New media in the marketing communication of enterprises in the international market - ebook

Introduction

Communication is the basic element leading to the achievement of the intended goals of entrepreneurs. Its significance increases along with the development of entities and their foreign expansion. As a result, the scope and diversity of the communication process and its elements are growing. In the case of communication with entities from other cultural circles, different values, symbols or ways of providing information should also be taken into account as they often play a fundamental role in successful negotiations or cooperation with a foreign partner.

Two types of communication can be distinguished. The first one – interpersonal communication – accompanies, in particular, B2B (business-to-business) entities, where discussions take place between representatives of cooperating enterprises or other institutions. The second type of communication is connected with the B2C (business-to-consumer) market, where the sender of the message is an institutional entity (e.g. an enterprise – a manufacturer of final goods), and its recipients – individual customers (potential buyers of these goods).

The importance of communication is constantly increasing. First of all, the continuous development of the Internet, new technologies and the emergence of more and more diverse communication tools in the market have a major impact on this. Secondly, the growing needs and changing requirements of counterparties and individual buyers require constant monitoring. It is connected with the necessity of multiplication of traditional and new communication solutions that contribute to the constant tracking of information from customers, introduction of changes, improvements and adjustments in the scope of marketing activities of enterprises. The growing number of media outlets used by buyers also makes it necessary to constantly monitor transmitted information, as negative feedback can very quickly affect the reputation of the company in the market, and a quick response may alleviate the escalation of the problem.

Changing the needs, preferences and attitudes of recipients is an important factor related to the development of new forms of communication. Equally important are the emergence and acceptance of new technological solutions in the area of communication. An important role is played by the development of new media, which, due to their specific nature, facilitate communication (it is much faster, becomes more direct and costs less than traditional forms of communication) with entities from both domestic market and distant foreign markets.

New media have become popular tools used in both interpersonal and marketing communication. The diversity of their forms makes almost every market participant (both individual and institutional) a user of at least one communication tool included in the new media, e.g. social networking sites, instant messengers or websites. The importance of new media can be proved by the statements that appeared in the largest economic journals in the first decade of the 21st century. In 2005, Business Week wrote that: social media is the biggest change since the industrial revolution, while a few months later The Economist published a text saying that: companies that do not understand digital communities will die (Smith, Zook 2016, p. 11).

The scope of implementation of modern solutions in communication is very high. Furthermore, they are constantly evolving and shaping the market (preferences and behavior of entities). In this context, increasing access to the Internet around the world and related tools contribute to combining traditional and modern solutions as far as the functioning of market entities is concerned (Kemp 2017). This situation stimulates the development of theoretical concepts, models or solutions in the area of communication, taking into account new market conditions and opportunities, e.g. computer mediated communication theory or technology acceptance model. In the area of marketing, on the other hand, strategies known as, for example, marketing 4.0 (Kotler, Kartajaya, Setiawan 2017), 360 degree marketing, social media marketing (SMM), inbound and outbound marketing, electronic word-of-mouth marketing (e-WoMM) and others are developed. They are a combination of “traditional” forms of communication with changes resulting from the development of new technologies that affect rapid change in tastes and preferences of buyers. In the 21st century, the nature of communication is changing, particularly in the B2C market, where the unilateral monolog of enterprises is transformed into a dialog with a potential purchaser.

Such a situation is possible due to the rapid development of the Internet and the specificity of communication tools operating thanks to it (including new media). They enable dialog both among individual purchasers of goods and with the participation of enterprises. New media are also used to collect information before purchasing a specific product, and contact between a potential buyer and an enterprise is becoming the last, rather than the first stage in making a purchase decision.

These changes also make it necessary to adapt the behavior of producers, which according to Scott (2014) should consist of “not disturbing the customer in their purchases”. What is more, the differences in behavior and needs between generations, where the Generations Y and Z are almost entirely dependent on access to the Internet and smartphones, necessitate the adaptation of marketing solutions taking into account the latest technologies. That is why marketing and IT specialists very often cooperate intensively and even create joint departments in enterprises (Marketing Team Structures Report 2017).

