1.0 Preamble The flood-gates stand opened! Today the world stands swamped with a flood of advertising and marketing with a host of products and services through digital words and figures. Their obituaries are ready - as Marketing gurus have started writing-off bill-boards, neon signs, hand-bills, posters and flyers as the media of marketing, replacing them with new-generation digital media. Into the drawing rooms and into the hands of people as digital devices explode, the digital media is fast becoming the favorite vehicle for marketers to reach the heart, mind and the purses of all – from infants to the aged. The ubiquitous digital marketing has arrived since the 90s and is seen rapidly penetrating the Indian marketing landscape. Today if one has made a purchase in the digital market-place of “amazon” and log in to the “IRCTC” web-site to book a railway ticket, the “amazon” banner appears with recommendations for one to purchase products from amazon’s virtual-stores based on the recent purchases one has made (which also appears). The cyber space is now swamped with a plethora of sellers, each one vying with one another fiercely, to capture the eye-balls of the netizens. The invasion is on even to the social media. While this is the case in the case of consumer products where literally a war is being fought, if one seeks as to whether to the same extent industrial sellers occupy the cyber-space, one would find that the visibility of the industrial sellers is not there to the extent of commercial sellers crowding the cyber-space. According to Mehmood Rehmani et al (2011)[1], “Jerry Wind[2] was one of the earliest champions of digital marketing, highlighting the revolutionary changes of the Internet on consumer behavior, marketing and business strategy. He urged executives to consider the potential of this new technology to transform their businesses.” Marko Merisova (2006)[3] writes that “The dominant logic of marketing is shifting from the exchange of goods toward service, interactivity, connectivity and ongoing relationships (Vargo and Lusch 2004). Technological innovations, new channels, and changing media environments facilitate this shift (Bhattacharya and Bolton 2000), and the question of how firms should interact with their customers is gaining in importance, especially as firms consider the cost differences between traditional communications media, such as television and sales forces, and electronic media, such as the Web and email (Reinartz et al. 2005). The cost efficiency and interactivity of digital channels facilitate ongoing dialogue between the enterprise and the customer (see e.g. Deighton and Barwise 2000; Peppers and Rogers 2004)”. With this background in this paper we make an attempt on presentation of the scenario of industrial marketing in India in the digital age. 2. Introduction to Digital marketing 2.1 Definition Popularly known as online marketing or web marketing or internet marketing in our country, digital marketing has been registering stupendous growth in our country in the past three years. A definition of Digital marketing would read as: “Digital marketing is marketing that makes use of electronic devices (computers) such as personal computers, smartphones, cellphones, tablets and game consoles to engage with stakeholders. Digital marketing applies technologies or platforms such as websites, e-mail, apps (classic and mobile) and social networks.”[4] According to the Digital Marketing Institute, “Digital Marketing is the use of digital channels to promote or market products and services to consumers and businesses”.1 What initially started as internet advertising (pop-ups) today internet marketing has undergone a transformation. “It’s less about advertising and more about creating an experience that transforms what it means to be a customer of a brand.” [5] Red ant[6] gives different definitions for digital marketing: Process definition: Digital is about finding the best way of achieving goals, normally promoting a brand or service, through electronic connected media. This could be online on the web, through specialist Internet applications, or through mobile phone applications (both network and Bluetooth connections). Emotive definition: Digital is the great equalizer and relationship builder. The greatest benefit of digital lies in its ability to forge individual relationships with the audience. Unlike any other broadcast medium, digital channels allow direct engagement with each member of the audience. Definition by difference: Digital offers brands new opportunities that traditional methods cannot easily match: • Digital does not obey the line. • Digital should be cost efficient. • Digital can be broadcast and personalized. • Digital should always prove returns. • Digital can be reactive as well as proactive Tracing the definitions of Digital Marketing Merisavo[7] (2006) says: “Despite the growing use of ICT in marketing, there are few definitions of digital marketing. Urban (2004) suggests that “Digital marketing uses the Internet and information technology to extend and improve traditional marketing functions.” This is a broad definition, concerning all of the traditional 4 P’s, and both customer acquisition and retention. We also acknowledge that terms like “interactive marketing,” “one-to-one marketing,” and “e-marketing” are close to digital marketing, but neither are they defined very precisely. Coviello, Milley and Marcolin (2001) have defined e-marketing as “using the Internet and other interactive technologies to create and mediate dialogue between the firm and identified customers.” They also consider emarketing as a subset of e-commerce. In their view, more than creating discrete transactions, emarketing is focused on managing continuous IT-enabled relationships with customers by creating dialogue and interactivity.” 