Are new technologies a threat to marketing strategies?

¶ … TECHNOLOGY AFFECT MARKETING?

The objective of this work is to develop knowledge relating to the marketing discipline historically and to the present and in terms of the future. The question this work seeks to answer is whether new technologies are a major threat to marketing as posited in the work of McKenna (2002) and to state either an agreement or a disagreement with McKenna's statement.

Marketing has been defined as "...a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of values with others." (Kotler, 2003) the work of McCarthy (1978) entitled: "Basic Marketing: A Managerial Approach" relates the 'Marketing Mix: 4Ps" which are: (1) place; (2) price; (3) product; and (4) promotion. The factors known to affect the marketing success of the organization on the micro level are: (1) people; (2) structure; (3) integration; (4) systems; and (5) leadership. Strategic success factors on the macro-level of the organization include: (1) environmental fit; (2) timing and success; (3) efficiency vs. effectiveness; (4) speed and decisiveness; (5) ambitious intent (operational, tactical and strategic); and (6) outstanding competencies of the organization. (Skukla, nd)

BACKGROUND to the STUDY

The work of Lusch (2004) relates that the Pre-1900 model for marketing was one known as the "Goods-Centered Model of Exchange." This model was Justas it sounds centered on goods and focused on resources. The 'Formative Marketing Thought' defines the period between 1950 and 2000 and includes: (1) customer orientation and marketing concept; (2) value determined in the marketplace; (3) management of marketing functions in achieving optimal output; and (4) emergence of marketing science and emphasis using optimization techniques. The period from 1980 through 2000 and to the present is a period characterized by the use of 'Marketing as a Social and Economic Process' including: (1) market orientation processes; (2) services marketing processes; (3) value and supply management processes; (4) resources management and competitive processes and (5) relationship marketing processes; and (6) network management processes. (Lusch, 2004) the present model is the 'Service-Centered Model of Exchange' characterized by: (1) intangibles; (2) competencies; (3) dynamics; (4) exchange processes and relationships; and (5) operant resources.

LITERATURE REVIEW

The work of Aker, et al. (2005) relates that marketing has the potential to be a powerful mechanism in some sectors and most notably in the report of Aker et al. that marketing: "...can be an importance mechanism for farmers and traders to reduce risk inherent in the production and sale of agro-food products. Existing economic literature typically does not integrate these tools into adoption frameworks." Technological change at a high rate is a "primary feature of modern agriculture, and to a large extent, is manifested by the adoption of new practices." Aker et al. states the fact that technological change "...is often associated with modifications in the production function that alter the relationship between inputs and outputs, rendering them more technologically efficient. This often results in improved production efficiency and implies increased profit maximization for users of the new technology." (2005)

Aker et all further relates that the constraints on producers to adopt technology "arise from a variety of economic and non-economic sources. For example, financial capital availability can be a constraint to adoption if farmers do not have the funds to purchase new technology or are unable to secure a loan for it. Human capital may be a constraint to the adoption of specific technologies for which proper knowledge is important." (2005) Another factor affecting technology adoption is the awareness of the technology and Aker et al. states: "If the potential adopters are unaware of the existence or specific attributes of a technology, then there is little probability of adoption." (Aker, et al., 2005)

It is predicted by Dexigner online that "The biggest cultural influence in 2005 (and beyond) on marketing is TIME and TECHNOLOGY." The perception is that we do not ever have enough Time." (2005) This report relates at Bureau of Labor Statistics report in 1986 which relates that "the ratio of food to technology expenditures was 300:1; in 2006 that ratio is projected to be at parity, which underscores our complete reliance on technology. Technology has become sustenance in a very short period of time and it has dramatically changed how we live our lives and how marketers need to address us." (DEXGNER, 2005)

Mobile marketing is another area that must be considered for marketing purposes and certainly this is a growing area of technology that can be utilized in marketing ones product or service. Yuri Radzievsky, in the work entitled: "Technology's Impact on Branding: In a Tech-Driven Customer World, CEOs need to stay on top of brand building" states: The scene: somewhere in the advertising future, between science fiction and science fact. You look up at the moon and staring back is the Coca-Cola logo. Your daughter smiles and her braces flash the word "Crest." Your rental car is free because you drive one with the Target bull's-eye glistening on the hubcaps." (2006) While, "...it's easy to laugh at the possibilities..." according to Radzievsky "What's not easy is to laugh at technology's impact on branding and advertising. Technology is transforming the way brands and customers interact. Wired. Networked. Multiplexed. Call it anything you want. Your customers are more in control of your business and brand. Marketing must adapt, or your brand will wither. How can a CEO formulate an agile approach to branding in a tech-driven customer world? " (2006)

