Individual paper_Internet marketing_Hoffman

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Individual paper_Internet marketing_Hoffman

  1. 1. By embracing new rules of (Internet) marketing a firm can become truly customer oriented.The potential of corporate blogs as a tool to implement Implementing participative marketorientation Ann-Christin Hoffmann Magistratsvägen 55X, Lund Gim11aho@student.le.se 1
  2. 2. IntroductionIn current years, the internet has changed marketing profoundly. The world wide web has become an“enabler of a global marketplace, characterised by equal access to information about products,prices, and distribution” (Pires et al., 2006, p. 937) This development goes hand in hand with changesin the competitive environment: “Competitive advantage is more likely to be derived from marketingstrategies focused on consumers’ perceptions of value1 and embodied in supplementary benefitstargeted to them” (Pires et al., 2006, p. 937). With the increasing demand to distinguish less aboutphysical, tangible aspects and more about immaterial, intangible aspects (De Chernatony, Dall ’Olmo Riley, 1998), the brands2 enter the focus of attention. “The potential of brands to play a pivotalrole in a company’s value generation has been widely acknowledged (Aaker, 2002; Ind and Bejerke,2007; Kapferer, 2004; Keller, 2007)” (Burmann et. al, 2009, p. 113). Building and communicating thebrand, however, has changed. Web 2.03 and its interactive technologies such as blogs, socialnetworking and video-sharing sides have empowered customer to take an active role in delivering,accessing and sharing brand–related content (Chua, et al., 2010; Burmann, 2010). Christodoulides(2008 in: Arnohold, 2008, p.13) sees the “new age of branding shifting from a predominant emphasison top-down marketing communications to an emphasis on relationships: Instead of passiverecipients of marketing messages consumers had to be appreciated as equal partners in mutualvalue-building relationships with brands and joint creators of brand meaning.” This poses a newchallenge for companies. They need to understand how they can incorporate the empoweredcustomer and his brand- related content into brand management while at the same timesafeguarding their own purposes (e.g. boosting brand equity4, financial aims).Literature on customer orientation suggests that putting the customer at the strategic focus of acompany is linked to the enhancement of business profitability (Narver, Slater, 1990). Despite theextensive academic literature in this field, the concrete implementation of customer orientation inthe company has often been neglected. Moreove, only few sources examine the concept against thebackground of brand building (Nwankwo, 1995; Ind, Bjerke, 2007). Ind and Bjerke (2007) contributeto fill this gap with their participatory market orientation (PMO). They suggest that including the1 In this paper, value is understood as defined by the customer and co-created between the company and the customer.Value for the customer is unleashed ‘in –use’ of a product or service that enables him/her to reach a desired end-state. Thisunderstanding builds on the new service dominant logic developed by Vargo and Lusch (2004).2 “Referring to the identity based brand management approach [see below] a brand is understood in the following as abundle of benefits with specific characteristics (In terms of communications, customer service, packaging, technologicalinnovation, etc.) causing a sustainable differentiation regarding other bundles of benefits which meet the same basic needsfrom the perspectiveof relevant target groups” (Arnhold, 2008, p.2)3 Web 2.0 is an umbrella term for vehicles such as blogs, podcast sites, video and photo sharing sites and social networkingsites which support the communication, interaction and collaboration in the internet (Arnhold, 2008, p.5)4 Brand equity in this paper is refereing to Aakers (2004) definition: awareness, loyalty, perceived quality, associations 2
  3. 3. organization and customers equally in the brand building process can enhance brand equity. Theresearchers outline measures through which the concept is successfully executed in an organizationoffline. However, they do not provide the same insight in depth for the online environment. So it isnot clear which tools companies can use to implement customer orientation in Web 2.0. In thiscontext Arnhold (2010, p.1) examines “how brand-owning companies may involve consumers ininteractive programmes such as corporate blogs, brand communities and online challenges in orderto strengthen the consumers relationship to the brand.” As this is mostly examined under thegeneric term ‘user generated branding’, specific advantages and challenges associated with therespective tool underlying this concept are not in depth covered. This is, however, important forbrand managers as there still seams to be a gap between the potential of the Web 2.0 technologiesand the efficacy of its usage, which can partly be traced back to a lack of knowledge. The 2011 SocialMedia Marketing Industry Report e.g. found that 69% of the 3300 polled marketers wanted to learnmore about blogging. Therefore the purpose of this paper is to discuss the potential and challengesof blogs as a tool to implement customer orientation from a company’s perspective. Therefore,first the concept of customer orientation in a branding context is outlined. As a second step, themanagement approach ‘user generated branding’ (UGB) is introduced. As a third step, the twoconcepts are linked by examining the underlying research question. 3
