E-Marketing Research Paper
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E-Marketing: The Effects of Network Research on Internationalization
As a tool that has only become prevalent in modern times, e-marketing has its roots in studies that date to being over half a century old. The suggestions of network research have matured e-marketing into a multi-million dollar industry.
An area of commerce that has benefited greatly from this is the internal aspect of a firm when looking into the process of internationalization. In this paper, we will analyze how developments in network research have influenced the e-marketing area of internationalization.
Network research is a discipline that promotes and contributes to many fields of study, from computer science to biology. It studies the way objects, groups and people link together in order to form bonds and associations. As a study that has consistently developed over the last decades, network research is also sometimes referred to as network analysis. Therefore, it is a science that can be used to analyze a variety of processes and the way in which changes occur over time. Such a variety of structured environments can include political, social, or economic (Wasserman et al., 1994). As scholars of different disciplines tried to solve experimental and theoretical problems, a common denominator ensued. No matter how distinctive the discipline was the network perspective was there to answer a wide range of problems. (Wasserman et al. 1994)
As internationalization can be developed utilizing public administration, sociology, and political science, and management skills, three streams of network research can be considered. These include (a) social network analysis, (b) policy change and the impact of networks on policy outcomes, and (c) public management networks (Berry et al., 2004) Because these areas of study is so wide, this paper will focus on the evolution of social network analysis and its importance.
It is widely accepted that in 1954, anthropologist Mitchell Barnes coined the term social network. (Wasserman et al., 1994) A year before, Jason Moreno introduced a methodological technique ge invented under the name sociogram (Moreno, 1953). It was an idea he had been working on since the 1930s. A sociogram is an illustration in which points are used to represent social units and lines are used to represent the relationship between them. This sociogram is still used today and has evolved into a method used as a probabilistic model of structural results. (Wasserman et al., 1994) Sociograms would soon be introduced to various analytic techniques, and later on mathematics. This gave legs to the development of sociometry.
In the following graphic of a sociogram, one can grasp onto the idea of how internationalization can borrow from e-marketing. Replace the circle with a person and the plus/minus with the emotion associated with a product. The use of e-marketing can allow for a person to associate positive or negative emotion with a product. The second circle can then witness this emotion and learn from it. This is why it is important to do the proper network research in order to understand how consumers will react to a product and it’s associations.
Sociometry can be defined as the study and measurement of patterns of interaction and how intense these interactions can affect the people who are experiencing it. Continuing Moreno’s application of Gestalt theory, psychologists Cartwright and Harary developed a process that showed consensus within subgroups being maintained all the while conflict between subgroups exists (Berry et al., 2004). This is directly relatable to the internationalization of firms as it means a new market must be approached differently even in the case where consensus, or domination of a current market exists.
The Internationalization Process
Internationalization is the process of making a product available to, and suitable for, the international market. It is a process that is becoming more frequent throughout various industries. This apparent need for exporting out of a domestic market is present due to market opportunity and potential growth. In other words, market size is one of the main determinants of internationalization. However, the potential for growth may not be worth the risks associated with the cost of market penetration. In this case, network research can help measure what is called the psychic distance (Beckermann, 1966) of the new market. In this case, psychic distance refers to the distance between the firm and the market. For instance, if the new market is geographically near to the original, domestic market, it does not necessarily mean that penetration will be accomplished with less effort. Even with geographic proximity, the political structure of the new market may differ greatly. As we have previously determined, network analysis aids in the study of economic, political and social structure.
As suitable research is performed, management can determine which type of branching out is appropriate for the subjected firm. Until now, we have only mentioned network analysis as a precedent for the marketing side of a firm. Consideration should also be attributed towards the purchasing side and production of a company. For instance, the network of suppliers within a given market can be more accessible in one versus another region. To realize why this is the case, and how to combat this issue, the ability to identify patterns of interaction, cliques, and small group dynamics is something that is of great importance (Berry et al, 2004).
When a firm decides to grow within the internationalization process, it must develop its brand awareness among new markets. This requires marketing platforms that can reach people on a local, national, regional, and international level. Until now, brochures, advertisement, events and promotion were the few ways companies could expand their reach. This is no longer the case. The growth of the many companies is now predicated on how they utilize the social networking model. Platforms such as the web, email, mobile (telephone and SMS), and digital television have capitalized on the augmentation of social networking. This has led to enhancements in the e-marketing segment that have allowed firms to explore many avenues towards their required publicity.
