Download A Strategic Framework for Digital Marketing Management/Digital

A Strategic Framework for Digital Marketing Management/Digital Transformation
Abstract
The purpose of this article is to develop a conceptual framework that further our understanding of
the role that digital marketing can play within firms and specifically within business processes that
create and capture customer value and, in turn, shareholder value. The framework highlights how
digital marketing efforts must be ingrained as an input to business processes and how it results in
output that build, sustain and deepen customer and shareholder value. In detail, the goals of the
article are three-folded: First, to articulate the role of digital marketing as generator and integrator
of market and customer inputs to the business processes. Second, to depict how digital marketing
can affect cash flows positively (e.g. brand equity) and reduce risk. Third, to specify the role of
digital marketing in the relationship among business processes and cash flows.
1. Introduction
According to Srivasta, Shervani and Fahey (1999) the role of marketing in any organization can be
seen either narrowly to customer view or broadly to marketing perspective to organization, in here
we embrace the holistic view. Srivastava et al. (1999) present an organizationally embedded view of
marketing as an entity that can be viewed as part of the three core business processes namely
customer relationship management, supply chain management and product development
management. In turn, these three core processes create value for the customer and eventually value
for the shareholder.
Since the publication of Srivastava et al. (1999), marketing as function, practice and science has
witnessed considerable shift from the use of traditional marketing strategy, programs and tools (TV,
radio, newspaper, magazine, e-mail, static websites and trade events) to encompass ever
increasingly amount of digital marketing tools (search engine marketing, website morphing.
marketing automation, predictive algorithms, behavioral and mobile marketing, augmented reality,
digital signage, social media, internet of things). Ad spending shift from late 1990s to today by
Fortune 500 companies illustrates the change from traditional/analog to digital. Today, which was
unheard of roughly 15 years ago, most of the big companies have created specific budgets for
digital marketing and have created a digital marketing unit with Chief-of-Digital marketing (CMO)
to take care of digital marketing activities within their organizations in cooperation with the CIO.
Digital marketing in here is understood broadly, reflecting the widespread definition of marketing
developed by American Marketing Association (Italics added), to encompass “Digital marketing is
the activity, set of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society at large in
digitized way.”
Due to the witnessed shift in the marketing activities and increasing focus on value based marketing
activities the purpose of the article is to develop a conceptual framework that broadens our
understanding of the role of digital marketing in general and specifically in relation to business
processes that create the value. The intent of the framework is to highlight how digital marketing is
linked to the three core business processes and how it may influence the outputs of those processes.
Specifically the research aims to answer following research questions: Is and how is digital
marketing influencing the three core business processes? And how subsequent value created and
captured is changing?
A conceptual framework is presented that integrates digital marketing into three core business
processes named here as customer experience management, supply chain management and
innovation as an entity that is partly controlled and influenced by marketing actions. It is also
shown how digital marketing creates value for both customers and shareholders in the customer
relationship management. Moreover, it is also depicted how the digital marketing enhances the
value created in the supply chain management. Additionally, it is illustrated how digital marketing
influences innovation. More importantly, the traditional view of digital marketing as customer
focused is expanded to encompass a more broad idea of market perspective to digital marketing
with the developed strategic framework pinpointing to the digital marketing management.
2. Methodology
We follow qualitative exploration research design. One of the researchers developed the digital
marketing framework first as pedagogical tool based on the literature review and conceptual
analysis. Pedagogically idea is to show the broader view of the digital marketing rather than the
narrow view e.g. social media only focus or neglecting industrial marketing activities. After
enactment it has been employed in numerous digital marketing classes from 2009 onwards. Main
five iteration rounds with the students, executives, colleagues and the four expert interviews led to
reanalysis and rewriting of the framework proposed.
