A Marketing Framework Integration Of Classic Marketing On Viral Marketing

Viral Marketing Integration

A Marketing Framework Integration of Classic Marketing on Viral Marketing Steve Sung MBA 673 Strategic Issues in Marketing the Growing Enterprise Dr. Cynthia Gibson March 23, 2009

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Viral Marketing Integration

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Table of Contents

Abstract

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Overview of Classic Marketing

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Overview of Viral Marketing

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Integration of Viral Marketing and Classic Marketing

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Viral Marketing is also a Multi-Disciplinary Practice

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Viral Marketing is also a Problem-Solving Strategy

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Viral Marketing also Benefits Customers as well as Organization/Stakeholders

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Viral Marketing also Involves Social and Ethical Responsibilities

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Conclusion

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References

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Viral Marketing Integration Abstract Over the years, marketing theory and definition have gone through iterations of revisions and debates. Due to marketing's multi-disciplinary nature and markets' uncertainty, it has been challenging to develop an agreeable theory or definition that satisfies the theorists and practitioners. However, marketing's principle remains to be customer-oriented. Viral marketing, on the other hand, is a modern strategy that is not only customer-oriented but often customer-initiated. While viral marketing seems far evolved from the traditional practices, its essence is still closely associated with its root. This paper attempts to integrate viral marketing with classic marketing by demonstrating how some of the traditional theories and definitions are also applicable to this millennium practice.

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Overview of Classic Marketing Classic marketing is a collection of marketing theories and definitions developed over the years by various scholars and practitioners. Among these individuals, William Baumol is one of the first to explain the nature of marketing. In his 1957 paper, Baumol describes marketing as a multi-disciplinary practice that involves psychology, sociology and economics (Baumol, 1957). Due to this complicated composition along with the market's high uncertainty, Baumol states that it may not be possible to actually develop a marketing theory. Baumol explains that although each one of the disciplines marketing covers had already developed its own set of theories, it is not feasible to simply integrate them and call this integration marketing theory. Due to this challenge along with others, some feel marketing theory is weak and its growth is slow when compared with other disciplines (Burton, 2005; O'Rourke, 2004). In 1967, Lazer proposed two main reasons that contribute to this phenomenon: lack of theorists and lack of theory courses in academic institutions (Lazer, 1967). Sixteen years later, Bartels (1983) explained the lack of theorists in marketing is largely caused by the presence of a large number of practitioners and the organized groups they helped to form, such as the American Marketing Association (AMA). Burton (2005) then strengthened Bartels' argument by stating that the majority of marketing academics are more related to marketing practice or practitioner-oriented research, rather than theory development. All these arguments are just a small reflection of the debates over classic marketing throughout the years, but they all echo with Wroe Alderson's (known as the father of modern marketing) definition of marketing, which states “ marketing is a problem-solving strategy that is based on a function of organizational behavior, as opposed to forming and following a theory” (Alderson, 1957). The AMA's latest definition of marketing further expands Alderson's statement. AMA defines marketing as “the organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the

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organization and its stakeholders” (Gundlach, 2007). Although this definition overlooks marketing's social responsibilities (Laczniak, Lusch, & Murphy, 1979) and seems to describe its purpose instead of theory, this definition does adequately capture the essence of classic marketing. Marketing is customer-oriented instead of product- or organization-oriented. It is to look for creative ways that raise customers' interest and desire to consume. Different industries may have different types of marketing strategies (e.g. sports marketing, entrepreneurial marketing and services marketing); and for each industry, marketing may be conducted via different environments or channels (e.g. global marketing, e-marketing and social marketing); even different people may categorize marketing differently. The bottom line is, however, the essence of classic marketing remains the same no matter how this practice has evolved.

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Overview of Viral Marketing Viral marketing is a type of marketing strategy that utilizes the word-of-mouth effect via social media (MarketingTerms, 2001; Wiktionary, 2009). The term viral was derived from this strategy's potential to spread information like how an epidemic virus would spread to the population. With viral marketing, it is no longer the marketers, but the consumers who promote the product or service. Smith et al. (2007) state that it is the moderately or highly connected people instead of the selected market mavens who hold the greatest potential for influence (Smith, Coyle, Lightfoot, & Scott, 2007). Some characteristics of viral marketing are: 1) the product or service is being offered for free only on the Internet and no other distribution channel; 2) the offer contains a real customer value; and 3) the first carriers (the ones who spread the virus) are chosen carefully and should be those who are well connected on the Internet (Helm, 2000). Wilson (2005) further expands these characteristics and lists the following as viral marketing's principles: 1) give away products or services; 2) transfer effortless to others; 3) scale easily from small to very large; 4) exploit common motivations and behaviors; 5) utilize existing networks; and 6) take advantage of others' resources. In their 2003 paper, Subramani and Rajagopalan present a framework to describe conducting viral marketing on social media (Subramani & Rajagopalan, 2003). In this framework (see figure 1), Subramani and Rajagopalan distinguish between people who spread the viral message actively or passively, and whether the outcome has more or less additional benefits. For example, when Sam sends Sue an email that attaches a Winzip file, he has passively promoted Winzip to Sue. When Sue installs Winzip and unzips Sam's attachment, she also gains additional benefit of having the tool to zip or unzip other electronic files. Sam and Sue's example represents the SGM quadrant (Q1) in Subramani and Rajagopalan's framework. In another example, John forwards Jane a link of an interesting article (actively sharing the information). Aside from enjoying the article, Jane does not receive any additional benefits from this process. John and Jane's example represents the TR quadrant in Q4 of the

