In the previous part of this series, under the sub-header “Marketing strategies”, we have discussed about Customer requirement and Customer acquisition. For many companies, online marketing is the most used medium for customer acquisition. The other points to discuss under the sub-header “Marketing strategies” are Customer loyalty and The challenge for marketing. “Digitization in the field of marketing” is a separate sub-header discussed later in this topic.
Customer loyalty
A satisfied customer is in most cases a returning customer. True to this motto, companies need to build and strengthen customer loyalty. Because while the customer always has the choice to change or exchange products and manufacturers, this behavior in the digital age and the state of global competition is not reserved for companies. On the contrary, they must try to stand out and stand out as “the right thing”. The company that knows the customer and his worries and can satisfy the needs. The company that inspires confidence and gives the feeling of being at home. A classic measure is, for example, to know and name their customers by name and thus build a relationship (relationship marketing). Another proven customer loyalty measure is the bonus principle, ie to reward the customer with bonuses or special service offers after the purchase.
Also customer cards, such as the Swedish furniture manufacturer IKEA with the IKEA Family [31] or the cinema company Cinemaxx do with the bonus card, they bind their customers for loyalty with discounts, special offers or vouchers. In addition to the marketing channels just mentioned, digitization opened up other channels that can be used to retain customers. This includes email marketing or social media services such as Twitter. Regardless of the method and the platform, you can use the digital channels to generate personalized and emotionalized content. One speaks here of direct marketing. This is made possible by the online behavior of users who leave data traces at any time when searching or shopping.
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This data is collected and analyzed by companies. Products and offers can then be created and placed individually to meet the needs and expectations of the customer. These structures mean that the behavior of the customer also changes. These are increasingly developing into so-called “hybrid customers”. One speaks of hybrid customers if the buyer has a split consumer behavior. Such people behave extremely price-conscious on the same day and shop at a discounter, then treat themselves to the experience purchase in an expensive boutique. In summary, it is increasingly important to orientate yourself closely to the customer.
New markets
The biggest challenge for marketing is opening up new markets. As early as 2012, online companies were mainly using digital measures to make customers abroad aware of their shop and to retain them permanently. Success in new sales markets is difficult and involves risks. In order to select the right markets, a number of criteria are included, including economic, political, legal, natural, technical and socio-cultural. In developing and emerging countries in particular, politics, business and society often work differently.
Digitization in the field of marketing
In the 1960s, experts divided marketing into four areas to describe a company’s marketing mix. They wanted to make the topic of marketing clearer and more manageable for those responsible for marketing. Product, price, place and promotion established themselves and clearly defined the marketing mix. Today, however, these four areas can no longer be clearly delineated, but are closely interlinked and flow into one another. Marketing mix is therefore a set of marketing measures that should work together to get the markets moving. Below the influence of digitization on the classic 4-P model – product, price, communication and sales is been highlighted.
Product policy
In the course of digitization, the importance of the product itself has changed in the recent past. Due to the increased focus on communication, advertising, identification and the targeted addressing of target groups – especially via new communication channels such as social media – the product (and this also means services and services) has been in the past few years in the Background. The product, which is at the heart of every brand, was considered a given and not changeable. However, none of the other marketing tools offer closer and more direct contact with people.
Nowadays it is important that the customer is convinced of the product by the experience of a product. Word-of-mouth propaganda arises from a product experience. And Apple’s success shows that word of mouth works. People talk about it before a product is on the market. Furthermore, a “product and brand experience” means that companies include several services. Let’s take an airline as an example: The customer wants to book a flight from A to B. The flight is the basic product. However, the brand experience encompasses the entire process: starting with online booking, check-in via smartphone, from free Wi-Fi in the waiting lounge to luggage collection. It is not enough to put huge advertising budgets in a product if the experience of the product or service cannot keep up with the advertising promise. Because even the best advertising is not enough these days if the product itself has defects or quality deficits. Since digitization has never had transparency about the origin and manufacturer.
Almost all products are interchangeable today. Therefore, the focus is not just on making a good product, but on experiencing it. The aim of a company is therefore that the customer deals with the product and experiences it. It is therefore not only important that there is an app, but that the customer also uses it. In the future, companies will not only be able to concentrate on their basic product, but also let the customer experience the product.
Pricing policy
A lot has changed in pricing policy too. If we went to the store earlier and accepted the price that was stuck on the product, today we compare the price online in advance. Comparison portals compare offers and promise the best price-performance ratio. Many customers compare prices directly on site using their smartphone and barcode scanning apps.
This price transparency, discounts and permanent low prices have hit retail companies in particular. In addition, the way to the store is usually no longer necessary if the cheapest price can be found on the Internet and the desired product is ordered with just a few clicks.
Today’s customers particularly carefully check how much something is worth to them. Anyone who relies solely on price arguments as a company must be aware that it is difficult to win. In the context of digitization, prices are comparable anytime and anywhere. Various market places offer an opportunity for local retail companies to advertise their products and services. Here companies can offer their products or services as “bargains”. These online couponing marketplaces have triggered tremendous hype among Internet users in recent years. However, trading partners must be aware that mostly no regular customers are won, but above all “one-day bargain hunters”. The challenge today and in the future is to understand exactly what price the customer’s own offer is worth. However, the cheapest price does not always win. Brands that actually add value from the customer’s perspective can also charge a higher price.
Click here to read the 4th part of this series.
