Electronic Business: Concepts, Methodologies, Tools, and Applications (4-Volumes) P150 ppsx

Chapter 5.3The Effects of Digital Marketing on Customer Relationships Marko Merisavo Helsinki School of Economics, Finland ABSTRACT Viewing the use of digital channels in marketing from

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APIEMS2004 Web page breakdown

1 http://www.math au/apiems2004/

2 www.maths.qut.e ages/spacer.gif

3 www.maths.qut.e ges/geninfo.GIF

4 www.maths.qut.e kground_new.png

5 www.maths.qut.e 2004/mm_menu.js

6 www.maths.qut.e ges/sciprog.GIF

7 www.maths.qut.e ges/accprog.GIF

8 www.maths.qut.e s/Abstracts.GIF

9 www.maths.qut.e es/regaccom.GIF

10 www.maths.qut.e s/sponexhib.GIF

11 www.maths.qut.e images/comm.GIF

12 www.maths.qut.e ages/title2.png

13 www.maths.qut.e s/asor_logo.png

14 www.maths.qut.e es/qut_logo.png

15 www.maths.qut.e ges/address.png

16 www.maths.qut.e s_rightside.png

17 www.maths.qut.e r2_pictures.png

Measured Components

Item Type

Start Offset

DNS Connect Redirect First Byte Content Bytes Sec Sec Sec Sec DL Sec Downloaded

1 Base Page - 1.05 0.35 * 0.35 0.77 12,076

2 image/gif 2.59 * 0.34 * 0.37 * 43

3 image/gif 3.31 * 0.4 * 0.35 * 1584

5

application/x-javascript 2.58 * 0.34 * 0.35 1.42 30737

6 image/gif 4.09 * 0.34 * 0.35 * 1281

7 image/gif 4.57 * 0.36 * 0.36 * 1870

8 image/gif 4.7 * 0.34 * 0.37 * 1337

Figure 3 Instant measurement of www.maths.qut.edu.au/apiems2004/ from Frankfurt DTAG performed

by MyKeynote on 23-Jul-04 2:26:14 PM EDT (User: Demo)

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APIEMS2004 Web page breakdown

0 http://www.maths.qut.edu.au/apiems2004/ 131.181.53.23 1512 12076

1 http://www.maths.qut.edu.au/apiems2004/mm_menu.js 131.181.53.23 1513 30737

2 http://www.maths.qut.edu.au/apiems2004/images/background_new.png 131.181.53.23 1512 27400

3 http://www.maths.qut.edu.au/apiems2004/images/title2.png 131.181.53.23 1513 164625

4 http://www.maths.qut.edu.au/apiems2004/images/mmmenu6_159x18_up.gif 131.181.53.23 1512 261

10 http://www.maths.qut.edu.au/apiems2004/images/spacer.gif 131.181.53.23 1512 43

11 http://www.maths.qut.edu.au/apiems2004/images/geninfo.GIF 131.181.53.23 1512 1584

12 http://www.maths.qut.edu.au/apiems2004/images/sciprog.GIF 131.181.53.23 1512 1281

13 http://www.maths.qut.edu.au/apiems2004/images/accprog.GIF 131.181.53.23 1512 1870

14 http://www.maths.qut.edu.au/apiems2004/images/Abstracts.GIF 131.181.53.23 1512 1337

15 http://www.maths.qut.edu.au/apiems2004/images/regaccom.GIF 131.181.53.23 1512 1919

16 http://www.maths.qut.edu.au/apiems2004/images/sponexhib.GIF 131.181.53.23 1512 1638

17 http://www.maths.qut.edu.au/apiems2004/images/comm.GIF 131.181.53.23 1512 1420

18 http://www.maths.qut.edu.au/apiems2004/images/ver2_pictures.png 131.181.53.23 1512 537055

19 http://www.maths.qut.edu.au/apiems2004/images/ver2_pictures_rightside.png 131.181.53.23 1513 465578

