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Chapter 3 The Consumer for Digital

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CHAPTER 3
The Consumer for Digital Marketing
LEARNING OBJECTIVES
After studying this chapter, you will be able to:

Explain the evolution of consumer behavior models, key attributes of online buying behavior
and the impact of digital technology on buying patterns
Understand consumer demand patterns and the ways these can be analyzed online through
web-tracking audits and forecasting
Describe integrated marketing communications, the channels, and basic constructs of such
communication

CASE STUDY Google India: From Keyword to Alphabet

A company which started on the premise that each individual has very specific tastes and that
every long-tail search can be monetized, has grown in the past 17 years to become the most
influential digital marketing behemoth globally. With Google’s inclusion as a verb in the Oxford
dictionary, it has become an integral part of our lives and paved the way to show all digital
entrepreneurs that consumer-behavior-oriented businesses, built around clean design,
simplicity, and machine algorithms, can do wonders. Google (now a part of Alphabet) being one
of the icons of multinational corporations has also showed impressive growth in India with
reported revenues of ₹ 4,108 crore for the 12-month period ending 31 March 2015, with a 35
per cent year over year (YoY) growth. The same figures for 2013–14 were ₹ 3050 crore with a
growth of 47 per cent.

Being operational across multiple online business categories including search, online display,
video, and social networking, Google India is eyeing growth through its Android platform and
Google apps-related services, attributing it to higher mobile adoption rates in India than other
comparable markets. Google’s focus on mobile services and Small and Medium Business
(SMB) targeting has helped penetrate not only large accounts but also improve presence in Tier
2 and Tier 3 cities. India is the fastest growing SMB market for Google Adwords since it has
one of the largest local shop owners in the world who are slowly but surely enhancing their
presence online to increase client base and establish branding across multiple digital channels.

One area where Google India has recently started focusing and is looking to (at least) double
its business in India every year is the enterprise services, especially in the cloud computing
area. With its ‘Google for Work’ suite of cloud offerings, Google India plans to subsidize Indian
enterprises and start-ups by covering the fees of Google Apps businesses locked into an
enterprise agreement with its rivals—Microsoft, Amazon Web Services, etc.—until their
contracts run out. Also, if prospects plan to move over competitor’s software, Google India
plans to give its software package (which costs $5 to $10 per user per month) for free. Google
India also plans to offer up to $20,000 as free credits for Google Cloud services to 1,000 Indian
start-ups from 2016 onwards. Through these cloud offers, it plans to move into the very
lucrative cloud services category by breaking prior lock-ins which showcases how Google sees
aggressive growth in this sector with growing internet penetration in India.

Several factors have been responsible for Google’s growth in India, the key among them being
India having the third largest internet users which is increasing by five million each month.
According to Rajan Anandan, Managing Director, Google India, the count would be 500 million
by 2018–19. Also, with India having a substantial English-speaking population and a rising
middle-class segment with increasing access to mobile services, Google is banking on its multi-
lingual bouquet of products and services to target the Indian market. The best example here is
of Android One through which the company is marketing its services to the rural segment to
promote the use of smartphones. One of the biggest areas in which Google has been able to
earn revenue in India is through hosting ads of e-commerce websites, a segment which of late
has been pumping a lot of money into digital marketing.

With such fast growth comes its own challenges. Globally, since its inception, Google has faced
a backlash both in terms of its business model execution and consumer privacy concerns.
Another challenge which Google faced in India was around government concerns on privacy
when it started collecting data for its ‘Street View’ project in Bangalore. Although Google India
maintained that this data was being collected to help people, businesses, and eventually the
government itself was viewed with healthy skepticism from multiple quarters. Earlier, in 2005,
India’s former president, A.P.J. Abdul Kalam had criticized Google Earth and other online
satellite mapping services for exposing sensitive installations in developing countries to
terrorists. There have also been some debatable content-related lawsuits against Google (and
the entire ecosystem of online websites) wherein their name came for allegedly hosting
offensive content. This heated debate was against 21 other websites including Google which
argued on its case stating that blocking websites is not a solution as it relates to a constitutional
issue of freedom of speech and expression.

The future looks quite bright with a lot of opportunities at hand in the Indian market. Google
announced in May 2015 that it would be investing ₹ 1,000 crore in Hyderabad, (Telengana), to
build a 2-million sq. feet campus (which will be its biggest facility outside the US). It has also
signed a Memorandum of Understanding with the Ministry of Culture and the Archaeological
Survey of India (ASI) to digitize heritage monuments. In another first, Google Business Groups
(GBGs) will be set up in about 30 Indian cities to help small and medium enterprises go online
with their business. Google also plans to bring free Wi-fi to 400 train stations across India in the
next several years and has partnered with India’s largest railway network and a major fiber
internet company to connect 100 stations. Google’s recent CEO Sundar Pichai (who is also of
Indian origin) has been right in mentioning, “We think this is an important part of making the
internet both accessible and useful for the more than 300 million Indians already online, and the
nearly one billion more who are not.”

With initiatives like streamlined search, which serves up fast-loading results on mobile devices
with slow connections; YouTube Offline, which lets users download videos to enjoy when they
are not connected; and Map Maker, which lets people mark roads, landmarks and disaster-
stricken areas on Google Maps, India is definitely emerging as one of the top markets for
Google worldwide both in terms of reach and influence.

CONSUMER BEHAVIOR ON THE INTERNET

Consumer behavior and related studies have formed an integral part of marketing as it is crucial
to understand the motivations and factors which lead to a consumer buying any specific brand
over another and choosing certain websites, platforms, and channels over and over again for
purchases. In this chapter, we shall go through the impact and influence of digital technology to
understand how consumer demand can be anticipated and managed with available online data,
how traces of consumer footprint can be tracked, and a fully customized marketing program can
be developed.
First, it is important to understand the difference between two terms which are often confused
and substituted for each other—the consumer and customer. In marketing parlance, the term
customer refers to the purchaser of the product whereas consumer refers to the end user of the
product or service. The simplest example relates to baby products wherein a mother is the
customer while the actual consumer is the baby for whom the product has been bought. In
several cases, the consumer can also act as a customer, when he/she is singularly involved in
searching, evaluating, and buying the product, and finally consuming it.

Why is this distinction between the two definitions important? It is because of the different
strategies which need be applied by brands to know whom to exactly market and who is the
influencer (also termed as advocate) to buy the product on behalf of the consumer. In a lot of
cases, the consumer would leave the selection process to the customer and it is actually
customer behavior which marketers need to track and comprehend to target all marketing
activities towards him/her.

For ease of understanding and non-repetition, marketers typically use the word ‘consumer
behavior’ while making a holistic consumer targeting strategy as it encompasses all
intermediaries and influencers who might affect the purchase decision. Let us begin this chapter
with an understanding of the evolution of consumer behavior models to see how this field has
developed and is impacting the way marketers absorb and analyze consumer behavior.

EVOLUTION OF CONSUMER BEHAVIOR MODELS

In the section on Chapter 1 (chapter001.xhtml) titled “Digital Marketing Channels—Types and

Business Models,” we had looked at the key stages of the consumer funnel which any
consumer would typically go through before finally buying a product. These stages (intent,
awareness, interest, action, and follow), describe the journey of the customer from an initial
thought to sealing the purchase.

But even before all of this occurs, a marketer has to be completely clear and focused on which
consumer segments he/she is planning to target the product portfolio and which consumer
segments are the most important for the product. And, to do that successfully, he/she needs to
understand the basic concepts of consumer behavior and how it varies across the emerging
digital channels.

According to ‘Schiffman and Kanuk’, the leading authority on Consumer behavior, this
marketing field is defined as “the behavior that consumers display in searching for, purchasing,
using, evaluating and disposing of products and services that they expect will satisfy their
needs.” It would be important here to understand that it is not only the consumer’s personal
thoughts and dispositions which matter during product selection but also the influences and
interplay of external forces like people, ideas, environment (social, political, and economic),
which impact a consumer’s mindset towards a particular product interaction.

Over the years, there have been multiple models developed by different researchers to explain
consumer behavior process and factors impacting it. Traditional consumer behavior models,
which were developed, drew their origins from varied disciplines (see Table 3.1).

Although the above models explained a generalist view of how consumer behavior works, they
were limited in their approach, composition, and lacked a broader perspective. This led to the
development of the modern consumer behavior models, the most influential of which included
‘The Howard Sheth Model of Buying Behavior,’ ‘The Nicosia Model,’ and the ‘Engel, Blackwell,
and Miniard (EBM)’ Model.

