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Concept and Business Models of Digital Marketing

Question:

The essay question to be addressed through research and review of the contemporary literature in the topic area: digital marketing.A range of references that should demonstrate breadth and depth of research.Industry and/or organisational examples to be incorporated into the essay as illustrative evidence.A original argument to be built through the use of critical thinking.Critical evaluation in the essay's conclusions.

The rapid growth of the technology has actually changed the activities of human like their interactions and also their habitats. The social relationship in the real world has been transformed to virtual world which is resulting in building in social relationship from across the globe to disclose the prevalence of the web. The marketers are discovering themselves having to quickly acclimatize to the vast sudden increase of new technology and digital media (Nielsen, 2000). This essay would discuss the concept of digital marketing and how it is advantageous to the organization. The essay would try to find out some evidence for “is digital marketing the way forward in marketing?” For evidence, it would incorporate few organizations as examples. The essay would critically analyze the impact of digital marketing from both the customers and also marketers’ perspective. The essay will be concluded by summarizing the overall discussion.

Digital marketing has become the most novel and innovative concept of 21st century. Digital marketing is also known as e-marketing, search marketing, web marketing, internet marketing or online marketing. The digital marketing does not refer to only marketing through internet but also marketing done through wireless media or e-mail (Miller, 2012). The digital marketing ties mutually the technical and the creative aspects of internet along with sales, ad and development. The digital marketing mainly refers to the media placement at different customer engagement cycle stages via search engine optimization (SEO), search engine marketing (SEM), web 2.0 strategies and poster advertisements on particular websites. This digital marketing is changing the business environment. This framework allows the organizations to shorter down their channel of distribution (Mckinsey.com, 2013).

There are different business model that the digital marketing utilizes: Local digital marketing: This is a model which is mainly used by the small enterprises through internet to identify and to increase relationships which can be utilized for real-world advantages. (Donnelly et al., 2012) The local digital marketing mainly utilizes mechanism like targeted online sales promotion, local directory listing and social media marketing (Morris, 2009). Another model is the Affiliated Marketing, in which a service or a product is mainly created by one body and is sold by other sellers for profits. Then the lead based websites, which is an approach using which the organization generates values by acquiring sales from that particular website. Lastly the e-commerce model in which the products are sold to businesses to consumers, businesses to businesses or from consumers to consumers (Farrar, 2010).

The advent of digital marketing has many advantages to the organizations. According to Whitla (2009), the web can be utilized for customer support, online sales, publishing and also market research. Further, the web also helps in building the brand, generating word of mouth (WOM), crowd sourcing and also buzzes marketing. Similarly, Eid and El-Gohary (2013), supports the argument by saying that the internet also helps in improving the performance of the firm and also execute the marketing strategies. Further, the digital marketing is inexpensive when identifying the ratio of cost for reaching the target audience. Organizations can reach their target audience with less advertising budgets (Mulhern, 2009). This medium permits the customers to purchase and research the services and products they are interested. Thus, businesses have the advantage of appealing the customers at low cost. Also, the digital marketing provides the benefit of measuring the statistics inexpensively and easily by testing, calculating and tracing the overall internet marketing campaign. The Marketers can utilize various methods and techniques like pay per action, pay per play, and pay per click through this internet marketing platform. Thus, through this the marketers can make a decision which contributions or messages are more appealing to their target audiences. The campaign outcomes can be easily tracked and measured due to the initiatives taken through internet marketing that generally requires the users to visit the website, click an advertisement and also carry out targeted actions (Mordkovich and Morokovich, 2005).

