How important is Direct and Digital Marketing in the twenty-first century?
Introduction
International markets have become highly competitive as new players seek entry into the global market. Existing global business firms need to evaluate their marketing strategies to determine whether these can support their goal to sustain competitiveness amidst the heightened competition coming from emerging new industry or sector players. Globalizing business firms need to consider their strategies carefully to develop ways of addressing the barriers to entry that existing global businesses have put up to secure their position as well as the challenges brought about by the different market environments. To secure or maintain competitive advantage, successful global business firms have invested in appropriate marketing channels and communication strategies to strengthen customer relationship and reach out to potential markets for expansion.
The digital age highly influenced the development of marketing tools by providing new venues for communication and modes of targeting specific customers. With global operations, new marketing strategies evolved to accommodate geographical distance and time differences. On one hand, direct marketing have evolved by adopting electronic channels to support its core purpose of directly offering value to customers as a way of fostering decisions and actions to make actual purchases. On the other hand, digital marketing channels have developed to allow international business firms to coordinate their marketing strategies for the different international markets. These two forms of marketing have similarities and differences in terms of concept, importance, strategic implications and opportunities to aid business firms in determining the utilization of these forms of marketing as either separate or integrated strategies.
Concept of Direct & Digital Marketing
Although, the concepts of direct and digital marketing overlap, there are distinct differences in these two forms of marketing. The similarities and differences determine the relative importance and application of direct and digital marketing in the twenty-first century as more business firms take on the challenge of the international market.
Direct Marketing
Direct marketing encompasses all the unsolicited contact and communication that business firms make with existing and potential customers to achieve at the least, the development of product awareness or at the most, the generations of sales. (2000) Two elements emerge from the concept of direct marketing. First element is direct communication or interaction with consumers involving different available channels. Direct interaction allows business firms to ensure the achievement of the attention of targeted consumers, especially through personal sales, or at least the exposure of consumers to their brands and product offerings of the company. Second element is the purpose of fostering response from consumers through awareness and call-to-action activities. Direct marketing enables business firms to accurately identity and contact their targeted market segment. Through direct marketing, business firms intend to make their presence known, through brands and products or services with the expectation that this would translate into revenue generation.
This is a cost-effective mode of marketing for many companies (1997). Traditionally, direct marketing happened through person-to-person communications, direct mail and leaflet distribution. Cost is limited to the creation of mails or leaflets and training of sales people to directly deal with consumers. With the popularity of the Internet, direct marketing evolved to include email marketing. This electronic marketing tool also involved minimal cost because of the wide accessibility of the Internet to consumers as well as the low cost of Internet access of business firms.
Although, direct marketing is cost-effective, campaigns need careful development to ensure the optimization of investments by obtaining the expected responses from consumer likely to respond positively to the marketing campaigns and avoiding individuals likely to respond negatively or likely not to respond to the personal communications, mails, leaflets and emails to prevent resource wastage ( 1997).
Direct marketing have significant utilities and objective targets. By applying direct marketing, business firms, especially small firms, expect to experience the following utilities: 1) focusing of limited resources in marketing areas or market segments where the greatest possible result is expected to be achieved; 2) analyzing responses in order to assess campaign success and make necessary adjustments as needed; 3) testing for market responses by using a representative market segment sample to determine which marketing campaign produces the best result before the development of the full-blown campaign (2002). From these utilities, it appears that direct marketing allows target-based resource allocation and goal-directed marketing activities. Accuracy and results are two of the strong points of the direct marketing.
Applying direct marketing would also allow the business firm to achieve a number of objectives such as increasing revenue generation from existing customers (1999). Although customers generate revenue, the ultimate objective of any business firm is to use marketing campaigns to develop a customer base that is able to ensure continued or long-term revenue generation for the company. Another objective is the building of customer loyalty (1996). Concurrent with the drawing of new customers, business firms also need to maintain consistency in brand value communications and product or service delivery to maintain and enhance customer satisfaction. Continuously satisfied consumers are likely to develop alignment with the company as well as its brands and products. Still another objective is the re-establishment of any lapsed or inactive customer relationships (1996). Through direct marketing, business firms are able to reconnect with one-time or occasional customers to convince them to make frequent actual purchases of the company’s products. Lastly, direct marketing also enables business firms to generate new businesses by motivating new customers to shift to the firm’s brands or products (2000). With new consumers that add to revenue generation, business firms are able to gain the necessary revenue as well as investments for expansion.
