Digital Marketing Excellence - 2

* Remix

The digital world affects every aspect of business, every aspect of marketing and every aspect of the marketing mix. This chapter is about how the old marketing mix naturally integrates into the fast changing digital environment. 

The traditional concept of the marketing mix is 4Ps (Product, Price, Place, Promition). But there were some arguments that 4Ps worked for products rather than services. As a result, 7Ps were developed and announced by Booms and Bitner in 1981. 7Ps include 3 more Ps (People, Physical evidence, Processes). which were considered to be crucial in the delivery of services. Since almost all products are becoming services (as more added value services are added online), this book explain the influence of the digital world on the marketing mix in terms of 7Ps.

As I am not really familiar with 7Ps. I have extracted some brief explanation about them.
(My opinion: whether it is 4Ps or 7Ps, definition of marketing never changed. I think 7Ps just emphasizes 3 more factors for service sectors which technically can be included in 4Ps.)

• People – All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering. (People create and deliver a service. If they aren't happy, the service falls apart.)

• Processes –The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for. (When it comes to service, Process of production is not behind closed doors but open for all to see. In addition, crystal clear processes have proven themselves critical in the successful use of social media.)

• Physical Evidence – Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDFs) they are still receiving a “physical product” by this definition. (When buying intangible services, many customers rely on cue given from tangible, or physical evidence such as uniforms, badges and buildings.)

The book emphasizes that the mix is tactical and decisions on the mix are not made until the marketing strategy has first defined the target markets and brand positioning. you need to develop the ability of thinking beyond the short-term mix and think ' long term' to be an excellent marketer. That is, Choosing a mix that nurtures 'lifetime customers' and grows share of wallet is really important. You need to keep in mind that everything today in marketing is about relationships and relationship marketing permeates all the decisions that marketing managers have to make about mix.

Marketing mixes definitely overlap one another at some point. In the digital world, they sometimes can also combine. Representative examples are apps and widgets. Apps and widgets improve the customer experience (product), delivering the experience wherever you are (place) and all of this simultaneously promotes the product (promotion). More specifically, take the Burger King app. The app improve customer experience by showing the nearest branch, letting users choose and ordering and selecting a pick-up time. At the same time they can promotes their new menus through the app. It is needless to say customers can order a hamburger wherever they are with the app in their phone.

Let's get more specific. How is each P in 7Ps affected by the digital world?

Product

Digital products are consumed differently. Many customers want to interact with the brand and with other customers in their new-found communities. Some want to share information, ideas, problems, challenges, solutions and so on proactively. Therefore, when it comes to developing a new product prosumer is also a hot keyword in this trend. Some companies sometimes create new products with UGC (User-Generated-Contents) or crowd-sourcing, which is technically known as 'open-innovation'. The deeper relationships between brands and customers, the more increasingly important the product or customer experience is online. This make after-sales services more worthwhile. The after-sales market is opening up new opportunities, and  all products eventually become services in the digital world. You have to keep in mind that after-sales service is the first step in converting customers into lifetime customers. 

Online opportunities for enhancing product value can also be identified. This also includes incorporating tools to help users during their use of the product or service. The extended product contributes to perceptions of quality. Quality and credibility are inextricably linked. Once a company wins a customer's trust, it is possible that the customer start to buy a wider range of products and services from the same supplier. That is, if the relationship is right, the share of wallet can grow.

Thus, setting and having a right OVP (Online Value Proposition) is really significant.

The OVP must somehow reinforce core brand values and clearly summarize what a customer can get from you that they cannot get elsewhere. If you are going to offer a consistent CX, then the online value proposition (OVP) should be the same as the offline proposition. The OVP is more than the sum of features, benefits and prices; it should encompass the complete experience of selecting, buying and using the product and service. Here is a good OVP of Youtube which is a good OVP as far as I think, "Broadcast yourself." The traditional categories of the different elements of the marketing mix are beginning to blur as proposition merges with product experience. (About time too, as all of the mix must be seamlessly integrated.)

Price

The internet is changing pricing forever. Pricing structures and options are becoming more complex. Companies that offer digital products such as written content, music or videos now have more flexibility to offer a range of purchase options at different price points, including Subscription, Pay Per View, Bundling, Ad-supported content. Also, diverse pricing options such as leasing, reverse auctions has been vitalized except for those in other areas. In theory, it is even expected that marketers with well-managed databases can tailor prices to discrete segments at optimum prices by tracking customer segments and their sensitivity to prices, which is in practice currently on a lower and imperfect level.