The first iteration took place at the Helsinki School of Economic which is nowadays Aalto School
of Business. The digital marketing framework has been utilized in the Aalto School of Business
from 2009 onwards at the Master level digital marketing class that has been lectured sometimes
twice a year due to its popularity. Altogether, the class has attracted over 1000 students. Each class
has evaluated the overall teaching but also specifically provided comments on the digital marketing
framework. Over the years the digital marketing framework has been clarified and improved based
on the comments and discussions with the students (most of the students at Aalto School of
Business work part-time while they study so they have also practical experience).
The second iteration started almost parallel to the first, as the digital marketing framework has been
utilized also in the University of Oulu, Oulu Business School (AACSB) from 2010 to 2014 while
teaching three day executive MBA course “Digital Marketing”. Altogether, the class has attracted
over 100 executives (with academic qualifications). Over the five years the digital marketing
framework has been clarified and improved based on the comments and discussions with the
executives.
The third iteration involved international aspect as the digital marketing framework has also
benefitted from other international student and executive exposure from Italy, Greece and Australia
during the period of 2010-2015. Altogether over 150 students and executives have participated
Digital Marketing or similar classes. Similarly, the digital marketing framework has benefitted from
the comments received during several guest lectures given in Finland and abroad.
The fourth iteration is most recent one and the digital marketing framework has been utilized in the
University of Cape Town, South Africa in 2016 while teaching “Digital Marketing” class.
Altogether, class attracted over 30 bachelor students with divergent backgrounds. Based on the
student feedback, comments, one workshop, and discussions the digital marketing framework has
been further clarified and improved. Digital marketing framework has been also used at the DBA
course “Digital Marketing Management” at the Aalto Executive Education and also at the doctoral
course “Digital marketing” at the Oulu Business School.
The iterations from one to four mainly involved students, executives and those participating the
guest lectures given at different institutions. The fifth iteration involves in-depth interviews. In 2013
four key-informant interviews (Kumar et al., 1993) lasting over one hour each were conducted to
discuss digital marketing trends but also more specifically focus on the digital marketing
framework. Key-informants were selected to reflect the areas of the three main business processes
and idea was to use them to clarify and depend the understanding of each digital marketing
technology and its relation to the business processes (value creation and capture).
First, key-informant (with over 10 years of experience in digital marketing) was selected from
advertising industry that has been heavily influenced by digitalization of advertising. Second, keyinformant chief-of-sales (of one of the fastest growing software companies in Finland, over 10 years
of experience in digital marketing) was selected from the business-to-business industry selling
digital marketing tools to the business-to-business industry. Third, key-informant, CEO, digital
marketing consultant and software house owner (with over 10 years of experience in digital
marketing) was selected from retailing industry. Fourth, key-informant (with over 10 years of
experience in digital marketing) was selected from the consumer orientated industry (games and
gamification).
Each iteration with the executives and students has brought small changes to the digital marketing
framework especially to the sections dealing specifically with each business process and what
digital marketing technologies could be aligned with that process and how. At first, the digital
marketing framework was presented as integrative framework at the end of a course but as years
followed it became clear that students and executives wanted to digital marketing framework to be
presented during the first lecture to orient themselves to what was to unfold. More importantly, the
feedback from the students from diverging backgrounds, executives, those participating guest
lectures helped to fine grain the business process specific digital tool utilization and metrics related
to their measurement. Also students provided ample of examples from their everyday life where
they have encountered different types of digital marketing tools being used.
3. Elements of the digital marketing framework
3.1 Digital marketing Strategy
First element is the strategy. Usually, the business strategy gives company the guidance on what
business we are in and where we aim to be in the 3-4 years’ time. It gives general direction. Then,
the other element is the customer strategy which says what type of customers we want to acquire
and with what costs and then what type of customers we don’t need and with what cost we are
going to defend our existing customer base. These two strategies give direction for the three core
processes that create and hopefully also capture value for us.
3.2 Value management (Value co-creation and capture)
3.3 Customer experience management
Role of the digital marketing is to complement traditional marketing activities while in some rare
case also to replace some marketing activities.
