If marketing creates demand, digital marketing drives the creation of demand using the power of the Internet. The Internet is an interactive medium. It allows for the exchange of currency, but more than that, it allows for the exchange of value. A business on the Internet can gain value in the form of time, attention and advocacy from the consumer. For the user, value can be added in the form of entertainment and utility.
The Internet has changed the world in which we sell. It reaches beyond being a new channel for marketing and offers a new paradigm for the way consumers connect with brands and with each other. The online medium provides consumers with more choice, more influence and more power.
Brands have new ways of selling, new products and services to sell as well as new markets in which to sell. More than ever, integrated strategies that speak to an overall brand identity are vital to achieving an organisation’s goals. However, marketing on the Internet does not necessarily mean throwing out the rule book on marketing and business foundations and principles. Instead, the Internet provides a new environment in which to build on these principles.
Profit is still revenue less cost. The Internet does not change that. Brands build loyalty through users who love their products or services. Users fall in love with products and services when their experience is tailored to their needs, as opposed to serving the brand. More than any other type of marketing, digital marketing is measurable. This gives brands the opportunity to build tailored, optimised brand experiences for consumers.
What is digital marketing strategy?
Digital marketing strategy builds on and adapts the principles of traditional marketing, using the opportunities and challenges offered by technology and the digital medium. User-centric thinking, which involves placing the user at the core of all decisions, is vital when looking at building a successful digital marketing strategy. The advent of new technologies means the digital marketing strategist of today is offered not only a plethora of new tactical possibilities, but also unprecedented ways of measuring the effectiveness of chosen strategies and tactics. The fact that digital marketing is highly empirical is one of its key strengths. Everything can be measured: from behaviours, to actions and action paths, to results. This means that the digital marketing strategist should start thinking with return on investment (ROI) in mind. Built into any strategy should be a testing framework and the ability to remain flexible and dynamic in a medium that shifts and changes as user behaviours do.
The 4 Ps haven’t gone anywhere
Products and Services
Products and services are what a company sells. From fast moving consumer goods to digital products such as software, to services such as consultancy, the Internet has allowed for a huge range of new products. Technology allows for mass customisation of products, seen in a growing trend of letting customers customise goods online before they are created. For example, NIKEiD (http://nikeid.nike.com and Converse (www.converse.com) both allow customers to create their own trainers based on a number of pre-set options that will then be manufactured to the customer requirements. In a similar fashion, computer products can be built to specifications, as the costs of offering this type of service to customers is reduced by the Internet. Digital products can exist because of the Internet. The very framework of the Internet allows for products such as software and digital music to be distributed. The Internet as a distribution medium is what makes these products possible.
With customers able to access pricing information from a number of suppliers with relative ease, the Internet is growing a market of near perfect competition. The prevalence of search engines and of shopping comparison websites, such as www.pricerunner.co.uk and www.nextag.com , make it easy for customers to compare product prices across a number of retailers. The opportunity for companies to differentiate themselves on price has led to decreased prices for many commodities. With price differentiation, especially for smaller players in the market, becoming a challenge, businesses need to consider differentiating on value. Value is a combination of service and price, where a customer might be willing to pay a higher price for a better experience.
Placement or Distribution
Particularly for digital products and services, the Internet gives companies access to a global marketplace. Product distribution and markets no longer have to be dictated by location. With efficient delivery and shipping channels, products that are not digital can also benefit from a far wider market place. The Internet allows the basic foundations of mail order businesses to flourish online with a catalogue that is cheaper to produce and update and cheaper to distribute – a website. In the travel industry, travel agents stopped issuing paper tickets as of 31 May 2008 (Iata 2008). Nearly all aeroplane tickets are now e-tickets.
The Internet, as an information and entertainment medium, naturally lends itself to being used to promote products. The online promotional mix is an extension of the offline, but with some significant differences. Online promotion can be tracked, measured and targeted in a far more sophisticated way. Advertising, personal sales, promotions based marketing and public relations can all be conducted through the online medium. These tactics and applications are developed further, later-on in this textbook.
A New P: People
In addition to the existing Four Ps, the Internet prompts the consideration of a new P: People. This final element speaks to examining the powerful human element that the digitally connected world permits: personalisation, peer-to-peer sharing, communities and consumer-centric organisations which allow people to participate in the brand story.
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