Below-the-Line Vs Viral Marketing

Be grim-the-Line Vs Viral MarketingMarketing has played a eventful role in condescension mastery for decades and is ultimately concerned with the insertion and retention of customers who with the purchasing of mathematical convergences yield profits for companies. It has been suggested that the appeal of attracting sweet customers is much eminent than brinytaining real ones and thus firms seek to induce up expeditious and potent retention systems for customers apply a trade salmagundi. opus the under-the- debate promotional mystify has established itself as a major atom of administering mixes refer adequate to the rapid schooling of new technologies and globalisation an divisioner(a)(prenominal) selling constellation, viral trade, has garnered broad attention, (Lanman, 2003). The reason for this attention is that companies shed exhibit their success with minimum selling budgets in generating millions of profits in using this tool. The Inter case Direct Marketing Network measured the commit of divers(prenominal) merchandise techniques and it found that 84% of firms utilise approximately form of down the stairs the line market (North, 1995). In this way the response of distribution of crossways and culture butt end be measured immediately. How everlastingly both organisations and individuals have been pillow slip to an unprecedented rate of change in the way they pursue and ar involved in disdain and commercial opportunities in the 21st vitamin C making the case for an expanded role for viral market ever much than compelling, (Kalakota, 1999).These characteristics include the internationalisation and globalisation of job and the resultant glowing competition from these trends which has buildd new self-propelleds within selling structures for whole companies, (Chesher Kaura, 1999). oneness of the most strategic needs for business infixprisees currently is the need to satisfy increasingly demanding customers who expect immediate responses to their requests both for goods and readying. The role of viral merchandising in conflict such a need has continued to increase with the refinement of use and users of the Internet. Graham (1999) argues that viral merchandising refers to strategies that ar absorbed by the people that interact with the heart and souls and wherefore manoeuver them on. Therefore the name viral selling is a good deal linked with the Internet because it digests a wide hunt down of free channels such as telecommunicate, networksite and chatting rooms in which to possess initial piths. Addition solelyy merchandising is not solely around natural things but deals with check offs, experiences and acts of communication which arouse be defined as branded, (Moore, 2003).The choice of appropriate selling model and because to a large bound is associated with prep are pinch of consumers on the part of organisations. save consumer behaviour is m ingled thus each market model has its own favours and disadvantages in influencing these behaviours. As a result an efficient merchandising mix should meet break customer requirements in affirm for the comp whatever(prenominal) to succeed in the market and at the same time the usage of any marketing mix schema will be constrained by the corporate imaginations and business structures which can be deployed to generate opportunities. Therefore this paper will critic tout ensembley compare viral with below the line marketing models and aim to survey the brilliance of matching marketing strategies with business structure and characteristics of product through an analysis of unendingly quicks usage of viral marketing.Below-the-Line Vs Viral MarketingAn substantial perspective in marketing philosophy is the distinction between qualification and in effect(p)ness, (Anonymous, 1989). therefore a comparative analysis of below-the-line marketing models and viral marketing ones can be conducted using these twin elements as frameworks. The essential residual between efficiency and effectiveness is that the former is concerned primarily with embody and the latter is customer focused in boundarys of retention and coevals capacities. This framework a homogeneous corresponds with an sympathy ground on the core run around of marketing which is to satisfy customer needs in a paying way by matching go or products with likeences.While preceding(prenominal) and below-the-line promotion has established itself as a major technique in communication with customers new challenges facing marketing managers have led to the development of new marketing techniques. Generally speaking in a higher place-the-line refers to the usage of all the main publicise media such as TV campaigns and magazine advertisements whereas below-the-line activities are to a greater extent focused on translating attitudes into sales such as with in investment firm advertisements. Her e as salubrious as habitual transaction become a bouncy part in the communication process, (Wilmshurst, 1994). til now Tauber (1974) argues that a customer orientated marketing strategy easily discourages innovation within organisations such as with the RD process. This is because companies prefer following customers tastes rather than creating new demands negateing then any risks associated with novel and groundbreaking product development. This can be seen as a negative bring on produce for the whole industry in the long term. then viral marketing is argued to be an innovation in marketing which has emerged since 1996 utilising email at first as a global marketing network, (Jurvetson, 2000). The pattern of viral marketing is one which is base on word of express and its first uses were conceptualised in terms of it being web-establish word of mouth marketing. attendant further technological development and globalisation viral marketing as such seeks to distinguish ad vantage of rapid multiplication to explode ace passs to thousands at low exist as hearty as several(prenominal) opposite complex marketing goals at the mature stage. Viral marketing is a method which allows small businesses to grow quickly through the cattle ranching of their marketing message like virus and avoid consequently major accounting entry barriers to the market and exclusionary techniques of competitors, (Jurvetson, 2000). as yet because of the nature of the Internet Dibb, Simkin and Vancini (1996) show up out that all forms of word of mouth to a large extent depend on intangible assets such as brand image, trust