1. Part 3 CUSTOMER BEHAVIOR AND E-MARKETING.

2. 6: Consumer Buying Behavior
7: Business Markets and Buying Behavior
8: Reaching Global Markets
9: Digital Marketing and Social Networking

3. Chapter 9 Digital Marketing and Social Networking
Professor Jason C. H. Chen, Ph.D.
School of Business Administration
Gonzaga University
Spokane, WA 99258

4. Definitions Digital Media Digital Marketing
Digital media are electronic media that function using digital codes; this includes media available through computers, cellular phones, smartphones and other digital devices
Digital Marketing
Uses all digital media, including the Internet and mobile and interactive channels, to develop communication and exchanges with customers
Electronic Marketing (e-marketing)
The ________ process of
distributing, promoting and pricing products and
discovering the desires of customers
help marketers to share information to the customers using digital media and digital marketing
strategic

5. Growth and Benefits of Digital Marketing
Marketers use __________ to form relationships, coordinate, communicate, and share information with stakeholders
It is now possible to target markets more precisely and reach markets previously inaccessible
Small businesses - Use digital media to reach new markets and access inexpensive communication channels
Large businesses - Use digital media to supplement their brick-and-mortar stores
The digital world is evolving quickly and is still in an early stage of ____________ into marketing strategy
technology
integration

6. Table 9.1 Characteristics of Online Media
Definition
_____________
Marketers’ ability to identify customers before they make a purchase
Interactivity
Customers’ ability to express their needs and wants directly to the firm
In response to the firm’s marketing communications
Marketers’ ability to obtain digital information
Connectivity
Consumers’ ability to be connected with marketers along with other consumers
Control
Customer’s ability to regulate the information they view and the rate and exposure to that information
Addressability
Accessibility

7. Consumer-Generated Marketing
Two major trends that have caused consumer-generated information to gain importance
1) Use of blogs or digital media by consumers to publish their thoughts, opinions, reviews, and product discussions
2) Consumers’ tendencies to ______ other consumers over corporations
Marketers can use these online forums to interact with consumers, address problems and promote their company
trust

8. Interactivity of Social Media
The main distinguishing characteristic of digital media is their ____________
Traditionally, customers faced a lengthy, dissatisfying experience when supplying feedback
Digital media allows interaction in real time
Interactivity helps marketers maintain high-quality relationships with existing customers
Allows customer to develop relationships with each other
interactivity
Copyright © 2014 South-Western, Cengage Learning. ALL RIGHTS RESERVED.

9. Types of Digital Media Social networking sites: Facebook, Twitter
Blogs and wikis
Media-sharing sites: Youtube, Flickr, Podcast
Virtual reality sites: Second Life, Sim City
Mobile devices: Smartphones, Tablets, PDAs
Applications and widgets
(p.239) Widgets: small bits of software on a website, desktop, or mobile device that enable users “to interface with the application and operating systems”
Widgets are an innovative digital marketing tool to personalize webpages, alert users to the latest company information, and spread awareness of the companu’s products.

10. Social Networks
A social network is a web-based meeting place for friends, family, coworkers and peers allowing users to create a profile and connect with other users to
get acquainted, keep in touch, or build a work related network
Marketers use them to:
Promote products
Handle questions and complaints
Assist customers in buying decisions

11. Figure 9. 1 - Do You Use Social Networking Sites
Figure Do You Use Social Networking Sites? Social Networking Usage by Adult Population

12. Social Network Facebook Twitter Used by marketers to:
Market products and interact with consumers
Take advantage of free publicity
Engage in e-commerce
Engage in relationship marketing, making consumers feel more connected to their products
Facebook
Hybrid of a social networking site and a micro-blogging site
Used to enhance customer service, create publicity about products, and gain a competitive advantage
Twitter

13. Blogs and Wikis Blog Wiki
Web-based journal where writers can editorialize and interact with other Internet users
Gives consumers control and can affect the image of a company
Used by corporations to:
Answer consumer concerns
Defend their corporate reputations
Wiki
Software that creates an interface enabling users to add or edit the content of some types of websites
Used as an internal tool for teams on projects requiring lots of documentation
Provides companies with a better idea of how consumers feel about the company brand

