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Unformatted text preview: By: Jessica Gahtan Intro to D-‐Marketing -‐ Consumer Behavior Online -‐ Long Tail Digital Marketing Is Bigger than Technology -‐
-‐ The Internet provides individual users with convenient and continuous access to information, entertainment, and communication. Communities form around shared photos (Flickr), videos (YouTube), and individual or company profiles (Facebook). The digital environment enhances processes and activities for businesses. Societies and economies are enhanced through more efficient markets, more jobs, and information access. The D Drops from D(igital)-‐Marketing -‐ Gartner predicted that the d would drop, making d-‐business just business and d-‐marketing just marketing. -‐ Nevertheless, d-‐marketing will always have its unique models, concepts, and practices. (Including: Online search, Online data collection, Online marketing strategies) Slow approach…what was traditional marketing all about? -‐ When did marketing as a practice come about? -‐ Why? -‐ What has been driving the latest innovative push in marketing starting in the early 1990s? -‐ What did this event do to marketing? -‐ What did the Web 1.0 bring to marketing? Digital Marketing Today: Web 2.0 -‐ Web 2.0 technologies connect people with each other through social media, which have created opportunities and challenges for marketers. • Power shift from sellers to buyers. • Consumers trust each other more than companies. • Market and media fragmentation. • Cultural shift (participatory, open, autonomous) • New opportunities and new risks for marketers. Slides – MKTG 4560 Page 1 By: Jessica Gahtan Exercise: What to do when it flows? A Crisis for marketing? -‐ “Today’s marketing world is broken…We are still too dependent on marketing tactics that are not in touch with today’s consumer” -‐ Jim Stengel, Global Marketing Officer, Procter &Gamble -‐
-‐ “Used to be, TV was the answer. The only problem was it stopped working sometime around 1987.” -‐ President GM North America “Broadcasting an ad on television or in a newspaper is admitting you have no idea who your customers are.” -‐ Gary Loveman, CEO, Harrah’s Or opportunity? -‐ Today the customer is in charge and whoever is best at putting the customer in charge makes all the money. Stephen F. Quinn, Senior vice president for marketing, Wal-‐Mart. -‐ Consumers wrest control away from brand management control freaks...get over it. Turning your brand over to the consumer is taking control -‐ and in fact, if you do, they'll return it to you in better shape. Russ Klein, President for global marketing, innovation and strategy, Burger King Slides – MKTG 4560 Page 2 By: Jessica Gahtan POWER SHIFT FROM COMPANIES TO INDIVIDUALS Acquiring a Customer from Social Media -‐ OTHER OPPORTUNITIES AND CHALLENGES IN WEB 2.0 -‐
-‐ Internet adoption matures. Online retail sales reach 7%-‐10% of all sales. Slides – MKTG 4560 Page 3 By: Jessica Gahtan -‐
-‐ Search engines are now reputation engines. Improved online and offline strategy integration 60% broadband adoption at home The long tail The Future: Web 3.0 -‐ Lines between traditional and new media are blurring. -‐ Appliances are converging and becoming “smart.” -‐ Wireless networking is increasing. -‐ Semantic web will provide worldwide access to data on demand without effort. Consumer Behavior Online -‐ The Customer’s Story -‐ A typical one-‐hour adventure in the life of a 25-‐year-‐old professional, Sue: • Tunes her iPod to the latest Diggnation podcast while her TV is tuned to CNBCs Morning Call and her cell phone and PC are within reach. • Picks up her computer to find a blog mentioned during the podcast, sees a video on the blog and texts a friend about the video. -‐ The Customer’s Story, cont. • Sue searches for the video title on Google and finds a job posting on Vimeo, an online video-‐posting site. • She posts a link to the video and Vimeo site to her Twitter stream. -‐ Sue is the new consumer: a multitasker attending to different media simultaneously. -‐ How can a marketer capture dollars from these behaviors? Exchange Outcomes -‐ There are 5 basic things that people do online: 1. Connect 2. Create 3. Enjoy 4. Learn 5. Trade -‐ Each is ripe with marketing opportunity. Slides – MKTG 4560 Page 4 By: Jessica Gahtan Connecting Online in the U.S. Creating & Uploading Content in the U.S. Learning and Getting Information Slides – MKTG 4560 Page 5 By: Jessica Gahtan Trading Online in the U.S. 21ST Century Marketing Challenges -‐ Twitter, Youtube, Facebook, Instagram, and on and on… -‐ FRAGMENTATION!! • Attention • Demand Marketing Implications -‐ Fragmentation makes both reaching and keeping the attention of your customer ever harder. Web 2.0 Communication shows two things: • Consumers love to interrupt! • Consumers love to talk! => Give me some examples… Changes your Relationship • From ‘selling to customers’ to hosting guests • From ‘controller’ of communication (teller of stories) to enabler of communication (resource for stories told by others). Slides – MKTG 4560 Page 6 By: Jessica Gahtan D-‐marketing Map But what else happens to consumers online? • Too many choices! • Information & cognitive overload! Hyperchoice and the choice paradox We think more choice is better, but there can be problems with excessive choice: 1. Ability to Choose 2. Satisfaction with Choice The Jam Experiment Tasting booth for unusual jams in an upscale grocery story. A: offered 6 jams B: offered 24 jams What percentage of tasters later purchased one of the jams? Slides – MKTG 4560 Page 7 By: Jessica Gahtan Choice and satisfaction -‐
