PART A

Introduction Part A of this assignment poses questions that are particularly relevant to the state of marketing today especially how the rapid pace of change in communications technologies has affected both marketers and consumers. I will seek to address these questions by first juxtaposing mass communications (masscom) and direct communications tools, looking at how these tools have been influenced by the evolution in various mediums of transmission, and how this has lead to a marked decrease in the effectiveness of masscom tools. An assessment on contemporary challenges and opportunities for marketers will follow.

Key Differences Between Mass and Direct Communications

Mass Communications Refers to the transmission of messages to a large group of undifferentiated individuals (Thompson, 1995). Direct Communications Involves the transmission of messages including a specific callto-action to identified individuals that comprise a market segment, which are often identified via the use of a database (Bauer & Miglautsch, 2006). Direct mail, telemarketing, personal selling, and customer relationship management. Also, the availability of massive consumer databases and the pervasiveness of the Internet and mobile connectivity through cellular phones has given rise to the prominence of interactive media. Interactivity enables consumers to choose how and when to receive messages, giving rise to pull marketing (Bouti, 1996). Also, feedback is usually available either directly or indirectly. Consumers become a medium of transmission, and are also able to modify messages (Ozuem, Howell, & Lancaster, 2008) Direct Communications (cont.)

General Descriptions

Examples of Tools

Outdoor advertising e.g. billboards, radio, television, newspapers and cinema. Also, event or celebrity sponsorship, public relations and sales promotions.

Common Traits

Recipient or consumer feedback is not generally required (McQuail, 2005). Messages are simply pushed to consumers. They do not participate in the distribution or evolution of the marketing message.

Mass Communications (cont.)

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Channels

Few, and which tend to be controlled by unreachable gatekeepers e.g. media conglomerates (Chaffee & Metzger, 2001)

Many, and which are controlled by a diversity of owners ranging from media companies to consumers themselves (Chaffee & Metzger, 2001)

Communications tools have evolved in response to the various mediums of transmission available, in particular from the dominance of analogue transmissions to the digital age of today. The availability and dominance of each medium at different times in history and in different geographical locations today changes the way consumers interact with each other and with marketers and their messages (Ozuem, Howell, & Lancaster, 2008) (Chaffee & Metzger, 2001). Mass communications tools were designed on the basis of economies of scale, on the ability to reach a large audience. Unfortunately the information carried in marketing messages cannot be treated in the same manner. The value of the information contained within marketing messages is inherently qualitative not quantitative and with the advent of digital transmissions information should no longer be disseminated on the basis of economies of scale (Bouti, 1996). In 1997 during the early days of the consumer Internet John A Deighton, Harvard Business School Professor of Business Administration, went so far as to state that The logic of direct marketing has become for industries from airlines to financial services to computer manufacturers the logic of all marketing. (Deighton & Glazer, Editorial, 1997)

How Mass Communications Tools Lost Their Effectiveness [1083 wds] Too Much Irrelevant Information As consumers today we are bombarded with a deluge of both electronic and conventional mail on a scale never before experienced (Wind, 2009). Ninety-seven percent of the estimated 200 billion email messages sent daily are spam and traditional junk mail still amounts to at least 100 billion pages a year. We are exposed to an estimated 5,000 marketing messages a day and as this number grows messages that are communicated en mass get lost or ignored as we become immune (Taylor, 2007).
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Changes in Consumer Behaviour and Expectations Today we are able to exercise control over incoming communication channels (CMO Council, 2009) by choosing to change channels and tune out messages completely. We prefer to choose when, where and how messages are delivered to us (Ozuem, Howell, & Lancaster, 2008). We would rather opt-in to a selective range of information that we are interested in than waste time having to opt-out of a deluge of annoying communications. Our time is valuable and given the immensity of choice available we expect to be delivered only information that is pertinent to our interests. Fail to do this and we will be happy to punish by defecting to brands that pay attention to our needs and interests. We are also less interested in product endorsement by celebrities and more interested in seeking product information and endorsements from trusted social networks (Marken, 2009). Increasing Consumer Popularity of New Communications Channels Offering Better Cost Efficiency and Measurability The Internet reached 50 million users within 5 years, a feat that took radio 38 years and television 13 years (Largrosen, 2005) to achieve. This new channel gave marketers alternatives offering better cost efficiency and measurability, and the opportunity for direct, two-way communication with consumers. In many markets online ad spend is fast approaching or about to exceed ad spend for television and newspaper. In H1-2009 online ad spend in the UK had already exceeded ad spend on television, a transition almost entirely driven by the attraction of more cost effective alternatives offering better accountability (Charles, 2009). In the example below we look at masscoms dominant model, the 30 second television commercial (Wind, 2009).