20 http://www.maths.qut.edu.au/apiems2004/images/asor_logo.png 131.181.53.23 1512 32504

21 http://www.maths.qut.edu.au/apiems2004/images/qut_logo.png 131.181.53.23 1513 4167

22 http://www.maths.qut.edu.au/apiems2004/images/address.png 131.181.53.23 1513 41410

Measured Components Item Pkt

OK

Pkt NOK rtype ctype DL time

sec DNS DNS2 SYN CONNECT ACK2

GET FIRST INDEX CONTENT

x-javascript

Figure 4 Instant measurement of www.maths.qut.edu.au/apiems2004/ from Wroclaw WASK performed

by Wing on 23-Jul-04 20:15:46 Europe/Warsaw

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Transport protocols like TCP compute an

esti-mate of the current RTT on each connection, but

unfortunately, the results of such an estimation are

not available for the user (application program)

TCP uses an RTT estimate to determine how long

to wait for an acknowledgment before

retransmit-ting We developed exactly the same method as

one used by TCP, and RTT was estimated using

the technique based on the measurements of time

spacing between the SYN packet sent by the client

to the server and the ACK-SYN packet sent back

in the reply by the server This is a CONNECT

time as shown in Figure 1 Thanks to Wing

ser-vice, we can perform the same analysis as TCP

when estimates RTT

In order to estimate the average transfer rate

of the TCP connection, we measured time

spac-LQJEHWZHHQWKH¿UVWE\WHSDFNHWDQGWKHODVWE\WH

packet of the object received by the client using

that connection Transfer rate was calculated

by dividing a number of bytes transferred by

the amount of time taken to transfer them The

throughput measured is the amount of pure data

WUDI¿FDYDLODEOHDWWKHDSSOLFDWLRQOHYHOWKDWLV

IP, TCP and HTTP headers are not included into

the calculations

We monitored and traced the HTTP transac-tions that had been sent periodically by the IE client localized within our campus network during

20 weeks Each time, our Web client requested WKHVDPH¿OHIURPDIHZGR]HQ:HEVHUYHUVDOO over the world We chose to download the rfc1945 W[W¿OHWKDWZDVIRXQGLQVHYHUDO:HEVLWHV2XU chosen resource was large enough — it has an original size of 137,582 bytes — to estimate average transfer rate, and still was not too large

to overload Internet links and Web servers The target servers were found by the Google search engine Among a few hundred links found, we chose 209 direct links to rfc1945 document After preliminary tests, we decided to use, for further measurements, only 83 servers which were fully active during preliminary tests Wing was pro-grammed to download (and monitor the HTTP transaction and measure) the rfc1945 document from every server 10 times a day After 20 weeks

of measurements, we received the database with 65,428 Web transactions

We investigated the correlation between a connection’s RTT and transfer rate to examine whether shorter-RTT connections tend to transfer more data Based on the measurements that we

y = 46456x-0,8805

R2 = 0,881

100

1000

10000 Average transfer

24 27 33 37 40 41 43 44.

47 51 52 54 57 61 62 64.

69 71 72 74 77 78 81 87.

88 89 90 101 103 104 107 109.

110 111 114 117 123 124 125 126.

128 132 135 136 141 142 146 154.

158 160 161 163 164 166 167 168.

170 171 173 174 177 179 181 182.

184 187 188 191 192 193 199 200.

202 205 209.

Figure 5 Distribution of median values of average transfer rate vs RTT

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had analyzed so far, it was inconclusive to say that

we can show such tendency for individual

con-QHFWLRQVEXWZHFDQVKRZVSHFL¿FSHUIRUPDQFH

behavior in the sense of a global performance

FKDUDFWHULVWLFVIRXQGIRUWKHVSHFL¿FORFDWLRQRI

users in the Internet, such as in our case for the

Wroclaw University of Technology location The

presence of such characteristics can be discovered

when we plot a graph for the median values for

the average transfer rate vs RTT for all servers

in question across the period of 20 weeks Figure

5 shows such distribution of the median values

for the average transfer rate vs RTT in double

logarithmic scale for all servers in question across

the period of 20 weeks We obtained a power-law

behavior where the distribution of the average

transfer rate vs RTT can be described using

and D = -0.8805

PERIODIC FULL PAGE

MEASURE-MENTS — URL “MORTALITY”