Process stage
Traditional
tools
Digital tools
Example
metrics
Identifying potential new
customers
Events (exhibitions),
freebies, shopping
mall
exhibitions,
buying
potential
customer lists and
databases e.g. LSM
data base in South
Africa,
surveys,
interviews and polls,
telemarketing
Trending searchers on search
engines, big data crunching, social
media activities (Facebook fans
and Instagram – who follows?) app
downloads,
website
visitor
information (e.g. Google Analytics
–
who
clicks?),
gathering
information
from
online surveys, polls, and Online
communities with nethograpy.
After looking at an item
on e.g. Nike Facebook
page potential customer
is shown relevant ads
and later contacted
Determining the needs of
existing and potential new
customers
Surveys,
focus
groups, in-store-out
store
observation
while they are using
existing
products,
mall
intercepts,
reviews and scores,
complaints,
suggestion boxes
Search engines advertising, cookie
data, website browsing data,
electronic newsletters, social media
(tagged existing and potential
customers from search engines that
utilize social media e.g. Facebook)
email surveys (panels online focus
groups), netnography (apple case
on blogs and forums), blogs,
crowdfunding, digital signage face
recognition
Learning about product use
and application
In-store
demonstrations and
workshops
with
customers, TV ads
infomercials,
general media, word
of mouth, testing
TV,
cinema,
outdoors (billboards
and
signage?),
Testing ads Radio,
Newspapers
and
magazines (above
the line , any paid as
those above), flyers,
pamphlets, posters
Content marketing, online (brand)
communities – recommendations,
vlogs/blogs, podcasts, e-wom,
social media and YouTube,
Facebook and Instagram, blogs,
virtual reality - worlds
-Search
word
e.g.
waxing example
-loyalty
program
Customer
reviews,
opinions and feedback
e.g. Uber and AirBnB
-BMW design a car
competition
Nike design your own
sneakers
Kickstarter.com
Nosto website browsing
TomTom GSP watch
YouTube
tutorial,
review, use of product
Developing/executing
advertising programs
Developing/executing
promotion programs
Flyers and coupons,
loyalty programs
Instore coupons and
advertising
Sponsorships
Popup instore
Websites (landing pages), search
engine marketing (e.g. Google
AdWords, AdSense, Baidu, Yahoo,
Bing), social media (Facebook,
Instagram, LinkedIn, Pinterest and
Twitter), video content (YouTube,
Vimeo, Vine), mobile apps,
multichannel integration of these to
achieve goals of the programs
Seeding strategies – viral, UGC,
ewom –some campaign
Use of iBeacons within retail store
Use of digital displays – signage in
retail stores, Mobile / Geo-location
awareness,
in-store
location
specific one category (iBeaconsbluetooth,
RFID
tagging
warehouse),
geocaching
one,
bigger picture heat maps, tracking.
Digital coupons and competitions
(online and mobile), flyers, digital
loyalty programs (e.g. mobile app
based or customer online loyalty
program, competitions, online
and Reference
Roggeveen, Nordfalt,
Grewal (2016)
Integrated advertising
with messages – City of
CT antidrug?
Some
famous
Superbowl
campaign
using digital
FB-analytics
and
YouTube campaigns
Dove
campaigns,
Redbull
Facetime-hangout?
Twitter
sponsored
messages
Foursquare – FB places
Instagram-Statigram
Heatmaps
Groupon
sales
announcements
via
email,
Twitter,
Facebook
and
Instagram
Facebook
and
JM Aspara Xueming
Venkatesan,
R.
and Farris, P.W.,
2012. Measuring
Door to door sales
Testers – going into
stores
advertising
Developing/executing
service programs
ATM, self-service
technology, phone
calls, warranty, snail
mail, complaint desk
– hotlines
Instore promotions
Digital (mobile) service programs
SMS reminders, IoT reminders,
email, UGC
Acquiring/leveraging
information
technology/system
customer contact
Phone, letter, Pointof-Sales data (POS),
asking to fill in form
in store, census?,
call centers, loyalty
cards
Digital (online web service)
customer service systems or loyalty
Mobile service (apps, in app
messages)
Email list subscription and lists ,
cookies, email signup on website
-Big data ? Competitions?
