Download Digital Marketing

MARKETING
17e
Hult • Pride • Ferrell
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
Part 3
Customer
Behavior and
E-Marketing
© iStockphoto.com/hh5800
6: Consumer Behavior
7: Business Buying Behavior
8: International Marketing
9: Digital Marketing and Social
Media
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-2
Objectives
 To define digital media and electronic marketing
and recognize their increasing importance in
strategic planning
 To identify and understand the role of digital media
in a marketing strategy and how each type of
social media can be used as an effective
marketing tool
 To understand digital marketing consumer
behavior
 To understand and identify how digital media
affects the marketing mix
 To identify legal and ethical considerations in
digital media and electronic marketing
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-3
Definitions
Digital Media – Electronic media that function using
digital codes; this includes media available through
computers, cellular phones, smartphones and
other digital devices
Digital Marketing – Uses all digital media,
including the Internet and mobile and interactive
channels, to develop communication and
exchanges with customers
Electronic Marketing (e-marketing) – The
strategic process of distributing, promoting and
pricing products and discovering the desires of
customers using digital media and digital
marketing
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-4
Discussion Point
 Companies like
Adidas build their
brand equity and
gain market share
with their digital
marketing
strategies
 Visit the Adidas website
? How does Adidas use its website to interact with
customers?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-5
Growth and Benefits of Digital
Marketing
 The Internet has become an important
component of a firms’ marketing strategies
 E-marketing allows marketers and customers
to share information
 It is now possible to target markets more
precisely and reach markets previously
inaccessible
 The digital world is evolving quickly and is still
in an early stage of integration into marketing
strategy
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-6
Characteristics of Online Media
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-7
Discussion Point
Wendy’s
encourages
customers to go to
their website for a
free order of their
new French fries
? Which of the online media characteristics best fits
this promotion?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-8
Interactivity of Social Media
The main distinguishing characteristic of digital
media is their interactivity
 Traditionally, customers faced a lengthy,
dissatisfying experience when supplying feedback
 Digital media allows interaction in real time
 Interactivity helps marketers maintain high-quality
relationships with existing customers
 Allows customer to develop relationships with each
other
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-9
Consumer-Generated Marketing
 Two major trends have caused consumer
generated information to gain importance
 The increased tendency of consumers to
publish their own thoughts, opinions, reviews
and product discussions through blogs or
digital media
 Consumers’ tendencies to trust other
consumers over corporations
 Marketers can use these online forums to
interact with consumers, address problems
and promote their company
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-10
Types of Digital Media
 Internet users are likely to participate using
one of these types of digital media
Blogs
Wikis
Podcasts
Mobile devices
Widgets
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
Social networks
Video sharing sites
Virtual reality sites
Applications
© iStockphoto.com/hh5800
10-11
Social Networks
 A social network is a web-based meeting
place for friends, family, coworkers and peers
allowing users to create a profile and connect
with other users for purposes ranging from
getting acquainted, to keeping in touch and
building a work-related network
 Marketers are using these sites to
 Promote products
 Handle questions and complaints
 Provide information to assist customers in
buying decisions
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-12
Social Networking Usage by
Adult Population
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-13
Social Networks
The wide variety of
social networks
allows consumers
to connect for both
personal and
business purposes
? How many social networking sites do you visit
on a weekly basis?
? Are there any you visit on a daily basis?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-14
Discussion Point
Twitter Emerges as a Digital Marketing Tool
 Businesses big and small are tweeting to
inform the world about their companies
 “Follow us on Twitter” signs are appearing on
doors and windows of businesses around the
globe
? Why is Twitter appealing to companies?
? How could Twitter be used as a tool to strengthen
customer relationships and to gather consumer
feedback?
