Direct advertising - Dissertation Example

AN EVALUATION OF DIRECT ADVERTISING AND WHETHER IT CREATES COMPETITIVE ADVANTAGE FOR COMPANIES. Table of content Content Page Introduction Literature Review 2 Direct Advertising 2 Competitive Advantage 3 Competitive Advantage and Direct Advertising 5 Research Aims and Objectives 7 Methodology 8 Research Philosophy 8 Research Approach 9 Data Collection Methods 10 Validity and Reliability 11 Research Ethics 12 Research Limitations 12 References 14 Introduction There is a clear need for highly targeted marketing within the Internet environment. The land of Internet is filled with smaller submarkets where constructing and maintaining relationships with online users generates substantial amount of sales and profit volumes. The online marketers may contemplate that online marketing only encompass one-to-one promotion. However, it is beyond and more than that limited understanding. Direct advertising can be carried out through emails and faxes in which customer directly contact with producer of products and services. In the absence of middle-man, the customer finds it satisfactory to purchase product or avail services on the basis of existing market position of organization. However, companies need to maintain a higher level of marketing strategies along with competitive advantage in order to maintain its existing market position and market share as well. Competitive advantage has been defined as advantage offering greater value either through providing additional services and benefits or possibly lower prices. To maintain the competitive position and competitive advantage in the market, organizations need to adopt and maintain a defensible position in the market that could be achieved by adopting strategies such as overall cost leadership, differentiation or focus as suggested by porter. However, some critics highlight that organizations cannot be able to simultaneously maintain these strategies. In the subsequent parts of this research proposal, literature review is provided in which direct marketing, competitive advantage have been discussed. Subsequent to that, research methodology has been provided in which research philosophy, research approach, data collection method, validity and reliability, research ethics and research limitations have been included. Literature Review Direct Advertising There is a clear need for highly targeted marketing activities within the Internet environment. The Internet is a collection of smaller submarkets where developing and maintaining relationships with online customers generates sales, regenerates sales and subsequently profits (Norwood et al. n.d). However, applying this kind of marketing approach is not as simple as it looks. The online marketers may understand that marketing online only includes one-to-one promotion. The difficulty may be that the statistical data of the online consumers do not favour relationship building: 88 percent own a home computer and 67 percent of Internet newcomers are male, 39 percent have a college degree and 17 percent live in householders with only incomes of $ 80,000 or more (Norwood et al. n.d). Moreover, the reports suggest that the online consumers could be identified as impatient, having no particular allegiance to any particular websites. And more specifically, the on line users can be described as ‘switchers’, empowered to choose which site they want to visit so that when encountered with a barrage of on-line advertising, they simply switch to another website. This could subsequently be said that the on-line consumer may not prefer to enter into a relationship. In addition to that, there is a strong perception that a considerable number of online users and consumers believe that they the promotions through direct advertising cannot be relied as the frequency of fraud cases have enhanced to a dangerous level. Given these circumstances, the task of constructing and maintaining long term on line relationships has become a biggest challenge ever faced by the marketers. The key is to secure customer loyalty which would bring increased shareholder value and asset efficiency (Blomer et al. 1997) and at the same time avoid customer switching, which can diminish market share and profitability (Paulin et al. 1997). (Blomer et al. 1997) suggests that customer satisfaction is assumed to have a direct positive attachment to customer loyalty. However, Barnes (1997) contends that there are a myriad of approaches to develop, build and maintain customer loyalty and to tailoring marketing programs. Particularly, such approaches include direct marketing, database marketing, and loyalty programs. Moreover, Kotler (1997) suggests that social benefits, financial advantages and increasing structural ties will generate and encourage bonding and satisfaction. Within this context, Levinson (1995) mentions three possible useful approaches to securing on-line customer loyalty: extend consumers an emotional stake; multiple the number of on-line visits; and upgrade and enhance the quality of each contact. The convincing process to customers to stay a customer considerably relies on the customer’s understanding and maintaining of perception of “value”. To further strengthen this claim, Jensen (1997) states that it is only possible to secure competitiveness via superior customer value in the consumer markets. As a result, the marketing strategy must have or must develop superior contributions to the