Digital marketing and technology
Lecture 1 – Digital capabilities
Trainor, K.J., Rapp, A., Skinner Beitelspacher, l., Schillewaert, N., (2011), Integrating
information technology and marketing: an examination of the drivers and outcomes of e-
marketing capability, Industrial Marketing Management, 40, 162-174.
Video 1: hotel that are runned by robots. 140 robots and 7 human staffers.
Video 2: Amazon drone delivery service.
Technology has become very important for marketing.
Marketers these days not only focus on communication, promotion, sales et cetera. They
need to use technology to support the different functions that they have.
Distinctive capabilities = the unique bundling of skills and resources (related to technology)
that facilitate the execution of business processes, that ultimately contribute to a
sustainable competitive advantage and superior performance.
- Being different from you competitors give you a sustainable competitive advantage.
- Distinctive capabilities are relevant as a concept because a lot of technology is used
to create these distinctive capabilities.
Competitive advantage is not just a function of how one plays the game; it is also a function
of the assets (e.g. specific technology) one has to play with, and how these assets can be
deployed and redeployed in a changing market (adaptability).
- Relates to technology and how it is used for your product offerings.
- Deployed and redeployed: use technology but is always gets better. You need to
adapt to new technologies that are introduced.
Organizational adaptability involves a firm’s ability to identify and capitalize both emerging
markets and technological opportunities. They enter into a state of adaption when they
achieve fit with their environment, to remain adaptable technological/digital focus is
needed.
- In order to adapt to the external environment, you need technologies. You cannot
improve products and services without using technology.
- Technology is needed to perform well from a marketing perspective.
If you have to use technology, where
do you start? Hype Cycle of Gartner
presents different technologies that
are sort of relevant and are
presented in a life cycle way.
Innovation trigger: technology is new
to the market. Technologies become
a trend. There is always a dip,
reinvention of the technology. Then
moving towards being more
mainstream.
1
,Digital marketing and technology
If you enter in the first phase, you are the very first using that technology. That gives you a
competitive advantage; you are unique. This can bring lots of revenues.
- However, you have to invest a lot. Applying new technologies always come with
investments.
- The risk with allocating budget early on, using the technology in the beginning of the
phase. This can result in losing the budget if the technology doesn’t become
mainstream.
- There is always a risk involved when trying to be unique and create a competitive
advantage.
If you use a mainstream technology, the technology will be likely to stay in the market. There
is no risk involved anymore.
This Hype Cycle helps you in identifying relevant technologies. Decisions: quickly start versus
wait for the technology to get mainstream and spend your money wisely.
Becoming successful in a digital era (strategic
renewal) means that you need a few components
to be successful. These components are in the
digital marketing core. Take these different
dimensions into account for the case assignment.
It is not that you can be good in one thing. You
don’t have to focus on one thing. It is about the
integration of the different dimensions. To become
successful, you need all these dimensions and
integrate them.
Good example: Netflix. They integrated this very well. They changed their product offerings,
started to produce their own series and movies based on big data. They analyzed lots of data
coming from the system, but also panel data. They combined traditional research with new
data research and use that for developing technology, selecting specific partners, use of
channels.
E-marketing capability: it is a construct with a few subdimensions.
- Human component = about knowledge, employees being able to apply new
technology, coming up with creative ideas.
- Business component = facilitating employees to come up with these ideas, to invest
in new technologies that come to the market.
- Technology component.
Independent variables: market orientation, technology orientation.
Moderator variables: competitive environment, competitive intensity, market turbulence.
Dependent variables: customer relationship performance, organizational performance.
2
,Digital marketing and technology
Customer relationship performance: successfulness of business here is defined as retained
customers and make them satisfied. On top of that, there is organizational performance
which has the outcomes ROI, profit and cost-efficiency.
Competitive environment: it is a multidimensional construct. Competitive environment
means focusing on customer, supplier and competition.
Direct effects:
- Positive effect of market orientation and technology orientation on e-marketing
capability. This tells that e-marketing capabilities are higher/better in case a company
has a market orientation or technology orientation.
- E-marketing capability has a positive effect on customer relationship performance
and organizational performance. the better the business is able to apply technology
for marketing objectives, the higher the CR and organizational performance.
