This paper will be concluded by a discussion of online surveys and user generated innovation. Personalized Marketing Personalized marketing is focused on an individual customer, or a small group of customers, instead of a group. In order to apply the concept of personalize marketing successfully, marketing department should be able to collect data and information regarding a specific customer, or a small group of customers. Personalized marketing differs both from mass marketing, and niche marketing. Mass marketing is trying to reach a widespread audience, and niche marketing is focused on a group or segment of a market (Vegans, 2007).
The target market relates to all the people who may be a potential customer attracted in buying the product or service. Some companies make every effort to focus on the largest target market achievable, while other companies create smaller segments of the market they wish to focus on. Personalized marketing Is the most advanced type of target marketing. As an alternative of developing a product designed to plea the whole population, the target market consists in principle of one specific customer. Personalized marketing might perform to a somewhat wider group than just one customer, but the market segment is still mall (Vegans, 2007).
To be successful in applying the concept of personalized marketing, the company must be capable to gather data with respect tot the individual. This type of marketing is in particular useful via Internet. The Internet Is a shared stage for communication between a company and a customer. Vela the Internet, the buying habits of consumers can be followed by using cookies. Advertisements can be created exclusively for the distinct customer based on his or her buying past. For example, Amazon. Com tracks the purchasing past of customers. Based on this, Amazon makes recommendations by presenting similar products to he customer’s home page.
A second example of personalized marketing concerns customers design their own shoes. Nikkei is no exception, however, Nikkei goes a step further than the other shoe manufacturers. The customer can obtain specific shoes for unique foot sizes. Nikkei also allows the customer to choose the shoe based on what type of sport the customer practiced. There are countless color variations of the customized Nikkei shoes available, and in additional these shoes can be customized with a written word. Price Discrimination The application of different prices for the same product to different customer roofs is defined as price discrimination.
Price discrimination is different compared to product differentiation, as product differentiation refers to similar, but different products. Three types of price discrimination can be recognized. First-degree price discrimination refers to the cases where the supplier applies a price the customer is willing to pay. To successfully apply price discrimination, the supplier must be able to gather detailed information about the customer. In the case of second-degree price discrimination, a company offers a diversity of pricing options. Customers can build cages based on their readiness to pay.
In case of third degree price discrimination, the price depends on the characteristics, such as place or the customer segment (Garbanzo & Lee, 2003). First-degree price discrimination is the most suitable form for the application of personalized marketing. The Internet has had a positive impact on companies in their capacity to apply price discrimination and dynamic pricing strategies. Through the Internet, it is easier to collect personal information about customers. Companies must be transparent about price discrimination methods in order to avoid the mistrust of consumers.
Amazon had to deal with these problems some years ago. Consumers detected that Amazon was charging a higher price to faithful customers, while Amazon gave larger discounts to new purchasers. Amazon said that this price variations was not based on information in its possession on customers, but was the result of an erroneous test of the price. Successful strategies to improve customer acceptance are product differentiation, delivery costs, bundling and versioning. Companies need to carry out further research on the response of customers on price discrimination, partly because of the unpredictable nature of consumers.
Through transparency, the distrust of consumers can be avoided (Thomas, 2009). Online against Offline Competition While a substantial portion of digital media that is purchased online can be used immediately after buying, the delivery of online purchases of physical products normally entails a shipping time that can vary from hours to days and sometimes longer. Further, these delayed-consumption products are the kind of product most expected to be available in both online and physical stores, so the impact of this delay can be particularly relevant in view of the interface between an online and offline channel.
The delay between order and consumption can be considered as a waiting cost. It is important for an online vendor to minimalism the waiting cost. In online marketing it is more difficult to obtain the trust of customers in contrast to offline marketing. It is one of the key hurdles for customers to make an online purchase. The online marketing strategy must allow for this aspect. Factors, which can impact the aspect of online trust, are privacy and security (Libber & Convener’s, Currently, a company needs to know which sales channels are most important to their customer to minimize or prevent channel conflict.
Retailers were used to use sales channels as distinct businesses. However, retailers can take advantage from a model that combines the distinctive abilities of all channels and to provide an interrelated sales channel to the customer. Online channels, which for old-fashioned apparel and fashion retailers normally involve a relatively small part of the total business, can bring customers to offline shops. Websites and promotional e-mails create sales both for the company’s online channel and also for its offline stores. Multi-channel vendors should observe for proper ways to remunerate the concerning channel for generating sales.
An effective remuneration system does not entail competition between channels, but assist the total business (China, 2006). Globalization The trend of globalization has also impacted international marketing. Markets become accessible to international organizations as the cost and difficulty of operating abroad is reduced by globalization. On the other side, globalization has also caused an intensified market competition. New competitors from abroad are entering the market, which increases the competition. Companies can get their products easier, quicker and cheaper to consumers, as logistic systems have became ore efficient.
In addition, the developments in the field the international payment system have ensured that the system is more efficient and more secure. The development of new communication technologies allows international marketing campaigns to be organized from a domestic office. The Internet and mobile phones have ensured that new international industries have arisen. Globalization has altered the way consumers purchase products. Consumers are competent to search for proper deals and are equipped to purchase from abroad without physically inspect the product (Bergmann & Bonito, 2011).
