Background on Digital Economy

1.0 Introduction

1.1 Background

The digital migration and adoption of digital tools in the business world has been regarded as a technological wave, that is not only convincing the way of life but also what people think and behave at the same time. Moon (2004) indicated that the emergence of digital economy is essentially influenced by e-commerce and information technology. Based on the Emerging Digital Economy Report established by Moon (2004), the weight of commerce can be high in some if the companies as noted with Dell Computer. Most of the sales are said to have been achieved through internet and other digital channels. The subsequent diffusion of e-commerce has provided a platform for consumers to search the information, evaluate it, purchase, as well as use the products in a more efficient manner. The internet, which carries most or all the digital tools, has shown the capacity of enhancing consumer efficiency through consistent access to information. Apart from provision of the information on a number of elements or qualities of the product, the internet has been behind the improvement of the consumer effectiveness through provision of images, visual tools and sounds, which are necessary and significant to customers before they make a choice on the products.

Bilgihan et al. (2016) further noted that consumers would always come up with decisions based on the information search, product usage and brand choice. The decisions are always difficult to make due to many alternatives that might be surrounding the consumer. Therefore, the contingent consumer decision making shows that the outcome is always determined by a variety of factors detected within the immediate environment. Bilgihan et al. (2016) went ahead indicating that such factors can either be cultural, social, and even psychological as far as the consumer behaviour and decision making are put into consideration. The same goes to the moderating role, which are framed through situational and continuous involvement. A prior research confirmed by Zhao et al. (2015) shows that consumer behaviour could only be determined through product purchase via the internet. However, even before the appearance of the digital platforms, consumer behaviours could easily form significant patterns in the market, based on which the businesses and investors can establish the trend or patterns in the market. A case study on the web advertisements of a menu conducted by Zhao et al. (2015) indicated that information search to consumers is an important process in the business world. The same case study indicated consumer satisfaction is essentially determined through the amount of information a consumer can access, the transmission speed, the update pace and user-friendliness. The brick and mortar business was less dynamic when compared to the businesses in the modern era. The key factor that describes the differences includes the speed of accessing information between the two eras. While the traditional methods forced customers to walk in the stores before they could access any information, the same thing may not be witnessed in the modern era where the platform for accessing information is more efficient, immediate, and convenient at the same time.

It is of note that the time between the point of accessing information and the point at which the purchase is made is always important. A customer who experiences relatively long periods between the two points is likely to change ideas and make different decisions from time to time. This means that such a customer may even fail to make any purchase decision at the end of the period. Therefore, it is important to note that the web characteristics, information search objectives and the consumer characteristics are enough in defining the market trends, consumption patterns and even forecast the market gaps. Across all the case studies mentioned, most of the discussions and analyses fostered the connection between consumer purchase decisions and the impact of internet. This focus has further created a research gap in that no case study worked on how the digital tools have become paramount in describing the consumer behaviours and decisions. This plays along description of different tools that can be found in the world of business, and how such tools can be applied in determining the trend in the market.

1.2 Research problem

The study of the digital framework and factors associable to its performance in the world of business appears to be a significant move. However, digital migration appears to have invited more questions in the business environments. Notably, the modern era has placed most of the investors in a dilemma accompanied with failure to describe or interpret the possible connection between consumer behaviours and the digital platform. The same goes to a scenario where businesses grab some of the digital channels without thinking about the possible outcome of the move on the consumption side of the supply chain. Therefore, there is an accruing need of analysing some of the behaviours and decisions customers make in relation to the highly adopted digital channels in the market. The hunt for significant information regarding the digital influence across business performance is equally informed by business interest and possible gains enterprises gain from the same channels.

1.3 Research aim and objectives

The major aim of this research is to determine how the digital channels are increasingly being used by businesses as tools that dictate consumer purchasing decisions as well as behaviour. This is supported by the following objectives:

To explore dominant digital channels used in the world of business

To determine the significance of digital channels in describing market trends

To analyse how digital tools convince psychological factors of consumers

To determine the impact digital channels have towards socio-cultural factors of consumers

To integrate the characteristics of digital channels with the capacity of consumer decision making

To examine how the nature of digital channels dictate the behaviour and decisions made by consumers

1.4 Scope and Limitations

The research will rely on primary data in examining decisions and behaviours among consumers that seem to be influenced by digital channels in the market. This goes alongside examination of how digital channels can influence the psychological nature of human beings before observing some of the socio-cultural factors aligned to particular consumer segments in the market. The scope retains the limits of the research aim and objectives, which are perfectly aligned to the research topic under study. The research will also be limited to the opinions and suggestions that would be collected from some of the millennials who are fond of using mobile technologies and internet as the key modes of accessing goods and services in the market.

1.5 Structure

The proposal only constitutes four key areas, which highlight the framework of the entire project. The four areas include the introduction, literature review, the research methods and the research plan. The introduction gives a glimpse of what the project entails the background and the research problem, the research aim and the objectives. The second section is the literature review where sampled case studies are tailored to meet the objectives. The research methods informs on the key tools that can be used to establish the course of the findings, which form the backbone of the project. The research project plan establishes the timeframe for each activity that is key in completing the project.

