lit review

Jacob McCown

Prof. Begert

Literature Review

11/5/14

Nowadays businesses are focusing more attention on reaching customers via the internet as opposed to using the more traditional tactics, such as customers’ phone numbers and home address.   Businesses do this with the assumption that they are saving money and reaching more people in a faster and more positive way.  However some still stand firmly behind the traditional methods believing that the customers respond better to the traditional ways and that the newer ways can be too invasive in some instances.  This paper will reflect the findings on ample research about this topic.  It will look at which forms of marketing is truly more effective, which is cheaper,  whether or not some of the methods used now are too invasive or creepy, and overall which is preferred by customers in this day and age.  It may be that people are becoming a little more use to what in previous generations would be called breaches in privacy, and are actually responding well to the new and more invasive tactics.  In my research three categories of information have presented themselves most often.  These categories are as follows: the study of geofencing, the continued use of traditional tactics, the modernization of marketing, and the ethics involved in the use of more invasive strategies.

In my paper I will be looking into the use and effectiveness of geofencing.  In my research I found that the journal Location-Based Social Networking and Services contains many informative articles on the subject. For example Data Alliance, a marketing company, wrote an article titled "Retailers May Benefit from Geofencing” This is one of the three article I use from this specific trade journal, this one will be the first I present in my paper.  This article provides background to geofencing and also a positive light on it.  It explains that geofencing is a form of location-based advertising in which a retailer sends a text-based promotion to consumers who have opted in to receive communications from the said retailer. A message is texted to consumers who are in the store's vicinity or targeted location. Unlike traditional advertising, it enables businesses to deliver pertinent messages to consumers at the most opportune place and time. Sidney Hill wrote another article in the trade journal "Location-Based Social Networking Is Not Attracting Many Users." This is number two of the three articles from this specific trade journal I will be looking at. This one talks about how few people are actually using “location based services”, and how when they launched, location-based services promised to take social networking to the next level, by allowing users to "check in" at businesses like restaurants, coffee shops, and stores, that they shop at often.  Checking in is supposed to allow your friends to know where you are and give people a way of discovering exciting new places to shop and mingle by tracking where their friends are checking in.  However, only 4% of Americans have ever even used this services to date. (At the time of this article written in 2011) I will be using this to help expand my knowledge of new methods and how effective they are.  Matt silk authored "Geofencing Can Be an Invasion of Privacy" which is the third and final article from this specific trade journal. This article shows a different side to geofencing.  The author explains that constantly monitoring the whereabouts of consumers is not only expensive but is intrusive and the use of real-time location data to reach consumers on their mobile devices is highly personal. This article add a different viewpoint to my previous research and will be used in the ethics and geofencing portion of my paper.  Xueming Luo also added to my research on my location based studies in his article "Mobile Targeting" found in Management Science.  This article delves deep into the correct place, geographically, and correct time, temporally, to reach out to customers via text message. (SMS)  Lou tests if alerting the customer on the same day of a sale is more effective than the day before or not, and if alerting the customer when they get close to the store is better than when they are a ways away.  They found that they can be most helpful individually.  This article really helped me to understand the usefulness of mobile targeting and geofencing.

Some of the sources that helped explain how traditional tactics that are still used were pretty old, but they still helped explain these strategies.  For example Victor J. Cook Jr wrote "Marketing Strategy and Differential Advantage" in Journal of Marketing. This is an old article that describes how scholars and marketing gurus thought at a time before the internet.  It uses examples like the US Auto Industry as compared to the Foreign Auto Industry of 1975.  I will use this journal to expand my traditional marketing part of my paper.  Another article that expanded my knowledge on traditional strategies was Lewis K. S. Lims’ article in the journal Journal of International Business Studies called "Development of Archetypes of International Marketing Strategy” This article focuses on international business’ “marketing strategy”, which is not quite as specific of a term in this article as it is in my paper.  This source is more based on how companies plan to market their already well off and well-known brand or company. It looks at keeping your logo or design of merchandise similar and not changing the physical look of things rather than more how to advertise them.  I learned ways that bigger companies used marketing and will probably put this into my traditional portion of the paper.  Also, Lori Chordas who wrote "Three-Dimensional Marketing" helped me look at the traditional strategies and helped me see that they are still used. This article from the trade journal Best's Review talks about new and net worthy companies and their marketing strategies.  Three-Dimensional Marketing is a trifecta of traditional, social and digital media.  Not only are video and online components being incorporated into marketing strategies, but now marketers are also relying on social networks and traditional print ads and sponsorships to create successful campaigns. This article can help me to connect brand new strategies that are being used to some traditional methods still circulating.