  4. 4. Theoretical frameworkCustomer orientation and participative market orientationCustomer orientation is extensively discussed in the literature. It has been explained in various ways,often associated with different terms e.g. marketing concept and market orientation. Kohli andJaworski (1993, p. 53) describe the concept as “the organization wide generation of marketintelligence, dissemination of the intelligence across departments, and organization wideresponsiveness to it“. Narver and Slater (1995) see customer orientation as a facet of marketorientation besides competitor orientation and interfunctional coordination. They describe marketorientation (including customer orientation) as an organizational culture and a long-term focus thecompany assumes. “[…] The primary focus of a market orientation is on creating superior customervalue, which is based on knowledge derived from customer and competitor analyses” (Naver andSlater, 1995, p. 68). By constantly collecting information about customers and competitors thecompany engages in a learning process that improves its understanding of the latent and expressedcustomer needs. Sharing this gained knowledge throughout the organization and acting on it canprovide the company with a competitive advantage and an enhanced businessperformance/profitability (Narver and Slater, 1990). A point for criticism raised by marketingpractitioners and academics is that it is often no clearly distinguished between customer orientationand market orientation which frequently leads to an interchangeable application of the terms(Nwanko, 1995).5 However, all concepts share “the goal of putting customers at the center ofstrategic focus” (Nwanko, 1995, p.6 ).Ind and Bjerke (2007) see several limitations in the concept of market orientation as outlined byNaver and Slater: While market orientation has been linked to overall business performance, it hasnot been explicitly connected to brand building capability— i.e. seen as a source to build a strongbrand in terms of brand equity. Furthermore, the entire side of the concept’s implementation hasbeen neglected. Building on this criticism, they develop the concept of participatory marketorientation (PMO). It is defined as a “philosophy that aims at building brand capability and brandequity by involving employees, customers and other stakeholders in the development of the brand.”The central principle of PMO is the idea of entrainment i.e. the direct engagement of theorganization with its customers in ongoing dialogues and the belief in the value of participation.5 The core literature in the following paragraphs uses the term participative market orientation, with referenceto Narver and Slater (1995), neglecting, however, the aspect of competitor orientation. 4
  5. 5. Referring to Eric Raymond, they describe their approach connected to the ‘Bazaar model’ of a brand:“ A bazaar model approach to branding lets consumers, retailers, press and public take a peek behindthe scenes and have a say when decisions are made” (Mack,2004, in: Ind, Bjerke, 2007,p. 140).Thecustomer’s role herein is that of a “ natural partner in a collective process of product and branddevelopment” (Mack,2004, in: Ind, Bjerke, 2007,p. 140). Developing PMO in brand building requiresas a first step to carry out market intelligence in order to form an idea about the customer needs andto ‘bring the customer inside the organisation’. This should be achieved by getting “[…] genuinelyclose to customers, so that the acquisition of knowledge is direct and unmediated” (Ind, Bjerke,2004, p.141). As a second step people in the organization have to be involved in order to develop aresponse. It can be described as a process of ‘externally sensemaking’ by engaging in open andongoing dialogues with customers and ‘internally sense sharing’ between managers and employeesorganization wide. PMO thereby recognizes the importance of both the internal and external facet ofmarket orientation. “ […]the value of this is in building brand equity and delivering customerexperience”(Ind, Bjerke, 2007, p. 141)Another limitation Ind and Bjerke (2007) highlight is that the outlined marketing orientation modelsdo not cover how the organization can practically implement market orientation. In their PMOapproach they outline several measures through case studies in an offline context. With the conceptof user generated branding Arnhold (2010, p.1) examines “how brand-owning companies mayinvolve consumers in interactive programmes such as corporate blogs, brand communities and onlinechallenges in order to strengthen the consumers relationship to the brand”. Thus, she delivers atheoretical basis and possible tools to implement PMO in an online context.User generated branding“UGB can be defined as the strategic and operative management of brand related user-generatedcontent (UGC) to achieve brand goals. That is, UGB is understood as the handling of all kinds ofvoluntarily created and publicly distributed brand messages undertaken by non-marketers – fromoriginal user comments to reviews, ratings and remixes with corporate messages, to even full artisticwork. This UGC might represent both expression of customer complaint and brand fan dedication. Itmight be visualized as text, image, audio or video and distributed not only via Web2.0 platforms suchas blogs, review, video sharing and social networking sites, but also via mobile devices” (Arnold,2010, p.5). 5
