An Examination of the Role of Digital Marketing in Supporting Business Recovery
Table of Contents
Chapter 2: Literature Review 3
2.1. Key Approaches to Digital Marketing 3
2.2. Key Uses of Digital Marketing During the COVID-19 Pandemic 7
2.3. Framework of the Study 10
References 13
List of Figures
Figure 1: The Five-Part Framework of Digital Marketing 3
Figure 2: A Typology of Key Means of Digital Marketing 4
Figure 3: A Typology of Firms’ Responses to COVID-19 7
Figure 4: Framework of the Study 10
Chapter 2: Literature Review
This chapter focuses on existing approaches to digital marketing, their applications to business recovery and the existing uses of digital marketing post-COVID-19 pandemic.
2.1. Key Approaches to Digital Marketing
Starting the discussion of contemporary approaches to digital marketing, the following figure outlines the five-part model of digital technology usage in marketing.
Figure 1: The Five-Part Framework of Digital Marketing
Source: Kannan (2017, p.23)
Digital marketing combines the usage of digital technologies to facilitate the interaction between the marketing environment (e.g., consumers’ interactions on social media) with the delivery of customer value (Kannan, 2017). The model accurately suggests that digital technologies could be implemented at all stages of this process such as informing the consumers of new price promotions using a brand’s social media accounts. However, the five-part framework fails to reference any specific marketing strategies, namely relying on user-generated content or using big data analytics to predict consumer sentiment (Saura, 2020). Furthermore, the above framework assumes that the impacts of digital technologies on the delivery of customer value are uniform across different industries or different purchasing contexts. As demonstrated by De Pelsmacker et al. (2018), online review volume and sentiment strongly influence consumers’ purchasing decisions in the hospitality industry; however, this effect is significantly stronger for five-star hotels compared to all other means of accommodations (Jiang and Wen, 2020). To address these limitations, the dissertation refers to the following typology of different means of digital marketing.
Figure 2: A Typology of Key Means of Digital Marketing
Source: Castro et al. (2017, p.84)
Although the above framework was created specifically for the tourism industry, the authors (Castro et al., 2017) accurately identified four main means of digital marketing such as electronic banners, search engine marketing and social media marketing. Companies can measure the efficacy of their digital marketing strategies through individual performance measures including impressions, clicks, engagement figures and delivery rates. The above model implies that the usage of digital marketing could be a valid replacement for traditional marketing when faced with restrictions on people’s movements arising from a global pandemic (Ketter and Avraham, 2021). However, the efficacy of digital marketing strategies also depends on factors not included in the framework of Castro et al. (2017). For example, customers’ familiarity with digital technologies (e.g., using smartphones to search for new product information) strongly determines the degree to which companies can use digital marketing to reach their target audiences.
While Castro et al. (2017) accurately identified social media, email and search engines as key platforms for digital marketing, the authors omitted any references to the following digital marketing strategies.
Influencer marketing.
User-generated content as digital marketing.
Pay-per-click marketing.
When reviewing influencer marketing, Jin et al. (2019) and Kadekova and Holienčinova (2018) noted that this strategy strongly improved brand impressions and perceptions of brand equity among the end consumers. The customers exposed to influencer-based content (e.g., Instagram ‘reels’ featuring social media celebrities) considered influencers to be trustworthy and reliable sources (Jin et al., 2019; Kadekova and Holienčinova, 2018). Nonetheless, such a discussion omits the risk of influencers exhibiting undesired behaviours such as supporting controversial political candidates or engaging in illegal activities. If consumers are exposed to such behaviours, influencer marketing may challenge business recovery instead of facilitating this process (Campbell and Farrell, 2020).
In contrast to influencer marketing, user-generated content encourages all customers to create digital content promoting a specific brand. Leveraging user-generated content as a digital marketing strategy typically involves brands creating contests or following similar approaches to marketing communications to encourage the sharing of consumer sentiment on digital platforms (Timoshenko and Hauser, 2019). On the one hand, user-generated content can be an effective means of promoting products and services as consumers could consider their peers to be highly trustworthy and effective sources of information (Timoshenko and Hauser, 2019). On the other hand, companies typically possess few means of controlling the exact sentiment shared by the end consumers. If user-generated content includes valid critiques of a company’s products and services, business recovery post-pandemic would be impeded (Müller and Christandl, 2019).
As opposed to search engine marketing (which focuses on optimising website characteristics and content), the pay-per-click strategy involves businesses placing paid advertisements on the search engine results pages (Hu et al., 2016; Kapoor et al., 2016). When following this strategy, businesses are only required to pay for every customer who clicks on the relevant advertisements, meaning that the pay-per-click strategy may be a cost-effective option for businesses recovering following the COVID-19 pandemic. Nonetheless, some consumers may be distrustful toward pay-per-click promotions (Hu et al., 2016). In contrast to organic search results which are ranked based on website and content quality, paid advertisements may be seen as intrusive or deceptive (Hu et al., 2016). For businesses, the pay-per-click strategy, therefore, might not necessarily be an effective facilitator of post-pandemic recovery processes.
