Impact of Digital Disruption on Traditional Marketing Practices

Digital technologies and practices in the modern world have greatly changed how businesses work. These technologies are affordable, powerful, and ubiquitous thus providing companies of all sizes and in any industry the ability to satisfy the needs of customers more efficiently and at lower costs (Budikova, 2014). Even companies that are established and successful cannot ignore digital disruption as it can greatly impact the value of products and services offered in the industry. Clearly, the digital economy has turned the traditional rules in the business world upside down (Schmidt and Cohen, 2013). The business models are changing, industry sectors shifting, and organizations using traditional models are feeling threatened by the influence of digital technologies. An even more important aspect is that digital disruption can happen in any sector, at any time, and it can have significant implications for organizations. Despite this, is seems that most organizations have not yet found the best strategies to take advantage of the opportunities that digital disruption offers.

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Many organizations may view digital disruption as a negative thing that attacks the business. However, the disruption only becomes a negative force for organizations who try to fight or totally ignore it (Downes, 2009). Those who embrace digital disruption find that it may be beneficial to their business in several ways hence contributing to their overall success. When organizations are aware of the likelihood of digital disruption emerging in their industry, then they can be in a better position to harvest the opportunities that it brings and flow with it rather than against it. Usually, digital disruption shows that there are changes in the needs of consumers (Downes, 2009). Working in line with the disruption, therefore, fulfills the emerging needs of the consumers while at the same time keeping existing customers satisfied and providing opportunities for new customers to gain trust and satisfaction from the brand.

One of the sector that has been greatly affected by the digital disruption is marketing. Digital technologies have brought tremendous changes in marketing resulting in a shift from the traditional marketing practices where marketers used to determine what is best for the consumers to more personal-based marketing that creates strong engagement between consumers and brands (Mrinalinee, 2013). Thus, marketers now need to confront digital disruption so as to engage with customers differently and more effectively. The big challenge in doing this is for them to find efficient methods that they can use to exploit the disruptive digital trends coming from social media, big data, smart shopping, and clever digital devices that are expected to emerge in the near future. Additionally, marketing budgets now have to reflect on the changing consumer behavior (Mrinalinee, 2013). Companies no longer discuss if there is need to allocate funds to digital activities the question that has now become important is what proportion of the budget should be channeled to digital activities. Organizations are now forced to adapt to the rapid changes in the digital world and thus respond to the disruptive digital trends so as to remain successful in their respective industries.

Literature Review

Defining Digital Disruption

When talking about disruption, most experts refer to Clayton Christensens article titled Innovators Dilemma (1997). Christensen introduced the Disruption theory as well as the term disruptive innovation which covers innovation in technology, products, services, and processes. According to Christensen (1997), a disruptive innovation is one that transforms products and services into being simpler and affordable so that consumers can easily acquire and use them. At their initial stages, disruptive innovations may not appear to be attractive as existing products or services when compared with traditional models (Robles, 2015). However, they get better over time and eventually satisfy consumers at a better price and with added value. The innovations address unsatisfied needs of consumers by offering different sets of benefits such as simplicity, accessibility, convenience, lower prices, and ease of use (Paetz, 2014). Occasionally, there may be breakthrough innovations that have the potential of redefining the product category. In considering the different articles on disruption with regards to technologies and business models, digital disruption can be defined as a tool, technology, business model, process, or behavior that changes customers by developing new behaviors, expectations, and values, while offering better products and services that are cheaper, and thus changing the environment and competition in the industry.

Business and Operating Models

Traditional business and operating models were based on the inside-out view. The main focus was built around products and other business values without much considerations to the needs of the customers as in the digital environment (Rust and Chung, 2006). The use of such models can be thought to have been as a result of lack of effective tools to measure their audience. In traditional metrics, vox pops, and polling are used, but usually, the data obtained is of low quality when compared to digital facilities which allow for measurement of visits and clicks among other things (Rust and Chung, 2006). The advancement of digital technologies has totally changed the game. Accurate measurement facilities allow digital business projects to learn more about customers and quickly obtain feedback by observing their behaviors using digital metrics and surveys. As opposed to the inside-out view of traditional media, digital technologies have provided an outside-in-view by focusing on customers and thus delivering a great experience to them.