consumers’ attitude to and perception of value. And the critical component of any on-line marketing approach or strategy remains to be an understanding of the silent features and dimensions of on-line customer value. Competitive Advantage A competitive advantage is an advantage availed over competitors by offering customers greater value either through providing additional services and benefits that justify similar or possibly higher prices or through lower prices. And understanding the competitive and performance implications of an organization’s realized strategies (Mintzberg 1973) is crucial for the long-term success. Porter (1985) contemplated that in the long-term the extent to which the firm is able to generate and maintain a defensible position in an industry is a significant determinant of the success with which it will out-shine and out-perform its competitors in the same industry. Within that context, he further described those generic strategies by which an organization can produce and maintain a competitive advantage along with creating a defensible position in the market. These strategies include (i) overall cost leadership, (ii_ focus, and (iii) differentiation. Porter further contended that by adeptly pursuing the differentiation, focus or the cost leadership strategies, organizations can avail and maintain substantial and enduring competitive advantage over their rivals (Porter 1985). Galbraith and Schendel (1983) states that a number of empirical studies have been carried out to test and ascertain the validity of Porter’s generic studies. These studies depend on Porter’s conceptual framework to describe strategic dimensions of relevant variables as Porter’s generic strategies are essentially “ideal” types and at the same time are somewhat difficult to operationalise. Two schools of thought have appeared concerning the conceptualization and adoption of competitive strategies; the competitive strategies include differentiation, cost leadership and focus. The first school of thought provides its support to Porter’s assertion that an organization has to pick one of the generic strategies and put its total commitment of resources to it (Dess and Davis 1984). In contrast, various authors have provided their disagreement and reservations against Porter’s assertion and suggest that organizations should concentrate on an amalgamation of strategies best suit their individual circumstances (Wright et al. 1990). The first school of thought describes that viable companies can prefer to seek either differentiation or efficiency. The more efficiency is sought by management, the less differentiation the company would be able to avail; while greater differentiation would be attached with a less efficiency company. Competitive Advantage and Direct Advertising In this age of technology, most of the direct marketing is carried out through the use of Internet with the adoption of methods such as electronic mails, direct on-line contact and so on. The online direct marketing tool achieves highly targeted direct communication with online customers of a particular product and promotion offers and incentives. Subsequent to that, targeting does not only include offering price discounts, it could also mean making certain types of consumer more aware of relevant products or services, special recognition, service enhancements or even inviting them to join in special events. As the promotion can be tailored to potential prospects, it comprises of higher chances of success. However, its success is only based on behavioural and descriptive consumer data. Without this data, the on-line marketer remains in danger of creating or forwarding promotions aimed at impatient, disinterested and unspecified consumers. In this type of condition, it is not possible to build online customer relationships and any other opportunities for the purpose of gaining competitive advantage. Curtis (1996) provides that consumer data has been described as the bedrock of all targeted marketing pursuits enabling marketers to comprehend and predict how their customers will behave. In this regard, online transaction are of some value, but for various online marketers the most significant consumer data is the one attached with patterns of transactions such as increasing revenues over a period of time or range of products bought over a period of time. The Internet technology provides businesses the opportunity to collect consumer data and inspect and monitor consumer choice through customers revealing their preferences in purchasing and navigational behaviour on the land of the Internet. Within that context, Turban et al. (2009) describes that with direct marketing and customization comes one-to-one, or the method of direct marketing, which can be considerably more effective than mass advertising. Direct advertising generates a fundamental change in the way in which advertising is carried out, not only for the purpose of online transactions, but also for the services and products that are ordered and shipped through the traditional methods. However, some scholars have examined the potential competitive advantage of competencies based on a variety of foundational resources; in marketing, competitive advantages in services (Bhardwaj, Varadarajan, and Fahy 1993) and marketing orientation (Hunt and Morgan 1995) have been inspected. Research problem Direct advertising not only brings competitive advantage for a company but also enhances