Both Kannan (2017) and Castro et al. (2017) implied that digital marketing, in general, allowed brands to communicate with the end consumers to a more intense degree than traditional marketing. For instance, social media platforms allowed customers to message brand representatives directly. Nonetheless, this finding failed to mention that digital marketing could be used to replicate traditional marketing strategies and tools. As an illustration, brands could use digital livestreams hosted using Instagram Live to replicate physical conferences and similar events (Haenlein et al., 2020; Lee and Kim, 2020). Digital marketing, therefore, could be used as a platform for sustained marketing activities despite restrictions on people’s movements. Nonetheless, neither Haenlein et al. (2020) and Lee and Kim (2020) focused on whether digital marketing was an effective tool for facilitating business recovery post-pandemic. Fully vaccinated consumers may be motivated to engage with traditional marketing by attending physical events or receiving physical flyers or coupons.
2.2. Key Uses of Digital Marketing During the COVID-19 Pandemic
This sub-section focuses on how companies have leveraged digital marketing tools and strategies during the COVID-19 pandemic and the subsequent recovery period. The following figure presents a typology of firms’ marketing responses to COVID-19 and the resulting challenges to targeting their customers.
Figure 3: A Typology of Firms’ Responses to COVID-19
Source: Wang et al. (2020, p.214)
According to Wang et al. (2020), firms’ marketing responses to COVID-19 could follow one of four strategies, namely responsive strategy, collective strategy, proactive strategy and the partnership strategy. The responsive strategy was typically adopted by firms that had relied on physical sales pre-COVID; therefore, the pandemic strongly threatened their business growth and survival. For example, a physical apparel retail business may close physical shops during the pandemic and transfer employees into the newly formed e-commerce division and social media teams. The responsive strategy, therefore, typically focuses on shifting the focus from traditional marketing to digital marketing (Kang et al., 2020). However, both Wang et al. (2020) and Kang et al. (2020) failed to mention how exactly digital marketing contributed to post-pandemic business recovery efforts and processes.
Similarly to the responsive strategy, the collective strategy involves businesses reconfiguring their marketing mix to address the shifting consumer needs. As an illustration, a grocery retailer may choose to partner with a well-known food delivery service to allow the end consumers to order fresh products without leaving their homes (Wang et al., 2020). The collective strategy is less cost-intensive than the responsive strategy and involves fewer structural changes in the marketing mix, suggesting that this approach is more conducive to subsequent business recovery (Crick and Crick, 2020). Nevertheless, it is unknown whether digital marketing is universally beneficial to firms relying on the collective strategy. In the above example, the grocery retailer may outsource all marketing communications to their new business partner and focus on traditional marketing (e.g., using mass-media) post-pandemic.
The proactive strategy involves treating the COVID-19 pandemic as a business opportunity and creating new products and services addressing the end consumers’ needs. For instance, after the implementation of restrictions on people’s movements, the Chinese company Tencent created the Tencent Conference software suite meant to act as an alternative tool to Zoom and Microsoft Teams (Wang et al., 2020). The same logic can be applied to digital marketing. Online retailers may launch 24-hour livestreams focusing on product reviews and similar content to provide their clients with a valuable digital feed of marketing-related information. As shown by the above examples, the proactive strategy can only be implemented by firms that had already possessed experience in using digital marketing pre-pandemic (Maulana, 2020). Furthermore, Wang et al. (2020) and Maulana (2020) did not comment on how exactly such usage of digital marketing contributed to business recovery.
Concluding the discussion of the typology offered by Wang et al. (2020), the partnership strategy involves using a company’s products and services as platforms of value delivery that could be used by other businesses. During the pandemic, Tik Tok allowed museums and musicians to conduct digital events, boosting the number of users of this software suite and allowing other businesses to mitigate the negative effects of the restrictions on people’s movements (Wang et al., 2020). The partnership strategy is only available to businesses that have previously leveraged digital marketing platforms as the key channels of delivering value and communicating with the end consumers (Maulana, 2020). In this case, businesses relying on such an approach would continue using digital marketing post-pandemic to return to the pre-crisis levels of profits and operational efficacy. Nonetheless, Wang et al. (2020) failed to comment on how exactly firms had to approach digital marketing when recovering from the effects of COVID-19.
