Please answer the following question(s) with a minimum of 150 – 200 word count total. A cover page/title page is not needed. Use APA format with scholarly articles to support your answer, include in-text citations and a reference page. Please use the reference that I provided in the attached file, here is the reference: Ferrell, O., Hirt, G., & Ferrell, L. (2009). Business in a Changing World. (7th ed.) pg. XX. New York, NY: McGraw-Hill Irwin. (Do not forget the page number where you’re using the reference) Please use additional scholarly articles, total of 2 references required, the one I provided you and another from your research! No PLAGIARISM and let me know if you have any questions or concerns! “Please review the attached file before proceeding”A) Why is the budgeting process important to a business? B) What does the term “the bottom line” mean to an organization?C) Share your experience in working with a budget.
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13
Digital Marketing and
Social Networking
Learning Objectives
After reading this chapter, you will be able to:
W
LO 13-1
Define digital media R
and digital marketing, and recognize their
increasing value in strategic planning.
LO 13-2
Demonstrate the role of digital marketing and social networking in
G
today’s business environment.
I
H
T
LO 13-4 Define social networking, and illustrate how businesses can use
, networking media.
different types of social
LO 13-3
Show how digital media affect the marketing mix.
LO 13-5
Identify legal and ethical considerations in digital media.
LO 13-6
Evaluate a marketer’s dilemma and propose recommendations.
Chapter
Outline
Introduction
Growth and Benefits of Digital
Communication
Using Digital Media in Business
Digital Media and the Marketing Mix
Social Networking
Types of Consumer-Generated Marketing
and Digital Media
Social Networks
Blogs and Wikis
Media Sharing
Virtual Worlds
Mobile Marketing
Applications and Widgets
Using Digital Media to Reach Consumers
Using Digital Media to Learn about Consumers
Legal and Social Issues in Internet Marketing
Privacy
Identity Theft
Online Fraud
Intellectual Property
Digital Media’s Impact on Marketing
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S
H
E
R
R
Y
2
7
9
3
B
U
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Enter the World of Business
Microblog Marketing: Reaching Millions
of Consumers with One Click
W
R
like Sina Weibo as a way to reach consumers in China. Sina Weibo, the Chinese
version of Twitter but with more socialI networking features, has approximately
309 million active users, of which 70Gpercent check their pages every day.
Hthe site. More than 1,000 multinational
Users can post up to 140 characters on
businesses—including IKEA, Royal Caribbean
International, and Nokia—use
T
this platform for marketing, brand building,
and gathering customer feedback.
,
Companies such as Starbucks and Mercedes Benz are using microblog sites
Because of the large user base, marketing over this channel is not only useful
but also cost-effective. For example, Mercedes Benz launched a digital mar-
S
H
sold in about eight hours.
E
Starbucks also received significant returns by marketing and communicatR
ing with customers on Sina Weibo. With more than 700,000 followers, the
R to promote Frappuccino sales. Over
company launched an $80,000 campaign
a two-month period, Starbucks madeY60 Weibo posts, which were reposted
keting campaign to sell more than 600 of its smart cars over Weibo. These cars
and commented on approximately 200,000 times. As a result, more than
2
95 million friend-to-friend recommendations
were made, and the company
saw a 14 percent growth in sales.
7
The quick comments and responses
9 allow companies to immediately address customer feedback, whether it 3
is positive or negative. This has helped
companies reduce the impact of bad public relations and successfully market
B
U
to the largest population in the world.1
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Introduction2
LO 13-1
e-business
carrying out the goals of
business through utilization
of the Internet
The Internet and information technology have dramatically changed the environment for business. Marketers’ new ability to convert all types of communications
into digital media has created efficient, inexpensive ways of connecting businesses
and consumers and has improved the flow and the usefulness of information. Businesses have the information they need to make more informed decisions, and consumers have access to a greater variety of products and more information about
choices and quality.