  6. 6. UGB is rooted in the theoretical frame of identity based brand management (Burmann, 2010). This“[…] takes into account both the brand perception by external stakeholders – referred to as brandimage – and the self-reflection of a brand by internal stakeholders – called brand identity. Byconsidering the inside-out perspective as equally relevant to the outside-in perspective” thisapproach differs fundamentally from the preceding one-sided image-oriented models” (Burman,Hegner, Riley, 2010). Herein, it shares a dynamic two dimensional understanding of the brand thatimplicitly can also be found in Ind and Bjerke’s (2007) internal/external view of brand building inPMO. It combines the sales market perspective with internal resources and competences of theorganization.There are two key UGB approaches that can be distinguished: non-sponsored UGB can be defined asthe monitoring of naturally occurring unprompted brand related UGC and the incorporation of thewon insights by adapting operative brand management tools. On the other hand, brand managementmay actively stimulate brand related UGC through blogs, contests, selected fan contributions orother forms of campaigns. The management of this form of UGC is called sponsored UGB (Arnholt,2010). Sponsored user generated brand related content, if “promoted as symbols of open brandcommunication, highlighting the brand transparency and responsibility principles” (Burmann,2010,p.3), are found to be a very effective branding tool and for actively fostering consumer-brandrelation ship (Burmann, 2010). Hence, sponsored UGB seems to provide opportunities for a companyto genuinely become entrained with the customer, one of the fundamental criteria of participativemarket orientation. One such tool of sponsored UGB is a corporate blog. In the following, thepotential of corporate blogs as a tool to implement customer orientation from a company’sperspective will be examined. 6
  7. 7. The potential of corporate blogs as a tool to implement PMOWhat are corporate blogs and why are they relevant?“A blog is defined as a type of webpage usually displaying date-stamped entries in reversechronological order” (Gill, 2004; OECD, 2006a, in: OECD, 2007, p. 36). It is updated regularly and canconsist of text, images, audio, video, or a combination of them (OECD, 2007, p. 36). Corporate blogsadditionally are characterized by three criteria. “Firstly, they are usually maintained by individualswho post in an official or semiofficial capacity at a company (known as the corporate blogger); theblog content is explicitly or implicitly endorsed by that company and lastly, entries are posted by aperson perceived to be clearly affiliated with the company” (Chua, 2010, p. 2). In part corporateblogs overlap with brand communities; however a point of distinction for this paper is that brandcommunities can be rather understood as a market place for per-to-peer storytelling, whilecorporate blogs are more positioned as forums for customers to talk to the company (Arnhold,2010).Despite the enormous growth of corporate sites on social networks like Twitter and Facebook, blogsalso represent an important tool for companies: among the Fortune 500 firms about 23 % adoptedcorporate blogs in 2011, a number that has been growing since 2008. Especially in branding,corporate blogs provide two important advantages compared to social networks. Firstly, the latterhave predefined interfaces which limit the possibility for the corporate’s visual branding.Furthermore, corporate blogs provide a better format for extensive storytelling (i.e. sharing legendsfrom inside the organization) which presents an important “hook for brands to be understoodinternally and externally” (Yan, 2010, p. 693). In the following the advantages and limitationsassociated with corporate blogs as a tool for implementing PMO should be examined from acompany’s point of view.Getting close to the customerAs outlined in the theoretical framework an important basis for PMO is to gain genuine informationand acquire knowledge by learning about customer needs. Chua et al. (2010) argue that corporateblogs facilitate the company-customer knowledge exchange given their dialogical nature. They areeffective in obtaining direct access to customer groups for unmediated market research purposes(Barwise, Meehan, 2010) and thus help companies to develop a deeper understanding of theircustomers’ interests and concerns. Due to the fact that many blogs are anonymous, customers likelyprovide uncensored opinions and insights. Numerous customers of the Italian moped manufacturer 7