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Figure 1: Average Cost (US$) Per Viewer for 30 Second Superbowl Ad Slots Data compiled from (Abramovich, 2007) (MSNBC, 2008) and (Wikipedia, 2009)

Figure 1 above shows that the average cost per viewer for 30 second slots during Americas most watch television broadcast, the Super Bowl, was only US$0.028 last year. However, given the increasing need for accountability for ad spend, most marketers would not be able to allocate or justify the US$3.1 million broadcaster CBS is demanding for a slot during the 2010 Super Bowl (Smith, 2009). Masscoms shotgun approach has made it difficult to quantify the impact of such expenditure. How many people changed the channel during the Super Bowls ad break? And of those that watched the ad, how many actually acted on it? Significantly cheaper alternatives have become available that enable marketers to reach out to large targeted segments of consumers, and gauge the return on their marketing spend in real time. In Figure 2 below we see that I can display a rich media or video advertisement 280 million times1 to consumers in the United States specifically interested in Super Bowl related searches or webpages. I can also do this at zero cost until a consumer decides they are interested in my message and clicks on my ad at which point, according to Google Adwords shown in Table 1 below, I would pay an average of US$0.61 per click.

PV denotes a pageview. Google records a pageview every time a webpage is loaded. Disregarding the ad rotations within slots on a page, you can assume a

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Figure 2: Screenshot from Google Ad Planner Querying Audience Size for Keyword Super Bowl and Filtered For Web Pages Shown Only in the United States and Only With Ad Slots for Rich Media or Video Ads.2

Global Monthly Searches Google Adword Keyword superbowl 3,350,000 super bowl 2,740,000 nfl draft 1,500,000 superbowl 2009 673,000 nfl football 550,000 super bowl 2009 450,000 superbowl commercials 450,000 nfl schedule 450,000 super bowl commercials 301,000 nfl picks 301,000 Average CPC US$ Estimated Avg. CPC (US$) 0.84 0.86 0.11 0.05 0.90 - 1.26 0.65 0.80 0.62 0.61

Table 1: Summary Search Volumes and Estimated Cost per Click (US$) for Super Bowl and Related Keywords 3

With television, radio, newspapers, and outdoor advertising marketers must rely on third party auditing services such as Nielsen Ratings, which are only able to report estimates based on small samples of large viewer, reader or other populations. Given the cost of masscom advertising the inaccuracy of these measurements has long drawn criticism (Carter & Elliot, 2009) (Marken, 2009).

2

Google Ad Planner is freely available and upon registration the same query can be run to extract the same or similar results. The 280 million PV count was obtained on 16 December 2009 for a query for keyword Super Bowl and filtered For web pages shown only in the United States and only with ad slots for rich media or video ads. 3 Google Adwords is freely available and upon registration the same query can be run to generate the same or similar results. A screenshot of the Google Adwords results page from which Table 1 has been extracted is provided in the Appendices.

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Inability to Sustain Satisfaction Levels and Retain Consumers The digital age has made it difficult for masscom to keep our interest. As the way we communicate with each other and the way we access information has changed, masscom has had trouble finding its place on these new communication channels (Deighton & Kornfeld, 2007). If one of marketings key goals is to maintain our satisfaction and retain us as consumers it is direct marketing techniques, and not masscomm, that has the better chance of reversing any decline in satisfaction over time (Bendall-Lyon & Powers, 2003). Masscoms loss of effectiveness has shifted the marketers focus towards direct communications giving rise to such concepts as mass customization (Davis, 1987) (Pine, 1993), interactive marketing (Blattberg & Deighton, 1991), consumer segments of one (Kara & Kaynak, 1997), permission marketing (Taylor, 2007), precision marketing, and individualised relationship marketing among others. Many of the opportunities and challenges presented by direct communications and associated tools are a result of a shift in power from corporations as brand owners towards consumers and their channels, and a reduction in the bargaining power and authority of brands (Deighton & Kornfeld, 2007) (Wind, 2009).