In digital world, price competitions are getting serious. A growth in competition is caused partly by global suppliers and partly by customers searching online for cheaper suppliers. Global suppliers now can easily enter into markets in any country. At the same time, consumers get price information more easily through internet even beyond their countries.

Moreover, prices of companies are transparent as prices are published on the web. buyer comparison of prices is more rapid than ever before. Price comparison sites have been around since the 1990s and such comparison sites create customer empowerment which leads to further downward pressure on prices. Therefore, It is definite that marketers will need skills defining the strengths and weaknesses of various exchanges and auctions in the digital world.

Place

In the digital world, Place and Promotion overlap when organizations extend presence online with links from other sites or with micro-sites in relevant places as the brand gets wider promotion, and simultaneously increases its distribution. Place means the place of purchase, distribution and, in some cases, consumption. Some products such as digitizable products like software, media and entertainment exploit all three aspects of place online. 

Widgets can extend distribution across many other web sites. Apps can extend distribution into the hands of millions of customers via their mobiles once downloaded. And QR codes can bring distant experiences closer. Proximity marketing and location-based marketing bring promotions to the customers as they physically move closer to a distribution point.

It is not digitizable products but all products and services can extend themselves online by considering their online representation for place of purchase and distribution. Even perishable goods such as food and flowers are sold online as customers like the increased convenience and reduced cost of ordering online, often using delivery partners for offline fulfillment. Thus, companies need to consider the alternatives for online representation seriously. they could be their own website, neutral intermediary, and customer site.

With the advent of the digital world, an explosion of radically new ideas has occurred in the last few years. Being listed, the representative ones are Disintermediation, Reintermediation, Informediation, Channel confluence, Peer-to-peer services, Affiliation, Group purchasing. In addition to these, the book also emphasizes atomization, which suggests how the content on a site is broken down into smaller fundamental units such as features, blog postings or comments, which can then be distributed via the wen through links to other sites. Widgets are another aspect of atomization where data can be exchanged between the widget and the server on which it is hosted.

Excellent distribution requires a deep understanding of when and where customers want products and services. Partnership skills also required as much distribution is exrernally sourced. Like this, distribution is getting complicated in the digital world. Marketers today need to think of multi-channels for distribution to ensure they make their products and services easily available to as many ideal customers as possible.

Promotion

Online promotion is continuing to grow in importance and gaining an increasing share of marketers' budgets and efforts. Online channels can do things that offline communicators simply cannot. For example, some web sites can promote, communicate and create a brand experience which is unique to the online users. Although web sites can be considered a separate communications tool, they are best thought of as an integrator of all ten tools. Here are the ten tools and online executions.

1. Advertising: interactive display ads, Pay Per click search advertising

2. Selling: Virtual sales staff and chat and affiliate marketing

3. Sales promotion: Incentives, Rewards, Online loyalty shemes

4. PR: E-news releases, E-newsletters, social networks, links and virals

5. Sponsorship: Sponsoring an online event, site or service

6. Direct mail: Opt-in email, E-newsletters, and web response

7. Exhibitions: virtual exhibitions and white paper distribution

8. Merchandizing: Web site design, promotional ad serving on retail sites, personalized recommendations.

9. Packaging: Photographs of real packaging displayed online

10. Word of mouth: Social media plus viral, affiliate marketing, e-mail a friend, reviews

The online promotional challenges that marketers need to respond to can be summarized by six key issues.

1. Promotional mix

Digital marketers need to mix the promotional mix appropriately. This involves deciding on the optimum mix for different online promotional tools.

2. Integration

Both online and offline communications must be integrated. All communications should support the overall positioning and OVP which he digital marketing strategy drives.

3. Creativity

Today's marketer can exploit the vast untapped creative opportunities presented online. The only limitation is your imagination. You need to be able to develop contents which fit the overall communications strategy relevant to a specific target market and positioning consistent with the overall brand positioning. The following are 'Ten golden rules of IMC', which is extracted from the book. (As I am interested in promotion, I am trying to put as many information as possible)

1. Get management support for integrated marketing communications (IMC) by ensuring they understand its benefits to the organization.

2. Integrate at different levels by putting IMC on the agenda of different meetings; integrate horizontally between managers in different functions such as distribution and production; and ensure that PR, advertising and sales are integrating their efforts.

3. Maintain common visual standards for logos, typefaces and colours.

4. Focus on a clear marketing communications strategy. Have clear communications objectives. Have clear positioning statements. Link core values into every communication.

5. Start with a zero budget - build a new communications plan by specifying the resources needed and prioritizing communications activity accordingly.

