Digital Marketing Strategy: Text and Cases

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9780131831773: Digital Marketing Strategy: Text and Cases

Digital Marketing Strategy emphasizes how digital technologies make marketing more effective because they allow for individual attention, better campaign management, and better product, marketing design, and execution. The book does not ignore the fundamental theories of marketing, but emphasizes their usefulness in developing a response to the threats and opportunities created by the Internet. It is organized around an easy-to-understand flow diagram for formulating marketing strategies: understand customer needs, formulate a strategy, implement the strategy, and build trust with customers. Digital technology discussed includes customer relationship management software, sales force automation, wireless technology, marketing automation software, and decision support systems. Case studies throughout the book illustrate real-life digital technology scenarios; they include: Mothernature.com, Dell, Insite, Terra Lycos, MarketSoft, OSRAM Sylvania, Logistics.com, Travelocity, and Citibank Online. For anyone pursuing a career in marketing; also for practitioners, marketing professionals, consultants, executive trainers and others employed in corporate training.

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This book began in 1999 as the impact of the Internet was becoming clear. I initiated a course on Internet marketing strategy with the intent of inserting the Internet's potential within a framework of strategic marketing. Although initially some argued that the Internet was a revolution and that "old" marketing would be replaced with new concepts and methods, it soon became clear that the Internet would not be a substitute but rather a complement to existing strategic marketing practices. I remember in 1999, after I gave a lecture stressing the fundamental concept of understanding customer needs and building a viable business model, a student raised her hand and said, "Professor Urban, you do not get it! It's all about the new game, seizing the high ground and capturing eyeballs." I responded that that may be true but that it was my feeling that fundamentals would rule and that she should "stay tuned" to developments over the next year. To her credit, at the end of 1999 when it was evident that the dot-corns were in trouble, this student e-mailed me, saying, "Well, that was not such a bad course! Could you send me the lecture notes again?"

We have gone from the optimism of 1999 to a crash of expectations about the Internet in 2001. If the Internet was too hyped and expectations were too high, now the opposite has occurred. Students' expectations are unrealistically low. However, all measures of digital impact are up—even on-line retailing is up over 25 percent per year for the past three years and up even when traditional retail sales were often flat. In 2002, after the same general lecture on customer needs and business models, a hand went up in the classroom, and I thought, "Oh no, not again!" But this time the student wanted to know why I did not teach these fundamental ideas to those who jumped into Internet start-ups and dramatically failed. Students are now open to learning the essential principles of marketing within a technological environment. They have a more realistic view of both the potential and the limitations of -digital technologies.

Large companies were not fooled by the hype and crash of dot-corns. Since 2000, they have consistently allocated more resources to utilizing the Internet and other digital technologies. The impact has been to improve the efficiency and effectiveness of marketing. Digital technologies have become a powerful method of improving marketing practice in a multichannel environment.

As I began the course in 1999, I found a shortage of up-to-date cases on digital marketing and few texts that stressed a strategic perspective of utilizing the new technologies. Therefore, I set out, with the help of my teaching assistants, to write a .,set of new cases. Fourteen cases were created, and nine are included in this book. I have abstracted the text notes from my lectures and from the comments of guest speakers and managers directly involved in the cases.

The structure of the book draws on the strategic framework from Advanced Marketing Strategy by Glen Urban and Steve Star, but the digital focus and cases are all new. During the past four years, I was codirector of the eBusiness Center at The Massachusetts Institute of Technology (MIT), so I benefited from discussions with our sponsors, who include Hewlett Packard, Intel, General Motors, British Telecom, United Parcel Service, Mastercard, Merrill Lynch, Cisco, Dell, Price waterhouseCoopers, and the Interpublic Group. This center contained few dot-com companies, but the major gains from the Internet have accrued to existing firms. Although some new companies like eBay, Travelocity, and Amazon have been successful, the majority of gains have occurred in the improvement of marketing in large established companies.

This book discusses the concepts of understanding customer needs and behavior, formulating a strategy to fill needs, implementing effectively and efficiently, and building a trusting relationship with customers. I present brief textual descriptions of the critical concepts in each area and then follow each chapter with a case chapter. I include cases that discuss the issues in large companies like Dell as well as small startups like MotherNature. Some cases deal with hightech products (e.g., InSite Marketing Technology), and others stress the use of new high-tech marketing methods to sell established products (e.g., Citibank). Some are global (e.g., Terra Lycos), and I consider products (e.g., OSRAM) as well as services (e.g., Travelocity). I span the functions of marketing from new product design (MarketSoft) to physical distribution (Logistics.com).

The goal of the book is to prepare the student to be an effective innovator and change agent by utilizing new digital technologies strategically to contribute to the firm's sales growth, profitability, and stock price. The technologies are pervasive in marketing and equip students to make valuable contributions to new product design, product management, advertising and public relations, selling, pricing, distribution, customer service, job opportunities as vice president of marketing and sales. With these skills, the student should be well qualified for the best jobs in established, emerging, and start-up companies. I cannot imagine marketing managers of the future not being skilled in digital marketing tools.

This text can be used for a range of courses. One is in a dedicated digital marketing course. Increasingly, digital technologies are being internalized into the basic marketing course, so this text can be used in marketing strategy or marketing high-tech products. I am even using the cases and much of the text from this book in my New Product Development course at MIT. Finally, this text can be useful in executive education courses that stress state-of-the-art marketing topics like trust-based marketing and emerging market research methods. A teacher's manual is available to aid professors in utilizing and customizing the case and text pedagogy.

The future will continue to change rapidly as new digital technologies emerge and the marketing environment morphs. This book's use of a fundamental strategic structure will, I hope, allow students and managers to use this book as a learning platform. The future is full of potential for existing and new firms, and if this text trains managers who can successfully innovate with new digital technologies, I will consider it a success.

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