? What are some of the drawbacks of using Twitter
as a marketing tool?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-15
Blogs and Wikis
 Blogs (short for “weblogs”) are web-based
journals in which writers can editorialize and
interact with other Internet users
 Blogs can represent a potent threat to
corporations or an opportunity due to the amount
of consumer control
 Companies can use external blogs to answer
consumer concerns or defend their corporate
reputations and internal blogs to build enthusiasm
and create relationships
 A wiki is a type of software that creates an
interface enabling users to add or edit content of
some types of websites
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-16
Discussion Point
High School Dropout Founds Fastest-Growing
Blogging Service
 20-year old David Karp, a high school dropout,
founded Tumblr, the fastest-growing blogging
service valued at $800 million
 Even though the company has yet to generate
much revenue, investors are eager to get involved
 Tumblr is created to make the blogging process
simpler and that simplicity extends to the look and
feel of the website
? Have you regularly read a blog? Written your own
blog?
? Were you familiar with the Tumblr site before now?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-17
Media Sharing Sites
Media sharing sites allow marketers to share
photos, videos and podcasts but with less
interaction
 Photo sharing allows companies to market
themselves with snapshots of company events
 Video sharing allows companies to upload ads and
informational videos and are now using consumergenerated videos
 Podcasts are audio or video files that can be
downloaded with a subscription that automatically
delivers new content to listening devices or
personal computers; offers convenience allowing
users to listen when and where they choose
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-18
Virtual Sites
Virtual sites include Second Life, Everquest, Sim
City and World of Warcraft
 These are user-created, three-dimensional worlds
with their own economies, currencies, lands and
residents
 Allows businesses to reach consumers in a
creative, fun way
 Some firms are using virtual technology for
recruiting purposes
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-19
Mobile Devices
 Over 80% of Americans have a mobile device,
many of these devices are smartphones
 Mobile marketing has proven effective in
grabbing consumers’ attention
 The common mobile marketing tools are:
SMS Messages
Multimedia Messages
Mobile Advertisements
Mobile Websites
Location-based Networks Mobile Applications
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-20
Smartphone Usage by Age
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-21
Applications and Widgets
Applications, or, more commonly apps
 Bring convenience and cost savings to the
consumer
 Companies are using mobile marketing to offer
consumers additional incentives
Widgets
 Small bits of software on a website, desktop or
mobile device
 An innovative digital marketing tool to personalize
webpages, alert users to company information and
spread product awareness
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-22
Discussion Point
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-23
Consumer’s Digital Media
Behaviors
 Businesses have witnessed a range of changes
in consumer behavior
 Consumers expect to access a vast amount of
information on companies, products and issues
 Consumers share information and experiences
with each other through social networking sites
 Consumers can regulate the information they
view as well as rate and sequence of exposure
 Digital media requires marketers to approach
their jobs differently compared with traditional
marketing
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-24
Consumer Power and
Marketing
 Positive ratings and reviews is free publicity
 Consumer-generated content appears more
authentic and can go far in increasing a
company’s credibility
 Digital media allows marketers to gather
information on their consumers, creating a new
way of gathering marketing research
 Marketers can use information on how
consumers use the Internet to better target
marketing messages and track the success of
their marketing campaigns
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-25
Social Technographics
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-26
Online Consumer Behavior
Consumers are grouped into seven segments
according to how they interact with digital media
 Creators – create their own media outlets such as
blogs, podcasts, videos and wikis
 Conversationalists – regularly update their
Twitter feeds or status updates
 Critics – are people who comment on blogs or
post ratings and reviews
 Collectors – gather information and organize
content generated by critics and creators
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-27
Online Consumer Behavior
 Joiners – are anyone who becomes a member
and participates in a social networking site
 Spectators – this is the largest group and is
composed of those who read what other
consumers produce but do not create any content
themselves
 Inactives – online users who do not participate in
any digital online media but this number is
dwindling
By knowing how to segment the online
population, marketers can better tailor their
online messages to their target markets
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-28
E-Marketing Strategy
 More than one-fourth of the world’s population
uses the Internet and the number is growing
 More than three-fourths of people in North
America have Internet access
 As more and more shoppers go online, the
power of brick-and-mortar businesses is
lessening
 Businesses must learn how to effectively use
social media and digital marketing
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-29
Product Considerations
 Traditional marketing and e-marketing are the
same on product considerations
 Marketers must anticipate consumer needs and
preferences and tailor products to meet those
needs
 The Internet is a large resource of consumer wants
and needs
 Digital media provides an opportunity to add a
service dimension and create new products only
accessible on the Internet
 With the constant sophistication of digital
technology, businesses find it necessary to
continually upgrade their products offerings
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-30
Distribution Considerations
 Digital marketing can be viewed as a new
distribution channel that helps businesses
increase efficiency
 Processing orders electronically
 Increase the speed of communications
 Push-pull dynamic – where the firm provides a
product (push), while connectivity allows
members to find each other (pull)
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-31
Discussion Point
The growth in
popularity of
e-readers had
lead to a greater
direct distribution
of magazines,
newspapers and
books
? Do you own an e-reader?
