how companies can react to the changing of digital marketing environment

HOW DIGITAL TOOLS ARE CHANGING MARKETING MIX?III.. Marketing mix is made through digital business, which is creating new business designs byblurring the digital world and physics.. the g

DONG THI PHUONG - HS150079 LECTURE: BUI THI HANH THAO

MKT1603

M K T 3 1 8 m

FPT UNIVERSITY - FALL 2021

TABLE OF CONTENTS

I INTRODUCTION

Overview of changing in digital world

Define what is marketing mix

How digital tools are changing marketing

II HOW DIGITAL TOOLS ARE CHANGING

MARKETING MIX?

III HOW COMPANIES CAN REACT TO THE CHANGING

OF DIGITAL MARKETING ENVIRONMENT?

Product

Promotion

Price

Place

REFERENCING

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5 5 8 10 12

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Along with the development of the internet, businesses have changed the way they market and build relationships with customers to the marketing mix

The marketing mix is the “tool kit” that marketers use to do their job It consists of four elements: product, price, place, and promotion The marketing mix gives executives a way to ensure that all elements

of their program are considered in a simple yet disciplined fashion.(HBR 1985)

The COVID - 19 epidemic has a major impact

on companies and businesses, economic

activities of businesses around the world that

have been severely affected by sales and

declining profits Global shares in flux are

greatly affected

According to the Financial Times Stock

Exchange Group (FTSE), FTSE is down 14.3%

in 2020, the worst performance since 2008

The IMF estimates the global economy to

shrink 4.4% in 2020 The organization

describes the decline as the worst since the

Great Depression of the 1930s (BBC 2021) For

developed and emerging economies, the

International Monetary Fund (IMF) estimates

that national output will contract by nearly

6% in 2020.(Forbes 2020) According to a new

United Nations report, the influence of the

epidemic to international tourism cost as

much as $4 trillion for the years 2020 and

2021 The steep drop in international arrivals

led to a $2.4 trillion loss in 2020

(Forbes 2021)

The pandemic has also changed the way

people behave, receive and process

information Therefore, companies and

businesses have gradually adapted to new

circumstances and ways of working to cope

with the effects of COVID-19

I Introduction

Marketing mix is made through digital business, which is creating new business designs by blurring the digital world and physics It promises to open up unprecedented convergence between humans, businesses and things that break up existing business models - even businesses that are born from the age of the internet and electronics

A transformation of marketing is underway as we spend more time on our mobiles, tablets and laptops The challenge for brands is to connect with customers through all these devices

in real time and create campaigns that work across social media, display advertising and e-commerce Marketers need to update their skills in order to make the most of these fast-moving, and highly relevant campaigns through digital (the guardian 2014)

The following will go into two major issues including the impact of digital tools on marketing mix(4p) and how companies can react to the changing digital marketing environment

II How digital tools are

changing marketing mix?

PRODUCT

Digital media has changed the way market business New

consumption trends change the business model of

organizations Advertising strategies have been replaced

with new forms of display and various opportunities and

difficulties A good commodity meets the needs or desires of

a customer An item is not only the item of the owner, it

can also be a help or a thought Products include quality

products, company management products and support

services Innovation is a key factor in the development and

success of most products (Marketing in a digital world) In

the age of technology, digital is moving from products and

brands created by companies to co-creation products and

the sharing economy

Co-creation is about encouraging cultural change within

the organization This mentality shift can be difficult to

accomplish and is subject to the capacity of top

administration to embrace a modest, compassionate, and

participative authority style ( Forbes 2018 ) To put it

another way, the act of transforming new businesses by

using the knowledge, skills, and resources of external

contributors, particularly from their consumers An

increasing number of businesses are using the company's

web platform to solicit customer input and pick ideas for

future items As such, in our new digital age, customers

don't just buy products, they can help design and develop

them.(Marketing in a digital world)

