Digital Technologies and Marketing Summary
Knowledge Clips Week 1
Digital Technologies in our Lives
The Internet of Things
Definition: the interconnection of different digital devices that allow us to perform multiple
activities.
Examples:
• Health: the use of wearables or sensors connected to patients, allows doctors to monitor
a patient’s condition outside the hospital and in real-time.
• Energy: smart meters communicate information to the consumer for greater clarity of
consumption behavior, and electricity suppliers for system monitoring and customer
billing.
• Insurance: data is collected by the driver’s vehicle and analysed by the insurer, which
then uses it to determine how much of a discount the driver is eligible to receive.
Disrupting Industries
Music Industry
• For the first time this millennium, music revenue is growing again (vinyl)
Taxi Industry
• Beginning: few players, extremely regulated
• 2015: Uber and others came
• The traditional market player (yellow taxis) dropped, causing a really strong protest
,What is digital? What is marketing?
MYTH 1: Marketing is about selling what you make
e.g., Disney Magic Wristband: able to control the traffic and increase the customer experience
inside the park.
Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and
society at large.
REALITY: Marketing is about creating customer value
Value proposition is the solution that a business provides to help customers solve a problem /
the set of benefits a business provides (changes over-time depending on customer needs e.g.,
apple’s value proposition was tech that works and gradually evolved to your privacy is safe
with us).
MYTH 2: Digital requires radical disruption of the value proposition
REALITY: It usually means using digital tools to better serve the known customer needs.
e.g., Disney Magic Wristband was not something completely new, but an incremental change
that would add up to the customer experience.
MYTH 3: Digital will replace physical.
e.g., BONOBOS, started as an online retailer, but understood that at some point, customers
have the need to try clothing before they buy it, therefore, they opened a physical store (the
other way around: a store can be physical and expand to being online as well).
REALITY: It’s a ‘’both/and’’.
MYTH 4: Digital is about technology.
e.g., Amazon is not about the technology, it is much more about the customer experience. If
you are able to improve the customer experience → you increase the traffic in your website
→attract many more sellers →higher selection → lower cost structure → lower the prices.
REALITY: It’s about the customer need.
,What is ‘’digital’’?
Digital = way of doing things
Westerman (2018): Digital technologies enable doing business differently
Readings Week 1
Article 1: Your Company Doesn’t Need a Digital Strategy
• What is the main research question?
• What are the main takeaways?
Introduction
Technology doesn’t provide value to a business. Technology’s value comes from doing
business differently because technology makes it possible.
E-commerce is not about the internet – it’s about selling differently.
Analytics is not about databases and machine language algorithms – it’s about understanding
customers better, or optimizing maintenance processes, or helping doctors diagnose cancer
more accurately.
Internet of Things is not about RFID tags – it’s about radically synchronizing operations or
changing business models.
Better Strategy, Enabled by Digital: Real-World Examples (Highlighted in article)
• Paint industry: organization’s transformation was powered by ERP software, call
centres, mobile phones and tablets, analytics, machine learning and autonomous
manufacturing.
• Banking industry: chatbots – voice activated software that is capable of engaging in
conversation – to make customer service more efficient.
• Shipbuilding industry: use VR technology to help designers envision complex
product designs. VR became a useful tool in the company’s broader effort to transform
the work process: now workers get warnings when a part is too heavy to lift, and
instructions on the correct sequence of installing components
How to keep the focus on Transformation, not technology
They keep four things in mind to avoid common pitfalls that often come from taking a
technology focus:
, • Get away from silo thinking. Focusing on the technology can direct aspirations toward
what technology can do, rather than what a transformed business should look like. The
most valuable transformations, come from changing the business through a range of
technologies and management interventions. A customer intimacy strategy, uses mobile
along with other digital technologies to constantly increase personalization,
engagement, and satisfaction.
• Don’t push the envelope too far, too fast. Looking too far forward toward advanced
digital innovations can make these more mundane technologies less satisfactory. But
business leaders leave easy money on the table if they ignore incremental steps and
pursue risky opportunities that may not be ready to pay off yet.
• Don’t ask your tech leaders to drive transformation alone. Even the best IT leaders
won’t be able to transform a business, or parts of the business, if they don’t run that
part of the business. Transformation comes from working with them, not asking them
to do it alone.
• Build essential leadership capabilities, not just technical ones. Think of digital
transformation as a capability. Create a transformative vision, engage your people in
that vision, and then govern strongly to chart a course across a whole portfolio of digital
transformation efforts. The benefit of focusing on transformation instead of digital is
that it highlights the fundamental role of leadership and organizational capabilities in
creating the real business value from technological innovations.
Article 2: The Store is Dead – Long Live the Store
Introduction
Offline demise and offline renaissance (rebirth) is the paradox of new retail writ large.
Consensus estimates predict that 25% of all shopping malls will shrink or close in the near
future. At the same time, online-first brands are successfully opening pop-ups, showrooms, and
full-blown stores.
Net result: offline is dead and dying, yet it is also alive and thriving.
Bonobo’s example: Their vision was to sell men a better-fitting pair of pants, and do it without
the ‘’burden’’ of physical stores. Dunn said ‘’I really thought stores were going away at that
time’’. Nearly 10 years later, the economist praised Bonobos for pioneering a new form of
physical retail. The ‘’zero-inventory store’’ is a small-footprint store where customers get a
high-service, tactile experience, purchase via table, and order the product shipped to a location
of their choosing.
Article themes: the expansions of online-first retailers into offline stores that serve the purpose
of ‘’supercharging’’ customer value, and the transformation of the stores of offline-first
retailers from fulfilment-dominant centres into experience-dominant centres, which
simultaneously reduce store size and inventory while improving the customer experience.
Supercharging Customers of Online Brands with Offline Showrooms
Supercharging occurs when customers are nurtured in a small-footprint location that typically
holds not inventory – and fulfilled, initially, from an operationally efficient distribution centre.
