Cost-Effective Marketing Through SMS and Internet

-- Mohit A Parekh
Faculty Member,
INC,
Vadodara.
The author can be reached at
mohitdream@gmail.com, mohit-dream@yahoo.co.in

Marketing has become extremely competitive due to globalization and the availability of more alternatives to customers. Marketers, therefore, have to be more effective, and at the same time, cost-efficient. This calls for examining the logic behind traditional mass media marketing options, and developing new tools and techniques to reach out to prospective customers. Recent advancements in information and communication technology have come in as a big help to today's marketers. These new age technology tools are not only cost-efficient, but are also highly effective in terms of their impact on the target audience.

Marketing through SMS and internet are gaining popularity in recent times because of their far reaching impact and cost-effectiveness. SMS Marketing or Mobile Marketing is also commonly referred to as anywhere and anytime marketing. In simple words, it is marketing through Short Messaging Services (SMS) on mobile phones. These days, mobile phones are used by a very large percentage of the population. Mobile phones have become the primary screen for a major part of the global population, replacing the television. Unlike television, radio and computer, the individual is always connected with his/her mobile phone. Thus, it can serve as a very wide-reaching and important medium for marketing.

SMS marketing can also be used to target selected segments. One such segment is that of travelers. The moment a mobile phone enters into a new circle, it is likely that the person would be requiring some services and facilities in that area. If the person is not a frequent visitor to the area, it is quite likely that the person is on a short vacation or business visit. Travel-related services and any products unique to that area can be offered to such travelers easily and at minimal cost through SMS.

People often spend weekends on shopping or entertainment/leisure activities. Generally, the decision regarding shopping or entertainment, and the destination, are decided just a couple of hours in advance. This is where SMS marketing can be effectively utilized. Just around 4 pm on Saturday evening, an SMS can be sent to cell phones in a targeted area informing or reminding the cell phone users about the discount sale in a nearby store. Similarly, information about a new movie, a theatrical performance or a new circus that has just come to town last week can be given wide publicity. Thus, the information is provided at the time when the customer is about to take a decision, thereby making it highly focused.

The major advantage is the cost-effectiveness of an SMS marketing. It hardly costs a few rupees (or paise) in India to send a SMS. Telecom service providers also offer special schemes for sending SMSs in bulk (Exhibit 1). Thus, the cost efficiency is extremely high.

The other major advantage is that an SMS can be stored and accessed anytime by the recipient, unlike communications received through television, radio and such other media. Thus, important information about the store location and other such details can be stored and retrieved easily at one's convenience. Thus, SMS marketing proves to be not only cost-efficient, but also quite effective and advantageous in other ways too.

Internet Marketing

Marketing and advertising on the Internet has proved to be another cost-efficient tool. Not only industrial products, but even consumer products and banking services are being marketed through the Internet. The internet has proved to be one of the best media to reach out to the youth segment. This segment is highly vacillating and keeps on experimenting and switching across various media. It can, however, be reached with comparatively greater degree of certainty through the internet. The ability that the internet provides to track the preferences and behavior of customers is another positive factor in its favor. Thus, the internet has turned out to be one of the most cost-effective means of marketing. These are various means for marketing one's goods or services through the Internet. Some of these are discussed below.

Banner Ads and Pop-Up Ads

Banner advertisements on websites have turned out to be a very effective means of advertising. Banner ads are used quite often in many general purpose sites, while pop-up ads are more common in social networking sites. Pop-up ads are those which pop-up on the screen when the user is navigating through a related website. They are designed in such a fashion that most users are unable to prevent these from popping up. Thus, the chances of their being noticed are much higher than that of banner advertisements.

However, pop-ups tend to interrupt one's work thus annoying the user. To avoid such annoyance and subsequent action of closing the pop-up, a modification referred to as pop-under ads is utilized. These ads are similar to pop-ups but they appear under the main website. The user will notice them only after he has closed the main website. Thus, the user is not annoyed and disturbed. Since his work is completed, he can pay full to the advertisement.