In recent times, it has become a recipe for success for companies to include the social networking aspect in their websites. Whereas message boards have existed for a while, the concept had not caught on with the general public, until very recently. Associating with social sites and networking sites such as Twitter, MySpace, Facebook and LinkedIn has enabled firms to gain vital insights on their desired publics, as users willingly provide intimate information. The ever-growing video streaming giant, Youtube, has seen many firms launch viral campaigns promoting products spanning across multiple industries, with the crucial possibility of immediate feedback. Blogging, and even more so, paid blogging, has become a standard method for raiding brand awareness and inducing trends. All of these tools have helped firms communicate their messages as well as gain knowledge about their targets’ likes, dislikes, wants, needs, lifestyle, occupation, marital status, along with a myriad of other types of information.
The process of internationalization depends on the firm’s ability to produce at a sufficient rate and create demand for their goods or services in a new market. This requires for a sound understanding of the group dynamics of particular subgroups. An example of a subgroup can be ‘parents without partners’. As traditional marketing methods would almost always involve a mass appeal approach, this could cause a problem in some countries where single parenting is a taboo. However, with the proper application of personalized e-marketing, this problem can be avoided. Since e-marketing creates customer orientation instead of supplier orientation, it is vital to understand the customers’ from a social network perspective.
E-marketing: An Advantage to Internationalization
In the above image, one can see the different channels and types of e-marketing. (Note: SMO stands for social media optimization, SEM stands for search engine marketing and CRM stands for Customer Relationship Management.) These activities can be helpful in reaching out to different segments as each audience has a preferred method of receiving information.
E-marketing uses the web as a platform that enables firms to identify with and establish a connection to social subgroups. In turn, E-marketing can create a change in both consumer and business behaviours. The ways it can benefit a firm can be described as follows. The most important change in the firm is the lowered expenditure on marketing as well as other transactions. (Watson et al., 2002) The communication between the firm and the consumer is more developed on both ends and it creates an opportunity for both sides to gain a better understanding of each other. Another advantage is the unproblematic accessibility of customers that normally would not usually be available due to geographical restrictions, a factor especially important in the case of internationalization.
On the other hand, the consumer is provided with a plethora of information that is considered more genuine in a form that is more comfortable for the receiver (consumer) as opposed to the sender (supplier). The possibility of customization of products to meet certain standards is another advantage that would otherwise not be available. (Watson et al., 2002) Lastly, human contact is no longer necessary as transactions can be completed electronically.
As internationalization occurs, it is important to consider the infrastructure of a country and its development. The network of marketing institutions available in some more advanced countries may not be available in others (Sharma and Dominguez, 1992). In the case where these marketing institutions exist the emphasis should be on researching the ways of reducing marketing costs. In countries where there are no developed marketing institutions the focus should be on self-help within the network of the aforementioned international e-marketing institutions.
As firms’ and industries’ persist with network analysis, new circulation arrangements will come into existence. The study of the change in consumer behaviour will require for change in design, production, and consumption of the good or service (Sheth et al., 2005). A move towards digitized goods and services, wherever possible, is recommended. Firms should be weary of the hazard that is the misunderstanding of social networking and how it affects e-marketing and e-marketing strategies. If there are not sufficient resources in order to perform the needed research, a partnership with those who have performed this research is crucial (Sheth et al., 2005).
Application and Individual Cases
This is an article posted by a representative of the social networking giant Facebook on February 8, 2008. It is a press release, which states that Facebook is now available in Spanish and will soon be available in many other languages in the coming months. Today, Facebook can be viewed in over 70 different languages. The reason Facebook has had such great success internationalizing their service is because it is in itself a great platform for e-marketing activities. It is a great proof for the importance of e-marketing activities of a firm in midst of the internationalization process. (Rush, 2008)
For three weeks, the beer producing company had launched a “Heineken Around the World” promotion based out of Shanghai. This was a contest where consumers and avid photographers would submit their photos to an online portal. The photos would be part of a collage in which only some would be chosen. This marketing campaign included charitable activity, with Heineken providing 2 yuans per photo used in their collage/ jigsaw puzzle. (Catty, 2009)
A promotion of this nature allows the executives and creative minds at Heineken choose the emotions associated with their brand. Instead of paying professional photographers for work, they outsourced the creative aspect of the campaign to the public, at a very low cost of zero dollars per photo. This method of communication seems to be beneficial for both parties as consumers feel like they are sharing a piece of themselves and that they are connecting with others. The company gets insights on their target market and gets the opportunity to surround their brand with the emotions and feelings they need.
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