Lecture 1: the digital environment, doing business in a connected world
1.1 Introduction
We will focus on generic aspects of technological development that:
- Have an impact on marketing
- Can be used by marketers
1.2 Digital transformation
Digital transformation = how the entire organization has adapted to – or ignored – the changes brought to
society by the digital revolution.
- It encompasses the use of new digital technologies to enable major business improvements.
o Digital transformation is not about technology, it is about the strategic use of technology to
achieve certain goals.
- Digital transformation cannot be undertaken by one area or departments
Big data
Big data = the collection of wealth of data from and about everything internal and external to the organization
and its interpretation to help make the business run more efficiently and improve customer service.
- Tracking customers and their communications across every channel
- Measuring and managing the customer experience
What can big data do?
- Help improve customer service levels
- Enhance customer retention
- Improve overall customer lifetime value
- Be used to deliver personalized services
Some scepticism:
- Big data mostly show what has happened or what is happening. But they have difficulty answering the
question of why things are happening.
o Qualitative research (surveys) does answer the question of why things are happening
- First learn to maximize value from smaller data before going big. Sometimes big data can also be
overwhelming/useless
Reverse marketing
Reverse marketing = the power relationship between firms and customer has changed. Nowadays there is
more power to the customer.
Organizations and brands are increasingly being distrusted by customers and so the customer has become the
marketer.
- Customer trust other customers more:
o Conversations on platforms such as Facebook
o Posting reviews on platforms such as TripAdvisor or retailer websites
There is a great impact of how potential customer use search engines
- How organizations react to a request determines who gets the business
- The goal is now to help the buyer to buy instead of helping the seller to sell
o 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 that traditional marketing tactics such as PR and advertising are wasted on
contemporary customers
- Reverse marketers suggest that if you connect with the customer in such a way that they are 100%
content with your product/service, they will do the marketing for you
- Traditional marketers suggest that this is another example of new marketers hijacking an old concept
– in this case, relationship marketing. They believe that reverse marketing is just an application of the
relationship marketing in the digital environment.
,Mobile applications
The smartphone is the best example of technological advances in mobile devices
- There are now more Google searches performed on mobile device than from PCs
- Consumer expect that all tasks should be easily achievable from a mobile device
What caused what? Was the rise of the mobile internet a result of serving the need of the consumer, or was
consumer behaviour changed as an effect of technology advancing?
- “Technology does not cause our behaviour to change, it enables our behaviour to change.”
- It was the convenience that smartphones enable that was behind their adoption, not their technology
The internet of things (IOT)
The internet of things = computer communicating with each other to perform tasks without intervention from
humans
Examples:
- Internet-connected fridges: order milk via a shopping app when you are running low
- Wearable devices: that are used to monitor health, wellness, or athletic performance
- Oral-B toothbrush: that connects with your smartphone in order to track which teeth are being
brushed
The automation of business process
Automation of business process = the most long-standing and widespread aspect of an organization
transforming to the digital world is the use of technology to automate processes
- Marketers should be looking for how its application can meet customers’ wants and needs
Examples:
- Robot building cars
- Computer software doing job that once required people
‘The technology has freed our crew and our guests from many of the mundane tasks that keep us from other
jobs that requires human interactions”
1.3 Programmatic marketing
-
1.4 Artificial intelligence
Intelligent agents = any device that perceives its environment and takes actions that maximize its chances of
successes at some goal.
Artificial intelligence = when a machine mimics cognitive functions that humans associate with other human
minds, such as learning and problem-solving.