Viral Marketing

Viral marketing is the latest buzzword in the field of marketing. But the fundamental roots of viral marketing lie in something which has been highly familiar to most marketers, i.e., Word-of-Mouth (WOM) publicity. In societal clusters, such as villages, cities, states, etc., word-of-mouth publicity has been one of the most cost-effective tools of marketing. Just try and recollect how you came to know about the best food joint or the best college in your town. It was not through advertisement but by referrals given to you by friends and relatives. No amount of money spent on advertising and promotion can create such high awareness levels. But the most important thing that comes along with it is the credibility of WOM publicity. Since an existing customer is talking about positive attributes of the product, new customers tend to easily believe it. Thus, WOM has been one of the most cost-effective tools of marketing in small clusters of society.

But today, it is not particularly logical to limit the meaning of clusters to geographic entities. Two persons living in two different towns in far corners of the world could be even more closely-connected than with the individuals in their own towns. This is what the internet revolution has done to connectivity across the world. Social networking sites have been one of the most effective media for connecting people across geographic boundaries. Two friends, one in India and another in the US could be chatting online through their HP desktop computers, wearing Nike shoes and munching a burger from McDonald's, and gulping it down along with a Coke. The more interesting part is not the chatting and global connectivity, but the similarity in their behaviors as consumers, and the commonality in the brands that they use - like HP, Nike, McDonald's and Coke.

With the advent of globalization and the opening up of emerging economies, more and more brands are going global. A large number of brands that we use today are available in many parts of the world. This makes the job of utilizing WOM publicity all the more important and difficult too. A brand like Nike is not widely promoted or distributed in India and it commands only a niche market in the country. But still, the positioning of Nike in the Indian market is almost the same as in other markets across the world. Such positioning requires strong support from WOM publicity.

The difficulty is that the Indian consumer segment is not physically connected to its counterparts in other parts of the world. How then does one achieve good WOM publicity? This is where internet plays a major role. The WOM publicity that is available through the internet is referred to as viral marketing. It is also known as word-of-mouse publicity.

The term viral marketing was first coined by a venture capital firm Draper Fisher Jurvetson which has been a big investor in internet start up companies. Google used viral marketing when it launched Gmail. Initially, for subscribing to Gmail, an individual had to be referred by an existing user of Gmail only. Many social networking sites have become popular primarily due to viral marketing. The failed attempt of companies like rediffmail to create awareness by advertising on national television re-confirms the importance of viral marketing as a cost-efficient marketing tool.

Some internet companies unfortunately adopt unethical practices for generating viral marketing messages. Many new and ignorant users are enticed by various companies to log in using their e-mail ID and password to participate in an online competition or to earn freebies. The e-mail ID and password are then used by the company to log into the e-mail account and send mailers to everyone in the mailing list. These mails spread a good word about the company's products and services or invite recipients to become members of a social networking site. Thus, unknown to the account holder, he or she is used to spread good publicity about the company. Although this may seem shocking, many companies are utilizing this method of viral marketing.

Blogs

Blogs - short form for web logs - created history in 2004 when the dictionary publisher Merriam-Webster declared that Blog was the most searched word on its website. Since its inception, blogging has attained the status of being one of the most sought after marketing techniques. Though it has a long way to go in countries, like India, marketers have started realizing the impact that blogging has on customers. WOM is one of the best methods to impress customers, and blogging is the best medium to achieve a larger share of voice and reach the common man. Common people can post their views about anything on a self-prepared website, which is made available by free website service providers on the internet. One can put up his or her own website for free or at a very small expenditure. Since the communication comes from a common man and not from the company, people tend to attach greater credibility to it. Even if blogging is not used for spreading good WOM publicity, it can still provide early warning about the negative WOM that is about to spread in the market place. Blogs are a source of great insights about the complexities of consumer buying behavior. Thus, blogs have turned out to be a very effective means for both understanding and influencing consumers' attitudes towards brands.

