Slovak university of agrigulture In nitra faculty of economics and management
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OBAL záverečnej práce v súlade s ISO 7144
Declaration of Originality I, the undersigned Terézia Krátka, solemnly declare that the thesis „New trends of marketing – case study of the chosen company“ is a result of my own independent research and was written solely by me using the literature and resources listed in Bibliography. I am aware of legal conseqences in case the data are not true and correct to the best of my knowledge.
I would like to thank my supervisor Ing. Patrik Rovný, PhD. for his help, expertise, valuable advice, comments and support during the writing of my thesis.
Table of contents Table of contents 6 List of illustrations 8 List of Abbreviations and Symbols 9 Introduction 10 1 Theoretical Background 12 2 What is marketing? 12 3 Marketing mix – 4P´s and 7P´s 13 4 Communication policy of the company 14 5 Advertising – new techniques 14 6 Guerrilla marketing 16 7 Choosing new media for marketing 17 8 Viral Marketing 17 9 Social media marketing 18 10 Internet Marketing 20 11 Mobile Marketing 21 14 Television and cinema marketing 23 17 The aim of the work 26 18 Methodology 27 19 Teoretical part 29 20 About Slovak Telekom 29 21 History of the company 30 22 Social network marketing 31 23 Viral marketing 31 24 Internet marketing of T-Com and T-Mobile 32 25 Television advertising of T-Com and T-Mobile 33 26 Marketing research 34 27 Characteristics of the sample and details about respondents 34 28 Effectiveness of T-Com and T-Mobile advertisin questionnare summary 36 29 Recommendations 45 Conclusions 47 References 49 Appendices 55 List of illustrations List of Abbreviations and Symbols FIFA International Federation of Association Football MMS Multimedia Message Service SMS Short Message Service TV Television
Introduction There are many businesses and companies in today’s free market environment. The aim of every company is to be profitable. Another very important aim is to be better than the competition. Companies use different marketing approaches to reach these aims. Nowadays, market place seems to be a kind of battle field where individual companies fight to gain customers. But how can a company win this battle? The answer is: by using the basic tool called marketing. There are many definitions of marketing. The simplest way to understand the mission of marketing is that marketing is a way for companies used to communicate with their customers, create, deliver and exchange offerings. Companies have been using marketing ever since. The traditional mediums of marketing have been compelling, effective advertisements, brochures and fliers on paper. These kinds of media have grown old, mainly because of fast-changing technologies and also because emergence of the new customers with higher exceptions and different needs. Companies have to keep track with the changing environment and adjust their products and services to new world trends. It is the new technology what drives an emergence of new marketing age. Booming Internet and constantly ongoing innovations of mobile phones created new mediums of marketing. The traditional trends in marketing are being replaced with new ones. There are variety of products and services in the market and customers are aware of their environment like they have never been before. They are aware of the brands, products and also about the fact that there are many alternatives to them because the world has become one huge marketplace – thanks to the new technologies. The aim of this work is to take a closer look at the new trends of marketing and how they are used in Slovakia. At first the marketing is defined. Then the thesis deals with marketing mix which describes a company’s marketing activities. One of the four elements of marketing mix is promotion. Additionally, there are described new techniques used in promotion, as advertising and Guerilla marketing. The company can choose from the various types of media to spread the adverts to present its products and services. New trends represent viral marketing, social network marketing, internet marketing, mobile marketing and television and cinema marketing. The next part of the work consists of practical background. The company is chosen to analyze its marketing strategy and use of new trends of marketing. The research in the form of questionnaire is done to find out whether or not is the advertising of the chosen company effective.
