Competitive advantage By using Internet platforms, businesses can create competitive advantage through various means. To reach the maximum potential of digital marketing, firms use social media as its main tool to create a channel of information.
Through this a business can create a system in which they are able to pinpoint behavioral patterns of clients and feedback on their needs. This means of content has shown to have a larger impingement on those who have a long-standing relationship with the firm and with consumers who are relatively active social media users.
Relative to this, creating a social media page will further increase relation quality between new consumers and existing consumers as well as consistent brand reinforcement therefore improving brand awareness resulting in a possible rise for consumers up the Brand Awareness Pyramid.
Although there may be inconstancy with product images; maintaining a successful social media presence requires a business to be consistent in interactions through creating a two way feed of information; firms consider their content based on the feedback received through this channel, this is a result of the environment being dynamic due to the global nature of the internet. Effective use of digital marketing can result in relatively lowered costs in relation to traditional means of marketing; Lowered external service costs, advertising costs, promotion costs, processing costs, interface design costs and control costs.
Effectiveness Brand awareness has been proven to work with more effectiveness in countries that are high in uncertainty avoidance, also these countries that have uncertainty avoidance; social media marketing works effectively. Yet brands must be careful not to be excessive on the use of this type of marketing, as well as solely relying on it as it may have implications that could negatively harness their image.
Brands that represent themselves in an anthropomorphizing manner are more likely to succeed in situations where a brand is marketing to this demographic.
As digital marketing is dependent on technology which is ever-evolving and fast-changing, the same features should be expected from digital marketing developments and strategies. This portion is an attempt to qualify or segregate the notable highlights existing and being used as of press time.
Segmentation: more focus has been placed on segmentation within digital marketing, in order to target specific markets in both business-to-business and business-to-consumer sectors. Influencer marketing: Important nodes are identified within related communities, known as influencers. This is becoming an important concept in digital targeting. Many universities now focus, at Masters Level, on engagement strategies for influencers. To summarize, Pull digital marketing is characterized by consumers actively seeking marketing content while Push digital marketing occurs when marketers send messages without that content being actively sought by the recipients.
Collaborative Environment: A collaborative environment can be set up between the organization, the technology service provider, and the digital agencies to optimize effort, resource sharing, reusability and communications.
Additionally, organizations are inviting their customers to help them better understand how to service them. This source of data is called User Generated Content. Much of this is acquired via company websites where the organization invites people to share ideas that are then evaluated by other users of the site.
The most popular ideas are evaluated and implemented in some form. Using this method of acquiring data and developing new products can foster the organizations relationship with their customer as well as spawn ideas that would otherwise be overlooked.
UGC is low-cost advertising as it is directly from the consumers and can save advertising costs for the organization. Data-driven advertising: Users generate a lot of data in every step they take on the path of customer journey and Brands can now use that data to activate their known audience with data-driven programmatic media buying.
Without exposing customers' privacy, users' Data can be collected from digital channels e. Also known as People-based marketing or addressable media, Data-driven advertising is empowering brands to find their loyal customers in their audience and deliver in real time a much more personal communication, highly relevant to each customers' moment and actions.
An important consideration today while deciding on a strategy is that the digital tools have democratized the promotional landscape. Remarketing: Remarketing plays a major role in digital marketing.
This tactic allows marketers to publish targeted ads in front of an interest category or a defined audience, generally called searchers in web speak, they have either searched for particular products or services or visited a website for some purpose. Game advertising: Game ads are advertisements that exist within computer or video games.
One of the most common examples of in-game advertising is billboards appearing in sports games. In-game ads also might appear as brand-name products like guns, cars, or clothing that exist as gaming status symbols. The new digital era has enabled brands to selectively target their customers that may potentially be interested in their brand or based on previous browsing interests.
Businesses can now use social media to select the age range, location, gender and interests of whom they would like their targeted post to be seen by. Ways to further increase the effectiveness of digital marketing A strategy that is linked into the effectiveness of digital marketing is content marketing. It is found that content marketing is highly present in digital marketing and becomes highly successful when content marketing is involved. This is due to content marketing making your brand more relevant to the target consumers, as well as more visible to the target consumer.
Marketers also find email an effective strategy when it comes to digital marketing as it is another way to build a long term relationship with the consumer. Listed below are some aspects that need to be considered to have an effective digital media campaign and aspects that help create an effective email system. Interesting mail titles differentiate one advertisement from the other. This separates advertisements from the clutter. This is effective in digital marketing as it allows organizations to build up loyalty over email.
Low Technical Requirements: In order to get the full use out of digital marketing it is useful to make you advertising campaigns have low technical requirements. This prevents some consumers not being able to understand or view the advertising campaign.
