updates via tweets
Can help (re)build customer relationships
Firms are using Twitter to gain a competitive
advantage
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Sponsored Content Marketing Videos
One of the best ways to get someone’s attention is to tell a
story, and in the digital age it is even more effective to tell that
story in a short online video
 These stories can be informational in the form of how-to videos or
learning videos that give people tips on how to use products as
they were intended or in a new way. Some examples include
videos on how to get the best curls with a curling iron or tips on
applying makeup.

Within the video, the viewer will see a brand logo but the message of
the video is not about the brand.

The point of these videos is indirect advertising where the viewer is
not seeing the content as promotional.

Companies will get these videos on different online outlets such as
BuzzFeed, and they have the potential to go viral.
SOURCE: William Launder. “Marketers Seek Extra Edge to Go Viral”. www.wsj.com. August 25, 2013.
http://online.wsj.com/article/SB10001424127887323980604579031391201753578.html. (accessed September 25, 2013)
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Blogs and Wikis
Blog
• A web-based journal in which a writer can editorialize and interact
with other Internet users
• More than ¾ of Internet users read blogs
• Give consumers power over companies because they cannot
control what bloggers write
Wiki
• Software that creates an interface that enables users to add or
edit the content of some types of websites
• Monitoring relevant wikis can provide companies with a better
idea of how consumers feel about the company or brand
? Did you know? Searching is the most popular online activity, while
social networking and blogging are fourth
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Media Sharing
Video
Sharing
Photo
Sharing
• Allows virtually anybody to upload videos
to the Internet
• Gives companies the opportunity to
upload ads and informational videos
about their products
• Companies increasingly use consumergenerated content for ads rather than
professional ad agencies
• Allows users to upload, edit, and share
photos
• Opportunity for companies to market
themselves visually by displaying
snapshots of company events, staff,
and/or products
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Media Sharing
Viral
Marketing
Podcast
• A marketing tool that uses the Internet,
particularly social networking and video
sharing sites, to spread a message and
create brand awareness
• An 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
• Good marketing tool for reaching the 1829 demographic
• Convenient, offer users the ability to listen
to or view content when and where they
choose
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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, and even real estate—all while spending
real money
 Firms are looking toward virtual worlds to familiarize
consumers with their products and services
 Firms are using virtual technology for recruiting
purposes
 By interacting with the public virtually, businesses
hope to connect with younger generations of
consumers
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Mobile Marketing
 Consumers increasingly do their business and
shopping from mobile devices and smartphones
 Requires marketers to adapt to new technologies
and consumption patterns
 Marketers spent $1.2 billion on mobile marketing in
2011
 E-commerce sales on smart phones totaled $5
billion in 2011
 Marketers expect this number to rise in upcoming
years
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Common Mobile Marketing Tools
SMS Messages
• Text messages of 160 words or less
• An effective way to send coupons to prospective customers
Multimedia Messages
• Takes SMS messaging a step further by allowing companies
to send video, audio, photos, and other types of media over
mobile devices
Mobile Advertisements
• Visual advertisements that appear on mobile devices
• Companies might choose to advertise through search engines,
websites, or even games accessed on mobile devices
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Common Mobile Marketing Tools
Mobile Websites
• Websites designed for mobile devices
• Mobile devices constitute 7% of web traffic
Location-Based Networks
• Built for mobile devices
• One of the most popular is Foursquare, which lets users
check in and share their location with others
Mobile Applications (known as apps)
• Software programs that run on mobile devices and give
users access to certain content
• Businesses release apps to help consumers access more
information about their company or to provide incentives
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Mini Movies and Trailers to Sell Real Estate

Real estate agents and developers have taken to hiring
directors and actors to make mini movies or movie trailers to
sell luxury homes

This trend has proven effective in a market where there is
slow growth and buyers don’t want to travel to see the
property

These mini movies last three to five minutes and are tailored
to the type of person the home is designed to attract

If the location looks like a bachelor pad, the story line of the movie
shows a younger male getting home from work and preparing for a
night out