The importance of new media in the communication of entities increases with degree of their use, which is visible in all market models and the nature of relations between entities. Both in communication between institutional units – B2B, institutional and individual customers – B2C, individual entities – C2C (consumer-to-consumer), as well as individual final buyers and institutional buyers – C2B (consumer-to-business) (Hüther 2016).

Marketing communication and the possibility of using new media in it plays an important role especially in B2C and B2B markets. It is based on the use of diverse media and business models due to different characteristics of the markets and their participants. In the B2B market, there is a significant degree of interpersonal communication (between representatives of institutional entities). In the B2C market, on the other hand, communication is both interpersonal and mass, e.g. between enterprises and individual purchasers.

The main objective of the monograph is to identify the significance of new media tools in international communication (international communication is understood as communication between entities from disparate foreign markets), the effects achieved through their use, as well as factors influencing the degree of their use. The particular emphasis is placed on two types of market relations – B2B and B2C communication. The combination of the role of new media in communication in these areas is not an issue widely presented in the literature on the subject.

Literature studies and primary pilot study, conducted by the author of the monograph, have shown that the nature of communication depends on the characteristics of the entities participating in it. In the B2B market, these are in particular the relations between institutional entities represented by their representatives. B2C market includes both institutional entities (e.g. enterprises) as well as individual customers (e.g. potential buyers of goods). New media and their use in marketing communication in the international market are the subject of discussion in the monograph. On the other hand, the subject in primary research are enterprises operating in foreign markets.

The thematic scope of the monograph is interdisciplinary, combining such areas as economics, international marketing, cultural anthropology, as well as sociology and psychology. The substantial part of the secondary sources of information are publications in the form of scientific monographs and articles in Polish and foreign journals. Due to the nature of the discussed issues and their constant development, a significant part of these sources are also publications in Internet journals, as well as the latest reports and compilations presenting the discussed issues.

Primary research, which was developed as part of author’s own scientific research on the role of new media in international marketing communication, was conducted among both Polish and foreign enterprises (B2B and B2C), based in Poland, which also operate in the international market. The concept of triangulation of research methods based on the use of various methodological perspectives in research (Denzin 2006, Flick 2011, Czakon 2013) was used in this part, including: individual interview using a standardized questionnaire (as a quantitative method) and in-depth interview (as a qualitative research method). Case studies were developed on the basis of qualitative research. The research procedure was presented in detail in the fifth chapter.

The monograph consists of eight chapters. The first three chapters are theoretical in nature and are the foundation of the deliberations as well as an introduction to the conduct of primary research. They were carried out as part of a research grant of the National Science Center, OPUS 9, No. 2015/17/B/HS4/00309. Their results and conclusions are presented in the empirical part.

The first chapter is an introduction to the theoretical foundations of communication, its types and conditions. Particular attention is paid to marketing communication, its specificity taking into account the division into B2B and B2C markets. It presents forms of communication that can be used by enterprises while considering the latest technological solutions.

The second chapter is devoted to new communication tools in the context of the development of the Internet. It describes the elements of the so-called world 3.0. distinguishing the specificity of the Internet environment, consumers and organizations. Then, the development of traditional and new media is outlined. The author’s original concept of 5C is presented, referring to the presentation of key features of new media.

Subsequently, the specificity, types, advantages and limitations of social media are described. The chapter analyzes the combination of new technological solutions and marketing activities of enterprises. The technology acceptance model is presented, followed by marketing concepts based on the development of new technologies and media. Finally, the significance of new media in the activities of enterprises in B2B and B2C markets is discussed. It has been developed on the basis of own research results and the achievements of other researchers.