CHALLENGES Delivering Contextual and Relevant Messages to Consumers As consumers today we demand timely and contextual messages, and clearly value opt-in, personal communications. We wanted to be treated as individuals (Simmons, 2008) and customising communication is not enough. Marketers need to figure out how to listen to us (Marken, 2009) so that they can deliver individualised offers, deals and value-added services with military precision at the right place, at the most appropriate time, and through the most appropriate format or channel (CMO Council, Nov, 2009). Failure to do so can have dire consequences. As postmodern consumers we avoid commitment and are happy to switch brands or products without expectations of loyalty to a brand or product (Brown, 1995) (Brown, Vote, Vote, Vote for Philip Kotler, 2002) (Dawes & Brown, 2000). In a recent poll by Chief Marketing Officer Council (CMO) it was found that an inability to connect with consumers with relevant
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information and in a context suited to the environment and time contributed directly to churn and disconnection rates. In fact, of 91% of consumers who unsubscribe from email lists 46% will defect because information received is irrelevant (CMO Council, 2009). To stay relevant and valued marketers need to adapt their communications to suit environments that we have socially and culturally constructed (Ozuem, Howell, & Lancaster, 2008). We simply are not receptive to irrelevant communications.

Loss of Control Over Information and Increased Competition In digital marketing domains such as the Internet and the mobile (telephone) messaging, marketing and selling do not flow uni-directionally from marketers to us (Ozuem, Howell, & Lancaster, 2008). We do not conform to social conventions of acceptable behavior as we can alter, rebuke, parody, reproach, reinforce and otherwise exercise greater control over your marketing messages as we are now active participants of the marketing process (Deighton & Kornfeld, 2007). We are able to provide and obtain this information to and from the marketplace anywhere in real time forcing marketers to ensure the accuracy and transparency of their marketing information including the competitiveness of their pricing. Marketers have lost their traditional chain of command over their marketing and sales information (Marken, 2009). The interactive, direct communication tools that empowers us as consumers forces marketers to acknowledge that control is now a collaborative effort between them and us (Bouti, 1996). Failure to do so and marketers will have forgotten that while the Internet has given them access to a global marketplace, it also brings with it global competition (Largrosen, 2005) and we can turn to alternative brands and products at the speed of the Internet. Lack of Real Time Data and Getting Organisational Buy-in To give us timely, contextual and accurate marketing messages marketers need to know who we are, what we want to see, and how and when we want to transact. The rich profiling picture that these variables present may change from moment to moment so access to real time data and analytics is needed. In addition to the
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Internet itself as a source of data, buy-in from different business units is needed to ensure that customer, market and translation related data is available and that it is used appropriately (Bose, 2009). Unfortunately there are still huge gaps between departmental functions and much of this valuable data remains siloed (Wind, 2009). Many marketers who responded to the CMO survey mentioned above admit that their lack of access to this data critically limited their ability to retain customers, and increase customer profitability and lifetime value (CMO Council, Nov, 2009). Only 15% of marketers believed their company integrated customer data sources across their organisation well. Analytics can provide significant new insights when marketing and finance perspectives are combined (Farris, Bendle, Pfeifer, & Reibenstein, 2006), and by combining insights from strategy and marketing (Day, 1990). Regulations and Privacy Information The ability to gather data from a plethora of consumer touch points and external sources may often lead to so much data on customers and transactions that privacy disclosure may happen inadvertently (Bose, 2009). To minimise legal liability companies must be aware of when such privacy disclosures may occur especially when such disclosure occurs unintentionally to unauthorised third parties. While much of data collection on the Internet is unregulated as consumers we are quick to distrust sites with known privacy issues such as Facebooks 2007 launch of Beacon (Blodget, 2007) or with incidences of data loss such as CardSystems Ltds 2005 loss of 40 million credit card account details which resulted in the mass exit of its banking clientele (Privacy Rights Clearinghouse, 2009). In the US alone marketers will need to play an increasing role in protecting our rights to privacy via dozens of proposed federal data security bills, some of which (the Personal Data Privacy and Security Act, and the Data Breach Notification Act) may come into effect in 2010.

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Change in Hierarchical Structure of Marketing to Consumers As companies began to market their products on the Net, the hierarchical structures of the traditional buying process, where consumers order their products via intermediaries has changed. Today we can bypass intermediaries such as distributors to gain direct access to the actual producers of goods and services. Many marketers who acted as intermediaries in the sales cycle now need to find new ways to add value to their roles and services (Ozuem, Howell, & Lancaster, 2008) at the risk of becoming irrelevant.

OPPORTUNITIES Use Digital Media and the Marketspace to Learn More About Your Consumers Most marketers would agree that they are not realising the revenue potential of current customers and that they would like to better understand them in an effort to do so. Fortunately today we leave digital fingerprints of who we are, our likes and dislikes, location, timing and activities (Marken, 2009) enabling marketers to hit a single consumer in a group with marketing messages with little or no collateral damage. The digital marketspace enables new levels of data mining of textual comments from survey research, emails and web server logs (Bose, 2009) to aid in the gathering, analysis and understanding of consumer interaction with products, companies and channels (Phippen, 2004). The same communications mediums marketers use to transmit their messages can be used simultaneously to listen to and gather feedback from consumers. The more you know about your customers the better their reaction and response to marketing campaigns and relationship building programs and consequently the better the experience of engagement and retention (CMO Council, 2009). The more marketers know about their existing customers, the more opportunities they may discover to fully commercialize yet unexploited potential such as the development of new products or functions.

