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Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings in the
Marketing Classroom
Scott D. Roberts & Kathleen S. Micken
To cite this article: Scott D. Roberts & Kathleen S. Micken (2015) Marketing Digital Offerings Is Different: Strategies for Teaching About Digital Offerings in the Marketing Classroom, Journal of Education for Business, 90:2, 96-102, DOI: 10.1080/08832323.2014.988200
To link to this article: http://dx.doi.org/10.1080/08832323.2014.988200
Published online: 22 Dec 2014.
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Marketing Digital Offerings Is Different: Strategies
for Teaching About Digital Offerings
in the Marketing Classroom
Scott D. Roberts
The University of the Incarnate Word, San Antonio, Texas, USA
Kathleen S. Micken
Roger Williams University, Bristol, Rhode Island, USA
Digital offerings represent different challenges for marketers than do traditional goods and services. After reviewing the literature, the authors suggest ways that the marketing of digital goods and services might be better presented to and better understood by students. The well-known four challenges of services marketing model (e.g., intangibility) first proposed by Zeithaml, Parasuraman, and Barry (1985) is explored and adapted as an organizing framework for digital offerings. The authors also present specific suggestions for assignments and class discussions to foster students’ critical thinking about the marketing implications surrounding digital offerings.
Keywords: digital goods and services, digital marketing, marketing pedagogy, teaching, teaching strategies
When the U.S. economy shifted away from its manufactur-ing base, services marketmanufactur-ing theory arose to help marketers deal with the unique nature of the increasingly intangible offerings (Berry 1980). More recently, the economy has shifted again, driven by digital technologies. Not only have products been digitized, but information and communica-tion technologies have also made it possible to distance pro-ducers from consumers, both in space and time. Marketing practice has responded to this environmental change, but academic marketing thinking has not come as far.
We first became aware of the problem while teaching MBA students concentrating in digital media management. For their marketing management course, we used Kotler and Keller’s (2009)Marketing Management. Kotler’s work has arguably been one of the central repositories of market-ing’s received theories and ideas. We quickly realized, however, that the discussion of the digital offerings that these students were so engaged with (film, music, and video games) was lacking. A search of the marketing literature revealed the reason why: there was considerable discussion
of the impact of digital technology on marketing, but there was much less about marketing strategies for digital goods and services. This article begins to fill that gap by providing an organizing framework for thinking about the marketing of digital offerings as well as some practical suggestions for how faculty might address digital offerings with their students.
BACKGROUND: THE DIGITAL ECONOMY AND THE MARKETING CLASSROOM
The digital sector is an important presence in the U.S. econ-omy. It contributed 4.7% of the U.S. gross domestic product in 2010 and will continue to grow “more than 10 percent a year” (Dean et al., 2012, p. 8). Individuals are becoming more connected, with up to one third of U.S. adults now being always addressable (connected to the Internet most of the day) across multiple devices, platforms and locations (Forrester Research, 2012).
How has the marketing discipline responded? Our pur-pose here is not to suggest that there has been a dearth of lit-erature about the impact of digital technology but rather
Correspondence should be addressed to Kathleen S. Micken, Roger Williams University, Gabelli School of Business, Department of Market-ing, 1 Old Ferry Road, Bristol RI 02809, USA. E-mail: [email protected] ISSN: 0883-2323 print / 1940-3356 online
DOI: 10.1080/08832323.2014.988200
that there are significant gaps in the literature about how to address digital offerings conceptually. Pedagogical scholar-ship has resulted in proposals for changing the way classes are taught (e.g., Askim-Lovseth & O’Keefe, 2012; Harrigan & Hulbert, 2011), as well as suggestions for incorporating digital marketing practices in the classroom (e.g., Clayton & Hettche, 2012; McCorkle & McCorkle, 2012). There has even been a call for “a radical redesign of the marketing curriculum” (Wymbs, 2011, p. 93). What is missing, how-ever, are pedagogical proposals for teaching about the chal-lenges of marketing digital offerings.
The need to fill this gap comes not only from marketing practice, but also from accrediting bodies. The 2013 Asso-ciation to Advance Collegiate Schools of Business (AACSB) standards mandate that business programs include learning experiences that help students understand the integration of information technology in business: “data creation, data sharing, data analytics, data mining, data reporting, and storage within and across organizations” (pp. 30, 31).
Clearly, it is time to equip our students with tools for understanding and embracing all things digital. And it is time to equip faculty with the tools to do so. Faculty are faced with students for whom digital offerings are perva-sive, yet who need to learn how to market those offerings strategically.
