UNIVERSITY OF JYVÄSKYLÄ School of Business and Economics

Transcription

1 UNIVERSITY OF JYVÄSKYLÄ School of Business and Economics Mari Laukkanen INTEGRATION OF DIGITAL MARKETING INTO THE BUSINESS-TO-BUSINESS MARKETING PROCESS Marketing Master s Thesis November 2011 Author: Mari Laukkanen Instructor: Heikki Karjaluoto

2 UNIVERSITY OF JYVÄSKYLÄ School of Business and Economics Unit Subject School of Business and Economics Marketing Author Supervisor Mari Kristiina Laukkanen Heikki Karjaluoto Title Integration of digital marketing into the business-to-business marketing process Type of the degree Master s thesis Time of publication November 2011 Number of pages The Abstract Digital marketing has revolutionized the field of marketing in recent years. The consumer markets have adopted digital marketing slightly better than the business-to-business environment but business markets are coming strongly behind. At this point digital marketing is becoming more and more general in the business world as well where the traditional marketing tools such as personal selling and trade affairs have generally ruled the marketing field. The goal of this study is to find out how an industrial b-to-b organization could apply and develop digital marketing. The study is conducted as a case study. In this study, the B2B marketing is studied as overall business marketing. The traditional marketing is as well covered but the main focus of the study is examining the integration of digital marketing into the firm s marketing process. The B2B marketing process is approached through the Moncrief and Marshall's (2005) sales framework, the evolved seven steps of selling, which provides the foundation for the theoretical framework of this study. On the basis of the evolved selling steps, the B2B marketing process has been constructed with the integrated digital and traditional tools. The results section describes the current marketing situation of the case company. In addition this study gives development ideas for their marketing process, especially in the field of digital marketing. From the theoretical point of view, this study confirms the earlier studies of digital marketing for the most part. It supports the view that the general development of digital marketing has been slow in B2B environment although the B2B companies might benefit greatly from the features of digital marketing tools. However, this study claims that some of the digital tools are not important in the B2B environment at present but they might be in the near future. In addition this study indicates that the seven steps of selling have evolved further and the digital tools have blurred the dividing lines of the traditional selling steps. Key words: business-to-business marketing, digital marketing, the seven steps of selling

3 CONTENTS ABSTRACT TABLE OF CONTENTS FIGURES AND TABLES 1 INTRODUCTION Background of the business-to-business marketing Background of the seven steps of selling Research problem and objectives Structure of the study INDUSTRIAL BUSINESS-TO-BUSINESS MARKETING B2B marketplace Business communications B2B marketing Personal selling Trade shows Advertising Digital marketing Internet marketing Social media marketing The planning of digital marketing INTEGRATING DIGITAL MARKETING IN THE TRADITIONAL ORGANIZATIONAL SELLING PROCESS From prospecting to customer retention and deletion Search engine marketing Website From preapproach step to database and knowledge management Customer relationship management CRM Intranet From the approach step to nurturing the relationship Blogs Microblogs marketing From the presentation step to marketing the product User generated site communities Banner ads Unified communications From the overcoming objections step to problem solving Communities Social networks From the close step to adding value Mobile... 50

4 3.6.2 Extranet From the follow-up step to customer relationship maintenance The summary of the sales process and digital tools METHODOLOGY Case study as a research method Data collection - interviews Methods of analysis RESULTS The present situation in marketing Present marketing actions Trade shows Digital marketing Marketing budget Competitors The attitude towards digital marketing in the case company Digital marketing tools Webpage Search engine optimization and advertising Intranet Extranet marketing CRM Banner ads Social media marketing Communities Facebook and Twitter Blogs Mobile marketing Developing ideas Discussion of the results CONCLUSIONS Research results Theoretical contributions Managerial contributions Quality of the study Suggestions for future research REFERENCES APPENDICES

5 FIGURES Figure 1 Business communications in B2B environment (De Pelsmacker et al. 2004, 521) Figure 2 Homepage of Rautaruukki s webpage Figure 3 News and events page of Rautaruukki Figure 4 Airclic s homepage Figure 5 B2B marketing process Figure 6 Evolved B2B marketing process TABLES Table 1 Social media selection (Gillin & Schwartzman 2011, 145) Table 2 The evolution of the seven steps of selling (Moncrief & Marshall 2005) 25 Table 3 Traditional and digital tools in the first step of selling Table 4 Traditional and digital tools in the second sales step Table 5 Competitive advantages of CRM system (Nguyen et al. 2007) Table 6 Traditional and digital tools in the third sales step Table 7 Traditional and digital tools in the fourth sales step Table 8 Traditional and digital tools in fifth sales step Table 9 Online communities (Porter 2004; Lehtimäki et al ; Kannan et al. 2007) Table 10 Traditional and digital tools in the sixth sales step Table 11 Traditional and digital tools in the seventh sales step Table 12 The summary of the seven steps of selling with the marketing tools.. 55 Table 13 Information of the interviewees Table 14 Digital marketing actions of the case company s competitors... 67