The defining characteristic of information technology in the 21st century is accelerating change. New systems and applications advance so rapidly that it is almost
impossible to keep up with the latest developments. Startup companies emerge that
quickly overtake existing approaches
W to digital media. When Google first arrived
on the scene, a number of search engines were fighting for dominance. With its
R
fast, easy-to-use search engine, Google became number one and is now challenging many industries, including Iadvertising, newspapers, mobile phones, and book
publishing. Despite its victory, Google
is constantly being challenged itself by comG
petitors like Yahoo! and Baidu. Baidu is gaining ground with 77 percent of the ChiH
nese search engine market. Baidu has aggressively
entered the mobile technology market and has sucT
cessfully overtaken Google’s market share. It is es,timated that Baidu’s market share of total mobile
search queries in China is 57 percent.3 Social networking continues to advance as the channel most
S
observers believe will dominate digital communication in the near future. Today, people spend more
H
time on social networking sites, such as Facebook,
E
than they spend on e-mail.
R In this chapter, we first provide some key definitions related to digital marketing and social netR
working. Next, we discuss using digital media in
Y
business and digital marketing. We look at marketing mix considerations when using digital media
and pay special attention to social networking.
2Then we focus on digital marketing strategies—
7particularly new communication channels like social
networks—and consider how consumers are chang9ing their information searches and consumption
3behavior to fit emerging technologies and trends.
Finally, we examine the legal and social issues assoB
ciated with information technology, digital media,
and e-business.
U
Growth and Benefits of Digital
Communication
Amazon’s mobile applications make it easier for users to shop and
purchase items on the go.
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Let’s start with a clear understanding of our focus
in this chapter. First, we can distinguish e-business
from traditional business by noting that conducting
e-business means carrying out the goals of business
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393
TABLE 13.1 Characteristics of Digital Marketing
Characteristic Definition
Example
Addressability
The ability of the marketer to identify customers before
they make a purchase
Amazon installs cookies on a user’s computer that
allows it to identify the owner when he or she returns to
the website.
Interactivity
The ability of customers to express their needs and
wants directly to the firm in response to its marketing
communications
Texas Instruments interacts with its customers on its
Facebook page by answering concerns and posting
updates.
Accessibility
The ability for marketers to obtain digital information
Google can use web searches done through its search
engine to learn about customer interests.
Connectivity
The ability for consumers to be connected with
R
marketers along with other consumers
Control
The customer’s ability to regulate the information
G they
view as well as the rate and exposure to that information
W
I
The Avon Voices website encouraged singers to upload
their singing videos, which can then be voted on by other
users for the chance to be discovered.
Consumers use Kayak to discover the best travel deals.
H
T
,
through the use of the Internet. Digital media are electronic media that function
using digital codes—when we refer to digital media, we mean media available
via computers and other digital devices, includingS
mobile and wireless ones like
smartphones.
H
Digital marketing uses all digital media, including the Internet and mobile and
E exchanges with customers.
interactive channels, to develop communication and
Digital marketing is a term we will use often, because
R we are interested in all types
of digital communications, regardless of the electronic channel that transmits the
data. Digital marketing goes beyond the Internet and R
includes mobile phones, banner
ads, digital outdoor marketing, and social networks.Y
The Internet has created tremendous opportunities for businesses to forge relationships with consumers and business customers, target markets more precisely, and even
reach previously inaccessible markets at home and around
2 the world. The Internet also
facilitates business transactions, allowing companies to network with manufacturers,
7
wholesalers, retailers, suppliers, and outsource firms to serve customers more quickly
9 created by the Internet have
and more efficiently. The telecommunication opportunities
set the stage for digital marketing’s development and growth.
3
Digital communication offers a completely new dimension in connecting with othB from traditional communiers. Some of the characteristics that distinguish digital
cation are addressability, interactivity, accessibility, connectivity,
and control. These
U
terms are discussed in Table 13.1.
digital media
electronic media that function
using digital codes via
computers, cellular phones,
smartphones, and other
digital devices that have been
released in recent years
Using Digital Media in Business
LO 13-2
digital marketing
uses all digital media,
including the Internet and
mobile and interactive
channels, to develop
communication and
exchanges with customers
The phenomenal growth of digital media has provided new ways of conducting business. Given almost instant communication with precisely defined consumer groups,
firms can use real-time exchanges to create and stimulate interactive communication,
forge closer relationships, and learn more accurately about consumer and supplier
needs. Consider that Amazon.com, one of the most successful electronic businesses,
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ranked number 49 on the Fortune 500 list of America’s largest corporations. Amazon
is a true digital marketer, getting 40 percent of its revenue from international sales.4
Many of you may not remember a world before Amazon because it has completely
transformed how many people shop.