The Howard Sheth model was pivotal in bringing forth the ‘Theory of Buyer Behavior’ which
provided “a sophisticated integration of various social, psychological, and marketing influences
on consumer choice into a coherent sequence of information processing.” The model though
revolutionary in its approach and construct was quite complex and included variables which
were not too well defined and difficult to measure. For this reason, it underwent improvements
in the form of new models, the most applied among them being the EBM model which we would
discuss in detail (see Fig. 3.1).

Table 3.1 Traditional Consumer Behavior Models

Figure 3.1 The ‘Engel, Blackwell, and Miniard (EBM)’ Model

The ‘Engel, Blackwell and Miniard (EBM)’ Model encompasses all types of need-satisfying
behavior for a consumer, including a wide range of influencing factors and different types of
problem-solving processes. This model has been influential since it has undergone multiple
revisions and has included works of other researchers too.

The model consists of four key stages:

1. Information input stage: This stage includes all the inputs and stimuli from marketing (like
advertisements in television, radio, newspapers, internet, word of mouth, etc.) and non-
marketing sources which form the basis for information processing in the next stage. The
stage also includes additional external information search which the consumer conducts,
especially when not enough information is available from memory or when post- purchase
dissonance occurs.
2. Information processing stage: The information processing stage is similar to the
consumer funnel, discussed in the beginning of this section, which involves the consumer
 getting exposed to the marketing message, paying attention to it, comprehending its intent,
proactively or subliminally accepting it, and retaining in memory to make a decision the next
time he/she is exposed to a similar message.
3. Decision process stage: Involves the following key stages which are commonly looked at
as the Consumer Decision Process (CDP) Model steps. These have become quite
important since with the advent of internet, the way consumers perform the following
activities has been completely altered.

Need recognition: With the availability of multiple touchpoints to various products

through the internet, the need recognition stage has expanded from being just a reactive
need-based model to a more proactive instant-purchase phenomenon.
Search: In contrast to search pertaining to a more physical context of moving around
and searching for a product, in the present times, focus has shifted to an all-pervasive
information search model which is accessible anytime and throws up amazing amounts
of data for a pre-purchase evaluation.
Pre-purchase alternative evaluation: It involves the ability which a consumer has in the
digital age to compare multiple alternatives before buying and also points to the
opportunity marketers have of influencing a customer towards their product, even
seconds before a customer is planning to complete the final purchase.
Purchase: It involves the act of finally purchasing the product. Traditionally, trust has
played a major factor for customers purchasing online, a phenomenon which is
undergoing rapid change with consumers increasingly becoming more comfortable with
buying online (as is evident from the increased online penetration of e-commerce sites
and their rising revenues).
Consumption: Relates to the actual usage of the product bought and includes important
concepts like the lag time between an online purchase and the actual time when a
customer receives the product at home/office and consumes it.
Post-purchase evaluation: It is the stage when the consumer decides if he was satisfied
with the purchase and the likeliness of a second buy or a referral to others on a trial of
that product. This is a very crucial stage for the marketer as true brand loyalty originates
or dwindles in this stage.
Divestment: The final stage of the CDP model involves the consumer divesting the
product which is not dependent on the purchase channel or buy pattern.

4. Variables influencing the decision process: Includes two broad categories—

Environmental influences: It includes factors like culture, social classes, personal

influences, family, and other situations which impact a consumer’s decision process
throughout the CDP stages.
 Individual differences: This includes more individual-driven factors which differentiate
one kind of consumer from another, based on factors like consumer resources,
motivation and involvement, knowledge, attitudes, personality, values, and lifestyle all of
which could have a huge impact on a consumer’s final decision towards a product or
service.

With an understanding of the evolution of consumer behavior and key models which have
shaped it over the years, we move forward to understand the impact digital technologies have
had on decisions and motivations of online buyers and how the internet has impacted
consumer behavior and changed the marketing landscape.

Impact of Digital Technology on Consumer Behavior

Before we move ahead to understand the impact of digital on consumer behavior, it is important
to know the difference between a regular consumer and one who is online. What are the
characteristics which separate these two types of consumers and why is it useful for marketers
to give importance to digital consumers?

A digital consumer has the following characteristics which differentiates him/her from the
traditional (offline) consumer and helps support the marketer’s cause.

1. Higher potential for profiling: Technology now provides the possibility to map each move
of the online customer, resulting in a much higher potential to gather data points on
consumer’s profile like location, number of visits, type of products bought, time spent on
different webpages, product browsing history (before final buy), etc., typically adding to the
overall information on specific customer sets.
2. Development of consumer personas: The concept of consumer personas has become
quite crucial and is widely applied across the advertising and marketing industry in present
times. It refers to creating fictional characters to represent specific customer segments and
their needs. Consumer personas help marketers understand the kind of products and
services which can be targeted to specific personality groups wherein their behavior towards
purchase has already been tested and measured and products are specifically developed to
target to their tastes and likings.
3. Possibility to gather unsolicited feedback: With online customers sharing comments and
reviews across multiple social networking sites and with advanced tools being developed to
analyze consumer sentiment through text analytics, marketers are now endowed with tools
which can help them gather feedback in an unsolicited manner to understand the real
preferences and attitudes of customers towards products which cannot be gauged even
through well-organized focus groups.
4. Availability of real-time expert/peer influence: Digital customers who in their offline
avatar have high difficulty to gather opinions and views of experts and friends, can obtain
these in a much more directed fashion online and marketers can influence consumer
decisions through investments in content marketing and targeted messaging even during
the last-mile steps of a consumer who is about to convert a purchase.
5. Use online data to target loyal offline customers: With digital channels, there is a high
possibility to gather preferences and attitudes of consumers who might already be loyal
customers in the offline world. With marketers now having the ability to track and map their
traditionally loyal customers and gather online data, they can use this knowledge to provide
customized experiences to customers who are buying products in real stores.

Knowing that online customers are distinctly important to marketers, let us see how marketers
are using multiple online elements to influence their CDP (Consumer Decision Process), and
thus, getting more leverage. Let’s discuss a classic example of buying a pair of branded jeans,
an activity which is quite normal in the traditional marketing world but one which has added a lot
of consumer-influencing elements to it with the advent of online channels.

In Fig. 3.2, we see how a particular consumer in the traditional world would be influenced while
purchasing a pair of jeans. We have divided the influences into two types—passive and active.
Passive influences are those on which the consumer does not have much control and he
receives them in an unsolicited manner, though he might be influenced by them. Active
influences, on the other hand, are the ones which a consumer actively seeks out while he/she
is evaluating or finalizing a purchase.

In Fig. 3.2, we see how the traditional marketing model could impact the CDP in a limited
manner only and there were not many opportunities that the marketer had to influence
consumer behavior and make it favorable for his/her set of products and services.

Figure 3.2 Traditional Areas Impacting CDP (Consumer Decision Process)

Figure 3.3 Impact of Digital Technology on CDP (Consumer Decision Process)

In contrast, if we look at the impact of digital technologies (see Fig. 3.3) on CDP , we shall see
addition of multiple marketing channels which the marketer now has at his/her disposal to
impact a consumer’s behavior and attitude towards his/her brands. Some of these passive and
active influences brought about by digital technology can be explained as below.

Passive Digital Influences

1. Influencing through more marketing channels: With digital technology providing far more
targeting options, marketers can use a mix like search marketing, native content, e-mail
communication, affiliate marketing, etc., which were not available traditionally.
2. Influencing through customized content: Marketers, with their knowledge of consumer
personas and individual data from previous buys of an individual, have the ability to target
through the use of customized content. Such content may be based on consumer’s
background, buying behavior, and even, in certain cases, cultural and social affiliations
which could be very powerful.
3. Influencing through targeted/re-targeted advertising: By knowing the set of customers
who have visited the brand page/e-commerce listing, for example, of a particular jeans
brand, one can set a retargeting campaign to try and influence conversions in the next
couple of days for customers who showed an interest but did not follow thereafter.
4. Influencing through social networks: With the concept of customer recommendations
being inserted for every product available online, marketers are making use of
conversations and online relations which a consumer might most respond to while
purchasing the brand.
5. Influencing through real-time information: Marketers can follow and use knowledge of
customer locations to pass on real-time information based on the stage where the customer
might be in the consumer funnel.