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framework. According to Subramani and Rajagopalan, this framework is useful to predict the customers' responses to a viral campaign.

Figure 1: Viral Marketing Framework

With social media such as Youtube, Facebook or Twitter receiving more attention and popularity than ever (Google Trends, 2009; Indeed, 2009; Ostrow, 2009; Trendsspoting, 2009), viral marketing is presented with an opportunity like never before. There is an increasing number of marketing campaigns that raise customers' attention and brand awareness virally; some recent examples include Barack Obama's presidential campaign (Carr, 2008; O'Hear, 2007), Dell Computer's promotion on Twitter (Ogg, 2009), and the blockbuster movie The Dark Knight's marketing campaign (Sciretta, 2007). Although viral marketing seems far evolved from classic marketing, there remains a strong resemblance between the two. The rest of this paper will demonstrate this connection.

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Integration of Viral Marketing and Classic Marketing Using various theories and definitions of classic marketing addressed in this paper so far, this section will integrate viral and classic marketing. Key points used here include Baumol's (1957) description of marketing's nature, Alderson's (1978) description of marketing's purpose, AMA's (2004) official definition of marketing, and marketers' responsibilities cautioned by Laczniak et al. (1979). Viral Marketing is also a Multi-Disciplinary Practice that Involves Psychology, Sociology and Economics (Baumol) Psychology. Subramani and Rajagopalan (2003) argued that different types of viral marketing initiatives create different psychological effects to the recipients. These effects can also be observed from people's intention and willingness to share information (Smith et al., 2007), which are the fuel that contributes to viral marketing's potential in creating word-of-mouth effect. Sociology. The main platform of viral marketing is a diverse set of social media on the Internet, where people interact and exchange information with one another. The only difference between human interaction in real-life and that on the Internet is, with the latter, the speed of connection and information spread are much faster. However, the principle of sociology is still applicable. Sociology's definition is “the study of the development, organization, functioning, and classification of human societies/social networks”; this definition can also be used to explain viral marketing's characteristics and effects adequately. Economics. Aside from social media's recent emergence and popularity, another reason that contributes to viral marketing's popularity is its low-cost and high-availability, along with high supply (according to Smith et al., anyone who is at least moderately connected qualifies as a supplier) and even higher demand (the number of people who received information from social media either directly or indirectly). In viral marketing, the roles of carrier (on the supply end) and recipient (on the demand end) are also interchangeable; someone who shares information may also be interested in information

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shared by others, and someone who receives valuable information may also share that with others. Viral Marketing is also a Problem-Solving Strategy (Alderson) Viral marketing is simply a way to solve marketers' problem by promoting the marketed goods. What differs viral marketing from traditional marketing is that while it is the marketer who promotes the goods in traditional marketing, in viral marketing this task is delegated to the consumers themselves. The question raised here is why do consumers do that, especially when they are not being rewarded by the company that offers the goods? This question will be addressed in the next section. Viral Marketing also Delivers Value to Customers in ways that Benefits the Organization and its Stakeholders (AMA) According to Smith et al. (2007), the reason that people are willing to share valuable information on the Internet is a behavior driven by the desire to help others; and while doing so, they feel valued and being needed. Sometimes because an individual becomes well-known on the Internet due to the constant quality of information he shares, his presence on the Internet improves, and his personal website's traffic will most likely improve as well. Although this person's website has nothing to do with the promoted goods, it does have the potential to generate revenue from ads displayed. Smith et al. also discover that those who are moderately or highly connected are more willing to forward valuable messages; in fact, they state that someone's willingness to share information is proportionate to his connectivity on the Internet. It is those active participants on social media who are the main catalyst of viral marketing. The constant movement of information they help to initiate creates a ripple effect that ultimately benefits the organization and its stakeholders. This effect is illustrated in figure 2. In this figure, the size of each circle indicates the connectivity and influence of viral carrier as well as the potential reward gained from personal web presence and traffic; and the total number of ripples indicates the magnitudes of both the viral spread that promotes the goods and potential customers reached on the network. Please

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note that neither the organization nor its stakeholders are present in this figure, yet they are the ones who receive the ultimate reward from this viral movement, which is people's attention and interests in their products or services. This is the power and attractiveness of viral marketing. This also illustrates how it is not just the customers, but the organization and its stakeholders who are benefited from this viral movement.