Advantages of Digital Marketing to Organizations

The digital marketing is about promoting and advertising the business using the internet platform. It has the capability to unite millions of consumers from across the globe in less time, unlike traditional marketing. However, it is very much important to understand the organizations can no longer dictate to the needs of the customers. Presently, the target audiences have been handled over the control, enabled with telling the organizations the needs of their clients (Kourdi, 2011). With the swathes of information, suppositions, thoughts and investigations being traded, organizations need to be sure and secure in who they are, their vision, points and goals. This implies linking, remarking, and voting. The brightness of digital media lies in the way that this works the other route around as well. Marketers have the capacity to get a constant, immediate, continuous investigation of where and when every penny or pence by the customers has been spent. This fortune of information empowers digital marketers to screen where patterns rise up out of and where they are heading (Kaufman and Horton, 2014).

Organizations that give services of digital marketing are in the matter of gathering out discernment from this trove of information. They watch out for purchaser patterns, analyze them, and structure complex methodologies to leverage social networking tools, create the brand image, design the websites, captivate clients and proselyte visitors into clients. Simply the technology ability is insufficient for digital marketing, as amazing as this may sound. The service of digital marketing incorporates knowing how to get individuals really inspired by looking at something, whether it’s a genuine issue or simply diversion, or here and there both. It's more than simply pushing an inane slogan or at them. It also helps to take the business on top and also helps to stick to the first page of Google. A decent digital marketing organization will provide the right and regular, guidance, current, precise reports on advancement and guaranteeing the customer that objectives expressed are being met (Wind and Mahajan, 2001).

Digital has changed the structure of numerous functions of marketing. Social networking and direct communication with shoppers has prompted effective co-creation in advancement and relationship administration. CMOs are presently working with their colleagues in developing the product and customer promoting to exploit these opportunities. Internet Marketing has changed the stream of distribution channels. It has done this by permitting the channels to end up shorter. Products may pass specifically to the shopper from the producers, by means of digital marketers (MxM India, 2013). This implies that as opposed to having numerous distribution channels there exists three main channels, the consumer, virtual marketer and producer. It could likewise be simply consumer and producer. Online platform mainly helps the organization to “bring a brand to life” by setting up few online activities that further helps to understand and get deep into the heart of the business and brand proposition.

Agencies and marketers don't make brands instead their customers are responsible for creating a brand. A brand is the passionate and psychological association of a client with a business and its services and products. The agencies and the marketers are great at is making situations that urge a brand relationship to happen between a business and its customers, and sustaining that relationship once an association has been made. Furthermore the decisive word here is 'empower', as it is not possible to constrain a client to have a brand relationship or ensure that it will even happen (Ryan and Jones, 2009). Each channel of marketing that a business utilizes can possibly support or devastate a brand relationship. Similarly, every time when a customer interacts with a business – either through the customary awareness advertising, the buying process, post-purchase activity, loyalty marketing or customer service – there is a risk the customer may leave or turn into greatest advocate (Smart Insights, 2011). Digital or all the more accurately the unlimited exhibit of digital channels is an incredible environment for building a brand. As both a sales and distribution channels, the digital platform provides organizations the chance to address the needs and desires of their customers all through the purchasing cycle. Likewise, no other channel offers the level of potential for client business intuitiveness that digital marketing does (Nielsen, 2000). This aide clarifies the just about crazy clamoring for the following huge thing in the recent years of digital world, whether that is E-CRM, Mobile, Search and Social Media.

Impact of Digital Marketing from Customer and Marketer's Perspective

The digital marketing face is changing at a face pace. It has become a daily fashion, through which the social media users are responding and reacting to the business specifics strategies. Continuously the search teams are applying experimentation and testing to identify and clearly understand the real works. According to the Uriel Alvarado, the chief marketing and public relationship officer of Saxo Capital Markets, digital marketing provides tools like programmatic marketing, algorithms and cookies through which the organization can run customized and automated campaigns effectively. As there is a rise in the use of mobile applications, he says that there is huge opportunity for the marketers to not only invest on the contents abut also on developing relationship capital, which would help to drive the strengths of brand. Further, Teresa Arbuckle, the marketing director of Ireland and UK of Grudig, says that in this online marketing world, it is very much important to communicate effectively through own channels (tactixnz.co.nz, 2014). The consumers have become savvier towards the brand message to build up strong relationship. This digital marketing platform offers real value to the contents and help to broaden the relationship. Similarly, Allan Blair, the head of strategy of Tribal Worldwide, London supports by saying that through digital marketing, the organizations can offer personalized products or services to their consumers. The brands can collect survey through this platform and can serve their target audiences or the consumers according to their needs (Davidi, 2014).