Active Digital Influences

1. Influencing through social communities: A jeans brand which has its own Facebook
page and has built a loyal community around it, has much more chances of being able to
provide relevant messaging and imagery to its large socially driven audience.
2. Influencing through expert information: With integration of quick chat and ‘fashion guru’
features which a lot of brands are integrating with their websites, consumers can actively
interact, seek information, and get influenced to buy a particular brand. There are even sites
available wherein consumers can compare products across categories and marketers can
sponsor such sites for stronger mind-share.
3. Influencing through product customization: With technology advancements, features
have been developed by apparel brands wherein a consumer can superimpose a picture to
see how he/she would look in a particular jean’s style and colour, thus giving a high level of
personalized touch to the buying experience.
4. Influencing through data-driven promotions: Marketers can also avail of the knowledge
of their traditional customers to offer them discounts at the last mile-stage of product
purchase, which is only possible with the use of extensive technology.

Attributes of Online Buying Behavior

With a good understanding of the impact of digital technology, let us now study the key
attributes of online buying behavior and what motivates customers to buy online.

In Chapter 2 (chapter002.xhtml) we had looked at the key value elements which create ‘digital
value’ for any online buying. Those included convenience, variety, cost, aesthetics,
communication, and customization. Lewis and Lewis (1997) in their studies have spotted five
different kinds of web users:

1. Directed information-seekers: These users look for information about specific products.
Their intention is not to buy but to search for information.
2. Undirected information-seekers: These users regularly browse and scan websites by
following hyperlinks. They are referred to as ‘surfers’ because they look around the websites
 to find something interesting.
3. Directed buyers: These users visit a website with the intention to buy products online. They
search specific products and make the transaction.
4. Entertainment seekers: These users visit websites that offer entertainment features, such
as quizzes, puzzles, and multi-player games.
5. Bargain hunters: This type of users search for special offers such as free samples or
discounts.

This classification helps us realize that although we might see a large number of visits to certain
websites, it is also very important to understand the behaviors and motives of key consumer
segments visiting those sites which will eventually determine the success or failure of the
business. To understand better how to guide potential consumers who are always present at
the top of the consumer funnel and do not trickle to the conversion stage, we would need to
understand important influencing factors or attributes which any online marketing activity must
offer to be a success.

The three key attributes identified across major studies done in this area include:

1. Price: Price is one of the earlier attributes for online buying. It has priority even before
convenience since for a long time buying online was not possible because of the
unavailability of broadband and the absence of the plastic card culture—considerations
which still hold true in developing counties like India. It has been studied that consumers
started going to internet primarily to compare prices and see if cheaper versions of the
product they intended to buy were available online. With a multitude of price comparison
sites available today and several e-commerce companies leveraging logistics-based
savings, price has definitely become the key attribute for online buying. It has also been
responsible for another much talked-about online trend, impulsive buying, wherein shoppers
who become quite comfortable with online buying do not even check prices and at times
overpay for products and services they might not have even tried to look at earlier. This
unanticipated trend though has proved to be quite useful for marketers.
2. Trust: Monsuwe et al (in 2004) had concluded that because internet was a new way of
shopping, initially it was looked at as being risky by consumers. This was primarily because
of the absence of a salesperson who was their major source of trust, as well as because of
the worry of payments going through and goods (once paid for) reaching the consumer in
delayed time. But companies like Amazon (globally) and Flipkart (in India) changed this
perception to their advantage trying to assure customers that online could also stand for
trust. This was possible through relentless pursuit of perfection across all areas of the
consumer purchase lifecycle, from secure buying to warehousing, to final delivery,
replicating this experience over and over. Flipkart even went to the extent of providing the
 ‘Cash on Delivery’ feature to show how the medium can be trusted in nations which had
never trusted online buying. Initiatives like these have led to trust becoming one of the key
attributes of online buying.
3. Convenience: This much discussed attribute truly has been the bedrock of online buying,
with customers taking advantage of being able to shop from wherever they like, at a time
most suited to them and in a way which requires just a few clicks. With companies
nowadays even looking to supply essentials like grocery and fruits through mobile
applications, online companies have completely redefined the concept of convenience to
include categories and services which could not have even been envisioned before.

These days, the growth and sustenance of online buying is attributed not just to the above
basic factors but also to constant innovations and efficiencies built in supply chain structures,
wherein pure online retailers are even looking at opening up offline spaces to provide maximum
coverage and convenience to their buyers, to supply products in a day with guarantee. In the
next sections, we would look at the key building blocks through which online companies are
developing such experiences for customers to keep them hooked onto this medium.

Influence of the Web Experience

According to Hofacher (2001), the information that is presented on a website is processed by
the human mind in five separate stages—exposure; attention; comprehensions and perception;
yielding and acceptance; and retention. These are also the same stages as put forth in the
EBM model (see Fig. 3.1). Let us understand how these five stages are crucial to developing
web experience online and how firms are integrating these elements into their web presence
(we can also see that these stages mirror the consumer funnel stages ‘Intent, Awareness,
Interest, Action, and Follow’ as described in Chapter 1 (chapter001.xhtml)).

1. Exposure: The content must be presented for a long time in order to be processed by the
user. The user might not process messages that quickly disappear off the screen or words
that cannot be read easily.
2. Attention: People have a tendency to give attention to things related to their expectations
and needs. Attention is influenced by the visual appeal of the information presented on a
website. Users notice things that move or are bright and loud.
3. Comprehensions and perception: The terms ‘comprehension’ and ‘perception’ are related
to the process of understanding and observing an element and connecting with the
information stored in our memories. When users look at a picture or a word they
automatically relate this information with the information stored in their minds.
4. Yielding and acceptance: The information must be up to date and truthful in order to be
accepted by the users. Users may not accept the content of the website if it does not seem
convincing.
5. Retention: The term ‘retention’ refers to the extent to which the information of the website
will be remembered by the user. It is accepted that information from a website that is well
organized will be easier to remember.

According to these five characteristics, websites should be developed to cover, if not all, most
of these aspects so as to gain the attention of the visitor. Let us now look at the key building
blocks of web experience as showcased in Fig. 3.4.

The building blocks and the factors mentioned herewith were a result of the review of 48
academic papers in the area of consumer behavior authored by Efthymios Constantinides for
the Emerald Group Publishing. The research came up with three key classifications under
which the following factors have been bucketed:

Figure 3.4 The Building Blocks of Web Experience

1. Functionality factors: Factors enhancing online experience by presenting the virtual client
with a good functioning, easy-to-explore, fast, and interactive website. Functionality includes
elements of ‘Usability’ and ‘Interactivity’.
2. Psychological factors: Websites must communicate integrity and credibility in order to
persuade customers to stop exploring them and interacting online. Psychological factors
play a crucial role in helping online customers unfamiliar with the vendor or with online
transactions overcome fears of fraud and doubts regarding the trustworthiness of the
website and vendor.
3. Content factors: Factors referring to creative and marketing mix-related elements of the
website. These factors exercise a direct and crucial influence on the web experience. They
are divided in two sub-categories ‘Aesthetics’ and ‘Marketing Mix.’

We would go through details of some of these impact factors in the later chapters, but for now it
would be important to understand how multiple factors help influence the web experience and
how consumer’s reaction to it would decide the fate of related marketing activities. The key here
is to realize that deciding the right combination of web experience elements is not an easy task.
The specific buying conditions, customer’s experience and needs can shift the importance
among different elements as influencers of the buying process.
Marketing Intelligence from User’s Online Data
This final section of the first part focuses on how to gather marketing intelligence through user’s
online data and the key application areas to benefit from those insights.

Consumer behavior data typically resides across multiple repositories and platforms and
marketers need appropriate tools and technologies to gather, integrate, and analyze that data.
This field, typically termed as web analytics across the marketing fraternity, includes concepts
drawn from large software implementation areas like data warehousing (relates to data storage
methodologies and structures), business intelligence (methodologies to generate business
insight from data), and advanced analytics (much more in vogue these days and relates to
advanced statistical analysis conducted to develop complex co-relations between multiple sets
of data often in real-time). Although web analytics is the core terminology that is used to
mention any exercise towards gathering market intelligence online, these days usage of terms
like big-data is also quite prevalent as it pertains to combining large sets of data to gather
insights not only from online data sources but through a logical combination of online and offline
data.

Let us go through the key stages to understand how marketing intelligence is derived from
these multiple sets of data (see Fig. 3.5).

