Individual assignment how digital tools are changing marketing mix (4ps) mkt318m

INDIVIDUAL ASSIGNMENT
How digital tools are changing marketing mix (4Ps)
MKT318m
Lecturer: Nguyen Minh Quang

Name: Bui Duc AnhAnh

Class: MKT1708

Student ID: HS160928

Date: Summer 2022


OUTLINE:
I.
INTRODUCTION
1.
Overview of changing in the digital world
2.
Definition of marketing mix
3.
How digital tools are changing elements of marketing mix (in
general)
II.
1.

HOW DIGITAL TOOLS ARE CHANGING MARKETING MIX
Product
1.1. Customer co-creation
1.2. Sharing economy

2. Promotion
2.1. User generated content
2.2. Doppelganger brand
3. Place
3.1. New retailer
3.2. Desktop manufacturing
4. Price
4.1. Pay What You Want
4.2. Freemium

III.
DISCUSS HOW COMPANIES CAN REACT TO THE CHANGING
OF THE DIGITAL MARKETING ENVIRONMENT.

IV. CONCLUSION
V. REFERENCE


I.

INTRODUCTION:
1. Overview of changing in digital world:
The development of modern technology has made many changes in our
lives. It has made tech products evolve faster, our lives are better and
more interesting. The digital world has opened up with the advent and
development of modern technology, digital tools and resources, to make
the most of our available resources combined with the Internet, humanmachine interaction, smart devices and advanced technology.
The digital world has brought us tremendous benefits in every aspect of our lives.
Especially when we've just been confronted by one of the most dangerous
epidemics of COVID-19, with the great humanitarian crisis between Russia and

Ukraine making it very difficult for trade and development. Human development is
severely affected. The General Statistics Office indicates that the global economy
could decline by more than 1% by 2022. In developing economies like Vietnam,
inflation could rise by 5.9% (according to the IMF). This would have a consumer
effect causing tighter spending and reduced purchasing of goods. So businesses
and marketers must find ways to innovate themselves, raise awareness about
brands, and increase their sales in new ways.

With human creativity and resilience, the digital world is constantly
being explored and developed. Under the difficult circumstances, digital
technology has the flexibility to integrate into all areas of operation.

2. Definition of marketing mix:
Marketing is a function of business that determines the needs of the
consumer. It also identifies target markets as well as applies services and
products to serve such markets.


The strong growth of digital tools has changed the marketing strategies of
businesses, especially in the marketing mix. So what is the marketing mix?

The Marketing Mix refers to the set of actions, or tactics, that a company
uses to promote its brand or product in the market. The key 4Ps that
make up a typical Marketing Mix - Price, Product, Promotion, and Place.
Today, however, the marketing mix increasingly includes several other Ps
like Packaging, Positioning, People, and even Politics as the key mix.
A marketing expert named E. Jerome McCarthy created the Marketing
4Ps in the 1960s. This classification has been used throughout the
world. Business schools teach this concept in basic marketing classes.
The marketing 4Ps are also the foundation of the idea of the marketing mix. The

4Ps of marketing are a model for enhancing the components of the "marketing
mix" - how a business brings a new product or service to market. It helps to
identify marketing options in terms of price, product, promotion, and placement of
a business's product to meet a customer's specific wants or needs.

3.
How digital tools are changing elements of marketing mix (in
general):
Digital tools have made the marketing industry make big changes compared to
the past by taking advantage of search engines, marketing tools for marketers
to use to research the market, classify customers, and bring the company's


products to the right audience. It requires marketers to constantly improve
their knowledge to keep up with the rapidly changing technology. The use
of digital tools has made marketing easier, and highly effective, saving time
and costs, and quickly reaching potential customers.

II. HOW DIGITAL TOOLS ARE CHANGING MARKETING MIX
1. Product:
In order to capture the impact of digital tools on the marketing mix, we will go into
the first of the four elements, which is the product. Commodities are tangible or
intangible items intended to satisfy a need or want of a customer. Products that
people can touch and hold such as tables, water bottles, shoes, ...

are tangible products. On the contrary, there will be products that do not
exist in a specific form, but it is an idea in the human brain and that idea is
bought by others or is an actual experience, it is an invisible product. Every
business needs to find their company's unique products, to develop longterm and compete with other competitors, so understanding the needs of
customers is really important.

and then try to give it to them. By the time you perfect it, they already want
something newer.= - Steve Jobs. Instead of the company as before, only the
company is the creator and producer, now the customer is involved in the
production and digital is the connecting tool.