Marketing touches every aspect of our waking lives, from our very birth to our death. What is important to remember is that marketing is dynamic and not static. Organizations, whether for profit or not-for-profit, must adapt their marketing to changing internal and external environmental factors. Organizations that remain “static” in their marketing thinking are prone to failure, most especially within hypercompetitive environments. From whatever angle we look the action of marketing takes place. It is all around us, whether we see it or comprehend it. (Groucutt, Leadley and Forsyth 2004) Today, we can say that marketing is everywhere. It is concerned with identifying and meeting human and social needs. That is why people and organizations engage in a huge number of activities that could be called marketing, whether they do it intentionally or unintentionally. Marketing is considered as both ´art´ and ´science´ because there is unchangeable tension between formulated and the creative side. Nowadays, marketing enormously affects our everyday lives and it has become an irreplaceable ingredient to be successful and profitable. (Martin, Craig and Rekesh n.d.) Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customers relationships in ways that benefit the organization and its stakeholders. (American Marketing Association 2004) Marketing is the management process that seeks to maximize returns to shareholders by developing and implementing strategies to build relationships of trust with high-value customers and to create sustainable differential advantage. (Shewell 2009)
The marketing mix was suggested by McCarthy, who classified marketing activities as marketing mix tools into four board kinds, which he called the 4Ps of marketing: product, price, place, promotion. The four marketing mix elements were expanded to 7Ps by Boden, which had a more services focus. (Kotler 2009) Nurgundkar 2006 claims that service marketers have for a fairly long time been mentioning the nned for additional P´s to take into account the special nature of services marketing. This demand has led to the emergence of various alternative P’s. Presently the most widely accepted marketing structure contains 7 P’s. In addition to the four basic P’s mentioned earlier these are the tree special P’s for services:
People: refer to all people directly or indirectly involved in the consumption of service like employees or other consumers. An essential ingredient to any service provision is the use of appropriate staff and people. Recruiting the right staff and training them appropriately in the delivery of their service is essential if the organization wants to obtain a form of competitive advantage. Physical Evidence: Where is the service being delivered? Physical evidence is the element of the service mix which allows the consumer again to make judgment on the organization. If you walk into a restaurant your expectations are of a clean. Physical evidence relates to the environment in which the service is delivered and the tangibles that help to communicate and perform the service. It includes brochures, letterheads, business cards, reports, signage, internet presence, and equipment. Process: refers to systems used to assist the organization in delivering the service. Process is the delivery and operating systems of procedures, mechanisms, and flow of activities required for the consumption of services. Managing the process factor is essential due to the perishability of services which means the services cannot be inventoried, stored for reuse, or returned. (Kumar 2010)
Marketing communications is a management process through which an organization engages with its various audiences. Through an understanding of an audience’s preferred communication environments, organizations seek to develop and present messages for its indentified stakeholder groups, before evaluating and acting upon any responses. By conveying messages that are of significant value, audiences are encouraged to offer attitudinal, emotional and behavioral responses. (Fill 2009)
Shimp (2010) defines advertising as “a paid, mediated form of communication from an identifiable source, designed to persuade the receiver to take some action, now or in the future.” The American Marketing Association (2003) defines advertising as “any paid form of non-personal presentation and promotion of ideas, goods and services by and identified sponsor.” Both these definitions see advertising as a paid form which means it is a commercial transaction. Advertising is not aimed on a single individual but the messages are directed at a mass audience. It reaches people through a vast number of types of mass communication, such as newspaper, television or printed adverts. The company wishes to influence the potentional customer either presently or in the future. (Shimp 2010) Tellis (2004) in his book Effective Advertising: Understanding when, why and how advertising works says that: “Advertising is pervasive. Today, advertisers bombard consumers with appeals or reminders from the moment they wake up till the moment they fall asleep. Ads appear on news programes that consumers´ access, in the entertainment they seek, on billboards as they commute, on Internte sites as they surf the Web, and even in their classrooms and office space. Estimates of the number of ad messages that reach consumers vary from 100 to more than 1,000 a day. Thus ads greatly impinge on consumers´ awareness and have the potential of greatly affecting their thoughts, attitudes, feelings, and decisions.” Tellis further claims that despite a lot of people think advertising is just an accident of free economy and sense it as a thing that bothers them, in reality advertising is extremely important force for several reasons. The first reason is that advertising is a major means of competition among firms. “In a free market, firms constantly compete with each other for sales by offering consumers better quality or lower prices or both. Firms use brand names to represent a consistent level of quality at particular prices.” Tellis also says that firms use advertising as a way to communicate to consumers promptly and efficiently when a change in price or quality of their goods or services changes. The second reason is that advertising is used by firms to inform consumers about new or improved products. Over the years, the quality of life of consumers has raised rapidly, primarily because of the better goods and services available to consumers. J. Tellis says that firms nowadays challenge constant pressure of innovation and designing of new products. Advertising has become the best way for the firms to achieve this task and inform consumers of the innovations. The third reason is that advertising provides major support for media in many countries.It is very effective for firms to communicate to consumers via media such as broadcast TV, cable TV, newspapers, magazines and also the Internet. The advertisers pay media owners for displaying their ads. The ads then reach consumers either free or much below cost. The fourth reason is that advertising is a huge, constantly growing industry.
