Marketing 1-5

Marketing

is the activity, set, of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, cilent, partners, and society at large.

What does good marketing require?

it requires thoughtful planning with an emphasis on the ethical implications of any of those decisions on society in general. good marketing should mean doing god for the world at large, while also benefiting the firm and its customers. to achieve this, firms develop a marketing plan.

Marketing plan

specifies the marketing activites for a specific period of time. its broken down into various components—how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer. in any exchange, all parties in the transaction should be satisfied.

What are the core aspects of Marketing?

• Marketing is about satisfying customer needs and wants.

• Marketing entails an exchange

• Marketing creates value through product, price, place, and promotion decisions. (through the marketing mix or four P’s.)

• Marketing can be performed by individuals and organizations.

• Marketing affects various stakeholders.

Marketing is about satisfying customer needs and wants

understanding the marketplace, and especially consumer needs and wants, is fundamental to marketing success. in the broadest terms, the marketplace refers to the world of trade. the marketplace can be segmented or divided into groups of people who are pertinent to an orgranization for particular reasons.

Marketing entails an exchange.

marketing is about an exchange, the trade of things of value between the buyer and the seller, so that each is better off as a result. sellers provide products or services and then communicate and facilitate the delivery of their offering to consumers. buyers complete the exchange by giving money and information to the seller.

Marketing creates value through product, price, place, and promotion decisions.

marketing traditionally has been divided into a set of four interrelated decisions and consequent actions known as the marketing mix, or four P’s: product, price, place and promotion.

The four Ps are the controllable set of decisions or activities that the firm uses to respond to the wants of its target markets.

What does each activity in the marketing mix (four P’s) entail?

• Product, which creates value.

• Price, that captures value.

• Place, consists of delivering the value proposition.

• Promotion, consists of communicating the value proposition.

Product: Creating Value

although marketing is a multifaceted function, its fundamental purpose is to create value by developing a variety of offerings, including goods, services, and ideas, to satisfy customer needs.

Goods

items that you can physically touch. a car, a Rolex watch, Nike shoes, a Pepsi-Cola, a Frappuccino, Kraft cheese, Tide, an iPad, and countless other products are example of goods.

they primarily function to fulfill some need, such as satiating hunger or cleaning clothing. but their ultimate value stems from what they provide—and how they are marketed—in terms of their safety benefits (e.g., self-driving cars and safety features), status (Rolex vs. Timex watch or The Row vs. ZARA), performance (innovative Nike sneakers), taste, and so forth.

Services

intangible customers benefits that are produced by people or machines and cannot be separated from the producers. when people buy tickets—whether for airline travel, a sporting event, or the theater—they are paying not for the physical ticket snub but, of course, for the experience they gain.

Sellers that provide products and then market services

even some sellers that mainly offer products might market some services to provide more value. for example FreshDirect creates and promotes “meal hacks” that suggest easy ways to use familar products in novel ways such as a delicious meal for Mother’s Day.

hotels, insurance agencies, airlines, and banks are more traditional examples of sellers that provide services. for example, getting money from your bank, whether through an ATM or from a teller, consitutes a service. the cash machines usually add value to the banking experience because they are conveniently located, fast, and easy to use.

Combining goods and services

many offerings in the market combine goods and services. when you go to an optical center, you get your eyes examined (a service) and purchase new contact lenses (a good). If you attend an Ariana Grande concert (its a service) and you buy a shirt or souvenir (its a good) to remember the concert. with those tangible goods, you can relive and remember the enjoyment of the experience over and over again.

Ideas

include thoughts, opinions, and philosophies; intellectual concepts such as these also can be marketed.

groups promoting bicycle safety go to schools, give speeches, and sponsor bike helmet poster contests for the members of their primary market—children. then their secondary market segment, parents and siblings, gets involved through their interactions with the young contest participants.

the exchange of value occurs when the children listen to the sponsor’s presentation and wear their helmets while bicycling, which means they have adopted, or become “purchasers” of, the safety idea that the group marketed.

Price: Capturing Value

everything has a price, although it doesn’t always have to be monetary. price, therefore, is everything the buyer gives up—money, time, and/or energy—in exchange for the product. marketers must determine the price of a product carefully on the basis of the potential buyer’s belief about its value.

Stanley’s buyers believe that the product is valuable based on their behavior of spending money, taking time out their day standing in lines early in the morning for a product drop, and even having the energy to fistfight other buyers for a Taylor Swift x Stanley quencher tumbler at 6 am.