6 6 1 INTRODUCTION 1.1 Background of the business-to-business marketing Business-to-business (B2B) markets tend to work slightly differently than business-to-consumer (B2C) markets. In the B2B environment products and services are often complex, specialized, and rather expensive which makes the buying process more complex and long as well. (De Pelsmacker, Geuens, Van den Bergh 2004, 509; Jones 2008, ) The long and complex buying process often demands extremely targeted and personalized communication (Anderson & Narus 1999). The communication of business markets have traditionally been considerably based on face-to-face communication. The messages have been individualized and tailor made for every customer and the communication has been highly interactive. People have involved strongly in the communication of the buying process. This is possible because of the oligopolistic situation of the markets; there are relatively few customers to deal with in the B2B markets. (De Pelsmacker et al. 2004, 512.) These all characteristic features of B2B markets have shaped the marketing of the business. B2B marketing tends to be extremely customer orientated and targeted to every customer individually. (De Pelsmacker et al. 2004, 512; Jones 2008, 13.) According to Smith, Gopalakrishna and Smith (2004) personal selling and trade shows are the most dominant marketing elements in the business markets. In addition advertising in the trade journals has traditionally been an effective way to reach the most of the target market at the same time (Anderson & Narus 1999). Although personal selling and trade shows are still significant marketing tools in the B2B markets, direct mailing, database marketing and especially online marketing has increased substantially in recent years (De Pelsmacker et al. 2004, 519). Altogether, the digital marketing is becoming more and more important in the B2B environment. Digital marketing has revolutionized the field of marketing in the recent years. Generally, consumer markets have been more enthusiastic to employ different digital marketing tools than business markets. However, digital tools

7 may be profitable to the B2B organizations as well. Digital marketing is often highly focused on the customer, similarly as the traditional B2B marketing. Therefore, digital marketing may be a great success for the B2B organizations adding the value to their customer relationships. Combining different elements of the digital marketing organizations may serve their customers more precisely and with better targeting than before (Scott 2010, 120, 146, Sharma 2002, Kho 2008). Digital marketing is often confused with Internet marketing. After all, Internet marketing is only one part of the digital marketing. Digital marketing includes a wide range of digital channels such as the Internet, mobile phones, wireless communications and digital television. (Li, Li, He, Ward and Davies 2011.) Certainly, Internet marketing is a vital part of the digital marketing totality. While the Internet is becoming more and more general all over the world, it constantly improves the reach of the organizations. In addition Internet marketing may reduce marketing costs of the organization. (Sheth & Sharma 2005.) Many of the Internet marketing tools, especially social media tools, are low-priced or cheap and therefore easy to implement in the organization. However, the tools should never be put into operation just because of a free or trendy tool. Internet marketing, such as the totality of digital marketing, should be managed similarly to the traditional marketing actions: the tools should be chosen on the basis of the organization's strategy and objectives. (Gillin & Schwartzman 2011, ) Background of the seven steps of selling The profession of selling has a rich and long history. The selling process has evolved together with the development of both the marketing and sales disciplines, especially in light of changes in the economic conditions. (Moncrief & Marshall 2005; Wotruba 1991.) Although the sales discipline has changed and evolved during the history, for at least eighty years the famous seven steps of selling paradigm has remained almost the same. The steps have traditionally been: 1) prospecting, 2) preapproach, 3) approach, 4) presentation, 5) overcoming objections, 6) close, and 7) follow-up. The seven steps of selling is one of the oldest and most widely accepted tenets in the sales field. For years, the seven steps have served as the foundation in the sales training and it has provided the framework for teaching the process of making a sale and for personal selling classes. (Moncrief & Marshall 2005; Hawes, Anne & Midmier 2004.) Although the seven steps of selling have dominated the selling field for years, the changes in the discipline have started to occur. For example rising customer expectations, consumer avoidance of buyer-seller negotiations, the power of giant retailers and globalization have all affected the way salespeople perform their jobs (Anderson 1996). These and other behavioral forces have changed the selling process to a more relationship-based approach.