According to the opinion of the Chief marketing officer of Mahindra & Mahindra, Vivek Nayer, digital marketing is making the customers of a brand more powerful. The main motto with this digital marketing is engagement and conversation of the consumers. The best part of this digital marketing is that it helps to develop and measure the brand. Similarly, Vinay Bhatia the VP, Marketing & Loyalty of Shoppers Stop, emphasized that the organization must tailor digital marketing as it offers thinking information, which can be used for betterment of the business. Also, the Chief Brand & Marketing officer of Reliance Industries, Andrew Campbell, states that the digital platform has helped retail to grow, provide high quality service, value and trust to the customers. This digital marketing platform also helps to develop strong bonding with the consumers (MxM India, 2013).

From the perspective of consumer’s the information communication technologies have various benefits involving participative, richer, convenience, efficiency information with product diversity, cost reduction and competitive pricing. The trend of online social media has enhanced these benefits more; the consumers are able to interact with the business proactively. Consumers have become quite comfortable with the online digital platforms. They are more attracted towards the digital retail experiences and also post-purchase researches for receiving the highest product value. The chief marketing officers are becoming more concerned with the mobile platform (wipro.com, 2013). CMOs believe that the mobile platform is influencing the path-to-purchase end, in-store facilities and also point-of-sale. The mobile applications allow the customers to be search and purchase faster. The latest mobile based payments methodologies are increasing the awareness in the developed markets through digital wallets, near-field communications (NFC) and couponing. For example, Starbucks provides the loyalty scheme in-store members with the option of payment credentials, where the customers can pay through their phone and also avoid check-out queues (Taylor, 2013). Apple recently announced a scheme for its iOS devices which enables the users to pay in-store and self-scan. With this engineering, retailers can convey the more customized online shopping encounters that numerous buyers are coming to expect when they go in-store. Individual experiences can likewise originate from empowering the client to further investigate the story behind the Products or the advertising – QR codes and products recognition through camera applications are being utilized for this reason (tnsglobal.co, 2012).

Significance of Digital Marketing in the Present Time

The social media platform is also blending the digital activities for the companies. The FCommerce of the Facebook commerce is helping towards the success of the brands. Many brands like Bulgari, Skoda, Heinz, Old Spice, Max Factor (Unilever), Starbuck, Warner Bros, Lady Gaga, Pampers, Gillette and Coca Cola have established the Facebook stores for various categories. The brands are using the Facebook platform for providing the customers with group-buying options. Through this they are able to create awareness and increase their engagement with the brand. The brands are leveraging Facebook as an exclusive deals and offers for rewarding the fans. Though Facebook Connect people are able to see what their peers are buying or adding to their cart. Amazon was the first organization to popularize the use of social engine (Charlesworth, 2014). Amazon has been utilizing the digital platform for generating competitive advantages. It is one of the strong evidence of how the digital platform or the technology can drive the growth for developing new revenue streams and also optimizing the retail experiences. This has also helped to maximize their distribution economies of scale. Also Amazon also uses the AWS (Amazon Web Services) which is a cloud infrastructure as a service (IaaS) division of its own. Utilizing broad information about the purchasing behavior of the customers cross-functionally in a closed-loop framework has permitted Amazon to create new products, enhance its web client experience and convey clients better continuous shopping proposals (Jackson et al., 2011). Analytical granularity of Amazon has even found that each 100 milliseconds of extra page load time on its site brings about a 1% reduction in deals, provoking the e-business titan to twofold down on location pressure and streamlining. In the interim, customary and more progressive retail models where IT and promoting can't make this kind of closed-loop are attempting to contend with Amazon's rate and viability (Donnelly et al., 2013).