Interaction effects:
- It was expected that competitive environment would have an effect on the
relationship between market/technology orientation on e-marketing capability. This
is the case for technology orientation, but no moderation effect in the case of market
orientation.
- Dotted line = non-hypothesized effect. include this because you need to include the
direct effects of the interaction terms. In this case, comp environment and market
orientation are interaction, comp environment on e-marketing capability is direct.
!! Surprising findings are the ones used on the exam (e.g. this dotted line).
o E-marketing capability is mostly driven by the external factor than by the
internal factor market/technology orientation. E-marketing capability really
depend on customers, suppliers, and competitors.
- Market turbulence has a moderation effect on the relationship between e-marketing
capability and customer relationship performance.
3
, Digital marketing and technology
o Market turbulence has a negative direct effect on customer relationship
performance. In high turbulent markets, the satisfaction and retention of
customers is lower. In turbulent markets it is more different to focus on
building relationships. Market turbulence facilitates switching behavior.
- Competitive intensity: no moderation effect of CI on e-marketing capabilities on
customer relationship performance. but there is a moderation effect on
organizational performance. in case of competitive intensity if you have good
capabilities then organizational performance increases.
o Direct effect: if there is a lot of competition, it is more difficult to survive. This
mostly has a negative effect on organizational performance.
!! Understand this model very well, understand the surprising results.
The article also included different graphs from the interaction effects.
Graph 1
E-marketing capability as DV and technology orientation as IV and comp environment as
moderator. The line represents the competitive environment, can be low, average or high.
The more competitive the market, the higher the influence of technology orientation on
e-marketing capability.
Graph 2
Customer relationship performance as DV and e-marketing capability as IV and market
turbulence as moderator.
The higher the market turbulence the stronger the effect of e-marketing capability on
customer relationship performance.
Graph 3
Organizational performance as DV and e-marketing capability as IV and competitive intensity
as moderator.
The higher the competitive intensity the higher is the effect of e-marketing capability on
organizational performance. In competitive markets you need e-marketing capabilities in
order to perform better.
4
Lecture 1 – Digital capabilities
Trainor, K.J., Rapp, A., Skinner Beitelspacher, l., Schillewaert, N., (2011), Integrating
information technology and marketing: an examination of the drivers and outcomes of e-
marketing capability, Industrial Marketing Management, 40, 162-174.
Video 1: hotel that are runned by robots. 140 robots and 7 human staffers.
Video 2: Amazon drone delivery service.
Technology has become very important for marketing.
Marketers these days not only focus on communication, promotion, sales et cetera. They
need to use technology to support the different functions that they have.
Distinctive capabilities = the unique bundling of skills and resources (related to technology)
that facilitate the execution of business processes, that ultimately contribute to a
sustainable competitive advantage and superior performance.
- Being different from you competitors give you a sustainable competitive advantage.
- Distinctive capabilities are relevant as a concept because a lot of technology is used
to create these distinctive capabilities.
Competitive advantage is not just a function of how one plays the game; it is also a function
of the assets (e.g. specific technology) one has to play with, and how these assets can be
deployed and redeployed in a changing market (adaptability).
- Relates to technology and how it is used for your product offerings.
- Deployed and redeployed: use technology but is always gets better. You need to
adapt to new technologies that are introduced.
Organizational adaptability involves a firm’s ability to identify and capitalize both emerging
markets and technological opportunities. They enter into a state of adaption when they
achieve fit with their environment, to remain adaptable technological/digital focus is
needed.
- In order to adapt to the external environment, you need technologies. You cannot
improve products and services without using technology.
- Technology is needed to perform well from a marketing perspective.
If you have to use technology, where
do you start? Hype Cycle of Gartner
presents different technologies that
are sort of relevant and are
presented in a life cycle way.
Innovation trigger: technology is new
to the market. Technologies become
a trend. There is always a dip,
reinvention of the technology. Then
moving towards being more
mainstream.
1
,Digital marketing and technology
If you enter in the first phase, you are the very first using that technology. That gives you a
competitive advantage; you are unique. This can bring lots of revenues.
- However, you have to invest a lot. Applying new technologies always come with
investments.
