Abstract
Marketing in this digital age is influenced by a lot of factors. However, it all revolves around the consumer who now controls the kind of marketing strategy that a company employs. The consumers are now able to interact in social media platforms, and even interfere with each other’s perspectives on various products through giving either positive or negative feedbacks. This paper analyses consumer behavior and motivations in the digital environment. It also considers how value proposition may influence consumer purchasing decisions. Lastly, it will analyze and give recommendations on how companies may employ technology aid segmentation and mass customization so as to appeal to the various consumer needs.
Introduction
Today, technology has ensured that information is always readily available at the fingertips of consumers. This is why companies are striving to achieve a good online reputation as it will be the determining factor of whether or not customers are attracted to its products or not. With a corporate culture that is customer centric, companies get to achieve the much needed customer trust. Consumers today are actively using social media to enquire more about the experiences of other individuals. As such, one challenge for a company such as Coca Cola is getting to achieve genuine and lasting customer loyalty. Customers know what they want, and they know how to use the social media to get it. Therefore, if they need quality products, all they will need is to use the social media to browse and look for feedbacks on a series of brands. This is one reason why customer loyalty is no longer a guarantee as any slight slip up will mean loss of a big percentage of customers who will go in search of products from other brands. Therefore, consumer behavior has also been affected in light of this digital age. This paper features an analysis of how marketing has been impacted in the digital age. It considers the case of the Coca Cola Company which has already established a digital image of itself. It will conclude by offering recommendations of how the company can conduct marketing to increase the chances of appealing to consumers so as to gain competitive advantage.
Customer Behavior and Motivations
Understanding customer behavior and motivations ensures that the strategies employed by a company are in line with what the consumers needs. In this case, The Coca Cola Company will have to conduct an analysis on its customer’s needs before determining the marketing strategy it will employ. Sometimes, a company may simply choose to use the various social media sites, forgetting that it should be focusing on its target market.
The consumer is the most important factor in a market as he is the one who dominates it and the resulting trends. He controls the demand and supply chain of a product because if he does not purchase, then the supply is also impacted because there would be no demand for products. When making purchasing decisions, the consumer is generally influenced by the marketing strategies of that particular company and the particular product advertisement. They have the power of making decisions.
It is clear that the digital revolution has greatly impacted consumer behavior and that the impact of the internet will still spread even further as more people become internet users. Therefore, organizations should be able to adapt to this ever changing digital world by constantly rethinking the processes they employ when identifying, communicating, and providing value for their clients. They need to improve on how well they can manage and satisfy individual and organizational clients. Basically, with the current trend, the marketing organizations will have to include their clients in the process of product or service development.
The emergence of online commerce and its constantly increasing use has led to the development of new models of personal interactions and impersonal transactions. They have a high level of interactivity and availability, which is what, has triggered the changes in both individual and group consumer reactions. The more informed online consumers now have more power. Therefore, consumer behavior is influenced by a series of factors, some of which cannot be controlled. However, marketers must still conduct research that will enable them to have an in-depth understanding of the theory and reality of consumer behavior. The figure below shows the impact that media has had on marketing effectiveness.
The most relevant factors that influence consumer behavior and motivations in the digital world are web site characteristics, consumer perceptions and psychodynamic characteristics, the characteristics of the selling organization and its social context (Torkzadeh & Dhillon, 2002). Online consumer behavior is mainly influenced by psychological factors such as online perception, trust, personality and the aesthetics of the company website. Perception is the unique view which an individual has of his or her own environment. It is believed that it is a passive factor whereby one sees and hears objectively. However, the objects and stimuli in the environment, such as the digital world, are perceived actively. Perception can also be viewed as an approximation of reality whereby an individual’s brain seeks to make sense of the stimuli it comes across.
According to Constantinides (2004), markets of the digital world should understand these elements which enhance or undermine customer trust. They should also understand how this trust will influence the perception the client has on the given web page. In addition, this author argues that, “web sites must communicate integrity and credibility in order to persuade consumers to stop, explore them and interact online. Psychological factors are those playing a crucial role in helping online customers unfamiliar with the vendor or unfamiliar with the online transactions to overcome fears of fraud and doubts as to the trustworthiness of the web site and vendor.” (QTD from Constantinides, 2004, pg.114). Social networks play a very important role when it comes to developing trust. It is quickly becoming the most valuable method of communication between customers and the organizations.