-mCRM
Face
to
Face
physical site checks,
weekly meetings, –
log books
Phone calls, door to
door visits, events,
fax, snail mail, press
releases,
return
policy,
service
quality, product and
process and other
quality checks
Above the line
advertising
Registration, catering etc. via
online system, digital log books
Robotization of service – service
robots that are automated
Third party rust seals, verified by
Visa, Master card in relation to
online
payments,
Amazon
automated payments.
Reputable buyer lists
Customer reviews and feedback
visible online – eopinions – wom
Successful delivery – return
policies
Following – engaging in social
media – listening
Information on privacy policies and
safety online
Customer control of privacy
Customer loyalty program
Customer database
and
salesforce
selling
activities
(deals),
bundling,
bundle discount,
Automated electronic newsletter
customized (based on last purchase
and purchase history - cookies) for
the individual customers. Landing
page of the campaign is also
customized to according to the
content in the newsletter)
Website/
EC/
SC
site,
recommending
similar
products/services
Customer online loyalty program
Shopping
cart
abandonment
recovery – emails
Browse to abandonment recovery –
emails
for
Managing customer
visit teams
site
Enhancing
trust
customer loyalty
and
Cross-selling and upselling
of product service offerings
Plus same as above in advertising
Native advertising - content
Gamification
SMS email
Google AdSense?
Instagram competitions
Red bull parties
Snapscan / Zapper
Filling in online service
order e.g. for car
service,
receiving
notification via SMS in
relation to service used
Email
Twitter KLM
Uber rewards
Customer
serve
themselves by altering
customer
contact
information and other
preferences e.g. in the
airlines’
frequent
customer online system.
Sign up website – self
service
Travelstart has some
competitions?
PnP smart shopper
newsletters
FB/ LinkedIn
Drones - CCTV
Visa and Master seals
EU law on online
purchase return rights
etc
Amazon – customer
product evaluations
Instant message help
service (also in Sales
good many use in
websites
ebookers,
autokauppa,com)
Than U W rewards card
Consumer
received
electronic
newsletter
tailored to last purchase
Amazon
offering
algorithm
Airlines
selling
transportation
and
accommodation
Accommodation selling
transportation
and
airline tickets. Nosto
Superbalist, razor and
blades and printer and
ink
and
managing
returns
from
retailercustomized
coupon
campaigns.
Journal
of
marketing, 76(1),
pp.76-94.
(Jarvenpaa
Balasubramanian
JAMS)
3.4 Supply chain management – demand chain management
Process stage
Traditional
tools
Digital tools
Example
metrics
Selecting and qualifying
desired suppliers
Trade
events/fairs
exhibitions,
Catalogues, Trade
newspapers, Phone,
fax, Paper mail
smth, Request for
proposal, site visits
and meetings, tender
process and sales
reps
Phone, fax, Paper,
person
with
checklists,
smth,
email?, manual
Search engine (65% of 1000
professional buyer use SE)
Electronic Market places (+reverse
auctions Jap JM)
LinkedIn
Industry online databases / social
media
Online wom
Online content marketing (Ponsse,
Nokian renkaat)
Digital tracking, RFID tagging,
ERP
systems,
logistic
3rd
party/external? online services
EB tools, mobile systems?
Google, but how about
hello Peter for negative
issues – negative wom
eliminating from a list
Online
content
marketing
(Ponsse,
Nokian
renkaat)
YouTube videos
Designing and managing
internal logistics
Phone, manually by
person, fax, Paper
smth, email?, audits
Establishing and managing
outbound logistics
Phone,
meetings,
fax, Paper smth,
email?
Integrated computer systems – ERP,
Intranet, RFID tagging, ERP
systems, logistic internal online
services, CAD?