The French postal assistance, La Poste, is a representation

of a multi-accomplice co-creation effort

La Poste's organization chose to expand their

movement business as their very post

business fell rapidly in light of the Internet

They ran into three issues: transporters who

weren't convinced or adaptable; clients who

expected to remain for a long time; and

disappointed close by chiefs, all of which

achieved lower benefits and extra time

wasted

La Poste pioneers chose to welcome tellers

and postal administrators to converse with

nearby clients concerning how to accomplish

those objectives A significant stage in

catching the consideration of tellers is to give

them a say in their own plans for getting

work done The outcome: Redesigned mail

depots have decreased client stand by times

by half Consumer loyalty is presently on the

ascent Occupation fulfillment among tellers

and chiefs has soared (Harvard business

review 2010)

Threadless, a T-shirt company in Chicago, products are born from designs contributed by customers The Internet-based company asks consumers to submit shirt designs they've created - it receives up to 300 submissions a day and lets consumers vote on the models they like best It pays winners $2,000 for their creations The company picks out the most popular t-shirt designs, screens them, and sells them on its website for three to eight weeks for $18, and releases seven new designs each week

Threadless, where they can exchange ideas -ideas that go beyond designing t-shirts Threadless gained 1.5 million Twitter followers and 100,000 Facebook fans in 2009 and uses the social network to advertise its businesses to attract designers They have consumers who voted on 150,000 designs This business model brought in nearly $30 million

in revenue in 2009 (Forbes 2010)

In addition to co-creation, one of the most important features of the digital revolution is the ability to connect individuals Digital tools make everything connected easier An important part of this increased connectivity is the sharing economy A shared or sharing economy is

an economic system in which assets or services are shared between peers or businesses for free or for a fee.(Forbes 2019) The sharing economy connects individuals who have things they want to share with those who need them

Everyone has participated in this economy in some way The sharing economy is expected to grow from $15 billion in 2014 to $335 billion by

2025 Businesses are moving into the world of the sharing economy.(Forbes 2019)

Sharing economy firms are disrupting traditional industries across the globe Airbnb at $10 billion, Uber is currently valued at $18.2 billion relative to Hertz at $12.5 billion and Avis at $5.2 billion Beyond individual firms, there are now more than 1,000 cities across four continents where people can share cars The global sharing economy market was valued at $26 billion in 2013 and some predict it will grow to become a $110 billion revenue market in the coming years, making it larger than the U.S chain restaurant industry (Harvard business review 2014)

Uber's ride-hailing service has exploded in 58 countries in the five years since its launch, though not without hiccups But it grows very quickly Uber delivered nearly 1 million rides a day in China, and in 2014, Uber's China business doubled shortly thereafter The number of trips in Chengdu

is 46 times greater than in New York at the same age Nine months later, Chengdu - China has 479 times more trips than New York (ABC news 2015) That shows the development of the sharing economy in today's digital society

II How digital tools are

changing marketing mix?

PROMOTION

This aspect of the marketing mix covers the methods of

communication that a marketer uses to provide

information about his products Promotion persuasive in

nature with a goal of getting customers to buy your

product instead of its competitors This information, it

can be built verbal and visual Thus, a promotional

strategy can influence consumers by appealing to either

their intellect, or their emotions (Marketing in a Digital

World)

The Internet's growth has made it possible for companies

to stand out and reach out to customers Businesses and

consumers now have the chance to communicate more

personally and emotionally in order to foster stronger

connections The business mainly promotes internet posts

and diverse user-generated content and differentiates the

brand image with the development of a distinctive and

attractive brand image from the Doppelganger brand In

marketing, user-generated content refers to content made

by someone who is not an official representative of the

company but is interested in the brand It could be posts

on social media or something else with a brand identity

for communication purposes

Cola is a great example of using user-generated content for communication Coca-Cola's marketing team came up with the idea to start a 'share a can of coke' campaign through social channels and advertising Overnight, it started to receive great feedback from general customers across the globe Twitter and Facebook posts with images of Coca-Cola bottles and cans are on the rise and both carry the hashtag #shareacoke to encourage users to promote their brands online

In Australia in 2011 and produced some impressive results Consumption of young people increased significantly, up 7% The campaign also garnered a total of 18,300,000 media impressions and traffic on the Facebook Coke page increased by 870%, with page likes up 39% In the UK, Coca-Cola has seen its Facebook community grow by 3.5% and globally by 6.8% The hashtag has also been used 29,000 times on Twitter (The Guardian 2013)