Direct marketing targets business-to-consumer, business-to-business and consumer-to-consumer marketing relations. Through direct marketing, business firms directly create relations with existing and potential consumers. Business firms also establish various levels of partnership or cooperative links with other business firms. Loyal consumers of the business firm have the tendency to continue direct marketing to their family members, friends, neighbors, office workers and other people to create an indirect effect of the direct marketing campaign of the business firm. (1999; 2000) However, marketing campaigns need modification depending upon the elements focusing on the different marketing relations targeted.
Despite these benefits, direct marketing has a major drawback, which is the possibility of receiving negative customer feedback for unwanted solicitations, especially in the case of postal mail and email, when people receive marketing communications, which they perceive are incursions into their privacy or an inconvenience to them ( 2000). This highlights the importance of accurately determining the targeted marketed and sending direct marketing communications with precision. In the case of email, anti-spamming software emerged to block spam mails from reaching the inbox of consumers. Moreover, regulations also exist to prevent spamming.
Digital Marketing
Digital marketing comprises all practices of promoting brands and products through digital channels of distribution linking consumers in real time in a cost-effective manner ( 2004). Although digital marketing has been closely associated with online marketing, this only constitutes one form of digital marketing. Digital marketing tools include Internet, SMS or MMS messaging, and digital displays of banners or advertisements (2001). Although digital marketing has been recognized as a single strategy in itself, it cannot be denied that it is an encompassing term that covers even direct marketing. Digital and direct marketing involves similar methods of communication with customers through digital means such as email.
Digital marketing has two forms, which are pull and push digital marketing. These different forms have respective advantages and disadvantages.
Pull digital marketing involves technologies that require users to seek out and grab the content themselves ( 2002). Websites, streaming media and blogs are good examples of pull digital marketing since customers need to access links or open websites and view or download the desired content.
Advantages of using pull digital marketing include the lack of limitations or restrictions on the content or the size of marketing communications. Company websites contain unlimited volume and format of information, which gives the company wide room to be innovative and creative in developing websites to attract the attention of surfers and encourage viewers to open links and read text or view audio-video content. Another advantage is the lack of need for additional technology in sending content except only for the display and storage of content. In the case of websites, customers only need Internet connection to view and store content from websites. Accessibility of content and display is easy so that business firms only need to develop the navigability of their websites to ensure clarity of content presentation and convenient shifting from one link to another. Still another advantage is limited regulations or opt-in systems. Basic regulations for online content includes the non-placement of pornographic content or contents that are offensive. Apart from these, business firms have the freedom to place whatever content and display they have determined to be effective in achieving their marketing goals. Customers also do not need to register to access websites since clicking a URL would direct the customer to the website and other linking options enables customers to navigate the site. ( 2002)
Pull digital marketing also has disadvantages. One disadvantage is the need for consumers to apply great marketing effort locating the message or content being communicated by the business firm. The business firm becomes a passive party and the customers become the active party seeking information. This means that the business firm relies on the motivation and effort voluntarily exerted by the customers for the success of its digital marketing campaign. This degree of dependence on customers constitutes the disadvantage of digital marketing because, on its own, it cannot ensure the achievement of the marketing goals of the company. Another disadvantage is the limited means of tracking or assessing capabilities. Websites can incorporate statistical feeds into their programming to obtain statistics on the number of visitors to the website for given periods. Other programming tools can also be integrated into the website program to allow the business firm to determine the number of file downloads and other activity in the website. However, these utilities are limited only to statistical measures of value but do not necessarily indicate the quality of the activities or the market profile of the people visiting the site. Apart from statistics on website visits and file downloads, business firms are unable to link these information to its goals of revenue generation or new customer generation. Nevertheless, business firms can also take advantage of websites as points of sale and customer service. In this case, companies are able to link website visits and download statistics to the sales. Lastly, digital marketing carries the disadvantage of lack of personalization. Content and viewing options are static so that the company cannot adjust website content and display to target different market segments unlike the other form of marketing. (2002)