The third chapter presents the determinants of the use of new media by companies in communication in the international market. These factors can be divided into exogenous, taken from the environment, and endogenous, i.e. dependent on the enterprise. The endogenous determinants include the degree of internationalization of enterprises, their size and type of products offered by them in the foreign markets. In the second group, the components of the economic, technological, cultural, political and legal environment are presented in the context of their influence on the possibilities and nature of using new media in communication. All these elements have been characterized in the context of their impact on the use of new media.

The fourth chapter focuses on the effectiveness and efficiency of marketing communication. At the beginning, the differences between the effects, efficiency and effectiveness of marketing activities, i.e. issues that are interpreted differently in the literature on the subject, are discussed. In this part of the monograph, in addition to presenting interpretative dilemmas, selected methods and indicators for measuring effectiveness and efficiency are presented. Furthermore, the problem of effectiveness and efficiency of marketing communication through social media is presented. The main emphasis is placed on theoretical and empirical models, including Bartholomew’s model, the Huyse model and others.

The fifth chapter of the monograph presents the methodology of own research, the main research assumptions of the empirical study and the stages of the research procedure. The objective of the research, research questions as well as hypotheses formulated on the basis of literature research, observations and own experiences are presented in detail. The triangulation of research methods resulting from the combination of quantitative and qualitative research methods is discussed. The studied population, sampling frame, and research sample are characterized. This chapter also presents the author’s original scheme showing endo- and exogenous determinants and the effects of using new media in communication activities in the foreign markets. The presented dependencies refer to formulated hypotheses, which were subjected to statistical testing, and its effects are presented in chapters 6 and 7.

Chapters 6 and 7 present the results of the “quantitative part of empirical research” concerning the importance of new media in international interpersonal communication with a foreign partner (B2B and B2C market) and marketing communication (B2C market). They include statistics on the influence of particular determinants on the use of new media, as well as its effects. These parts are concluded with a summary and discussion related to theoretical concepts. The results of statistical tests with the use of Spearman’s rank correlation, chi-squared test and Cramer’s V indicators showing the correlations presented in research hypotheses are also discussed.

The results of qualitative research are presented in chapter 8. The main research method consists of in-depth individual interviews conducted among selected individuals belonging to studied population. As a result of this research, six case studies (three from the B2B market and three from the B2C market of various sizes) are developed describing the importance of new media in international communication activities. The chapter is concluded with a summary and a reference to the results obtained in the quantitative part.

The monograph ends with a summary in which attention is focused on the applicability of the research results obtained and theoretical considerations carried out throughout the work. Reference is made to the enterprises diversified in terms of the type of products offered to foreign markets, the degree of their internationalization as well as their size. Furthermore, research limitations and proposals for their development in the future are also indicated.1. Marketing communication in the light of Internet development – theoretical background

Sales promotion

Among the forms of the mix promotion, there are also tools for increasing the sales and customer loyalty to brands that are not included in the types of advertising described above. Mühlbacher, Leihs and Dahringer (2006) define sales promotion as short-term decisions and activities of the company within marketing communication, which aim to attract attention, stimulate interest, and motivate potential customers to buy products. In the source literature this kind of promotion is also called “additional promotion” or “complementary promotion” of advertising (Czinkota, Ronkainen 2007; Wiktor 2013), the main area of promotion.

One of the basic features of sales promotion, emphasized in many definitions, is the stimulation of purchase and an almost immediate effect in the form of a product purchase by a customer (Mühlbacher, Leihs and Dahringer 2006; Czinkota, Ronkainen 2007). Kotler (2004) states that “sales promotion consists of applying incentives and rewards, which encourage customers to buy now rather than later” (p. 152). Similarly, Czarnecki (2003) emphasizes the large, though short-lived effect of this type of promotion. In his opinion, the most appropriate stage for using such activities in a product life cycle is, first, the moment when it is introduced to the market (encouragement to buy and get to know the benefits), and then when it reaches maturity or even enters the phase of decline. Sales promotion tools are then designed to stimulate interest and purchase again.