the chances of customer loyalty Research Aims and Objectives Highlighting the significance of direct advertising for the obtaining and retaining competitive advantage Evaluating the direct advertising methods and means of two companies for securing and maintaining competitive position in the market Understanding the disadvantages facing a company not employing direct advertising for gaining competitive advantage Methodology Research is comprised of small but delicate steps. It has been defined as a process of collecting, analyzing and interpreting data or information with an aim of obtaining answers for research objectives and research questions. In this regard, research is also attempted with the employment of certain features that must be rigorous, controlled, valid and verifiable, empirical and critical as well (Dawson 2002). They have been highlighted as the foundational components of research; their relevant and effective application along with evaluation remains to be key factors deciding whether the intended research objectives have been properly attained. With an aim of obtaining research objectives, researchers are first needed to ascertain relevant research philosophy so that research process must appropriately obtain the purpose of research objectives. Research Philosophy Phenomenology and Positivism are two basic research philosophies. The supporters of both philosophies considerably differ and enforce different research philosophy while carrying out research work. Historically, the supporters of both philosophies have been discrediting each other’s versions. A leading German philosopher-cum-social scientist Edmund Husserl (1859-1938) laid the fundamental foundations of Phenomenology. Smith et al. (1991) provide the basic features of both philosophies; the supporters of Phenomenology believe and support that the world is socially attached and constructed and subjective as well. In contrast, the supporters of Positivism opine that the world is objective and external. On the other hand, the supporters of Phenomenology argue that researcher is a part of what is being researched or in other words the researcher must be taken as a part of the research process; and the researcher must employ his or her subjective thinking, understanding and beliefs while carrying out research activity. On the other hand, the supporters of Positivism disagree with the perceptions highlighted by the supporters of Phenomenology and they contend that researcher is independent of research work and must not be allowed to involve or use his or her subjective understanding for the research activity. In this work, the researcher intends to use the philosophy of Phenomenology. The following factors necessitate the use of this philosophy. First, the online marketers need to understand the understanding of the online customers or those who receive emails, fax and other methods employed for the purpose of direct marketing. Second, in this work, the research objectives are going to be appropriately entertained by using the philosophy of Phenomenology. The relationship between direct advertising and competitive advantage can be better employed when the researcher employs the subjective understanding and beliefs common in the marketing world. Research Approach Qualitative and quantitative research approaches can be employed to conduct research activity. The qualitative research approach is utilized with the philosophy of Phenomenology and the quantitative research approach is employed with the philosophy of Positivism. Both approaches have unique features that enable them to remain suitable for different research objectives and research questions. Some authors suggest that the quantitative approach was originally developed to entertain research objectives pertaining to natural science; the main examples include such as survey methods, mathematical modelling and econometrics. On the other hand, the qualitative research approach is employed to obtain answers relevant to social science and so on; action research, behavioural analysis and ethnography can be quoted as the examples of this research approach. The researcher intends to use the qualitative research approach to entertain the research questions. The rationale behind employing the qualitative research approach is supported by the subjective nature of the research questions. The quantitative research approach is insufficient to appropriately address and provide relevant answers to the research questions. Data Collection Methods Primary and secondary data collection methods are employed to collect data. The primary research method enables researcher to obtain access to first hand information. A piece of information that has not been previously used or employed or accessed. On the other hand, the secondary data collection method is used to secure access to pre-existing data or information that has already been accessed and quoted and normally easily accessible. There are various ways to amass data and information are the primary methods include contact and observation methods. In the observation method, researcher is made responsible to observe actions, reactions, behaviours, thoughts, impressions of respondents whose prior free consent is highly essential so that the process of observation begin to take place. And the contact method may occur in a face to face interview, telephonic interview or emails can be used to obtain first hand information. Before