Similarly to the above discussion, according to Antúnez et al. (2021), COVID-19 provided an opportunity for existing brands to promote new products. For instance, food manufacturers in Argentina used Facebook to promote ultra-processed products in addition to distributing educational videos about working out at home and similar activities (Antúnez et al., 2021). On the one hand, the findings of Antúnez et al. (2021) implied that at least some companies were able to integrate the pandemic into their existing marketing strategies. On the other hand, this discussion omitted that different industries faced different levels of diminishing consumer interest during the COVID-19 pandemic. Tourism and hospitality firms avoided explicitly promoting their services during this global health crisis (Ketter and Avraham, 2021). Instead, their marketing communications focused on promoting healthy behaviours (e.g., wearing one’s mask) to facilitate the subsequent recovery of the tourism industry (Ketter and Avraham, 2021).
The present study argues that the COVID-19 pandemic allowed the end consumers to formulate new needs that could be, subsequently, addressed by brands through digital marketing. Supporting this interpretation, He and Harris (2020) argued that during the pandemic, customers in developed markets were highly attentive toward firms’ sustainability efforts including protecting their employees from COVID-19. In turn, companies could address such expectations by communicating directly with the customer using social media platforms, hosting digital events (e.g., Q&A conferences) and relying on email marketing (He and Harris, 2020). The state-of-the-art research (Antúnez et al., 2021; He and Harris, 2020) on the topics of digital marketing and COVID-19, nevertheless, omitted any considerations of business recovery. It is unknown whether firms should continue leveraging digital marketing to facilitate their recovery despite the removal of the restrictions on people’s movements and similar rules limiting the ability of customers to interact with traditional means of marketing.
2.3. Framework of the Study
The next figure acts as the framework of the study by summarising the key processes involved in business recovery and the preservation and continuity of enterprise value.
Figure 4: Framework of the Study
Source: Paulsson (2007, p.7)
Business recovery typically focuses on six key processes, namely risk assessment and audit, emergency responses, crisis communication, the creation and implementation of business recovery strategies, employee training and project review. While this model was created to assess supply chain recovery after natural disasters, Paulsson (2007) accurately defined the main procedures required for the preservation of enterprise value when faced with significant macro-environmental threats including the COVID-19 pandemic. The following discussion evaluates the degree to which digital marketing could contribute to each of the above processes.
Risk assessment and audit. As opposed to traditional marketing, digital marketing provides firms with an opportunity to identify and evaluate key risks facing enterprise value during recovery processes (DuHadway et al., 2019; Vieira et al., 2019). For instance, firms may use big data analytics software suites to summarise consumer sentiment on social media and identify pathways for subsequent products and service improvement. Social media and similar tools could also be used for the creation of remote focus groups to elicit new consumer needs and alleviate market risks. Nonetheless, implementing such recommendations is cost-intensive and may require firms to partner with IT agencies or similar outside companies (DuHadway et al., 2019).
Emergency response. Firms may use social media and other digital marketing tools to inform the end consumers of their preferred emergency response strategies (Tiago and Verissimo, 2014). As reported by Wang et al. (2020), a physical retailer may share news about opening e-commerce services on Instagram and Twitter to increase consumer interest. On the other hand, Wang et al. (2020) failed to consider how exactly firms should frame their emergency response communications. While some businesses may issue formal white papers and reports, others could focus on influencer marketing or user-generated content.
Crisis management and communication. Similarly to the previous process, digital marketing is a valid tool for sharing information about the process of business recovery to the end consumers (Tiago and Verissimo, 2014). Returning to the above example, the physical retailer may report the re-opening of its previously closed stores using the company’s Twitter and Instagram accounts (Wang et al., 2020). However, there is no theoretical or empirical support for the claim that such communications would necessarily drive consumers to use post-recovery products and services. While digital marketing is an effective tool for communicating with the targeted customers, other authors (Tiago and Verissimo, 2014) did not discuss whether its usage necessarily contributes to the efficacy of business recovery processes.
Business recovery strategies. Digital marketing could facilitate the creation and implementation of business recovery strategies. As an illustration, an enterprise may use social media to ask their consumers to submit product or service ideas for post-pandemic implementation, leveraging digital marketing tools as a source of open marketing innovation (Hitchen et al., 2017). Nonetheless, Paulsson (2007) failed to comment about which specific means of digital marketing (e.g., social media vs. email marketing) have the most significant positive effect on business recovery.
Employee training. According to Paulsson (2007), employee training was a fully in-house process that did not involve any communications between a company and their customers. Nonetheless, social media and other means of digital communications may be used to share employee sentiment about a firm’s training and career development opportunities, potentially increasing consumer interest in the relevant brands and facilitating business recovery (Tiago and Verissimo, 2014).
Project scope and review. In the framework of Paulsson (2007), digital marketing was not linked to project scope and review as this process typically focused on evaluating firm performance and proposing improvements. Similarly, Tiago and Verissimo (2014) failed to mention project scope and review among the possible areas to which the use of digital marketing had a positive contribution. As neither Paulsson (2007) nor Tiago and Verissimo (2014) focused on global health crises similar to the COVID-19 pandemic, real-life businesses may devise innovative ways of facilitating project review via digital marketing.
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