and public relations in ordinate to be self-made. In this sense a flourishing viral marketing strategy needs to bourgeon advantage of other resources to build up brand image and kinds with customers.In summation several(predicate) marketing mixes rely on different characteristics of products and industries, organisational competition as well as upcountry resources including material resources, intangible assets and human resources. Therefore understanding the advantages and disadvantages of each model is vital in helping marketers, whatever their scene of action of business, carry out effective marketing practices.Business StructureAn effective implementation of a marketing strategy relies on getting nonionised for the work and the route a conjunction chooses depends on a mannequin of meanss. However the first step for any type of association is understanding consumer behaviour. This understanding allows a follow to position their products or service in effect in relation to the preferences of its target customers. However any customers purchasing conclusiveness process is a complex one thus it is useful to underpin in mind whatsoever chance upon influences on these decisions. First of all the development of technology peculiarly the Internet has changed both buyers and companies behaviour in various ways. For example research has indicated that the scale of the e-commerce market will drop $7.3 trillion in 2004, from $145 billion in 1999 reflecting its growing importance as fashion of doing business, (Suh Han, 2003). As a result it is vital that companies wreak the Internet on with other marketing tools such as leave marketing or in store sales to achieve promotional goals time viral in order to create new opportunities for growth in the future.In addition to advertising below-the-line practices play an increasingly important role in communicating and building close relationships with customers. For example metalworker and Taylor (2004) argue that each element of the marketing mix communicates so that some major advertising campaigns need to be back up by public relations activities and besides at the same time be supported for example by launch leaflets. Combining these elements maximizes the effect of promotions and advertising campaigns for companies. Kitchen monitor (1991) claim that public relations is a growth area for companies because it is an effective way to generate cocksure word of mouth for a come withs products. A further consideration to take into account when firms look at strategic decisions about marketing techniques is the cultural and social effects on consumer behaviour. Web establish deliin truth though can be say to circumvent some of these problems by allowing for easy tailoring to specific contexts due to the absence of any necessity for bodily places to conduct marketing trading operations.Marketing researchers encourage the use of an integrated marketing mix as it is believed to be sufficient to create militant advantages and boost sales and profits whilst saving time, money and avoids some of the stresses involved in implementing marketing plans, (Harrison, 1995 Smith Taylor, 2004). From this perspective both below-the-line and viral marketing models should utilise different communication tools in relation to customers and ontogeny productive relationships with them. For this reason there are key gains of an integrated marketing address yet there are excessively obstacles due to hold in resources in terms of financial, time and power constituents. In this case inefficiency mogul occur due to interior(a) competition or unbalanced ration of resources addressed due to over emphasis on one marketing tool. It can be strongly argued that a web-based viral marketing approach could balance conflicts among different departments as well as with suppliers simply because it seeks to take advantage of others resources in assisting with the delivery of the troupes marketing message, (Wilson, 1999). In considering these two approaches to marketing this work utilises a 4P framework as an analytical guide to their several(prenominal) strengths and weaknesses. carrefour It is intelligible that no matter what kind of marketing model companies choose the ultimate goal is to sell a product (service) to cus tomers at a war-ridden worth. However the product purchasing decision involves choices regarding brand names, guarantees, packaging and services which accompany the product. Reports suggest that expenditure on below the line marketing in Europe has grown rapidly in recent years due to intense competition, (European Marketing Pocket Book, 2000). so one of the most important goals for advertising campaigns is effective positioning of products. Ogilvys (1983) sawing machine is for a business to never sell to a stranger which means it is important to understand the target audience and their purchasing behaviour and alike build long term relationships with them. Companies therefore choose different tools in order to segment customers and then position their products in order to sell the right thing to the right people.Below the line marketing strategies often attempt sales people to communicate with customers face to face. This allows an organisation to gain learning about custome rs deeper feelings about products rather than the more im mortalal learning gathered by web-based questionnaires. Also when companies adopt a viral marketing strategy customers are not able to touch the product or in other words they see tangible assets only envisioned on web pages. This means then that trust plays a major role in delivering the product message to consumers. This is why viral marketing firms use a strategy of giving away free product samples to customers. This is in order to build up trust in the company and brand and then utilise these customers through word of mouth to spread the product message further. Holt (2004) highlights trust as the essential lubricant of web-based business operating successfully with note products being a critical factor for success in building up trust.Price Price is always used by buyers as an indicator of quality in that higher(prenominal) impairment tends to send a different message compared to lower pricing. The clog for companie s is even is hitting the sweet spot in terms of price and quality. Therefore high price product firms prefer adopting differentiation strategies in order to maintain competitive advantages. A typical feature of below-the-line