8 8 Relationship selling concentrates on creating, developing and maintaining longterm relationships with the profitable clients. (Moncrief & Marshall 2005.) The focus of selling is no longer in performing the sales on the basis of sequential steps. Rather the focus is on the strategic use of the sales organization where the emphasis is on the selling mission (Leigh & Marshall 2001). Although the seven steps of selling are still widely used, the new philosophies of selling have started to dominate. The emphasis of the new philosophies is on relationships. (Moncrief & Marshall 2005.) Moncrief and Marshall (2005) suggest that many transformative factors have affected on the development of selling steps in the last two decades. Technology, the expanding strategic role of selling within organizations, teambased approaches to selling, increased buyer knowledge and sophistication have all been the key transformative factors in moving the traditional selling steps to an evolved selling process. In the evolved selling steps the focus is on the customer whereas the traditional selling process is more sales orientated. The evolved selling process according to Moncrief and Marshall (2005) is: 1) customer retention and deletion, 2) database and knowledge management, 3) nurturing the relationship, 4) marketing the product, 5) problem solving, 6) adding value/satisfying needs, and 7) customer relationship management. In the traditional selling process the selling steps are sequential where the salesperson starts form prospecting and proceeds step-by-step towards the follow-up. The time or effort spent in one step may vary but the goal is to go through every single step. In contrast, the evolved selling process is nonsequential where the salesperson generally performs various steps of the process in some form but he or she does not do it step-by-step. Rather, the steps of selling occur over time. In addition the evolved selling process takes the focus broader in the organization from the salespeople. The sales role is often a shared role between salespeople and other firm members and the selling steps are performed in collaboration in the organization. The goal of the evolved selling process is that an organization as a whole will concentrate on securing, developing, and maintaining long-term relationship with profitable customers. (Moncrief & Marshall 2005.) Thus, remarkable changes have occurred in the field of selling in the recent years. However, it is odd that the traditional seven steps of selling are still widely cited in the literature and form the basis for most sales training (Moncrief & Marshall 2005.) The traditional seven steps have not been evolved as effectively as the sales discipline has developed. On the other hand there are plenty of studies and textbooks relating to relationship selling and other new selling techniques. However, the different steps have remained practically the same during the last decade although the selling process has evolved significantly and new technical tools have changed the working habits considerably. Mocrief and Marshall (2005) integrate some of the digital tools to the selling steps in their study. However, the focus of their study is on evolving the selling steps, not on the digital tools. Long, Tellefsen and Lichtenthal (2007)

9 integrated Internet marketing tools into the traditional seven steps of selling. Their study concentrates on traditional steps and Internet tools, excluding the totality of digital tools. Actually their study does not even include social media. Thus, the study of the integration of the digital tools into the evolved selling process has been quite remote. This study aims to develop the Moncrief and Marhall's (2005) evolved seven steps of selling by integrating new and old digital marketing tools to the selling process. This new perspective to the subject is critical for at least two reasons: 1) the selling steps have not been developed in relation to the changes in the sales field, and 2) digital marketing tools keep on constantly developing and especially in the recent years many new digital tools have been introduced Research problem and objectives The objective of this study is to investigate the application and development of digital marketing in an industrial B2B organization. To reach the target, the problem will be approached through the main research question and two subquestions. The main research question is: How an industrial B2B organization can apply and develop digital marketing? The first sub-question is: How marketing is applied in the B2B organizations at present? The second sub-question is: How employees respond to the digital marketing in the B2B environment? The main research question will find out how the digital tools could be applied and developed in the marketing of B2B organization. It will find out what would be the best tools for B2B digital marketing and how they could be integrated into the organization's overall marketing strategy. The two subquestions will explain the factors which affect to the development of digital marketing in the B2B organization. The first sub-question will discover the present marketing situation of B2B companies because naturally the current situation of the marketing defines the starting points of developing the digital marketing. The second sub-question will explain employees attitude towards digital marketing in the B2B environment. This as well naturally has an impact on the development of digital marketing. The main research question and the two sub-questions are approached all through theoretical and empirical research.

10 Structure of the study This study is divided into five different chapters. The abstract and the table of contents are at the beginning of the study. The first chapter, the introduction, handles the background of this study. The introduction gives an overview of B2B marketing and the seven steps of selling which form the theoretical background of this study. In addition, the first chapter presents the research problems and the objectives of the study. The second and the third chapters provide the literature review for the study. First, the special features of B2B marketing are presented in the chapter three where the traditional and digital marketing in the B2B environment are handled. After the examination of the B2B marketing, the study moves on to the second theoretical part of the study. The fourth chapter is based on the Moncrief and Marshall's (2005) article, The evolution of the seven steps of selling. Besides describing the evolved selling steps, the digital tools have been integrated in the selling process. Different digital tools are presented on different sales steps. The theoretical framework of this study is found at the end of chapter three. The fourth chapter, the methodology, presents how the study was conducted. It presents the research method of the study and explains how the data for the study was collected and analyzed. This chapter also includes a brief introduction of the case company. The next chapter, the results, presents the empirical results of the single case study obtained from industrial markets. In addition there is discussion of the results where the results of this study are referred to the prior theory and the theoretical framework that will be modified on the basis of the findings. The final chapter, the conclusions, includes the theoretical and managerial contributions of the study. The final chapter will as well present the arguments of the quality of the study and ideas for future research in this field. At the end, the appendices are included, which present the themes of the interviews, the interview structure with defined questions, and contain original quotations from the interviews.