14. What is Web 2.0?
"Web 2.0" refers to the second generation of web development and web design.
It is characterized as facilitating communication, information sharing, interoperability, user-centered design and collaboration on the World Wide Web. It has led to the development and evolution of web-based communities, hosted services, and web applications.
Examples include social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies.
Web 2.0 is the business revolution in the computer industry caused by the move to the Internet as a platform, and an attempt to understand the rules for success on that new platform.
What Is Web 2.0
Design Patterns and Business Models for the Next Generation of Software
by Tim O'Reilly The bursting of the dot-com bubble in the fall of 2001 marked a turning point for the web. Many people concluded that the web was overhyped, when in fact bubbles and consequent shakeouts appear to be a common feature of all technological revolutions. Shakeouts typically mark the point at which an ascendant technology is ready to take its place at center stage. The pretenders are given the bum's rush, the real success stories show their strength, and there begins to be an understanding of what separates one from the other.
The concept of "Web 2.0" began with a conference brainstorming session between O'Reilly and MediaLive International. Dale Dougherty, web pioneer and O'Reilly VP, noted that far from having "crashed", the web was more important than ever, with exciting new applications and sites popping up with surprising regularity. What's more, the companies that had survived the collapse seemed to have some things in common. Could it be that the dot-com collapse marked some kind of turning point for the web, such that a call to action such as "Web 2.0" might make sense? We agreed that it did, and so the Web 2.0 Conference was born.
Source:

15. Media Sharing Sites
Allows businesses to share their corporate messages in more visual ways (e.g., photo and video sharing and podcasts)
Limited in scope in how companies interact with consumers
More promotional than reactive
Popularity of these sites provides wide reach

16. Media Sharing Sites Photo-sharing sites Video sharing sites Podcasts
Allow users to upload and share their photos with the world
Companies can market themselves by displaying snapshots of their:
Corporate events
Staff and products
Photo-sharing sites
Allow users to upload videos
Companies can upload ads and informational videos about their products
Video sharing sites
Audio or video files that can be downloaded from the Internet with a subscription
Automatically delivers new content to listening devices or personal computers
Companies can create brand awareness, promote their products, and encourage customer loyalty
Podcasts

17. Virtual Sites
User-created, three-dimensional worlds that have their own:
Economies and currencies
Lands and residents
Offer opportunities for marketers to connect with consumers in unique (creative and fun) ways
Technology used by some firms for recruiting purposes
Virtual sites include Second Life, Everquest, Sim City and World of Warcraft

18. Mobile Devices
Allow customers to leave their desktops and access digital networks from anywhere
Common mobile marketing tools
SMS messages and multimedia messages
Mobile advertisements
Mobile websites
Location-based networks
Mobile applications: Software programs that run on mobile devices and give users access to certain content

19. Applications and Widgets
Offer convenience and cost savings to consumers
Companies use mobile marketing to offer additional incentives to consumers
Allow shoppers to compare prices or download electronic discounts
Widgets
Small bits of software on a website, desktop, or mobile device
Enables users to interface with the application and operating system
Used to:
Personalize webpages
Alert users to company information
Spread product awareness

20. Changing Digital Media Behaviors of Consumers
regulate
Consumers are better able to _________ the information that they view as well as the rate and sequence of their exposure to that information.
Result of digital media
Marketers:
Have limited control over the content to which users are exposed
Adopt a different approach than traditional marketing
Effectively target their messages to the audience
Easily track the success of their online marketing campaign
Enjoy free publicity by way of positive customer feedback

21. Online Consumer Behavior
Consumers are grouped into seven segments according to how they interact with digital media (see Table 9.2):
Creators – create their own media outlets such as blogs, podcasts, videos and wikis
Conversationalists – regularly update their Twitter feeds or status updates
Critics – are people who comment on blogs or post ratings and reviews
Collectors – gather information and organize content generated by critics and creators