In my research I found a lot of newer articles that contained a lot of new and modern strategies for marketing and advertising.  A good bit of these had to do with social media. One the article I found was written by Gary Knight.  Knight authored "Entrepreneurship and Marketing Strategy: The SME under Globalization" and his article in the Journal of International Marketing describes changes in how “Small to Medium Enterprises” (SMEs) are marketing internationally. He tells us how they are evolving their strategies concerning the globalization of the modern age.  A lot more small businesses are becoming international and because of this their marketing strategies are changing.  They are using more internet based advertising and expanding in easier ways to advertise internationally. I also found Bruce Horovitz’s article about McDonalds called "He's Lovin' It: Ronald McDonald Rocking a New Look." This is a news article within USA Today about the attempts to raise McDonalds’ sales by changing up “Ronald’s” look. I chose this article because it opens up my eyes to ways large companies change their marketing strategy as the years go by.  Also, is keeps my research up to date on some previous research on sources that I have already looked at. I am probably not going to put this into my paper but it helps expand my knowledge of the topic. Another source was Susan Heavey  and Lisa Richwine’s article "Aggressive Pharmaceutical Marketing Practices Often Outpace Regulatory Efforts” found in The Pharmaceutical Industry. This article talks about how the FDA is regulating some of the more aggressive tatcics that the drug companies are trying out.  They are starting to use Facebook, Twitter, YouTube and other social media networks are the new frontier in marketing, and drug makers are dipping in like everyone else. The FDA is applying “separate guidance that are issue-specific and can apply to the various mediums used on the Internet.”  I will be applying this to the part of my paper about modern tactics and the ethics portion.

The last main recurring theme was the ethics behind these new strategies.  Dina Mayzlin was the author of one of the sources titled "Promotional Reviews: An Empirical Investigation of Online Review Manipulation."  In this article taken from The American Economic Review the author talks about the ethics behind faking reviews on internet sites.  They examine differences in the reviews for a specific hotel between TripAdvisor and Expedia.  TripAdvisor allows anyone to post reviews, whereas Expedia only allows customers to write them.  I am going to use this in my ethics portion of my paper. Another source was George R Milne’s article "If It's Legal, Is It Acceptable? Consumer Reactions to Online Covert Marketing" found in the Journal of Advertising Regulation and Self-Regulation.  This article explains how some companies covertly market products online and how people reacted when they found out what this meant.  It show that companies pay subsidiary companies to advertise their product on people computers based on the customer previous purchases and search history etc.  It also shows that once consumers found out how and what these companies where doing with their “personal” information they often reduced their purchases from that company.  I will use this to expand my ethics portion of my paper.  Finally the last source I looked at was "Pop-Ups, Cookies, and Spam: Toward a Deeper Analysis of the Ethical Significance of Internet Marketing Practices." Written by Daniel E. Palmer in Journal of Business Ethics Promoting Business Ethics, which is another article that helped develop my understanding of the ethics behind new marketing and advertising methods.  It talks mainly about the ethics behind pop ups and spam emails.  It shows that people tend to distrust the companies that send out spam mail and/or pop ups.  It also talks about the ethics behind such strategies and how business ethics in general have changed with the commonization of the internet.