-‐ No choice can be bad. Excessive choice can also be bad. Limited choice may be best. Breaking apart the choice paradox Where does this leave the e-‐marketer (e.g. retailer, information broker, etc. ? • New Businesses and Business models Slides – MKTG 4560 Page 8 By: Jessica Gahtan o Search o Curating & subscriptions model (s-‐commerce) Exercise • Fab.com • Birchbox.com • Mistobox.com • Quarterly.co -‐ In teams, analyze what these sites do? -‐ What need(s) do they satisfy? -‐ Based on your example, identify one additional C&S idea. Subscription Commerce and Curated Commerce -‐ Solving the BIG CONSUMER BEHAVIOR CONTRADICTION OF E-‐MARKETING: • Balancing the risk of consumers’ cognitive overload with a need to offer choice • Or: a need for simplicity driven by very busy lifestyles coupled with the pleasure of trying and discovering something to one’s own taste in this contemporary Aladdin’s cave. -‐ Answer: style-‐masters, professional stylists, celebrities and experts on a certain field carefully select a limited and manageable choice of products S-‐Commerce & Curated Experiences -‐ Curation: simplicity, convenience, personalization and discovery. -‐ Since 2010 there has been a rise in the number of e-‐sites offering handpicked item selections, usually on a subscription model that combines convenience, curation and the pleasure of being surprised and taken care of. S-‐Commerce -‐ Curate & subscribe e-‐commerce sites ¤ cater to a wide range of consumers’ needs (tea lovers, foodies, fashionistas, new parents, etc) ¤ Subscription fees range from the US$10,000 per year for a Net-‐a-‐Porter shoe-‐subscription to the US$39.95 USD for ShoeDazzle and the US$10 per month charged by Birchbox. Consumer behavior: Conclusion -‐ Consumers become active -‐ Consumer Attention becomes fragmented -‐ Consumer Attention reaches limit -‐ Leads to new value propositions ¤ Curate & subscribe Slides – MKTG 4560 Page 9 By: Jessica Gahtan Marketing in the Age of Fragmentation -‐ Mapping Digital Marketing Media and What can we learn from an Youtube/ebay/Facebook world? -‐ Now, the Goldcorp Challenge How do you innovate in Gold Mining?? It was late in the afternoon, on a typically harsh Canadian winter day, as Rob McEwen, the CEO of Goldcorp Inc., stood at the head of the boardroom table confronting a room full of senior geologists. The news he was about to deliver was not good. In fact it was disastrous, and McEwen was having a hard time shielding his frustration. The small Toronto-‐based gold-‐mining firm was struggling, besieged by strikes, lingering debts, and an exceedingly high cost of production, which had caused them to cease mining operations. Conditions in the marketplace were hardly favorable. The gold market was contracting, and most analysts assumed that the company's fifty-‐year-‐old mine in Red Lake, Ontario, was dying. Without evidence of substantial new gold deposits, the mine seemed destined for closure, and Goldcorp was likely to go down with it. Tensions were running at fever pitch. McEwen had no real experience in the extractive industries, let alone in gold mining. Nevertheless, as an adventurous young mutual fund manager he had gotten involved in a takeover battle and emerged as Goldcorp Inc.'s majority owner. Few people in the room had much confidence that McEwen was the right person to rescue the company. But McEwen just shrugged off his critics. He turned to his geologists and said, "We're going to find more gold on this property, and we won't leave this room tonight until we have a plan to find it." At the conclusion of the meeting he handed his geologists $10 million for further exploration and sent them packing for Northern Ontario. Most of his staff thought he was crazy but they carried out his instructions, drilling in the deepest and most remote parts of the mine. Amazingly, a few weeks later they arrived back at Goldcorp headquarters beaming with pride and bearing a remarkable discovery: Test drilling suggested rich deposits of new gold, as much as thirty times the amount Goldcorp was currently mining! The discovery was surprising, and could hardly have been better timed. But after years of further exploration, and to McEwen's deep frustration, the company's geologists struggled to provide an accurate estimate of the gold's value and exact location. He desperately needed to inject the urgency of the market into the glacial processes of an old-‐economy industry. What is he to do? Now, the Goldcorp Challenge -‐ form groups of 5. 1. Describe McEwen's problem (strategic issue). 2. Analyze the challenge for reaching Goldcorp's strategic objective. 3. Based on your knowledge from other industries and Chui et al.’s points, recommend a course of action for McEwen. 21ST Century Marketing Challenges -‐ FRAGMENTATION!! • Attention Slides – MKTG 4560 Page 10 By: Jessica Gahtan •
