Chapter 1: The digital environment

Chapter 1: The digital environment

1.1: Introduction

This first chapter considers some of the aspects of technological development that will, or already do, impact on the digital marketer. They are generic (algemeen) in nature in that they are not marketing subjects, but they have either (a) an impact on marketing, or (b) can be used by marketers in the practice of their craft.Simply put,marketingis managing profitable relationships,by attracting new customers by superior value and keeping current customers by delivering satisfaction. Marketing must be understood in the sense of satisfying customer needs. Marketing can be defined as the process by which companies create value for customers and build strong customer relationships to capture value from customers in return.

1.2: Digital transformation

Digital transformationhas become the term that indicateshow the entire organisation has adopted, adapted to – or ignored – the changes brought to society by the digital revolution. In attempting to define digital transformation, Fitzgerald et al. (2013) suggest itencompasses the use of new digital technologies to enable major business improvements(such as enhancing customer experience, streamlining operations or creating new business models).It is agreed, however, that for any organisation to digitally transform, that transformation has to: -be organisation wide -be understood by everyone in the organisation -involve everyone in the organisation -be cultural and not forced -have no end date.An effective digital transformation cannot be undertaken by one area or department of the organisation. Furthermore, digital transformation is not about technology, it is about the strategic use of technology.Key components of the digital transformation include:big data, reverse marketing, mobile applications, the Internet of things and the automation of business processes.Let’s consider each in more detail.Big data:is the collection of data from and abouteverything internal and external to the organisation and itsinterpretationto help make the business runmore efficiently and improve customer service ▪Trackingcustomersand theircommunicationsacrossevery channel ▪ Measuring and managing the customer experience What can big data do?▪ help improve customer service ▪ enhance customer retention ▪improve overall customer lifetime value ▪ be used to deliver personalised services

Some scepticism:

▪ Big data mostly showwhat has happened or what ishappening– but they do not always explain why things are happening ▪ First learn to maximise value from smaller data before going big – sometimes big data can also be useless 1 / 3

Reverse marketing:The relationship between firms and customers has changed – power to the customer! Organisations and brands are increasingly distrusted by customers andso the customer has become the marketer.Customers Trust other customersmore ▪ conversations on platforms such as Facebook ▪ posting reviews on platforms such as TripAdvisor or retailer websites The impact of how potential customers use search engines How organisations react to a request determines who gets the business Helping the buyer to buy: shifting from helping theseller to sell to helping the buyer to buy Consumers now expect to be facilitated in their research on the product or service that best meets their wants and needs There is an argument thattraditional marketingtacticssuch as PR and advertising are wasted on contemporary customers. Traditional marketers suggest that this is another example of new marketers hijacking an old concept– in this case, relationship marketing

Mobile applications:

The smartphone: the best example of technological advances in mobile devices

More Google searches are now performed on mobile devices than from PCs Consumers expect that all tasks should be easily achievable from a mobile device

The internet of things (IOT):

Computers communicating with each other to perform tasks without intervention from humans

Examples:

• Internet-connected fridges that order more milk via a shopping app when you are running low • Wearable devices that are used to monitor health, wellness or athletic performance

The automation of business processes:

The most long-standing aspect of an organisation transforming to the digital world is the use of

technology to automate processes. Examples:

• Robots building cars • Computer software doing jobs that once required people

1.5: Virtual and augmented reality

Virtual reality (VR)offers a digital recreation ofa real-life setting.Augmented reality (AR)delivers virtual elements as an overlay to the real world. Although distinct, they both use similar types of technology and aim to provide the user with an enhanced experience.VRis usually delivered to the user through a head-mountedor hand-held controller. Examples of VR are immersive ads (viewing a hotel room) and VR test drives in a car.ARis being used more and more in mobile devices suchas laptops, smart phones, and tablets to change how the real world and digital images, graphics intersect and interact. An examples of AR is Nintendo’s Pokémon Go mobile game, which overlaid digital monsters onto the player’s own environment using Global Positioning System (GPS) technology

Chapter 2: Digital customers

2.1: Introduction

Buy: to acquire by paying

Sell: to transfer ownership in exchange for payment

Customer: the person who pays for a product

Consumer: the person who consumes it. The customermight not always be the consumer (e.g., I might buy milk but someone else in the household consumes it) 2 / 3

Customer behaviour: not only financial transactions, where a good is exchanged for money Example: The aim of a website might be to provide information. Therefore, downloading a pdf might be the required sale.

2.2: Online buying behaviour

There are three models of buyer behaviour: business to consumer, AIDA, and business to business.Business to consumer (B2C)is the most commonly usedmodel of buyer behaviour. It considers the

buying process as acyclein a series of steps:

• Problem recognition • Information search • Evaluation of alternatives • Purchase decision • Post-purchase behaviour For some products, the process is swift – all stages might even take place almost instantaneously (e.g., grocery shopping). For other products, the process might be much longer (e.g., a new car or kitchen).Another classical model of buying behaviour:AIDA(Attention, Interest, Desire, Action) model • Did the ad grab attention?• …arouse interest?• …stimulate desire?• …provide a call for action?The AIDA model is a funnel model. Not as linear as the buying cycle model. It acknowledges the fact that people leave the buying cycle at various stages (i.e., the funnel narrows as it progresses to the sale) The process can also be seen as circular: the last stage of one buying process leads directly into the first stage of the next process.

B2B (business to business)differ from B2C in:

• the decision-making process and the actual purchase • the range of products Decision-making process: online presence (e.g., thecompany’s website) serves more as a source of information and less as a transaction channel Range of products: much more diverse than B2C, marketersmust adapt their online selling to different product lines

2.3: Privacy

Digital footprint: all data generated through onlineactivities. Examples: Websites visited, comments made, and emails sent, received, opened, deleted.Privacy concerns: individuals’ beliefs about the risksand potential negative consequences associated with sharing information.One would expect that people with privacy concerns should also take action to protect their privacy.Privacy paradox: although individuals have concernsabout their online privacy, they often do little to address these concerns.More recent research shows that people who are informed about privacy issues have concerns which they address by: using fewer online services and setting stronger security settings, BUT: even these individuals ignore their concerns when it comes to social media!

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