Rewards: The lucrative offers would always help in making your digital campaign a success. Give some reward in the end of the campaign. This would definitely invite more engagement and word of mouth publicity Ineffective forms of digital marketing Digital marketing activity is still growing across the world according to the headline global marketing index.
Digital media continues to rapidly grow; while the marketing budgets are expanding, traditional media is declining World Economics, Digital media helps brands reach consumers to engage with their product or service in a personalized way. Five areas, which are outlined as current industry practices that are often ineffective are prioritizing clicks, balancing search and display, understanding mobiles, targeting, view ability, brand safety and invalid traffic, and cross-platform measurement Whiteside, Why these practices are ineffective and some ways around making these aspects effective are discussed surrounding the following points.
This means one in a thousand click ads are relevant therefore having little effect. This displays that marketing companies should not just use click ads to evaluate the effectiveness of display advertisements Whiteside, Balancing search and display Balancing search and display for digital display ads are important; marketers tend to look at the last search and attribute all of the effectiveness to this.
This then disregards other marketing efforts, which establish brand value within the consumers mind. ComScore determined through drawing on data online, produced by over one hundred multichannel retailers that digital display marketing poses strengths when compared with or positioned alongside, paid search Whiteside, This is why it is advised that when someone clicks on a display ad the company opens a landing page, not its home page.
A landing page typically has something to draw the customer in to search beyond this page. Things such as free offers that the consumer can obtain through giving the company contact information so that they can use retargeting communication strategies Square2Marketing, Commonly marketers see increased sales among people exposed to a search ad. But the fact of how many people you can reach with a display campaign compared to a search campaign should be considered.
Multichannel retailers have an increased reach if the display is considered in synergy with search campaigns. Three factors stand out as the most important explanations of Japanese MNCs outstanding success in managing the center-for-global process: 1 gaining the input of subsidiaries into centralized activities, 2 ensuring that all functional tasks are linked to market needs, and 3 integrating value chain functions such as development, production, and marketing by For example, at Matsushita, the integrative systems rely heavily on the transfer of people.
First, the career paths of research engineers are structured so as to ensure that a majority of them spend about five to eight years in the central research laboratories engaged in pure research, then another five years in the product divisions in applied research and development, and finally in a direct operational function, such as production or marketing, wherein they take line-management positions for the rest of their working lives.
More important, each engineer usually makes the transition from one department to the next along with the transfer of the major project on which he has been working Bartlett, Multinational New Product Development European MNCs rather prefer to develop local-for-local innovation processes, which rely on subsidiary-based knowledge development. For reasons related to their unique administrative and cultural heritage, European companies have a track record of local adaptation and functional excellence unmatched by other companies of comparable size, diversity, and maturity, to the extent that many European MNCs are often thought to be a domestic company in the countries in which they operate.
Of the many factors that facilitate local-for-local innovations, there are three that are the most significant: 1 the ability to empower local management in the different national organizations; 2 to establish effective mechanisms for linking the local managers to corporate decision-making processes; and 3 to force tight cross-functional integration within each subsidiary cf.
Such dispersed managerial and technological resources, coupled with local autonomy and decentralized control over the resources, enable subsidiary managers to be more effective in managing local development, manufacturing, and other functional tasks, such as marketing Source: adapted from Bartlett, Transnational New Product Development The complexity of the innovation and new product development processes in a MNC is significantly enhanced by the fact that the location of an opportunity is often different from the location where the complementary capability of the company is located.
To tackle this challenge, firms following a transnational strategy have developed a two-pronged approach described by Bartlett and Ghoshal Bartlett, Ghoshal and Birkinshaw, ; Ghoshal and Bartlett, , as locally leveraged and globally linked.
The two aspects of this approach ensure high levels of knowledge creation, diffusion, and worldwide learning within the MNC. The first aspect of the approach is centralized knowledge development and diffusion. In this case, knowledge is developed in the centralized operations but also incorporating inputs from different subsidiaries to ensure that the centralized knowledge development process is market driven.
The developed knowledge is diffused through transfer of personnel involved in the process to other units thereby broadening the scope for knowledge sharing. The second aspect of the approach is localized knowledge development in which empowered subsidiaries develop special knowledge based on creative responses to local environmental demands made possible by tight cross-functional integration.
Conclusion While the two more sophisticated processes that result in transnational innovations are becoming more widespread, they have supplemented rather than replaced the traditional central and local innovation processes.
