Swarnabha Shankar Ray

10BM60092

Vinod Gupta School of Management

Indian Institute of Technology Kharagpur

Index

Abstract 2

Introducing the term Digital Marketing 3

Differences between Digital and traditional Marketing 4

Differences between Digital and Internet Marketing 5

Understanding of Digital Marketing Concept in India 6

Digital Marketing Strategies 7

Future: How is Digital Marketing better 11

Conclusion 12

References 13

Abstract

"A widely practiced strategy in launching this type of marketing program is to do a test run initially. Data

collected from the test run will provide an indication of the level of response to be expected if the direct

marketing campaign is launched. If the level of response is judged to be too low, then the management

has to revise its procedures of selecting the right consumer segment. Because the costs of implementing

direct marketing programs are high and because digital marketing programs usually generate a very low

percentage of response, it is critical that the right consumer segment be selected."

This paper examines the ways that digital marketing can provide the operational framework through

which digital relations with customers may be built and maintained. The paper stresses that, because the

investments required to launch a digitalmarketing campaign are quite high, management has to evaluate

rigorously the profitability of launching digitalmarketing campaigns. The paper then underscores the

importance of the market research through all stages of the functional value chain. The paper then points

out methods of evaluating digitalmarketing programs such as calculating the return on investment (ROI).

The paper presents various examples of digitalmarketing programs.

Introduction:Gone are the days when internet marketing was considered a stand-alone

promotion medium. The next big thing in the marketing world is Digital Marketing. This mode is

contemporary, user-friendly and very accessible. Also known as online marketing, this is a way of

endorsing products and services using the digital interactive distribution channels. This medium

involves usage of modern communication media like internet, mobile and digital outdoor

mediums.The importance of digital media advertising can be ascertained by a prediction which

says 'Strategic internet marketing is likely to replace the traditional tools of marketing in the next

five years.' A large section of marketing experts believe that this digital interactive marketing

medium will make traditional marketing tools appear irrelevant to the new generation media

consumer.

Before going any deep into the topic ‗digital marketing‘ we need to understand the concept

called Marketing.Marketing is basically one‘s interaction with one‘s consumer. This interaction

with one‘s consumer is done so that one can get the consumer to purchase ones product or

service. Marketing is all about, getting the customer to purchase ones product or service.There

are tendencies to confuse ―marketing‖ with other terms like ―advertising‖ or ―publicity‖ etc.

However, advertising is a small part of marketing,it is just like the tip of the marketing glacier.

Advertising is one of the methodsby which you can get the customer to purchase your product or

service. There are many other ways. Like "publicity" though newspaper will increase awareness

about one‘s product or service and thus may get the customer to purchase one‘s product or

service.The thing is that marketing is a mixture of all the activities of advertising, promotion,

publicity, deciding the look and feel of the product, how it will be sold and sent to the consumer

etc. All of these are the different parts of marketing. They are not marketing.

Whereas a Digital describes electronic technologies that generate, store, and process data in

terms of two states: positive and non-positive. Digital systems are data technology that uses

discrete (discontinuous) values. By contrast, non-digital or even analog systems use a

continuous range of values to represent information. Although digital representation is discrete,

the information represented can be either discrete, such as numbers, letters or icons, or

continuous, such as sounds, images, and other measurements of continuous systems.1

Digital Marketing is the practice of promotion of products and services using interactive digital

distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner.

While digital marketing include many of the techniques and practices contained within the category of

1http://en.wikipedia.org/wiki/Digital

Internet Marketing extends beyond this by including

other channels with which to reach people that do

not require the use of The Internet. As a result of

this non-reliance on the Internet/digital media, the

field of digital marketing includes a whole host of

elements such as mobile phones, sms/mms,

display / banner ads and digital outdoor.

Previously seen as stand-alone service in its own

right, it is frequently being seen as a domain that

can and does cover most, if not all, of the more

traditional marketing areas such as Direct

Marketing by providing the same method of

communicating with an audience but in a digital

fashion. Digital is now broadened to support the

"servicing" and "engagement" of customers.

Digital Marketing is the promoting of brands using all forms of digital advertising. This now includes

Television, Radio, Internet, mobile and any other form of digital media.2

At this point we need to answer a few obvious questions

What is the difference between digital and traditional marketing?