Increased Reach and Interaction The same digital marketspace allows us to participate in distal and proximal transactions at any time beyond the limitations of a physical marketplace.

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Ubiquitously connected, we are technically always available to be communicated with at every waking moment giving marketers more time and reach to interact with us (Deighton & Kornfeld, Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers, 2007). New interactive communications tools allow marketers to avoid the one-messagesuits-all trap (narrowcasting) to tailor information to each of us in multiple ways using a combination of sound, image and text and thus allows us to pick and choose (broadcatching) the styles of what maybe the same message that we wish to receive (Bouti, 1996). It also gives you the opportunity to allow us to customize your products and services ourselves (Balasubramanian, 2001) and to interact with you in variety of other meaningful ways such as providing feedback (Marcolin, 2005). Through social media marketers have the most undiluted, most direct and most cost-effective means of learning about us (Marken, 2009), and through digital media in general marketers have the potential to form long, lasting relationships with us (Ozuem, Howell, & Lancaster, 2008). Produce Culture, Encourage Brand Evangelism The speed with which ideas flow on digital communications networks creates new opportunities for marketers to contribute to, even create, our culture (Deighton & Kornfeld, Digital Interactivity: Unanticipated Consequences for Markets, Marketing, and Consumers, 2007). Our evolution from the consumption of food to concepts (Ariely & Norton, 2009) is supported by the digital media environment that allows us to spread and share ideas we like. These ideas may be your marketing messages but because they come from us our peers do not feel they are receiving advertising messages (Rushkoff, 1996). A widely distributed network of consumer brand ambassadors may also be cheaper than the single celebrity spokesperson paid to endorse your brand (Swartz, 1996). Once we are active participants in the distribution of marketing messages marketers may, in addition to owning the brand, also end up owning the customer (Billings, 2009). At this point marketers find themselves in a unique position of being able to create new segments of consumers wanting to differentiate themselves through
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consumption where sharing within each clique is key (Gruen, 2005) (Cova, 2007) (Marken, 2009).

CONCLUSION Staying relevant, valued and connected to consumers has become the number one challenge for marketers today and this is absolutely impossible to do using mass communications, which fails in its ability to provide two-way communication between the marketer and the consumer. Digital, interactive media is leading the charge for direct communications in its ability to target individual consumers effectively, to engage hard-to-reach younger audiences, to deliver fast turnaround, affordable results, to forge direct and interactive relationships with consumers, and to provide a degree of measurability previously unheard of (Billings, 2009). Today, marketers must succeed by correctly exploiting time-sensitive, locationspecific information specific to smaller and smaller groups or even individual consumers. However, in a technological age that has made change the norm marketers must perform this function with a process of adaptive experimentation, learning on-the-go, and keeping pace with consumers who now have immediate access to a global wealth of products, information and choices.