promotions though is an element of price war and price cutting in order to initially entice customers. This has the effect of increasing direct costs to the business and reduces the gross profit accordingly so that sales people have to work harder to earn the same amount as before the price cut. In short letter to below-the-line promotions companies with viral marketing models benefit from the lower cost of not having physical stores, sales people and/or expensive advertising campaigns on TV, radio or magazine and other expensive media forms. As a result viral marketing firms often offer duplicate discounts to attract customers and it is suggested that one of the most important reasons for people purchasing online are the lower prices compared to traditional retail stores, (Reedy Schullo, 2004). Reedy and Schullo (2004) in addition argue as a result that it is vital electronic resources be integrated into marketing mix by both traditional offline as well as online retailers.However an important point worth highlighting is that of strategic versus tactical pricing. Strategic pricing refers to long term pricing which depends on how the company intends to position itself in relation to customers. An example of below-the-line marketing are the practices of the supermarket Tesco which has build a reputation for low prices or the lowest pricing in the town in which it operates. In this case its pricing strategy seeks to generate a competitive advantage while Marks Spenser in contrast utilises an image of pause quality food at a higher pricing level in order to differentiate itself and thus avoid a price war with Tescos. Additionally although viral marketing models benefit from lower costs and be able to offer more competitive pricing pr oducts like health- link up tablets firms tend to not be able to exploit a strong brand name for quality and effectiveness. Rather it is the low pricing which initially attracts customers. Therefore the importance of word of mouth is much more pronounced for the continued success of viral based marketing firms.Promotion As mentioned before researchers and economists have argue that the cost of attracting a new customer is five times that of maintaining an existing one, (Jobber, 2001). Companies attempt then to keep customers satisfaction level high and encourage them to get more products through the creation of brand loyalty. Below the line marketing forms by using direct promotion and a human sales fierceness to build a close relationship with customers can be said to do this more efficiently. Examples can be seen from fashion brands like YSL and Christian Dior which deliver their brand images using highly trained and skilled force out creating strong connections in the minds of customers between brand image and products and form a foundation for brand loyalty. However the cost of sales people as well as training investment is a balancing factor while viral marketing on the other hand is able to take advantage of free internet sources by using tools like email or low cost advertising presences such as banner ads on websites.It is also interesting to note that below the line marketing can be viewed as pushing instruction to consumers whether it takes the form of communication from sales assistants or leaflets in magazines and so on. In doing so companies attempt to communicate with customers by explaining and giving detailed product or service information to them. In contrast viral marketing can be seen as an information pulling tool which seeks to spread sentiency of the product through popularisation. However marketing emails need to provide great value for readers such as through being more entertaining, spicy or compelling in order that viral marke ting message be more effectively taken up by readers, (Reed, 2005). A common inducement often used by companies is to pay those readers who pass on the message to others or can prove products bought have been through so on their recommendations. This can be problematic though due to fraud or other criminal activities. Related to this is the problem of protective covering features emerging in the use of the Internet whereby viral mail is hardened as virus mail or junk mail (or spam) and thus the marketing message may be blocked from reaching its intend audience through the workings of such things as email filters. diffusion Brownlie and Saren (1992) argue that the concept of marketing has assumed many of the features of an ideology of faith which dominates the decisions of many organisations. In other words they believe companies must not only take into account giving customers what they need but also focus on the integration of these demands into other core business functions. Th is entails then the balancing of the satisfaction of consumers with the performance of other company requirements. Therefore it is particularly important for companies which adopt below-the-line strategies to choose an effective distribution channel which satisfies customers demands efficiently as well as other business participants such as suppliers and retailers. Likewise it is important for suppliers to have a physical in-store presence while manufacturers must show more interest in the basics of selling and displaying in store. In this case a well trained and actuate sales team plays a critical role in alter a companys in-store performance.However the costs associated with physical stores are high as well as the cost of training employees. The usage of internet based viral marketing models are able then arguably to infract integrate resources at lower cost and concomitantly allows the building of stronger trading relationship between each partner within the business network. For example viral companies conduct strategies such as allowing each customer who makes a purchase to also act as a wholesaler for the company and in doing so encourage them to use their own network of contacts to sell more products for the company and at the same time profit from their selling. Therefore it is obvious that successful viral marketing companies are those which can successfully exploit customers networks and exploit word of mouth to spread rapidly rather than make use of expensive advertising campaigns or below-the-line promotions. Smith and Taylor (2004) though point out that the place of purchase also communicates within a marketing mix which means an item purchased in Selfridges has a differently perceive value to an item purchased online. In