Push digital marketing requires the active participation of the marketing agent who is the message source and recipient who is the user of the message. Email, SMS and RSS are some examples of push digital marketing. Marketing agents need to push or send messages to users to ensure receipt of the content. (2002)
First advantage of push digital marketing is personalization because messages sent to consumers can be made to target specific market segments. Through personalization, business firms are able to customize messages for different target markets in order to have a bigger impact on the customers since customers respond more positively to messages they can relate to or relate to their day-to-day experiences. Second disadvantage is the capability for reporting and tracking. Marketing agents are able to keep tabs of the number of people viewing their messages as well as gain information on the recipients of the message. Assessments of the merits of the push marketing campaign become more accurate in determining whether the business firm has achieved its goals and the extent to which goals and benefits are achieved. Third advantage is the possibility of achieving enhanced returns on investment. If push marketing campaigns are executed effectively, push marketing can bring in added revenue by reinforcing company brands and products. (2002)
Although, push marketing carries promising benefits, there are also disadvantages. Firs disadvantage is the need to comply with certain regulations involved in using the digital channels. Push communication channels involve certain regulations such as the content censorship for emails and text messages. Business firms need to comply with these regulations in order to ensure the effective use of these communication channels. Second disadvantage is the need to use certain mechanisms to send content. RSS feeder, email, and mobile services are needed to utilize these digital tools, which mean additional cost as well as the intervention of service providers. Third disadvantage is the possibility that service providers could block delivery if the content and display are not compliant with the regulations and customers can also reject or delete message even before these reach consumers or without viewing or reading the content. (2002)
Comparison of Direct and Digital Marketing
Similarities between direct and digital marketing fall within the overlapping of these two forms of marketing. Internet constitutes a common marketing tool since emailing constitutes direct marketing while this also comprises one type of digital marketing. Customization also constitutes another similarity since direct marketing involves targeting of specific market segments while push type of digital marketing also enables business firms to target specific market segments.
There are also differences linked to the broader scope of digital marketing. More channels of communication are available to digital marketing because it covers websites, mobile services, and outdoor digital displays. More channels of communication allow digital marketing to reach more customers, especially when the target markets are reachable through various marketing channels. Direct measures also constitutes another difference since the various modes of direct marketing allows business firms to send direct messages and obtain direct results or measures to determine the success of the campaign while not all the forms of digital marketing are able to directly send communications or receive direct responses and result measures.
However, the differences between direct and digital marketing are not conflicting but rather subject to integration. Using one type of message or communication channel could be effective but higher levels of effectiveness and better results are obtained in combining different forms of content and communication channels. Various combinations can be developed depending upon the targeted or intended outcome. Business firms promoting a new brand or product could use mail and email together with an outdoor digital banner to draw the attention of more people or to increase the time allocated by recipients to the mail and email. Business firms could also develop their website together with emails and outdoor digital displays that promote the brand or product and provide links to the website as a point of sale or in the email as connecting point to the website.
Nevertheless, carefully planning the combination of tools and resources necessary to achieve specific pre-determined results is necessary to derive results. Combining emails with a website is not effective when the message in the email is not personalized so that customers treat this as junk mail and delete it or even block the sender from further sending emails or even if the email is personalized but the website is not navigable or content is inconsistent.
Importance of Direct and Digital Marketing
(1997) propounds that direct marketing should become the more dominant means of retail marketing in the United States. Although, direct marketing is important because of its core values of accuracy and direction, consumers perceive direct purchases as the last resort instead of the primary means of purchasing. The failure of business firms and consumers alike to accrue due importance to direct marketing can be primarily attributed to the mistakes committed in implementing direct marketing but direct marketing offers many opportunities for firms and consumers.