2.2 Types of companies in the digital space Cap Gemini Consulting in their paper on the study of digital advantage[8] state that “Some companies are what we call the “Digirati.” They have the digital maturity not only to build digital innovations, but also to drive enterprise-wide transformation. And they benefit from their actions. Digirati have significantly higher financial performance than their less digitally-mature competitors”. According to Cap Gemini “Digital maturity is a combination of two separate but related dimensions. The first, digital intensity is investment in technology-enabled initiatives to change how the company operates – its customer engagements, internal operations, and even business models. Firms maturing in the second dimension, transformation management intensity, are creating the leadership capabilities necessary to drive digital transformation in the organization. Transformation intensity consists of the vision to shape a new future, governance and engagement to steer the course, and IT/business relationships to implement technology-based change. The elements of transformation management intensity work together – through a combination of top-down leadership and bottom-up innovation – to drive ongoing digital transformation. However, in many companies, these elements are overly slow or conservative, preventing the company from investing in innovative opportunities.” According to this paper there are four different types of digital maturity. Digital Beginners: These firms do very little with advanced digital capabilities, although they may be mature with more traditional applications such as ERP or electronic commerce. Digital Fashionistas: These companies have implemented or experimented with many sexy digital applications. Some of these initiatives may create value, but many do not. While they may look good together, they are not implemented with the vision of gaining synergies among the items. Digital Conservatives. They favor prudence over innovation. Conservatives understand the need for a strong unifying vision as well as for governance and corporate culture to ensure investments are managed well. However, they are typically skeptical of the value of new digital trends, sometimes to their detriment. Though aiming to spend wisely, their careful approach may cause them to miss valuable opportunities upon which their more stylish competitors will pounce. Digirati. They truly understand how to drive value with digital transformation. They combine a transformative vision, careful governance and engagement, with sufficient investment in new opportunities. Through vision and engagement, they develop a digital culture that can envision further changes and implement them wisely. By investing and carefully coordinating digital initiatives, they continuously advance their digital competitive advantage The paper quotes the example of Asian Paints saying “…..went the other way, creating vision, governance and IT capabilities to become a more unified company. Then it repeatedly built on its capabilities to transform its customer engagement, internal operations and business models.” 2.3 Why Digital marketing is taking roots.[9] According to SAS Consultants Digital Marketing is on the growth trajectory for reasons listed below. (a) Power Shift to Consumers via the Internet and Social Media Over the past few years, there’s been a continuous power shift to consumers. Customers can share their opinions online and influence tens of millions of people to buy from you – or not. According to a Nielsen Global Online Consumer Survey[10] of more than 28,000 online consumers throughout 56 countries, 36 percent now own a smart phone – a 15 percent increase over 2010 numbers. Nielsen also found that 35 percent of online respondents worldwide are likely to make payments with their phones. These metrics reinforce the need for organizations to provide consistent, relevant and personalized messages across multiple channels. Consumers want to determine how and when companies can engage with them, and they now hold the power to control that engagement – at any time, in any place – and with their own personal mobile devices. (b) Media Fragmentation The attention of consumers is fragmented across a wide range of media channels and devices. The Internet, mobile applications, email, Twitter and other channels have cannibalized the once-dominant position of influence held by TV, direct mail, and magazine ads. (c) The Demand for Consistent, Personalized Attention across Channels Today’s customers demand product and service information that’s personally relevant, timely and delivered via preferred channels when they choose to interact through them. (d) The Data Explosion The world contains an unimaginably massive amount of digital data today – and it’s increasing tenfold every 10 years. Companies are collecting, storing and linking massive amounts of data. 2.4 The need for Digital Marketing According to a white paper generated by IBM[11], “….online advertising spend will surpass print and the gap between online and television will become smaller in the coming years. In 2012 the spend gap will be $25 billion but by 2016 it is anticipated to shrink to about $10 billion.” “Marketing has entered a mandatory transition period. This is a time when migrating away from the traditional large demographic approaches toward more granular, data-driven, highly targeted campaigns becomes a matter of survival, not a matter of choice.” “Digital marketers are dealing with newly empowered consumers. Today’s customers have instant access to product, price and quality comparisons from a steadily expanding range of channels. Successful digital marketers will have