The Effect of Technology on Strategic Marketing Management - Essay Example

? The effect of Technology on Strategic Marketing Management The Marketing strategy of an organization is what allows it to focus its limited resources to capture its desired target market while countering and taking advantage of its internal and external environment. In developing the formal marketing strategy for the organization, the starting point is with the basic market analysis which lets them know of the demand trends in the market, insight into customer’s behavior, and the conditions of the competitive environment through intensive primary or secondary research. The research could be casual, descriptive or exploratory in nature according to the needs of the organization. After the analysis is done the organization can move on to developing a viable, long term strategy for the organizations’ marketing efforts. The main focus of the strategy is to allow for segmentation and targeting of the desired customer base and deciding on the value proposition that they would be offered in return for becoming their customers. The basic challenge of strategic marketing is, therefore, to manage marketing intricacy, customer and stakeholder expectations and to reconcile with the effects of a varying atmosphere in the context of certain resource availabilities. Strategic Marketing enthusiasts often adopt management concepts to their unique needs. As the basic purpose of both management and marketing is to explore the relationships an industry or organization has with its environment, some of the widely used management tools and frameworks have been adopted for the marketing process. These would include the industry analysis techniques of Porter and the portfolio matrices (Fahy, Smithee, 1999, p1). Strategic Marketing Management is a field of study in which due consideration is given to understanding the different parts of the marketing strategy and their integration framework for defining and evolving the market which ultimately helps the marketing manager into transforming concepts and theories into practical strategies and action plans for any organization. In Strategic Marketing Management the focus is on the ‘3 Cs’ of the external environment. The competitors, customers and the channel form the three pronged focus of the firms efforts. By searching and providing better solutions to their customers needs and to cater to their demands is the first step for any the organization in designing a product and related marketing strategy. The competitors are important because ultimately they will impact the consumers buying decision and the overall industry profitability, the strategy has to be such as to differentiate and better the position of the company in the eyes of the consumer from the competitor. Finally, the channel or the supplier side of the equation deals with the processes of manufacturing or producing a good for the market and the people that will have to be dealt with during it all. An organization has to be on the lookout for any opportunities or threats which exist because of changes in the 3 Cs environments, and their marketing strategy has to be strong and flexible enough to adept to these changes in a beneficial way. Like any other process, marketing is also subject to the changes in the technological, lifestyle, social and economical trends. Even more so because marketing, ultimately, is designed to and catered for the needs and wants of the people and these depend largely on the time frame and environmental and psychological factors. In the 21st century there are some trends which have slowly become a stronghold in of the modern markets and for the prudent organizations, their strategy has to be managed to accommodate these trends. There is a cynicism prevalent in today’s consumer which makes them check and double check the claims that a company is making about their product or service. They are self conscious about the decisions they make, ethically motivated, passionate about eco friendly practices and generally more aware about the issues surrounding them. They demand transparency in their dealings with a firm and they have the resources on how to get the information. With the advance of internet and web resources creating and distributing information has never been easier and the organizations have to keep this is mind with regards to adopting their communication and marketing mediums. Currently marketing is moving from the multi channel approach to the uni channel approach. All the different media channels of interaction and communication are being integrated and joined seamlessly so that consumers don’t feel disoriented. This would increase the ease of transactions as well as provide greater convenience to the customers who can enter their sales code in the website and get a call directed to the customer center or get a magazine mailed to their homes without having to change their medium. This is one of the direct responses to the need of transparency and information sharing. Greater communication also provides the organizations with another strategic advantage. They can attempt to fulfill one of the most central consumer demands of the modern world- the need for personalization and customization. People are increasingly becoming individual minded and they want their possessions and services to in some way be an extension of their personality. Better manufacturing processes, smart softwares, greater interaction and appropriate use of consumer insight through research means that organizations are finally in a position to introduce the concept of mass customization and individualization. All of these trends in one way or the other are related to our increasing dependence and utilization of technology and technological processes. In the industries of the world technology has brought profound changes at each and every step of providing services and manufacturing better products. While pure manufacturing businesses have greatly benefited from introduction of automation processes which are more efficient, increase productivity and offer higher safety standards for workers, the services and IT sector have benefitted from the greater communication and the scope of research and analysis which is now possible due to the access to intensive databases and online information bases. The capability of firms to capture internal information in a structured manner which increases reliability, quality and consistency of the data available has also enhanced their ability to identify trends, opportunities and weaknesses. For the consumer’s demand side, with technology affecting and impeaching on every part of our lives, it can no longer be confined