11 11 2 INDUSTRIAL BUSINESS-TO-BUSINESS MARKETING 2.1 B2B marketplace The business market is huge. It involves far more dollars and business transactions than consumer markets do. There are a lot of similarities in business and consumer markets, but there are still many divergences between those two markets. (Kotler & Armstrong 2001, 213.) Business market works slightly differently because of its special characteristics. Buying the product or service in B2B markets is not that simple because the products and services are often complex and specialized which leads to a more complex buyer decision making and longer buying processes. Naturally, the special features of B2B markets affects as well the communication and marketing of the business. (De Pelsmacker et al. 2004, 509; Jones 2008, ) Business communications Personal communication is vital in B2B world. The salesforce in the B2B environment are striving for personal communication with their clients. Telephone calls, s or face-to-face-communications are common communication tools with clients and prospects. As a matter of fact, even the large trade shows can be seen as personalized way of communication where the salesforce tries to get the valuable face-to-face-time with the prospects and their existing customers. Most of the B2B communication tools allow the interactivity between the seller and the customer. The customers or prospects are often approached individually when they can easily respond to the messages. In the b-to-c environment it is impossible to contact all the customers personally, but B2B markets are oligopolistic which means that there are fewer sellers and fewer buyers in the market which allows the interactivity between the seller and the buyer. (De Pelsmacker et al. 2004, 510, 520.) The oligopolistic situation

12 12 in the B2B markets makes the marketing as well highly focused and highly targeted for the customers (Jones 2008, 13). The characteristics business communications is presented in figure 1. When the communication is mostly personal, it can additionally be easily individualized and tailor-made. In the business buying situations, the buying decision is done by a buying centre or a decision making unit (DMU) which are comprised of people who work in different roles in the organization. (De Pelsmacker et al. 2004, 514, 520.) People who work in different duties within the organization may have very different demands for the messages they receive. For example the users of the product or service and the buyers in the organization may need very different kind of information from the seller and therefore the message needs to be tailor-made to meet the demands of its recipient. In addition the whole buying unit is not a fixed and formally created unit. The size and the structure of the buying center varies for different products and buying situations. (Kotler & Armstrong 2001, 219.) Therefore, the seller organization should know the buying center of every purchase to convince everyone in the buying center. According to Jones (2008, 12-13) products or services are generally complex ones in the B2B environment and the product or service may be usable only by experts who know how to use it. In addition, it is common that the products and services of the B2B are really expensive. Since products and services are often tailor-made, complex, and expensive everyone in the decision making process is highly involved in it. Because of the complex nature of the products and the several people who participate in the buying process, the sales cycles are usually long which also leads to high-involvement on the process. In consequence of the high involvement in the long buying process, the communication is generally very rational in the B2B environment. The messages are realistic and they do not play a lot with brand images and emotions. (De Pelsmacker et al. 2004, 520.) Rational Face-to-face High involvement Business Communications Individualized Tailor-made Interactive Figure 1 Business communications in B2B environment (De Pelsmacker et al. 2004, 521)

13 B2B marketing According to Anderson and Narus (1999, 13) segmentation, targeting, and positioning are the building blocks of the B2B marketing. Consumer market segmentation takes place on the basis of the demographic and psychographic characteristics but the business market segmentation is determined by the type of the industry, the end market served, the level of technology and the characteristics of the decision making unit. (De Pelsmacker et al. 2004, 511). The targeting process is supposed to result in a definition of the target market which represents the best success for the company. There is a fine line between the target market that is too large or too small. The target market needs to be carefully defined to get the best result from it. (Coe 2004, 66.) With the totality of the organization s four P s: the product, price, promotion and place, the company will position itself into the markets. (Anderson & Narus 1999, 13). Whether the segmentation and targeting will be successful or not, the company will not probably get mass of customers in the B2B markets because of the oligopolistic situation of the markets. There are relatively few customers to deal with in B2B markets and therefore business marketing is traditionally highly customer orientated (De Pelsmacker et al. 2004, 512). The distinctive characteristics of the business communications in figure 1 are the building blocks of marketing, which is as well highly focused and targeted to the customers (Jones 2008, 13). Indeed, the B2B salespeople know the needs and wants of their customers and the marketing process may be highly individualized and interactive. In general, relationship marketing which means building long-term, high-service relationship with customers is frequently practiced in B2B environment. (De Pelsmacker et al. 2004, ) In addition to the importance of the external relationships, the organizations need to strengthen their internal relationships all the time with internal marketing. Business marketers needs to constantly communicate with others what they are learning on the marketplace. (Andersen & Narus 1999, 13.) Before, there were written reports and manuals for the internal marketing but today intranet and CRM-systems are helping the companies to disseminate the market information. Anderson and Narus (1999) argue that sales and marketing programs consist of internal and external elements. The external elements are objectives and measures of feedback. It is a common problem that organizations have not defined their objectives sufficiently or they are completely missing. The objectives should flow from the marketing strategy and on the basis of the measure of the feedback the organization may assess the extent to which the program is accomplishing its objectives. The measure of the feedback is vital. Depending on the strength of the feedback, the organization may change the activity to better meet the wanted objectives. The internal elements are the actions to be taken, the responsibilities defined, the budget and the timing. These four elements should be well designed in a way that they will lead the company to meet the objectives. (Andersen & Narus 1999, )