Because it is fast and inexpensive, digital communication is making it easier
for businesses to conduct marketing research, provide and obtain price and product information, and advertise, as well as to fulfill their business goals by selling
goods and services online. Even the U.S. government engages in digital marketing
activities—marketing everything from Treasury bonds and other financial instruments
to oil-drilling leases and wild horses. Procter & Gamble uses the Internet as a fast,
cost-effective means for marketing research, judging consumer demand for potential
new products by inviting online consumers to sample new-product prototypes and
provide feedback. If a product W
gets rave reviews from the samplers, the company
might decide to introduce it. ByR
testing concepts online, companies can save significant time and money in getting new products to market.
I
New businesses and even industries
are evolving that would not exist without digital
media. Vimeo is a video websiteG
founded by filmmakers to share creative videos. The
site lets users post or view videos from around the world. It has become the third most
H
popular video website after YouTube and Netflix.5
T markets are more similar to traditional markets
The reality, however, is that Internet
than they are different. Thus, successful
digital marketing strategies, like traditional
,
business strategies, focus on creating products that customers need or want, not merely
developing a brand name or reducing the costs associated with online transactions.
Instead of changing all industries,
S digital technology has had much more impact in
certain industries where the cost of business and customer transactions has been very
H is less expensive online because customers can
high. For example, investment trading
buy and sell investments, such as
Estocks and mutual funds, on their own. Firms such
as Charles Schwab Corp., the biggest online brokerage firm, have been innovators in
Rtrading. Traditional brokers such as Merrill Lynch
promoting online
have had to follow
R with online trading for their customers.
Because the Internet lowers the cost of communication, it can conY to any industry or activity that depends on the flow
tribute significantly
of digital information such as entertainment, health care, government
services, education, and computer services like software development.
2
The publishing industry is transitioning away from print newspapers,
magazines, and 7
books as more consumers purchase e-readers, like the
Kindle Fire or iPad, or read the news online. Even your textbook is
9
available electronically. Because publishers save money on paper, ink,
3 times electronic versions of books are cheaper
and shipping, many
than their paper B
counterparts.
Digital media can also improve communication within and beU In the future, most significant gains will come
tween businesses.
from productivity improvements within businesses. Communication
is a key business function, and improving the speed and clarity of
communication can help businesses save time and improve employee
problem-solving abilities. Digital media can be a communications
backbone that helps to store knowledge, information, and records in
management information systems so co-workers can access it when
Home Depot has an application that connects
faced with a problem to solve. A well-designed management informamobile users to its website to search and shop
tion system that utilizes digital technology can, therefore, help reduce
for products.
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Digital Marketing and Social Networking
395
confusion, improve organization and efficiency, and facilitate clear communications.
Given the crucial role of communication and information in business, the long-term
impact of digital media on economic growth is substantial, and it will inevitably grow
over time.
Firms also need to control access to their digital communication systems to ensure
worker productivity. This can be a challenge. For example, in companies across the
United States, employees are surfing the Internet for as much as an hour during each
workday. Many firms are trying to curb this practice by limiting employees’ access to
instant messaging services, streaming music, and websites with adult content.6
Digital Media and the Marketing Mix
LO 13-3
While digital marketing shares some similarities with
Wconventional marketing techniques, a few valuable differences stand out. First, digital media make customer comR
munications faster and interactive. Second, digital media help companies reach new
target markets more easily, affordably, and quickly than
I ever before. Finally, digital
media help marketers utilize new resources in seeking out and communicating with
G
customers. One of the most important benefits of digital marketing is the ability of
HThrough websites, social netmarketers and customers to easily share information.
works, and other digital media, consumers can learnT
about everything they consume
and use in their lives, ask questions, voice complaints, indicate preferences, and
, Many marketers use e-mail,
otherwise communicate about their needs and desires.
mobile phones, social networking, wikis, media sharing, blogs, videoconferencing,
and other technologies to coordinate activities and communicate with employees,
S network and a micro-blog,
customers, and suppliers. Twitter, considered both a social
illustrates how these digital technologies can combine
Hto create new communication
opportunities.