In a competitive environment, most companies recognize the need to engage their resources and capabilities in as many ways as they can. In other words, they must maximize the number of processes through which they can develop The challenge is to build an organization that can simultaneously facilitate all four processes of innovation and learning. Because, this decision is more complicated and more important in the case of services compared to the case of product Zeithaml, Berry and Parasuraman, , , we will focus our attention, in the chapter, on service quality strategies.
In services marketing, the concept of service quality plays a central role in understanding customer satisfaction and retention Parasuraman, Zeithaml, and Berry Typical services differ from physical products in four key ways: 1 they are intangible as they cannot be stored or readily displayed or communicated; 2 production and consumption of services are inseparable; 3 services cannot be inventoried, and production lines do not exist to deliver standardized products of consistent quality, therefore, delivered services are heterogeneous in nature; finally 4 , because services cannot be stored, they assume a perishable nature e.
These characteristics have a strong impact on the internationalization strategies of service firms as well as on the standardization or segmentation of service quality Furrer, Liu, and Sudharshan, ; Lovelock and Yip, ; Vandermerwe and Chadwick, There are fewer opportunities to realize economies of scale with services than with physical products and guaranteeing service quality worldwide is more difficult Gillespie, Jeannet and Hennessey, However, not every service is equally affected by these characteristics.
Lovelock and Yip distinguish between three categories of services: 1 people-processing services, that involve tangible actions to customers in person; 2 possession-processing services, that involve tangible actions to physical objects; and 3 information-based services, that depend on collecting, manipulating, interpreting, and transmitting data to create value.
People- processing services necessarily involve a high degree of contact with service personnel and 3 Another important characteristic is the absence of ownership Judd, ; Lovelock and Gummesson, ; Rathmell, , This characteristic is, however, less relevant in the internationalization context we are discussing in this chapter. On the contrary, possession- processing and information-based services have the potential to be much lower contact in nature Lovelock and Yip , so they can be standardized at the global level.
That is, it is when services involve a high degree of interaction between customers and service personnel, that cultural elements have the greatest influence Furrer, Liu and Sudharshan, Culture affects a number of aspects of the service experience, including customer expectations, the waiting experience, and the recruitment and behavior of service personnel Gillespie, Jeannet and Hennessey, cf.
One element of service marketing that is particularly influenced by culture is service quality Donthu and Yoo, ; Furrer, Liu and Sudharshan, ; Mattila, ; Winsted, Box Influence of Culture on the Service Experience Customer Expectations: Customers may exhibit different expectations concerning service levels.
Department stores in Japan still employ women in kimonos to bow and greet customers as they arrive at the store. Service personnel are available and solicitous. In the U. They are more accustomed to self-service and may even feel nervous in the presence of hovering salespeople Gillespie, Jeannet and Hennessey, The Waiting Experience: Time is always an aspect of services, and attitudes toward the time it takes to be served vary across cultures Trompenaars and Hampden-Turner, For example, waiters in European restaurants take care not to hurry patrons.
Eating a meal is supposed to be an enjoyable experience most often shared with friends. Servers also wait to be asked to deliver the bill for the meal. Diners may wish to sit for hours. Americans would wonder what had happened to their waiter. Americans expect fast service at restaurants and like the bill to be dropped promptly on the table. What would be a good service experience for a European diner would be a bad one for an American Gillespie, Jeannet and Hennessey, Service Personnel: In many cultures, such as the Middle East, working in a service occupation is often considered akin to being a servant.
This social stigma can make it hard to recruit qualified personnel for some positions, especially those that require higher levels of education as well as technical and interpersonal skills. Until relatively recently, stewardesses for many airlines from the Middle East had to be imported from Europe, and nursing has never achieved the status in the Middle East as in the West. Men as well as women feel the stigma. It is not uncommon for well-paid technical repairmen, such as those in work in air conditioning, to dress in a suit and tie and carry their tools in a briefcase Gillespie, Jeannet and Hennessey, Service quality is one of the most important issues for service firms Fisk, Brown and Bitner, Of these five dimensions, reliability is the ability to perform the promised service dependably and accurately.
Responsiveness is the willingness to help customers and provide Assurance is the knowledge and courtesy of employees and their ability to convey trust and confidence. Empathy is the caring individualized attention provided to the customer, and tangibles are the appearance of physical facilities, equipment, personnel, and communication materials.
However, the development of these service quality dimensions was based on research conducted across multiple contexts only within the U. Zeithaml and Bitner, As a general rule, reliability comes through as the most important dimension of service quality in the U. But what happens when we look across culture? Are the service quality dimensions still important?
Which ones are most important? Furrer, Liu and Sudharshan, Recent studies by Winsted , Donthu and Yoo , Mattila and Furrer, Liu and Sudharshan have established a strong link between cultural dimensions and service quality. They found, in cultures with a large power distance, significant negative relationships between power distance and empathy, responsiveness, and reliability.