14 14 To meet the objectives of marketing, an organization needs to carefully choose the tools for it. The traditional tools in the B2B-marketing are strongly focused on personal communication. De Pelsmacker et al. (2004, 519) claims that personal selling is the most important tool in B2B marketing and trade shows are marginally very important as well. Similarly, Smith et al. (2004) suggest that personal selling and trade shows are the two dominant elements in business marketing. De Pelsmacker et al. (2004, 523) argues that advertising has traditionally played a minor role in business marketing. Nevertheless, advertisements have been a cost-effective way to reach the entire target market at the same time (Andersen & Narus 1999, 303). Personal selling, trade shows, and advertisements are still certainly important traditional marketing tools but direct mailing, database marketing and especially the Internet marketing has increased substantially in recent years (De Pelsmacker et al. 2004, 519). The next chapters will provide the overview for the traditional B2B marketing tools and general review of the Internet marketing. The relevant Internet marketing tools for this study will be thoroughly discussed in chapter three Personal selling Personal selling is typically the most dominant instrument in B2B marketing (Smith et al. 2004). Rajput and Vasishth (2008, 126) defines personal selling as an interpersonal communication process where the seller revels and satisfies the needs of the customer. The outcome of personal selling will provide mutual, long term benefit for both the seller and the buyer. Kotler and Armstrong (2001, 582) are as well suggesting that with personal selling, the organizations may build long-term personal relationships with the customer s key persons. Personal selling can happen face-to-face or through phone calls, video conferences, s or by other supplemental means (Smith et al. 2004). These definitions fit in the B2B environment because they stress that personal selling is not just a sale and getting an order, but it aims for building a long term relationship, a partnership. Personal selling may be truly efficient in complex selling situations, which happen in B2B environment all the time because the products are complex and the sales cycles are long. With personal selling, the salespeople can get to know the customers better and adjust the marketing offer to fit the specific needs of each customer. (Kotler & Armstrong 2001, 582.) Personal selling is not a single activity but an ongoing interactive process which evolves all the time. When personal selling is aiming for the long term relationship with the customer, the order is not the ending of the selling process but it is rather one positive feedback from the customer. In addition, the feedback from the customer is continuously available in personal selling. The salesperson does not need to wait the feedback after the process but he or she gets it immediately and is able to react to it instantly. (Rajput & Vasishth 2008, 127.) Personal selling may be effective but additionally it is rather expensive. Personal selling still takes time and effort of a salesman although there are sales automation programs today. (Smith et al ) On the other hand, good sales

15 persons know the qualified prospects and direct their effort in them. In that way, the waste coverage is reduced to a minimum in personal selling whereas for example in the advertising the waste coverage is normally much bigger. (De Pelsmacker et al. 2004, 445.) In the past salespeople could concentrate more on personal selling but today they need to take care of increasing non-selling activities such as customer service, channel support, monitoring competition, and customer relationship management. (Smith et al. 2004). However, according to De Pelsmacker et al. (2004, 445) the time of the salespeople should not be misspent in the administrative tasks. In contrary, organizations should fully utilize the knowledge and capabilities of the salespeople in dealing with the customers Trade shows Trade shows are important marketing tool in industrial B2B environment. In trade shows organizations are trying to make the whole organization and its products visible. Exhibitors are trying to attract clients and potential clients to their booth by employing different tactics such as lively demonstrations, promotional give-away items, brochures, and eye-catching signage. (Gopalakrishna, Roster & Sridhar 2010.) In trade shows a group of potentially interested buyers and sellers are uniquely assembled in a same place over a short duration of time. Under these circumstances, it is rather easy to attract customers into the selling activities that usually follow the event. (Smith et al ) Trade show is a live event where live communication takes place. Kirchgeorg, Springer and Kästner (2010b) have divided the communication forms in to three categories which are traditional communication, live communication and virtual communication. Live communication is focused on giving the target group a personal encounter and a hands-on presentation of the company and its products and services. Usually the encounter takes place in stage-managed and emotional settings. Trade shows are basically live events but one of the unique features of live communication is that in the live communication, organizations may as well combine traditional and virtual communication. By traditional communication Kirchgeorg et al. (2010b) mean for example radio, television, newspaper, and magazines and by virtual communication the computer-based interaction. According to Gopalakrishna and Lilien (1995), companies use attention-getting techniques to enhance attraction efficiency. These techniques are used to drawn the potential customers to the company's booth and are pre-show and at-show impersonal promotional activities. In other words, the traditional and virtual communications are mixed to get the visitor s attention whereas the personal promotional activities are used since the potential customer has been attracted to the booth of the company. Thus the trade shows are integrated marketing communication in real time (Kirchgeorg et al. 2010b). Personal selling is in significant role at trade shows. Once the potential customer is on the booth, personal selling is the tool to get the customers 15