  8. 8. Vespa for example contribute with their product reviews on the blog to the company’sunderstanding of customer preferences (Singh et al., 2008). An important aspect for a successfullearning process is the existence of trusting and open customer-company relationships which PMOstresses as a crucial point in its approach (Ind, Bjerke, 2007) Corporate blogs have the capacity tobuild these relationships. An example of a corporate blog that practices radical disclosure to theircustomers is Zappos’ blog ‘Insight’ where the shoe fabricant shares everything from internal memosto e-mails. This openness has fostered strong bonds between customers and the company (Fournier,Averey, 2011). Furthermore, co-operate blogs establishing strong customer relations is by providingthem a platform to engage in the co-creation of the brand. Thus, “ they satisfy a need: the desire ofengagement with a brand they wish to be associated with, or to put it in Engeseth’s terms to feel‘one’ with the brand” (Yan,2011). Through their participation, customers identify with the brand andbecome involved. The deeper the resulting relationships are the more they will create opportunitiesfor acquiring knowledge, hence make the company more flexible in adapting to the customers’ needsand giving their brands greater relevance (Chua et al, 2010; Yan, 2011). “If the organization goesonline with these ideas in mind, then it is a modern sign of its market orientation: it becomes alearning organization, getting data from audiences directly, providing it with competitive advantage.”(Yan,2010, p. 692 ). An example for this provides Patagonia’s corporate blog. The brand is known as aproducer of apparel outdoor clothing and gear. On their blog, they feature customers’ stories of high-end adventure journeys. Thus, they not only enable customers to carry the company’s brand promisethrough to their personal experiences but at the same time allow the company to learn about thecustomers’ interests and new outdoor trends.Corporate blogs are also useful tools for revealing the thinking of the people behind the brands(Yan,2010). This corresponds to the ‘Bazaar model’ that is key in PMO. BBC’s ‘The editor’s blog’ forexample ‘aims to explain the editorial decisions and dilemmas faced by the teams running the BBC’snews service’. Weighing in these information customers then can decide how news should becovered. The Disney Parks Blog provides another example of how to take customers behind thescenes. It features posts about dance rehearsals, sneak peeks at new construction sites, interviewswith employees etc. Posts like this humanize a company and give the customer valuable insights(Singh, 2010).As PMO is a bi-dimensional approach with an internal and external perspective, after illustrating thecapacity of corporate blogs ‘to bring the customer inside the organisation’, now their potential forinternal response building will be examined. 8
  9. 9. Being responsiveAn important aspect of PMO in this context is to connect employees organization wide in order toallow ’internal sensesharing’ of customer insights. Corporate blogs leverage this process. Corporateblogs facilitate internal collaboration by allowing employees to share knowledge and experiences(Sing et al.,2008). South Western airlines’ blog for example features stories of employees talkingabout their job experiences, their customer encounters, company news etc. Thus, the blog serves asan important platform for internal brand management. The stories around the brand foster theemployee relationships and strengthen their knowledge about activities in other departments.Moreover, they help them to understand the brand and feel aligned to it (Yan, 2010, p. 693).Employees who are ‘living the brand’ are better able to deliver positive brand experiences tocustomers which is a vital prerequisite for creating brand equity (Ind, bjerke, 2007).Furthermore, by applying data filtering methods the blog becomes an efficient tool for internalknowledge management (Singh et al., 2010). Also important is that, blogs provide organizations theopportunity to quickly respond to customers’ comments on the page “while setting the expectationthat their opinion will result in a better product or brand in the long run” (Sing et al.,2008, p. 286).Starbucks, for example incorporates customer ideas in new product variants.ChallengesDespite the advantages corporate blogs provide as a tool for PMO in branding, they also entailchallenges. A major challenge that companies are facing is the considerable loss of control overbrand messages and brand meanings, although to a less extent than other mediums (Arnhold,2010)Customers are invited by such blogs to freely share brand related comments opinions andinterpretations. These, however, do not necessarily always overlap with the maketer’s concept of thebrand or are in favour of it.Connected to this is also the challenge of anonymity. While it might grant valuable insights on theone hand, it also makes it difficult for the marketers to assess the root of the problem and doesn’tallow a targeted response (Singh et al., 2008). 9
