Influence of Digitalization on Marketing : Part I

The customer now spends more time online than ever before. It matters less whether on the desktop PC or mobile via smartphone and tablet. Regardless of the time, location and end device, they are strongly networked and require information in real-time. Around 50 per cent of the population in the developed & developing countries already uses the Internet every day, and one in five now also uses it on the go.

At the same time, the acceptance of classic advertising messages is steadily decreasing. Most companies have recognized the importance of digital transformation for future viability and are already responding to these changes. Online shop providers must follow today’s developments in order not to be crowded out. However, in mobile commerce, in particular, there are sometimes completely different forms of usage behaviour, so that companies in the marketing sector are faced with a difficult task. Online retailers need to analyze exactly which trends will prevail and which fields should be invested in. The digitization of marketing is the key to this and enables individual customer contact across all channels and devices.

How can marketing platform respond to new and future customer needs? How does marketing specifically want to address and control the necessary and sometimes serious change processes in the organization? What needs to be considered concerning roles, leadership culture and employees? The aim of this work should now be to show the enormous influence of digitization on the different areas of marketing. Therefore, the basics of digitization and marketing are first examined individually. Then the company and marketing goals are generally set out, to be able to discuss the influence of digitalization in the area of ​​marketing. This point is divided into the consideration of the classic marketing mix, the new marketing channels, as well as marketing analysis, marketing controlling and the digital transformation of the company. Finally, the potential opportunities and risks that digitalization brings with it in the area of ​​marketing are discussed.

To be able to deal more specifically with the influence of digitalization in the field of marketing, the terms digitization and marketing should first need to considered and precisely defined.
With digitization, the path goes further and further away from paper or something even more tangible (analogue) to bits and bytes (digital).

New technologies, among other things, are driving e-business forward and result in even shorter response times, faster communication channels and cost reductions. Indeed, the Internet is revolutionizing the way we process information, communicate with one another, cultivate relationships – and ultimately our entire social environment.

Improving electronic networking is a prerequisite for ever-increasing digitization, i.e. the electronic infrastructure must be in place so that end devices can communicate with each other. The keyword here is the Internet for everyone. The expansion of networking is increasing rapidly. Even in the mid-1990s, even large companies had only a few Internet connections to which only selected employees had access. Today, services that are taken for granted, such as email, SMS or mobile communication, were in their infancy.

According to the experts, the number of households worldwide with Internet access rose from around 14 per cent in 2002 to 46.4 per cent in 2019. This increasing number of potentially reachable customers represents a growing focus for companies in marketing their products through digital media. In companies, this does not only include the marketing of their products but the complete process of their services. With more and more data, every company is facing an ever-increasing challenge to collect and process data and at the same time to make it usable for itself. The chances and risks arising from this will be discussed in more detail in the following of this homework.

 

What is Marketing?

 

The term marketing was coined in the United States at the beginning of the 20th century. It is derived from the verb “to market”. Marketing essentially means all activities systematically directed by a company to the market, which should contribute to the achievement of predefined goals. According to the experts, however, the term marketing has changed continuously since its inception due to economic, sociopolitical and other developments. Because of this, various definitions of marketing exist today, which include a more extensive interpretation of the term. The American Marketing Association describes marketing as follows: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offering that has value for customers, clients, partners, and society at large. Marketing is so much more than just selling and advertising. Marketing is the area of ​​a company that deals most intensively with customers and their needs. Sales only take place after a product has been manufactured, while marketing begins before production.

The task of the marketing department is to identify the needs, determine their intensity and analyze them and whether a profitable product idea can be generated from them. Marketing, therefore, continues throughout the entire product life cycle, it tries to find new customers and keep current customers by improving products. Sales are thus the end product of successful marketing. If a company’s marketing experts precisely identify customer needs and build good products based on them at market-oriented prices and original advertising, sales will work as if by themselves. Good marketing creates products that are torn out of the hands of sellers. Examples include the first Walkman from Sony, or currently iPhones and iPods from Apple. This is not about products that you want to have because someone else has them, but about innovations that you have to have. At best, needs to be awakened by the customer. As a result, marketing can be defined as a process in which companies create value for customers and build strong customer relationships, in return for skimming off value from consumers.

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