Place: Delivering the Value Proposition

represents all the activities necessary to get the product to the right customer when that customer wants it. Place also deals specifically with retailing and all activities required to get the right product to the right customer when that customer wants it. it encompasses both supply chain and marketing channel management.

Supply chain management

a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transporation intermediaries into a seamless operation in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time as well as to minimize systemwide costs while satisfying the service levels their customers require.

it’s broader than marketing channel management since it includes all the operational aspects of manufacturing and moving and storing merchandise.

Marketing channel management

developing and maintaining partners and relationships within the supply chain. to do so, it includes the set of approaches and techniques firms employ to integrate their suppliers efficiently and effectively to serve their customers.

many marketing students intitally overlook the importance of supply chain management because a lot of these activities are behind the scenes. but without a strong and efficient supply chain system, merchandise isn’t available when customers want it and then customers are disappointed, and sales and profits suffer.

but even the best efforts to design an effective, efficient supply chain can fall short due to external influences. so marketers must develop contingency plans and adopt effective predictive analytics to anticipate problems, like FedEx’s decision to keep meteorologists on staff to help it predict inclement weather effects.

Promotion: Communicating the Value Proposition

even the best products and services will go unsold if marketers cannot communicate their value to customers. promotion is communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their opinions and elicit a response. promotion generally can enhance a product’s or service’s value.

Marketing can be performed by individuals and organizations.

imagine how complicated the world would be if you had to buy everything you consumed directly from producers or manufacturers. you would have to go from farm to farm buying your food and then from manufactuer to manufacturer to purchase the table, plates, and utensils you need to eat that food.

fortunately, marketing intermediaries such as retailers accumulate merchandise from producers in large amounts and then sell it to you in smaller amounts through B2B marketing and then B2C marketing. you can also buy from other consumers and sell to other consumers through C2C marketing.

Business-to-business (B2B) marketing

the process of selling merchandise or services from one business to another.

Business-to-consumer (B2C) marketing

the process by which businesses sell to consumers.

Consumer-to-consumer (C2C) marketing

the process in which consumers sell to other consumers.

Marketing affects various stakeholders.

most people think of marketing as a way to facilitate the sale of products or services to customers or cilents. but marketing can also affect several other stakeholders (supply chain partners, society at large).

partners in the supply chain include wholesalers, retailers, or other intermediaries such as transporation or warehousing companies. all of these entities are involved in marketing to one another. manufacturers sell merchandise to retailers, but the retailers often have to convince manufactuers to sell to them.

marketing also can aim to benefit an entire industry or society at large.

What are the various eras of marketing?

• Production (turn of the century to 1920)

• Sales (1920-1950)

• Marketing (1950-1990)

• Value-based marketing (1990- turn of the 21st century)

• Technology-augmented marketing (2010)

Relational orientation

a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship.

Customer relationship management (CRM)

a business philosophy and set of strategries that focus on identifying and building loyalty among the firm’s most valued customers.

Value cocreation

customers act as collaborators with a manufacturer or retailer by in this case leveraging advanced technology to create the product or service that appeals mostly to them and thus offers optimal value.

How Does Marketing Create Value, and How Do Firms Become More Value Driven?

Value stems from the four main activities that value-driven marketers undertake.

• Building relationships with customers.

• Gathering and analyzing information.

• Engaging in social and mobile marketing.

• Addressing ethical and societal dilemmas.

Adding Value

Value-oriented marketers constantly measure the benefits that customers perceive against the costs of their offerings. they use available customer data to find opportunities to satisfy their customer’s needs better, keep down costs, and develop long-term loyalties.

Marketing Analytics

modern marketers rely on sophisticated data analytics to define and refine their approaches to their customers and their markets. the growth of big data and the associated challenges are inescapable, so detailing their implications for a wide range of organizations and firms, as well as their customers.

in particular, companies such as Starbucks, CVS, Kroger, Netflix, and Amazon collect massive amounts of data about how, when, why, where, and what people buy and then analyze those data to inform their choices. with an inventory monitoring system, reliant on cutting-edge AI capabilities, Google precisely monitors customers purchases, seeking ways to improve their retailer experience.

Social and Mobile Marketing

marketers leverage social media mobile applications to promote and provide products and services.

Ehical and Societal Dilemma

socially responsible firms build trust with investors and customers, helping their bottom line in the long run

Geotargeting

segmenting an audience according to their current and past locations.

Marketing strategy

identifies a firm’s target market(s), a related marketing mix (its four Ps), and the bases on the firm plans to building a sustainable competitive advantage.