to engage consumers with consistently relevant messaging across these diverse channels in real time.” “The growth in social media platforms has enabled individuals to express themselves in every conceivable way and generates an immense volume of data. Consumers by the tens of millions are speaking both to each other and directly to businesses about what they want and how they feel about it. Success in digital marketing means tuning in to what consumers are saying, and employing real-time messaging methods that let them know you’ve been listening. If you don’t, your competition will.” “This newly empowered consumer audience is also highly mobile with a proliferation of small screen devices enabling uninterrupted access to information and continuous real-time communication. The competition among small screens will drive device prices down and usage up. The audience shift to online will not abate.” “Digital marketers must remain connected to their audiences no matter where they go or what device they use. Tablets and smart phones combine social, local and mobile technologies (SoLoMo), enabling consumers to zero-in on precise local information about products and services. It’s another opportunity and challenge for digital marketing to fulfill growing customer centricity expectations and ‘be there’ with real time, personally relevant messaging.” Digital marketers would have to resort to Data Analytics: “The insights derived from big data analytics will drive future decisions in accurately delivering the right message to the right person at the right time for the right price. Intuition-driven marketing is diminishing rapidly. Big data analytics and digital marketing is getting tightly interwoven.” In their study paper, Forrester Consulting[12] commissioned by Dell in 2011 to study the customer centricity arising out of digital marketing have found that: “Today, an increasing percentage of business‐to‐business B2B and business‐to‐consumer B2C customers are empowered to use a variety of social technologies to help them make complex purchasing decisions. This new age of empowerment has altered the way many companies are now approaching customer‐centricity. Companies are learning how to effectively listen to their customers by empowering their employees to utilize various social media tactics in their marketing mix. These social media tactics have helped companies build deeper engagements with their customers by allowing them to monitor, measure and participate in online conversations. Companies also experience derivative benefits from their listening and digital engagement efforts as they achieve organizational efficiencies from embedding these activities in their marketing, customer service, and sales functions.” Forrester Consulting also found that “organizations across various industries that have implemented listening and digital engagement initiatives are starting to see impressive business returns. According to this study, many companies are progressing in their social media efforts, which are beginning to deliver solid quantitative and qualitative business results. Organizations can increase the value and efficiency of their existing social media efforts by evolving their approaches to customer‐centricity and by implementing listening and digital engagement initiatives that empower them to engage online with customers through their marketing efforts.” Ford and Freeman[13] state that “traditional marketing still has a wider reach across the population, but typically does not carry the same explosive potential for change that characterises the most extreme examples in the digital space. Digital marketing also plays a slightly different role, emphasising communication of more functional, practical information than non-digital media, particularly in comparison to television advertising. This general pattern is also true and indeed more marked for word-of-mouth, including any communications not directly managed by the brand owner. Their incidence is small but their influence is large, particularly so for digital word-of-mouth”. From the article made by the red ant[14] group, Digital is clearly still the fastest growing area of marketing, customer retention and engagement. Inevitably, digital channels and engagement through digital channels are now not only an expected part of audience experience when connecting with a brand - they are often at the core of an audience member’s engagement with a brand. Audience expectation has increased to such a level when considering brand engagement that: • It is no longer acceptable for a brand to wait for the audience to visit • Brands must actively communicate to prosper • Positive engagement snowballs, arrogance creates stagnancy. Digital strategy offers brands and companies new, unique ways of engaging with their customers and audiences to a far higher level than has been previously possible. Well-conceived digital strategies and campaigns will push brands ever forward in the consciousness of their audience and lead to lasting adoption, advocacy and, over time, increase expectation from industries as a whole. From an audience perspective, digital allows the model to change from being a monologue to a dialogue. 