Mistakes in the implementation of direct marketing cover aspects of relationships with consumers that lower the likelihood of consumers in making actual purchases. With lesser propensity of consumers to make actual purchases, sales also suffer. First mistake committed by marketers is information overload (1997). Giving potential customers too much data on brands and products, results to a less likelihood of actual purchases. Customers have an overload limit for the information they can process at a certain time as part of the purchasing decision process. Too much data slows down the decision-making process of consumers as well as lead to bad decisions or to indecision. Competing marketers just send information in a repetitive and voluminous manner based on the impression that this would make customers pay attention to brands and products. However, this does not necessarily work especially when companies in competition, flood customers with information instead of creating a cooperative but competitive business atmosphere that allows competitors to reach the same target market without impeding the decision-making process. Direct marketing should be more about sending clear and convincing information and not about sending more information with greater frequency (2000).
Second mistake is the inability of marketers to recognize and accommodate the interests of consumers (1997). Often, interests of marketers and consumers differ, which creates a communication gap between these parties. Marketers are preoccupied with sales, costs, schedules and deadlines while consumers focus on cost, utility, timeliness and risk. Due to the gap, frictions occur between marketers and consumers that negate the decision of consumers to make a purchase or to purchase the brands or products marketed.
Third mistake is marketing as product-driven instead of consumer-driven (1997). By focusing on products, marketers send voluminous information to as many people as possible including existing and potential customers without considering the differences in the information needs of existing and potential customers. The intention is to throw out information on brands and products to the market with the hope that somehow there would always be people willing to purchase. Existing customers feel inconvenienced by the volume of information they receive that they already know while potential customers find it difficult to process information thrown at them. This results not only to the inability to gain new customers but also the decline in sales or revenue generation.
(1996) explain that digital marketing deserves the focus as well as the commitment of business firms because of its various cost and efficiency benefits. However, the success of digital marketing largely depends on the consistency of products and services with digital marketing. This means that not all products and services can be effectively marketed through digital means. Possible failures of digital marketing cover the appropriateness of digital marketing as well as the modes of organizing digital marketing.
First mistake is assuming the appropriateness of digital marketing in offering the products and services of the company ( 2001). Although digital marketing channels such as websites and outdoor digital promotions can be effective means in introducing new products and services, there are commodities that require direct marketing such as medicine and real estate to influence actual purchasing decisions.
Second mistake is giving little consideration for the internal readiness of the company for digital marketing (2001). Business firms may develop websites to promote new products and services without implementing changes in company operations to accommodate digital channels of sale. Orders or questions posed through the website end-up not being addressed with the same speed and accuracy as direct marketing. The development of digital marketing strategies should also correspond to changes in the internal operations of the business firm.
Third mistake is the minimal consideration of the extent of competitive activity in the sector as basis of the development of digital marketing activities (2001). Knowing existing players, products and services, and campaigns allows the business firm to identify the way of developing a unique value through digital marketing channels.
Strategies of Direct and Digital Marketing
Direct marketing offers a tool with the least possible marketing friction. However, experiencing the benefits of direct marketing involves innovation so that only the business firms able to adjust and readjust to changes in market values can achieve success in direct marketing. A number of strategies exist to support the success of direct marketing and address the mistakes that could occur in implementation.
First strategy is to optimize low cost benefits of direct marketing. Business firms involved in direct marketing should not only recognize cost savings but also use it in marketing communications since low cost structures can be transferred to customers as savings. By engaging in direct marketing, business firms not only have a marketing tool but also content for marketing communications. ( 2005)
Second strategy is to be innovative by providing room for testing and adjustments. In applying direct marketing, only the business firms with room for change can meet emerging changes in consumer needs so that the firms that take undue time to react would not successfully achieve the benefits of direct marketing. (2001) Since direct marketers have easy and fast access to existing and potential customers, they are in a better position to become innovative when compared to store marketers.