To be able to develop a good product that meets the needs of users,
we should use marketing tools to develop product images for users by
a number of measures:

1.1. Customer co-creation:
●
Co-creation is a business practice that refers to the process of designing a
product or service in which the consumer will participate in the process. Today's users
enjoy better education, more diverse needs and want, and become a resource for mining
businesses. There are four different forms


of co-creation: co-designing, collaborating, submitting, and tinkering;
with each type of guest being able to engage with their creative idea.

●
Participants: are everyone from seniors, experts, managers, suppliers
and especially customers.
●
Objective: All people involved in co-creation will develop the idea and
finalize it as a blueprint; plan, and then send it to the business to receive
feedback. That idea will be evaluated and voted on by everyone from the
business: directors, managers,...and customers of the business. Products that
are highly appreciated and have outstanding votes will be validated by the
company and put into the production process to create new products.

●
What drives people to co-creation is social and corporate recognition,
being known for their unique creative ideas, and being produced. Along with that,
the author of an idea recognized in the co-creation activity will receive additional
financial incentives from the business and a discount on the revenue of the
product created by him.
●
Business benefits: Involved creators will help drive new product launches, New
products entering the market will be supported by more people because the product has
gone through the process of evaluating


ideas from clients. Therefore, the revenue for the business is
promoted and developed more.
●
Lego is the most famous toy brand in the world, surely we all have chair
clips with many different designs. It is known as a toy not only for entertainment
but also to help us enhance our concentration, stimulate creativity, fine motor and
promote problem-solving skills. The Lego Ideas platform was officially launched
in 2014, it allows fans to submit their new product designs or even ideas for entire
Lego sets to their liking. Every month, the site receives tons of creative designs
from Lego fans around the world. Their ideas will be posted for all to see and
comment on. With an article receiving 10,000 supporters, that idea will officially
be developed by the Lego team into a new product. On average, Lego releases
about 10 of these ideas as official Lego products each year. This initiative
therefore plays an important role in the Lego product development strategy.
Currently, many businesses use this form to connect themselves with customers
as well as show that businesses always listen to their thoughts and aspirations.
The online news service Digg.com and the cable channel Current Television both
provide most of their content directly from their users. In contrast to the standard

approach used by commercial news organizations, Digg.com has decentralized
editorial control and instead, allowed a community of more than 300,000
registered reviewers to vote for stories they deem worthy of showing.


1.2. Sharing economy:
●
Next is the sharing economy, a mixed market model that refers to a
peer-to-peer network based on shared access to goods and services. There
are many areas that a business cannot provide forever on their own, they will
cooperate with many other businesses. From here, the sharing economy
begins to take shape, which will reduce the burden on businesses. Not only
businesses but even individuals or simply people who like to share also want
to apply the sharing economy model. Even in developing countries like
Vietnam, this model is being applied quite successfully.

●
Benefits of Sharing Economy: Since the sharing economy appeared, it has
created countless positive values for society. Specifically like:

●
Job Opportunities: It opens up many more job opportunities for
society, as well as diversifies the number of occupations.
●
Minimize Waste of Assets: A product when its owner does not need it
will exchange it with someone who needs it. Both parties benefit, the owner of
the property will receive a cost. People who need to use property will solve
their problems.
●

Innovation

➢
The sharing economy model has pushed traditional companies to
innovate, continuously improve, and apply technology as a lever for strong
development.
➢
Create an extremely competitive environment, always aiming for the new
and the good. And in this case, the customer is always the beneficiary.


●
Minimizing Transaction Risks: In the sharing economy model,
transactions between customers and suppliers always have an intermediary to
guarantee. And the same goes for customers, this will help both parties
ensure their own safety.
●
Protecting the Environment: Making the most of idle assets will help
us reduce the large amount of waste produced each year. This not only helps
us to limit the exploitation of resources but also helps the environment to be
cleaner.
●
Activate: Basically, there will be 3 objects in this sharing economy model.
There are asset suppliers, demanders, and connection units. The asset supplier and
the demand side will both link with the intermediary to deliver and receive their
products. All subjects receive their own benefits. And are guaranteed benefits,
property providers and tenants can rest assured because there is a guaranteed
intermediary.