Other locations that are fit for a family, will show a family living in
the house and the story line will take them through all the rooms so
the viewer gets a full view of the location
SOURCE: Candace Jackson. “Your House Is Ready For Its Close-Up”. www.wsj.com August 22, 2013.
http://online.wsj.com/article/SB10001424127887324823804579016701333363072.html. (accessed September 25, 2013)
13-28
Applications
 Applications are adding an entirely new layer to the
marketing environment
 Approximately half of all American adult cell phone users
have applications on their mobile devices
 Most important feature of apps is the convenience
and cost savings they offer to the consumer
 Companies are beginning to use mobile marketing
to offer additional incentives to customers
 An estimated 70% of U.S. consumers will own
smart phones by 2014
13-29
QR Codes
 QR codes are black-and-white squares that
sometimes appear in magazines, posters, and
storefront displays
 Users who downloaded QR scanning app can open
their smart phone and scan the code which
contains a hidden message accessible with the app
 QR scanning app recognizes the code and opens
the link, video, or image on the phone’s screen
 Marketers are using QR codes to promote
their companies and offer consumer
discounts
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Widgets
 Widgets are small bits of software on a website,
desktop, or mobile device that enables users “to
interface with the application and operating system”
 Have been used by companies as a form of viral
marketing
 Users can download the widget and send it to
their friends with a click of the button
 Can update the user on the latest company or
product information, enhancing relationship
marketing between firms and their fans
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Using Digital Media to Reach Consumers
 Customer-generated communications and digital media
take some of the professional marketer’s power to control
and dispense information and place it in the hands of
consumers
 Marketers can use digital media to get better and more
targeted information about the consumer
 Essential that marketers focus on:
 The changing social behaviors of consumers
 The ways in which they gather and use information
 The way the Internet is enabling them to get involved in the
marketing process
 As in traditional marketing efforts, marketers need to know
their target market
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Using Digital Media to Learn about
Consumers
 Marketing research and information systems can use
digital media and social networking sites to:
 Gather data on consumers
 Ask consumers about preferences
 Twitter, Facebook, and Myspace can be good substitutes
for focus groups
 Online surveys can serve as an alternative to mail,
telephone, or personal interview
 Crowdsourcing involves using communities of interested
consumers to gather input and feedback for marketing
purposes
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Using Digital Media to Learn about
Consumers
 Consumer feedback is an important part of the digital
media equation
 25% of the U.S. online population reads consumergenerated ratings and reviews
 Digital media forums do allow businesses to closely
monitor what their customers are saying
 Business can communicate with consumers to address
problems or complaints much more easily than through
traditional communication channels
 Many companies do not yet take full advantage of the
digital tools at their disposal
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Legal and Social Issues in Internet Marketing
 The extraordinary growth of information technology, the
Internet, and social networks has generated many legal
and social issues for consumers and businesses
 Privacy concerns
 Risk of identity theft
 Risk of online fraud
 Need to protect intellectual property
 U.S. Federal Trade Commission (FTC) compiles an
annual list of consumer complaints related to the
Internet and digital media
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Privacy
 Current technology has made it possible for marketers to amass
vast quantities of personal information, often without consumers’
knowledge, and to share and sell this information to interested
third parties

Cookies are often used for tracking & scraping is an activity where
companies offer to collect personal information from social
networking sites and other forums
 Laws and regulations have difficulty keeping up with the rapidlychanging Internet
 Federal Trade Commission considering creating legislation that
limits information companies can gather online, possibly:

An online privacy “Bill of Rights” to protect consumers from having
their information tracked without permission
o
Many web advertisers are attempting self-regulation
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Identity Theft
Identity Theft
• When criminals obtain personal information that allows
them to impersonate someone else in order to use their
credit to access financial accounts and make purchases
 Security breaches are serious threat to organizations and
individuals
 Phishing is using a counterfeit of a familiar website to deceive
people into divulging private information
 To deter identity theft, the National Fraud Center wants
financial institutions to implement new technologies such as
digital certificates, digital signatures, and biometrics (the use
of fingerprinting or retina scanning)
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Online Fraud
Online Fraud
• 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
 Another tactic is to create typosquatting sites based on
common misspellings of search engines or social
networks
 Faecbook vs. facebook
 Always be careful what information you give out when online;
and use trusted sites whenever possible
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Intellectual Property
 Intellectual property can include songs, movies, books,
and software
 Such intellectual property consists of the ideas and
creative materials developed to solve problems, carry out
applications, and educate and entertain others
 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
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Digital Media’s Impact on 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
New media may require employees with new skills or
additional training for current employees
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Discussion
?
?
How is the Internet
changing the practice
of marketing?
What impact do
digital media have on
the marketing mix?