Figure 3.5 Marketing Intelligence through User Data

1. Stage 1—Online data collation: To explain this stage, we would use key concepts of
owned, earned, and paid media (introduced by Forrester Research Group and used widely
these days to classify interactive media) and the type of user data they generate:

Owned media data: Owned media refers to all the channels that a brand controls. This
includes data gathered from user/visitor activity to company’s prime online properties be
it their website, blog, social media page, or mobile applications.
Earned media data: Earned media refers to coverage obtained and customers converted
through non-owned media channels which are mostly social in nature. Data here would
be about customers who post online comments, share viral videos, re-tweet companies,
Twitter posts, etc.
Paid media data: includes consumer data derived from actions users perform on multiple
paid channels which the brand uses for their marketing activities. This includes data on
visitors clicking a display ad or a search ad put up next to Google search. It would also
include third party audience data collated from other companies generally known as
data-management platforms (an emerging concept in online marketing, which we would
cover in detail in later chapters).

2. Stage 2—Consumer data repository creation: This stage involves collating all the data
obtained from the first stage and integrating it into a consumer data repository. Once that is
accomplished and duplicate data is refined/cleansed (for accuracy and quality), this dataset
is compared and merged with offline datasets which consists of traditional databases,
customer relationship management (CRM) lists, product/service subscription, retail, events
and promotions, etc. With a combination of all these data sets, the firm is in a position to
identify each customer individually and build customer segments and personas related to
their area of products and operations.
3. Stage 3—Consumer segments development: Following stage two, in this stage,
consumer segments are formed along the lines as already discussed in the section titled
‘Attributes of Online Buying Behavior.’ This segmentation helps understand the nature of
customers who are interacting with the brand in its various online forms and their attitudes
towards these interactions. Once these segments are built, it is much easier for firms to
decide which products to target to a particular nature of customers, at what price bands, and
across which channels.
4. Stage 4—Application areas identification: Finally, with the customer target segment
decided, marketers can use all the consumer data and intelligence from their previous
interactions to apply it to improve their digital marketing initiatives and optimize campaigns
in the most effective manner. Key application examples of this marketing intelligence
include:
 Target channels/sites: Marketing intelligence on key customer segments helps brand
marketers decipher the most effective target channels/sites through which they can push
their marketing message, for it to be really received and acted upon.
Customized messaging: With knowledge of likes/dislikes, attitudes, influences and
motivations of key consumer groups, marketers can customize their messages both
across paid channels and earned media for higher interaction.
Campaign intelligence: To run an effective marketing campaign, it is essential that
marketers understand the routines and patterns of consumer’s purchase cycle and
align/target campaigns with matched resources and investments.
Sentiment analysis: Through advanced analytics tools, it is possible to understand
consumer sentiment across any property and channel to decipher the impact of
marketing messages received and products browsed.
Advertising exposure: Helps marketers decide the nature and extent of marketing
exposure needed for varied consumer segments.
Product optimization: Involves optimizing products based on consumer’s previous buying
patterns and comments/feedback across varied online channels.
Data-driven promotions: Marketers can use technology in a real-time manner to target
promotions based on location and intent to help improve conversions.

MANAGING CONSUMER DEMAND

With an understanding of consumer behavior and its changing patterns and influences, in this
second part of the chapter we shall concentrate on what consumer demand means, how we
can gauge it, the factors impacting demand and how marketers can interpret and manage
changing consumer demands to integrate them into the product development lifecycle.

Understanding Consumer Demands

Before we start to focus on the forces that impact consumer demand let us get an insight into
the concept of demand itself and how it varies from traditional to online marketing mediums.

The concept of demand (which originated from the field of economics) is the utility for a good or
service of an economic agent, relative to his/her income. Though the definition seems loaded,
simply translated in marketing terms it refers to the want for a commodity backed by the ability
and willingness to pay for it.

Consumer demand as a term is generally used to denote the overall demand for a product or a
service in the market. It can also be seen in two different ways—individual demand and market
demand, wherein individual demand is the quantity a consumer would buy at a given price,
while market demand would be the total demand of all buyers together at a given price in a
given period of time.

In Chapter 1 (chapter001.xhtml), section titled ‘Delivering Enhanced Customer Value,’ we had

touched upon the concepts of Online Value Proposition (OVP) and seen how different types of
needs (stated and unstated) can lead to new/improved products/services to be developed. The
concept of consumer demand moves parallel to that of needs and wants. There are mainly
eight types of demand patterns which have to be taken into consideration by marketing teams:

1. Negative demand: consumers dislike the product and may even pay a price to avoid it
2. Non-existent demand: consumers may be unaware or uninterested in the product
3. Latent demand: consumers may share a strong need that cannot be satisfied by an
existing product
4. Declining demand: consumers begin to buy the product less frequently or do not buy at all
5. Irregular demand: consumer purchases vary on a seasonal, monthly, weekly, daily, or even
hourly basis
6. Full demand: consumers are adequately buying all products available in the marketplace
7. Overfull demand: more consumers would like to buy the product than can be satisfied
8. Unwholesome demand: consumers may be attracted to products that have undesirable
social consequences

Figure 3.6 Factors Impacting Consumer Demand

With an understanding of key demand pattern types, we would now look at the key factors
impacting consumer demand.
The primary factors impacting consumer demand can be classified into four broad areas
(see Fig. 3.6):

1. Consumer factors: This area refers to factors impacting a typical consumer of the product
at hand. Key consumer factors cover the extent/type of consumer need, his income level,
historical budget to spend on that category, presence of substitutes available which the
consumer can buy, and his prior experience with the use of that product or brand and
views/opinions he/she holds of it.
2. Product factors: This category includes product/brand-specific factors that impact a
consumer’s choice for it. The price of product and its variants is a key determining factor
here followed by product variety (including availability) as also its novelty/desirability factor
along with the overall trust a brand exudes through its communication, history, or imagery.
3. Micro-factors: Involves other factors which are crucial and can be impacted by marketers
one way or the other. Key micro-factors include the price of related goods (in competition
with the product/brand, wherein marketers can compare and match prices with their nearest
competitor to improve demand), consumer expectations of increase/decrease of prices in
the near future, specific tastes and preferences of an audience/regional area, and other
aspects like product advertisement or channels of marketing.
4. Macro-factors: Involves ecosystem factors which actually define key consumer segments
and typically cannot be impacted by marketers. Macro-factors include overall spending
patterns of consumer segments, the demography they belong to, key economic indicators
(to gauge the growth of that sector itself), population growth and other such macro-
economic indicators.

With an understanding of these impact factors, it is also important to know how digital
marketers can gauge these changing consumer demand patterns. Typically, any marketer who
wants to manage and direct consumer demand for higher profits needs to:

1. Conduct regular demand analysis along with online sales channel partners
2. Measure audience activity on various digital sales channels
3. Understand buying preferences/patterns of digital audiences
4. Define consumer personas based on their demand patterns (timing/seasonality)
5. Test-market products with new promotional strategies to gauge demand
6. Compare and study dependencies of offline/online buying
7. Study perceptions and engagement patterns of new online customers
8. Assess impact of price changes and availability of substitutes for that product/brand
9. Conduct usability and design tests (multivariate A/B Tests) to understand channel
attractiveness
We have earlier shared multiple techniques available to manage and improve target
consumer’s perception and demand for a certain category of products. We will study some of
these pointers in depth in later chapters when we cover techniques to develop and improve
digital marketing to make it more effective. The key point to realize here is that consumer
demand has to be monitored and analyzed on a regular basis as there are so many new trends
and variables impacting the nature of online demand that it is of utmost importance for a
marketer to realize and chaff trends which are to stay and those which are just fads (and would
not impact consumer demand on a long-term basis).

Demand-Led Product Development Process

With an understanding of consumer demand and its patterns, we realize how important it is for
marketers to continually understand and incorporate consumer demand to service them in the
most productive manner. Although product improvements based on feedback are a historical
given, there is a whole new wave of demand-led product development which aims at drawing
inferences from the nature of demand emerging across multiple channels and platforms and
making them as a starting point for inputs related to the product development process.

Marketers have traditionally relied on superior product attributes, thoughtful communication,

advertising, and other public relations platforms to create a demand for their product. The
typical feedback they gathered from multiple channels post sale was limited to the number of
stock keeping units (SKUs) sold in a region or territory, which was the singular indicator to know
which kind of products a particular population liked and which specific variants were bought
more. What this approach lacked was a kind of qualitative indicator which could help marketers
know about the following details:

1. The kind of experience people had

2. How they went about searching for the product
3. Which features in their view differentiated the products from competition
4. The nature of demand behind the purchase: was it for a specific occasion; was there a
context to the purchase; what kind of specific keywords a customer used while searching for
the product; what was the scale of customer satisfaction post purchase; and so on

A lot of these questions, though may have been touched upon or gathered through offline
responses, customer surveys, salesperson feedback, and focus groups, there never existed a
structured way to get such responses and insights in the traditional world. The online world with
technology by its side, opened up multiple ways to not just gather split-second responses but
also provide a mechanism to store them for future analysis to build demand-led marketing
strategies.
The biggest example of this was the proliferation of search technologies wherein consumers for
the first time had an option to write plain text in a searchbox indicating his/her need or in
economic terms putting up a very specific demand for marketers to cater to. This was the start
of Search Engine Marketing (SEM) as one of the most prominent digital marketing tools (which
we will cover in greater depth in the later chapters). SEM with its advanced algorithms was able
to match a consumer’s intent and match it to a marketer’s product to create an instantaneous-
demand-driven fulfillment process which had never been envisioned before.