this sense strategic branding seems particularly important for companies who rely on in-store marketing. Adding value to physical places could be used as part of a branding strategy in maintaining competitive advantage over low cost viral marketing stores. forever and a day livelihood Reports indicate that viral marketing techniques are growing in popularity in their use among corporations in the US ranging from small businesses to transnational companies, (Bulkeley, 2002). perpetually hold Product co. can be viewed as a successful example of the usage of viral marketing strategies which have contributed to its now multinational business network. According to Wilson (2000) successful viral marketing strategies refers to those which are able to take advantage of rapid multiplication in delivering the product or service message to as wide an audience as possible. In other words viral marketing is closely linked with the term and process of word-of-mouth marketing. In particular these methods have sought to take advantage of the rapid increase in internet usage and as a result web-based forms have become the most important resource for viral marketing techniques. For example forever and a day liveline ss Product has promoted itself as an international firm which seeks to exploit natural sources in producing products contributing to peoples health. The company delivers its product information through the use of a website and seeks to recruit existing customers as wholesalers for its products as well as utilising them to deliver the marketing message. These inducements psychologically are an effective means of retaining existing customers and attracting new ones.Linked to this meeting peoples emerging demand for a better quality of life in terms of high health levels is a key factor for the success of Forever Living products. As such along with financial inducements the cookery of information supporting the marketing message is a key constituent for the companys marketing strategy. For this reason the Forever Living website is designed to provide customers with clear information about its products and services as well as information on how customers can join its business model. A ccording to Solomon, Bamossy and Askegaard (2002) people spend a considerable amount of time in searching for information before they decide to purchase high price goods or opulence products. A web-based marketing model enables consumers who are interested in the products and services go to visit websites and acquire information in a cheery and flexible vogue. However these advantages are countered by the tendency for viral marketing websites to provide too much information. Reed (2005) argues that efficiency in communicating a marketing message might decrease because of excessive information. Principles of web design then become important considerations to both enhance accessibility and decrease the dangers of information overload.Marketing mix In modern marketing literature the concept of marketing is often expressed as the attainment of corporate goals through meeting and exceeding customer needs better than competitors are able to, (Jobber, 2001). Viral marketing can descri be any strategy that encourages customers to pass on a marketing message to others which creates opportunities for electric potential corporate growth, (Wilson, 2000). Viral marketing consequently as a form of marketing strategy is predicated and based on successfully understanding consumers in terms of what will satisfy them in product and service provision. However as has been mentioned consumer behaviour is both a complex and a dynamic process and therefore understanding this behaviour requires considerable amounts of information. The Internet is widely used as an effective tool in capturing a grand amount of digital data related to consumer behaviour and viral based marketing forms are in a good position to successfully make use of this data and also contribute means of throng it. However such information is largely full generalised and unspecific devoted the amount of traffic which the Internet sees in terms of purchasing decisions.Thus Jackson (2000) contends that viral marketing works best only when the key consumer interaction has relatively broad appeal to the target market. Forever Living Product successfully entices people arguably through the opportunity to lay out their own business and offering the possibility of higher income levels. It is a message therefore with near universal appeal for people. It is also a message which allows for individualised emotional investment to be made in products, in that customers will be dogmatic about a product as their interest in selling it is related to their own financial gain. However a key factor for continued success is maintaining the quality of the products as studies indicate that negative word-of-mouth images spread twice as spendthrift as positive images, (Haywood, 1991). In the case of Forever Livings aloe range of products the high quality is based on its International Aloe Science Council Seal of adulation for consistency and purity. Such external confirmations of quality add to and enha nce the companys internal messages dealing with the quality of its products.Additionally the clear return and guarantee policies offered by Forever Living also contribute to its success since recourse is minded(p) to customers should products or the process of purchasing products not meet their expectations. These are considered to be the most important factors affecting customer behaviour in buy online as they enhance significantly customer trust in the product and organisation, (Reedy Schullo, 2004). Managers with communications responsibility must try to deal with complaints as well relate satisfaction dynamically considering the ease of spreading and access to information online. Haywood (1991) believes that people- talking is the best form to communicate but Blythe (2000) argues that the website of a company is principal initial source for the content of such communication. Therefore Forever Living Products website is designed to provide full information about the products a s well as the business plan for those who want to get involved. In doing so the firm avoids considerable expense on physical stores and layout, personnel and the possibility of inefficient explanation and communication by sales person dealing with products. Providing contact points for additional customer questions also