To build trust, a company must make use of strategies that will reduce uncertainty thereby ensuring the safety of the personal information of customers, as well as their transaction data. This will also ensure that their fear of fraud is eliminated as different users who do not get to meet in person will discuss positive factors about the particular vendor (Kotler & Armstrong, 2008). For example, Coca Cola Company has loyal consumers all over the world who have never met, but are always discussing about the product and its characteristics. When one who has never tried it engages in the conversation, he will either be trustful of the organization or not basing on the type of message being passed across in the online platform.
Personality is yet another factor which can greatly influence online consumer behavior. Within a digital environment, consumers tend to have varying personalities compared to what they would showcase in their daily lives. Many tend to use their alter egos when communicating in the virtual world. According to Schiffman & Kanuk (2009), this virtual personality notion gives the individual an opportunity to use different identities, which is quite similar to going to the mall and trying on different outfits in a store. The social networks are full of ideal selves which are projections by individuals who want to increase their chances of socializing effectively. These people exaggerate their positive qualities on sites such as Facebook and MySpace, while others are turning to special services like the Reputation Defender which removes embarrassing posts before “the boss” can see them (Solomon, 2009). Therefore, to market effectively in this digital world, the marketers need to focus on the visual and auditory features of a product or service as this will ensure that they can connect with the actual virtual identities.
The website’s aesthetics should also be taken into perspective. In relation to this, traditional marketing terms it as atmospherics. Within the digital world, the corresponding element is the website design, quality of presentation, design elements and the style. This virtual atmosphere is very important for gaining the attention of online customers as it induces positive and powerful motives for visitors to stop, explore and even interact with others in the website (Constantinedes, 2004).
The social factors which influence consumer behavior, on the other hand, include; reference groups, family, and social roles. Basically, in the digital world, an individual is constantly influenced by the immediate virtual environment that they are a part of. This will mostly occur as a result of the Word of Mouth. Schiffman & Kanuk (2009) identify the types of consumer reference groups as: friendship groups, shopping groups, virtual communities, work groups, and consumer action groups.
The most visited social networks and blogs are Facebook, Blogger, Twitter, WordPress, MySpace, LnkedIn, Tumblr, Google+ and Yahoo! Plus. This list is in order of the most popular website. By understanding how these sites work, and learning more about the consumers present as members, a company will be able to market effectively and cost effectively. This is because they will make use of cheaper alternatives of grasping customer attention instead of employing marketing strategies that are expensive with very little impact on the target market (Trusov, Bucklin & Pauwels, 2009).
Therefore, it is evident that marketing approaches must also change now that the environment is no longer traditional but digital. Technology has played a major role in this change as it has introduced the internet and the social media sites whereby consumers are now interacting with one another (Kotler & Keller, 2006). Coca Cola Company, therefore, should understand its consumer behavior in the digital world, and realize which social site it can use to trigger a response.
Value Propositions
A value proposition refers to the quantifiable benefits which an organization promises to deliver. To develop a value proposition that is appealing to consumers, the organization must first understand the needs of consumers. In the present digital world, a value proposition is developed by reviewing and analyzing the costs, benefits and value that the organization is capable of offering its prospective consumers (Scannell, 2016). The consumers must understand the value proposition and be interested in it before they can become loyal and trust the specific company over its competitors. For instance, The Coca Cola Company should conduct a research which analyses the needs of consumers so that they can have an effective value proposition that will trigger the purchasing action.
The customers of The Coca Cola Company are individuals from different age groups with different tastes. This company has offered a value proposition consisting of a product that will suit the unique needs of consumers. Different people have varying tastes, and this company has differentiated its products to ensure that all consumers get the drinks they desire. This includes different flavors of the carbonated drinks, an inclusion of water in the product lines, and even the presence of sugared and low sugared products to suit diabetic individuals.
In the digital world, it is necessary to consider updated techniques for researching customer needs. This can be achieved through the analysis of customer discussions on various social media sites. Once the company has known what the customers are most interested in when it comes to drinks, they can use the information to develop a high quality value proposition.
The Use of Technology to Aid Segmentation and Mass Customization
The concept of mass customization should never be viewed as an alternative strategy to the process of market segmentation. It should always be seen as an important part of market segmentation which provides companies with the best approach for satisfying individual consumer needs while still triggering revenue production. Mass customization enables a company to recognize the differences that are present among consumers, hence pushing them to recognize these and offer unique products that will suit all their needs.