To understand this search demand driven marketing, we would need to briefly introduce the
concept of keyword which forms the core of this most successful form of digital marketing.
Keywords in digital marketing terminology are “words or phrases typed in a search engine by
potential consumers which showcase their intent and a corresponding demand signal for any
marketer”. The way keywords are written, their sequencing and structural composition with the
use of semantic algorithms and tools, gives marketers lots of insights to comprehend and
reason out whether a particular product is being demanded by the consumer and whether it
makes sense to market a particular product based on that query.

It is believed that Yahoo! first made available targeted keyword advertising to its customers. In
1996, Chip Royce , head of online marketing for InterZine Productions of Boca Raton, Florida,
approached Yahoo!’s sales agent (Flycast Communications) suggesting ads around keyword
results to provide a more effective, targeted advertising within Yahoo!’s search results. Yahoo!
obliged placing targeted ad banners when the keyword “Golf” was searched by Yahoo! users.
Yahoo! later turned this opportunity into a formal marketing program for its entire customer base
and promoted this in a July 1996 article in the Internet World magazine.

The example of journal publishing (showcased at length in Chapter 2 (chapter002.xhtml)) is a

good example of how consumer demand and intent can be determined much more accurately
in the online world and how marketers can analyze the aggregate of these cues to develop
products on which consumers are more willing to spend, thus impacting the whole product
development process itself. With multiple keyword analysis techniques like keyword occurrence
analysis, seasonality and usage statistic, topic-based relationships and other qualitative and
quantitative techniques, marketers now have real-time tools to judge demand patterns even at
a daily or hourly level.

For creating scholarly articles (as already shared in Chapter 2 (chapter002.xhtml), section titled
“Digital Marketing Models Creation”), a journal publisher today has the wherewithal to access
the entire keyword set which their target consumer (student community) would have typed or
queried and with the help of a keyword planner, can easily classify demand for a specific type of
content to develop multiple pricing models based upon the more sought after keywords and
related content.

This search/intent-based model is just one of the examples of how marketers can gauge
demand through online channels to model and market their products accordingly. The other
ways in which marketers can gain substantial insights on consumer demand include consumer
feedback through comments, social media mentions, product purchase analysis, Facebook
page likes, etc. Marketers are applying multiple demand analysis techniques to the data
gathered through these online consumer interactions:

1. Consumer feedback/comments: One of the more relied ways in which consumer

comments across various websites, e-commerce forums, review sites, blogs, etc., is
collated and consumer sentiment towards a particular product is analyzed.
2. Social media mentions: Community development tools are becoming crucial to gauge
trending factors which influence communities as a whole rather than just individuals. For
example, analyzing Twitter mentions are becoming crucial for brands to gauge whether their
products are in demand (being conversed) or falling out of favour.
3. Product purchase analysis: With large amounts of historic product purchase data trends
available through APIs (Application Programming Interfaces) shared by top online
merchants, it has become important to keep a tab on the purchase analysis for specific
regions and markets.
4. Facebook page likes: We are taking a specific example of Facebook (the top social
networking site in the world) which has become the barometer for brands to test their
followership and not only get reactions from them on new product launches, but also involve
them in new product creation. These days through crowd sourcing (gathering thoughts from
a large crowd for business applications), new ideas can be developed and tested with top
influencers (top 2 per cent of the intended audience) to forecast future demand and potential
acceptance of new.

The example mentioned earlier shows the wide extent of data available to online marketers to
gauge demand in a much more scientific fashion and apply elements of this knowledge
gathered to various aspects of product development, be it, product research, feature creation,
pricing, marketing, and online/offline fulfillment. We would look at multiple examples in the next
set of chapters on how consumer insights, if researched well, can be really crucial, particularly
for the success of newly launched products.

Brand Building on the Web

In this section, we would understand the actions marketers take to develop brands on the web
which consumers can relate to, lend their trust, and be swayed by them over an extended term.
A brand according to classic marketing definition is the “name, term, design, symbol, slogan,
packaging, or any other mix of such elements that identifies one seller’s product distinct from
those of other sellers”. Brands are typically known to provide value through these elements
which are far beyond just the product or service. Below are the six main criteria for choosing
brand elements which any firm can use to build a brand:

1. Memorable: It should be easily recognized and have a top-of-the-mind recall.

2. Meaningful: It should be descriptive, credible, and suggestive of the corresponding
category. Elements with rich visuals and strong verbal imagery make stronger impact.
3. Likeable: It must be aesthetically appealing or pleasing. For certain categories, it is
important that brand exudes fun and is interesting to the consumer segment.
4. Transferable: It should be transferable across product categories, geographical boundaries,
and cultures. A great example here is Coca-Cola and McDonalds.
5. Adaptable: It should have an ability to synchronize with changing consumer perceptions
and preferences, be flexible, and should have an ability to be updated easily.
6. Protectable: It should be legally and competitively protectable.

With an understanding of brand and key criteria impacting brand elements, let us understand
the concept of customer-based brand equity and how it is crucial in building brand presence on
the web. Brand equity is a phrase used in the marketing industry which describes “the value of
having a well-known brand name and its ensuing benefits”. The valuation of brand equity can
include a number of factors like changing market share, profit margins, consumer recognition of
logos and other visual elements, brand language associations made by consumers, consumers’
perceptions of quality, and other relevant brand values.

To relate brand development to consumer behavior and build the right kind of experiences in
the customer’s mind such as positive thoughts, feelings, beliefs, opinions, perceptions, etc.,
Kevin Lane Keller, a marketing professor at the Tuck School of Business at Dartmouth College,
developed the Customer-Based Brand Equity (CBBE) Model. This model is built on the premise
that when you have strong brand equity, your customers will buy more from you; they will
recommend you to other people; they will be more loyal, and you are less likely to lose them to
competitors.

The four steps in the Keller’s CBBE model (see Fig. 3.7) contain the six building blocks that
must be in place along with specific questions which need to be answered at each stage to
develop a successful brand. Let us look at each of the six building blocks across the pyramid:
1. Salience dimension includes creating brand salience or ‘awareness,’ to make the brand
stand out so that customers recognize it.
2. Performance dimension defines how well a firm’s product meets its customer’s needs.
According to the model, performance consists of five categories—primary characteristics
and features; product reliability, durability, and serviceability; service effectiveness,
efficiency, and empathy; style and design; and price.
3. Imagery dimension refers to how well a brand meets its customer’s needs on a social and
psychological level.
4. Judgment dimension refers to judgments made by customers about a brand and these fall
into four key categories:

Quality: Customers judge a product or brand based on its actual and perceived quality.
Credibility: Customers judge credibility using three dimensions—expertise (which
includes innovation), trustworthiness, and likeability.
Consideration: Customers judge how relevant the product is to their unique needs.
Superiority: Customers assess how superior the brand is, in comparison to competitor’s
brands.

Figure 3.7 Keller’s CBBE Brand Equity Model.

5. Feeling dimension: A brand can evoke feelings directly, but customers also respond
emotionally to how a brand makes them feel about themselves. According to the model,
there are six positive brand feelings—warmth, fun, excitement, security, social approval, and
self-respect.
6. Resonance dimension: Brand resonance is the most difficult and desirable element for a
marketer as it relates to consumers’ feeling of a deep psychological bond with the brand.
Brand resonance is divided into four key categories:

Behavioral loyalty: This includes regular, repeat purchases.

 Attitudinal attachment: Refers to the love customers show towards a brand, and the
product they buy, which is considered as a special purchase.
Sense of community: Customers feel a sense of community with people associated to
the brand.
Active engagement: This is the strongest example of brand loyalty. Customers are
actively engaged with the brand, even when they are not purchasing or consuming it.
This could include joining a club related to the brand; participating in online chats,
marketing rallies, or events; following the brand on social media; or taking part in other,
outside activities.

