DM CHAPTER 1 (2)

1. Digital Marketing

Over the past decades, the framework of marketing has changed dramatically due to the rise of the internet, influencing consumer and business buyer behavior. Knowledge of online consumer behavior and Digital Marketing is essential for modern marketers. This chapter defines Digital Marketing and covers the fundamental principles discussed throughout the book, including the integration of Digital Marketing into business processes, the significance of effective websites and apps, digital/web analytics, and the planning and organization of the Digital Marketing process.

1.1 Definition of Digital Marketing

  • Marketing Definition: According to Kotler and Armstrong (2019), marketing is the process of creating value for customers and building strong relationships to capture value back from them.

  • Purpose of Marketing: Peter Drucker (1973) stated that marketing aims to know and understand customers so well that products fit and sell themselves.

  • Digital Marketing Defined: Digital Marketing is a sub-process of marketing where organizations and customers interact via the internet to create and exchange value. It encompasses marketing activities conducted online and is synonymous with terms like internet marketing and e-marketing.

  • E-commerce vs Digital Marketing:

    • E-commerce: Refers specifically to selling products/services over the internet and completing transactions.

    • E-business: A broader term that involves all digital processes within an organization, encompassing both marketing interactions and backend processes not customer-facing.

1.2 Digital Marketing vs. Traditional Marketing

  • Increasing Importance: Digital Marketing is becoming crucial due to the vast possibilities for digitalization and interactivity.

  • Benefits of Digital Marketing:

    • Easily meets customer demands for information.

    • Provides tailor-made content and gathers significant amounts of customer data.

    • Allows for measurable effects of marketing communications.

    • Facilitates high interactivity with customers, transitioning to personalized marketing strategies.

  • Individualized Marketing: Utilizes saved customer data to create personalized offers, motivating customer loyalty and tailored recommendations.

1.3 Digital Marketing and the Marketing Mix

  • Marketing Mix Concept: Originally a formula involving four elements (4 Ps): Product, Price, Place, Promotion. Marketers blend these elements to meet target audience needs.

  • Evolution in Definition: With the advent of the internet, the 'Place' element expanded to include all customer touchpoints and distribution methods via digital communications.

  • Shift from 4 Ps to 4 Cs: Robert Lauterborn proposed the 4 Cs model, focusing on:

    • Customer solution (instead of Product)

    • Cost to the customer (instead of Price)

    • Convenience (instead of Place)

    • Communication (instead of Promotion)

1.4 Digital Marketing in Relation to Business Processes

  • Five Core Processes of Marketing (Kotler & Keller, 2016):

    1. Market Sensing Process: Updates on market needs and trends.

    2. Product Realization Process: New product development and supply extension.

    3. Customer Acquisition Process: Defining and acquiring new customers.

    4. Order Fulfillment Process: Managing orders and payments efficiently.

    5. Customer Relationship Management (CRM) Process: Building customer understanding and relationships.

  • Role of Online Analytics: Continual market sensing through web analytics aids in tracking customer behavior and optimizing marketing strategies.

1.5 Development of Digital Marketing

  • Phases of Development: Digital Marketing evolved through three key phases:

    • Mass Media Phase: Marketers primarily pushed messages to consumers.

    • Internet Phase: Increased interactivity facilitated dialogues between consumers and brands.

    • Social Media Phase: Consumers now heavily influence brand narratives, creating a reciprocal effect.

1.6 Important Models for Digital Marketing Communication

  • Digital Marketing Funnel: Encourages the conversion process from visits to completion of sales, emphasizing repeated actions by visitors to enhance loyalty.

  • RAIA Model: Focuses on guiding target audiences through phases of Reach, Attention, Interest, Activation (leading to hard conversions).

1.7 Book Structure

  • Chapter Overview: The upcoming chapters will elaborate on strategic aspects of Digital Marketing, processes for customer acquisition, online research, effective communication strategies, and CRM, among other topics. Each chapter aligns with the practical decision-making process of organizations engaging in Digital Marketing.