INTERNATIONAL MARKETING

BU 5816

University of Aberdeen

4th

July 2008

TOPIC : Does the convergence of digital media makes international marketing easier to manage in

terms of reach and delivery?

By

Group 6

Vijay Raghavan Iyengar Mohan (07969363)

Hsu Yin Mon (07989131)

Theint Ei Phyu (07989138)

Mehtab Alam (07983217)

Prabu Kalivarathan

Narmada Prabhakaran (07970987)

Venkatraj Sowrirajan

1. INTRODUCTION

Digital media has been developing at an exponential rate over the past few decades and has

reached phenomenal promotions in the current date and age of digital communications.

Digital media has helped businesses go more international and market their products to a

wider customer base. Digital media convergence has occurred in the current market due to

convergence in technology and the easy access to this technology available to all. Covell

(2000) defined digital convergence as “the merging of digital communication technology,

internet and the media”. The convergence of digital media can be explained by defining terms

such as reach and delivery. The reach attained by a company is critical in determining the

type of customers and also the number of customers who will be targeted by the firm. The

reach attained by the company is a direct result of the type of delivery method used to depict

the company’s products. This report aims to analyse primarily the various forms of digital

media such as textual media, audio and video secondly the reach and delivery in digital media

by such techniques as internet video conferencing, streaming media, digital broadcasting and

smart phones to name a few and finally the pros and cons of convergence in digital media and

the various digital marketing strategies (in term of push and pull) employed by firms have

been explained in detail.

2. CONVERGENCE OF DIGITAL MEDIA

Covell (2000) defines digital media as the digitised content, be it in a textual form, in the

form of an audio recording or in a visual format that can be transmitted over either the World

Wide Web or over other computer networks. Digital media technology covers every aspect of

modern day life with numerous technologies like mobile phone communication, GPRS

systems and any technology associated with the World Wide Web (www). The digital media

of digital communication technology, internet and the media is converging recently. It has

been contended that digital convergence is about developing strategies that can help the

whole firm gain a competitive advantage, rather than just seizing market share. Convergence

in digital media is aimed at developing the firm and making it competitive not just for the

present but also in the future (Hamel and Prahalad, 1996).

Today, as it is known that we are in the revolution of digital media and that digital technology

in this era of 21st century comprises of two types of network or services i.e. Vertical Network

(single services) and Horizontal Network (multi-services).

Vertical Network -This type of network known as single service network because it uses

separately single mode of network in international marketing .The examples includes fixed

line, mobile network, radio/satellite services,Wi-Fi, LAN etc.

Horizontal Network -This is the cluster of multi services which uses combination of digital

media in international marketing. Today this service has not yet completely used in

international marketing. So it is expected that tomorrow this services in digital media will be

completely merged and single service will serve the purpose instead of having separate

services. The example includes combination of mobile network, fixed network, broadcasting

network and WLAN etc.

2.1 Convergence of digital media helps in manage international Marketing

Some of the digital media technologies used in business include blogs and podcasts which

can be used for public relations purposes; viral videos to inspire word-of-mouth or buzz

marketing; using wikis for collaboration and communication; online advertising; learning

organization type of corporate environment (Smith 2007); monitoring the blogosphere for

customers both satisfied and dissatisfied ( Gillin 2007); networking within organization and

externally with consumers/users(Hathi 2007); share and learn from brand related social

networking media ( Murray 2007); and enhancing customer loyalty and relationship

marketing.

Ø Advertising

Internet advertising is the fastest growing advertising medium. Zenith Optimedia expects

online advertising to account for 8.6% of global ad spending in 2008, 9.4% in 2009, and

11.5% in 2010 (Kaplan 2007a, 2007b). This clearly indicates that online advertising will

surge ahead of radio and magazines by 2008 and 2010 respectively. Advertisers are turning to

search ads of advertising (Google, Yahoo) since it is the most discerning way of reaching a

prospect. For instance, a consumer is doing a search on, say, arthritis remedies and ads for all

the arthritis products appear at that very moment.

