Tuesday, September 23, 2008

Article Review: How Companies are Marketing Online

Overview:
Companies are using digital tools for customer services. Most of the companies advertise online and majority of those also using digital tools for product development. Online ads were considered useful for brand building for receive direct response. More companies will spend majority of the advertising budget online in next two to three years. Many companies expect to gain more sales from online channels. But most of the companies treated the online and offline marketing separately.

Companies:
The reasons of low usage of online tool were lack of capabilities to manage them and limited access to high-speed Internet. Online marketing tools were used more frequently by public companies in high-tech industry. Most widely used functions were providing service information via Web sites, interacting with customer via email and sales transaction. The companies use digital tool frequently would more likely to use complex tool for online service, like Internet calling or chats. As the use of digital tool increases, online and offline campaigns would likely to be more integrated.

Consumers:
Most consumer use the Web to search for information. Web would be part of two stages of the consumer decision-making process – product awareness and information gathering. Therefore companies see it as a useful vehicle in brand building.

Interactive tools:
Collaboration tools used internally help to make information more accessible by everyone in the organization without have to flow through layers to reach the decision makers. Most of companies who advertise online also use some kind of interactive tool for customer service. Some companies host forums for customers to exchange idea or help each other. Interactive tools were used to help build relationship between customers and companies to the benefit of customer retention and brand building. A lot of companies also use the tools to involve customer in product developing or to test idea. It is part of the business technology trends that encourage user collaboration. Base on the survey by McKinsey, Web services, collective intelligence and Peer-to-peer networking were more popular for company investments. Some companies are more focus on networking and collective intelligence technologies then others. These companies are usually large, in high tech and in Asia, especially in China where companies adopt fast even though they were later followers.

These studies only show how Internet improved interaction with customers. But many companies switch the service online completely and discourage consumer to reach them offline. The interactions were sometimes cut off and would be considered as bad services. Some online service system were not well design to serve all customers’ need and was not flexible, therefore it is necessary to have service integration online and offline.

Cautions:
Internet has changed fundamental processes of communication in term of who provide information and how the audience receives it. In term, corporations lose a degree of control at it. Traditionally, consumer can only receive the information provided by the corporation with traditional media. With Internet, everyone can be the information provider and the control is limited. Therefore it is necessary to learn how to better manage its reputation online and better handle the negative impact on corporate reputation.

Online Sales:
Majority of companies would like to gain sales online while facing infrastructure and culture issues offline. Many companies were lack of resources to keep up with a sales channel online and some simply neglected it. Although many corporation plan to invest in this area, many factors need to be considered. US is one of the mature market with good infrastructure to support the online shopping activity. And consumers in US were exposed to concept of catalog and TV shopping therefore the concept was well accepted by consumer. Another good example would be China with a fast growing online market. Internet penetration is growing rapidly and consumer start to realize the benefit of shopping online. To encourage online shopping, there are intermediate service providers that offered online payment with bank to prevent fraud. It is a good example of the technology development according to culture and shopping hobbit of the country. With the development and successfully implemented, the technology then can be transferred. But interestingly, it was not the payment security that consumer were most concerned in China but the quality and security. Security and privacy would be the issue still required improvement or even regulation worldwide to promote online shopping.

Integration:
Most companies still separate their online and offline marketing efforts. Many companies’ regular businesses are disconnected from their online business. It is important for companies to have integrated campaigns. A lot of online marketing were to influence the offline sale. But a well integrated service will improve consumer’s overall experience. It is for companies’ benefit not only at cost cutting, but also for better customer satisfaction or experience to have integrated marketing online and offline.

Conclusion:
It is the technology trend for companies to market online with technology tools. It will not only improve consumer relation, it often improves communication and efficiency internally. Implementing technology tools not only encourage customer interaction but also help with product development. Companies need to use the tools with caution for maintain brand image. Companies need to learn how to transfer the benefit offline. It is also important to understand the risk of the tool too. Many companies expect the online marketing to be a major tool in the future therefore properly select the right tool and management would be something company need to pay closer attention to.

References (click to view)

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