Gone are the days when internet marketing was considered a stand-alone promotion medium. With

increasing reach of digital marketing technologies, online marketing is capable of taking over most of the

traditional marketing areas in a digital way. Direct marketing seems to be an outdated phenomenon after

internet marketing made its place in commoners' life. Direct marketing is now quick, easier, interactive

and beyond human limitations with the use of internet marketing tools.

With every passing day, human lives are moving online. Traditional marketing media is losing its

momentum. A TV spot, which was considered most effective a few years back, is losing its charm. Today,

it is 25% less effective as compared to a situation few years back. Strategic internet marketing reaches

the consumers where they are. A recent survey study disclosed that up to 90 percent of the real estate

prospective buyers begin their search on the internet. This indicates that real estate companies have no

choice but to resort to digital marketing strategies.

2http://en.wikipedia.org/wiki/Digital_marketing

Internet marketing tools have advantage of easy accessibility. SEO, banner placement, email marketing,

social media, various other online tools of marketing are easy to access at consumers' end. The

marketers can get the exact figures of hits on advertisements. They can easily figure as to how many of

the hits are converted into leads. Whereas, incase of traditional marketing, ascertaining exact figures is a

hard nut to crack.With the development of business societies and the rapid progress of information

technology, the internet has become a unique business

environment. Meanwhile, the marketing techniques applied in

electronic commerce, the business activit on the net, has

even become a marketing way that a lot of companies would

like to explore. The significant differences between them

come from the combination of traditional marketing (4Ps:

product, price, place and promotion) and that of . Internet

marketing is derived from traditional marketing. The line of

difference is very thin in terms of what is on offer. Both hold

prime positions. But time is changing and one‘s prospective

clients are far more likely to 'Google' their needs as a first

port of call than go anywhere else for information. And it

becomes the switched on business person to go where the

people go. The difference between traditional method and Internet marketing really lie in effectuality, ease

and cost. The costs are certainly lower with the former and the effects of online promotions are more far-

reaching and have a higher impact. Testimony to the fact, that we are living in new and exciting times.

And this is strongly indicated by the ways that online social media marketing enables businesses to

commune with hundreds of thousands of people, whereas the traditional methods of actually meeting

people in person at corporate events or expos might result in contacts that would struggle to make the

100 mark. In that respect the Internet offers all that traditional marketing does, but on a wider scale, for a

longer term and at a significantly reduced cost. 3

What is the difference between digital marketing and Internet

marketing?

In a nutshell, Digital Marketing technique is the practice of promoting products and services using digital

distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner.

3 Article source - WebTotal Marketing/Srssolutions

While it is a fact that digital marketing technique includes many techniques and practices contained

within the category of Internet Marketing, it extends beyond this by including other channels with which to

reach people that do not require the use of The Internet. As a result of this non-reliance on the net, the

field of digital marketing

includes a whole host of

elements such as mobile

phones, sms/mms, display /

banner ads and digital outdoor.

Previously seen as a stand-

alone service , digital

marketing is now taking over

on most, if not all, of the more

traditional marketing areas. In

the not too distant future the

majority of marketing

communication will be done in

digital form and the internet

will only encompass a small

piece of the digital universe.

The big difference between

digital marketing and Internet marketing is in the type of marketing techniques used. Internet marketing,

although using the digital media, focuses on every means of getting information to potential customers

about products and services a merchant is offering using only the Internet. Digitalmarketing use all the

channels available in the digital media to get information to customers, and it does not limit itself to the

Internet.4

Understanding of the Digital Marketing Concept:

4By -Wayne Shantz

The concept ‗digital marketing‘ is path

breaking and new in the Indian market.

It will take a little time before Indian

Consumer market gets fully aware and

used to it.The prospect of web based

companies are expected to be very

bright considering the fact that more

and more Indians are going in for web

based marketing.The following pie

chart shows the understanding of the

digital presence among the internet

users in India.

Digital Marketing Strategies

The importance of developing an effective digital marketing strategy is indicated by Michael Porter (2001)

who has said:

‘The key question is not whether to deploy Internet technology – companies have no choice if

they want to stay competitive – but how to deploy it.’

A digital marketing strategy is required to provide consistent direction for an organization‘s e-marketing

activities that integrates with its other marketing activities and supports the overall objectives of the

business. For many companies, the first forays into digital marketing are not the result of a well-defined,

integrated Internet strategy; rather, they are a response to competitors activities or customers demand.