STUDY

We are now just learning that the Web content is

very volatile Wing has been used in the study on

the reliability (availability) of Web servers and the

³PRUWDOLW\´RI85/VLQWKHVHQVHRIWKHLUGLVDS-pearance in time In our experiment, we wanted

to portray the statistics of the disappearance of measured URLs We have continued the measure-ments which were introduced in Section 5 for the next 27 weeks, collecting almost 150,000 Web transactions together These measurements have EHHQDQDO\]HGLQWKHFRQWH[WRIWKH³PRUWDOLW\´RI 85/V2XUPHDVXUHPHQWVGLVFRYHUHGWKH³PRUWDO-ity” process of URL links as presented in Figure

6 We determined the death-rate of measured URL links as -0.06 Only about 80% of URLs available

in the beginning of measurements were still valid

in the end of experiment

CONCLUSION

In this paper, we have presented the Wing In-ternet service, which can be used by a user to visualize and analyze how the target Web page is downloaded In instant measurement mode, Wing KHOSVWRLGHQWLI\LQHI¿FLHQWQHWZRUNXVDJHE\WKH browser and server and helps to tune applications DQG:HESDJHVWRXVHWKHQHWZRUNHI¿FLHQWO\7KLV

is done by precise data collection and exact

visual-y = -0 ,0 6 4 2 x + 1 0 0

R2 = 0 ,9 6 8 9

7 5

8 0

8 5

9 0

9 5

1 0 0

Day of o bs erv ation

Figure 6 URL “mortality” vs day of measurement

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Wing can be a good analysis tool for Web page

and network application developers

Wing can also be used in periodical

mea-surements We presented the results of two such

H[SHULPHQWV ,Q WKH ¿UVW VWXG\ WKH FROOHFWHG

data was employed in model building of Web

characteristics of WUT location We obtained

a power-law behavior where the distribution of

the transfer rate vs the round-trip time can be

with k = 46456 and D = -0.8805 In the second

H[SHULPHQWZHVWXGLHG85/³PRUWDOLW\´LVVXH

and determined URL death-rate

REFERENCES

Borzemski, L (2002) The impact of

cluster-based Web systems design on user-perceived

performance In P Isaias (Ed.), Proceedings of the

IADIS International Conference WWW/Internet

2002 (pp 642-647), Lisbon, Portugal Lisbon,

Portugal: IADIS Press

Borzemski, L., & Nowak, Z (2004a) WING:

A Web probing, visualization and performance

analysis service In Web Engineering: 4th

Interna-tional Conference, ICWE 2004, Munich Germany,

Lecture Notes in Computer Science, Vol 3140 (pp

601-602) Berlin Heidelberg: Springer-Verlag

Borzemski, L., & Nowak, Z (2004b) An empirical

study of Web quality: Measuring the Web from

Wroclaw University of Technology campus In M

Matera & S Comai (Eds.), Engineering Advanced

Web applications (pp 307-320) Princeton, NJ:

Rinton Press

Borzemski, L., & Zatwarnicki, K (2003) A

fuzzy adaptive request distribution algorithm

for cluster-based Web systems, In Proceedings

of Eleventh EUROMICRO Conference on

Paral-lel, Distributed and Network-based Processing

(pp 119-126), Genova, Italy Los Alamitos: IEEE

Jacobson, V (1994) TCPdump, The protocol packet capture and dumper program Retrieved from ftp://ftp.ee.lbl.gov/tcpdump.tar.Z

Hall, J., Moore, A., Pratt, I & Lesli, I, (2003)

Multi-protocol visualization In Proceedings of the ACM SIGCOMM 2003 Workshop on Models, Methods and Tools for Reproducible Network Research (pp 13-22), Karlsruhe, Germany New