going to conducting primary research, the researcher is required to develop a questionnaire based on either open-ended or close ended questions. The secondary data collection method employs both online and offline sources to collect data or information. Books, academic journals, peer-reviewed journals, newspapers, websites and other available sources can be used to collect information. In this dissertation paper, the researcher intends to use secondary research to fulfil the research objectives and research questions. The researcher plans to obtain data and information from both online and offline sources including books, journals and newspaper and so on. Validity and Reliability Validity remains highly essential features of research work and information obtained. Various research critics opine that entire foundation of research work depends on validity. The concept of validity has been defined as such type of correct measures that have been tested to facilitate answers to research questions. And to a considerable extent, this concept is used in the qualitative studies. However, winter (2000) contends that this concept is neither universal nor single instead it is a contingent construct inescapably associated with research methodology. Furthermore, some experts suggest that validity is not pertinent to such type of researcher as the researcher’s subjective understanding and personal perceptions considerably influence of validity of entire research process. The concept of reliability has been described as the quality measurement procedure linked with accuracy and repeatability. Some experts argue that the reliability is commonly employed in the quantitative research. Thereby, reliability is utilized to elaborate the quality of the quantitative research. However, an effective qualitative study extends comprehension relevant to circumstance that would otherwise be complex (Eisner 1991). Within this context, Stenbacka (2001) contends that this empowers researcher to use the concept of reliability with an aim of generating and enhancing understanding. The researcher intends to ensure both validity and reliability by employing the authentic sources. As the sources remain highly essential to ascertain the validity and reliability of information provided, the researcher plans to use authentic books, peer-reviewed journals, newspapers. The researcher intends to avoid obtaining data or information from websites as they may not fulfill the conditions relevant to validity and reliability. Research Ethics Ethics may represent different things to different people (Butts and Rich 2005). And the extent of ethical violation is not easy to determine as well (Munson 2002). Ethics may be defined as such actions which can be considered as morally right or wrong. There has been no universally agreed mechanism or framework providing absolute ethics definition and extent of ethical violation. Moreover, for every activity, ethics do not remain the same but they are keeping on changing from one activity to another. The researcher considers plagiarism as unethical act. Copying or using other ideas and representing them as one’s one constitutes plagiarism. In order to avoid this unethical act, the researcher has appropriately quoted the original source to avoid the conduct of plagiarism. The researcher has properly provided their reference not only in the in-text citation but also in the reference list as well. In addition to that, the researcher has alone worked on this paper and has avoided getting any assistance from anyone. Obtaining support for completing this kind of task also becomes unethical. The researcher has only relied on personal efforts to complete the paper requirements. Research Limitations Personal bias and exaggeration cannot be ruled out. The researcher intends to use secondary sources such as books and journals, newspapers etc. There is a possibility that some authors may not be appropriately objective rather they may employing their subjective understanding. And subjective understanding cannot be termed as error free or absolute truth. Second, there is also a possibility that the quoted information may be based on the incorrect information. It is possible that some authors, whose information would be quoted in the dissertation, may not be having impartial view and they may be having partiality. As a result, the researcher would not be able to highlight or pinpoint that shortcoming and subsequently it could become part of this or the dissertation paper. Although the researcher intends to only incorporate valid and reliable information, yet the possibility of such shortcomings cannot be ruled out. References Barnes, JG1997, Exploring the Importance of Closeness in Customer Relationships, Proc. Of the American Marketing Association Special Conference on New and Emerging Paradigms: The Emerging Future of Marketing, 227-240 Bharadwaj, SG, Varadarajan, PR, and Fahy, J1993, Sustainable Competitive Advantage in Service Industries: A Conceptual Model and Research Propositions, Journal of Marketing 57, pp. 83–99. Bloemer, JMM, Pauwels, HDP, & Kasper, HDP 1997, There is a More to Loyalty Than Just Satisfaction: The Effects of Satisfaction and Involvement on Brand Loyalty and Dealer Loyalty, Proc. Of the American Marketing Association Special Conference on New and Emerging Paradigms: The Emerging Future of Marketing, pp.36-37 Butts, J.B., & Rich, K. 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