Mass customization is now viewed as a valuable business strategy. This is the reason why more firms have been applying advanced manufacturing and information technologies to produce low-cost personalized products in large numbers (Duray, 2002). Some of the well known products that are frequently mass customized include; bicycles, diesel engines, computers, fast-food and even computers among many others (da Silveira et al., 2001). All these products are usually designed and produced uniquely to ensure the needs of specific customers are met at reasonable prices.
Broekhuizen et al. (2002) describes mass customization as the ability to produce customized products in large numbers at fair costs. It is based on three elements; first, the operations must be capable of producing differentiated products that will meet the unique needs of consumers. Second, the cost of mass customized products should be almost the same as that of mass produced items. The difference should not be too big. Third, the economical feasibility should enable large scale production by ensuring the unlimited access to a broad range of markets and individual customers (Tu et al., 2001). Therefore, mass customization seeks to ensure the traditional cost-variety trade-off in operations is overcome when working in the mass market environment (Prabhacker, 2001). This is the paradox of developing low cost products in large numbers (Duray, 2002).
Different scholars have suggested that mass customization occurred as an industrial phenomenon due to three main elements (Zipkin, 2001). First, shorter product life cycles and the increasing globalization triggered competition and a breakdown in mass markets. There was suddenly a need to focus on individual consumers and not on the target group’s general needs. Second, the customers, who now had digital access to each other, started demanding for greater levels of variety and product personalization. Lastly, the technological innovations enabled companies to be flexible enough to offer customized products at low costs.
Although mass customization is said to be only effective in industries with a high demand for customized products, the use of technology can assist in ensuring that it is effective for most industries as consumers will always have varying needs. Therefore, although there are other contributors such as lean manufacturing, flexible manufacturing and information technologies have been identified as the main factors behind mass customization (Tu et al., 2001). Examples of the major technologies include;Computerized numerical Control (CNC), Flexible Manufacturing Systems (FMS), and even internet applications (da Silveira et al., 2001).
Recommendations
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The recommendations on how Coca cola can use technology to aid its marketing strategies are based on the following model;
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The CNC technology should be employed in the Coca Cola Company as it offers two important mass customization capabilities. First, with its employment, complex, innovative designs can quickly be converted into products. This can enable the production of goods with lead times of as short as 24 hours, compared to what would have previously been the case in products that would be produced in as much as 2 weeks. This not only reduces time but also reduced resource wastes, hence leading to the development of products that are not only cheap but still of high quality (Nistor, Dehne & Drews, 2010). It is because the technology enables the translation of manufacturing specifications into CNC instructions as soon as customers place an order for personalized products. Second, this technology enables machine reconfiguration to take place within the shortest time possible. Therefore, the economies of scale are enabled when products are being produced in small batches.
The FMS technology, on the other hand, is recommended as it has the potential to improve manufacturing productivity and flexibility, thereby reducing costs of customization. Therefore, organizations can cheaply customize products whenever a customer requests, at little or no costs whatsoever. With the FMS technology, assorted products can be produced at the same time when machines are linked together with automated materials and a computer system. Therefore, as long as they are preprogrammed, they can produce whatever goods are required at that particular time.
Lastly, the internet is the main medium for passing along information on product customization options (Liechty et al., 2001). The Coca Cola Company may develop a webpage whereby it offers its customers with the opportunity of customizing products from a series of components and options. Offering such a menu provides an opportunity for customers to become aware of all possible featured and options available when thinking of making a personalized order. This website may also be used for tracking services after an order is placed (Kagan et al., 2000).
Therefore, in this digital world, technology must always be considered before deciding on a marketing strategy. It ensures that segmentation and mass customization are considered which will lead to more impressed and satisfied customers (Phillips, et al., 2004). The Coca Cola Company should also consider this example of technology use to introduce segmentation and mass customization. Through technology, its prospective market can be segmented depending on what they have in common.
Conclusion
It is evident that marketing in the digital world has indeed become more complex than in the traditional market. Without a proper understanding of the consumer characteristics, behavior, and motivations, it will be impossible to market effectively. Most of the efforts made will not trigger the desired results as it will either feature a poor value proposition that is not appealing to the consumers, or the company will be marketing through the wrong medium and with an expensive approach. Fortunately, through the various researches available, organizations can employ the knowledge they achieve from analyzing these literature pieces hence ensuring that they understand what is going on. If such knowledge is present, the organization will know how to attract their target market and where exactly they should focus their efforts on. This marketing approach will ensure that the organization attains competitive advantage over others as it will be getting maximum effects from its strategies.
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