Guerilla Marketing distinguishes itself from other promotion tools by its surprise effect and it has become a very popular marketing strategy in current times. The name “Guerilla” originally describes a group that uses a violent approach to achieve the implementation of their beliefs and ideology. Their opponents are often a tremendous force consisting of more people and even of more resources such as weapons or money. The Guerilla fighter’s only advantage is the fact that only they know where and when they will strike. (Drüing and Fahrenhol 2007) Drüing and Fahrenhol (2007) further claim that Guerilla Marketing is a marketing strategy, nowadays predominantly used for the Marketing Mix “P” Promotion. It is a marketing strategy, which involves the consumer in the advertising experience. Guerilla Marketing campaigns display creative ideas dynamically with unconventional methods at places where advertising would be least expected. The aim is to irritate, fascinate, and animate the consumer. The surprise effect belongs to the root philosophy. It is advisable not to repeat a Guerilla action as it might not be surprising anymore, but rather annoying. Guerilla Marketing should stand out from the saturated advertising landscape by being fun and not bothersome. Classical marketing communication via TV commercials, Newspaper Ads, Radio Spots, and Direct Mail does not really excite the customer anymore. Guerrillas employ a wide assortment of marketing tactics to send cohesive messages to targeted clients. They use their Web sites, newsletter or zines, speeches, research and survey reports, presentation materials, proposals, endorsements, testimonials, references and even their letterhead and business. Each of your marketing approaches must support, reinforce, and cross-promote the others. Your goal is to imprint multiple, positive impressions on clients in your target markets. The right mix of marketing in unison will create an overall marketing impact that is more potent than the sum of its parts. (Levinson and McLaughlin 2011) Levinson (2007) in his book Guerrilla Marketing says that guerrilla Marketing simplifies the complexities and explains how entrepreneurs can use marketing to generate maximum profits from minimum investments. He further claims that guerilla marketing is not expensive, easy, common, wasteful, taught in marketing classes, found in standard textbooks, practiced by advertising agencies, or known to the majority of the companies competitors.
Enhanced technologies and innovative product development provide and ongoing barrage of new communications that join the ever-growing list of existing media transforming rapidly into old media. New media can be defined as media that are interactive and integrate computers with multimedia; they seem to greet us wherever we turn. Today’s new media continue to emerge as a function of digital technology, ranging from the now ubiquitous Internet, to mobile phones and online games. (Stafford and Faber 2005)
Viral marketing happens when content (video, picture, text) is created by an individual or company and is “spread” to others. “Going Viral” means creating a message designed to be forwarded again and again. Anyone who has ever used email has received viral messages. Most of us have also forwarded emails, which makes us part of Viral marketing. A Viral campaign begins with seeding. If a company creates a video it wants people to forward, it can choose from a variety of places where we can see it first. It can post the video on sites like YouTube or BoreMe. It can email it to people. It can also send it to Bloggers, website editors, and sports-themed websites. Or, it can advertise a mini company website that hosts the video. (Vered 2007) One of the coolest things about the Web is that when an idea takes off, it can propel a brander company to seemingly instant fame and fortune. For free. Whatever you call it—viral, buzz, word-of-mouse, or word-of-blog marketing—having other people tell your story drives action. One person sends it to another, then that person sends it to yet another, and on and on. With consumers showing increasing resistance to traditional forms of advertising such as TV or newspaper ads, marketers have turned to alternate strategies, including viral marketing. Viral marketing exploits existing social networks by encouraging customers to share product information with their friends. (Leskovec, Adamic, Huberman 2007)
Social networks are online communities of people who typically share a common interest or activity. They provide a variety of ways for users to interact with each other — blogs, e-mail, instant messaging, and newsfeeds which contain information about, or valuable to those in your network. They are powerful in their ability to facilitate communication. Examples of social networking sites include Facebook, and the professional networks, LinkedIn® and LabRoots. Users share opinions and make recommendations on social networking sites. It has been repeatedly shown that consumers seek others opinions when considering the purchase of products and services. (Red Bridge Marketing 2008) One of the most valuable aspects of social media from a marketer´s perspective is in building and maintaining a feedback loop. It is through this feedback loop – and your measurement of it – that you can learn where and how to influence the social conversations that are important to you. Of course, getting data is only part of the equation: doing something with it is where the real action is. (Evans 2008) Red Bridge marketing (2008) claims that social networking can be an element of numerous business initiatives, including: • Amplifying word-of-mouth marketing • Market research • Idea generation & new product development • Co-innovation • Customer service • Public relations • Employee communications • Reputation management Fox (2009) says that social networks are for networking of the old-fashioned, twentieth-century “meeting people to make new friends and get to know them better” variety. This means building relationships to attract new customers and increase purchases by existing customers. Social networks are specialized tools for helping the company meet people and maintain their relationships more easily; they automate much of the legwork of traditional networking. While they can be very useful, social networks still require basic steps like being friendly and meeting people. They help facilitate that process by amplifying the company’s ability to meet new people, find common interests and keep in touch. So unless the company is going to buy a bunch of advertisements on the network web sites, the way to use social networks successfully to market the company’s products is to “network”. All the social networking sites/systems/services offer some version of a “profile page” where you can share info about yourself. With millions of people sharing their personal characteristics and interests online trough such profile pages, the social networks are essentially huge databases of self-updating résumés. (“self-updating” is used because your contacts keep their own info current, and this is automatically available to you.) This means that social networks are great for contact management because they largely eliminate time-consuming “keeping in touch” tasks like sending update e-mails, sharing photos, updating, Rolodexes, and so on. (Fox 2009)
Being there will improve the company’s search engine rankings: A presence on a social network creates more links to company’s main web site, which creates higher search engine rankings and more traffic for the company’s web site.
Harris (2008) defines Internet Marketing as a marketing practice that online business owners are targeting to master because of the massive contribution that can bring to the business. When Internet marketing is taken within the context of web advertisement, then it is commonly being referred to as advertising on the web or marketing using the web platform. Internet Marketing compared to the traditional advertising is considerably more powerful, more robust, and far more effective because of the limitless geographic range that it can penetrate. Almost every person is cognizant of the Internet presence as such he is vell-educated about how to utilize the Internet. This is the same reason why online business owners are seeing the promising potentials of the Internet as a platform for business. (Harris 2008) According to Todaro (2007) advertising and its associate activities have been one of the most significant actions in the marketing industry in the last 50 years. In the early 1990s, the Internet made a warm entrance into the advertising world, appearing to be the little sister of traditional and significant advertisement channels (newspapers, billboards, and television). Nobody believed at that time that online advertising would produce such a direct impact into the market and affect the business performance of the traditional, multibillion dollar advertising channels.
According to M. Becker and J. Arnold (2010) the Mobile marketing is “a set of practices that enable organization to communicate and engage with their audience in an interactive and relevant manner trough any mobile device or network.” Prenzel (2009) defines Mobile marketing as “the activity, set of institution, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” In the last fine years we have sent the IT sector move its focus away from personal computing to mobile/wirless communications. Mobile phones have been gaining in popularity, and encroaching into the realms of PDAs and laptop computers. However, it is not just the popularity of mobile phones that has been so interesting to the marketer, but also the explosion of multimedia services. We have entered a new era – the ´all mobile´, era in which mobile phones do it all. Marketing has changed. (Michael and Salter 2006) M. Leppäniemi H. Karjaluot (2005) in their publication Int. J Mobile Communication claim that “Mobile advertising has the potential to be one of the most powerful one-to-one digital advertising mediums if utilized in the right manner. SMS trials across the world have shown the power of m-advertising in building direct one-to-one relationship. According to study published by Enpocket [20], one of the leading companies providing wireless marketing services, 94% of m-advertising messages are read by the recipient, 23% of people will forward it to a friend, and 15% of people will respond to the message in some fashion.”
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