22. Online Consumer Behavior
Joiners – are anyone who becomes a member and participates in a social networking site
Spectators – this is the largest group and is composed of those who read what other consumers produce but do not create any content themselves
Inactives – online users who do not participate in any digital online media but this number is dwindling
By knowing how to segment the online population, marketers can better tailor their online messages to their target markets

23. Table 9.2 - Social Technographics
Consumers are grouped into seven segments according to how they interact with digital media:
By knowing how to segment the online population, marketers can better tailor their online messages to their target markets

24. E-Marketing Strategy
More than one-fourth of the world’s population uses the Internet and the number is growing.
More than three-fourths of people in North America have Internet access
Businesses use digital marketing to gain or maintain market share
__________ considerations
Opportunity to:
Add a service dimension to traditional products
Create products accessible only on the Internet
Ability to access product information for any product impacts buyer decision making
Product

25. E-Marketing Strategy ___________ considerations Distribution
Essential for continually upgrading products to meet consumer needs
Online advertising campaigns and contests can be used to help develop better products
___________ considerations
Makes products available at the right time, place, and in right quantities
Helps businesses increase efficiency
Push-pull dynamic
Push products through the marketing channel to consumers
Enable customers to pull products through the marketing channel
Distribution

26. E-Marketing Strategy __________ considerations
Allows marketers to approach promotion in new, creative ways
Increases brand awareness and markets to consumers
Traditional promotional events can be enhanced or replaced by digital media
_________ considerations
Consumers gain access to more information about costs and prices
Demand for low-priced products increases
Enables customers to compare prices of products
Sellers are pressured to:
Offer buying incentives to generate demand
Differentiate products so that customers focus on attributes and benefits other than price
Promotion
Pricing

27. Ethical and Legal Issues
________
___________
______________________
Privacy
Online fraud
Intellectual property

28. Privacy
One of the most significant privacy issues involves the misuse of personal information collected from website visitors
May violate user's privacy
Hackers can steal personal information
Scraping - Collecting personal information from social networking sites and other forums
Counteractive measures
Developing regulations to limit the amount of consumer information that can be gathered online
Web advertisers are attempting self-regulation

29. Online Fraud
Online fraud includes any attempt to conduct dishonest activities online
Avenues for fraud
Fraudulent profiles on social networking sites
Mobile payments
Counteractive measures
Some firms monitor social networks for fraudulent accounts
To avoid divulging personal information online

30. Intellectual Property
Copyrighted or trademarked ideas and creative materials developed to solve problems, carry out applications, and educate and entertain others
Consumers’ rationalizations for piracy
No money to pay for what they want
Peer influence to engage in piracy and swap digital content
The thrill of getting away with it and the slim risk of consequence
Allows them to show how tech savvy they are

31. Video Case 9.1
ROGUESHEEP’S POSTAGE APP: THE POSTCARD OF THE FUTURE.

32. Summary
This case discusses how a company is using mobile apps to supplant traditional postcards with digital ones. RogueSheep created the “Postage” iPhone app, a mobile app that allows users to choose from over 90 postcard designs, customize the design by inserting their own photos, and send the postcard to their friends or relatives. Since its introduction, the Postage app has won several awards and has broken into the social networking world. To create awareness of the product, RogueSheep uses a combination of traditional media, apps, social networking sites like Facebook, and free trials.

33. 1. How do you think businesses could effectively use RogueSheep postcards in their communications program?
Businesses can use the app to send digital postcards to remind customers about their products or special events. This application could potentially be customized to be a less expensive, more impactful business-to-the-consumer promotional postcard.

34. 2. Is it possible for RogueSheep to advance its digital postcards to those who do not have access to iPhone apps?
Since RogueSheep is continually creating new products and looking into new technologies, it seems feasible that digital postcards can be advanced beyond iPhones. Other likely candidates for non-iPhone digital postcards are laptops (some people bring their laptops with them on trips), smartphones, or iPads.

35. 3. What are the advantages of the RogueSheep digital postcard over traditional postcards?
Advantages include saving money on postcard and mailing costs, the speed with which a digital postcard can reach the recipient (versus snail mail), the ability to customize their postcards and share their designs with others via social networks, and the reduction of paper waste.