2.0 Literature Review

The literature review is always seen as the narrative review of the scholarly papers that carry the current knowledge. The review incorporates substantive findings and methodical contributions that are made towards the research topic. In this case, the review will focus on the following areas.

2.1 Dominant digital channels used in the world of business

Based on the case studies conducted by Verhoef et al. (2015), the world of business never grows without marketing activities. This is a trend that is being observed across the small agencies in United Kingdom, which is heavily depending on digital marketing. Most of the digital marketing tools or channels are said to account for almost 60% of the marketing. More than 80% of the companies are now adopting digital channels believing that they also stand a chance in a competitive market to convince a significant market share. However, Blaschke et al. (2017) believe that not all the digital channels are used in the world of business. While millions of customers would run to the Facebook platform, not even a quarter of this total number knows how to use Instagram or twitter. The key question remains as to what are the dominant channels that can be used by businesses to reap maximum profits from a growing and a more dynamic market. Taiminen and Karjaluoto (2015) and Blaschke et al. (2017) noted that digital marketing is the most appealing approach that surpasses the influence of traditional marketing. However, the three researchers believe that not all digital channels are good and not all of them conform to the marketing tactics as well as strategies. This makes them to be classified as one way channels and two-way channels. The one-way channels include websites, online directories, banner advertising, email newsletters, search engine optimization as well as search engine advertising.

Two-way digital channels comprise of the social media, company own communities and company generated blogs. Verhoef et al. (2015) noted that email and websites could be perfect examples of one-way communication channels as realized with a high company control. Companies would have their own websites, which are known for describing the home of the brand that is anchored on the online environment. Emails are used for different marketing purposes such as promotion, sharing information, creating relationships as well as guiding clients to the websites that carry more details regarding a specific brand. However, email as a digital channel is in nature a two-way channel but it is normally considered as one way because of its applications in advertisements as well as the newsletters. Findings established by Verhoef et al. (2015) indicate that over 90% of the SMEs are currently making use of the company website as well as the email in marketing most of their products and the services to be delivered in the market. However, almost 100% of the SMEs find it difficult to make use of the advanced channels because of the costs of maintenance, security challenges, and the commitment required in running such platforms.

The Search Engine Optimization (SEO) would commonly be used as one way of enhancing or bolstering the rank of the website search engine across the organic search results. The key purpose of the one-way digital channels is to inform customers on the available products and services. The SEA and the SEO are normally used by large firms. Apart from the one-way digital channels, Coupey (2016) noted that businesses are equally becoming aware of the two-way communication channels. The emergence of social media has changed the relationship between the customer and marketer to be upside. The shift in power current fronts the customer as the key person before the objectives of the company are established. Social media platform is commonly used as the most dominant two-way digital channel that has introduced newer dynamics in the world of business. Through social media, the company would have minimal control over the brand and the qualities of the product and services are purely dictated by the opinions and suggestions unleashed by the customers. The real-time marketing messages, sales pitches and conversations behind a given product yield the authentic stories that carry along the expectations of the customers. Social media, as noted by the researchers, emerges as the key tool in branding as well as marketing communications. For instant, Facebook is such an important platform where the business can create brand awareness and engage consumers at the same time. Blogging is also finding its way in the market as companies try to manage the content. A study on the 462 SMEs in the United States confirmed that most of them are struggling with the extra workload introduced by the social media. Most of them would spend over six hours of each week on different social media platforms. Facebook takes over 90% of the business use while Twitter takes a whopping 70% of the business and personal use as well. The performance of Pinterest, LinkedIn and Google plus is a bit low but expected to rise with time.

2.2 The significance of digital channels in describing market trends

Cebulsky et al. (2018) argues that it is time that businesses should make use of the digital channels with the central reason of creating seamless as well as consistent engagement. This comes in the light of the commercial websites that first appeared in the 1990s, the growth of digital technology and dynamic consumer behaviours in the market. Digital convenience, however, is said to have emerged at the expense of the constructive engagement across the digital transactions. Besides, Cebulsky et al. (2018) asserts that companies are currently taking key elements of every digital channel and tailor them to meet the customer value expected in the market. For instance, Cebulsky et al. (2018) shares the experience of a fashion retailer- All Saints. The fashion retailer had a convenient web-browsing platform compelling the owners to add internet-enabled sites in their stores. This enabled customers to browse and check the availability of different fashion brands through online and respond to the orders available. All Saints is said to have made significant profits from such experience that was established from the seamless as well as meaningful engagement model. Therefore, this confirmatory platform highlights the dynamics observed behind the latest technologies in the market as companies turn their attention to the test and learn approach.