16 16 convinced. Smith et al. (2004) reveal that trade shows may improve personal selling efficiency. With more effective personal selling, the salesperson can accelerate customer's progression in the buying process which finally leads into faster completion of the sales. In addition to improved selling, the study proved that the return-on-sales figures were as well higher among those clients who attended trade shows compared to those who did not attend. Also the purchase intention levels remained high or even rose in the attendees group even several weeks after the show. (Smith et al ) According to Smith & Smith (1999) trade show attendees have a combination of buying and non-buying goals for the occasion. Buying dimension may include the placement of orders or product information while non-buying goals may involve gathering competitive intelligence, professional networking, and browsing to see what is new. In addition there may occur lead generation and customer complaints handling which are sales-related and activities which aim for stronger product awareness and corporate image, which are non-sales related. (Kerin & Cron 1987.) Whatever the objections of the trade shows are, it is vital that the organization has set specific objectives for every trade show. When there are clear objectives defined, it is easier to estimate whether the trade show was profitable or not. (Andersen & Narus 1999, 151.) The defined objectives are giving the guidance and direction to all activities that relate to the trade show participation (Kirchgeorg et al. 2010b). Trade shows have been the essential sales and communication tools in B2B world for many centuries. In some industries, the companies have left trade shows but in some industries the trade show tradition is still appearing very strong. But how about the future of the trade shows? In recent years trade shows have faced strong competition from new media. The technological developments may pose considerable challenges for traditional trade show companies. Kirchgeorg, Jung and Klante (2010a) have estimated the future of trade shows. According to their study trade shows will remain as an important marketing tool in the future as well but there will be some changes in the trade show behavior. Kirchgeorg et al. (2010a) suggest that companies should move away from selling space and become more sort of information brokers who facilitate the networking and interaction of market players. The study indicates that this function signifies the competitive advantages for companies in the trade shows Advertising Advertising has not been the most significant tool in the marketing mix of B2B companies (De Pelsmacker et al. 2004, 523). However, it has been a good complementary tool to assist the work of the sales force (Gopalakrishna, Lilien, Williams & Sequeira 1995). B2B organizations are trying to create awareness and interest with the advertisements in their target groups. In addition, the advertisements are used to build preference or reinforce the attitude after the transaction. Advertising in B2B world is traditionally used in trade journals targeted at a specific specialized audience. (De Pelsmacker et al. 2004, )

17 Industry magazines have been a good way to reach the whole target audience at the same time (Andersen & Narus 1999, 303). A common way has been to use the direct response advertisements. Those advertisements traditionally promote some special offers from the products or services and a request for the reader to contact the organization for more information. In that way the companies are able to stimulate inquiries from the potential customers. (Andersen & Narus 1999, 303.) Advertisements may as well provide a favorable climate for the sales calls and therefore work as premarketing for the sales force activity. If the advertisement succeeds to give a positive foundation for the sales call, it can improve the sales force efficiency. In addition to pre-marketing the company before the reference, advertisements may also work as a pre-show message before the trade shows. With effective pre-show advertisement, organizations are able to increase the likelihood of trade show attendance. (Smith et al ) Business ads tend to be factual and rational. People expect that business advertisements include technical aspects of the product or service and the economic performance that the product or service brings for the client. (De Pelsmacker et al. 2004, 524.) Compared to the B2C advertisements, business advertisements usually include fewer people and psychological appeals and more text (Lambert, Morris & Pitt 1995). For those above-mentioned reasons, business ads are often conceived boring. Business advertisements tend to highlight the company name rather than the product. (De Pelsmacker et al. 2004, 523). In B2B environment products do not have strong brand names and companies do not use the brand names as inducements in marketing. Industrial marketers have long claimed that brand names do not affect the decision making process because B2B buyers are more rational than consumers. This has been the tradition in B2B world but recently the brand names are increasingly viewed as competitive advantage and a source of differentiation. (Low & Blois 2002.) After all, although organizational decision processes are striving buyers to be as rational as possible, it is clear that people, who are responsible of industrial buying, make their decisions partially based on emotional benefits (Lindgreen, Beverland & Farrelly 2010). They are humans after all, not machines Digital marketing As was earlier described, Internet marketing has become an important marketing tool in the B2B environment. Digital marketing is often confused with Internet marketing and in the literature digital marketing and Internet marketing are sometimes used almost as synonyms although Internet marketing is only one part of digital marketing. For example Harden and Leyland (2009, 4) claim that digital engagement of the organization means managing the power of Internet users to profit the business. Similarly Ryan and Jones (2009) describe in their book only Internet marketing techniques although the name of the book is Understanding digital marketing. In addition there are 17