  10. 10. For some companies it can also become a challenge to maintain authenticity and transparency in theperception of the customer. An illustration of this provides the Wal-Mart blog scandal. “Wal-MartingAcross America,” was a blog that spread positive information about the retailer and was ostensiblycreated by a man and a woman traveling the country in an RV and staying in Wal-Mart parking. In2006 customers revealed it as a fake blog sponsored by the company and organized by a publicrelations firm. Subsequently, the Wal-Mart brand suffered a severe reputation crisis instead ofexperiencing the intended image boost. Similar problems can arise if there is somebody else than theclaimed person behind the blog as in ‘ghostwritten’ CEO blogs for example (Founier, Averey, 200;Yan,2010).Summarizing the analysis of the potential of a corporate blog as a tool for implementing PMO it canbe said that they leverage both the external sensemaking and the internal sensesharing: They enableunfiltered market intelligence while offering a unique personal manner to connect with the customerand learn about him. Moreover, they can foster employees together and offer a convenient way tobuilt direct responses. Thus, corporate blogs can be seen as interactive tools that help to involveboth the customer and the employees in building the brand.ConclusionThe new rules of branding in Web 2.0 have migrated the relationship between the customer andcompany to an interactive level. Companies therefore face the challenge to encounter thesedevelopment and integrate the customer into its brand management. A customer focus in brandinghas become imperative. However, the literature so far delivered hardly any tools for companies toimplement customer orientation in branding in an online context.The purpose of this paper therefore was to discuss the potential and challenges of blogs as a tool toimplement customer orientation from a company’s perspective.Corporate blogs were thereby found to fulfill both external sensemaking and the internalsensesharing: On the one hand it connects the organization with its customer, making it morerelevant through better tailored offerings and eventually boosting brand equity. On the other hand italso fuels internal collaboration leading to supreme value generation. Thus, corporate blogs can beseen as interactive tools that help to involve both the customer and the employees in building thebrand. Nevertheless, also the challenges have to be taken into account with one of the biggest beingto establish a transparent and authentic dialogue with the customer. 10
  11. 11. By analyzing the underlying purpose the paper made a contribution to the current PMO literature byadding a concrete tool for companies to become more customer orientated in the online context.Moreover, the insights gained are valuable with regard to closing the current knowledge gap ofbrand managers who want to learn more about the potential and implications of blogging. Small andmedium enterprises’ benefit especially from the analysis as they can harness corporate blogs as arelatively inexpensive tool for enhancing their customer orientation in branding and thus becomemore competitive against big companies with higher media budgets. A limitation of this paper is thatthe role of UGB programs in strengthening a brand ’ s organizational interaction capability is stillrelatively uninvestigated which points out a field for further research. 11
  12. 12. BibliographyLiteratureArnhold, U. (2010). User generated branding: integrating user generated content into brand management (1st ed.). Wiesbaden: Gabler Verlag.OECD (2007). Participative web and user-created content. Web 2.0, Wikis and social networks. France: OECD Publications.Journal ArticlesBarwise, P., Meehan, S. (2010). The one thing you must get right when building a brand. Harvard Business Review, 88(12), 80-84.Burmann, C. (2010). A call for user generated branding. Journal of Brand Management 18, 1-4.Burmann, C., Hegner, S., Riley, N. (2009). Towards an identity based branding. Marketing Theory 9(1), 113-118.Christodoulides, G. (2009). Branding in the post-internet era. Marketing Theory, 9(1), 141-144.Chua, A., Parackal, M., Deans, K.R. (2010). Conceptualising co-creation of value via corporate blogs: A proposed framework. International Journal of the Computer, the Internet and Management, 18 (1), 1-8.de Chernatony , L . , Dall ’ Olmo Riley , F . ( 1998 ). Defining a “ Brand ”: Beyond the literature with experts ’ interpretations , Journal of Marketing Management , 14 , 417 – 443 .Fournier,S. , Avery, J. (2011).The uninvited brand. Business Horizons, 54, 193—207.Ind, N., Bjerke, R. (2007). The concept of participatory market orientation: An organization-wide approach to enhancing brand equity. Journal of Brand management 15(2), p.135-145.Jaworski, B., Kohli, K. (1993). Market Orientation: Antecedents and Consequences. The Journal of Marketing, 57(3), 53-70.Joško Brakus,J, Schmitt B., Zarantonello, L. (2009). Brand Experience: What Is It? How Is It Measured?Does It Affect Loyalty? Journal of Marketing, 73(3),52-68.Narver J., Slater, S. (1990). The Effect of Market Orientation on Business Profitability. Journal of Marketing, 54, 20-35. 12
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