Sustainable competitive advantage

an advantage over the the competition that is not easily copied and can be maintained over a long period of time. a competitive advantage acts like a wall that the firm built around its position in a market. this wall makes it hard for outside competitors to contact customers inside—otherwise known as the marketer’s target market.

Macro Strategies for Developing Customer Value

there are four macro, or overarching, strategies that focus on aspects of the marketing mix to create and deliver value and to develop sustainable competitive advantages:

• Customer excellence

• Operational excellence

• Product excellence

• Locational excellence

Customer excellence

achieved when a firm develops value-based strategies for retaining loyal customers and provides outstanding customer services.

Retaining loyal customers

Having a strong brand, unique merchandise, and superior customer service all help solidify a loyal customer base. in addition, having loyal customers is, in and of itself, an important method of sustaining an advantage over competitors.

loyalty is more than simply preffering to purchase from one firm instead of another. it means that customers are relucant to patronize competing firms. loyal customers drink Pepsi even if Coca-Cola goes on sale. more and more firms realize the value of achieving customer excellence by focusing their strategy on retaining loyal customers. viewing customers with a lifetime value perspective rather than on a transaction-by-transaction basis is key to modern customer retention programs.

Providing outstanding customer service

marketers also may build sustainable competitive advantage by offering excellent customer service, though consistency in this area can prove difficult. customer service is provided by employees, and, invariably, humans are less consistent than machines. firms that offer good customer service must instill its importance in their employees over a long period of time so that it becomes part of the organizational culture.

although, it may take consider time and effort to build such a reputation for customer service, once a marketer has earned a good service reputation, it can sustain this advantage for a long time because a competitor is hard-pressed to develop a comparable reputation.

Operational Excellence

achieving operational excellence involves, efficient operations, excellent supply chain management, and strong relationships with suppliers.

Product Excellence

provide products with high perceived value and effective branding and positioning.

Locational Excellence

especially important for retailers and service providers.

many say, “the three most important things in retailing are location,

location, location.”

competitive advantage based on location is not easily duplicated.

Marketing plan

a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four P’s, action programs, and projected or pro forma income (and other financial) statements. the three major phases of the marketing plan are planning, implementation, and control.

Multiple sources of Advantage

a single strategy (low prices or excellent service) is usually not enough to build a sustainable competitive advantage.

southwest airlines provides good service at a good value (on-time flights that are reasonably priced).

What are the phases and steps of a Marketing Plan

Planning Phase

Step 1: Define business mission and objectives.

Step 2: Conduct a situational analysis (SWOT)

Implementation phase/Marketing strategy

Step 3: Identify and evaluate opportunities (STP)

Step 4: Implement marketing mix and allocate resources (Four P’s)

Control phase

Step 5: Evaluate performance using marketing metrics

Planning phase

marketing executives, in conjunction with other top managers, define the mission and/or vision of the business. for the second step they evaluate the situation by assessing how various players, both inside and outside the organization, affect the firms potential for success.

Implementation phase

marketing managers identify and evaluate different opportunities by engaging in a process known as segmentation, targeting, and positioning (STP) (Step 3). they then are responsible for implementing the marketing mix using the four P’s (Step 4).

Control phase

evaluating performance of the marketing strategy using marketing metrics and taking any necessary corrective actions (Step 5).

Step 1: Define business mission and objectives.

a mission statement, a broad description of a firm’s objectives and scope of activities it plans to undertake, attempts to answer three main questions: what type of business are we?, what are our objectives?, and what do we need to do to accomplish those objectives? these fundamental business questions must be answered at the highest corporate levels before marketing executives can get involved.

Step 2: Conduct a situation analysis

after developing its mission, a firm would perform a situation analysis using a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats. in addition, it should assess the opportunities and uncertainties of the marketplace due to changes in Cultural, Demographic, Social, Technological, Economic, and Political/Legal forces (CDSTEP).

Step 3: Identify and evaluate opportunities

after completing the situation analysis, the next step is to identify and evaluate opportunities for increasing sales and profits using segmentation, targeting, and positioning (STP).

With STP, the firm first divides the marketplace into subgroups or segments, determines which of those segments it should pursue or target, and finally decides how it should position its products and services to best meet the needs of those chosen targets.

Segmentation

many types of customers appear in any market, and most firms cannot satisfy everyone’s needs. for instance, among internet users, some do research online, some shop, some look for entertainment, and many do all three. each of these groups might be a market segment consisting of consumers who respond similarly to a firm’s marketing efforts. the process of dividing the market into groups of customers with different needs, wants, or characteristics—who therefore might appreicate products or services geared especially for them—is called market segmentation.