According to the Gartner study, 2014 around 70% of the Fortune 500 companies have hired the CMT (Chief Marketing Technologist) or similar leadership role, who are mainly responsible for arranging a cross-functional mobility team among the business organization and IT. The main objective of the organization is to find the appropriate software innovations which can improve the digital-physical experiences of both the employee and the consumers (Percolatehq.tumblr.com, 2015).

Digital Marketing is also way forwarding for the Automobile industries too. The e-commerce rewards, the promotions, the service contracts, etc have a significant portion of IT budget. Investment in the digital marketing through mobile device or social media usage is helping the automobile industries to integrate the experience of the customers across the distribution channels. These technologies are allowing the automobile companies to customize the experience of the users. Schemes like “loyalty cards” and “rewards points” are flourishing which is permitting the users to build communities and share experiences (Chakravarti, 2013).

Even though there is an increase in the usage of digital platform for marketing the products and services of the organization, from the perspective of buyers, there some limitation of online purchasing or using internet marketing which the organization must take care of. Information security is critical both to organizations and clients that join in online business. Numerous customers are mindful to purchase things over the Internet on the grounds that they don't accept that their individual data will stay confidential (Davidi, 2014). A few organizations that buy customer information show the alternative for people to have their information expelled from the database, otherwise called withdrawing. However, numerous clients are ignorant if and when their information is being imparted, and are frail to stop the exchange of their information between organizations if such movement happens. An alternate significant security worry that purchasers have with e-trade dealers is whether they will get precisely what they buy (David Stone and David Woodcock, 2014). Online venders have endeavored to address this worry by putting resources into and building solid client brands (e.g., Overstock.com, Amazon.com and ebay), and by leveraging dealer and exhortation rating frameworks and e-business holding arrangements. (Bishop and Rowley, 2012) All these arrangements endeavor to guarantee customers that their exchanges will be free of issues in light of the fact that the shippers can be trusted to give dependable items and administrations. Furthermore, a few major online installment systems (Google Checkout, PayPal, credit cards and so on.) have given back-end purchaser assurance frameworks to address issues on the off chance that they happen (Bird and Bird, 2007).

Before concluding the essay it is necessary to answer the question, is digital marketing the way forward in marketing?. From the above discussion, irrespective of the limitations of digital marketing, it can be said that yes, the digital marketing is way forward. Keeping the key idea behind, incorporating the digital marketing gives opportunity to create more strong relationship with the customers and also emphasize on engaging more customers and transform the traditional way of purchasing to digital purchasing (Anna Rickman and Cosenza, 2007). Further, various technologies that is continuing the innovation include LTE mobile networks, Augmented Reality, 4G, 3D printing and next generation web search which is helping to enhance the customer experience (tnsglobal.co, 2012). These types of technologies are actually making the digital nature more powerful. The digital touchpoints are actually driving the demand and experience of the customers (avanade.com, 2011).

In conclusion, the essay has analyzed the concept of digital marketing and have effectively answered to the question is digital marketing a way forward to the marketing through various companies examples. The essay highlights the opinions of some of the top management marketing experts and authorities, to understand whether digital marketing is really provide competitive advantages or not. The essay discusses the meaning of digital marketing and finds that it is all about empowering the IT and making the organization to develop proper plan and strategy with respect to their digital marketing. Through the digital marketing channel, the business drives direction and clarity. It is discussed that the organizations have transformed from the traditional media marketing to display advertising, social media, e-mail marketing and also mobile marketing. The essay has provided some of the companies examples like Starbucks, Apple, Amazon, Automobile industry to understand the impact of digital marketing. The reason behind the utilization of digital marketing instead of traditional way of marketing is it helps to personalize the experience of the customers for improving the loyalty and conversion rates and also lower the cost.

References

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