Digital marketing lays emphasis both traditional and digital marketing strategies for providing customers

with the latest news and developments about products and services. Digital marketing uses all the

available channels available in the digital media to get information to customers, and it does not limit itself

to the Internet.

Digital Marketing Media

The digital marketing sector use many different digital marketing media channels, such as- Cell phone

Short Message Service (SMS) , Really Simple Syndication (RSS) feeds , Podcasts , Voice Broadcast ,

Video E-mails , Banner ads on affiliate websites , Outdoor digital displays , Websites and Blogs

RSS Feed is a network of web feed formats used to publish frequently updated works—such as blog

entries, news headlines, audio, and video—in a standardized format.

A podcast also known as non-streamedwebcast, is a series of digital mediafiles (either audio, video or

both) that are released episodically and are often downloaded through web syndication.5

It uses all these digital medias to reach out to the prospective customers. These forms of media channels

are both cost effective and are also targeted and positioned to proper segment.

New marketing mix for the digital business strategy:

The 4 Ps marketing mix was created in the earlier days of the marketing concept when physical products,

physical distribution and mass communication were dominant. Today, with the new business environment

created by the different and empowered capabilities of digital contexts, the marketing mix paradigm

increasingly becomes object of criticisms. E-marketing research and practice arrives to a deeper

comprehension and maturity in the digital environment, and advents a new marketing mix paradigm which

will definitely put to the traditional 4 Ps to rest and give light to a new widely accepted paradigm for

5Wikipedia

Digital Marketing

MediaProdcast

Cell Phone(sms)

Really Simple Syndication (RSS) Feeds

Voice E-mails

Voice Broadcast banner ads

on websites

Outdoor Digital

Displays

Blogs

Websites

marketing operations.In the Italian literature, Prandelli and Verona (2006) propose a 3 Cs model, where

each C contains some key elements: content (Web site and platform), community(interaction platform and

relational capability), commerce (including the 4 Ps: product, price, place and promotion); while Pastore

and Vernuccio suggest a 3C+I (interface) model where the 4 Ps are integrated and recontextualized in

the on-line environment

Then came the theory of 8 P‘s of Digital Marketing.

Product – A tangible item or an intangible service that is producedin bulk amount or

manufactured on a large scale with a specific volume of units.

o Intangible products are service based products like the tourism industry&Hotel Industry

o Tangible products such as a car,bike,soapetc

To retain the competition in the market, product differentiation is required and is one of the

strategies to differentiate from its competitors.

Price – It is the amount a customer pays for the product. It is determined by a number of factors

o market share

o competition

o material costs

o product identity

o the customer's perceived value of the product.

The condition of the business may increase or decrease the price of product if other stores have

the same product.

Place–represents the location/demography where a product can be purchased. It is often referred

to as the distribution channel. It can include any physical store,metamarket,malls as well as

virtual stores on the Internet.Digital marketing uses this virtual market as its mode of operation.

Digital Promotion represents all of the communications that a digital marketer may use in the

marketplace. Promotion has three distinct elements:

o advertising

o public relations

o sales promotion.

In digital media advertising is done through web pages. Feedbacks are taken after one avails a

online service. This is done to maintain a long term relation with the customer and for marketing

surveys.Offers available online in the form of pop ups form the sales promotion.Any organization,

before introducing its products or services into the market; conducts a market survey. The sequence

of all 'P's as above is very much important in every stage of product life cycle Introduction, Growth,

Maturity and Decline.

Precision refers to the increased accuracy of the selection process of the target segment and for

marketpositioning in digital contexts. This is explicitly possible due to database management

systems

Payment systems must be secure and easy for customers to use

Personalizationis the possibility to create a flexible interface, which is able to adapt to

customers‘ needs and wills

Push and Pull regards to the choice of trade-off among the active communication policies (push)

and communication onuser‘s demand (pull).

o Pull digital marketing– the customer seeks information about products or services by

visiting the company‘s sources of information searching for the specific product or service

information. They are basically requesting to view this specific content.

These are typically located in

Websites

blogs

streaming audio

video sources

Customers have found related information on other websites or been directed to the

company‘s sources by a referring website to find the information.

o Push digital marketing– customers are provided information by receiving or viewing

advertisements digitally, such as: cell phones, Short Messaging Services, RSS, calls, etc.

Future: How is Digital Marketing better

Digital marketing

With the advent of globalization all businesses had to undergo modification, at least it is

mandatory today for every company to have their digital presence. Customers are global in

scope. There's no boundary in ones business and transactions is 24 * 7 and more importantly no

holiday.

