Digital marketing Transcending barriers

By Dr Huazhong Zhao

Dr Huazhong Zhao is Assistant Professor in the Department of Marketing. Here he looks at the remaining barriers to the emergence of a full digital marketing ecosystem and what this means for the teaching of marketing in business schools.

Corner store vs back-alley store

It is a truth universally acknowledged, that a business man in possession of a good fortune must be in want of a perfect store location.

Location! Location! Location!

The importance of location can never be over-emphasised in any line of business, especially when success depends on large numbers of consumers flowing through the door.

Corner stores attract more consumers than stores buried deep in the alley. Once you can hold on to a perfect location, the benefits are enormous. However, securing a high-traffic location has never been easy. Occupants defend their business locations to the hilt. The back-alley store has faced an inescapable barrier. That is until now.

Click and Buy. It's almost a natural reflex. We do it every day. Thanks to the exponential development of information technology, we already live in a world with far fewer barriers than a decade ago. And they are falling rapidly. Let's look at the current state-of-play.

Connectivity Wearable smart devices are already with us. Next up may be implanted chips. When connectivity and bandwidth are no longer restricting communications, the landscape of marketing and advertising will be vastly re-shaped. Upgraded connectivity means uninterrupted communications, between merchants and consumers – a dream of marketers whose ultimate goals are to reach, persuade and convince. Marketing communications can then shift from bulky “tell-all” type to personalised “butler style” reminders. Then, micro-communications are able to constantly address consumer needs in real time. Feedback mechanisms are also enhanced with better connectivity and increased amount of data that can be collected to help analyse consumer behaviour.

Information asymmetry Maybe this barrier will never be totally demolished due to privacy and strategic considerations. But price comparison websites are a good start to equipping both stores and consumers with better information. Technology re-shapes the competitive landscape and merchants are less likely to charge unreasonable prices. Information asymmetry is becoming a thing of the past. Furthermore, with information barriers partially brought down, stores are forced to re-consider their long-term strategies and cannot compete only on price. Their strategy would eventually turn to the competition for added-value or brand loyalty.

Personalisation Hundreds of years ago, wealthy kings and lords would make themselves more comfortable by hiring butlers and maids to attend to their personal needs. But the barrier of understanding each and every person at any time was impossible to overcome without information technology advancements. When the personalisation barrier is brought down, and needs can be more precisely recorded (PillPack.com) and predicted (Amazon.com), the landscape of the whole supply chain is re-shaped.

Sensational experience Digital technology has helped us into the multimedia era where we can see and hear through smart devices to experience things that we do not physically apprehend. But, it is still more hearsay than true experience at the current stage. The barrier of physical restriction which prevents us from actually experiencing something that is not present is hard to demolish. Of the five senses, VR technology has already leapt forward in the sight and hearing departments, but other senses still have the potential to be truly enhanced. When the physical sensation barrier is brought down, a whole new world will be open to us, with unlimited possibilities.

The marketing toolkit

When we go back to the very fundamentals of marketing, the essential job is to find, cultivate and satisfy consumers' needs. From this angle, no matter what tools we use and what routes we take, the focus of marketing strategy will always be how to match the consumers' needs with the stores' offerings. In the foreseeable future, there may be jaw-dropping new technologies that will equip us with even more amazing abilities.

We have both the constant and variables in the marketing toolkit. The unchanging constant is the marketing logic, e.g. segmentation, targeting, needs analysis, etc. which will always stay focused on the goal of analysing consumer needs. The variables are the vastly changing environment which marketers needs to adapt to whenever technology brings about new revolutions and removes barriers. As marketers, the key is to keep consumer needs at the centrepiece of our marketing strategy.

What does this mean for business schools?

Both marketing logic and marketing tools are important to business education. In business schools, we still need to focus on the constant and teach the logic of consumer behaviour, and then use the updated tools to persuade. Before getting into the planning stage of any marketing strategy we need to know the objective of the campaign. Then the duration, target audience, message, etc. These questions are campaign-independent and need to be answered in every strategic planning process. The logical structure of how to identify and organise the key elements of setting up an effective marketing strategy should be emphasised as the fundamental marketing theory training that will develop the basic instinct of a sophisticated marketer.

In the meantime, business schools should also be able to provide the most up-to-date toolkits to address contemporary marketing issues. For example, supply chain management courses are to be revamped or even overhauled with technological advancements such as barcodes, ERP systems, future unmanned automated delivery, etc. Advertising courses need to shift the focus from paper media to online platforms and to embrace social elements mirroring the prevalence of social media. Only with these updated tools, can our students be properly equipped to face the marketing challenges when they leave school.

Dr Huazhong Zhao
Assistant Professor
Department of Marketing