Potential of Geo-Marketing-Tools for the development of advanced Online-Marketing business models E-Book
Peter Menne
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- Herausgeber: GRIN Verlag
- Sprache: Englisch
- Veröffentlichungsjahr: 2009
Master's Thesis from the year 2008 in the subject Business economics - Offline Marketing and Online Marketing, grade: 1,3, University of Applied Sciences Essen, language: English, abstract: “About 80% of all business-relevant information within a company has a relation to spatial data” (Wagner, 2006). Facing a rapid technological change and embedded in a highly competitive en-vironment, companies are pressured to react quickly and to adopt fast to changing market conditions. Thereby, the capability of the recruitment, retention and recovery of customers more and more plays an important role. Furthermore, knowledge regarding promising customers becomes a factor of success. Hence, methods of data-based customer management are used to handle these challenges. Furthermore, those methods were used accretive in view of online marketing activities. Thus, Online-Marketing increases sustainable its importance for a company as well. But, with regard to the introducing quote, it could be ascertained that today's Online-Marketing has no spatial justification, although about 80% of all business-relevant information is suggested to have a relation to spatial data. Hence, the assignment at hand will explain the reader aspects of customer value in view of the principles of Customer Relationship Management as well as of Online- and Geomarketing. Furthermore, it will merge these ideas for the development of a structured communication and business model at the intersection of Geo- and Online-Marketing. Based on this, an analysis of recent applications will be done as well recent gaps shall be examined. Finally, a recommendation regarding advanced Online-Marketing business models will be done by the development of an exemplary business model. Thus, the reader shall get to know the interrelations as well as some hints for further considerations will be given.
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LI S T O F A B B R E V I A T I O N S
Abbreviation Description
Government / Customer / BusinessG / C / B
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EX E C U T I V ESU M M A R Y
“About 80% of all business-relevant information within a company has a relation to spatial data”(Wagner, 2006 p. 8) Facing a rapid technological change and embedded in a highly competitive environment, companies are pressured to react quickly and to adopt fast to changing market conditions. Thereby, the capability of the recruitment, retention and recovery of customers more and more plays an important role. Furthermore, knowledge regarding promising customers becomes a factor of success. Hence, methods of data-based customer management are used to handle these challenges. Furthermore, those methods were used accretive in view of online marketing activities. Thus, Online-Marketing increases sustainable its importance for a company as well.
But, with regard to the introducing quote, it could be ascertained that today’s Online-Marketing has no spatial justification, although about 80% of all business-relevant information is suggested to have a relation to spatial data. Hence, the assignment at hand will explain the reader aspects of customer value in view of the principles of Customer Relationship Management as well as of Online- and Geomarketing. Furthermore, it will merge these ideas for the development of a structured communication and business model at the intersection of Geo- and Online-Marketing. Based on this, an analysis of recent applications will be done as well recent gaps shall be examined. Finally, a recommendation regarding advanced Online-Marketing business models will be done by the development of an exemplary business model. Thus, the reader shall get to know the interrelations as well as some hints for further considerations will be given.
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1 Introduction
To remain in a highly competitive environment companies need a clear picture of the current market situation and their customers (infas GEOdaten GmbH, 2006 p. 11). This is especially of importance concerning the adjustment of marketing activities. Embedded in a surrounding of shortened product life cycles and saturated markets, companies are more and more forced to acquire new customers and to improve the loyalty of recent customers. Thereby, the activities of recruitment and retention regarding the recent or potential customers have a task to geographical aspects. For naming those problems, the decisions about the advertising planning (Tappert, 2007 p. 9), the management of field service and sales representatives (infas GEOdaten GmbH, 2006 pp. 21, 37) as well as the customer segmentation (Holland, 2004 p. 81) shall be emphasized as examples. Thereby, especially new forms of communication concerning modern online technologies have to be taken into consideration, triggered by an ongoing trend of technological improvement.
1.1 Background
As a consequence of this ongoing technological improvement, marketing gets more and more data-based and technology-oriented. One result of this development is the aggravating change in the field of spatial marketing. Based on customer-related data and enabled by modern hard- and software technology, the role of Geo-Marketing increases rapidly. So, nowadays Geo-Marketing is no more related to pins on a map, but to a highly efficient type of data-based marketing.
Beside this, but based on the same technological development also, the importance of Online-Marketing increases as well. In that context, two essential fac-tors of success have to be named: First, the unbroken swelling spread of the internet and second, the strong cross-linkage and convergence of different technologies. Whereas, based on the second aspect the ability arises to use online-services everywhere and at any time.
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So, keeping these recent developments in mind, it might be unavoidable for companies to extend their Geo-Marketing activities in view of Online-Marketing as well as vice versa to optimize the Online-Marketing by cognitions of Geo-Marketing.
1.2 Problem description
With regard to the given statements the necessity of a merged view on Geo-and Online-Marketing arises. Thus, a sound analysis of these marketing segments is necessary to develop perceptions about gainful business applications. But as already mentioned, beside these business-related marketing aspects, the technological feasibility has to be examined as well. For that reason, marketing and technological aspects have to be scraped together to derive benefit and to detect new business models.