With this understanding of how a successful brand can be developed for each product, let us
look at a structured mechanism to build web-specific components of a brand. A lot of the
techniques mentioned here have been drawn from strategy and tactics marketers are using
extensively these days to build their brand online. These steps include:

1. Knowing the online audience: The first and most important step is the ability to
differentiate online specific audience from the traditional segment, understand their needs
and how they approach buying a product of the same brand online. Take the case of the
sports shoe brand Nike. Though it might seem that the audience who buy a pair of Nike
shoes online would be the same as the one buying it from a nearby physical store, there
would be genuine differences in the way each of them approach these channels.
Nike being a premium brand, it is highly likely that a typical online Nike consumer would be
a loyalist of the brand or possess a good knowledge of the attributes of the product, or have
researched well about the brand; hence, there are good chances for him/her to have even
shared thoughts on previous shoe models bought on social platforms. So, it becomes
imperative for brands promoting online to:

Develop a listening strategy: This means being present on prominent listening posts to
know where customers spend their time online.
Understanding audience segments: Involves utilizing analytics to track and understand
consumer segments as a part of consumer/market research.
Analyze social sentiment: Even before developing brand attributes on the web, it would
be helpful to understand present consumer sentiment by gathering customer feedback
though text-analysis tools.

2. Developing brand elements specific to the audience: In the next stage, once marketers
have a clearer idea of online customers and their habits, brands need to extend their profile
to add elements which differentiate them online. These parameters include:
 Engaging web presence: Any brand, even if it is an influential one offline, needs to
replicate and transfer its core brand values to develop online presences and destinations
in the form of websites, blogs, affiliate sites, social pages, etc., which catch the fancy of
online customers and engage them best. Important elements include site layout,
usability features, product imagery, expert content, compelling design, etc.
Online reputation/partnerships: As important it is to develop a brand’s own channels, it is
crucial to make relationships with other top brands, trusted sites, and e-commerce
channels to build the brand. These techniques are referred to as relationship marketing.
Order fulfillment strategies: As in the second layer of CBBE model described earlier,
along with imagery, performance is crucial; so the brand needs to build and test its
complete back-end support model to ensure that it can fully support the online promises
made and reputation earned.

3. Web communication strategies to build the brand: Once the brand elements have been
developed, brand messaging and marketing strategies become crucial to get online
customers to try the product and get hooked to purchasing it online. Depending on business
objectives and how strongly the brand is already positioned in the minds of the intended
online customers, marketers can go out for a big-bang communication strategy launch or
develop a selective-multiple burst strategy on influential channels which the audience visits
regularly.
4. Reinforcing brand values and attributes: Once consumers have started interacting and
purchasing the brand online, it is crucial to develop strategies to keep customers engaged
and make the brand relevant and interesting. Brand values can be reinforced through
regular connect with customers on social channels, through contests, promotions, loyalty
based discounts, exclusive club memberships, etc., which keep the customer involved with
the brand.
5. Converting loyalists to brand advocates: Finally, as in the last stage of the CBBE model,
it is important that engaged consumers be converted to brand advocates, wherein their
aspirations are aligned to the brand and they are influenced to promote the brand through
product reviews, brand mentions among their communities, writing positions for brand’s
blogs, and in certain cases, being invited to discussions on new product development to
make them feel a part of product creation. Such brand inclusions done in an exclusive
manner would help the brand achieve cult status and display unique elements which would
be difficult to copy.

Web-Tracking Audits and Forecasting

In the earlier section, we learnt the steps to build a brand on the web and how multiple
elements go on to influence the target consumer. We also learnt how engaging web presence is
crucial for brands to make a lasting impact and maintain the trust factor. In this section, we
would look at the importance of regularly tracking a firm’s web presence in relation to consumer
activities to know whether the performance is going as per target. Based on the consumer
behavior analyzed through such web audits, future demand patterns are forecasted accordingly.

A web-tracking audit implies using web visitor tracking tools to analyze visit behavior on a
website. Any web-tracking process typically involves a code that tracks each user’s visit pattern
and with the resulting data on consumer behavior helps provide targeted content and
experiences that make the website and the brand experience more personal and interactive.

Need for Web-Tracking Audits

Web-tracking audits began more with a business context of understanding a website visitor’s
behavior to gather his intentions and browsing pattern, but with growing times, it has also been
linked tightly with consumer privacy. Since the past four–five years, several legislations have
been issued to safeguard a consumer’s privacy where web data in the form of cookies is being
gathered without the knowledge of the user. Typically, web-tracking audits are important for the
following reasons:

1. Improve consumer interaction: With the knowledge of consumer types, their

demographics, time spent, pages accessed, features used, brands can take better decisions
and improve profitability through more accurate demand analysis.
2. Understand consumer preferences: With data on site search performed by customers,
marketers can accurately decide which content is best suited for consumer’s interest, which
products are most sought after, and how the navigation of the site should be improvized.
3. Develop successful campaigns: With strong web-tracking tools, content websites can
earn by executing well laid-out campaigns where an ad network tracks user behavior and
serves the most relevant ads to visitors to generate advertising revenue.
4. Improve site performance: If the website has excess tags from old and redundant
programs, the website load time increases and web page downloads slow down. Web-
tracking audits help to keep most optimal site performance so that customers do not leave
the website due to performance issues.
5. Track consumer data leakage: With third-party codes being used on websites, a data-
aggregator might collect useful information on customers and sell it to competition or other
sites causing a breach of privacy. A quality website-tracking audit identifies such trackers,
their sources, purposes, privacy risk levels to decide which ones to continue.

Understanding Web Cookies and the Web-Tracking System

It is important to understand the concept of web cookies to exactly know how web tracking
occurs. Cookies are small bits of text that are downloaded to consumer browsers as they surf
the web. Their purpose is to carry bits of useful information about consumer’s interaction with
the website that sets them. Cookies typically contain unique identifiers through which a website
can know whether it has touched the browser before.

Web tracking is done by looking and combining data collected through these cookies and other
sources like flash trackers, server logs, and web beacons. These set of cookies contain
trackers which run on the browser and keep collecting every piece of information by observing
the web browser session of each consumer. A web-tracking tool typically analyses these
trackers to understand relevant consumer behavior and at the same time manage a list of
approved vendors who can place their cookies (third party trackers) onto the website. This
helps manage data integrity and also prevent loss of consumer data to other aggregators and
competitors. Apart from that this exercise also gathers information towards forecasting
consumer demand.

INTEGRATED MARKETING COMMUNICATIONS (IMC)

With an understanding of consumer demand, the impact of its patterns on product

development, and the basics of web tracking, we move towards the final section of this chapter
which discusses integration and application of consistent brand messaging across both
traditional and non-traditional marketing channels through an understanding of the
fundamentals of Integrated Marketing Communications (IMC).

Basics of Integrated Marketing Communications (IMC)

In 1989, IMC was formally conceptualized and introduced in Northwestern University. The first
definition of IMC (according to Schultz and Kitchen Schultz et al, 1993) was used in a survey
conducted in 1991 by Northwestern University in cooperation with the American Association of
Advertising Agencies (4As) and the Association of National Advertisers in the United States.
The definition of IMC used in this research was: “IMC is a concept of marketing
communications planning that recognizes the added value of a comprehensive plan that
evaluates the strategic roles of a variety of communications disciplines (for example, general
advertising, direct response, sales promotion, and public relations) and combines these
disciplines to provide clarity, consistency, and maximum communications impact.”

The Journal of Integrated Marketing Communication from the Medill School of Journalism at
Northwestern University which is dedicated to research in this area describes IMC as “a
strategic marketing process specifically designed to ensure that all messaging and
communication strategies are unified across all channels and are centered around the
customer.” The concept involves leveraging the strength of each separate communication
channel to achieve a stronger combined impact than is possible by a single channel. The
concept is closely related to consumer’s ability to absorb messaging from each medium and
takes into account limitations of each medium to cover them up with others.

The concept of IMC evolved in the 1980s, when most companies in US were set up as
departments that conducted their operations as separate profit centers. With a need to go
global and still manage the communication, branding, and cultural elements, it became
important to integrate messaging across all channels to make them consistent so that the
customer across all countries could see one view and image of the product and there could be
better synergies not only in promotion but also in the manner distinct product features are built.

Historically, communication elements like advertising, public relations, sales promotion, etc.,
were planned and developed, as well as implemented and measured separately. The key issue
in implementing IMC was how to bring across key elements in a coherent manner which not
only leverages synergies but also makes communication comprehensible to the customer as a
whole. With new digital channels coming forth and with the changing forms and technology
developments behind them, Mulhern, in 2009, suggested using a set of axioms about
relevance, exposure, timing, behavioral response, and other precepts of media planning. But
these are still not as developed and this field keeps on evolving even to this day.