- Not as futuristic as its sounds. It has become a reality long time ago and now can even be considered
mundane
Examples:
- Character recognition used in scanning documents
- Voice recognition software (Apple’s Siri)
- Personalization of marketing messages
- Chatbots offering intelligent responses to questions
- Dynamic pricing (e.g., budget airlines)
- Automatically creating video highlights
“Robots will do everything better than us. Government regulation of artificial intelligence is needed because it
poses a fundamental risk to the existence of human civilisation”
,1.5 Virtual and augmented reality
Virtual reality (VR) = offers a digital recreation of a real-life setting/experience
- Usually delivered to the user through a head-mounted or hand-held controller
Examples:
- Immersive ads (e.g., viewing a hotel room)
- VR test drive
Augmented reality (AR) = delivers virtual elements as an overlay to the real world
- Is being used more and more in mobile devices such as laptops, smart phones, and tablets to change
how the real world and digital images, graphics intersect and interact
Examples:
- Nintendo Pokémon Go
- Snapchat’s Colorista lens for L’Oreal
Although distinct, they both use similar types of technology and aim to provide the user with an enhanced
experience.
Lecture 2: digital customers
2.1 Introduction
Clarification of terms
Buy = to acquire ownership 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 customer might not always be the consumer (e.g., I might buy milk but someone else in the
household consumes it)
- The term customer might not be appropriate in all contexts
o Example: universities à students, hospitals à patients, churches à worshippers
Customer behaviour = not only financial transaction, where a good is exchanged for money. But also, when the
customer agrees an action in return for a commitment on their part.
- 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
- Business to Customer (B2C) –
Buying cycle
- The most commonly used model of buyer behaviour in general (also offline)
- It considers the buying process as a cycle in a series of steps
- A further consideration is the length of time that the potential customer takes to progress from
problem recognition to purchase.
o For some products, the process is swift. All stages might even take place almost
instantaneously (e.g. grocery shopping)
o For other product, the process might be longer (e.g. a new car or kitchen)
(1) Problem recognition
o In this stage the consumer recognize that he needs something because he has a problem.
However, it could also be the case that his standards have become higher.
§ Potential customers can be made aware of potential problems within the content of
any web presence, including websites, social media platforms or emails.
, (2) Information search
o In this stage the consumer start to search for information
§ Normally using search engines, the potential customer looks for information on the
products that can meet their needs. They might use the website of manufacturers,
dealers or retailers as well as review websites and social media. Some argue that it
is this facility that is the Internet’s biggest contribution to marketing
(3) Evaluation of alternatives
o In this stage the consumer starts to compare different options. The consumer will make a
trade-off between quality and price
§ Having determined a type of product that provides a solution, the web is used to
compare the offerings of various organizations and brands
(4) Purchase decision
o In this stage, the customer will decide which option he will choose
§ Although they might be used in the evaluation stage shopping comparison sites are
particularly helpful at this stage where, for example, the best price for a particular
product can be found. Selecting a specific seller would fall into this category
(5) Post- purchase behaviour
o In this stage, the consumer will decide if he is satisfied with this product
§ Although all previously visited sites can help reassure the buyer that they made the
right purchase decision, they might also participate in forums on the product or
mention the product on social media. Like their offline counterpart they are also
more likely to receive ads for the products that they purchase.
AIDA
- Another classical model of buying behaviour: AIDA (attention, interest, desire, action)
- The AIDA model is a funnel model
o It is not as linear as the buying cycle model
- In online marketing it is most frequently used in developing or assessing websites
- 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
o Commonly recognized as relationship marketing. Which considers purchase
as a repeated process, not isolated event and that customers should be
encouraged to develop a relationship with the supplier to increase customer
retention.
Eisenberg’s 20 forces that influence buying behaviour
Basic needs Compulsory purchase
Convenience Ego stroking
Replacement Niche identity
Scarcity Peer pressure
Prestige The “Girl Scout Cookie effect”
Emotional Vacuum Reciprocity or guilt
Lower prices Empathy
Great value Addiction
Name recognition Fear
Fad or innovation Indulgence
- Different situation will lead to different motivations to buy a product
- Conclusion mini case study: people value their time and are willing to pay more in order to save time
o Convenience is a key driver of buying behaviour, and that is even more the case when buying
online