E2E Commerce

E2E is the next step in the field of e-commerce. It stands for Exchange to Exchange. Most existing e-commerce sites link individual buyers and suppliers. E2E facilitates buying across exchanges. This combines the liquidity of both the exchanges. The higher liquidity attracts a large number of participants towards the exchanges. This further leads to increased volume of selling and buying activity. Collaborations amongst industry players help in building marketing synergies. Though E2E is in its nascent stage, leading companies and industry consortiums have begun working on this concept. Particularly those companies which are in the field of automobiles, multinationals, such as General Motors and Ford Motors, and Indian players like Tata Motors and Ashok Leyland, have entered into partnerships to work on the concept of E2E commerce. A prominent example is that of Steel Exchange India (Exhibit 2).

Search Engines

Search Engine Marketing Professional Organization (SEMPO) defines search engine marketing as ``an act of marketing a website via search engines, whether this be improving the rank in organic listings, purchasing paid listings, or a combination of these and other search engine-related activities." Most of the time, a person searching for Common Admission Test (CAT) or other management institute entrance tests is likely to enroll for a tutorial class sooner or later. This is the assumption on which search engine marketing works. The moment one keys in a search word or phrase, a number of paid and unpaid links open up. This has emerged as one of the low-cost options of internet marketing. The effectiveness of targeting the right audience is also very high.

A study, conducted by the digital marketing firm DoubleClick, shows that 41% of internet users gain awareness about a brand from search engines. Another study, by Nielson Net Ratings, reveals that 129 million US citizens spend roughly 50 million hours per month searching the web for information. Comparative data, which shows cost per lead across various direct marketing methods, demonstrates the power of search engines (Exhibit 3).

Dedicated Brand Sites

Shifting focus from online advertising, many companies have started launching brand dedicated sites. Having a pop-up message, when the customer is using Yahoo!Mail, may distract and annoy him thus leading to negative feelings towards the brand. To avoid such a situation, companies are focusing on exclusive websites dedicated to brands. The website provides an enjoyable experience to the target audience in sync with the brand's values and promises. This translates into a high recall for the brand and a favorable attitude towards it.

A case in point is the brand Sunsilk, which has been the largest beauty shampoo brand in India. Launched in 1964, it has been positioned as the `Hair Expert'. It is generally identified with the female gender. Although it has been a brand commanding a strong equity, efforts have been made to make Sunsilk a powerful brand by providing a unique brand experience built around Sunsilk. This has been done by launching a portal, www.sunsilkgangofgirls.com.

This website is all about brand Sunsilk. The site targets young Indian girls who form the brand's core target market. The website provides features, such as beauty tips from experts, chatting, blogs and groups, music lounge, etc. Thus, this portal, not only provides information about new variants of Sunsilk, but also creates a unique experience for the target audience of this brand. It, therefore, serves as a very effective advertising and communicating tool in times when the traditional media are not only expensive but are also crowded with a large clutter of brands. Thus, the core positioning of the brand Sunsilk gets reinforced in the minds of consumers in an extremely cost efficient manner.

Market Research

Luck and Rubin (authors of a book on Market Research) define market research as "the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services." This process is very important, particularly in situations where competition is high. A product will sell only if it satisfies the needs of consumers. But how does one know what kind of product meets consumers' needs? The internet serves as a low cost platform for conducting market research. A case in point is that of Procter and Gamble.

Procter and Gamble (P&G) is well-known for the importance that it accords to the market research process. With the advent of the internet, P&G has become one of the first consumer product companies to use the internet for conducting market research. The company uses online concept testing to obtain valuable insights regarding consumer preferences and behavior. It collects customer feedback and uses the same to launch new products or improved versions of existing products. This not only leads to cost and time saving, but also reduces the dependency on external research agencies. This also gives better control on the data collected.

