Digital Marketing Environment

Core Functions of Marketing

According to Daumas (1962, p.1)¹ technology is the "...methods man has discovered and utilized to improve the conditions of his existence." Some of the techniques that affect our day to day life are: production technique (e.g., industrial machinery), sustenance technique (e.g., agriculture), transportation technique (e.g., automobiles), measurement technique (e.g., clocks).

Marketing at a very broad level deals with three kinds of primary functions:

• Production: Production of goods and services is primary function of marketing. Mass marketing, customization, personalization has changed the nature of production process.
• Distribution: Transaction of goods and service between consumers and producers (including the middleman such as wholesellers and retailers) is the core focus of distribution process.
• Facilitation: Facilitation includes communication of marketing information, creation of possession, and the completion of the transaction.

In summary technology is know-how and in the context of marketing it may relate to product, process, and management.

Definition of Marketing

These three functions together creates a complete marketing mechanism through which market meets the needs and wants of customers with available limited resources. This ideology is ingrained in the definition of marketing provided by American Marketing Association.

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

The major changes in human civilization from food-gatherer to food-produces, and shift from animal, wind, and water power to fossil, electricity, or atomic power are made possible due to breakthroughs in technologies. Across various phases of history - agricultural age, industrial age, and postindustrial age - technology has been paramount in production, distribution, and facilitation processes.

Industry 4.0

German government’ initiative of Industry 4.0 pretty much summarizes the mega trends in technological revolution during industrial and postindustrial age.

Industry 4.0 represents a paradigm shift from "centralized" to "decentralized" production - made possible by technological advances which constitute a reversal of conventional production process logic. In other words, this means that industrial production machinery no longer simply “processes” the product, but that the product communicates with the machinery to tell it exactly what to do.

The first Industrial Revolution 1.0 led to change from an agrarian, handicraft-based economy to one led by industry and machine manufacture with the introduction of mechanical production methods. This was facilitated by water and steam. The second Industrial Revolution 2.0 was the period of mass industrial production age. This was facilitated mainly by electricity. The third Industrial Revolution 3.0 was the continuation of automation of production process. The fourth Industrial Revolution 4.0 represents the way to an Internet of Things, Data and Services.

Marketing Era

This gels very well with the evolution of Marketing Era too.

Note that the technological development follows the cycle of production-distribution-facilitation, and the cycle repeats itself.

Impact of Technology on Marketing

So, we realize that the technology has huge impact on the core functions of marketing. Following are some of the major changes in marketing process due to recent technological development.

• Technologies have shortened the cycle of production-distribution-facilitation. Sometimes it is hard to distinguish between product, price, place, and promotion strategies (elements of 4Ps or marketing mix).
• The transfer of technologies is much faster now. This makes marketing to think from global perspective. One of the mantra of today’s marketing is Think Global Act Local.
• The technological development in today’s world is often revolutionary rather than evolutionary. Therefore, marketing has to keep with the changes taking place in the technological world.
• The industrial world is shifting from labor- and capital-intensive to knowledge- or information-based economy.
• The Internet plays a key role in technology driven market place. The Internet is driven by two aspects of technology:
  • Hardware: Computing devices such as desktops, laptops, mobile, smart devices
  • Software: Online networks
• The technology has direct impact on following marketing activities:
  • Product Design
  • Product Life Cycle
  • Market Segments
  • Behavioral Segmentation
  • Customization and Personalization
  • Understanding customer needs
  • Market Competition
  • Market Innovation
  • Business Models
  • Product Centric Business Model to Customer Centric Business Model
  • Organizational Restructuring
  • Regulations (especially dealing with Governments)
  • Globalization
  • Labor Force
  • Value Propositions
  • Better customer service
  • Market Intelligence
  • Real Time Marketing
  • Business at the Speed of Light
  • Marketing Communication
  • Relevancy of marketing messages
  • Data Driven Marketing
  • Big Data
  • Advanced Marketing Analytics
  • IoT - Internet of Things
  • Human machine interface
  • Digital to Physical Transfer
  • 3D printing
  • Virtual Reality
  • Meet-Demand marketplace has been replaced with On-Demand marketplace.
  • This calls for know-demand approach.
  • Customer Decision Journey has changed.
  • Algorithms will automate consumers’ decision making.
  • User experience will be the key to product success.

This digital compass summarizes the impact of technology on business operation.

In sum, technology blurs traditional strategic and functional boundaries by enabling an organization to deliver a large number of differentiated products to a large number of differentiated markets.

Definition of Digital Marketing

Definition-1: Digital marketing is the use of networks created from hardware and software in the process of marketing.

Definition-2: Digital marketing is the facilitation of transaction through the medium of the Internet.

Definition-3: Direct digital marketing is defined as a digital marketing method that provides relevant marketing communications that are addressable to a specific individual with an email address, a mobile phone number or a Web browser cookie. Traditional direct marketing uses an individual’s postal address. With the evolution of direct marketing to direct digital marketing, addressability comes in the form of the three primary digital channels.

It’s not about a particular tool or system, it is about being curious about other possibilities because the tools we will use in two or three years time will be totally different from the ones we were using two years ago. ( Adobe digital marketing director John Watton)

The scope of digital marketing fits very well with the change of marketing definition by American Marketing Association. The word is an organizational function from previous definition is replaced with is the activity, set of institutions which makes marketing an educational process with focus on long-term value.

Digital environment affects all spheres of our lives. Therefore, the role of digital marketing in meeting customers’ needs is going to be paramount in the success of business strategies. Because people now don’t go online, they live online.

What it takes to build a successful long-lasting career in Marketing today?

The market has evolved from bundling era to specialization era to automation era. The extent of product and service automation will increase in future with the Internet of Things. Therefore, there will be tremendous pressure on organizations’ marketing department to automate their products and service in a real time setting to satisfy customer needs. Given the complexity of the system and data-driven decision making a marketer must be:

A Strategist

An Analyst

A Technologist

to build a long-lasting successful career in marketing.

Industries are looking for Marketing Maestro not any more Marketing Maven.

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