to the domains of the few intelligent and interested groups. “From an evolutionary standpoint, technology has infiltrated every aspect of our lives faster than we can assimilate the changes” (Brown, 2005). People want technology to be presented in a form which is familiar and comfortable to use, with a user interface designed with human emotions in mind. Successful brands in the coming years would be the ones who can introduce this level of technology for their employees and forward it to their consumers- they have to market their efforts towards making technology acceptable. If we take the example of the Banking sector it has changed drastically in the last decade or so. ‘This explosion of technology is changing the banking industry from paper and branch banks to' digitized and networked banking services. It has already changed the internal accounting and management systems of banks. It is now fundamentally changing the delivery systems banks use to interact with their customers’’ (Ghaziri 1995) In face of new entrants in the sector which were seen as threats to the established banks and to increase their market penetration as well as capture new markets, banks revamped their services and offerings to be more in tune with the requirements of the modern day financial needs- they utilized technology to change their businesses practices and then successfully humanized their services in a way which was acceptable and beneficial for the consumer. Remote Banking is already seen as a part of the basic retail banking service. Started with offering telephone operator services for transactions, the service moved on to ATMs (Automated Teller Machines) and internet banking where through an online bank profile the customers can check their account, make transactions and avail other banking services without ever needing to visit a physical branch. In theory, ‘virtual banks’ are a possibility now which would work using remote banking distribution methods without ever having to establish a physical branch (European central bank, 1999, p10). The process of moving all these services from human and paper processes required a lot of resources in terms of time, money and technological ability. According to a survey conducted by the American Bankers Association, US banks expenditure on information technology grew from $16.3 billion in 1994 to $18.7 billion in 1995-an increase of 14.7%. There was the need to develop and maintain databases of all the information regarding banking process, customer profile, account details etc and it had to be easily accessed in all branches of banks and by the consumers. The need for fast and efficient banking system was already there but the banks humanized their services to provide simple user interface and marketed it as such. The banks that started to adopt these new technologies early on distinguished themselves and were able to update and innovate as times changed. Understanding the changes that technology has brought into the strategic marketing practices would be difficult without an analysis of the benefits and innovation that the industries have gained in different sectors by new information management systems and other developments. The most significant effect has been on the research opportunities available. By adopting information technology, companies have an increased ability to be customer centric and market driven. Technology is responsible for bringing the focus back on the individual for marketing efforts, the rise in use of technologies such as single-source data, integrated computer networks, softwares for data collection and analysis, powerful mathematical tools for statistical analysis and modeling marketing transformed marketing research. With better support for managerial decisions, customers could be segmented into distinct categories even down to an individual level, based on very specific characteristics. It became easier to identify buying patterns, loyal customers and potential markets. Utilizing this research firms could now design distribution, promotional vehicles and tailored messages for each group separately and expect good results (Rust & Espinoza, 2006, p1075-76) . Marketing finally become an evidenced based field with hypothesis, proofs and clear results. For an industry like banking identifying their loyal customers, delighting and retaining them is crucial. Through new data sources they can track high value customers and tailor specific services for them. Credit Card bills are often accompanied with discount offers and online payments carry ads of certain bank services, banks may offer lower discount rates to certain firms- the decisions to send certain customers these is not a ‘gut reaction’ it’s a result of customer insight research. The relationship with stakeholders has also undergone significant changes, especially for B2B sector where technology has been utilized to enhance supplier-customer relationships. Through use of systems like Supply Chain Management and Customer Relationship Management a high quality of coordination and collaboration can be achieved between different stake holders for the benefit of the business. The research done by Walter & Ritter gives empirical prove of the fact that IT can be used to deepen and extend the exchange processes between customers and suppliers to increase efficiency and effectiveness (2006, p300, 303). However, their research also points out the importance of human interaction and ‘humanization of technology’ to maintaining a balanced and comfortable communication. On the other hand, building relationships with customer’s as a process has become reliant on E marketing, which is fast becoming the most prominent tool in the marketing strategy management of today’s organization. Increasingly the consumer is invited to interact with the organization through its website, receive information from newsletters (which may be customized according to their preferences), they can give their feedback and suggestions, enjoy leisurely shopping through their pcs, and they can avail services with a click of a button. Market research enables the firms to put advertisements on the websites which are frequented by their target audience, social networking websites are a new emerging source of data and a very rich ground for capturing new target markets. The availability of inexpensive computers, wide internet networks and increasing technology awareness has made e marketing the biggest trend in latest years (Mort & Gillian, 2002, p12). While banks focused on using the power of internet to make available remote banking possibilities, they are also not idle in marketing themselves through the same medium. Customers can view any number of their