In August 2000, P&G was planning to launch Crest Whitestrips—a teeth whitening system. The product was priced at $44 which seemed over-priced as compared to industry standards. To check whether the customer will accept the pricing or not, the company used online research. Prospective customers were prompted to visit the site, collect information about the product and even try out free samples. The survey provided valuable insights about the consumer buying process. It was found that 80% of the purchases were made by women, out of whom 50% belonged to the age group of 35 to 54 years. The product was eventually launched in 2001 and turned out to be a huge success. It was found that among those who visited the website, 20% actually purchased the product. A 20% conversion rate, with hardly any expenditure, is a stupendous marketing success.

Online Public Relations

Public Relations (PR) has always been an effective marketing tool. The cost involved is also low. The internet provides great opportunities for online PR. Certain shortcomings of regular PR activities can be obviated by using online PR:

• The audience that is available for online PR is global. The information can be disseminated to virtually each and every part of the world in real time.

• Online PR provides feedback from the audience in real time, which is not possible with traditional media. Through e-mails or online feedback forms, the audience can immediately respond to the organization's PR activities. Organizations like WWF (World Wildlife Fund) have dedicated teams of executives working exclusively for online PR.

• Online PR is a very effective tool in times of crisis management. The most important factor in crisis management is time. Clarifications to be provided by organizations should reach customers really fast to avoid more damage or more negative publicity. Traditionally, one has to wait for press briefings and subsequently for the news to get aired or published. In the mean time, the damage keeps on increasing. Thus, online PR turns out to be a very cost-efficient and effective medium for PR activities.

• The response to PR activities can also be easily measured in the case of online PR. Instead of relying on TRP (Television Rating Points) and other statistics, online PR can immediately provide information about the reach of the PR activities. Information about visitors to the site such as their geographical location, time spent by them on the site, etc., can be easily captured and recorded online. This helps in measuring the effectiveness of online PR.

• Online PR also enables the organization to extend the period of promotion. Traditional PR activities can only last for a few hours or days. Right timing is very crucial in traditional PR. But in the case of online PR, time is not a constraint. PR activities can be continued for a long period of time. Many film producers are launching dedicated websites months before the actual launch of the movie. The websites provide information and unique experience about the films to the prospective viewers.

E-mail Marketing

E-mail or Electronic mail has been one of the most far-reaching communication revolutions that mankind has ever witnessed. It has become a part of daily life for a very large part of the population. Today, it is indeed rare to find a person with a certain minimum level of socio-economic and educational background, who does not have an e-mail account. Sending and receiving e-mails have become part of daily routine for many individuals. Even the busiest executive spends a significant part of his or her time checking e-mails. E-mail marketing is just one medium to capitalize on the amount of time and attention that consumers devote to e-mails.

A major advantage is that e-mail marketing is quite inexpensive. It hardly costs anything, except the time of the person sending the e-mails. And repeated e-mails can be sent to a person to keep reminding him about the brand or the product. But the bigger advantage comes when e-mail marketing is clubbed with creativity. A creatively designed e-mail will not only break the clutter and attract attention, but will also lead to a higher level of brand recall. A couple of years back, an e-mail was in circulation. The subject line described that it was something about a very rare phenomenon. On opening the mail, it was stated that this was a unusual phenomenon where 20 tigers would assemble together at one place once in 100 years. To know further about it, one was instructed to scroll down. At the end of the mail was a picture of 20 tiger biscuit packets kept together on the table. The creativity and fun associated with the mail would provoke any reader to forward the message to everyone in the mailing list, which hardly takes a couple of minutes. Thus, the awareness and brand recall increase. And for products like biscuits which are otherwise low involvement products and are often purchased on impulse, the sales also get positively influenced. This is the impact of creative e-mail marketing.

Conclusion

The technological advancements that we have witnessed over the past few years have found phenomenal applications in the field of marketing. SMS and internet have not only made marketing more cost-effective, but have also significantly enhanced the impact of marketing activities. In current times, the attention span of consumers towards marketing communications is rapidly on the decline. Added to this, a large number of brands are competing to attract the consumer's attention. This is where the below the line impact of technological tools in marketing become very important and effective