CHAPTER 10
Digital Marketing and Social Networking
TEACHING RESOURCES QUICK REFERENCE GUIDE
Resource
Location
Purpose and Perspective
IRM, p. 203
Lecture Outline
IRM, p. 204
Discussion Starters
IRM, p. 213
Class Exercise
IRM, p. 214
Chapter Quiz
IRM, p. 215
Answers to Discussion and Review Questions
IRM, p. 216
Answers to Application Questions
IRM, p. 219
Answers to Internet Exercise
IRM, p. 220
Answers to Developing Your Marketing Plan
IRM, p. 221
Comments on the Cases
IRM, p. 222
Case 10.1
IRM, p. 222
Case 10.2
IRM, p. 223
Strategic Case 4
IRM, p. 224
Instructions for Role-Play Team Case Exercise
IRM, p. 225
Examination Questions: Essay
Testing CD
Examination Questions: Multiple-Choice
Testing CD
Examination Questions: True-False
Testing CD
PowerPoint Slides
PURPOSE AND PERSPECTIVE
The purpose of this chapter is to provide students with an overview of changes and innovations in
marketing. The digital revolution has generated new technologies that make the field of marketing
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LECTURE OUTLINE
I. Growth and Benefits of Digital Marketing
A. Digital media are electronic media that function using digital codes.
B. Digital marketing uses all digital media (including the Internet and mobile and interactive
channels) to develop communications and exchanges with customers.
D. The Internet allows marketers to communicate with consumers, reach new markets, and
target markets more precisely.
1. The most important benefit of e–marketing is the ability of marketers and consumers to
share information. The Internet has changed how marketers communicate with
consumers, suppliers, and employees.
II. The Interactivity of Social Media
A. The interactivity of digital media enables the firm to engage with its stakeholders.
B. Traditional marketing involves one-way communication, which often takes a long time as
marketers and customers struggle to reach each other.
III. Types of Consumer Generated Marketing and Digital Media
A. Digital media are more consumer–driven than traditional media and are changing marketing.
B. Two major trends have caused consumer–generated media to gain in importance.
1. The increased tendency of consumers to publish their own thoughts, opinions, reviews,
C. Understanding where online users are likely to express their thoughts and opinions can help
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D. Social Networks
1. A social network is a web–based meeting place for friends, family, coworkers, and peers
that allows users to create a profile and connect with other users for the purposes that
range from getting acquainted, to keeping in touch, to building a work related network.
2. Today’s social networks offer a multitude of consumer benefits, and marketers are using
5. While billions of dollars in investments are being funneled into social media, it may be
too early to assess the exact economic contribution of social media to the entire economy.
6. Facebook
a. Internet users create Facebook profiles and then search the network for people with
7. Myspace
a. Users of Myspace create profiles and interact with other members.
8. Twitter
a. Twitter s a hybrid social networking and micro–blogging site (users can “tweet” status
updates of up to 140 characters).
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E. Blogs and Wikis
1. Blogs (web-logs) are web-based journals through which authors can editorialize and
interact with other Internet users.
a. Blogs give consumers power over companies because companies cannot control what
bloggers write.
2. Wikis are a type of software that creates an interface that enables users to add or edit the
content of some types of websites.
a. Wikipedia is the most famous wiki.
(1) The site is expanded, updated, and edited by a large team of volunteer
contributors.
3. Marketers who want to form better customer relationships and promote their company’s
products must not underestimate the power of these two tools as new media outlets.
F. Media–sharing Sites
1. Media-sharing sites allow marketers to share photos, videos, and podcasts.
2. Media-sharing sites are more limited in scope in how companies interact with consumers.
a. While firms can promote their products through videos or photos, they usually do not
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3. Photo–sharing Sites
a. Photo–sharing sites allow users to upload and share their photos with the world. Well –
known photo sharing sites include Flickr, SmugMug, Picasa Web Albums, and
4. Video–sharing Sites
a. Video-sharing sites allow anybody to upload videos to the Internet. Some of the most
advertising firms to develop professional advertising campaigns.
c. Podcasts are audio or video files that can be downloaded from the Internet with a
subscription that automatically delivers new content to listening devices or personal
computers.
(1) Podcasts offer the benefit of convenience, giving users the ability to listen to or
view content when and where they choose.
G. Virtual Sites
1. Virtual sites are user-created, three-dimensional worlds that have their own economies
and currencies, lands, and residents. Virtual sites include Second Life, Everquest, Sim
City, and the role–playing game World of Warcraft.
real money.
2. Real-world marketers and organizations have been eager to capitalize on the popularity of
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virtual realities.
3. Firms are also using virtual technology for recruiting purposes, such as holding virtual
H. Mobile Devices
1. Mobile devices such as smartphones, mobile computing devices, and tablet computers
allow customers to leave their desktops and access digital networks from anywhere.
I. Applications and Widgets
1. The most important feature of apps is the convenience and cost savings they offer to the
consumer.
a. Some apps allow consumers to compare a product’s price with the prices of identical
offer consumer discounts.
2. Mobile technology is changing the shopping experience.
a. Shoppers can use apps to tally up purchases and pay through their smart phones.
can tap the phone at the point of sale for the transaction to be registered.
3. Widgets are small bits of software on a website, desktop, or mobile device. Marketers
might use widgets to display news headlines, clocks, or games on their webpages.
a. Widgets downloaded to a user’s desktop can update the user on the latest company or
IV. Changing Digital Media Behaviors of Consumers
A. Consumers now expect to have access to more information and receive it faster than before.
B. Consumers can connect with each other more than ever before, as well as get the “real story”
on products and companies.