Ø Relationship marketing

Relationship marketing is all about satisfying customers and all other stakeholders with not

only product quality but also long-lasting, trusting relationship with them. Digital media

helps organizations to improve and enhance the brand/customer loyalty while at the same

time getting feedback from customers and seeking what changes are expected by the

consumers. For example, American Express is experimenting with a beta version of a ‘travel

community’ for its membership.

Ø Niche marketing

Companies create products using the micro segmentation for target markets that are too small

to be profitable by traditional marketing strategies. The objective is to use buzz marketing

through internet. Which is to get consumers to promote a product, perhaps on their blogs,

social networking profiles etc., (Friedman et al. 2007). For example YouTube could go viral

and successfully support a small company in launching and promotion of its new product or

service

3. DIGITAL MEDIA MARKETING STRATEGIES

3.1 PUSH AND PULL STRATEGIES

Pull digital marketing – “the customer seeks information about products and/or services by

visiting the company’s sources of information searching for the specific product or service

information. They are basically requesting to view this specific content. These are typically

located in websites, blogs, streaming audio and video sources. Customers have found related

information on other websites or been directed to the company’s sources by a referring

website to find the information” (Wetzel, 2008).

Push digital marketing – “customers are provided information by receiving or viewing

advertisements digitally, such as: SMS, RSS, cellphone calls, etc., as subscribers of the latest

product and service information provided by the company” (Wetzel, 2008).

3.2 PUSH AND PULL ADVANTAGES AND DISADVANTAGES

Pull Advantages

Ø Low cost

Kendall and Kendall (1999) stated that using the pull digital technology provides “a low cost,

basic method that yields good, perhaps optimal results when the user is trained to perform in

optimal way”. Walmart and Dell is the great example of using pull online strategies by using

internet technology to reduce inventory cost which provided competitive advantages over

their competitors. “Walmart initially leveraged pre-Internet electronic data interchange (EDI)

technology to dramatically lower inventory costs” (David Bollier, 2006; 22).

Push Advantages

Ø Tracking of Customer Preference

Push technology able to track of user preferences and customized according to their

preferences (Kendall and Kendall, 1999). The good example of TiVo broadcasting

technology is that it memorized the user preferences and provides information such as TV

series, movies etc to them according to their preferences. The another example of push

strategy advantages by using digitised technology is that the marketer can send their

customized advertisement through digitised media such as SMS, email etc.

Ø Increase Accessibility

Customer accessibility can increase by companies market and advertise their products using

push technology. Subscribers get pushed by built in developed software called pointcast that

enable users to receive automatic content updates via their internet connection and web

presence as the channel to get information when their computers are not in use. (Ferreri

2001). For a good example is the utility company receives transmission of the regional sales

force from corporate headquarters by every evening around 2 pm. It includes latest sale

figures, demand statistics and new application notes and so on. Therefore user can easily

access information as it is automatically received and waiting to display on the desktop.

Pull Disadvantages

Ø Non Customization

Pull technology (search engines, web surfing etc.) do not deliver the need of the customer

preference. Google, Yahoo search engines only provides information and lists of websites

related to customers search topic. Customers have to choose the websites or information from

these lists sometime more than 100 pages. The customers may not have patience to go

through the individual websites that appears from the search engines.

Push Disadvantages

Ø Privacy Concerns

“Users fear a loss of privacy as commercial concerns or even governments may snoop to see

what other cookies are stored on the computer” (Kendall and Kendall, 1999; 19). For

example, after streaming in webcasting or broadcasting website (Push Technology), the

cookies are automatically stored into the hard-drive of the computer. The cookies in the hard

drive allow site tracking, allow advertisers to use the profile and build market data.

Ø Requires Delivery Technology

Kendall and Kendall (1999) also stated that there is no standard to deliver through digital

media channels. For example different digital convergence media providers will have

different technology requirement. BBC radio digital broadcasting online may require

RealPlayer to listen to the radio whereas other broadcasting providers may require mp3

player to play or listen to the music or radio.