2.5 Methods of digital marketing From the survey run by Harris Interactive[15] in the USA we conclude that Digital Activity would cover: Advertising on a website, a search engine or instant messenger, an email or text message Own website Visibility on information websites, such as price comparison sites ‘Inbound’ digital word-of-mouth, e.g. seeing comments about the brand via a blog, chat room, YouTube or social network ‘Outbound’ digital word-of-mouth, e.g. creating word-of-mouth through a blog, chat room, etc 2.6 Four Stage Method of building a Digital Strategy According to Red Ant, there are four core stages to building and running a digital strategy. They are Planning, Creation, Actualization and Evaluation. Each of these stages runs into the next to deliver a coherent digital campaign. Combined, they deliver an ongoing digital strategy as the audience and brand perception evolves. Planning The planning of a digital strategy involves analyzing the following: • The initial aims and expected returns • The background of the brand, present positioning and perception • The audience (broken down into key segments) • Audience locations and value of each audience segment against initial aims The planning stage deals purely in the analysis and identification of focus areas. Creation The creation stage is purely focused around campaign formalisation. This involves: • Planning campaign elements based upon previous analysis • Creating key performance indicators per channel and estimating expected return per channel • Design and build of campaign elements / channels • Planning and establishing actualisation routes, communication flows and expectations The creation stage for each channel finishes on the launch of each channel. Actualisation The actualisation focuses on the delivery of the campaign, including: • Building the engagement timeline • Engaging with the audience through the engagement loop • Sampling progress through a campaign and optimizing the campaign message • Recording salient information through each campaign step for evaluation The actualisation stage runs as a microcosm of the strategy as a whole and relies on rapid responses to tune the strategy. Evaluation The evaluation of a digital strategy is imperative to learn the lessons of the campaign, including: • Evaluating KPIs and fiscal achievement • Reviewing engagement and unexpected longer term benefits • Taking lessons on board to build stronger future campaigns • Scoring the strategy and the benefits that it has given Evaluation improves the effectiveness of future campaigns and strategies by becoming the key building block in planning them. 3. Impact of e-commerce on Industrial Marketing With the gradual but visible change in the mode of procurement from manual to e-procurement mode in the Industrial world, the face of Industrial Marketing is undergoing a metamorphosis. In the eighties and the nineties, in the personal experience of the author, visits by the Industrial Marketers to the Purchase Department were a common phenomenon. At the peak, in the late ‘80s it used to be at least 200 visits in a year by Industrial Marketers. (Including repeat visits). Apart from visits, the Purchase Department used to get catalogs, flyers and leaflets from various suppliers on almost daily basis. (There would be glossy and highly informative catalogs from foreign sources, which would include product specifications, extracts of National and International Standards and financial reports). The catalogs and leaflets would be indexed and filed for future references and was used as a reference document by the Purchase Department. The engineering information was also considered useful for the design engineers to update themselves with the product knowledge and know the trends in the field of engineering. Today physical visits by Industrial marketers and receipt of hard-copy catalogs has waned drastically. Online catalogs and online supplier directories are available on the net to guide the Purchasing Officers and the design engineers to keep themselves abreast and to update themselves and to search and identify newer and competitive suppliers and products. Hard copy introduction letters are now replaced with e-mails. While targeted e-mails directed to specific buyers are used by Industrial Marketers there are also mass-mailers who are able to address a larger audience with the click of the mouse. Suppliers are also creating their own web-sites where complete information that any Buyer needs is hosted by them. The information available in a web-site ranges from details of the promoters, the e-catalog of their products, price ranges, product profiles, specifications, methodology of product selection, client list, and contact details. Some web-sites provide a facility where the buyer can submit on line queries, request for proposals and requests for quotations. Innovative web-sites also provide interactive, online ‘chats’ for buyers to elicit more information from supplier’s experts. As can be seen from the above, the obvious advantage that arises out of replacing the traditional marketing with the e-marketing is the reduction in the cost of marketing. The need for maintaining an army of marketing specialists, their travel expenses has been given away with the advent of e-marketing in the Industrial buying scene. With every new customer acquisition, it is now possible for the sellers to more accurately gauge the return-on-investment on their e-marketing effort. On the buying side also there has been a paradigm shift from paper based buying to e-buying. Including Government Departments have now switched over to e-procurement. E-Tendering, Reverse auctions are now the norms for transparent buying by the government buying. Government buyers are mandated to upload their requirements in the Central Public Procurement Portal (cppp) and in the web-site tenders.gov.in. Buyers are also setting up B2B portals as a part of their web-sites, where Sellers can register themselves. B2B portals are used by Buyers to list their requirements which Sellers can browse through and if the requirement is in their range of manufacture, Sellers can directly register themselves as potential suppliers for the buyers. There are also specialist service-providers like globaltenders.com who are agglomerators of various tenders issued globally