Short-term operation of sales promotion, as incentives to buy, is also emphasized by Żbikowska and Potocki (2011), as well as other researchers in the publication Communicating in Marketing edited by Mruk (2004). According to the authors of the last position, sales promotion brings the best results when it is a part of IMC. In their opinion, sales promotion activities are complementary to advertising or PR, which bring results after a long time (Mruk 2004). Similar characteristics of sales promotion are distinguished by Wiktor (2013), pointing out that these tools “offer economic and psychological benefits” (p. 206), encourage quick purchasing decisions and, as a consequence, give almost immediate sales results.

The goals and functions of this mix promotion instrument result from the interpretation of sales promotion. The most important among them are:

- stimulating interest in the company, its products and brands, which may result in increased sales;
- testing new products – samples or tastings can be helpful in assessing new proposals appearing on the market, as well as interest in the offer;
- increasing off-season sales (for seasonal products or services), where effective price reductions or attractive gifts (additions to the product) may be effective;
- increasing customer loyalty – participation in loyalty programs may cause an increase in sales, thanks to re-visits of the store by customers (additional discounts for regular customers, rewards for internships, birthday gifts, etc.). Increased loyalty can also be achieved by invitations to stores when a new collection appears, offering substantive help to regular customers, advice or training.

The above features, goals and functions of sales promotion tools refer mainly to positive market effects. Some negative aspects of sales promotion should also be indicated, including:

- the possibility of increasing the buyers’ price sensitivity;
- with frequent promotions, products and brands can be seen on the market as cheap and low quality;
- costs incurred by the company in connection with promotional activities;
- the possibility of uneven sales (sale increases rapidly during the promotion, and significantly decreases after its completion – customers can “stock on” cheaper products).

In the light of the above elements, each situation should be well thought out and adapted to the market and expectations of its participants.

The variety of criteria allows distinguishing many types of sales promotions. One of them is the nature of the entities (auditorium) to which promotional activities are directed. Due to this element, the following activities are distinguished (see Table 5):

- Commercial promotion – it is most often used by producers in relation to intermediaries participating in the product distribution channel. For example, manufacturers provide samples or free products delivered to wholesalers or directly to retail stores, discounts on sales volumes, joint advertising, co-financing, etc.
- Consumer promotion – includes final buyers of products, which most often are individual entities. The following types of promotions should be distinguished: price promotions (periodic price cuts), free samples of goods, packaging bonuses (increased packaging for the unchanged price), gifts when purchasing a specific product (also known as a purchase bonus), participation in competitions and lotteries, tastings, refund offers (refund of part of the paid amount on showing proof of purchase), discount coupons (e.g. available in the press or other places), guarantees (e.g. extended warranty), trade stamps (their collection allows you to get a discount or a gift over a longer period of time), contests and lotteries, as well as many types of loyalty programs aimed at causing further purchases of products of a given brand.
- Promotion addressed to individual sellers (sales staff) – usually includes individual traders who have influence on the buyers’ choices. This type of sales promotion is also referred to as internal promotion, as it mostly concerns employees who are part of the company (B2B) or sales staff (B2C). This type of promotion distinguishes: remuneration systems, bonuses, business meetings (so-called events), contests, trainings, co-financing or even trips.
- Business promotion – aims to draw attention to the products of a given brand and to attract interest in the offer, i.e. fairs and exhibitions, advertising gadgets.

Table 5 presents selected sales promotion tools, their goals, as well as the entities which they are directed to.