York: ACM Press

Luckie, M J., McGregor, A J., & Braun, H.-W (2001) Towards improving packet probing

tech-niques ACM SIGCOMM Internet Measurement Workshop (pp 145-150), San Francisco New

York: ACM Press

Mogul, J (2002) Clarifying the fundamentals of

HTTP In Proceedings of the Eleventh Interna-tional Conference on World Wide Web (pp 25-36),

Honolulu, Hawaii New York: ACM Press Ostermann, S (1996) TCPtrace Retrieved from http://irg.cs.ohiou.edu/software/tcptrace/index html

Yoder, J (2002, February 27) Better end user vis-ible Web browning performance Presented at Intel

Developer Forum, Spring 2002, San Francisco Available at http://www.intel.com/cd/software/ products/asmona/eng/219852.htm

Zhi, J (2001) Web page design and download

time CMG Journal of Computer Resource Man-agement, 102, 40-55.

ADDITIONAL INFORMATION

http://www.empirix.com http://www.mykeynote.com http://www.paessler.com http://www.patrick.net http://www.softwareqatest.com

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http://www.websiteoptimization.com

This work was previously published in International Journal of Enterprise Information Systems, Vol 2, Issue 1, edited by E Szczerbicki, pp 54-66, copyright 2006 by IGI Publishing (an imprint of IGI Global).

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Chapter 5.3

The Effects of Digital Marketing

on Customer Relationships

Marko Merisavo

Helsinki School of Economics, Finland

ABSTRACT

Viewing the use of digital channels in marketing

from a customer relationship perspective offers

VHYHUDO EHQH¿WV WR D PDUNHWHU %UDQG

FRPPX-nication can be frequent and personalized, and

GLIIHUHQWRSWLRQVIRUDGLDORJXHH[LVW7KHEHQH¿WV

of dialogue include learning from and about

cus-tomers, revealing their needs and interests, and

being able to provide them with better and more

personal service From a customer perspective,

the Internet has given power to get up-to-date

information, to compare products and services

more easily, and to get in touch with marketers

In a digital environment, customers increasingly

use self-service and have more options to initiate

action A customer’s perceived value of using

digital channels and interacting with a marketer

can come in several ways; it could be money,

time, information, convenience, and so forth This

chapter examines how marketers can use digital

channels to develop and strengthen customer

relationships In our framework, brand communi-cation, service, personalization, and interactivity are suggested to be the key elements

INTRODUCTION: DIGITAL MARKETING AND CUSTOMER RELATIONSHIPS

According to Schultz (2002), multi-channel mar-keting is just a new term with old challenges; it

a marketing organization makes its products and services available to customers and prospects and how the marketer determines the best choice of distribution systems and type of communication program to use However, nowadays, the use of digital channels like the Internet, e-mail, mobile phones, and digital television in marketing has increased, and marketers need to understand how

to use these channels for different purposes For example, some marketers use them for acquiring

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new customers, while some focus on serving

cus-tomers better Digital marketing communication

typically has been information about products,

advertising on the Web, and direct marketing

via e-mail and mobile It seems like the channels

and concepts of digital marketing have been used

separately and operationally, while the strategic

understanding and models of how and why to use

different digital channels are still developing At

the same time, marketers have acknowledged the

importance of cultivating customer relationships

Consequently, there is now increasing discussion

about how to use digital marketing to develop

customer relationships, an approach that has not

been fully utilized yet

To look at the use of digital channels in

mar-keting from a customer relationship perspective

RIIHUVVHYHUDOEHQH¿WVWRDPDUNHWHU%UDQGFRP-munication can be frequent and personalized, and