There are important lessons that firms can learn from the technological revolution. Those that have capitalized on the possibilities that the revolution offer have transformed entire industries with some experiencing tremendous growth. The transformation of the business and operating models is what makes organizations stand the rapid advancements of digital technologies (Calia et al., 2007). Therefore, to be successful now, businesses need to create new or enhanced business and operating models, new ways of engaging with customers, and new ways of selling. They must decide whether it would be effective for them to enhance their existing models or invent new models so as to keep up with the pace of advancement in digital technology.

Digital Innovations that Affect Marketing

Clearly, technology has greatly affected the field of marketing. Today, marketing is mostly data-driven hence making it important for organizations to be more aware of various technologies in order to gain a competitive edge in the marketplace (Weber, 2009). In the blink of an eye, a company may find that the marketing strategies it has been using have become outdated due to the rapid technological advancements. Some of the most recent advancements that can greatly affect marketing include social media, big data, mobile technologies, and wearable technologies. These technologies allow companies to tailor their marketing strategies to reach a wider audience in different parts of the world (Tiago and Verissimo, 2014). Additionally, unlike traditional marketing models in which marketers told consumers what was best for them, these technologies allow for more engagement with the customers hence the ability for companies to build stronger relationships with consumers. As a result of increasing popularity of the digital technologies, many companies have been increasing the portion of funds allocated to digital activities. In fact, a study conducted in 2011 estimated that most companies would increase their marketing budgets significantly over the next few years so that they can keep up with the changes (Neti, 2011). Such an action is due to the changing relationship between businesses and consumers. Digital innovation has given consumers the ability to connect with brands in ways that were previously impossible. Content is now tailored to individual preferences so as to make the customers feel valued for being loyal to the business (Ryan, 2016). These developments are likely to kill mass marketing in a few years. It is no longer effective to take a mass marketing approach to content as nowadays data is usually consumer driven for brands to be successful in connecting with customers.

Consumers and Businesses Behavioral Patterns Towards Digital Innovations

Digital innovations have impacted both consumers and businesses in almost equal measures. For businesses, digital innovations have impacted the way in which they collect and organize data, the channels that they can use to reach customers, and the process of developing advertising assets (Wertime and Fenwick, 2011). With these innovations, businesses have more data, more online places to interact with consumers, and more marketing formats. Thus, businesses strive to maintain a full scope of the relevant channels that they can use to communicate with existing and prospective customers. From the consumer side, digital innovations have made marketing more integrated into their everyday life (Wertime and Fenwick, 2011). Thanks to the vast amount of information available from sources such as social media and browsing behavior, businesses can create accurate advertisements tailored to the needs of consumers. However, such exposure has also resulted in valid concerns of privacy for the consumer (Belanger and Crossler, 2011). Apart from the issue of privacy, another outcome of the modern technology-driven is the issue of ad blindness. As consumers become conscious about marketing, they will likely ignore the marketing of most businesses unless the companies tailor the message to the right context (Wertime and Fenwick, 2011). It is thus becoming increasingly important for businesses to understand consumers through capturing insights such as their likes and dislikes and offering relevant content so as to create loyal customers for the brand.

Evolution of Marketing

Marketing strategies have changed drastically since the development digital technologies. Some elements of marketing, particularly the promotional element have greatly evolved with the new technologies. It is, therefore, important to have a better understanding of the evolution of marketing and the changes that have taken place as a result of digital technologies and the communication tools they offer.

The field of marketing started growing in early 20th century, and since then, it has evolved a lot. Indeed, in the 1930s, marketing focused on production capabilities, and companies saw the development of products and services that were of high quality and innovative as the main key for success (Ainal, n.d.). However, in the 1950s, there were many products in the markets thus the marketing strategies of companies became more oriented towards sales. Companies had to have aggressive sales efforts so as to make customers purchase their products and services (Ainal, n.d.). Most of these companies thought that they should persuade people to buy their products regardless of their quality. Such orientation resulted in many fails and companies started to become more aware that they should formulate their marketing strategies to be more customer oriented. This was in the 1960s-1970s (Ainal, n.d.). Being customer-oriented meant that companies were close to customers and thus understanding their needs and problems. This strategy ensured customer satisfaction who told others of their experiences which had a positive impact on their purchasing decisions (A...