Targeting

after a firm has identified the various market segments it ight pursue, it evaluates each segment’s attractiveness and decides which to pursue using a process known as target marketing or targeting. for example, Hertz realizes that its primary appeal for the SUV/Minivan/4×4 Collection centers on young families, so most of its marketing efforts for this business are directed toward that group.

Positioning

finally, when the firm decides which segments to pursue, it must determine how it wants to be positioned within those segments. market positioning involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

Hertz positions itself as a quality car (and truck) rental company that is the first choice for each of its target segments. in its marketing communications, it stresses that customers will get peace of mind when they rent from Hertz, the market leader in the car rental business, and be able to enjoy their journey (leisure consumers) and reduce travel time (business consumers.)

after identifying its target segments, a firm must evaluate each of its strategic opportunties. firms typically are most successful when they focus on opportunities that build on their strengths relative to those of their competition.

Step 4: Implement Marketing Mix and Allocate Resources

marketers implement the actual marketing mix—product, price, place, and promotion—for each product and service on the basis of what they believe their target markets will value. at the same time marketers make important decisions about how they will allocate their scarce resources to their various products and services.

• Product and Value Creation Products

• Price and Value Capture

• Place and Value Delivery

• Promotion and Value Communication

Product and Value Creation Products

successful products and services are those that customers perceive as valuable enough to purchase.

Price and Value Capture

price is what the customer is willing to pay for a product they perceive as good value.

perception is everything - price should be based on the value the customer perceives.

Place and Value Delivery

the product must be readily accessible when and where the customer wants it.

Promotion and Value Communication

Integrated Marketing Communications (IMC) includes:

• Advertising

• Personal selling

• Sales promotion

• Public relations

• Direct marketing

• Online and social media marketing

Step 5: Evaluate Performance using Marketing Metrics

the final step in the planning process includes evaluating the results of the strategy and implementation program using marketing metrics. a metric is a measuring system that quantifies a trend, dynamic, or character. metrics are used to explain why things happened and also project the future.

they also make it possible to compare results across regions, strategic business units (SBUs), product lines, and time periods. the firm can determine why it achieved or did not achieve its performance goals with the help of these metrics.

understanding the causes of the performance, regardless of whether that performance exceeded, met, or fell below establishing goals, enables firms to make appropriate adjustments.

typically, managers begin by reviewing the implementation programs, and their analysis may indicate that the strategy (or even the mission statement) needs to be reconsidered. problems can arise both when firms successfully implement poor strategies and when they poorly implement good strategies

Who is accountable for performance?

at each level of an organization, the business unit and its manager should be held accountable only for the revenues, expenses, and profits that they can control. thus, expenses that affect several levels of the organization (such as the labor and capital expenses associated with operating a corporate headquarters) shouldn't be arbitrarily assigned to lower levels. In the case of a store, for example, it may be appropriate to evaluate performance objectives based on sales, sales associate productivity, and energy costs. if the corporate office lowers prices to get rid of merchandise and therefore profits suffer, then it's not fair to assess a store manager's performance based on the resulting decline in store profit.

performance evaluations are used to pinpoint problem areas. reasons performance may be above or below planned levels must be examined. if a manager's performance is below planned levels, was it because the sales force didn't do an adequate job, because the economy took a downward turn, because competition successfully implemented a new strategy, or because the managers involved in setting the objectives aren't very good at making estimates!

the manager should be held accountable only in the case of the inadequate sales force job or setting inappropriate forecasts.

What metrics are used to evaluate performance?

comparing the firm’s performance over time or to competing firms, using common financial metrics such as sales and profits. another method of assessing performance eis to view the firm’s products or services as a portfolio. depending on the firm’s relative performance, the profits from some products or services are used to fuel growth for others.

Financial Performance Metrics

some commonly used metrics to assess performance include revenues, or sales, and profits. sales are a global measure of a firm's activity level. For example, a manager could easily increase sales by lowering prices, but the protit realized on that merchandise (gross margin) would suffer as a result. An attempt to maximize one metric may therefore lower another. thus, managers must understand how their actions affect multiple performance metrics. It's usually unwise to use only one metric because it rarely tells the whole story.