Interpersonal Communication The Internet offers a new norm for managing business relationships and evolving of marketing strategies. Consumers and companies can consume from their homes or offices for a diversity of products and services from all over the planet. They are in a position to view, via the Internet, products on their computer monitors, and imagine how the products may fit their demands Noise, Scorcher, & Scuffle, 2003). They can also participate in online conversations with other consumers about the products and services they look for. There is no medium available which holds all these eaters.
The Internet links the complete buying process, from product exposure to product buying, into one straightforwardly accessible tool. The possibilities with respect to the level of interaction on the Internet are the main reason that consumers have a preference for this type of advertising. Consumers prefer interactive advertising as it places the consumer in charge. The Internet is a tool where the customer normally has to find the marketer rather than the other way around. The interpersonal communication part of the Internet permits a more customized advertising participation.
Consumers can request information from companies via e- mail Noise, Scorcher, & Scuffle, 2003). For example, Campbell Soup sends out recipes to interested customers on a weekly basis. The combination of mass and interpersonal communication on the Internet has played a decisive role for marketers Word of mouth marketing can be described as the actions of companies to create personal references as well as recommendations for brand names, products and services. Usually, marketing and interactive communications were disconnected by time and location.
The Internet allows consumers to network, and these interactive ammunitions might have commercial consequences. Via the Internet, consumers have now entrance to both marketing and interactive communications simultaneously and at the same space on several sites on the Internet (Reigned, 2007). The effectiveness of word of mouth marketing may diminish if a company decides to include these recommendations in the company’s website to support the marketing campaign. The foregoing is due to the fact that consumers would most likely notice the optimistic word of mouth as a part of manipulated marketing program.
In addition, the employment of positive word of mouth in a company’s Bessie may actually weaken the company’s marketing message (Susan, Gould, & Westfield-Spotter, 2006). To ensure that word of mouth will be part of an effective marketing tool, the positive word of mouth can be assigned to a separate website, which has no relation with the advertising company. The independence of the website will get the most out of the marketing campaign. Online Reviews The Internet is an effective tool in order to manage global market study. Models of new products can be tried via the Internet to obtain responses directly.
This information is given voluntary by guests of a company’s website. This info is beneficial for the company, as possible clients have provided the information. This information is helpful for salesperson to prepare the profile of the client (Melanoma, 2010). GOBI, a toy inventor, has used this method successfully. In February 2006, GOBI presented their latest invention, a baby dinosaur from the Jurassic era. This plaything was called Pole and equipped with senses for sight, sound and touch. In addition, Pole had a self-learning skill, which emerging as he discovered the situation.
The character of Pole would be affected through the interface with the environment. In first instance, the target group of Pole was children between seven and twelve years old. However, approximately seven thousand adults registered for the Pole updates on Goober’s website. The reviews, which have been send to theses adults, were returned with a 42% reply rate. Furthermore, the reviews showed that 40% of the respondents were men of age 25 with a great interest in mechanical playthings. Surprisingly, women in the age of forty to sixty were also interested in Pole, actually the plaything attracted the nurturing nature of these women.
Due to the online reviews, GOBI could successfully redefine TTS target group and, subsequently, apply an effective marketing strategy. This example shows that online reviews can be an effective research method. The collection of similar information via customary research methods would be both too expensive and too difficult. User-Generated Innovation The users of a product can play an important role in the innovation process of companies. Von Hippie (1976) investigated that about 80 per cent of the innovations were created by users of the products. This study showed that users are an important basis of innovation.
Two types of users can be characterized. First of all intermediate users, users that use products from manufacturers to produce other manufacturer and the final users. The second type of users concerns the consumer. Generally, this user is the final consumer, but it can also be a society of end users. More and more users have succeeded to invent for themselves, and in addition also to commercialism their creations. Users can play a role in a number of ways to the innovative ability of a company. First, the user can change the product or service by itself. These changes may improve the product to the wants of a group of consumers.
As a result, the manufacturer is capable to sell more products. The second way relates to knowledge. Certain users can be considered to be experts, and have valuable knowledge about the product. These principal users are faced with wants that conventional users may have several months or even years later. Companies can benefit from these principal users to produce advanced products. Correspondingly, co-creation can have an important impact also. Co-creation permits users to autonomously test and innovate. Companies can provide a platform for user societies (von Hippie, 2007).
Monika, a Finish mobile phone manufacturer, collects the ideas of customers via online applications. Monika has placed a phone application, called Sports Tracker, on the website of the company. This application was accessible to the visitors of the website. The application was in first instance designed for runners and cyclists. These users can log workout data and plan routes. At the end, more that one million users have downloaded the application, and it showed that the application was used for a wide diversity of sports. The users provided significant useful comments to Monika.
Based on these replies, the developers of Monika came to the conclusion that targeting the application to runners and cyclists was too narrow. Apple has succeeded to provide a platform for user generated innovation, and to introduce a new business model. Customers can download applications via the App Store of Apple. These applications have been designed by third parties, and via the App Store, an audience of millions can be reached through the App Store of Apple. The structure has been extremely beneficial for Apple. First of all, Apple receives fees for every sold application through the App Store.
Secondly, the success of the App Store will have a positive effect on the sale of phones, pad’s and pod’s. A complete range of applications boosts the attractiveness of these mobile devices of Apple. Conclusion The new economy has recently started as a result of the technological innovation and development. The digital revolution has enhanced the expansion of the new economy. Consumers have anytime and anywhere access to all types of information for product and services. Furthermore, standardization has been replaced by customization with a significant increase in terms of product offering.