11/24/2015

Marketing Management-II

Prof. Ravi Shekhar Kumar

XLRI - Xavier School of Business, Jamshedpur
ravishekhar@xlri.ac.in

How Digitalizing Customer journey can yield

impressive Result

Mckinsey (November 2015)

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Digital marketing: Introduction

• What is digital marketing?
– Marketing of products/services using digital channels to
reach consumers.
– Based on individual customer centric approach.

• What does digital marketing consist of?

 Online advertising & public relations
 Email marketing
 Websites
 Social media & Blogs
 Mobile marketing

Digital Marketing: Introduction

 What is key point of digital marketing?
– Market Demassification

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Digital Marketing: Types

 Direct Marketing
– email, Telemarketing, Catalogue marketing
 Interactive Marketing
– email, Web, Search Engine Optimization, Search Engine Marketing,
Pay per Click, Contextual marketing, Display advertising, Affiliate
marketing
 Social Media Marketing
– Twitter, facebook

Direct Marketing
• Direct marketing is the use of consumer-direct channels to
reach & deliver goods/services to customers without using
marketing middlemen.

• What is Digital Direct Marketing?

– Provides relevant marketing communications that are addressable to
a specific individual with an email address, a mobile phone
number or a Web browser.
– Addressability comes in the form of the three primary digital
channels.

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What are Direct Marketing Channels?

• Direct mail
• Catalogs
• Telemarketing
• Other direct response
– interactive TV,
– kiosks,
– Web sites,
– mobile devices

What are dimensions in Reaching to Prospects

 Whom to Reach
– Recency
– Frequency
– Monetary value

 How to reach
– Elements of the Offer Strategy
– Product  Offer  Medium  Distribution Method  Creative
Strategy

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What are Public Issues in Direct Marketing

 Irritation
 Unfairness
 Deception/fraud
 Invasion of privacy

Interactive Marketing: A few Points

 Tailored messages possible
 Easy to track responsiveness
 Contextual ad placement possible
 Search engine advertising possible
 Subject to click fraud
 Consumers develop selective attention

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What are Interactive Marketing Options?

• Websites
• Email Marketing
• Search Engine Optimization
• Search ads/ SEM
• Display ads/banner ads
• Internet-specific ads and videos
• Affiliate marketing/programs
• Online communities
• Mobile marketing

SEM & SEO

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Is mobile marketing the next big medium

for direct & interactive marketers?

Technology Adoption

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Social Media: Introduction

• What is Social Media?
– Internet-mediated applications for Social Interaction
among people in which they create, share or exchange
information, ideas, pictures or/& videos in virtual
communities & networks.

• How it is different from traditional/industrial media?

– Differ from traditional/industrial media in many ways,
including quality, reach, frequency, usability,
immediacy & permanence.
– Even, CEC issued guideline on use Social Media in 2014

Associated Terms
 Web 2.0
– A Web 2.0 site allows users to interact & collaborate with each
other in a social media dialogue as creators of user-generated
content in a virtual community, in contrast to Web sites where people
are limited to passive viewing of content.

 Buzz Marketing
– an event or activity that generates excitement, creates publicity, &
conveys new relevant brand-related information through
unexpected or even outrageous means.

 Viral Marketing
– A marketing phenomenon that facilitates & encourages people to
pass along a marketing message.

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What are key characteristics Social Media?

 User-generated content
 Interactive
 Employ mobile &/or web-based technologies

Buy why so much importance to Social media?

• It has high importance, because…

– It is an e-WOM

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Social Media: WOM

WOM Communication
• People (consumers or individuals other than sponsor)
share information about brand with friends.
• Research has found that word-of-mouth communication
about products is more likely to be negative than
positive.

 Key attributes
– Influential
– Personal
– Timely

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Word of Mouth Marketing

 Example:
 In the mobile-phone market, the pass-on rates for key positive & negative messages
can increase a company’s market share by as much as 10 percent or reduce it by 20
percent over a two-year period, all other things being equal.