●

Example: The appearance of Grab has broken the long-standing
traditional market and formed a new technology ride-hailing market. Grab
succeeds with a breakthrough based on the sharing economy, the company
connects with available resources to develop services. They connect with
freelance drivers, people who have a car but don't need to use it, people who
know how to ride but don't have a car, etc., and thereby optimize costs. and
offer customers a price that fits everyone's pocket. The customer experience
is improved and enhanced by the extensive distribution network, saving time
and being able to always give their opinion and feedback after each trip. In
Hanoi, as of December 2017, Grab taxi has 11,474 vehicles participating in
the pilot in the area, accounting for 90.67% of the licensed vehicles operating
in the city. The success of Grab has led to the boom and development of the
ride-hailing market.


2. Promotion:
Promotion is the method of communication that marketers use to provide
information about products; services to customers. Along with that is the
planning of advertising, sale promotion, public relations and direct
marketing to increase awareness among customers.
• Personal Selling • Sales Promotion
• Public relations (PR) • Direct Marketing• Advertising
When a product is launched and appears on the market, businesses will
always find ways to make their products stand out from competitors'
products. Promotions will be launched to attract customers, including an onsite trial service to stimulate human curiosity. It is considered a way for
businesses to communicate with customers. The most talked about theory
on how to convince customers is the Elaboration Likelihood Model or ELM
for short. This model shows us that there are two main paths to customer
persuasion. The first gland, the central gland, is marked by internal
awareness, which enters the consciousness of each person from childhood

to adulthood, and the second, the peripheral gland, is emotional in nature.
Calculating more losses, advantages and disadvantages, sharp eyes.
images combined with sound to influence customers.


2.1. User Generated Content:
●
User-generated content is any brand-driven content created by users.
In recent times, user-generated content has become a great way for
businesses to achieve the same marketing goals as using advertising or
creating content without much investment.
User-generated content is created in many forms through a
variety of channels.

●
Business benefits: Low production costs because users create content
about their businesses, this will help advertise products and businesses instead of
businesses implementing marketing strategies.

●
Gain the trust of customers: Users will share their experiences about
the products and services of the business, so they will receive higher trust
from customers.
●
Good impact on revenue: Gaining the trust of customers through creative user
content will attract great attention from customers, awakening their purchasing behavior.
This will help businesses increase revenue quickly.
●
Fresh content: lots of users create content so you won't have to worry about
duplicate content. The content is innovative and extremely rich. What drives users to

engage in content creation is the social recognition of their products. Along with that,
there are financial incentives for


businesses. It is these things that will help users be extremely
excited when participating in content creation.
●
Conditions for enterprises to apply UGC: Cooperation impact on
others, individual quality of the UGC, competition how much better the UGC
was than that provided by others. What motivates users to contribute is that
UGC will receive human and social recognition, and rewards commensurate
with their achievements.
●
You can see currently the wave of doing KOLs is being responded to
by many people. People instead of seeing traditional advertisements, people
tend to see other people's reviews about that product, see if they have any
comments and reviews about that product. Especially when the product is
used and evaluated by famous people, it creates more trust in the hearts of
consumers.
●
GoPro uses User Generated Content (UGC) to promote its YouTube
channel - with the majority of GoPro's top-performing YouTube videos on their
channel being UGC content. GoPro created UGC through its GoPro awards
program which generated 130K website visits in 2019. The program includes a
number of content challenges that reward contestants in terms of equipment,
visibility, and cash - awards $1 million per year to the top content creators in total
prizes. (Rightmetric, 2020, Digging into GoPro’s User Generated Content
Strategy for YouTube) Entrants have three months to film and submit content that
follows the contest guidelines, such as raw clips only, no music, and 100% GoPro
HERO 9 Black footage.

At the end of the Million Dollar Challenge, GoPro creates a featured reel
featuring all the winning videos. The GoPro final challenge had 42,000
clips submitted and 45 creators split the million-dollar prize pool.