services on their websites and make queries; Banking offers are also strategically placed in financial magazines, on retail websites or any website which would deal with high financial assets. However, there are still some weaknesses in the E-marketing strategy. The requirement of physical hardware means that access is still restricted, internet availability is another problem. While developed countries have wide overage, it’s not the case for developing countries. The human motivation factor is also there, the firms still need for the person to click on their link to actually avail the services provided or learn more about their business- advertisements can only go so far. The answer to these problems has been the rise of m-marketing or Mobile marketing, which involves marketing directly to the consumer via short messaging and provision of certain retail services through mobile devices. The reasons for the boom in m-marketing are multi dimensional. The most obvious reason would be the increasing user base of mobile devices, the demand for mobile devices such as PDAs, cell phones and digital music players is at an all time high-the world demand was expected to grow from $17.3B in 2006 to $76.9B in 2011. These devices are convenient to use and portable, their small size and with simple functions and user interface is designed to be as friendly as possible and Wireless service means that area of coverage is greater and the devices can be easily used in different areas without much need for maintenance. This why not only have these devices become a mainstay in the society, they are also used in almost all the age brackets. But it is not the only reason why marketers are increasingly moving towards this medium for their marketing efforts. The cost factor plays an important role in the m-marketing strategy, most versions of hand held devices are much more inexpensive that an average pc or laptop. While this doesn’t make much difference in the developed world, it has significant effects in the third world countries where cell phone usage has even taken over telephone lines and is the preferred secure and cheap way of communication. For marketers wanting to tap these markets, m-marketing is the powerful strategy designed with the use of technology in mind. The banking sector is again in the front of this technological advancement. “The uptake of m-banking/m-payment system has been particularly strong in the Phillippines where three million customers use systems offered by mobile operators, smart globe in South Africa, where 450,000 people use Wizzit or one of the two other national systems (Anyasi & Otabu, 2009, p4). Similarly Nigeria and the South-East Asian regions have been very successful with such banking efforts which offer financial services to people through a medium which they already have and provide financial security and empowerment in deprived areas. The three main services offered are: access to a stored value (currently) through the handset connected to bank account, convert cash in and out of stored value through flexible means and transfer the value between one users to another. Moving into the developed areas, the advantage banks have in introducing m-marketing, is that because of the wide and fairly addictive user base they will not have to wait for 10-15 years before it becomes a mass marketing tool. Mobile device usage is increasing rapidly and with the more premium devices, the users belong to the affluent class that the bankers want as customers. M-marketing would appeal to them and be beneficial for the firms and industry over all (Shevlin, Bezard & Fishman,2011). In conclusion, when looking at the effects of technology on strategic marketing management what we are seeing is the older marketing strategies revamped with new tools. Research, target marketing, providing value to your consumers- all these have always existed in some form but now the industries have better means to go about doing them. The new marketing strategy greatly makes use of the greater connectivity provided by networks to give more consideration to the consumer. The well defined databases, research instruments and statistical measures now available allow them to keep their marketing efforts focused, structured and innovative. Bibliography Rust, T., & Espinoza, F,. 2006. How technology advances influence business research and marketing strategy. Journal of Business Research 59, 1072-78. Shankar, V, & Balasubramanian, S., 2009. Mobile Marketing: A Synthesis and Prognosis. Journal of interactive Marketing, 118-129. Afuah, A., 2000. How much do your ‘Co-opetitors’ capabilities matter in face of technological change? Strategic Management Journal, vol.21, No.3. Ritter, T. & Walter, A., 2006. Matching High-tech and High-touch in supplier-customer relationship. European Journal of Marketing, Vol.40, Issue: 3. Mort, G. & Drennan, J., 2002. Mobile digital Technology: Emerging issues for Marketing. Journal of Database Marketing, 10(1), p9-23. Fahy, J. & Smithee, A., 1999. Strategic Marketing and the Resource Based View of the Firm, Academy of Marketing Science Review Volume 1999 no.10. Available at: Anyasi, F.I, & Otubu, P.A., 2009. Mobile Phone Technology in Banking System: Its Economic Effect. Research Journal of Information Technology 1(1): 1-5, 2009. Available at: < http://www.maxwellsci.com/print/rjit/1-5.pdf> Ghaziri, H., 1998. Information technology in the banking sector: opportunities, threats and strategies. Graduate School of Business and Management, American University of Beirut. Available at: < http://almashriq.hiof.no/ddc/projects/business/it-banking.html> European Central bank, 1999. The effects of Technology on the EU banking system. Frankfurt, Germany. Available at: < http://www.ecb.int/pub/pdf/other/techbnken.pdf> Brown, M., 2005. The New BrandScape: Six Future Trends Changing Marketing [online]. Marketingprofs, Available at: Scope of Strategic Marketing [Online]. Available at: < http://media.wiley.com/product_data/excerpt/51/04708498/0470849851.pdf> Shevlin, R., Bezard, G. & Fishman, J., 2011. The Impact of Mobile Banking:   A Case for Mobile Marketing. Aite Group LLC. [Online] Available at: < http://www.intel.com/content/dam/doc/white-paper/financial-services-the-impact-of-mobile-banking.pdf> Click, 2012. Four Mobile marketing trends to watch. [Online] Available at: < http://mashable.com/2012/04/17/mobile-marketing-trends/> Odde, L., 2011. Future Trends: 2012 Online Marketing & Technology Predictions [Online]. TopRank Marketing Blog, Available At: Kaplan, C., 2011. Marketing: Trends in Bank Marketing, ABA Issue Summary.ABA Public Relations. Available at: < http://www.texasbankers.com/pdfs/59Marketing_trends.pdf> Read More