In addition to assessing the absolute level of sales and profits, a firm may wish to measure the relative level of sales and profits. for example, a relative metric of sales or profits is its increase or decrease over the prior year. In addition, a firm may compare its growth in sales or profts relative to other benchmark companies.

the metrics used to evaluate a firm vary depending on (1) the level of the organization at which the decision is made and (2) the resources the manager controls. for example, although the top executives of a firm have control over all of the firm's resources and resulting expenses, a regional sales manager has control over only the sales and expenses generated by their salespeople.

Portfolio Analysis

management evaulates the firm’s various products and businesses—its “portfolio”—and allocates resources according to which products are expected to be the most profitable for the firm in the future. portfolio analysis is typically performed at the strategic business unit (SBU) or product line level of the firm, though managers also can use it to analyze brands or even individual items.

Strategic business unit (SBU)

a divison of the firm itself that can be managed and operated somewhat independently from other divisions.

Product line

a group of products that consumers may use together or perceive as similar in some way.

What is one of the most popular portfolio analysis method?

The BCG matrix. it requires all firms classify all their products or services into a 2×2 matrix.

the horizontal axis represents the relative market share.

the relative market share provides managers with a product’s relative strength compared with that of the largest firm in the industry.

the vertical axis is the market growth rate, or the annual rate of growth of the specific market in which the product competes.

each quadrant has been named on the basis of the amount of resources it generates for and requires from the firm (Stars, Cash Cows, Question marks, and Dogs)

Stars

(upper left quadrant) occur in high-growth markets and are high market share products. that is, stars often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth. as their market growth slows, stars will migrate from heavy users of resources to heavy generators of resources and become cash cows.

Cash Cows

(lower left quadrant) are in low-growth markets but are high market share products. because these products have already received heavy investments to develop their high market share, they have excess resources that can be spun off to those products that need it.

Dogs

(lower right quadrant) are in low-growth markets and have relatively low market shares. although they may generate enough resources to sustain themselves, dogs are not destined for “stardom” and should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes.

Question Marks

(upper right quadrant) appear in high-growth markets but have relatively low market shares; thus they are often the most managerially intensive products in that they require significant resources to maintain and potentially increase their market share. managers must decide whether to infuse question marks with resources generated by the cash cows, so that they can become stars, or withdraw resources and eventually phase out the products.

Growth Strategies

firms consider pursuing various market segments as part of their overall growth strategies, which may include four major strategies (market penetration, market development, product development, and diversification). The rows distinguish those opportunities from those it has in a new markets, whereas the columns distinguish between the firm’s current marketing offering and that of a new opportunity.

Market Penetration

Marketers use the existing marketing mix and focus on existing customers.

• Requires greater marketing efforts.

• Marvel expanding movie offerings is an example of market penetration

Market Development

Marketers push current products or services to new markets

Product Development

Marketers push a new product or service to the current market

Diversification

Marketers push a new product or service to a new market segment.

Related diversification:

• Marvel producing themed home décor.

Unrelated diversification:

• If Marvel were to provide childcare services.

Digital Marketing

pertains to all online marketing activities, which includes all digital assets, channels, and media, spanning not just online but also social media and mobile marketing. among the online marketing activities associated with digital marketing, website design, blogging, and search engine optimization are prominent.

Social media

online and mobile technologies that create and distribute content to facilitate interpersonal interactions, with the assistance of various firms that offer platforms, services and tools to help consumers and firms build their connections. through these connections, marketers and customers share information of all forms—from personal assessments and thoughts about products or images, to uploaded personal pictures, music, and videos.

How has changes and advances online changed how firms communicate?

the changes and advances in online, social media, and mobile technologies have created a perfect storm, forcing firms to change how they communicate with their customers.

traditional ways to market products, using brick and mortar stores, traditional mass media (print, television, radio,), and other sales promotional vehicles (mail, telemarketing), are no longer sufficient for many firms. the presence of online, social media, and mobile marketing is steadily expanding relative to these more traditional forms of integrated marketing channels and communications.

The 4E framework for digital marketing

the changing role of traditional media, sales promotions, and retail, coupled with the new online, social media, and mobile media and technology, has led to a different way of thinking about the objectives of digital marketing: the 4E framework:

• Excite customers with relevant offers

• Educate them about the offering

• Help them experience products, whether directly or indirectly

• Give them an opportunity to engage with the firm’s digital marketing activities.

Excite customers with relevant offers

marketers use many kinds of digital offers to excite customers, including mobile applications and games to get customers excited about an idea, product, brand, or company.

firms actively use social media to communicate deals that are likely to excite consumers. to excite customers, an offer must be relevant to its targeted customer. relevancy can be achieved by providing personalized offers, which are determined through insights and information obtained from customer relationship management (CRM) and/or loyalty programs. to obtain these insights and information, the firm might use online analytic tools such as Google Analytics.

in some cases, location-based software and applications help bring the offer to the customers when they are in the process of making a purchase decision.