6. Think customers first. Identify the stages before, during and after each purchase and develop a sequence of communications activities that help the customers through each stage.

7. Build relationships. Ask how each communication tool enables you to do this. Customer retention is as important as customer acquisition.

8. Develop a good marketing information system which defines who needs what information when. IMC defines, collect and shares vital information.

9. Share artwork and other media. Consider how advertising imagery can be used across mail shots, new releases and the web site.

10. Be prepared to change it all. Constantly search for the best communication mix.

(Smith and Zook, 2016)

4. Interaction
This is the extra layer of creativity. Interaction with customers obviously enhance the experience and deepen the impact, giving a chance to create an opportunity to collect customer data.

5. Globalization
There are added complications of a global audience as companies can access to consumers all around the world. Web sites and social media platforms give a global access to your promotions. Cautions about cultural and business need to be exercised when entering international markets.

6.Resourcing
The online communications opportunity is infinite. However, resources required to design and maintain content marketing, service interactions and the database are not infinite. Resources are also needed to service customer enquiries whether online or offline. Resourcing needs to be planned carefully and you must expect to grow social media resources over time.

These are the challenges that marketers face online. But remember that all communications are wasted if the rest of the mix is wrong. Great promotions can't save a poorly targeted and designed product. Keeping in mind, take advantage of the characteristics of the new media through promotion that is dynamic, carefully targeted, highly relevant and helps to build an ongoing relationship based on the permission and trust of the customer.

People

In service marketing, people or staff, are considered a crucial element of the marketing mix. As more products add online services to enhance their offerings, 'people' become more and more important. Everyone in a organization is an ambassador and a salesperson in its own way. Happy staff make happy customers and happy shareholders. The challenge is to recruit the right people, train them and reward or motivate them appropriately.

It is worth investing in continual staff training as well as in online tools. A research revealed tat companies which invest in all three key stakeholders (employees, customers and shareholders) out perform those that invest in only two or fewer. Through right investment in people, companies can eventually keep content fresh and be prosperous in a turbulent environment where customer expectations are rising and just satisfying these rising expectations is not enough to keep customers loyal.

Physical evidence 

Customers look for online and clues for reassurance whether on a web site, an app, a virtual experience or even an email as services are intangible. Therefore, giving right clues for customers is essential in the online world. Of course, this corresponds to offline. Take Web sites, Web sites should be designed in an uncluttered style with a consistent look and feel that customers feel comfortable with. If there is a typo in a web site, customers will be sure about the quality of its products.
reviews, ratings gurantees, refund policies, privacy policies, security icons, trade body memebrships, awards, customer lists, customer endorsements, independent reviews, news clippings and so on, all of these can deliver a reassurance to a customer in addition to design, layout and professionally proofed quality content in the digital world.

Process
Process refers to the internal and sometimes external processes, transactions and internal communications that are required to run a business. Products turns into services with added digital value being layered on top of the basic product and services are dependent on excellent processes, since the process of production and consumption are often simultaneous unlike pure products which are produced privately behind factory gates. This is why excellent execution of these is vital.
Traditional offline services have processes continually on view, with the manufacturing process for goods behind closed doors. Online services and their process of production are not as visible since many of the processed operate in systems unseen by the customer. Some of the process or system, is on view, like menus, form filling, shopping baskets, follow-up emails, and the integration on web sites. It is on this part of the process and its outputs that customers will judge service. To have good services on the part, of course, establishing good back-end systems which are out of sight in the back offices is required. In the process of optimizing internal processes, a company might have a chance to optimize its external processes as reviewing processes and systems can help organizations to radically redesign supply and distribution chains. It is no need to say it can compete much more effectively as a result. Keep in mind that good processes and systems can create competitive advantage.

Partnerships
The book suggests one more P, 'Partnerships' or marketing marriages or alliances. It is not surprising to find award-winning digital marketing campaigns revealing a common pattern - partnerships. In the digital world, no company can succeed globally without partners. Some companies have people specializing in partnerships; other companies employ agencies to be their partners or even agencies to find their partners, whether through a blogger out-reach programme or an affiliate marketing campaign. There is no doubt that partnerships need to be identified, recruited and nurtured for success. We can't do everything ourselves. Partnership can help enormously, but they require skilled management.

Environments for marketing have changed over time. As environments have changed, elements and contents of the marketing mix have also altered to deliver products' values to customers successfully. In this respect, understanding How they has been affected is really important as it is the first step of planning good marketing programs. with understanding of the effects of the digital world on the marketing mix, Let's get down to review 3.

To be continued...