Figure 2: Influence Ripples Created by Viral Marketing

Viral Marketing also Involves Social Responsibilities (Laczniak et al.) In the late 70s, sensing the needs to raise ethical awareness in order to prepare for future marketing, Laczniak et al. conducted a survey to raise social and ethical awareness in marketing. They identified that marketing has vulnerability that may cause social issues. The authors concluded their paper by reminding marketers to be accountable to their ideas and strategies. Viral marketing, a strategy that popularized after the millennium, is the kind of future marketing that Laczniak et al. cautioned about. Utilizing on the Internet and its capability to spread information,

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viral marketing also comes with great potential and easiness to cause controversies or even be unethical. For example, in 2005 Volkswagen launched an ad featuring a suicide bomber who intended to detonate a bomb while driving a Polo (the model advertised), but the car remained intact after the explosion (Youtube, 2005). While this ad did catch viewers' attention and was even named top viral video of 2005 by some, many people criticized Volkswagen's insensitivity in dealing with terrorismrelated topic. In another example, a company offered web surfers with misleading information just so that they would be lured to sign up for memberships and subsequently help this company to increase web traffic and revenue (Kamrani, 2008). Because the effectiveness of viral marketing is dependent on the word-of-mouth effect created by consumers, marketers face the temptation to use provocative ways to generate the buzz (Porter & Golan, 2006). There is only a fine line between a campaign that is edgy-but-acceptable and one that is controversial-and-unethical, and sometimes even big corporations such as Microsoft fall into the trap of socially irresponsible marketing (Kilby, 2005). Often times the viral campaigns that create the biggest snowball effect also happen to be those that are most controversial, and a viral marketer has as much responsibility to remain ethical and truthful as a traditional marketer, if not more.

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Conclusion Whether it is viral, traditional or any other marketing strategies, the objective remains to be raising customers' desire to consume. This paper attempts to demonstrate how viral marketing's essence is still closely associated with classic marketing, even though it has been far evolved from its traditional root. Key points used to integrate viral and classic marketing include marketing's nature, purpose, beneficiaries and responsibilities. While a case study of an actual viral campaign and a deeper coverage of viral marketing's vulnerability may strengthen this paper's argument, this paper can be used as a basic guideline to assess a viral campaign's motivation, effectiveness and possible setbacks.

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Viral Marketing Integration O'Hear, S. (2007). Barack Obama launches social network. Retrieved February 7, 2009, from http://blogs.zdnet.com/social/?p=89 O'Rourke, F. (2004). The analysis of markets in marketing: Weakness in marketing theory. The Irish Journal of Management, 25(2), 108-120. Ostrow, A. (2009). Twitter now growing at a staggering 1,382 percent. Retrieved March 21, 20009, from http://mashable.com/2009/03/16/twitter-growth-rate-versus-facebook/ Porter, L., & Golan, G. J. (2006). From subservient chickens to brawny men: A comparison of viral advertising to television advertising. Journal of Interactive Advertising, 6(2), 30-38. Sciretta, P. (2007). The Dark Knight: Six new viral sites launch. Retrieved February 1, 2009, from http://www.slashfilm.com/2007/11/23/the-dark-knight-six-new-viral-sites-launch/ Smith, T., Coyle, J. R., Lightfoot, E., & Scott, A. (2007). Reconsidering models of influence: The relationship between consumer social networks and word-of-mouth effectiveness. Journal of Advertising Research, 47(4), 387-397. Subramani, M. R., & Rajagopalan, B. (2003). Knowledge-sharing and influence in online social networks via viral marketing. Communications of the ACM, 46(12), 300-307. Sullivan, E. A. (2009). Guerrillas in the mist. Marketing News, 43(4), 06-06. Trendsspoting. (2009). Social media trends 2009. Retrieved February 7, 2009, from http://www.slideshare.net/TrendsSpotting/social-media-influencers-predictions-2009-bytrendsspotting-presentation?type=powerpoint Wiktionary. (2009). Definition of viral marketing. Retrieved February 7, 2009, from http://en.wiktionary.org/wiki/viral_marketing Wilson, R. F. (2005). The six simple principles of viral marketing. Retrieved March 20, 2009, from http://www.wilsonweb.com/wmt5/viral-principles.htm Youtube. (2005). Volkswagen suicide bomber ad. Retrieved March 22, 2009, from http://www.youtube.com/watch?v=aZ-fyst4-7w

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