In such cultures with a large power distance, customers are more likely to tolerate failure when service providers are perceived as experts. In cultures with a high degree of individualism, customers are more independent and self-centered.
Individualists, due to their drive and self- responsibility ethic, demand that others be efficient and therefore demand a high level of service quality. During their relationships with a service provider, individualists also prefer to maintain a distance between themselves and the service provider.
Due to their self-confidence and self-responsibility, Individualists do not expect to be assured by service providers. In cultures with a high degree of masculinity, customers expect a female service provider to be more feminine than professional. This is supported by the significant negative relationships between masculinity and responsiveness. In cultures with a high degree of masculinity, it is important for female service employees to have feminine appearance, which is supported by a significant positive relationship between masculinity and tangibles.
In frequent service situations, uncertainty from the possibility of failure has to be reduced by the guarantee of a quick solution to problems. This hypothesis is supported by the significant positive relationships between uncertainty avoidance and responsiveness, assurance, empathy, and reliability. On the other hand, in frequent service situations, tangibles are less important In cultures with a long- term orientation, long-term relationships with service providers are expected.
In these cultures, reliability, responsiveness, and empathy are extremely important. Also significant are the negative relationships between long-term orientation and assurance and between long- term orientation and tangibles are also significant cf. Furthermore, a study by Liu, Furrer and Sudharshan also showed that service customers from different cultures react differently when faced with poor quality services, if customers from cultures with lower individualism or higher uncertainty avoidance tend to complain less, customers from cultures with higher individualism or lower uncertainty avoidance tend to switch provider, engage in negative word of mouth, and complain.
Box Cross-Cultural Preferences in Luxury Hotels In the context of luxury hotels, customer with a Western cultural background individualism, small power distance rely more on the tangible cues from the physical environment and their Asian counterparts collectivism, large power distance are more likely to rely on deportment of service personnel staff.
The hedonic dimension of consumption experience is also more important for Western consumers than for Asian ones Source: Adapted from Mattila, Most service firms having started their internationalization later than most product firms, they learned from the experience of these firms Vandermerwe and Chadwick, Recognizing that an international or a global strategy would be difficult due to the intangible nature of most services and the various cultures of their world customers and recognizing that a multinational strategy would be to costly to implement and to manage due to the large number of differences within and across cultures, they often adopted a transnational strategy as soon as they started their internationalization process.
Service firms following such a transnational strategy have two leviers to achieve both global efficiency and local responsiveness by coordinating service quality across countries and cultures: 1 cross-cultural segmentation and 2 the standardization of the core service and the adaptation of supplementary services.
The traditional approach to worldwide marketing segmentation was to segment a market on a country basis to take account of national differences in demand conditions. Kale and Sudharshan , however, suggested a different approach for segmenting worldwide markets, which is more compatible with the requirement for transnational marketing strategy.
The approach makes customers and their needs the basis for segmentation. It has the advantage of being consumer orientated, while allowing worldwide coordination of marketing, since it focuses on similarities rather than differences across groups of consumers in different countries or cultures. The basis of this approach is the identification of transnational segments of consumers, with similar needs, who will respond similarly to a given marketing mix.
Furrer, Liu and Sudharshan identified five different customer segments based on differences in the importance of service quality and cultural dimensions cf. Box Five Transnational Service Customer Segments Followers: Large power distance, high collectivism, high masculinity, neutral uncertainty avoidance, arid short-term orientation.
Balance seekers: Small power distance, high collectivism, neutral masculinity, high uncertainty avoidance, and medium-term orientation. Self-confidents: Small power distance, high individualism, medium femininity, low uncertainty avoidance, and long-term orientation.
Sensory seekers: Large power distance, medium individualism, high masculinity, low uncertainty avoidance, and short-term orientation. Functional analyzers: Small power distance, medium individualism, high femininity, high uncertainty avoidance, and long-term orientation. Figure 2 graphically presents the relative importance given by each of these five segments to the different dimensions of service quality.
From figure 2 it is clear that the service quality dimensions are important across cultures, but their relative importance varies depending on cultural value orientation.
For example, small power distance cultures with high to medium individualism and long-term orientation self-confidents and functional analyzers rate reliability and responsiveness as most important. On the other hand, cultures with large power distance and high masculinity followers and sensory seekers rate these same dimensions as less important.
The tangibles dimension shows the widest variation, with sensory seekers rating it most important and functional analyzers rating it least important. Figure 2: Transnational Service Customer Segments For example, if the target market has a follower cultural profile, service providers may want to emphasize training their employees to have professional knowledge and be trustworthy to gain the trust of these customers, combined with tangibles and empathy to convey service quality.