18 18 articles where the headline of the article refers to digital marketing but the contents are all about Internet marketing, such as Farrah (2010). Nevertheless, there is literature where digital marketing is seen in broader context than the Internet marketing. According to the definition of Li et al. (2011) digital marketing employs in addition to the Internet a wide range of digital channels such as mobile phones, wireless communications and digital television. Similarly Raulas and Merisavo (2004, 8, 11) defined that the tools of the digital marketing are the Internet, , mobile, and digital television. In their definition the special characteristics of digital media are that with them it is possible to personify the message, interact with the recipient and offer new type of self services. In this study the concept of digital marketing comprehends the Internet, which includes as well and mobile marketing. Because of the nature of the B2B environment, digital television and other channels have been left outside of the study. Internet marketing is a very strong element of digital marketing and it also includes social media marketing. Internet marketing and social media marketing are generally described in this chapter. Mobile marketing and the different tools of Internet marketing are presented in the following chapter Internet marketing The growth of Internet marketing has been revolutionary in the last decades (Sharma 2002). The Internet has really changed the field of marketing. It has brought many new techniques and tools for marketers to be used in their marketing. Although the Internet has shaken up the traditional marketing actions, it does not mean that the main goal of marketing has changed. The main focus of marketers is still to get people to buy products or services they are marketing. (Halligan & Shah 2010, 3.) Although the first wave of Internet marketing happened in the business-to-consumer environment, B2B is coming strongly behind (Sharma 2002). Generally Internet marketing is defined as a marketing tactic where organizations are using the versatile tools of the Internet (Pallab 1996; Watson 2010; Sharma 2002; Sheth & Sharma 2004.) According to Sheth & Sharma (2004) Internet marketing allows people to provide information, communicate and conduct transactions. Watson (2010) suggests that Internet marketing is for both personal and mass communication. The Internet provides a seemingly endless catalog of marketing messages and advertising in an interactive way. (Pallab 1996.) Watson et al. (2010) defines Internet marketing as an interactive tactic which is enabling to contact the customers with interactive and multimedia capabilities. Pallab (1996) and Watson (2010) are defining the tools which can be used in Internet marketing. These are , interactive advertisement, bulletin boards, research and online discussion groups, chats, video files, search engines, to mention a few. Naturally there are more tools to be used in the latter Watson's definition while the Internet is constantly developing. Watson (2010) takes the definition into the next level by talking about integrated Internet

19 marketing. The central idea of integrated Internet marketing is that organizations should combine their use of the Internet into their marketing strategy. None of the definitions of Internet marketing are universally accepted. Thus, in this study Internet marketing is thought in the light of integrated Internet marketing. In this study the tools of Internet marketing are integrated into the seven steps of selling framework. Internet marketing is as well seen as an interactive way to reach the customers both the individuals and the masses. Additionally, all Internet marketing tools are not considered in this study, only the ones which are proper for the B2B environment. According to Sheth and Sharma (2005), the primary advantage of Internet marketing is that it improves reach and reduces costs. In traditional marketing, organizations are used to the high prices of marketing actions and one of the greatest things on the web is that when an idea takes off, it can bring a lot of success to a brand or a company for free (Scott 2010, 93). Sheth and Sharma (2005) highlight that Internet marketing is reducing marketing cost because it offers platforms that allow transactions that would typically require human contact. With Internet marketing, organization can as well provide unlimited amount of information to customers without human intervention. The tools of the Internet have enabled a lot of marketing actions where the human intervention has taken off which can fasten and ease some operations. On the other hand, that can also be a drag on the development of Internet marketing in the B2B environment where face-to-face contacts have always been in a significant role. Therefore the Internet marketing of B2B may have developed slightly slower in the B2B world. The Internet may take off some human interventions but at the same time Internet marketing is highly focused on the customer as well as B2B marketing, which was discussed in the earlier chapters. Indeed, the customer is the king on the web environment as well. Scott (2010, 120, 146) even argues that the product or service is secondary when organizations are marketing online. Instead of focusing on the attributes of products and services, online marketers should concentrate on clients and buyer's problems. Fortunately, it is rather easy to concentrate on customer on the web by using the efficient communication tools. Actually communication is the primary purpose of the Internet because it was originally designed to be a collaboration platform (Halligan & Shah 2010, 11). The tools of Internet marketing make it easier to communicate directly with customers. Open communication channels enable straight communication between the organization and customer without intermediaries. Marketers should learn a new way to communicate with the customers in social web. Instead of talking to customers, marketers should listen and then talk with them. It is important to have openness with customers as openness often leads to trust, confidence, and respect. But if an organization is not an open one it can lead to suspicion, fear, and contempt. Customers want a transparent, genuine dialogue with the companies (Weber 2009, 3-4, 58, 17.) 19