GLIIHUHQWRSWLRQVIRUDGLDORJXHH[LVW7KHEHQH¿WV

of dialogue include learning from and about

cus-tomers, revealing their needs and interests, and

being able to provide them with better and more

personal service From a customer perspective,

the Internet has given power to get up-to-date

information, to more easily compare products

and services, and to get in touch with marketers

Furthermore, in a digital environment,

custom-ers increasingly use self-service and have more

options to initiate action (e.g., give feedback,

check account balances, request and personalize marketing communication) From the customer perspective, perceived value of using digital chan-nels and interacting with a marketer can come in several ways It could be money, time, information, convenience, pleasure, entertainment, assistance, social interactivity, prestige, or something else the customer appreciates This chapter examines how marketers can use digital channels to de-velop and strengthen customer relationships In our framework, brand communication, service, personalization, and interactivity are suggested

to be the key elements

BOOSTING CUSTOMER RELATIONSHIPS WITH DIGITAL MARKETING

Central Elements of Digital Marketing

:H GH¿QH digital marketing as marketing and

interaction via digital channels— Internet, e-mail, mobile phones, digital TV, and so forth Digital marketing includes communication (e.g., advertis-ing, newsletters), service, and tools for customer-managed communication and interaction (e.g., FAQs, games, etc) Both marketer and customer can initiate interaction Digital marketing as a

BRAND COMMUNICATION

•Frequency

•Content

•Functionality

SERVICE

•Perceived value by a customer

•Efficiency

•Accessibility

•Reliability

CUSTOMER RELATIONSHIPS Effects on brand loyalty:

•Purchases

•Usage

•Awareness

•Attitudes

•Images

•Recommendation

•Activity

•Satisfaction and service perceptions

PERSONALIZATION

INTERACTIVITY

o

Figure 1 Central elements in boosting customer relationships with digital marketing

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term is more inclusive than e-marketing, because

it encompasses marketing via digital channels

independent of the medium

Interactive marketing, one-to-one marketing,

customer relationship management (CRM), brand

management, and service management literature

emphasize the importance of building and

manag-ing customer relationships, and each offers useful

models to understand how customer relationships

develop The literature reveals certain concepts

and trends that could be central elements in

boosting customer relationships with digital

mar-NHWLQJ)LUVWEUDQGFRPPXQLFDWLRQLVLGHQWL¿HG

as an important way to create customer loyalty

Second, service is considered a central element of

customer relationships, and many examples show

that digital channels (i.e., the Internet) can be good

tools for customer service Third, personalization

is expected to create value for customers Fourth,

interactivity is presented as one of the major

ad-vantages of the Internet and other new marketing

channels We think that brand communication

and service are the key elements when boosting

customer relationships via digital marketing, and

elements of personalization and interactivity can

be mixed into them to reinforce the effects (see

Figure 1) We suggest that digital marketing can

have a positive effect on customers’ brand loyalty

(i.e., purchases, attitudes, etc.)

Three main factors in brand communication

are expected to affect customer relationships:

frequency (e.g., how many brand messages per

week), content (e.g., promotional offers or

informa-tion), and functionality (e.g., how easily customers

¿QGLQIRUPDWLRQRQD:HEVLWH%UDQGFRPPX-nication also can be personalized For example,

VHJPHQWDWLRQRUFXVWRPHUSUR¿OHVFDQEHXVHGWR

create different messages for different customers,

sent via their preferred channels In addition,

brand contacts can be interactive, which means

that customers can search for information, make

inquiries, give feedback, and engage in various

other activities with marketers or each other by

Service that is perceived as valuable by custom-ers is expected to affect customer relationships positively This value could be money, time, information, convenience, pleasure, entertain-PHQW DVVLVWDQFH DQG VR IRUWK (I¿FLHQF\ DQG accessibility of the service are also important, which could mean easy access to a Web site and WKH DELOLW\ WR ¿QG GHVLUHG VHUYLFH RSWLRQV DQG information associated with them with minimal effort Reliability of the service is essential, as well (e.g., the technical functioning and safety

of an online bank) Service also can be person-alized (i.e., by offering different service options for different customers and remembering their individual preferences of service situations) Various elements of interactivity (e.g., online chat with service personnel) can be combined with service