Educate them about the offering

when potential customers arrive at the websites or stores, the marketer has a golden opportunity to educate them about its value propositions and communicate the offered benefits. some of this information may be new, but in some cases, education is all about reminding people what they already know. therefore, by engaging in appropriate education, marketers are expanding the overlap of the benefit that they provide with the benefits that customers require.

also, to market ideas, this framework can be a means to improve people’s well-being, along with selling the underlying concept

Experience the Product or Service.

provide vivid information about offerings and simulate real-life experiences.

Engage the Customer

in a sense, the first three Es set the stage for the last one: engaging the customer. with engagement comes action, the potential for a relationship, and possibly even loyalty and commitment.

through social media tools such as blogging and microblogging, customers actively engage with firms and their own social networks. such engagement can be positive or negative.

positively engaged consumers tend to be more profitable consumers. but negative engagement has the potential to be even more damaging than positive engagement is beneficial.

Artificial Intelligence in Marketing

the 4E objectives of digital marketing all can benefit from marketers’ effective uses of artificial intelligence (AI). some observers even suggest that AI applications in marketing represent its future. its integrated into chatbots, voice assistants, recommendation systems, and so forth, today’s AI can can not only conduct rational and cognitive analyses but also tell jokes, write poems, and paint original art.

you can categorize AI applications through the AI Four-Quadrant framework.

Artificial Intelligence (AI)

the ability of information technologies, machines, and computers to exhibit intelligence, such that they can learn continually from data and perform tasks and functions that previously would have required human intervention.

the AI Four-Quadrant framework

a way to categorize different AI applications, its according to whether the AI interacts directly with the customer or functions in the background (vertical axis), as well as whether its purpose is to replace human workers or else complement and augment their efforts (horizontal axis).

Increase Efficiency (Quadrant 1), Expand Capabilities (Quadrant 2), Augment Capabilities (Quadrant 3), and Autonomous AI (Quadrant 4).

Increase Efficiency (Quadrant 1)

AI applications substitute for humans and do not interact with consumers, the technologies help firms perform various critical activities that are not actively noticed by consumers, such as filling orders in distribution centers or cleaning floors in stores. these applications effectively increase efficiency, because they perform necessary tasks at relatively low costs while also freeing up employees to spend their time serving customers.

Expand Capabilities (Quadrant 2)

the AI works in the background but functions to assist human employees, it provides an opportunity for expanded firm benefits. AI applications and monitoring systems provide real-time information and suggestions to aid marketing decision makers.

Augment Capabilities (Quadrant 3)

shifting to AI applications that interact with customers, some of them augment human capabilities. this capability is particularly evident in the service industry, where AI applications might perform tedious tasks, but customers still need some conversation or input that requires a certain level of emotional intelligence.

Autonomous AI (Quadrant 4)

AI interacts with customers without the assistance of human employees, commonly seen with customer service chatbots.

Online Marketing

online marketing is the most familiar and well-established element of digital marketing.

nearly all firms use online marketing:

• Websites

• Blogs

• Social media presence

• E-commerce sites

the largest online marketer in the United States is Amazon.

firms use these primary online channels for a variety of goals that reflect the 4E. as firms develop their online marketing efforts through their websites and blogs, they can turn to the 7C framework for online marketing.

The 7c Online Marketing Framework

1. Core goals

2. Contextual elements (design & navigation)

3. Content

4. Community

5. Communication

6. Commerce

7. Connection

Core goals

the basis of any marketing strategy is its goals.

determine specific goals.

align the goals with the target market and align the 7C’s with the goals.

Context elements

website elements like design and navigation must align with the wants of the target audience.

Content

monitor content to ensure relevancy.

devise appropriate keywords to improve organic search.

implement SEM and paid search.

Search engine marketing (SEM)

an activity used in online searches to increase the visibility of a firm by using paid searches to appear higher up in search results.

Paid search

is similar to conventional adversting because firms pay to appear higher up in the search results, and also often pay an additional fee every time a user clicks on their entry.

Community

firms also use their websites and blogs actively to allow customers to interact, socialize, share iformation, and create a sense of community by posting comments, reviews, responses, images, videos, and suggestions for new products or services. thought-sharing sites are particularly effective for creating a sense of community, whether they take the form of personal, corporate, or professional blogs, or microblogs.