Third strategy is to maximize vertical channels. Business firms engaged in production or services can implement their own direct marketing activities instead of depending on retailers. (2005) Through technology, product and service companies can establish direct links with their customers. This gives business firms with greater control over the marketing process to determine first-hand the success of its direct marketing campaigns or experience the benefits of direct marketing.
Fourth strategy is adopting a customer or market drive perspective. By doing this, the problem of conflict in interest will be prevented since marketers have a thorough understanding of the purchase concerns of the market so that they can integrate these concerns into their marketing communications. With an extensive database of customers, direct marketers should be able to have the advantage of having the tools to practice customer-based marketing campaigns. (1996; 2002)
Fifth strategy is adding value through marketing communications (2001). Customers are becoming more aware of product and service marketing competition so that they look for business firms that are able to provide the highest value compared to competitors and add consumer value that leads to satisfaction. Providing this added value should be the focus of marketers.
Sixth strategy is maximizing available technology. Technology is the driving factor for marketing in the twentieth century so that direct marketing should also capitalize on technology to ensure effectiveness. Since direct marketers experience the advantage of the learning curve, integrating technology with their knowledge and experience would ensure the effectiveness of the marketing campaign. (2000)
Seventh strategy is the application of customer-specific marketing activities. Business firms should develop and offer products and services with unique value that the customer cannot obtain this from other companies or obtain this from competing firms at a higher cost. (1996; 2002) Technology gave way to mass marketing and technology would enable business firms to individualize or customize direct marketing. Making customer-specific offers involves knowledge of customer needs and effective ways of communicating, which technology can both usher.
Digital marketing’s success depends upon the adherence to a number of strategies based on best practices with consideration of the potential mistakes previously mentioned. Through the application of these strategies, the benefits of digital marketing of achieving a wide market and increasing revenue generation.
First strategy is focusing on the commencement of the digital marketing campaign as an initial concern before considering the perfection of the system. It should be recognized that digital marketing involves an experimental process that starts with an initial campaign to be polished through the identification of areas of weakness. In the case of pioneers, the launch of digital marketing campaigns constitutes a strong means of building excitement and commitment within the organization. However, this should be tempered by standards, so that continued efforts are applied in improving the campaign after a successful launch. ( 2001)
Second strategy is involving senior management in the commencement in the digital marketing process. Although ‘below radar’ operations may be appropriate during the initial stages of the process since front line employees hold market information needed in planning the marketing campaign, the involvement of senior management cannot be ignored during the implementation stage. Senior management affords the marketing campaign with legitimacy needed to acquire funding for the campaign and credibility to ensure the acceptance and cooperation of the members of the organization. (2002) Top-level policy support becomes necessary in ensuring that digital marketing campaigns adhere to the goals of the business firm.
Third strategy is the management of conflicts within the organization. Going digital could involve multi-level conflicts such as between the marketing and information technology departments or digital marketers and distributors or retailers. Key to the prevention of conflicts is the recognition of the interdependence between or among these parties and units so that there is need to consider and balance concerns and interests to enhance the role of digital marketing in achieving business goals. (2002)
Fourth strategy is the use of external parties, as needed, to foster the infusion of necessary skills into the organization. Business firms engaging in digital marketing for the first time may not have the skills necessary to implement this mode of marketing so that outsourcing of skills may be necessary in the development of creative programming. (2001; 2004) This involves the challenge of selecting the appropriate partners and managing the external relationship for the company to achieve its digital marketing goals.
Fifth strategy is giving way to the innovative and creative direction of younger members of the organization ( 2002). Older and younger members of the organization could have differing perspectives and opinions on digital marketing. Younger members assumed to have greater exposure to digital technology could offer valuable insight into the means of effectively using digital technology to influence consumers to make actual purchases.
Potential or Opportunities of Direct and Digital Marketing
By recognizing and addressing the possible mistakes that could occur in applying direct marketing and using the strategies of effective direct marketing campaigns, direct marketing offer a number of opportunities for business firms operating and thriving in the twenty-first century. These opportunities should enable direct marketing to receive due importance as a potent marketing tool for contemporary businesses.