• Demand Community and Communication Attention Economy -‐ Fragmented media -‐ Consumers tuning out or completely skipping messages • 61% of consumers say that marketers and advertisers do not treat them with respect • 69% are interested in products or services that would help them skip or block advertising -‐ Poor Information/Metrics on effectiveness Long Tail (Chris Anderson) -‐ Fragmented Demand -‐ Niches are Riches What is “Natural Demand”? -‐ The “Head” of the Demand Curve: • Pre-‐Internet, old economy firms turned out a small number of “hits” or blockbuster products -‐ The “Tail” of the Demand Curve: • Internet-‐era, new economy firms offer a broader range of niche products. The Head -‐ Prior to the Internet, production, distribution, and consumption focused on a few hits because of scarcity of resources: • There simply was not enough time, space, or money for businesses to offer everything for everybody. • The 80/20 rule was the dominant model—20 percent of a business’s products accounted for 80 percent of its sales (and usually 100 percent of its profits). The Long Tail -‐ In markets where technology dramatically reduces the costs of reaching niches through one or more of these powerful forces: • Democratizing the tools of production greatly expands the universe of content • Democratizing distribution greatly reduces the costs of consumption • Connecting supply and demand by lowering search costs of finding niche content drives demand down the tail. -‐ But how do you lower the search costs? The Long Tail -‐ In the long tail model, these forces allow online businesses to greatly increase the variety of their products. Slides – MKTG 4560 Page 11 By: Jessica Gahtan •
• Anderson argues that 98 percent of a long tail business’s products sell at least one unit in a quarter On a cumulative basis, these small numbers of sales of large numbers of niche products generate enormous revenues and profits. Is there a Long Tail? -‐ hosts more than ten thousand reviews and its Web traffic statistics show that even the most popular film represents less than 1 percent of their business. • In June 15, 2006, "The Da Vinci Code" and "Brokeback Mountain" were tied at 0.8 % of page views • the next most requested reviews in 2006 were for "V for Vendetta" (0.7) • "X-‐Men: The Last Stand" (0.6) • "An Inconvenient Truth" (0.5). -‐ The lesson: People are curious about a lot of different movies." Is there a Long Tail? -‐ The Long Tail of Holiday Music. • eMusic had 1,226 holiday albums in the catalog • 1,128 had been downloaded over the Christmas season. • That's 92% of the catalog! Source: Digital Audio Insider, 2007 To Summarize: • In virtually all markets, there are far more niche goods than hits • The cost of reaching those niches is now falling dramatically. • Simply offering more variety does not shift demand by itself. Consumers must be given ways to find niches that suit their particular needs and interests. A range of tools and techniques—from recommendations to rankings—are effective at doing this. • Once there’s massively expanded variety and the filters to sort through it, the demand curve flattens. There are still hits and niches, but the hits are relatively less popular and the niches relatively more so. • All the niches add up. Although none sell in huge numbers, there are so many niche products that collectively they can comprise a market rivaling the hits. • Once all of this is in place, the natural shape of demand is revealed. That shape is far less hit-‐driven than we have been led to believe. Online Branding & Tools Goldcorp. Challenge – Understanding the role of Digital Marketing Slides – MKTG 4560 Page 12 By: Jessica Gahtan Online Branding • A key marketing challenge in today’s multi-‐channel, multi-‐device world is the integration of digital marketing opportunities into the traditional marketing mix. • Leveraging the capabilities of the Internet’s network connectivity and interactivity to drive revenue is of paramount importance to today's marketer. Today the customer is in charge and whoever is best at putting the customer in charge makes all the money. Stephen F. Quinn, Senior vice president for marketing, Wal-‐Mart. Consumers wrest control away from brand management control freaks...get over it. Turning your brand over to the consumer is taking control -‐ and in fact, if you do, they'll return it to you in better shape. Russ Klein, President for global