APPLYING A SERVICES MARKETING MODEL TO DIGITAL OFFERINGS
With typical British humor, The Economist (n.d.) defines services as “products of economic activity that you can’t drop on your foot.” Services marketing scholars might agree, as intangibility has been the primary defining attri-bute of a service (Shostack, 1977; Zeithaml, Parasuraman, & Berry, 1985). The same can be said for digital offerings; their fundamental defining feature is intangibility (e.g., Hui & Chau, 2002; Lovelock & Gummesson, 2004).
Zeithaml et al. (1985) consolidated the intangibility characteristic with other differences into the intangibility, heterogeneity, inseparability, and perishability (IHIP) framework to provide a conceptual basis for thinking about the problems and strategies in services marketing. In this study, we adopt a similar perspective with regard to digital offerings: that the marketing of such offerings usually requires different strategic approaches. We suggest that a modification of the IHIP framework can provide guidelines for the marketing of digital offerings. We begin with a review of the IHIP framework. Next, we discuss the ways in which digital offerings both fit within that structure, yet are different enough to require adjusted marketing strate-gies. We also present example assignments that can spark class discussion about digital offerings and the strategic marketing implications.
With the IHIP framework Zeithaml et al. (1985) summa-rized four “unique service features and [the] resulting mar-keting problems” (p. 35). This framework “constitute[s] today’s received wisdom [about the differences between goods and services] in the broader academic marketing community” and continue[s] to be “a unifying theme for services marketing” (Lovelock & Gummesson, 2004, pp. 22, 25)1. The framework is as follows:
1. Intangibility
a. services cannot be stored,
b. services are difficult to protect with patents, c. services are difficult to display/communicate
about,
d. services are difficult to price; 2. Heterogeneity
a. standardization and quality control of services provision are difficult;
3. Inseparability
a. the consumer is involved in service production, b. other consumers often involved in production, c. centralized mass production is difficult; 4. Perishability
a. services cannot be inventoried.
This IHIP paradigm, however, did not anticipate digital offerings. At its core, a digital offering is made up of data files (recorded ones and zeros) stored on either the drives/ media of consumers or on the servers of marketers/facilita-tors (e.g., in the cloud). These files come together in the form of solutions (bundles of benefits) for consumers. Many traditional offerings have become available digitally including maps, tax preparation, customer service, refer-ence sources, higher education, and distance medical consulting.
APPLYING THE IHIP FRAMEWORK TO DIGITAL OFFERINGS
As economies move into the digital realm, definitions such as The Economist’s (n.d.) foot-drop test are not so useful. Digital offerings, while they cannot be weighed, often either reside on physical media or require physical media to access them. Unlike traditional broadcast media, such as television and radio, which also required a physical device for accessing them, digital offerings often can be more eas-ily captured, stored and shared, for example saving a movie on a digital video recorder or uploading content to a torrent site. Thus, when applying the IHIP framework to digital offerings, some significant differences arise, both in terms of the features of the offerings as well as the attendant mar-keting challenges. Table 1 presents Zeithaml et al.’s (1985) IHIP framework and highlights these distinctions, which are discussed subsequently.
MARKETING DIGITAL OFFERINGS IS DIFFERENT 97
Intangibility
In the traditional paradigm, “most services cannot be seen, touched, held, or put on a shelf” (Fisk, Grove, & John, 2014, p. 9). Among the challenges typically associated with intangibility is depicting a service in marketing communi-cations (how to tangibilize a service) and the inability of consumers to examine a service in advance of delivery.
Intangibility—digital. As discussed previously, a digi-tal offering also meets this definition, as, at its core, it is not tangible. Nevertheless, the issues that are identified as prob-lems for services are not necessarily probprob-lems for digital offerings:
a. A digital offering is electronically stored, thus the “cannot be stored” challenge of marketing services becomes a non-issue in the digital realm, assuming access to sufficient storage resources.
b. Because digital offerings are driven by software (see also the subsequent inseparability discussion), the code underlying the service can be protected—by copyright rather than by patent, typically (see Wen, Forman, & Graham, 2013).
c. Digital offerings are displayed and communicated quite well in digital format (apps, company websites, and blogs).
d. Price setting is no more a challenge in digital offer-ings than in most marketing exchanges.
Intangibility, however, does not give rise to the kinds of issues Zeithaml et al. (1985) identified for services. Instead, the intangibility is often an advantage that can be exploited in the ways addressed previously, as the following assign-ments illustrate.