This challenge drives new GoPro camera purchases as all
submitted footage must be shot on their latest release. This also
helps to introduce new camera features (clearer video, larger
screen, camera stabilization, etc.)


2.2. Doppelganger brand image:
Another aspect mentioned here is the doppelganger brand image. The
appearance of an advertisement or a product happens in two directions,
one is received positively but the other is not satisfied. When so many
people participate in product reviews that sometimes stopping will feel
inappropriate, they will leave negative reviews. Moreover, with
competitors, creating a conflict between advertising and use makes
customers confused and doubtful about the product they have bought.

In 2021, Xiaomi spent 7 billion VND to change the logo. It created a media wave
about the doppelganger brand image. Anyone can recognize this logo is not
much different from the previous logo. People talk about the price of VND 7


billion passionately without realizing that what Xiaomi really needs is not a
new logo, but an "attached" media fever. Everywhere, everyone is talking
about Xiaomi.

How brands respond to Doppelganger encounters is:
• Businesses use digital to monitor their brand posts for greater control.

•

Identify and track your branded consumers. Instead of being passive to DBI, we will
observe and analyze to determine the cause and have optimal solutions.

• Developing and testing a new story, once DBI is defined, even in the early
stages, brand managers should look to create a new story to address DBI.

• Protect your brand from the threat of a DBI: we need DBI validation and
after validation, there will be viral marketing strategies that provide authentic
brand information.

3. Placement:
Have you ever wondered why your branded stores are located on the main
roads, why, not in a certain alley? In business, location is an important thing to
attract customers. Gucci fashion brand was born as the realization of the
aesthetic thinking of European aristocrats in the 20s of the last century.
According to the results announced by Kering (the parent group), Gucci
currently has more than 505 stores globally, providing more than 4000 products
to developed markets such as Norway, Sweden, Denmark, and Finland. For
nearly a century of struggle for survival, Gucci has always maintained its own
operating philosophy, cherishing and preserving the classic values of traditional


craftsmanship, the heritage of the brand endures forever. Most of Gucci's stores
are located in large shopping centers and places with eye-catching locations
that make customers irresistible every time they stand in front of the store.

3.1. New retailers:
●

How has digital impacted location?
New retail is a very interesting concept in the digital world. As before,
there will be an item or product that you want to buy, but it must be
placed somewhere else. It will take a long time to receive the goods
because of the geographical distance, not to mention the careful
packaging. Having a retail store is really necessary, it will be a bridge
between customers and the main product, avoiding them from feeling
lost. With retail stores that integrate digital technology, customers will
be more interested in what they learn and experience. The number of
online shoppers is increasing, having such digital retail stores will help
them have the most accurate information about products and will be
marketed thoroughly.

●
Let's see how well Tesla has applied this concept. Tesla is currently one of the
largest automakers in the world and is rapidly expanding into Asia and Europe. Many
other traditional automakers are facing sales declines, but Tesla, by contrast, is standing
firm thanks to its differentiated retail strategy. Regarding retail locations, Tesla has fewer
retail locations than other traditional companies but is managed by Tesla itself without
the


involvement of a third party. Next is retail space, often small
in a shopping center and only two or three in a showroom.
Finally, thanks to digital adoption and sales tools, Tesla's car
sales only take about 5 minutes to do, the fact that Tesla earns
70% from online sales gives customers peace of mind and peace
of mind, quickly when making transactions.

3.2. Desktop manufacturing:
●
Another concept mentioned in the article is that Desktop Manufacturing is
understood as the process of producing consumer products using labor and
machines, tools, combined with recipes or processing processes. The gradual
transition as technology evolves is from physical goods to digital goods. The use of
3D printers to create a different product line than before, when it has been fully
optimized and much more economical. Digitally shipped products save both time and
money and give companies greater control over the distribution process, so cutting
out the middleman is a very attractive prospect. A company can do this by posting
digital files of its products or product parts on a website for easy download or
possibly posting on a third-party website.


●
For example, NASA uses 3D printers to replace broken parts on
spacecraft while in space. This shows the high applicability of 3D printers when
being able to meet such practical needs. These things, are enough to show us
that nothing is irreplaceable, so cultivate your digital knowledge every day, it will
be a tool to help you in your career later. You see today there are jobs where
machines can replace humans, so if you don't try to keep up with the world's
optimization trends, chances are one day, your business will fall into crisis.