In online business it is considered as very fast and economical for promoting product and

business growth.

Credibility plays an important role to invite more customers. You can't fool your customers, once

they've been fooled, you're out online forever.

Good public relation contributes to the success and failure of any product available online. You

should have a strong public relation to your customers to survive on the Internet. Feedbacks are

taken and worked upon, and a large database management system helps in maintaining

customer feedback.

Integrated cross-functional solutions. Customization, for example, requires close integration of

marketing, operations, and customer services.

Global perspective. In a world in which the reach of the Internet is global and the firm may have

no knowledge of customer needs, preferences, likely behavior, or local competitive

behavior, a global perspective is a required

Strategic alliances: The increased importance of strategic alliances as outsourcing

initiatives for the development and delivery of the Internet strategy is evident from the

enormous growth of the professional services firms.

Time competitive. Shorter development cycles, faster decisions,faster market penetration,

and time as a key objective are the new realities.

Expand the Role of Branding in the Global Portfolio

Traditional Marketing

Customers are only limited in one‘s service area. There is a boundary and scope of product

distribution.

Product promotions entail big budget, using tri-media methods of promotion.

Because customers can see, touch and feel the actual product, they've the choice to buy it,

based on their personal decision.

Good public relation contributes one‘s failure and success in offline business. One‘s dealing with

one‘s customers would attributes how you'll succeed in the traditional method of marketing.

Conclusion

As the digital revolution has taken place, as the world shifts from physical to virtual, as values

move from the hard steel of the industrial age to the high concepts of a knowledge economy--

what could be more important to companies than their relationships with customers and other

external constituencies? Knowing how to communicate with customers, meet their changing

needs, and build sustainable relationships and loyalty--this is what digital marketing and its new

rules are about. The Internet provides us with powerful outlets to strengthen our commitment to

customer satisfaction. In new business environments, it is essential to focus on changing

customer needs and behavior and on the establishment of strong relationships with customers

and other stakeholders. Marketing competencies based on the new rules of marketing articulated

here are, therefore, one of the primary sources of advantage for companies in a digital age.

For dot-com companies, the challenge is what to adapt and prepare for the next Internet

technology, business models, and theirmarketing implications. How to avoid being on the

"bleeding edge" and how best to move towardthe "brick-and-click" world.In addressing these

issues, a key task for the firm is the implementation of the adaptiveexperimentation philosophy.

This should encourage the development of customercentric newbusiness incubators to develop

and launch innovative "out of the box" businesses that addressemerging customer needs.This

recommendation is motivated by a recognition that the new marketing paradigm defines a central

philosophy, approach, and set of activities that should be adapted by all executives. If wehave

great technologies that arenot focused on the market, what value will it provide? Whatadvantages

will it create? By understanding the new global digital reality and focusing on the newrules of

marketing, marketing professionals can begin to reclaim some of their lost ground andcorporate

executives can increase their likelihood of success.Digital technologies have opened new

channels for selling products. It provides the consumer with apreviously unimaginable quantity

and quality of information in an easily accessible form.Consumers can sort products based on

any desired attribute: price, nutritional value, functionality,or combination of attributes such as

price/value. Consumers can use it to obtain third-partyendorsements and evaluations, or they can

tap into the experience of other users. Digitaltechnology has put the customer in charge, creating

a fundamental shift in the dynamics ofmarketing. Empowered by technology, customers are

unforgiving. Pity the poor company that failsto see this or refuses to play by the new rules.The

enormous advancement in information technology is shattering walls between industries as

well,shifting the balance of power to empowered consumers and creating what information

technologyexpert Colin Crook has called the emergence of a "global grid." This grid is a network

of users andportals, offering free communications, scalability for even the smallest corporations,

globalization,total connectivity, and universal digitalization. In this new environment, simple rules

often producecomplex outcomes, such as fractals or traffic patterns on the Internet. Internet

performance hasbeen improving even though the volume of traffic has increased tremendously.

References

http://en.wikipedia.org/wiki/Digital_marketing

www.fastfreenews.com

http://www.smartinsights.com/wp-content/uploads/2010/09/Marketplace-analysis.png

http://EzineArticles.com/?expert=Crisologo_Ramasasa

http://www.livrariacultura.com.br/imagem/capitulo/483875.pdf

International Journal of Business Management -

http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/2606/3326

http://www.glennward.co.uk