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1. In many ways, some of the power of the professional marketer to control and dispense
C. Some companies are using the power of the consumer to their advantage.
1. While negative ratings and reviews are damaging to a company, positive customer
feedback is free publicity that often helps the company more than corporate messages do.
2. Because consumer–generated content appears more authentic than corporate messages, it
D. Online Consumer Behavior
1. Marketers must constantly adapt to new technologies and changing consumption patterns.
2. Digital media channels have a high attrition rate; it is hard to stay on top of the latest
4. Forrester Research developed a classification system to help marketers understand how
different groups of consumers use social media. The Social Technographics Profile
classifies consumers into seven groups (which may overlap):
a. Creators are those consumers who create their own media outlets, such as blogs,
podcasts, consumer–generated videos, and wikis.
5. Marketers who want to capitalize on social and digital media marketing will need to
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V. E-Marketing Strategy
A. Basic Internet literacy is rising all over the world, making it a good way to reach global
consumers.
D. Product Considerations
1. Digital media provide an opportunity to add a service dimension to traditional products
and to create new products that could only be accessible on the Internet.
a. The ability to access product information for any product can have a major impact on
E. Distribution Considerations
1. The Internet is a new distribution channel that helps businesses increase efficiency.
a. Processing orders electronically reduces inefficiencies, costs, and redundancies while
increasing speed.
F. Promotion Considerations
1. Promotion is one of the best applications for digital media.
G. Pricing Considerations
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1. Price is the most flexible element of the marketing mix.
2. Digital media marketing facilitates both price and nonprice competition because Internet
marketing gives consumers access to more information about costs and prices.
a. As consumers become more informed about their options, the demand for low-priced
3. Digital connections can help the customer find the price of the product available from
various competitors in an instant.
a. While this new access to price information benefits the consumer, it also places new
VI. Ethical and Legal Issues
A. How marketers use technology to gather information can raise many ethical and legal questions.
B. The rapid spread of the Internet and digital technologies means that regulation has not kept pace.
C. Privacy
1. One of the most significant privacy issues involves the personal information that
companies collect from website visitors. Privacy concerns include:
a. Companies collecting personal information from website users
2. Many of these breaches occur at banks, universities, and other businesses that contain
sensitive consumer information, which requires organizations to implement increased
security measures to prevent database theft.
3. Facebook, Google, and other social networking sites have also come under fire for
D. Online Fraud
1. Online fraud includes any attempt to conduct fraudulent activities online, such as by
deceiving consumers into releasing personal information.
a. Cybercriminals are increasingly using online social networking sites and other digital
media to commit fraud—either to damage a company’s reputation or to gather private
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information from consumers.
b. Some fraudsters create typosquatting sites based on common misspellings of search
2. Organizations and social networking sites are seeking to develop ways to combat
fraudulent online activity.
E. Intellectual Property
1. Intellectual property can be ideas and creative materials, songs, movies, books,
electronics, etc. that is developed to solve problems, carry out applications, and educate
and entertain others.
4. Online piracy has become such an issue that the U.S. government proposed two bills, the
Stop Online Privacy Act and Protect Intellectual Property Act, that would enable the
5. The software industry is particularly hard-hit by IP violations and illegal file sharing.
6. Many consumers rationalize the illegal sharing of digital content.
7. All users of digital media must make an effort to abide by ethical practices.
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DISCUSSION STARTERS
Discussion Starter 1: Online Shopping, Technology, and Privacy
Amazon.com is one of the Web’s most recognizable marketers. Visit the company’s website at
www.amazon.com and describe how the company adds value to its customers’ buying experience.
ASK: Have you ever shopped on Amazon.com?
ASK: What did you think about the experience? Did you enjoy it?
ASK: Do you like how Amazon remembers you and recommends things to purchase based on your past
purchases? Other companies, like Netflix, do a similar thing. Do you think more companies should
employ similar technology? Would it convince you to buy more things?
Students may have a strong reaction to these questions. Some people may feel that it is a violation of
Discussion Starter 2: Is Electronic Marketing for Everyone?
ASK: In general, do you think that electronic marketing is effective at reaching target markets?
Students may answer this question in a variety of ways. If strong sides emerge, you may want to set up a
ASK: When you indicate that you ‘Like’ or are a ‘Fan’ of a product or company on Facebook, does that
make you more likely to be a customer of that company? Or are you merely passively indicating that you
think that company makes quality products?
It should be interesting to see how students answer this question. Reason would stand that they would be
ASK: Can you think of any products that should not be marketed online?
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CLASS EXERCISES
Class Exercise 1: Online Social Networking and Marketing
Note: This could easily be converted into a take-home assignment for either individuals or groups.
Social networking is a popular method of communication for individuals, businesses, and organizations of
all kinds. Conduct some research online and identify how companies are utilizing some of the most
they doing, and how successful have they been?
Class Exercise 2: Blogs are Big Business (and a Powerful Tool for Marketers)
Whether businesses like it or not, bloggers have tremendous power. A positive review on a popular blog
can mean exponential increases in sales. The opposite situation could be true for a negative review.
Regardless of whether or not most bloggers are qualified to give advice about products, their readers pay
attention and so, therefore, must marketers. Many companies now send out samples, free trips, stays in
hotels, etc. to bloggers in the hopes of garnering praise on popular (and moderately popular) blogs. With
literally millions of blogs already in existence, and new ones popping up all the time, this can amount to
an overwhelming task for marketers. However, blogs can be a great way for companies to generate some
low-cost publicity. This is why so many firms have resorted to appealing to bloggers.