Radzievsky states that there are five questions, which require an answer with the most important trend being identified as that of: "Transparency. Thanks to technology, nearly everything you do as an enterprise or brand can be observed and published to the world at large. Dell Computer learned this in a series of incidents. A reporter named Jeff Jarvis became enraged with what he called poor service from Dell and he turned his blog, "Buzz Machine," into a rant against the company. His outrage spread rapidly through the Web and erupted into mainstream media. The result? Dell recently committed $100 million to improve sales and support. Dell was victimized next by photos and videos of exploding laptops whose batteries malfunctioned. These were published on the Web and flashed around the globe. " (2006) the question is asked of: "Where does convergence really fit in the branding equation? " (Radzievsky, 2006) According to Radzievsky, new methods of communication and interaction are being discovered by consumers and brand marketers through converging technological applications and software. Radzievsky states the following example:

For example, the phone -- for younger generations, at least -- is the all-terrain media vehicle of choice for navigating the digital landscape. It can display your latest TV spot, turn commercial and theme music into ring tones and alert customers to discounts and special deals by text messaging. The phone turns passive customers into engaged brand loyalists. It can involve them in brand-based games, challenge them to create commercials for brands, bring them together for brand-sponsored events, galvanize brand feedback, energize brand sharing and transform your brand into a powerhouse of convergence." (2006) the second question posed is that of: "What is measurement's role in the bigger branding picture?" (Radzievsky, 2006)

According to Radzievsky, it is not just the ability to collect the data but as well is 'deciding what to do with the data." (2006) the third question posed is "What should my role be in the new marketing and branding world? Radzievsky (2006) states: "Two words: leadership and motivation." Radzievsky relates that the custodian of the brand is the leader. Radzievsky states that: "Today's market space demands that your marketing teams vigorously embrace technology." (2006) it is critical that experimentation be rewarded due to the fact that "technology has created a fluid, fast changing array of marketing channel. Few know how to exploit them all." (2006) Another question that is critical to ask is "How can I stay on top of what's happening and what's next?" Radzievsky states that this involves exploration, experimentation and observation of technology and its' possibilities in marketing.

The work of Margarit entitled: "Using Web Technology as a Means to Strengthen Competitive Advantage" relates that websites are often undervalued by firms for use in gaining competitive advantage in their markets because "most businesses only utilize their website as a means of displaying their corporate profile, lists of products as well as things like their contact details and email address." (nd) the web portal is one way that distribution networks can be used to enhance logistics and create new market channels. Margarit states the fact that an Internet Portal "can substantially strengthen the firm's current product offering. Methods of using the web site to enhance the product offering are varied and range from "offering new web related products through to establishing outgoing affiliate programs." (Margarit, nd) Providing better services to the customer that drives the core product's appeal is an effective method of relating products to the needs of customer. Margarit states: "This usually involves the creation of secondary or ancillary products that can either be sold or provided for free. These additional offerings can help to generate higher, sometimes passive, earnings as well as increase a firm's potential differentiation. Ways" (Margarit,

Methods that can be used to do just this include the following:

Setting up a knowledge base that your clients can have access to that includes a FAQ or query function allowing your clients to query you for information.

Using a feedback form where clients can offer their input as their needs and product suggestions can help in determining valuable information concerning customer's needs; and if the product is difficult to operate the provision of free or subsidized training will assist customers to overcome these difficulties.

Margarit relates that automation of the various functions of the firm through use of web technology results in a significant saving of operating costs..."

The work of Chatterjee entitled: "Technology for Establishing a Global Presence Using Electronic Branding & Marketing: A Perspective Implementation Aspect" relates that whether a business has a presence on the Web in terms of a company website is "really irrelevant." (nd) Chatterjee states that e-marketing "encompasses the tasks of Informing, Communicating and Promoting products and services by making information available over the net, covering the availability of the product and services for achieving sales and provides inputs that helps generate good word of mouth. I t is achieved by getting the customer to visit a featured outlet. Almost every large sized firm has this kind of basic information available on their website."

E-Commerce is stated to include: "...the additional technology capability built in a website that permits transactions including enquiring, selecting, collecting payment and providing customer support to ensure 'automated' selling of product and services on the net with a bundle to associated services. The complexities involved in ensuring a secure transactions environment for the company as well as the customer makes it an expensive and challenging task. User-friendliness makes the difference." (Chatterjee, nd) Chatterjee states that 'e-business: "...is the most complex form of these technologies, which includes the use of integrated technology platforms and applications to conduct company's entire set of business processes in an automated manner." (Chatterjee, nd) Chatterjee relates that it is important for "Businesses to understand what are the typical issues faced by them. The major problem areas are:

It is difficult and expensive to establish and maintain web-presence due to investment and technical constraints, as a result of which Sales opportunities are often in lack of up-to-date _ information on products, or current; price lists (when and where it is wanted), 2. Creating and maintaining web content is dependent on external agencies, costing money apart from the efforts involved in follow-ups to get things somewhat right! (Chatterjee, nd)