? If so, do you access books, magazines or
newspapers?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-32
Promotion Considerations
 Social networking sites allow marketers to
approach promotion in entirely new, creative
ways
 Digital promotions attempt to increase brand
awareness
 Almost any traditional promotional event can
be enhanced or replaced by digital media
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-33
Pricing Considerations
 Pricing relates to perceptions of value and is
the most flexible element of the marketing mix
 Digital online media marketing facilitates both
price and nonprice competition
 Demand for low-priced products has grown
 Consumers are able to find the price from
various competitors in an instant
 Access to price information benefits the
consumer and places pressure on the seller to
be competitive and to differentiate products
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-34
Discussion Point
The Postcard of the Future
 RogueSheep is a software development
company who’s postage application is giving
the traditional postcard a run for its money
 For $4.99, iPhone users can purchase the
app, choose from more than 90 postcard
designs, customize the design and send
? How do you think businesses could effectively use
RogueSheep postcards?
? What are the advantages of the RogueSheep
digital postcards over traditional postcards?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-35
Ethical and Legal Issues
 How marketers use technology to gather
information, both online and offline, raises
numerous legal and ethical issues
 Among the issues of concern are
 Personal privacy
 Fraud
 Misappropriation of copyrighted property
 Twitter freely shares their online security
measures with consumers
? Do you ever worry about the safety of your
personal information while using social media
networks?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-36
Privacy
 Companies collect personal information from
website visitors in their efforts to foster longterm relationships with customers
 Hackers may break into websites and steal
personal information enabling them to commit
identity theft
 The FTC is considering developing regulations
that would better protect consumer privacy by
limiting the amount of information businesses
can gather online
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-37
Online Fraud
 Online fraud is any attempt to conduct
fraudulent activities online, including deceiving
consumers into releasing personal information
 Includes, among other things
 Setting up fraudulent profiles on social
networking sites
 Create typosquatting sites based on common
misspellings of search engines or social
networks
 Using social networking sites to pose as
charitable institutions
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-38
Intellectual Property
 Each year, intellectual property losses in the
U.S. total billions of dollars
 There is a fine line between protecting
intellectual property and maintaining freedom
of speech
 Consumers rationalize pirating by thinking:
 They don’t have the money to pay for what they
want
 Their friends engage in piracy
 The thrill is worth the risk
 They are smarter and more tech savvy
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-39
Discussion Point
Social Networking in the Workplace
 It is estimated the average employee spends
one work-hour per day on social media sites
 Distractions from social media and other
devices can cost a large company over $10
million annually
 Employees indicate that blocking social
networking sites might actually decrease
productivity and lower morale because
restrictions indicate distrust
? Should employees be allowed to use social
networking sites at work?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-40
Discussion Point
 To learn more about the world’s first creative
ad agency built on crowdsourcing principles,
look at the Victors & Spoils site
? How can Victors & Spoils be used to outsource
advertising campaigns through co-creation and
mass collaboration?
 Victors & Spoils and crowdsourcing is built on
the foundation that good ideas come from
anywhere
? Is it possible that this new approach will eliminate
traditional ad agencies and creative departments?
© 2014 Cengage Learning. All Rights Reserved. This edition is intended for use outside of the U.S. only, with
content that may be different from the U.S. Edition. May not be scanned, copied, duplicated, or posted to a
publicly accessible website, in whole or in part.
© iStockphoto.com/hh5800
10-41