E now spend more time on
Nielsen Marketing Research revealed that consumers
social networking sites than they do on e-mail, and social
R network use is still growing. Figure 13.1 shows the use of social media among Internet users in select counR new markets through these
tries. With digital media, even small businesses can reach
Y
Percent
100
90
80
70
60
50
40
30
20
10
0
88
73
48
Brazil
fer79397_ch13_390-418.indd 395
86
China
Egypt
Philippines
2
7
986
3
B
U
Russia
FIGURE 13.1
Social Networking Use in
Select Countries
79
73
Turkey
United
States
Note: Internet users in the United States
represent adults who said they use
the Internet or e-mail or connect via a
mobile device “at least occasionally.”
International Internet users represent
adults who use the Internet at least
occasionally or own a smartphone.
Source: Lee Rainie and Jacob Poushter,
“Emerging Nations Catching Up to U.S.
on Technology Adoption, Especially
Mobile and Social Media Use,” Pew
Research Center, www.pewresearch.
org/fact-tank/2014/02/13/
emerging-nations-catching-up-to-us-on-technology-adoption-especiallymobile-and-social-media-use/
(accessed May 19, 2014).
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inexpensive communication channels. Brick-and-mortar companies like Walmart utilize online catalogs and company websites and blogs to supplement their retail stores.
Internet companies like Amazon and Zappos that lack physical stores let customers post reviews of their purchases on their websites, creating company-sponsored
communities.
One aspect of marketing that has not changed with digital media is the importance
of achieving the right marketing mix. Product, distribution, promotion, and pricing
are as important as ever for successful online marketing strategies. More than 40
percent of the world’s population now uses the Internet.7 That means it is essential
for businesses large and small to use digital media effectively, not only to grab or
maintain market share but also to streamline their organizations and offer customers
entirely new benefits and convenience. Let’s look at how businesses are using digital
W strategies on the web.
media to create effective marketing
R
Product Considerations. Like traditional marketers, digital marketers must
anticipate consumer needs and Ipreferences, tailor their goods and services to meet
these needs, and continually upgrade
G them to remain competitive. The connectivity created by digital media provides the opportunity for adding services and can
enhance product benefits. SomeHproducts, such as online games, applications, and
virtual worlds, are only available
T via digital media. The more than 800,000 applications available on the iPad, for instance, provide examples of products that are only
,
available in the digital world.8 Businesses
can often offer more items online than they
could in a retail store. Additionally, Netflix offers a much wider array of movies and
games than the average movie rental stores and original content, along with a onemonth free trial, quick deliverySand easy returns, online video streaming of some
movies, and no late fees. NetflH
ix also prides itself on its recommendation engine,
which recommends movies for users based on their previous rental history and how
E As Netflix demonstrates, the Internet can make it
they rate movies they have seen.
much easier to anticipate consumer
R needs. However, fierce competition makes quality
product offerings more important than ever.9
R
Considerations.
Y
Distribution
The Internet is a new distribution channel
for making products available at the right time, at the right place, and in the right
quantities. Marketers’ ability to process orders electronically and increase the speed
of communications via the Internet
2 reduces inefficiencies, costs, and redundancies
while increasing speed throughout the marketing channel. Shipping times and costs
7
have become an important consideration
in attracting customers, prompting many
companies to offer consumers low
9 shipping costs or next-day delivery. For example,
Walmart is attempting to take market share away from e-marketers like Amazon.com
3
by reducing delivery time and creating
a “site to store” system that eliminates shipping costs for consumers who pick
B up their deliveries in the store. This offer has the
increased benefit of getting customers into the store, where they might make add-on
U
purchases. Walmart …
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