1.3 Objectives
With regard to the pictured endeavor of deriving benefit for companies by detecting new business models, this assignment shall examine, whether and how principles and methods of Geo-Marketing could be used in the field of Online-Marketing and as well, what the recent limitations are. Furthermore, a frame-work for the development of advanced Online-Marketing business models shall be provided.
1.4 Methodology
To achieve the stated aim of the Master Thesis, a thorough literature review will build the sound basis for this assignment. Thereby, the explanation of different marketing aspects, the development of a business model structure and the analysis of environmental limitations will be done by a literature based research. This should provide the reader both a broad understanding and an actual overview regarding the recent literature. In a further step, recent applications will be analyzed as well as possible new business applications shall be developed by a
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deductive argumentation. For that reason, the pictured all relevant aspects shall be put together. Based on this cross-sectional view, the aim of the Master Thesis, to derive benefit for companies by detecting recent gaps in the creation of value and by the development of new business models, should be reached. Finally, a brief subsumption, a critical appreciation and an outlook from the au-thor’s point of view will be provided.
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2 Marketing framework
With the aim to evaluate the potential of Geo-Marketing tools for the development of advanced Online-Marketing business models a sound analysis of relevant problem fields is needed for providing a broad theoretical background about all related aspects. Before starting the development of advanced business models the framework of marketing in general and of Geo- and Online-Marketing in special should be analyzed. Furthermore, interdependencies shall be outlined and the relevance for the development of advanced business models should be pointed out. In view of further explanations a detailed background of the understanding of business models will be provided also. So, a sound bases for remaining considerations shall be given.
2.1 Relationship Marketing and Customer Value
As a starting point for further considerations the marketing framework of this assignment shall be put into focus. Giving a first definition of what marketing means, marketing can be understood as a process within the economic- and social-structure which enables single persons and groups to satisfy their needs and wishes by creation, offering and exchange of products and other exchangeable objects of value (Kotler, et al., 2007 p. 11).
2.1.1 Transactional vs. relationship oriented marketing
Although the definition shows the interrelation of supply and demand quite well, it might be too unspecific to derive benefit for the further explanations. With regard to economical aspects and to confine the focus of this assignment, the following definition might be more useful: Marketing contains the conscious influence on commercial exploitation via the instrumental mix with the intention, to reach quantitative and qualitative objectives by generating customer benefits through a purposeful arrangement of sales-relevant business relations (Pepels, 2004 p. 25).
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As this definition seems to be more applicable, it underlines the importance of business relations as well. Furthermore, it reflects the evolution of the comprehension of marketing over the years. Whilst the classical marketing concept has a transaction-oriented and new-customer-focused point of view, the modern understanding of marketing more and more puts the customer-relationship into the focus (Kuß, 2006 pp. 21-23).
A reason for that are the findings of several market- and customer researches: First, the realization of the correlation between the duration of the business relation and the increasing return per customer. Second, the insight that caused by
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high communication costs and decreasing advertisement-power the winning of new customers becomes more and more unprofitable. (Zollondz, 2006 p. 82). In that context, customer relationship management could be defined as a management approach aligned to a systematic creation and care of customerfocused relations with the ideal-typical five process steps of accosting - winning over - informing - servicing - caring. (Zollondz, 2006 p. 85) Beside this change from a transactional marketing approach to a relationship-oriented one, even the relationship-concept itself had changed the focal point over the years. Based on an increasing individualization, intensified efficiency-orientation and derivative IT-solutions the focus turned from customer satisfaction to customer value.
[Source: Graphic by author’s own, based on(Homburg, et al., 2004 p. 291)
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Beside these aspects regarding relationships, the given definition of marketing also underlines the concept of the instrumental marketing mix. Thereby, companies try to optimize their allocation of resources with regard to the product, price, promotion and place for improving the commercial exploitation (Meffert, 2005 pp. 971-972). In respect to the initial letters this concept is called the 4Pconcept (Zollondz, 2005 p. 8).
In an analogue style to this 4P-concept considering the instrumental marketing mix (Zollondz, 2005 pp. 11-12), a three-phases-model in view of relationships put across within the recent literature. This so called 3R-concept divides a relationship into the phases of recruitment, retention and recovery. Thereby, the recruitment shall intensify the customer dialog with the effort to improve the customer acquisition. Through the customer retention a consolidation and expansion of the relationship is aspirated. Finally, the recovery-phase contains activities to keep or win back customers. (Bruhn, 2002 pp. 32-33) These two concepts can be conjoined to extend the ability of the company’s resource allocation. Furthermore, the correlation of marketing activities, their embedding in the relationship context as well as additional comparison to the customer attractiveness could be shown at a glance.
Furthermore, the previous comparison of the classical marketing approach versus the customer oriented concept yields the ability of a classification of relationships and emphasizes the figuration of customer value (Meffert, 2005 p. 26). In this respect, new business ratios like the customer contribution margin and the customer value complement the usual ones just as profit, revenue and expenses (Bruhn, 2002 p. 32).
