Page 278 - Foundations of Marketing

Digital Marketing and Social Networking | Chapter 9 245

These digital promotions all attempt to increase brand awareness and market to con-
sumers. As a result of online promotion, consumers are more informed, reading consumer-
generated content before making purchasing decisions and increasingly shopping at Internet
stores. Consumer consumption patterns are changing radically, and marketers must adapt their
promotional efforts to meet these new patterns.
Almost any traditional promotional event can be enhanced or replaced by digital media.
Banks are using blogs, podcasts, and Twitter to post rates and financial products and to answer
financial questions. Even direct selling representatives from firms like Avon or Amway are
gathering their consumers on Facebook to discuss products, much like socializing around the
kitchen table or engaging in a focus group.

Pricing Considerations

Pricing relates to perceptions of value and is the most flexible element of the marketing mix.
Digital media marketing facilitates both price and nonprice competition, because Internet
marketing gives consumers access to more information about costs and prices. As consumers
become more informed about their options, the demand for low-priced products has grown,
leading to the creation of daily deal sites like Groupon, CrowdCut, and LivingSocial. These
companies partner with local businesses to offer major discounts to subscribers to generate
new business. Several marketers are also offering buying incentives like online coupons or
free samples to generate consumer demand for their product offerings.
Digital connections can help the customer fi nd the price of the product available from vari-
ous competitors in an instant. Websites provide price information, and mobile applications can
help the customer fi nd the lowest price. Consumers can even bargain with retailers in the store
by using a smartphone to show the lowest price available during a transaction. While this new
access to price information benefi ts the consumer, it also places new pressures on the seller to
be competitive and to differentiate products so that customers focus on attributes and benefi ts
other than price.
Until recently, social networks like Facebook and Twitter were mainly used for promo-
tional purposes and customer service. Those who wanted to purchase items were often redi-
rected to the company’s website. However, retailers and other organizations are developing
e-commerce stores on Facebook so that consumers will not have to leave the site to purchase
items. Smaller companies such as Got What It Takes and the Baby Grocery Store have opened

Entrepreneurship in Marketing

Kayak.com Becomes a Top Player in the Travel Search Market

Kayak co-founder and chief technology officer Paul The company strives to offer the lowest prices in airfare,
English is trying to succeed in a competitive digital hotels, and car rentals while booking traveling. In the digital
marketplace filled with opponents—and doing it with world, Kayak has joined a number of companies that find
a smile on his face. It started when co-founder Steve the lowest travel prices available for consumers, facilitating
Hafner approached Paul to create a company whose both price and nonprice competition over the Internet. The
pricing dynamic could be unbeatable. They launched dynamic pricing model along with a customer-driven focus
Kayak, an online travel site, in 2004 with a beta site are the essential components of why this company has been
launch. Kayak sorts travel information from hundreds able to compete against competitors such as Orbitz and
of websites and presents the information to users in a Expedia. Its success has attracted the attention of Priceline.
d
single place. com, which has agreed to acquire Kayak for $ 1.8 billion.

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