20 20 If the organization is able to accomplish the discussion with the customers and suppliers and get them better involved in the running processes, it may enhance customer satisfaction and loyalty (Sharma 2002). In addition, throughout the increased communication, organizations may learn more about their existing customers. With the direct communication channel, the web helps marketers to map customer s behavior more carefully and find out what is important to them. The web can help to find out what customers do, think, like and dislike so targeting becomes more precise than ever before. (Weber 2009, 38.) Additionally, Internet marketing is improving the information flow both within and between the organizations and in that way, the organizations are able to deliver better value to the customers. (Sharma 2002.) Besides the existing customers, the Internet is also an efficient tool for prospecting new customers. Internet marketing allows organizations to reach customers that may not be reachable through existing distribution channels (Sheth & Sharma 2005.) Social media marketing Scott (2010, 38) defines social media as a media, which provides the way for people to share ideas, content, thoughts and relationships online. Anyone can create, comment on and add to social media content and the content can be in the form of text, video, audio, images and communities. According to Halligan & Shah (2010, 85), social media means that people are connecting, interacting and sharing online with each other. Because of the active role of the users social media is also called user-generated communication (Michaelidou, Siamagka & Christodoulidies 2011.) The social media tools are versatile today. Cortizo, Carrero and Gómez (2011) present a broad list of social media tools. The tools may be based on textual information, such as blogs, microblogging, wikis, forums, and social networks. In addition to the textual information, there are social media applications through which users share photographs, videos, livecasts, and audio and music tracks. In the recent years, the virtual worlds, online gaming, game sharing and mobile social media have become important tools as well. Although the blogs, for example were first based on the text, today they represent other content like videos and photographs as well. In this study social media is understood as a marketing and communication tool but the selection of the tools is not that broad than in the definition of Cortizo et al. (2011). The most appropriate social media tools were chosen on the basis of the context of the study. It is common that B2B companies use social media tools differently than B2C organizations, and therefore it is not rational to examine every social media tool. The adoption of social media has been slow in B2B companies. According to the study of Michaelidou et al. (2011) the main reason for the reluctance of the social media tools is that the nature of the industry is seemed as irrelevant for wide social media utilization. Besides the lack of employees familiarity with social media and technical skills, the social media tools are claimed to be the drags on social media development. In effect, it is ironic that social media tools have attained more popularity in business-to-consumer world, because they

21 may actually be more effective in B2B environment. The reason for that is that the social media tools enable faster and more personalized communication with customers and that can enhance corporate credibility and deepen relationships. (Kho, 2008.) Social media is a great tool for the connections of the company. Attracting new customers and cultivating the existing customer relationships are considered the most important social media goals of B2B organization (Michaelidou et al. 2011). Besides, the customers it is easy to stay connected with business partners, such as distributors and manufactures. (Weber 2009, 26.) With the social media tools it is easy to get closer to the customers and it will enable the companies to create a unique brand identity and to differentiate themselves from the competitors (Michaelidou et al 2011). By using social media organizations can directly communicate with their customers and bypassing the media filter completely (Scott 2010, 22). However, it does not mean that the organization can forget the quality of the content. In contrary, organizations must constantly think about the content on social web because interesting content is the thing that will get people talking to each other and returning to the organizations' destination over and over. According to (Halligan & Shah 2010, 118) the key to success on social media sites is to create remarkable content that people want to consume and share. Companies should avoid the jargon of their industry and instead write for their buyers wellwritten materials with effective marketing to help the customers to understand how the company can solve their problems (Scott 2010, 157). Social media tools are often easy to employ because they are often free or cheap and the implementation is rather easy. For this reason many companies have started to use some of the social media tools with big expectations but the experiment has failed. (Gillin & Schwartzman 2011, 142). Although the social media tools are cheap and easy to use, it does not mean that social media tools work by themselves. Rather they need time and effort to succeed. If there is a lot of going on in social media, there should be at least one person in organization who takes care of it. That person would be responsible for example communitybuilding, content, customer mapping, analytics and behavior, competitive analysis, competitive landscaping, new media, traditional and digital media relations, and customer care (Weber 2009, 114, 204.) However, the first thing before trying any social media tools for the organization is to define the objectives for the organization and start to create the social media strategy (Gillin & Schwartzman 2011, ) The planning of digital marketing Digital marketing is a hot topic today and many companies are thinking what to do. Activities range from opening a Facebook page, a Twitter account to writing a blog, or something else. The main thing at the beginning is not to decide what tools to be used. Organizations should plan their digital marketing like any other marketing starting from the goals and work backwards to tactics and technologies. The choice of the digital marketing tools should be the last decision to be made. Gillin & Schwartzman (2011, 145) have presented a four- 21