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PART B Background For Part B I will use the example of Online Antivirus Sdn Bhd (OASB), the sole authorised distributor of Kaspersky anti-virus and Internet security products online for the retail markets of Brunei, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. Information on the companys existing marketing activities was obtained from discussions with Mok Chee Yong, Sales Director of OASB, and from the Internet. OASB is based in Kuala Lumpur, Malaysia. In addition to OASB, Kaspersky Lab (the ultimate holding company based in Moscow, Russia) appoints agents in each country solely to market and distribute boxed versions of the same products off-theshelf. However, OASB is charged with overseeing product distribution online across all Southeast-Asian markets and also the overall marketing of Kasperskys products in Malaysia. Particular interest is given to OASB because it entered a market largely dominated by Internet security solutions vendors such as Norton and McAfee. Although Kaspersky was in the business for a long time as a supplier of the technologies now used by its competitors, Kaspersky had not licensed its solutions for sale directly to the public. While OASB has gained some ground in terms of market share in Malaysia, it continues to face major challenges which include building brand recognition and recall, ensuring customers renew their annual subscriptions, and also marketing to consumers who are not particularly aware of the need for anti-virus systems and who may be new to the Internet. In addition, if OASB succeeds in getting consumers to purchase and renew licenses online it must be careful not to lose its position as an online distributor if Kaspersky should later choose to discontinue its relationship with OASB and instead, manage online sales itself. The following integrated communications strategy is recommended on the basis of overcoming these challenges and what would currently be practicable for OASB. It focuses on increasing direct interaction with the consumer marketspace, securing relationships with customers, and the use of buzz marketing.
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Messaging Kaspersky does not have an exciting, easy-to-recall message that consumers can identify its products with. Its products are licensed annually at nearly 50% of the price of its competitors (RM69 versus RM139 for Norton and RM119 for McAfee). Where Norton offers Confidence in a Connected World and McAfee offers Ultimate Protection Software for Your PC, Kaspersky offers Antivirus Software. While this does make clear what is on offer, in such a highly competitive market consumers may form their own perception of OASBs products being cheap and not as good as alternatives. A catchier more complete message, and possibly one created by the consumer marketspace is likely to offer better perception and recall. OASB should create a regional competition via a dedicated online forum or microsite where consumers can submit suggestions for a new slogan. To ensure more consumers actually experience the product, participants should be required to download and install a free three-month trial prior to entering the competition. To encourage participation two levels of prizes should be offered. This could include a lifetime license with full upgrades and support to the regional winner, whose catchphrase would then go into the running for a global prize of a trip for two to Kasperskys headquarters in Moscow. This approach would be extremely cost effective. A lifetime license might only cost RM69 x 30 years or RM2070, and the global prize could be capped at RM20,000. In addition to being cheaper than contracting a copywriting agency, coming up with the catchphrase would generate attention and interest among online communities of new users.

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Public Relations Kaspersky recently contracted martial arts actor Jacky Chan to be its product representative and spokesperson along with Eugene Kaspersky, Founder and CEO. Both have undertaken event appearances across Southeast Asia and online and television advertisements. The use of a Hollywood superstar will no doubt help draw attention to the product and the use of Eugenes image will help increase credibility among consumers. Neither of Kasperskys main competitors have personalities behind their products. However, the use of Jacky Chan has fallen short in two important areas. He is not as popular in Indonesia, Thailand and the Philippines as he is in other parts of Asia. Secondly, the use of his quote I choose Kaspersky misses out on a seemingly obvious opportunity to relate the products antivirus fighting capabilities to his own with more convincing quotations such as Knock-out Internet Threats! or The best self-defence online. In addition to Jacky Chan whose image operates better at the global level, country-specific celebrities should be employed to become spokespeople and reach out to consumers in individual territories. Advertising Through Online-Community Building To increase reach into the community, social networks (using Facebook, Twitter and MySpace) should be created using the online personalities of Jacky and Eugene together. These online properties could give consumers the chance to interact directly with Jacky and Eugene or their proxies on the topic of Internet security. Ghost writers can be employed to maintain regular updates on each site and stimulate discussion among readers. This will create a direct, two-way flow of communication between the company and consumers. As the network grows, members can be mined for a wealth of additional information such as demographics, product or campaign likes and dislikes. This information can be used to tailor email communications based on each members preferences, especially for license
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renewal. Antivirus solutions usually comprise multiple products, and a consumer may not require the use of all of them. If these preferences were available, subsequent licenses could be offered at a lower price and without the unused functions. The issue of privacy concerns will be minimised as the data is gathered via social networking sites under which consumers must opt-in to join Kaspersky pages. Members can be encouraged to recruit new members through simple, regular competitions or even through the creation of Kaspersky-related online games which are played with among friends. The space can also be used to immediately disseminate product or event related information. As the number of followers grows, these sites will offer an increasingly cost effective means of advertising. On-the-Ground Events and Promotions Given that many consumers in Malaysia are new to the Internet and do not fully appreciate the need for online security solutions, OASB must meet these consumers where they are most comfortable, offline. This could involve the setting-up of short workshops in schools, universities, and community centres offering free introductions to the Internet. Each workshop could comprise a one-hour introduction to the Internet and basic activities such as setting up an email account, conducting Internet searches and of course, overcoming Internet threats using Kaspersky. Participants could also be encouraged to set-up Facebook, Twitter or MySpace accounts starting with membership of Kasperskys sites. These workshops could be run by a mobile team who would travel around the country in a dedicated promotional vehicle. To create a sense of community and a sense of festivity, country-specific celebrities could appear at random workshops to meet potential new users. If OASB is able to execute the above changes it will take on a critical role of managing interactions, both online and offline, with the consumer marketplace in Southeast Asia. This would add significant value to OASB as a distributor to Kaspersky, which would lose access to this consumer network if the relationship ended.

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