and provide this information to sellers on a subscription basis. They also provide a vast e-platform to the buyers by providing them the access to the large database of suppliers who are registered with them. Thus there is an electronic platform for buyers and sellers for exchanging information. Social platforms have not yet reached the maturity of being a platform for industrial buyers and sellers, though however such sites like linked.in has been adopted by some sellers to approach potential buyers on individual basis. Based on the profile of the individual on the net, some of the marketing personnel are taking personal initiative in approaching such persons with ‘introduction’ messages. To what extent such approaches have matured into orders would require a different study. It is only highlighted here that some enterprising marketing personnel are exploring and leveraging such social and business web-links to promote their business. One impact of the e-commerce has been the reduction of the human touch. The shift from person-to-person based face-to-face marketing to impersonal marketing where the entire business of buying and selling can be and is transacted over the net remotely with the buyer and seller using only the cyber-space for the transaction without any physical interaction. Today offers are solicited and got, orders placed and payments released electronically by buyers through the e-procurement route eliminating the need for a physical marketer. The need for human based proactive industrial selling now stands replaced by e-commerce. To study the impact of digital marketing in Industrial selling, a short analysis of industrial sellers to a large engineering organization has been carried out by the authors, which is presented here. 4. Analysis 4.1 Sample Selection Using an online random number generator a set of 60 suppliers was selected from a database of about 600 suppliers. A look at the list shows that it is fairly representative: The list has Public Sector undertakings, Public Limited Companies, Private Limited Companies and Proprietorship companies. The list is representative of industrial manufacturers, suppliers, software system suppliers and industrial traders (wholesalers / dealers and retailers). There are large scale manufacturers, medium scale manufacturers and small and micro enterprises. There are suppliers with millions of rupees of turnover to small vendors. There are purely industrial suppliers to hybrid suppliers who cater to both industrial and non-industrial supplies. A survey was done to understand as to how these Industrial suppliers fare in the digital space. 4.2 Data Analysis While rigorous statistical analysis is not carried out to assess the adequacy of the sample size, considering the spread and range of the industrial suppliers that the sample has, it is considered as fairly representative of the nature of the industrial suppliers. The number selected forms about 10% of the supplier base of a large industrial organization, where one of the authors works. The internet was surfed to find out the presence of these suppliers in the digital space. Out of the sixty, two do not exist on the ‘net’. (These two suppliers do not have a ‘web-site’ on the internet – Please see the pie-chart below – Figure: 1). The availability of the following data was sought from each web-site (where available).
(The percentages are calculated with the base of 58, which is the number of suppliers who have a valid web-site) Table:1 Data availability in Supplier web-site Figure -1: Distribution of availability of web-site In addition to the 10 characteristics that were checked in the respective web-site of these industrial seller a quick reconnoiter of the internet was also made to examine and find out that apart from their own web-site whether these suppliers have got themselves listed in the online trade web-links such as: “justdial”, “tradeindia”, “indiaexporters”, “niir” “eximguide”, “industrialregister”, “indiamart”, “sulekhaindia” and “industrialproductsfinder”. Surfing the web shows that even those who do not have their own web-site are listed in one or more of such trade web-sites. It is thus seen that all industrial suppliers exist on the web one way or other. But in the extent of listing in other than their own, the suppliers are roughly equally divided with 45% not figuring in such trade sites (they have only their own web-site) while the rest 55% are figuring in one or more such trade web sites. (Please see figure 3) While the large manufacturers definitely do not get listed in the trade-sites, 12% of the suppliers who have a web-site and who are not small have preferred not to be listed in the trade web-sites. 5. Findings and Conclusion (a) With the penetration of e-commerce in the field of industrial buying, there is a distinct shift from personnel based marketing to a regime of e-based marketing. (b) Aggressive personnel based marketing is displaced by passive marketing on the web. The industrial suppliers are having their own web-site and / or listed in trade web-sites which serve as directories for industrial buyers. (c) There is no heavy traffic of mass mailing and / or individual approach of buyers by Industrial marketers. Approaches are far and few between. Since the requirements of buyers are available on the net (B2B portals), Industrial sellers find it easy and profitable to respond directly to the buyers’ RFPs and RFQs. (d) Social media like Facebook is not utilized by Industrial Marketers. However sites like linkedin provide a business platform for networking, but which appears to be not fully leveraged. Figure 2: Distribution of suppliers across web-characteristics Figure 3: Proportion listed in trade web-sites
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