Similar to Coca-Cola, in 2014, Starbucks ran a White Cup Contest campaign, encouraging customers to draw some artistic doodles on their white cups and post them on social media with the hashtag #WhiteCupContest Within just 3 weeks, it received a tremendous response with about 4,000 withdrawal cups being sent to Starbucks by users (Forbes 2017)

A doppelganger brand is a family of disparaging images and stories about a big brand that are circulated in popular culture by a loosely organized network of consumers, anti-brand activists, bloggers, and opinion leaders in the news and entertainment media The word doppelganger is a word that is German in origin, and actually a combination of two words, doppel, which means double and ganger, which means walker Thus in essence, a doppelganger is a double walker (Marketing in a Digital World)

Pepsi introduced a new logo back in 2009 They paid a famous design firm a million dollars to create this new logo, which as you can see, is really just a modification of its prior logo, not much different Nonetheless, this new logo was heavily criticized by several Internet blogs as being a waste of money In addition, several graphic artist created their own doppelganger versions of this logo to represent an obese man as a means of protesting against Pepsi's effect

on our health This doppelganger campaign quickly became an Internet meme and increased attention to the negative consequences of drinking Pepsi (Marketing in a Digital World)

II How digital tools are

changing marketing mix?

PRICE

This aspect of the marketing mix focuses upon the amount that

a customer pays for a product A pricing strategy is a firm's basic approach to how it prices its products Now, firms employ

a very broad range of pricing strategies Three of the most common pricing strategies are cost-plus pricing, competitor-based pricing, and value-competitor-based pricing (Marketing in a Digital World) Price is considered an important element of the marketing mix as it determines the survival and profitability of

a company Currently, it is free to pay for products and services, such as paying according to the ability and desire of consumers such as pay what you want and freemium

Many marketers have considered using a Pay What You Want pricing scheme to sell their products On the face of it, it seems such an alluring idea, predicated on human decency and reciprocity PWYW pricing is simple: Provide a good-quality product to customers, let them enjoy it, and then give them complete discretion to pay whatever they want for the product

No bills, no claims , pay if you want to, don’t if you don’t (Psychology Today 2017)

Panera Bread expands pay what you want experiment, company launched the first of five pay-what-you-want cafes Panera calls it the Meal of Shared Responsibility and says the potential benefit is twofold: Above-the-cost proceeds go to cover meals for customers who cannot pay the full amount and to St Louis-area hunger initiatives; and for those in need, the 850-calorie meal provides nearly a day's worth of nutrition at whatever price they can afford If the experiment works in St Louis, it could be expanded to some or all of the chain's 1,600 bakery-cafes across the USA (CBS News)

0 2

Radiohead produced the album In Rainbows

and sold it on a pay what you want method to

sell for whatever price fans were willing to

pay In a study that examined traffic to

Radiohead's In Rainbows Web site during the

first 29 days of October, 38% of those who

downloaded the album at the site paid

something to get the album, while 62% paid

nothing Of those who paid, 17% paid $4 or

less, 6% paid between $4.01 and $8, 12% paid

between $8.01 and $12, and 4% paid more

than $12 Put another way, those who paid

more than $8 accounted for about 79% of the

revenue generated from the site (Forbes 2007)

A freemium is a digital product or service

that offers a set of basic features for free but

then charges a price, usually a monthly or

yearly subscription, in order to obtain a set of

premium features

Freemiums combine free and premium and this model can work well for digital products and services due to the fact that the marginal cost of adding a new user is close to nothing (Marketing in a Digital World)

Dropbox is a master of this model The company has 500 million registered users who receive two gigabytes of free storage Once they exceed that capacity, however, customers are offered the option to upgrade to one terabyte for a monthly or annual subscription fee With this model, Dropbox generated $1 billion in revenue in 2017 from 11 million paying individual and business users and continues to grow its user base (Harvard business review 2019)

The “freemium” model used by Spotify to amass

60m users and 15m paying subscribers around the

world

The Spotify business model relies on attracting

users to a free service that offers a selection of

music but with limited functionality, with the aim

of converting those users to paying subscribers

Spotify generates some revenue around the free

service but makes more via paid subscriptions

Ad-supported free streaming generated $295m in

the US for music labels in 2014, much less than the

nearly $800m generated by paid subscription

(Financial Times 2015)