3.3 BALANCING PULL AND PUSH STRATEGIES

The successful digital marketing requires balancing both pull and push strategies to reach and

deliver through digitized media. Mike Sands (2003) stated that it is essential to achieve high

score in the search engine which will pull more visitors into marketer website as a pull part of

strategy. The push part of strategy is where the promotional message is embedded in an

informational e-newsletter. According to Mike Sands (2003; 31) “in order to people to keep

subscribed this newsletter care must be taken to ensure that a good balance is struck between

useful general information and announcements of a purely commercial nature.” Mike Sands

agreed that in order to be successful in the online (digital) marketing, both push and pull

strategies are essential and balancing those two strategies is vital.

4. REACHING AND DELIVERING IN INTERNATIONAL MARKET

Evans and Wurster (1999) define reach as follows “It is about access and connection. It

means simply, how many customers a business can connect with and how many products it

can offer to customers. Reach is the most visible difference between electronic and physical

businesses, and it has been a primary competitive differentiator for e businesses so far”.

Reach essentially gives an idea about the size of customer base that a business can expect to

cover and is particularly important in the case of digital media as a whole and the internet in

particular.

It has been contended that delivery of digital media is dependent upon both supply and

demand side factors and delivery of digital media arises when there is a juxtaposition of

outsourcing and e-commerce (DIGITAL DELIVERY OF BUSINESS SERVICES,

Organisation for Economic Co-operation and Development). If the method of delivery of a

firm is flawed it is highly unlikely to succeed even if the services offered are exceptional.

4.1 Reaching and Delivery to the Consumers (Broadcasting)

The components of the convergence of digital media have got its reach and delivery to its

consumers through broadcasting technology. The concept of TiVo in America and Sky in

U.K many other forms of media have been used to broadcast to the customer in maintaining

effective reach and delivery. TiVo helps the consumer to select particular program sessions.

TiVo has the capability to record and play the recorded programs at the same time. TiVo

tracks consumer’s preferences and reschedules television to suit the individual tastes. TiVo

objective is not just consumers to buy TiVo box also to sign up account with them to gain

continuous income.

4.2 Advantages in Global Market Management

The convergence of digital media has far reaching impact on globalization of international

marketing. Convergence of digital media has tracked the customers exactly in terms of their

wants and needs of the products and services globally. It has advantages over saving time and

reducing the cost in terms of reach and delivery (example of TiVo – tracking the household

behavior and recommend the series similar to that consumers want). Manage easily in

communication and relationship between Consumers and Marketer which enhance the faster

reach and delivery. E.g. Smartphone (blackberry, N95, Sony Ericsson P series) combination

of digital camera, wi-fi, Bluetooth, web & walk, mp3.

5. CHALLENGES IN DIGITAL CONVERGENCE

With the rise of digital revolution, the challenges in digital convergence have emerged as

important factor. There are two types of challenges in the convergence of digital media (1)

Technological Challenge and (2) Societal Challenge.

Ø Societal Challenge

This includes new problems that arise from the extensive use of the availability of the digital

media devices. Examples include children misusing the digital media in downloading sexual

and porn contents. The problem like occurrence of traffic accidents due to mobile phones

while on driving. Another type of social challenge is to how to improve the life of the people

through this convergence and to sort out existing problems.

Ø Technological Challenge

The technological challenges are focused on operating, refining and sorting out the ways in

which we use the technologies like software, hardware, user interface, and manufacturing etc.

For example in mobile phones the access of latest features like internet, podcasting, GPS,

navigation etc. requires series of pushing the buttons in ordered way. Also operating the

digital devices involves referring to the user manuals which is somewhat complicated and

jargoned.

6. CONCLUSION

The development witnessed by the digital media industry over the past few decades has been

exponential. Digital media technology such as Peer to Peer networks, Global Positioning

Systems, teleconferencing so on and so forth have been analysed keeping in mind the reach

and delivery tactics used in business. The reach attained by a company is a prime factor in

discerning the composition as well as the size of the firm’s customer base. The role of digital

media in encouraging production and enhancing the access to a product has been discussed in

detail. Marketing strategies applied by firms have been differentiated and classified based on

push digital marketing and pull digital marketing concepts. On analysis, it can be safely

stated that the convergence in digital media technologies has played a very vital role in aiding

international business prospects of a firm. It has been happening at an explosive rate and

there are no signs to indicate that this progress will slow down in the future because

technology is already freely available for everybody to access.

7. REFERENCES

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