In the model, brand communication and ser-vice are treated as separate elements, acknowl-edging that sometimes digital communication can

be considered as a service, as Brondmo (2000) suggests for permission-based e-mail, while in other cases, it may be seen as a promotion Brand communication and service do not always have

to be personalized or interactive in order to have effects on customer relationships Adding person-alization and interactivity, however, can increase the positive effects of digital brand communication and service on customer relationships

Brand Communication

Digital channels offer opportunities to keep up frequent brand communication with customers Brand communication refers generally to all com-munication between the brand and customers This complies with the view that the process of build-ing brands and customer relationships is much more than traditional media advertising (Aaker & Joachimsthaler, 2000) Digital marketing can be used to create brand communication that custom-ers perceive to be informative, entertaining, and

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contacts Frequent communication has positive

effects on customers’ brand loyalty, and

customer-brand relationships are deepened (Aaker, 1996;

Kapferer, 1998)

As in the off-line environment, there is

word-of-mouth communication in the digital

environ-ment, one visible form of that being a brand

community Brand communities are important for

a marketer, because brand knowledge and

experi-ences are quickly spread via those communities,

and new opportunities for brand communication

are opened In brand communities, customers

interact with each other and brands by

commu-nicating via different channels or face-to-face

In many cases, consumers and marketers jointly

build brand communities These communities

may form around any brand, but it is more likely

to form around brands with a strong image and a

rich and lengthy history that threaten competition

and are publicly consumed (Muniz & O’Guinn,

2001) Marketers are encouraged to create brand

communities, because customers belonging to

them are more loyal than others; they are less apt

to switch brands and more motivated to provide

feedback (McAlexander et al., 2002)

The digital environment offers great tools for

community building Virtual communities can

have greater geographical scope and narrower

focus than most off-line communities (Wind

et al., 2002) Nevertheless, brand communities

often mix the off-line and online environments,

as community members often meet and discuss

both on the Web and in the real world The

im-portance of community Web pages to consumers’

day-to-day lives is demonstrated by their rich

FRQWHQWFRQWLQXRXVXSGDWHDQGPRGL¿FDWLRQDQG

active discussion For example, Dynamiitti.com

is a Finnish brand community site that connects

WKHGULYHUVDQGHQWKXVLDVWVRI¿YH-DSDQHVHFDU

brands (i.e., Honda, Mazda, Mitsubishi, Toyota,

and Nissan) The site offers a discussion board

with various topics for each brand, as well as

areas for general discussion of driving and

rac-ing Members share their views of new models,

accessories, repair services, tests, and so forth Generally, news spreads very quickly within this community There also is a market forum, where community members can buy and sell cars and other items This community converges virtual and physical communities, as active members regularly meet each other and join events in the bricks-and-mortar world

Brand communities represent both opportuni-ties and challenges for companies There is an op-portunity to build an online infrastructure where brand users freely share their brand knowledge, experiences, and feelings with each other This information can be collected easily by the mar-keter, which gives an important inside view for the customers Active community members can

be considered opinion leaders who can be used

to test new ideas and concepts and, hopefully, to spread positive word-of-mouth comments There

is also an opportunity to communicate directly

to the brand users For example, a representative

of the marketer can be an active member of the brand community who joins everyday discus-sions among the other members Also, ads can be placed for a sponsored brand community site On the other hand, a company’s ability to control the discussion of brand communities can be relatively limited or non-existing Even on sponsored brand community sites, advertising must be kept at a minimum to keep members from being bombarded

by too many commercial messages

Service

The development of the Internet and other new FKDQQHOVKDVPDGHLWSRVVLEOHIRU¿UPVWRFUHDWH new services and develop interactive and rela-tionship-building contacts with their customers

To further emphasize the importance of online service, extensive survey data from more than 2,000 e-tail sites shows that price-sensitive cus-tomers may be the least loyal, whereas customer service support is the main factor that attracts repeat buying (Reibstein, 2002) Indeed, the

Brand... being a brand