marketing, innovation and strategy, Burger King MKTG 101: BRANDS • What is a brand? • Do we need brands? • Who creates brands? • How do you create a brand? • How do you value a brand? BRANDING IN THE 21ST CENTURY BRAND IMMERSION -‐ What is brand immersion? -‐ Tell me about a time that you felt immersed in a brand. -‐ What makes a medium or environment immersive? • Persistent • Interactive • Socially networked • Experiential • Emotional • Affective What is this? -‐ Immersion via Ambient Communication: Festivals, Pub talk, Street stunts, and/or Online chat rooms/games/Social Network Sites Advergaming: turning “brick” brands digital WHY ADVERGAMING? -‐ Advergames blur the distinction between entertainment and advertising. Slides – MKTG 4560 Page 13 By: Jessica Gahtan -‐
-‐ Web audiences can be drawn in long enough for marketers to deliver their messages. More importantly, message appears „un-‐pushed“ Advergaming used in conjunction with a competition for prizes and product promotions stimulates a whole new realm of peer-‐to-‐peer marketing. A viral explosion occurs as users share the game competition with friends and ultimately bring others into contact with your brand. WHAT WE KNOW OF THE GAME-‐MARKETING LINK: -‐ Games generate high degree of attention -‐ Games generate comparatively long attention span -‐ Games generate positive emotions which the player associates with the product / brand -‐ If additional information about the product / brand is offered, it will be received favorably=> credible source! -‐ Games decrease the propensity for critical thinking during game-‐play: the player will not work up counter-‐arguments against marketing propositions But brands aren’t just online… Extend Marketing Space -‐ Healthy Choice has used its online games to drive people to supermarkets to actually buy its products, by offering the chance for customers to print "mystery coupons" -‐ A Hanes sweepstakes promoted the apparel company's new "tagless" t-‐shirt by using a tag as the virtual game piece: "Lifting" it with the mouse revealed the visitor's prize. Turning a Digital Brand Physical In the 21st century, this is what your job is all about: -‐ Making your brand experiential and hence more memorable! • Careful spatial planning • Live, real-‐time, event-‐based nature of brand interaction -‐ Shift consumers’ perception and practice of what constitutes a marketing ‘space’ – Immersion marketing seeks to achieve a much more proximal relationship between consumers and brands -‐ As theorists of the ‘experience economy’ put it: “the more effectively an experience engages the senses, the more memorable it will be” Discuss You have been assembled to analyze and assess the NikeiD incident. In 15 minutes you are to report back to Mark Parker (CEO) about: • What was the reason for the NikeiD disaster? Slides – MKTG 4560 Page 14 By: Jessica Gahtan •
• What are the implications of the NikeiD incident for Nike’s online marketing strategy (name two)? Based on your analysis provide two recommendations for improving Nike’s online marketing strategy. Best and Worst Performing IMC Tactics Research Insights: RQ: What influences effectiveness of online advertising? -‐ Matching an ad to website content increases purchase intent -‐ Increasing an ad’s obtrusiveness increases purchase intent -‐ In combination – these two strategies are ineffective. Ads that match both website content and which are obtrusive do worse at increasing purchase intent than ads that do only one or the other Why? -‐ Privacy concerns -‐ The negative effect of combining targeting with obtrusiveness is strongest for people who refuse to give their income, and for categories where privacy matters most -‐ The results suggest a possible explanation for growing bifurcation in internet advertising between highly targeted plain text ads and more visually striking but less targeted ads Slides – MKTG 4560 Page 15 By: Jessica Gahtan Classifying Online Advertising 2 Strategic Implications for Brand Building -‐ Encourage and valorize social communication. -‐ Brand and market leadership through thought leadership -‐ Together these mean: inbound marketing Some Inbound Tools: -‐ Communities (brand, support, innovation, etc.) -‐ Expert hubs -‐ Blogs (including Audio, video) There is no simple formula for success. Turn a good story into a groundswell of communication and attention. -‐ Will it blend? (YouTube) -‐ Nokia N95 (blog seedings) -‐ Mike Pedersen -‐ Le Cache Premium Wine Cabinets -‐ BearingPoint – Mike 2.0 wiki Slides – MKTG 4560 Page 16 By: Jessica Gahtan Inbound & Thought Leader Tools: Adoption by Small Businesses Summary -‐ It’s a philosophy: Brand building with e-‐marketing is inbound marketing -‐ The customer is the guest and the marketer is the host/enabler -‐ Acquisition and retention comes from authentic thought leadership Mobile Commerce & CRM/Customer Branding Mobile Marketing: Linking Time & Location Nike I...
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