Digital intangibilty in the classroom. Faculty can assign students to evaluate both a traditional service
offering (e.g., a meal in a restaurant or an oil change)2and a digital offering (purchasing an app for one’s phone or new software—even a computer game). What factors made the offerings either easy or difficult to evaluate in advance of purchase? Was one easier to assess than another? If so, why? How did the tangible elements and visual cues of each contribute to evaluating the intangible elements? How do the strategic implications for marketers of each offering differ? This last question allows a faculty member to address the issues of storing the offering, of protecting it from being copied by competitors, of communicating with customers, and of pricing.
If students meet in a computer classroom, an additional assignment could ask them to review websites with a focus on user interface design strategies. (In a traditional class-room the assignment would require screen shots.) In this instance, the discussion would revolve around how the digi-tal presentation facilitates the display of and communica-tion about the offering and how that display might be customized, using cookies, for returning versus new visitors (part of the heterogeneity issue considered next).
Heterogeneity
Also called variability, this challenge refers to the difficulty of standardizing service delivery quality (Fisk et al., 2014). One of the problems this characteristic creates for services marketers is a difficulty of scaling up, due to the difficulty of creating a consistently great service across time, loca-tions, situaloca-tions, and employees.
Heterogeneity—digital. Digital offerings are often delivered through the web or through mobile applications. They are based on repeated execution of computer code and thus do not exhibit the problem of inconsistency associ-ated with human-based services delivery. For example, Zil-low, a free online real estate database service, requires minimal to no interaction between the company and the TABLE 1.
Intangibility, Heterogeneity, Inseparability, and Perishability Applied to Digital Offerings
Characteristic Traditional services Digital offerings Examples
Intangibility Cannot be held, stored; difficult to communicate and price; intellectual property challenges
Intangible but can be easily measured, stored, transferred, communicated, and priced
Files stored on a hard drive or in the cloud
Heterogeneity Scaling challenges due to human agents being different at the point of service delivery
Because people are not involved in delivering the core offering, digital offerings can theoretically be designed to be perfectly homogeneous.
Zillow delivers the same information to all viewers, but search allows for customized presentation of results
Inseparability Inseparable from human provider; the experience requires marketer presence
Inseparable from delivery systems, such as hardware, software, and peripherals
Pandora (streaming radio) cannot be experienced without hardware and software
Perishability Cannot be stored for later consumption Because they are kept and delivered via storage media, they are not perishable (though file maintenance can be an issue)
Automatic backup systems
end users. To the extent that the digital offering is delivered without the intervention of human beings, marketers increasingly have the ability to decrease or eliminate het-erogeneity in the offering:
a. Standardization is only challenged by the need of consumers for a customized offering and lack of hard-ware and operating system standardization. Standard-ization and quality control can be built into the creation and delivery of digital offerings because the delivery of digital offerings is closely tied to software code, which does not vary (the very definition of homogeneity). If standardization is well thought through in advance, quality control need not be an issue. This is particularly true of digital consumption that does not require human marketer involvement, such as streaming a movie on a tablet.
Consistency in software execution can produce a con-sistent outcome at the consuming end of the process. Strategic thinking and thorough beta testing of consumer applications are the keys to homogeneity in the provision of digital offerings. There is, however, a significant het-erogeneity/variability challenge associated with the deliv-ery of digital offerings that is inextricably tied to the devices needed to access those offerings. Browsers, screen resolution, and operating systems have always been a challenge for the consistency of web-based deliv-ery. With the advent of smart phones and tablets, how-ever, the potential heterogeneity of user experience has expanded and the termresponsive designhas entered the digital design lexicon.3
Digital homogeneity in the classroom. Faculty could ask students to compare the experience of using cell phones (or tablets) with different operating systems. The discussion should expand beyond the user experience to address strate-gic issues. What is required of a developer to ensure that the user experience is the same across all the different phones? Does the limited human interaction suggest an even stron-ger requirement for planning and testing of the user inter-face—and of the efficiency of the coding to reduce transmission costs? Is it important that the user experience be similar across all platforms? Consider asking students to compare working with Microsoft Office products on a Mac versus on a PC. Is the transition seamless? If not, what are the consumer implications? The assignment can be taken further to address the responsive design issue: How impor-tant is it for companies to ensure that the content is experi-enced in the most optimal way, regardless of the device a customer uses: desktop, laptop, tablet, smartphone, televi-sion, or video gaming console?