 Rules for Word of Mouth Marketing

 Be interesting
 Make it easy for people to talk about you.
 Make people happy.
 Earn Trust and Respect.

How to implement WOM Marketing?

 Why People Talk About You?
– They like you & your service.
– Talking makes them feel good.
– They feel connected to a group
 Who Are The Talkers?
– Talkers are people just like us.
– Talkers aren’t always big spenders,
 Finding Your Talkers
– Happy customers -- On-line Talkers
– Logo Lovers -- Eager Employees
– Listeners -- Fans and Hobbyists
– Professionals

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Content in WOM –Importance

• In the mobile-phone category, design is more important
than battery life.
• In skin care, packaging & ingredients create more powerful
word of mouth than do emotional messages about how a
product makes people feel.
– Companies need to outperform on these features more as they
influence WOM

 Word of Mouth Equity: an index of a brand’s power to

generate messages that influence the consumer ’s decision
to purchase.

WOM: Measuring Impact

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Social Media Classification

Self presentation / Self- disclosure Social Presence / Media Richness

Low Medium High

Social networking Virtual social

High Blogs sites Worlds
(e.g., Facebook) (e.g., Second Life)

Virtual Game
Collaborative Content
worlds
Low projects communities
(e.g., World of
(e.g., Wikipedia) (e.g., you Tube)
Warcarft)

Kaplan & Haenlein, 2010

Social Media: Functional Building Blocks

Presence

Sharing Relationships

Identity

Conversations Reputation

Groups

Kietzmann et al., 2011

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Linkedlin: Social Media

Kietzmann et al., 2011

Youtube: Social Media

Kietzmann et al., 2011

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Facebook: Social Media

Kietzmann et al., 2011

Why People use Social Media?

 Socializing
 Entertainment
 Self-Seeking
 Information

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Why do Firms use Social Media?

 Inevitable Presence
 Advertising sucks
 Niche audiences
 Budget constraints
 Smart marketing
 Feedback loop
 Digital asset
 Huge long term value

Why some brands are reluctant to use social

media?
 Cost & Time
 Knowledge Risk
 Incentive structure
 Measurement
 Loss of Control

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HOW does one use it?

• Build a base of target community
• Create engagement with them, so they LIKE to be
there
• The real power is the viral factor; Let your
customers SAY
• Listen to what they tell you, use the feedback
• Generate interest: Use Pictures & Videos

Seven Steps to Social Media Success

Kumar et al., 2012

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Return on Social Media

 Customer Influence Effect:
• Net influence wielded by a user (in a social network) in terms of his
or her ability to spread positive or negative WOM through his or her
direct & indirect connections, to measure the influence of an
individual in a social network.

 Stickiness Index:
• To be effective influencers, individuals needed not only to be
influential on social networks but also to like to talk about brand.

 Customer Influence Value:

• Influence of an individual to the monetary value, that he or she
accrues for the firm; CIV is the monetary gain/loss realized by the
firm that is attributable to a customer’s influence effect.

Kumar et al., 2013

Recent Trends

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Recent Trends in Communication

 Changing consumer demographics decrease influence of
traditional mass-media marketing messages.
 Growing consumer sophistication heightens demand for
channel-agnostic communications.
 Enhanced information availability empowers both
marketers & consumers with insight that allows for
precise customer targeting & intelligent purchase
decisions.
 Rapid technological advances allow for consumer-
marketer interactions that are more frequent, easier &
more relevant than previously possible.

% Spend in Marketing Communication

Category 2007 2011 2017 (P)

Digital 12.3 21.1 34.4

Television 36.8 38.6 36.8

Audio 8.3 7.2 5.8
Cinema 0.4 0.5 0.4

Out-of-Home 7.4 6.9 6.2

Consumer Magazines 8.0 6.1 3.7

Newspapers 26.5 19.1 12.1

Video Games 0.2 0.5 0.6
McKinsey, 2013

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