According to Tom, Duncan; Caywood, Clarke (1996), the following trends and changes have
been the key factors behind the adoption of integrated marketing communication:

1. Decreasing message impact and credibility: Consumers are becoming callous to

commercial messages to the extent that it is increasingly difficult for a single message to
have an effect.
2. Decreasing cost of using databases: The dramatic reduction of storage and retrieval
costs, coupled with the increased sophistication of audience segmentation has provided
marketers with more effective ways to reach target audiences.
3. Increasing client expertise: Clients now are not only pushing their agencies to be more
cost effective, but are also realizing that television might not be always the primary
advertising medium for consumers.
4. Increasing mergers and acquisitions of agencies: Many top public relations firms and
advertising agencies became partners or were partnered with other communication firms.
These mergers allowed for more creativity and the expansion of communication from
advertising to other disciplines, such as event planning and promotion.
5. Increasing mass media costs: While database costs were falling, increases in mass
media cost per thousand impressions (CPMs), especially television, prompted marketers to
 look at a mix of other channels too which would be relatively less expensive.
6. Increasing media and audience fragmentation: With increase in radio, television stations
(especially cable), and magazines, media was getting fragmented, thus increasing the
competition for consumer’s attention. Also, with the use of computers and sophisticated
research methods, companies were able to target specific segments and geographic
audiences more accurately.
7. Increasing global marketing: There was a rapid influx in advertising competition from
foreign countries. Companies quickly realized that even if they did not conduct business
outside their own country, they were now competing in a global marketplace.
8. Increased number of competitive products: With increasing number of new products
being launched in the market, marketers needed to look at newer communication models to
strengthen their brands against competition.

With an understanding of the factors that led to the rise of IMC, let us now understand the key
channels for Integrated Marketing Communications.

Channels for Integrated Marketing Communications

The key difference between traditional marketing and the integrated marketing concept as
discussed in the definitions in last section relates to IMC being an audience-driven business
process. This essentially means while firms develop business plans, the audience or targeted
consumer becomes central to the planning process and the main driving force for all key
decisions.

The difference between traditional marketing communication approaches and the IMC
audience-driven approach has been summarized in the paper on ‘Revisiting the IMC Construct’
by Jerry Kliatchko (see Table 3.2).

Table 3.2 Difference between Traditional Communication and IMC Approaches

With an understanding of these differences, let us now look at the key channels which can be
included as a part of IMC depending upon how firms want to develop their marketing
communications strategy:

1. Advertising: It includes broadcasting/mass advertising (print, internet advertising, radio,

television commercials) and outdoor advertising (billboards, street furniture, stadiums, rest
areas, subway advertising, taxis, transit).
2. Sales promotion: Contests, coupons, product samples (freebies), premiums, prizes,
refunds/rebates, special events, bonus packs, loyalty programs, sales materials (sell sheets,
brochures, presentations), installation, customer help, returns and repairs, billing. On the
trade side they include trade allowances, POP displays, training programs, trade shows, co-
op advertising, etc.
3. Public relations: includes special events, interviews, conference speeches, industry
awards, press conferences, testimonials, news releases, publicity stunts, community
involvement, charity involvement, and events.
4. Direct marketing: refers to direct mail, telemarketing, catalogs, shopping channels, inter-
net sales, emails, text messaging, websites, online display ads, fliers, catalog distribution,
promotional letters, outdoor advertising, telemarketing, coupons, direct mail, direct selling,
grassroots/community marketing, mobile.
 5. Digital/internet marketing: This being the latest addition to IMC includes all the digital
marketing and communication channels which we would be looking at in this book. These
include all the channels as shared in Chapter 1 (chapter001.xhtml) (Section ‘Digital
Marketing Applications and Benefits’):

Intent-based marketing (search marketing)

Brand marketing (display/digital advertising—banner ads, rich media ads, online
classified ads, email ads, mobile advertising)
Content marketing (website, blog, native content)
Community-based marketing (social media, business platforms)
Partner marketing (affiliate marketing, sponsorships, PR)
Communication channel marketing (e-mail, messaging, sms)
Platform-based marketing (mobile, video, out-of-home, media platforms (Surface),
kiosks, In-apps)

It is primarily the addition of digital/internet marketing and communication channels which has
brought about the value differentiators of customer centricity and audience-driven inputs to the
overall IMC process. Since this textbook is about digital marketing, we would be looking at
multiple examples of integration of digital components to the overall communication mix in the
subsequent chapters which would help understand how these elements cover up the limitations
of traditional media and provide avenues for a stronger one-to-one consumer connect.

Since IMC primarily deals with leveraging the strong characteristics of each key communication
medium and strengthening the limitations with newer communication channels, it would be
important to know the key advantages and limitations of major media types (see Table 3.3) as
shared by Philip Kotler in Marketing Management (Millennium Edition). This would also help us
realize the need to for additional digital channels to upend the traditional ones for enhanced
communication impact.

Table 3.3 Profiles of Major Media Types

Four Pillars of the IMC Construct
IMC as an emerging paradigm has been studied in a number of ways and through multiple
approaches. One of the first consolidated studies was done by Jerry Kliatchko in 2005 (further
revisions made to it in 2008) wherein he proposed the four pillars of IMC and viewed IMC as an
evolving developmental process. His work is important as it provides the much-needed
understanding and a theoretical context to this otherwise applied process. The four elements of
IMC as defined by Kliatchko (2008) include stakeholders, content, channels, and results. Let us
understand them in more detail through content aggregated from multiple papers by Kliatchko
(the text below has been picked up as direct excerpts from those papers):

1. Stakeholders: The term ‘stakeholders’ refers to all relevant publics or multiple markets with
which the firm interacts. The term ‘publics’ include both external and internal audiences.
 External audiences may refer to customers, consumers, prospects, intermediaries, and
other entities outside the organization, while internal audiences consist of those within the
organization, such as employees, managers, etc.
Managing the external markets in IMC pre-supposes that the entire process of developing
an integrated brand communication program places the target market at the core of the
business process so as to effectively address their needs and wants and establish long-term
and profitable relationships with them (Kliatchko 2005).

2. Content: The development of content in IMC flows from a deep knowledge and
understanding of multiple markets that an IMC program is intended to address.
Understanding consumers beyond traditional marketing descriptors, such as demographic
and psychographic data is essential (Schulz and Schulz 2004). An appreciation of consumer
understanding gives rise to consumer insights and the discovery of the consumer “sweet
spot”—the perfect connection between the brand and the customer (Fortini Campbell 1992)
—that ultimately leads to the creation of compelling content.
Content in IMC may be differentiated between messages and incentives. Messages refer to
brand concepts, ideas or associations, and all other values or perceptions that marketers
transmit to customers, while incentives are short-term offers or rewards to consumers for
having done something of value to the firm and consumer (Schultz and Schultz 2004).

3. Channel: There are two main determinants to consider in deciding which marketing or
brand communication channel to utilize in preparing an integrated media plan: relevance
and preference (Schultz and Schultz 2004). Contrary to a common misconception that
media planning in the era of IMC implies ‘ambushing’ consumers at all possible points of
contact for maximum exposure, the IMC planning approach deliberately takes on the
consumer’s perspective in deciding which channels would be the most effective in reaching
target audiences.
By conducting a brand contact audit of consumers, as well as examining the consumer’s
‘path to purchase,’ marketers could determine which contact points or channels are relevant
to them and which they prefer as sources of information about a company and its brands.
The brand contact audit may also aid marketers in determining how consumers would want
to communicate and interact with the company in return.

4. Results: Measuring results of marketing communications programs against set objectives

has always been the norm for business organizations. However, unlike the traditional
attitudinally-based models of measuring effectiveness that focus on evaluating
communication effects (for example, brand recall or awareness) and outputs (for example,
what media placements were bought), the IMC approach measures behavorial responses
(for example, actual purchases made by consumers and prospects) and outcomes (for
 example, financial returns in terms of income flows from consumers) (Schultz and Walters
1997).

At the heart of IMC, therefore, is the drive for accountability, that is, IMC programs must be
accountable for business results. This is done through a process of customer valuation and by
estimating return-on-customer-investments, or ROCI (that is predicted incremental sales
achieved by investing in specific customers), which are then verified and evaluated at certain
points over time, to track the effectiveness of IMC programs (Kliatchko 2005). Schultz and
Schultz (2005) further explain that measuring IMC programs follows the predictive modeling
approach that focuses on customers that generate returns for the brand, and estimating the
impact and effect that a variety of brand marketing investments might have on the program.