The key purpose of marketing does not change when using technology but remains the same and is comprised of "Creating awareness, tracking campaigns, crating rich customer contact records, fulfilling literature requests, providing information, assistance or support over web and email, and creating linkage to customer order and support database." (Chatterjee, nd) Done consistently this will result in "compilation of all prospect and customer data in a single repository. That in turn will help easily identify the key accounts within this repository. With the right set of analytical capabilities, processes and tools, it will also be possible to develop an ideal client profile(s) by identifying key attributes for targeting just the right kind in a database, based on selection of relevant attributes. Lastly, this will help in identifying prospective client organizations, similar to the businesses, where the offered services are drawing repeat purchases feasible only if, there is a systematic effort at acquiring names of key players in the newly identified prospect organizations. This would involve generating leads from key customers through references, converting qualified leads into revenue, forecasting sales pipeline and evaluating the effectiveness of new marketing campaign by understanding which product / service map relates to a specific segment, and conduct surveys to determine level of Customer Satisfaction in each of these segments to drive improvement. Now that the activities and benefits from the marketing efforts are stated, it may be the right place to seek a few inputs to determine the steps ahead." (Chatterjee, nd)

Questions that will assist in identification key issues related to attracting and retaining online visitors and prospective customers include the following:

How much should you spend on building and marketing your site?

How can you get more prospects to know and visit your site?

How do you make your site more experiential and real?

How can you convert visitors into repeaters?." (Chatterjee, nd)

After having established a successful website the more complex issues will need to come under focus, which include:

How to build a stronger relationship with current customer;

How to build a customer community;

How to capture and utilize customer data for selling and cross-selling;

Web Presence Marketing

Web Presence Marketing' is a process of making use of the Internet in business promotion. Marketing via the World Wide Web has been found to be a method in reaching a target audience that is more cost effective and is more effective overall in reaching prospective customers by many organizations. According to Webconsul (2007): "The first step is to develop a professional website with concern for both human viewers and optimized for search engines. The site is then promoted using a variety of techniques. on-going maintenance is required to ascertain the success of the campaign to date and to determine steps to enhance performance. Since the web itself is constantly in flux, the on-going maintenance also involves enhancements to keep the site up-to-date." Secondly, it is important to understand that a web site, no matter how well developed is of absolutely no use unless it is seen by potential customers. Web marketing is the tool used to generate traffic to the website. A vital aspect of web marketing is the 'search engine placement'.

Optimization of search engines combined with off-site promotion improves the website's rankings. Organic positioning is used in search engine optimization and has the requirement of the ability to "think like a search engine." Associated costs for this optimizing may result in returns that well exceed the cost. Another component of marketing on the web is registration with engines and directories as well as other web sites that might drive traffic to the organization's website. Some directory subscriptions are free and others require a payment that may be either a one-time or annual fee payment for the organization to be listed in the directory. The organization may reach the target audience through an email campaign.

The work of Shukla (nd) relates that the customer's needs are the beginning point for product design and investment decisions and even the most successful firms will be required, if success continues, to be sensitive to customer feedback at all times in an ongoing manner. Market fundamentals noted by Shukla include the fact that the family remains significant in purchasing decisions for most products. Because of the older and newer cultural factors among consumer segments the customers of today will be influenced by different values in terms of lifestyle and receptivity to advertising. Shukla states that there are four types of marketing which include:

Unethical Marketing in which marketer benefits are high;

Good Marketing in which marketer benefits are high;

Wasteful marketing with low or negative benefits to marketer; and Dumb marketing with low or negative benefits to marketer.

Customer benefits are low or negative in unethical and wasteful marketing while they are high in good marketing and dumb marketing. Shukla states that marketing practice is in need of reform including the following areas of needed reform:

Marketing should be, in the corporate staff function, as strategic as areas of finance, information technology, legal and HR management;

Marketing should report directly to the CEO;

The head of the corporate marketing should be titled 'Chief Customer Office (CCO) for minimization of internal perceptions and problems of image about marketing;

Marketing should have budgeting responsibilities and authority;

Marketing should include branding, key account management, and business development;

Marketing should manage outside suppliers such as market research, ad agencies and public relations; and Marketing should have a Board level standing committee similar to Audit, Compensation and Governance committees. (Shukla, nd)

SUMMARY and CONCLUSION

The literature reviewed in this study has demonstrated that technology is most emphatically not a threat to marketing but instead presents new tools that can be utilized in all aspects of marketing to bring more success to the organization. Of primary importance in technology use for marketing is the ability to information, communicate and promote the organization's products and services with potential customers via the Internet, cell phone, PDA, and other technology and applications presently being used and those still under development that will emerge in the rapidly changing technology society. The 'Social Media Optimization' (SMO) reviewed in this work is very much similar to social marketing theories and is a method of integration of various technological applications in communication, providing information and promotion of products and services in a method akin to 'word of mouth' marketing and advertising methods.