enhances the effectiveness for this model. Yet a weakness is that if initially the website is not successful in attracting customers it is flimsy they will return. In this sense the persuasive capabilities of below-the-line models with their human elements is missed.Forever Living is a multinational company which runs business in over cv countries as the words largest grower, manufacturer and distributor of aloe vera, (Forever Living Product, 2005). It is fair to say that during the internationalisation process the Internet has been vital in spreading the business rapidly and easily compared to the opening of physical stores. It has also allowed the offering of an interactional tool tailored for communicating with global consumers in their respective national contexts. Traditionally communication media follow a passive one-to-many model where a firm reaches many current and potential customers through marketing efforts however feedback from customers in such models is limited, (Hoffman Novak, 1996). Forever Living operates a model of distributed calculate that facilitates an interactive many-to-many communication tool and model. For example the website is designed to help customers build a solid stable business through professional training meetings and regular recognition of their efforts. The running of the business online minimises the physical investment indispensable and need for large product inventories but requires a motivated and efficient distribution channel. A significant advantage of this model is that full gunstock and product control is integrated into supply and distribution as all of these elements from production to sale are realised within the website. This allows for large cost savings and creates a feeling of auspices for customers and wholesale sellers in the operations of the company.As discussed in the preceding section companies using below and above the line marketing tools view human resource as an important factor in the completion of these forms of marketing strategies successfully. In a positive sense they are able to exploit a skilled custody in achieving promotional goals but negatively failure might issue from unenthusiastic sales personnel or negative sales manner in the conduct of the promotion. By using a website instead of a sales person along with already satisfied customers Forever Living minimises the risks of negative information provision and capitalises on cheap and effective positive information provision, (Wilson, 2000 Diorio, 2001). In addition to online ordering Forever Living also makes use of more traditional phone call services for those who are not able to access internet increasing its coverage. The online model also allows Forever Living circumvent the considerable entry barriers to participating in the health care market. These barriers include large investment in physical assets as well as the brand loyalty for other manufacturers or certain retailers concretely established as a result of other marketing strategies. The creative use of the website as both a marketing tool and an intangible shopping space creates competitive advantages for the firm. Although the price of Forever Living products means they are not cheap due to general features of luxury health care goods and compared to pricings and costs associated with other luxury health care products Forever Living is able to compete on very effective grounds with other retailers.Viral branding strategy over the last few years companies have increasingly moved to co-ordinated the World Wide Web into their overall marketing strategies. Viral marketing strategy in itself has changed t he way to do the business and communicate online by taking advantage of the specific contextual advantages offered by the Internet. However along with internet based marketing the emerging challenge for viral marketing companies is to build up strong brand name in order to compete with below-the-line firms as well as other web-based and offline companies, (Jobber, 2001). The first associations that enter into customers consciousness in relation to a brand name are always those associated with products or product categories, (Franzen and Bouwman, 2001). Thus with Forever Living Product they have sought to link the brand name with superior ranges of aloe vera based products. The corporate research centre creates a professional image of the company matching with images of traditional high-tech pharmaceutical industries but meshes this with an appeal to realism and back to nature images associated with its products. The key message then contains both security over the high qualities mai ntained in the products manufacture but also the manner in which it is a natural product taking advantage of green sentiments among customers.Diorio (2001) argues that one of the obstacles to viral marketing is the obstacle in identifying triggers that can motivate customers to pass along the business message. Beaven and Scotti (1990) claim that consumers develop internal scripts related to their service transactions which they recall for future purchases of that service. Hence a satisfied personalised experience is a key driver in the repeat purchase of products. The tool used by Forever Living Product in this respect is the motivation from self-owned businesses joining satisfied product use with opportunities for personal financial reward. However its branding strategy also contributes to the success of its differentiation from other companies competing in the same market. Web-based branding strategy is able to reach a large amount of customers but the difficulty remains in estab lishing trust which is the main basis for long term customer relationships using this model. Also there are ethical issues related to viral marketing such as those arising from security of investment and personal privacy in providing information online especially financial information. Trust then for Forever Living is not only related to product quality and satisfaction but about providing a completely secure packet boat for customers upon which trusting relationships can be built.Benefits of a website as an integrated marketing toolFrom an analysis of Forever Living which prefers the use of a website as the core technique and means of achieving marketing goals it is fair to say that the effective design of web sites contributes to whether it will be a success or not to a large extent. First of all the website is able to provide full information