On the other hand, to serve self-confidents, providers should emphasize equipping and empowering the employees so they are capable of providing reliable, responsive service. A second element of a transnational strategy for service firms, proposed by Lovelock and Yip , is the standardization of the core service and the cultural adaptation of the supplementary services.
Most services comprise a core service e. In the core service may benefit to be standardized, increasingly, the supplementary elements not only add value, but also provide the needed local adaptation.
There are potentially dozens of different supplementary services, although they can be grouped into eight categories: information, consultation, order-taking, hospitality, care-taking, exceptions, billing, and payment Lovelock, cf. Many of these services are based on informational processes that can be located in one part of the world and delivered electronically to another. Those may benefit to be standardized, other are involve a personal interaction between the customer and the service provider and should be customized.
In developing a transnational strategy, service firms must decide which supplementary elements This is the essence of the transnational strategy, but services offer much more flexibility in this respect than do tangible goods Lovelock and Yip, Box Eight Categories of Supplementary Services Information: To obtain full value from any service, customers need relevant information about it, ranging from schedules to operating instructions, and from user warnings to price.
Internationalization affects the nature of that information including the languages and format in which it is provided. Consultation: Consultation and advice involve a dialogue to probe customer requirements and then develop a tailored solution.
Order-Taking: Once the customers are ready to buy, suppliers need to make it easy for them to place orders or reservations in the language of their choice, through telecommunications and other channels. Cultural definitions of appropriate hospitality may differ widely from one culture to another, such as the tolerable length of waiting time.
Care-Giving: When visiting a service site, customers often want assistance with their personal possessions, ranging from car parking to packaging and delivery of new purchase. Expectation may vary by culture. Exceptions: Exceptions fall outside the routine of normal service delivery. Billing: Customers need clear, timely bills that explain how charges are computed. Payment: Ease and convenience of payment including credit are increasingly expected by customers when purchasing a broad array of services.
Major credit cards solve the problem of paying in foreign funds for many retail purchasers. Within this framework, we have identified four generic worldwide strategies: the international, multinational, global, and transnational strategy. We have also shown that these four strategies could be distinguished by their different positioning on three key-dimensions that are: standardization-adaptation, configuration-coordination, and strategic integration.
We have also shown that, constrained by their administrative and cultural heritage, MNCs from different regions of the world tend to follow a particular generic strategy: Typical American MNCs tend to follow an international strategy, typical European More recently, MNCs from all regions have started to converge toward a transnational strategy.
After the presentation of these four generic strategies, we have explored the consequences of their adoption for three critical marketing operational strategies: 1 marketing decision-making processes; 2 innovation and new product development; and 3 service quality strategies.
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Hout, Thomas M, Michael E. Jain, Subhash C. Jarillo, J. Carlos and Jon L. Jayachandran, Satish, Javier Gimeno and P. Johnson, Julius H. Johnson, Steven B. Judd, Robert C. This strategy is formed by the strategies of the marketing mix or also called the 4Ps of marketing are variables of great importance to achieve the commercial objectives that the organization has. The 4 variables are product, price, distribution and promotion.
This strategy focuses on competitive value. You must define where you are in the market compared to your competition. It will maintain customer loyalty. It will prevent them from leaving with the competition thanks to the constant creativity and good customer service that the company will provide to its consumers. It can include discounts, promotions, gifts, etc.
This strategy is based on the creation of content such as: articles, computer graphics, ebooks. This type of strategy can be used as a blog where you can:. A direct-customized message is implemented with the client. Today most companies do digital marketing something that was not common several years ago. Being just one click away from information makes this strategy popular.
With the type of strategies mentioned you can visualize what objectives you want to achieve and what results you want to bring to your company in a short term.
A marketing strategy is a type of strategy with which each business unit plans to achieve its marketing objectives by:. In order to develop the marketing plan, it is important to first choose the marketing strategy for the long-term objectives of the company.
Some of the traditional strategies that are still widely used by organizations today. However, the world is in a constant media development so companies have also felt the pressure to use other types of marketing strategies to survive and transform the processes of change, this is why the importance of digital marketing strategies. Not all organizations carry out market strategies in the same way. Just as there is diversity of people, there is diversity of brands, and each of them has particular preferences and needs.
Choose the strategies that work best for you and take you to the right audience. Get Toolshero updates on new methods, models and theories! Join us. What do you think? Is the Marketing Strategy key to achieve the objectives that the company has with its customers?
Is it necessary to create a marketing plan after constituting the marketing strategy? What kind of strategies you use in your organization?
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