4. Price:
The last factor is price. It is the amount a customer has to pay when they buy a
certain product. The price is a non-fixed quantity that will continuously change
from time to time as the company deems appropriate. The more businesses want


to increase the value of the company, the more they must have a good,

perfect pricing strategy to help gain long-term profits. To have a good pricing
strategy is often very difficult and must carefully consider and calculate the
production costs and incurred costs of the product. Some of the factors when
it comes to pricing are: discounting, price setting, credit collection, and cash
and credit purchases. In addition, businesses can rely on competitive product
prices and the original price of products when manufactured to make informed
decisions about prices. This will attract customers to your product.

Therefore, every decision on pricing is extremely important to the
business. Today with the emergence of digital tools that have
developed and help businesses come up with more innovative pricing
strategies, attract more customers and are extremely novel such as:

4.1. Pay what you want (PWYW):
●
PWYN is known as a pricing strategy that allows customers and consumers
to pay any price for a product they buy and possibly without paying. Implementing
this strategy will help sellers understand the needs of the market, eliminating the
disadvantages of conventional pricing.

●
An example of a successful application of the PWYW strategy is the
Humble Bundle.
The Humble Bundle is known as a digital platform store that primarily offers
video games. Founded in 2010 by Jeff Rosen and John Graham from the
beginning they used a PWYW model that allowed users to pay as much as
they wanted for bundles of PC games. Most packages have an additional
bonus announced mid-term as an additional incentive for game

purchases as users pay more, previous purchases automatically receive
those rewards. Revenue from this strategy will be shared between the
Humble Bundle store, the game developers, and charitable donations.

By the end of October 2014, participating developers had grossed
more than $100 million and by September 2021, the total charitable
amount raised by the Bundles exceeded $200 million across 50
different charities (taken from en.wikipedia.org). However, this strategy
also has many downsides and not all businesses apply it successfully.
Because letting customers pay at will greatly affect revenue and cause
financial instability if the business is not strong enough. The application
of PWYW should be carefully researched, suitable for the product the
company is trying to sell and should propose an average price for
buyers to refer to or only implement the strategy when the new product
is launched on the market, take place during certain months of the year
to capture the customer experience.

4.2: Freemium
●
Freemium pricing—a mix of the words pricing strategy that businesses use if they want to offer customers free services
in addition to paid options. (Patriotsoftware, 2019, Going the Freemium Pricing
Route, para1)


●
With freemium pricing, a business offers at least two levels of service:
paid and free. The free option usually has fewer features than the paid option.
Or, it may have an attraction (e.g. advertising or limited usage). Premium
options are optional, but they often offer additional features, a better

experience, or both.
●
Freemium doesn't just apply to businesses that offer perpetual free
and paid options. It can also apply to companies that offer a free trial of their
service.
Businesses using a freemium pricing strategy hope to entice customers
with the free option, then convince them to upgrade to the paid version.

●
➢
➢

Advantages of Freemium Valuation:
No barrier to use, tends to lead to a large user base
Reduce marketing costs and attract customers

➢

Free products tend to be more widely known and have a loyal following

●
Spotify's story is also quite interesting when they launch two versions:
free and paid to serve the entertainment and relaxation needs of customers. The
product quickly became widely accepted with the feature of recommending music
in line with users' current music trends, allowing users to manage playlists and
follow their friends. They see this as a successful step in directing users to the
premium version of Spotify. But the reality shows that, although the number of
people who download Spotify uses a lot, they do not pay to upgrade to the high
version, not to mention there are many competitors.

Increasing the number of paid Spotify subscribers is what the
development team wants. They have come up with strategies to
improve the quality of the product, making the paid version
different such as no interrupting ads, richer playlists, can be played
directly without downloading, there are many different interfaces…
That way they convince users that the premium version is worth it,
they will see a clear difference from the free version and don't
hesitate to upgrade. With its efforts, Spotify has achieved an
amazing Freemium model conversion rate of 26.6%. Out of 75
million monthly users, 20 million are paying for the service.