Extranet (call in truck)
Other integrated IS, Telematics/
web services (see trucks location in
real-time)
RFID (identify truck arriving and
leaving)
Mobile message (identify truck
ready), B2B integration?. M2M –
IoT, automated warehouses –
robotization,
Geo-location
awareness, heat maps, tracking
Designing work flow in
product/solution assembly
Phone, fax, paper,
CAM- assembly line
MRP
systems,
email?,
intercom
system
Manual
batch,
CAM, Phone, fax,
paper, MRP system,
email?
Process dependent
information seeking
behavior
(Paper,
trade association and
events, formal and
informal
discussions), R&D
activities
and
education, manual
labor
Phone, fax, paper,
mail,
accounting
books, writing an
invoice – barcodes
Competitor analysis
–relative
pricing
surveys
Phone, fax, paper,
mail, hierarchy - top
down
Establishing and managing
inbound logistics
Running
manufacturing
batch
Acquiring, installing and
maintaining
process
technology
Order processing, pricing,
billing, rebates and terms
Managing
channels
(multiple)
and Reference
Tagging of steel plates
Vehicle/product/parcel
tracking
Automated QC (quality
control) system
Tagging of steel plates
Company intranet / ERP
Transportation of steel
plates
ERP / other integrated
IS, packaging systems –
3D codes augmented
packages etc.
CAM
3D design and illustration, ERP
systems, robotization – digitized
manufacturing
Using 3D scans to
identify bottle necks in
the work flow
ERP systems, embedded SW, M2M
iot, prototyping, 3D printing
Machinery
integrated
IS, 3D printing
Process
dependent
digital
information seeking behavior, R&D
activities (3D or virtual worlds for
developing and visualization of
process solutions), and education
(online learning environments,
mobile applications for learning),
online purchase of technology extranets
Steelcase?
Website, extranet, email, electronic
market places – auctions for order
taking
Pricing software ERP – competitor
analysis online, billing, rebates and
terms (extranet for information
sharing), mcrm?
Category management?, Vendor
Managed
Inventory
(VMI),
Efficient Consumer Response?.
Collaborative
planning
and
forecasting), EDI?, EFT, extranet
ERP based pricing –
Miilux
e-invoice
Office supply VMI
system in Oulu Uni
Managing
customer
services such as installation
and maintenance to enable
product use
Phone, fax, paper,
mail,
salesforce,
aftersales
service,
questionnaire, polls
Remote access to site (information
gathering or direct involvement)
Salesforce? Aftersales service?
Review forms online
Online tutorials, online chatroom –
IRC, skype
M2M – IoT laivojen etäohjaus
Remote access to power
plants etc. processes in
chemical e.g. wood
processing industry
Website with FAQs
YouTube
online
tutorials
Skype session with
technician
3.5 Innovation
Process stage
Traditional
tools
Digital tools
Example
metrics
customer
Ideas asked from
the customer –
personal interview
, surveys, polls
focus groups –
market
research
(customer insights)
, feedback forms
Call
centers,
observations
on
use,
Online (brand) communities
(searching for hidden and
emerging needs based on
customer behavior (comments,
like/dislike discussion, actual
behavior)
Virtual worlds (hidden and
emerging needs)
Big data, online focus groups –
surveys
Blogs – many same as first of
CRM? UGC
iBeacons – survey in store?
Designing tentative new product
solutions
Co-design with the
customer
Research
and
design
Brainstorming
,
sketches,
(with
customers
or
within company)
per
paper
blueprints, trial and
error, concept and
proto design
Design with SW
-Virtual
prototyping
Crowdsourcing
Virtual worlds
Neuromarketing?
Use of EB tools (PDM?)
CAD sketchup
Create a digital prototype that
customers can interact –
playwith
Online reviews of competitors
products
Basecamp/Slack/internal social
media (Pradeep Durgam)
How Apple develop Ipod
from newsgroup discussions –
case that Jari uses in teaching
Social login?