First opportunity is the provision of frictionless marketing. Direct marketers adhering to the critical points of consumers’ perspectives should expect to minimize if not prevent frictions in the process of directly marketing to consumers. This is because direct marketing becomes aligned with the priorities of consumers. (1996)
Second opportunity is customer-oriented marketing. Direct marketing allows business firms to focus on individual customers to ensure the possibility of the customer in making direct sales. Direct marketing operates based on the recognition that customers, even those belonging to the same market segment, have different issues and concerns in deciding on purchase issues. (1996) Direct marketing allows business firms to connect directly to customers through available technologies to create stronger relationships with customers even to the extent of developing customer loyalty. Customers rewarded for their positive response to the company have the propensity to become long-term customers of the company because of direct marketing.
Third opportunity is the empowerment of products since direct marketing constitutes a process of empowerment. Customers seek greater power over the process of purchasing. (2002) Through direct marketing, customers achieve this power. Through Internet technology, customers have the option to select products and make purchases without the need to go to stores. By recognizing the importance of empowerment, business firms should establish systems to maintain empowerment by developing efficient systems of purchasing by phone and delivery.
Fourth opportunity is the achievement of competitive advantage through the introduction of chameleon products (2001). While mass marketing offered products with similar prices to the market in general, direct marketing allows business firms to offer individualized products and services through available technology at mass market prices. This combination of marketing offer features defines the unique value offered to customers that ensures sales and a customer base.
Fifth opportunity is effectiveness and efficiency through the integration of direct marketing and the Internet culture. Global Internet sales are growing at an exponential rate with many business firms achieving global success through Internet-based marketing. By aligning direct marketing with the Internet consumption model, electronic commerce could allow business firms to achieve combined benefits including the offering of customized service at mass market prices together with the ability to meet customer demands though the Internet and gain a wide potential market base. ( 1999)
Sixth opportunity is increase in sales through the shift in the perspectives of direct marketers (1996). The traditional perspective of focusing on products and operations instead of changing market needs and demands should be abandoned for marketing directed towards customer satisfaction and loyalty. Technologies allows direct marketers to gain an advantage by allowing them means of gathering and analyzing customer information and translating information into efficient product and service delivery.
Digital marketing offers a number of opportunities for business firms seeking to achieve global success in the electronic age by taking into consideration the problems that the firm could experience and the various strategies of ensuring digital marketing success.
First opportunity is information delivery to a wide range of consumers (1996). Interactive media allows business firms to deliver information on its products and services to a different market segments and incurring lower costs. Interactive media enables business firms to hurdle geographic and time differences to reach out and offer products and services to the international market.
Second opportunity is relationship building through interactive digital technology (1996) that allows business firms to establish and maintain quality relationships with many customers. Continuing innovations in digital technology should enable business firms to transcend its limitations in establishing personalized relationships with a wide range of consumers. By adopting digital innovations, business firms are able to draw information on the customers as bases for customized information and offer able to support the goal of gaining new consumers and developing loyalty among existing customers.
Third opportunity is the minimization or elimination of intermediaries in customer relationship building (1996). Interactive media can comprise a new marketing channel, with the potential of removing traditional intermediaries to minimize cost or introduce a new intermediary to add value to digital marketing and usher greater customer satisfaction.
Conclusion
Direct and digital marketing are inevitable to the success of business firms in the twenty-first century as marketing strategies. Similarities between direct and digital marketing allows the possibility of integration to derive better results while the differences enable business firms to achieve results by focusing on ether direct or digital marketing depending on the marketing strategy that best suit their particular business context. Nevertheless, regardless of the form of marketing strategy and the direction of marketing strategy implementation, technological innovations constitute inevitable tools for business operations in the twenty-first century. Business firms seeking competitive advantage and longevity need to adopt these innovative tools, which are the core tools of direct and digital marketing, in their marketing strategies to survive and thrive in the modern business world.
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