Digital Marketing- MKT318

INDIVIDUAL ASSIGNMENT

How digital tools are changing marketing

mix (4Ps)

Class: MKT1505
Lecturer: Bùi Thị Hạnh Thảo
Course: MKT318m – Digital Marketing
Date: Summer 2021
Contents
I. INTRODUCTION.......................................................................................................3

1. Overview of changing in digital world...................................................................3

2. Define what is marketing mix.................................................................................4

3. How digital tools are changing marketing (in general)........................................5

II. HOW DIGITAL TOOLS ARE CHANGING MARKETING MIX (IN

DETAIL).............................................................................................................................5

1. Product......................................................................................................................5

2. Promotion..................................................................................................................7

3. Price...........................................................................................................................8

4. Place...........................................................................................................................9

III. DISCUSS HOW COMPANIES CAN REACT TO THE CHANGING OF

DIGITAL MARKETING ENVIRONMENT................................................................11

IV. REFERENCE.........................................................................................................12
 I. INTRODUCTION
1. Overview of changing in digital world

Since the late 19th century, the international scene has seen several waves of
globalization that have changed a lot. The current wave that economists have defined as
“globalization 4.0” – is shaped by an industrial revolution that combines digital, physical
and biological transformations. Digital technology has a profound impact on everything
around us both public and private goods such as health, education, transportation or
energy. It changes the terms of the global condition. Disruption of both social
organization and interpersonal relationships and globalization (Postel-Vinay 2020).

The existence of the Internet and other advancements in technology have brought
some major changes to both sides of the market. There has been an explosion of data
available to sellers. There's clickstream data, click-through data, online product reviews,
blogs, social media data, video data, purchase history data, and many more types of data.
This has given rise to extremely large data sets (big data) that require new analytical
methods. This has led to the need for methods capable of making sense of this volume of
data and the growth of data science as a profession. Big data has also led to a significant
increase in the ability to target individual consumers, and the ubiquity of smartphones has
made mobile advertising a major medium. On the buyer side, online retailing has grown
rapidly, the availability of online information has greatly reduced the cost of searching,
and the internet has promoted social networking and online reviews as sources of
information for both buyers and sellers. Massive intermediaries such as Google, Amazon
and Facebook have emerged to facilitate the online transmission of data to the buyer, the
flow of data to the seller and the flow of the transaction between the buyer and the seller
(Ratchford 2020).

The marketing field has been provided with a wealth of research topics and
increased feasibility for addressing them, thanks to a new medium, new forms of
advertising, social networks as a new vehicle for word-of-mouth, the growth of online
retailing, clickstream data, data from online reviews, and increased computer power.
Over the last 10 years, the marketing profession has taken full use of these prospects
(Ratchford 2020).

2. Define what is marketing mix

Marketing mix describes the set of tools that can be used to impact sales. Although
Neil H. Borden used the term marketing mix in his teaching already in the late 1940’s,
the term popularized in 1964 after Borden article “The Concept of the Marketing Mix”.
Borden marketing mix included product, planning, pricing, branding, distribution
channels, personal selling, advertising, promotions, packaging, display, servicing,
physical handling, and fact finding and analysis. It was E. Jerome McCarthy who later
compressed Borden marketing mix into the 4 P’s of marketing that are known today:
product, price, place, and promotion (Graham Jackson & Vandana Ahuja 2016).
 Effective marketing mix management allows marketers to create a combination of
elements that will allow a company's budget to be wisely managed to achieve desired
goals (Margarita Išoraitė 2016).

3. How digital tools are changing marketing (in general)

Digital technologies have changed marketing and consumption dramatically over

the last two decades, and the trend will continue in both predictable and surprising
directions in the next decades. Engineers, entrepreneurs, marketers, and everyday users
are continually co-creating and updating the digital world, and their inventions are shared
and accepted at breakneck speed throughout the world (Ratchford, 2020).
Marketers all around the world have been able to effectively create important
exchanges with their consumers over the last 60 years by carefully applying these 4 Ps.
The digital revolution has lately supplied marketers and customers with new tools
including the Internet, smartphones, and 3D printers. In my research, I'll look at how
these new technologies are affecting these four aspects of the marketing mix (Aric
Rindfleisch 2019).

II. HOW DIGITAL TOOLS ARE CHANGING MARKETING MIX (IN

DETAIL)
1. Product

The first of the four Ps is product. A product is really anything that fulfills a
customer need or want. This co-creation process is changing how firms create products
and manage brands. Customer co-creation is customers help companies improve their
new product development activities by both contributing ideas as well as selecting ideas
for possible new offerings. Managers have to manage crowdsourcing and motivate
customers to engage in co-creation. There are 2 main methods to motivate customers:
social recognition and financial reward (Aric Rindfleisch 2019).
With operations in 190 countries and products used by more than 2.5 billion people
daily, Unilever has a large customer base from which to provide ideas and solutions to
product development questions. Unilever actively searches its customer base for product
solutions, asking startups, academics, designers and customers for ideas and suggestions.
Through its Open Innovation platform, launched in 2010, Unilever presents specific
challenges to the public, encouraging individuals to submit feedback for potential
adoption by the company. These cover topics such as smart product packaging, oil
oxidation technology, refrigeration and freezing systems, and others. If a proposal is
successful, the sender may be offered a commercial contract for their solution, as well as
professional recognition. The global response to the Unilever platform has been strong,
with the company receiving more than 1,000 proposals in the first half of 2012. This
approach has also helped develop a more open culture: now Today, more than 60% of
Unilever's research projects involve external collaboration (Warc 2012).
There are some other companies that are successfully applying co-creation, such as
Lego, Heineken, IKEA, etc. (Javier Marcos-Cuevas et al 2016; Gabriela RUSU, Silvia
AVASILCAI 2014; IKEA 2021).