Survey monkey, Qualtrixs,
google survey
Google search results
AMPS
–
all
media
surveyeighty20.com
Online brand tracking
FB brand pages – surveys,
Twitter
Dell Ideastorm and Starbucks
forums
Kulula –emails after your
flight
Threadless t-shirt
3 D cave virtual hospital
Autocad
Online test marketing (FB
game developers- 3 ideas for
hard core gamers type of
thing)
3D printing fashion
A/B testing
Competitor websites
Developing
prototypes
Manufacturing
physical prototype,
manufacturing
plant, outsourcing,
per
paper
blueprints
and
brainstorming
Virtual/augmented
prototyping,
UGC,
crowdsourcing, 3D virtual
caves (using them to test
prototypes), 3D architectural
design of hospital, Virtual
worlds (give prototype to
potential customers for trial
use and observe), Online focus
groups,
graphic
design
competitions
Ascertaining
needs
new
new
solution
and Reference
Ponsse? Used 3D cave to test
their wood cutter machine
(metsakone)
Ukiarkkitehdit,
used
3D
design of a hospital with end
users e.g. doctors, patients and
even cleaners to solve
potential problematic issues
before the hospital was built.
Several improvements were
done and costs related to
building hospital decreased
dramatically.
XYZ company from lectures,
developed steel case / chair
Identifying
and
managing
internal/functional/departmental
relations
Phone, fax, paper,
mail, office parties,
regular meetings
and
social
interaction,
interview
E-mail,
online
company
forum/FB page
Collaboration and project
management tools (e.g. for
R&D)
Digital visualization tools
3D printing in general and of
lungs and body parts
Basecamp etc
WhatsApp group
Intranet and extranet, ERP
Oracle integrated cloud apps
platform services

employees
–
brainstorm, conflict
resolution
Developing
and
sustaining
networks of linkages with
external organizations
Trade and other
social
events,
meetings
and
discussions,
fax,
telephone, letters,
sponsorship,
manual invoicing,
delivery etc
Coordinating product design
activities to speed up business
process
Phone, fax, paper,
mail, office parties,
coordinating
internal
manufacturing to
identify
bottlenecks,
production
meetings
–
outsource
manufacturing, e.g.
mobile
phone
tablets, deadlines,
scheduling,
hire
staff,
project
management tools
(GANTT,
Chaves?)
4. Integrative framework
Basecamp, Yammer etc
Internal mobile communication
(MCRM for PDM)
EB tools (internal innovation
sharing)
Social
media
services
(LinkedIn, Google+, ITtoolbox
and
similar
online
communities)
Expert communities (Philips
healthcare community, Oulu
Ilari Kerola – doctor portal)
Mobile crm, email, extrane
Affiliate marketing, email,
skype conference
Digital bonds
E-mail
Collaboration and project
management tools (e.g. for
R&D)
Shared CAM?
Digital visualization tools
Outsourcing – crowdsourcing
Google docs, iCloud
Fully integrated production
system
Digital project management
Steel and truck industry?
Nokia
Advertising online
Digital sponsorship
Automated email
Basecamp etc, mobile systems
Computer
controlled
machinery – embedded or
integrated m to mIOT
Google drive – calendar DPM
asana
Automated orders
4. Conclusion
5. References
Webster Jr, Frederick E. "The changing role of marketing in the corporation." The Journal of
Marketing (1992): 1-17.
Roggeveen, A.L., Nordfält, J. and Grewal, D., 2015. Do Digital Displays Enhance Sales? Role of
Retail Format and Message Content. Journal of Retailing.
Srivastava, R.K., Shervani, T.A. and Fahey, L., 1999. Marketing, business processes, and
shareholder value: An organizationally embedded view of marketing activities and the discipline of
marketing. Journal of Marketing, 63, pp.168-179.
Anne L. Roggeveen, Dhruv Grewal, Claudia Townsend, and R. Krishnan (2015) The Impact of
Dynamic Presentation Format on Consumer Preferences for Hedonic Products and Services. Journal
of Marketing: November 2015, Vol. 79, No. 6, pp. 34-49.