An extension of the assignment would be to ask stu-dents to share the ways in which they have customized their phones. In traditional services marketing literature,
service providers strive for standardization to ensure quality control. In what ways does the provision of digi-tal offerings require both standardization and customization?
Inseparability
In the traditional marketing services literature, inseparabil-ity means that “for most services, the production and con-sumption of the service occur simultaneously” (Fisk, Grove & John 2014, p. 10). Fisk, et al. also note that the consumer is sometimes a co-producer of the experience—in the way an audience is important to the production of live theatre. This characteristic has also been termed simultaneity.
Inseparability—digital. With digital offerings, the inseparability comes not from the inability to separate the offering from the (human) provider, but rather from the inability to separate the digital offering from some sort of tangible delivery device. A core digital offering cannot sim-ply be consumed on its own. Consumer usage requires aid-ing devices (hardware), operataid-ing systems (firmware) and applications (software). For example, in order to watch a previously-recorded television show (ones and zeros on a hard drive), the consumer must at a minimum have a view-ing screen, hardware (the box, laptop, tablet), software, the underlying operating system, the computer code that accesses the recording, Internet access, if applicable, the ability to interface with the machine and choose the pro-gramming (touchscreen, mouse, remote), a sound system (speakers, headphones, earbuds), and a power source. Thus, digital offerings still have the inseparability characteristic; it is just that the characteristic is expressed in a different fashion and gives rise to different marketing challenges:
a. There is no need for consumers to be involved in the production of digital offerings. The provider and the technology allow the offering to be produced (the coding) and later consumed without a synchronous marketing presence. For example, LegalZoom pro-vides a variety of documents and services that do not require interactions with an attorney.
b. Consuming digital offerings does not require the pres-ence of other consumers. Neither does the prespres-ence of other consumers interfere with an individual’s con-sumption of the offering. Watching a movie down-loaded from Netflix means that he or she does not have to put up with other people talking during the show. It is possible to shop online without interfer-ence from other customers.
c. One of the major differences that digital offerings demonstrate is that they are highly scalable, as the only limiting factor is the bandwidth of the producer (server size or capacity and transmission speed, in particular). So the need to centralize mass production
MARKETING DIGITAL OFFERINGS IS DIFFERENT 99
around employees is eliminated unless it is a live vice delivered digitally, such as online customer ser-vice, for example, via Twitter or chat. When scaling up is unrelated to human resources, the need for strong employee training is not an issue. The ability for marketers to scale up is theoretically unlimited.
Consumption of core digital offerings is tied to devi-ces—televisions, radios, PCs, laptops, tablets, phones, and video game consoles. It is acknowledged that in precom-puter times, analog offerings (radio and television broad-casts, recorded music) were also tied to devices, but not to the degree that digital offerings are. As discussed under het-erogeneity, this inseparability issue goes beyond the ques-tion of Mac or PC. Operating system issues now include Android, IOS, and Windows Phone, as well as questions of screen-view optimization (Stokes, 2011).
Digital inseparability in the classroom. Faculty can begin by asking students to identify the companion prod-ucts that one needs to access digital content. In what ways do the size, ease of use, speed, battery life, and durability of these devices enhance or detract from the consumption of the offering? What about the fragmentation of devices to access the same digital content? What new digital offerings have arisen to help ameliorate that issue—such as cloud-based storage services (e.g., Google Drive, iCloud, Drop-Box, OneDrive) that facilitate access to one’s content? How important is it that such offerings be platform agnos-tic? From a strategic perspective, what are the implications of the always addressable consumers, who use multiple devices throughout the day? How do marketing communi-cations need to adapt? A related consideration is the three (or four) screen issue, of consumers accessing digital con-tent via television, via computers, and via mobile devices, sometimes using two (or more) of these simultaneously.
Perishability
“Most services. . .exist only at the time of their production”
(Fisk et al., 2014, p. 11). This characteristic challenges marketers to keep a supply of the service ready for when demand becomes effective. Since a car transmission flush cannot be kept in inventory until it is needed (because it requires the right mix of personnel and equipment just at the moment of demand), consumer need at the wrong time or consumption delayed may mean a lost sale. Communica-tions scholars call this characteristic ephemerality when referring to broadcast media (Pavlik & McIntosh, 2011).