IMPACT OF DIGITAL CHANNELS ON IMC

With an understanding of the four pillars of IMC, let us look at the impact integration of digital
channels had on overall marketing communications:

1. Intent-based marketing (search marketing): With the incorporation of search-based

marketing communication, not only do firms get to know the top keywords which are
important to their customer set with regards to the products they aim to sell, but it is also the
most credible medium to take customers from an intent to the consumption stage in the
least possible time.
2. Brand marketing (display/digital advertising): With display having the power to track all
online customer actions and send them targeted messages based upon each marketing-
funnel stage interaction, this form of advertising extends a creative and immersive angle to
other integrated communication channels.
3. Content marketing (website, blog, native content): Digital content as also in the case of
traditional content is a powerful addition to the marketer’s communication armoury and with
the emerging usage of native content and advertorials, it becomes crucial to have a strong
online content marketing strategy for each campaign.
4. Community-based marketing (social media, business platforms): With digital
community channels providing a quick, responsive, and immediately accessible word-of-
mouth option, it has grained a lot of prominence in improving brand trust and letting
consumers know that similar people also have a preference for the product they are about
to purchase.
5. Partner marketing (affiliate marketing, sponsorships, PR): With the need for
communication extending to multiple destination sites, instead of just one portal, partner
marketing helps the overall IMC program reach out to customers with varied interests on the
online destinations they like to visit.
6. Communication channel marketing (e-mail, messaging, sms): Through details collected
from traditional visits and feedback forms, companies now have options to pursue personal
data for permission-based marketing, wherein communications are guided by seeking
customer permissions rather than pushing the product onto the consumer. Online offers are
being integrated with offline purchases, through offers, coupons, location-based marketing,
contests, and other successful techniques.
7. Platform-based marketing (mobile, video, media platforms kiosks, In-apps): Finally,
with new technology platforms being developed and adopted, there are tremendous
possibilities to improve reach, extend branding, customized interaction, all of which form the
core of IMC exercise.

PRACTICAL EXERCISE

Executing Consumer Analysis

Key Objective To develop an understanding of consumer trends and gather insights into the
consumer mindset with the help of available internet tools.

Project Brief Imagine that you are working in a team looking to launch a new smartphone in
India and you need to gather insights on Indian audience, types for smartphones, feature
preferences, usage patterns, etc. Which online websites or platforms would you use to conduct
the research and gain relevant insights across target audience? Please visit those resources
and share a report on your consumer insights or observations in your class.

Execution Let us look at some of the websites or platforms you could use to gauge specific
consumer insights.

1. Searching Articles on Consumer Preference: As a first step, you should start searching
both Indian and global websites that regularly publish multiple articles on consumer
preferences and trends across multiple age, demographic, and psychographic segments
across geographies. An example of one such website is https://www.nielsen.com/in/en.html
(http://www.nielsen.com/in/en.html) that publishes articles on consumer insights.
2. Reviewing Trend-Watching Websites: The next step includes following and searching for
trends across multiple trend-watching websites. Some example includes:

www.jwtintelligence.com (http://www.jwtintelligence.com)
www.trendhunter.com (http://www.trendhunter.com)
www.psfk.com (http://www.psfk.com)

3. Following Google Alerts: Apart from searching the web, the best way to gather information
is to setup specific alerts in the form of RSS feeds to your email inbox. Google Alerts is a
 great way to specify keywords and get daily consumer insights in the form of trending
articles delivered in your inbox.
4. Executing Consumer Surveys: One of the best ways to gather consumer insight is to
execute specific surveys (most of them for free) with your target audience segment. Most
commonly used survey tools include:

Survey Monkey
Typeform
Google Forms
Google Survey
AYTM

5. Reviewing Quora questions and answers: One of the best ways of gauging the questions
on top of consumers’ mind in your segment and their thoughts across areas related to your
product or service is to go through Quora questions and answers.
6. Finding Influencers in an Industry: Influencers are important audience set to know across
any research category. Key influencers can be reached for a partnership to gather their
insights or pay them for marketing a brand. Key tools for finding influencers include Klout,
Kred, PeerIndex, etc.
7. Social Media Channels: Social media platforms are a great way to interact with your
followers and members of your Facebook or LinkedIn groups to gather insights from them
across multiple topics and interest areas. You could also utilize the social media audience
from groups created by your college or company for research purposes. Facebook audience
insights is a great too to classify regional audiences based on their age, demographic,
interests, education, relationship status, work, etc.
8. Following Industry Association Reports: Multiple industry reports related to consumer
insights and trends are shared on a yearly basis by top consulting firms, agencies,
marketing associations, etc. These reports gather the pulse of Indian and global audience
across multiple industry segments, technology, and process areas, and can be used as a
useful barometer of consumer preferences.

Researching consumer trends across digital and online platforms is crucial towards forming an
integrated view of any consumer segment for any specific product or category. This exercise
along with gathering market and brand insights will help digital marketers place their bets on the
right action areas that are most useful for digital campaign execution. Once you have
completed the consumer insights research exercise, please have the document reviewed by
your faculty or teammates for any comments and feedback.

CHAPTER SUMMARY
 Part 1: We learnt about the basic concepts of consumer behavior and the evolution of
consumer behavior models, especially the EBM model and its four key stages. We also
looked at the impact of digital on Consumer Decision Process (CDP) in an active and
passive manner. This was followed by an understanding of the key attributes of online
buying behavior and the building blocks of an effective web experience. We also looked at
utilizing market intelligence to gather customer data to build segments and resulting
marketing application areas.
Part 2: In the second part, we looked at the eight types of demand patterns and key factors
impacting consumer demand. This was followed by an understanding of demand-led
product development process. We then looked at the Keller’s CBBE Brand Equity Model to
understand the six brand equity elements and the five-step process to building a brand on
the web followed by an understanding of web-tracking audits and demand forecasting.
Part 3: In the final part, we introduced the concept of IMC, its history, and key factors behind
its adoption. This was followed by looking at the differences between traditional
communication and IMC Approaches and the four pillars of IMC construct. At the end, we
also learned about the impact of digital channels on IMC and how they have enhanced its
concept and utility.

REVIEW QUESTIONS

1. What is consumer behavior? Can you describe the four traditional consumer behavior
models?
2. Explain the four key stages of “Engel, Blackwell and Miniard (EBM)” Model in detail.
3. Name some of the characteristics that differentiate a digital consumer from a traditional
(offline) consumer.
4. Can you compare passive and active digital influences stating at least two examples for
each?
5. According to Lewis and Lewis, what are the five different kinds of web users as discussed in
the chapter?
6. Explain the five stages during which information that is presented on a website is processed
by the human mind?
7. Describe the key stages by which marketing intelligence is derived from multiple user data
sets.
8. What is consumer demand? Which eight types of demand patterns need to be taken into
consideration by marketers?
9. Explain in detail the four factors impacting consumer demand.
10. What is a brand? What are the six main criteria for choosing brand elements which can be
used by a firm for brand building?
11. What are web-tracking audits? Why are they important?
12. How did the Integrated Marketing Communications (IMC) concept emerge? What trends
and changes have resulted in the adoption of integrated marketing communication?
13. Explain at least five key differences between Traditional Communication and IMC
Approaches.
14. Share the advantages and limitations of any four major media types.
15. Explain the four key pillars of the IMC construct.
16. State five distinct impacts of digital on Integrated Marketing Communications.

DIGITAL APPLICATION EXERCISES

1. Take the example of Oyo Rooms to explain the four key stages of “Engel, Blackwell and
Miniard (EBM)” Model.
2. From the five different kinds of web users in the chapter, what kind of web user would you
identify yourself as and why?
3. Uber is a classic example of one of the most modern consumer-oriented apps. Can you
describe the five stages how any user might process the interactions with the app across
the five interaction stages?
4. Can you think of eight different Indian brands representing each of the eight types of
consumer demand patterns?
5. Zomato has developed itself into an iconic brand name in India with high recall. Visit
Zomato.com (http://Zomato.com) and lay out the key criteria of the six brand elements you
feel they have used to develop their brand building activities.
6. Pickup BigBasket.com (http://BigBasket.com) as an example to discuss key differences
between traditional competition and IMC approaches.
7. If you were to build a digital brand from scratch, which category would it be and why? Share
your approach to develop the four key pillars of IMC construct for that digital brand.

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