Picture 1: Heineken co-creation “The Club” be created by 100 clubbers (Brand Genetic 2012)
 2. Promotion

This aspect of the marketing mix covers the methods of communication that a
marketer uses to provide information about his products. We usually consider of this data
as persuasive, with the purpose of persuading clients to buy your product instead of one
of its competitors (Aric Rindfleisch 2019).

The rise of new digital tools has made the creation and dissemination of
promotional messages much cheaper and easier than ever before. It leads to anyone with
an Internet connection, a computer, or a smartphone, and an idea and some energy can
easily create and disseminate a promotional message for just about any product- this is
the basic idea behind user generated content, or UGC. Of all the different types of UGC,
product reviews appear to be the most common and also has the strongest impact on
customer purchasing decisions (Aric Rindfleisch 2019).

Table 1: The impact of UGC (TurnTo 2017)

With a lot of benefits such as low cost, positively relate to product sales, more
reliable, content fresh. Beside company also has to face with number of risks that bring
back, for example bad reviews can affect the company's reputation. The company
problem is how to encourage their customers to generate UGC and try to link integrate
UGC with traditional promotion to achieve best result (Aric Rindfleisch 2019). GoPro
was very successful with their strategy, today a search for “GoPro” on YouTube yields
40,000,000 results and the brand is more than one of the YouTube’s most popular
with over 10 million subscribers (GoPro 2021).

3. Price

This part of the marketing mix is concerned with the price a consumer pays for a
product. Pricing differs from the other three aspects of the marketing mix in that it creates
value for the consumer, whereas price collects that value for the company (Aric
Rindfleisch 2019).

With the development of digital tools that not only allow price comparisons
between companies, but also change the way firms approach pricing, from fixed to
flexible. The digital revolution allows consumers to get lots of things for free and choose
the price options that fit them best (Aric Rindfleisch 2019).

It leads to new definitions was born with different advantages and disadvantages:
Freemium- a combination of “free” and “premium” and Pay what you want (PWYW)
strategy (Aric Rindfleisch 2019). Firstly, freemium model allows customers to access a
portion of a product or a service for free and then pay only for any added offerings that
they would like to have (Aric Rindfleisch 2019). Here are a few examples of some
familiar firms that successfully employ the Freemium model: Linked In targeted to
different segments, offers a variety of different premium memberships that range in price
from around $30 to $120 per month and these premium subscribers have access to a
variety of additional features not available to Linked In’s free members and some other
firms like Dropbox, Spotify and New York Time, etc. (Aric Rindfleisch 2019). To gain a
higher level of conversion the firm should: add new features, be sticky, be restrictive,
reduce your marketing costs.

Secondly, Pay What You Want is a pricing strategy that lets customers decide how
much they want to pay for a particular product even nothing. One of the most famous
firm was applying this strategy is Panera. Although the store has lost 30% of their
revenue after 8 years of opening, it has left a significant impact and garnered media
attention (Angela Stringfellow 2021).

4. Place

This aspect of the marketing mix focuses on making a product conveniently

accessible to potential customers. Many firms are supplementing or even bypassing
physical retailers by making their products directly available at either an online retailer
like Amazon.com or on their own website. And with the 3D printer Thingiverse.com are
providing freely digital design for mass of useful products. Today, we are moving from
long channels for physical goods to short channels for digital goods (Aric Rindfleisch
2019).
In today's digital world, just about any product can be purchased online.
Traditional physical businesses are facing a significant challenge from online retailing.
Several well-known businesses in a range of product categories, including music, books,
and electronics, have gone out of business as a result of the online competition. Many
indoor retail malls in the United States are shutting, and the majority of them contain at
least a few empty storefronts. Due to this threat of online retailing, physical retailers have
had to change how they do business- new retailer was born. New retailer definition is a
collection of strategy (both physical and digital) that physical retailers are using to react
to the challenges of operating in a digital world (Aric Rindfleisch 2019). For instance,
Walmart have made it easy for customers to order online and then pick up their products
at the store. And several physical stores are starting to use digital tools to enhance the
shopping experience like Tesco, B8ta, Panera, Tesla, etc. (Aric Rindfleisch 2019; Reuters
2012)
Picture 2: Panera using digital tools to enhance shopping experience of customers
(Forbes, 2017)
 Picture 3: Tesco opens new concept 'food to go' store in London

III. DISCUSS HOW COMPANIES CAN REACT TO THE CHANGING OF

DIGITAL MARKETING ENVIRONMENT

According to Dholakia (2019), with the continuous development of digital tools

and the number of people using digital tools not only offer excitement and opportunity
but are also daunting and overwhelming to a great many consumers, companies, and
institutions, struggling to keep up with the magnitude and pace of change.
Therefore, to operate a successful company activity in the trade sector, you must
do the following: grow your service offering, sell high-quality items, pay to meet
customer wishes, and cut expenses. In order to attain success, it is also necessary to align
and effectively use marketing mix elements and their activities. Effective marketing mix
management helps marketers to establish a mixture of factors that will allow the
company's budget to be sensibly managed in order to reach the intended goals. Last but
not least, to avoid falling behind, marketing professionals must constantly monitor the
environment and its changes in order to respond and adapt appropriately to them.

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