Perishability—digital. Digitally delivered offerings need not be completely perishable, as they can be re-experi-enced, assuming effort has been taken to record the event (e.g., time-delayed viewing of a webinar). An example would be the use of a digital tax service, such as TurboTax,
which allows the consumer to save versions of a tax return on local or distant drives:
a. The traditional services marketing challenge of per-ishability is summarized by the cannot-be-inventoried description. Yet digital offerings can clearly be inven-toried, and technology even allows for infinite copies to be made rather instantaneously, such that that hold-ing large inventories is not an issue or expense (Anderson, 2006). It also nullifies many problems associated with having sufficient human resources available at key times of demand.
The primary limitation to keeping old digital offerings is maintenance of the files (both storage and access). Some-times organizations choose to delete older files for economic or legal reasons. Individuals also may choose to delete files to simplify their lives or because they no longer feel the need to save old files. The price of storage media is so low that the cost of storing older files is theoretically approach-ing zero (Anderson, 2009). Thus, the cost of maintainapproach-ing and keeping the files useful, as well as the ability to access files written in a programming language no longer much in use, such as COBOL, are the only true challenges associated with the long-term inventorying of digital records, at least from the producer/marketer perspective. For consumers, the extra cost of an external hard drive or cloud-based service, of course, can be an important consideration, but may be a lesser cost than that associated with losing data.
Finally, most consumers have experienced an additional perishability problem: having important data trapped in old devices. Storage media have changed from magnetic tapes to magnetic discs to magnetic hard drives to optical drives to flash or solid state drives, and from there to offsite cloud storage. Similarly, over time, upgrades and newer versions of productivity and other software have created an ongoing need to move important data (say, family photographs) to newer systems so that the information can still be retrieved and used. This obsolescence problem is closely related to perishability, in that irretrievable data are effectively lost data.
Digital perishability in the classroom. Faculty can facilitate productive discussions around the perishability of the aiding devices that digital offerings require. Most stu-dents will have stories of lost contact lists, photographs and class assignments because a hard drive crashed, a cell phone was dropped in water, or an operating system update resulted in loss of an app that they liked.
Discussion can extend to considering whether the perish-ability challenge of digital offerings has shifted from pro-viders to consumers. Does this aspect of the perishability challenge provide an opportunity for marketers to amelio-rate the problem by selling additional digital offerings, such as cloud storage, for example, services such as
Carbonite? What about insurance for lost data files? Con-sumers can sometimes pay an additional fee that allows them to redownload purchased software should something happen to the original downloaded version. Or, should this challenge be dealt with in alternative ways, such as Ultra-Violet or Disney Movies Anywhere? Both services provide free cloud-based storage for movies that consumers have purchased on DVDs and Blu-rays so that they can be streamed to different devices at any time. Another form of perishability is the obsolescence of operating systems. How long do marketers need to support products that do not run on the newer operating system?
Finally, this perishability discussion can be a teachable moment for talking about citing digital sources. The dynamic nature of webpages, databases, and other digital collections explains why the APA and other citation styles usually require that the date of access be included.
DISCUSSION
Digital technologies have become ubiquitous in marketing. In adjusting pedagogy to acknowledge these changes, mar-keting faculty have begun to incorporate more technology in the classroom, have begun to address the new options available to marketers for engaging with customers, and in some cases have created not only new courses but also new majors/concentrations. External forces also propel this movement forward: accrediting agencies and organizations seeking interns and employees who understand the technol-ogy as well as how to use it strategically.
The production of unifying marketing frameworks has not always kept pace with the speed of digital business evolu-tion, and thus marketing texts are not providing timely struc-tures for conceptualizing these changes. This paper suggests ways faculty can effectively use the existing services market-ing IHIP framework, but also presents the deviations from it necessitated by digital offerings. Additionally, we offer sug-gestions for assignments and discussion probes to augment faculty presentations. Faculty may find the suggestions here helpful in organizing their own thinking about these issues, which in turn will help move the discipline forward.
ACKNOWLEDGMENTS
The authors would like to thank Rajiv P. Dant, Irvine Clarke III, and the reviewers for their comments on ver-sions of this article.
NOTES
1. We are cognizant that the IHIP framework has been criticized as being neither empirically derived nor
tested (e.g., Keh & Pang, 2010). Other scholars have questioned whether services offerings are indeed as different from product offerings as the literature would suggest (e.g., Greenfield, 2002).
2. Though these two examples come from the tradi-tional services marketing literature (Shoshtak, 1977), both include significant physical elements.
3. Responsive design refers to creating websites so that they can be easily read and navigated regardless of the device one is using to view the site. In the words of the term’s creator, Ethan Marcotte (2010), respon-sive design allows a site to be viewed “along a gradi-ent of differgradi-ent experiences.”
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