Table 5. Selected sales promotion tools, their goals and recipients

---------------------------- ----------------------------------------------------------- ------------------------------------------------------------------------------------------------------------
Sales promotion tool Target group Goals
coupons consumers/individual customers stimulating the purchase process or encouraging re-purchase
discounts consumers/individual customers encouraging re-purchase
free samples consumers/individual customers/intermediaries stimulating the purchase process, building distribution, increasing orders
bonuses consumers/individual customers incentive to re-purchase
packaging bonuses consumers/individual customers stimulating the purchase process or encouraging re-purchase
contests and lotteries consumers/individual customers/intermediaries/sales staff stimulating the purchase process, increasing the number of orders
training intermediaries/sales staff providing information, improving sales skills
business meetings (events) intermediaries/sales staff providing information, improving sales skills/attracting attention
fairs and exhibitions consumers/individual customers/intermediaries/sales staff attracting attention/providing information/building distribution channels/stimulating purchases and orders
---------------------------- ----------------------------------------------------------- ------------------------------------------------------------------------------------------------------------

Source: (Mühlbacher, Leihs and Dahringer 2006).

Due to other elements of the socio-cultural and legal environment (Albaum, Duerr 2011), sales promotion instruments, like advertising messages, may differ on foreign markets (Keegan, Schlegelmilch 2001). Sales promotion tools, such as contests, lotteries and games, as well as attaching gifts to another product, are largely dependent on the law in a given country, e.g. in France they cannot exceed 7% of the value of the product to which thay are added (legislators consider that buyers should not buy gifts, only products) (Usunier, Lee 2009). However, collecting stamps, points and other instruments that after a certain period of time bring effects in the form of bonuses or price reductions, is more popular in cultures focused on achieving long-term goals, e.g. in Japan (Usunier, Lee 2009). In countries with short-term orientation, the preferred types of promotion allow to “feel” the effect of a promotional strategy immediately, e.g. in the “2 in 1” formula etc..4.3. Measuring the effectiveness and efficiency of marketing communication – methods and indicators

Referring to theoretical considerations on the effectiveness and efficiency of enterprises, the measurement of the efficiency of marketing communication will be presented in the “objectives – effects (results, outputs) – outlays (inputs)” relation. The specificity of selected indicators of effectiveness and efficiency of marketing communication used for its measurement is presented below.

The basic indicator showing and measuring the efficiency of marketing communication activities (EMCA, Polish: EDKM) is the one that takes into account the relationship between economic effects and financial outlays (Taranko 2015):

Efficient activities can be described when the counter of the above fraction (effects) is greater than its denominator (financial outlays). Estimating both the effects and outlays for communication activities is one of the extremely difficult activities resulting from the separation of this activity from the general activity of the enterprise. Furthermore, these effects are very often intangible in nature and it is difficult to estimate their financial value. Taranko (2015) gives as an example the use of marketing communication tools for building the corporate image or maintaining good customer relationships. Thjomoe, Olson and Bronn (2002) came to similar conclusions, analyzing companies that incorporate sponsoring in their marketing activities. The surveyed entities had a sense of well-invested money in this type of activity, but only approximately 1/3 of them measured them economically.

Difficulties in measurable measurement and determination of the general level of efficiency of marketing communication activities result in the fact that few enterprises undertake this task. The results of research conducted by Forrester and ITSMA in 2013 confirm that the most frequent activity in the field of efficiency measurement is the preparation of reports that present operational results concerning, e.g. the number of page views, the range of exposure, advertising consumption, etc. The efficiency of marketing communication in relation to the presentation of economic (business) results in the form of e.g. measurement of market share, return on marketing investment or measurement of the impact of communication tools on customer loyalty is much less frequently examined (as cited in: Karpińska-Krakowiak 2015).

Reports on the activity of enterprises and the results of scientific research indicate that the measurements of the efficiency of communication activities is separated due to the tool used. Entities much more often use, for example, analyses of the impact of advertising or sales promotion tools on total sales than measure all marketing activities (including communication).

Measuring the effectiveness of marketing communication is a smaller problem for entities using its tools in their operations. It results from the essence of the term, i.e. the degree of achieving the intended goals/effects (see Figure 46), as illustrated in the following EsMCA (Polish: SDKM) relation: