FICHE BUSINESS EXPLORATION
PART 3, CHAP.11:
MARKETING IN AN EVER-CHANGING WORLD
Marketing 2: Operating in a Digital Marketing and Social Networking Environment
11.1) Two talented technology geniuses merge
11.2) Product
KEY TAKEAWAYS
With a few exceptions, companies that choose to design, develop, and market products
aimed at college students need to incorporate technology into their products.
The desire for connectivity by college students mandates that those designing products
aimed at this target group link their product to students’ digital devices.
Those obtaining funding for their start-up companies through a Kickstarter campaign
benefit from feedback received from the backers who sent in money.
The Internet of Things (IoT) refers to “electronic devices that are able to connect to
the Internet and share data with other Internet-enabled devices.”
As the number of Internet-connected devices grows exponentially, users are in danger
of data’s getting intercepted and used for malicious purposes.
Consumers’ demand for connected products affects the way Internet of Things devices
are designed, manufactured, delivered, and sold.
The Internet of Things benefits businesses by encouraging them to produce smarter,
more useful products, helping them improve business operations, and allowing them to
better serve their customers.
11.3) Pricing
KEY TAKEAWAYS
In pricing the Oculus Rift, Facebook had to decide which short-term pricing strategy
to adopt: penetration (charge low price to grab market share) or skimming (charge
high price which results in high profit, but brings in competition).
On a long-term basis, Facebook had to decide which of these pricing methods to use:
cost-based pricing, demand-based pricing, target costing, or prestige pricing.
Hotels and airlines (and others) use dynamic pricing—a pricing strategy where the
price of an item fluctuates frequently based on complicated algorithms.
Starwood Hotels and Resorts used a form of dynamic pricing called a Revenue
Optimization System—analytics software that improves demand forecasting and
automatically updates the pricing of its rooms using hundreds of supply-and-demand
variables.
11.4) Placement
KEY TAKEAWAYS
The advantages of being on online seller include: ability to reach people from all
geographical locations, inexpensive relative to setting up a brick and mortar business,
and easier to capture data on customers.
The disadvantages of selling online include: some people feel uncomfortable buying
online, customers cannot see the products, and there is a lot of competition
(particularly from Amazon).
Although only about 12 percent of retail sales take place online today, the trend is
moving upward.
New technologies help supply chain members reduce costs and improve service
through the use of wireless technologies, cloud computing and radio-frequency
identification (RFID) tags. Amazon is testing a new delivery system called Prime Air
—sending products to customers by drones.
11.5) Promotion
KEY TAKEAWAYS
The advantage of digital ads from the viewpoint of the seller include: can be published
quickly, not restricted geographically, buyer can view, select, order and pay for a
product online, can measure effectiveness of ad, charged for only the number of
clicks.
An online seller can capture information about your product search and use this
information to send you relevant ads that match your shopping habits. Product
marketing “focuses on selling a product to a specific demographic through a
traditional outreach, such as paid advertisements, television commercials, and direct
mail.”
Content marketing is not about “what you sell,” it’s about “what you stand for.”
Content marketing attracts potential customers by delivering customer-focused content
that those in their targeted audience are interested in and want to hear about.
The media outlets for content marketing include YouTube, Twitter, Facebook,
Instagram, Pinterest, company websites and emails.
The advantages of product marketing include: (1) you can be sure your ad is seen; (2)
you get fast results from your ad; (3) potential buyers know you are running an ad.
The advantages of content marketing include (1) it can be fairly inexpensive; (2) can
give you long-term results; (3) builds brand awareness and fosters strong relationships
with customers.
Social media marketing and content marketing go together: content marketing creates
attention-grabbing content and disseminates this content to customers and others
through social media.
11.6) Big data and privacy
KEY TAKEAWAYS
The term Big Data is used to describe extremely large collections of data, which are
analyzed by computers to reveal useful consumer information, such as customers’
buying habits, personal profiles, purchases and social conversations.
Big Data can be generated internally or acquired through business services
companies.
Some of the ways in which Big Data benefits marketing initiatives include: giving
great offers to existing customers; identifying new customers; and making more
profitable ads.
Big Data is also used for non-advertising, marketing initiatives, such as inventory
control.
Big Data is not limited to only the Internet. Brick-and-mortar stores can also use Big
Data for purposes such as monitoring customer visits and purchases.
The right to privacy is an important ethical issue in the collection of data. This right
lets individuals decide who should have access to their personal information.
The Institute of Business Ethics identified several questions organizations should ask
themselves when trying to balance protecting customers’ privacy with efforts to
improve marketing performance and customer service through the use of Big Data:
Does the organization send a privacy notice when personal data is collected?
Does the organization assess the potential negative effects that the use of data
might pose to an individual or group, say credit card holders?
Does the organization have preventive measures to lessen risks associated with
a specific type of data, for example, credit cards?
Does the organization act responsibly when sharing or buying data from third
parties?
Whether an individual should be worried about data privacy is a personal issue. Forty-
four percent of those surveyed said they did not trust businesses with their personal
information online.