- The risk with allocating budget early on, using the technology in the beginning of the
phase. This can result in losing the budget if the technology doesn’t become
mainstream.
- There is always a risk involved when trying to be unique and create a competitive
advantage.
If you use a mainstream technology, the technology will be likely to stay in the market. There
is no risk involved anymore.
This Hype Cycle helps you in identifying relevant technologies. Decisions: quickly start versus
wait for the technology to get mainstream and spend your money wisely.
Becoming successful in a digital era (strategic
renewal) means that you need a few components
to be successful. These components are in the
digital marketing core. Take these different
dimensions into account for the case assignment.
It is not that you can be good in one thing. You
don’t have to focus on one thing. It is about the
integration of the different dimensions. To become
successful, you need all these dimensions and
integrate them.
Good example: Netflix. They integrated this very well. They changed their product offerings,
started to produce their own series and movies based on big data. They analyzed lots of data
coming from the system, but also panel data. They combined traditional research with new
data research and use that for developing technology, selecting specific partners, use of
channels.
E-marketing capability: it is a construct with a few subdimensions.
- Human component = about knowledge, employees being able to apply new
technology, coming up with creative ideas.
- Business component = facilitating employees to come up with these ideas, to invest
in new technologies that come to the market.
- Technology component.
Independent variables: market orientation, technology orientation.
Moderator variables: competitive environment, competitive intensity, market turbulence.
Dependent variables: customer relationship performance, organizational performance.
2
,Digital marketing and technology
Customer relationship performance: successfulness of business here is defined as retained
customers and make them satisfied. On top of that, there is organizational performance
which has the outcomes ROI, profit and cost-efficiency.
Competitive environment: it is a multidimensional construct. Competitive environment
means focusing on customer, supplier and competition.
Direct effects:
- Positive effect of market orientation and technology orientation on e-marketing
capability. This tells that e-marketing capabilities are higher/better in case a company
has a market orientation or technology orientation.
- E-marketing capability has a positive effect on customer relationship performance
and organizational performance. the better the business is able to apply technology
for marketing objectives, the higher the CR and organizational performance.
Interaction effects:
- It was expected that competitive environment would have an effect on the
relationship between market/technology orientation on e-marketing capability. This
is the case for technology orientation, but no moderation effect in the case of market
orientation.
- Dotted line = non-hypothesized effect. include this because you need to include the
direct effects of the interaction terms. In this case, comp environment and market
orientation are interaction, comp environment on e-marketing capability is direct.
!! Surprising findings are the ones used on the exam (e.g. this dotted line).
o E-marketing capability is mostly driven by the external factor than by the
internal factor market/technology orientation. E-marketing capability really
depend on customers, suppliers, and competitors.
- Market turbulence has a moderation effect on the relationship between e-marketing
capability and customer relationship performance.
3
, Digital marketing and technology
o Market turbulence has a negative direct effect on customer relationship
performance. In high turbulent markets, the satisfaction and retention of
customers is lower. In turbulent markets it is more different to focus on
building relationships. Market turbulence facilitates switching behavior.
- Competitive intensity: no moderation effect of CI on e-marketing capabilities on
customer relationship performance. but there is a moderation effect on
organizational performance. in case of competitive intensity if you have good
capabilities then organizational performance increases.
o Direct effect: if there is a lot of competition, it is more difficult to survive. This
mostly has a negative effect on organizational performance.
!! Understand this model very well, understand the surprising results.
The article also included different graphs from the interaction effects.
Graph 1
E-marketing capability as DV and technology orientation as IV and comp environment as
moderator. The line represents the competitive environment, can be low, average or high.
The more competitive the market, the higher the influence of technology orientation on
e-marketing capability.
Graph 2
Customer relationship performance as DV and e-marketing capability as IV and market
turbulence as moderator.
The higher the market turbulence the stronger the effect of e-marketing capability on
customer relationship performance.
Graph 3
Organizational performance as DV and e-marketing capability as IV and competitive intensity
as moderator.
The higher the competitive intensity the higher is the effect of e-marketing capability on
organizational performance. In competitive markets you need e-marketing capabilities in
order to perform better.
4