The question remains as to whether digital channels can be part of the description of the market trends in the world of business. Kagermann (2015) responds to this question by submitting a digital trends report, which was published by Adobe together with Econsultancy. The findings were based on a global survey that was conducted across the 13000 marketers and the digital professionals said to have taken part in the research. A close focus on digital marketing, essentially social marketing, is currently over-indexed concerning the predictions that started taking shape way back in 2016. Over 2.5 billion users in the world keep visiting most of the social media platforms, which makes it easier to establish trends from WeChat, Weibo, Instagram and Facebook among others. Digital marketing is therefore a gift that promises most of the marketers to harness significant information from different platforms clients interact with. Kozinets et al. (2018) indicated that companies are increasingly getting a quantifiable uplift because of the customer centric approach. This comes in the light of optimization of significant customer experience, which gives the business people an opportunity. Digital channels are currently parenting data-driven marketing, which commands the client-side perceptions that are easily tapped from the social media platforms. Companies are increasingly reaping benefits from the data-driven approach, which is rigorous as well as scientific at the same time. Because of this approach, digital channels form the most convincing tool that commands the data while establishing a possible future for the business.

According to Kozinets et al. (2018), companies may not be well equipped with significant skills and technology. However, such companies end up acknowledging data-driven marketing, which is essentially powered by creativity, intuition and data as far as great customer experiences are put into consideration. The wealth of research has gained or gone a notch higher due to research, which can easily be conducted through digital channels. For instance, it is currently easier to know the number of clients who commented or liked a photo of a celebrity who put on a particular dress or takes a unique style in the fashion industry. From simple metrics, one can easily establish that consumption of a particular dress in the market is largely convinced by how frequent the celebrity puts on the same dress. The forces of marketing will now take charge to predict whether more young people are trending compared to married people, or more young people are attracted more to certain brands compared with others. Simple forecasts can still be extracted from such platforms like Twitter and Facebook among others. Companies are becoming more interested in digital tools believing that they would take them to a better platform where performance would easily be realized. One company that seem to appreciate the dynamics and the influence of the digital tools is the Glostars Company, which does photo sharing for individuals, organizations and even individuals in a competitive fashion and art industry. The company operates through allowing users to make use of the features as winners receive their awards. The success of Glostars is essentially based on the simple slogan of valuing the content that is shared by the clients. Such content is what enables the company to create the features that meet the needs of the consumers. Glostars appreciates what digital channels, social media, has done to the growth of the company. This is because it relied on the social media platform to establish a trend that carries the attitude of a large section of the consumers.

2.3 How digital tools convince psychological factors of consumers

Babu (2017) admits that studying consumer behaviour can be challenging due to the dynamics in the field of marketing. Despite the unpredictable dynamics, businesses put more hopes in most of the digital platforms believing that business performance squarely depends on the performance of such channels. However, this one area has attracted more research in the world of business and commerce. While most of the marketers would try to impress the customers, most of them are seen playing around with the psychology of their clients. They understand what the customer wants from the market and, therefore, attempt all means that ensures that clients get what they want. Rahbar and Abdul Wahid (2011) looked into how the digital marketing activities can impact the consumer psychology. The two authors noted that increased marketing activities are likely to attract as well as retain more customers for the cause of attaining or acquiring a sustainable competitive advantage. For the purposes of achieving such objectives, companies or groups are expected to focus their efforts on both the development and sustainability of the organizational culture. This ensures that the interests and the wellbeing of the customers are given the top priority, which is accompanied by the processes that engaged while making significant decisions before policies are established. Amid the processes, the psychology and behaviour of consumers are integrated across the promotional activities. This compels the companies to think alongside their consumers while reading their moods in every move.

Rahbar and Abdul Wahid (2011) indicate that scholars in the 1900s began working on the psychological principles, which could be used by both the marketer and the advertiser. At the time, Viennese psychologist Ernest was able to conduct a motivational research as he used the Freud’s psychoanalytic techniques in understanding the hidden motivations of most of the clients in both a subjective and qualitative nature. Later on, Ditcher’s researchers, in the year 1950, worked on the brilliant ideas that had been developed by the Freudian psychology before they could popularize them. Psychology reason across the consumer behaviour allows businesses to understand how the consumer can possibly react to a product. It is imperative for advertisements and the digital channels to embrace both the psychodynamic concepts a well as theories. This begins from analysis of the consumers’ lifestyle, which forms a description of their behaviour at the same time. The lifestyle describes what consumers use, what they purchase, what they consume and what they think at the same time.

Digital channels are known for carrying significant characteristics that can be tailored to meet the desires of the clients in the market. A platform like a company website has a product-item, which shows the availability of certain products that can be ordered by the clients. Secondly, the channel includes the price and the place where the client or customer can find the product. Both the one-way and the two-way channels understand there are people who can access the internet and get the products. The channels also entrust the perception of the brand that is virtually put in the market place and lastly, digital channels shorten the process of information reach, which benefits the clients or customers more than it does to the business itself. All these are done to create the right impression before the clients.

2.4 The impact digital channels have towards socio-cultural factors of consumers

Digital channels can still be discussed in terms of the influence they have toward the values, beliefs and norms, which are cited as socio-cultural factors. Studies have further bee framed around establishment of the characteristics of digital channel that carry the capacity of decision making on the site of the consumer.

Chapter 3: Methodology

3.0 Research Methods

Research methods constitute a systematic plan that is meant for conducting the research under consideration. Sociologists have confirmed research methods are simply a collection of tools that are meant to enable the researcher to conduct the research process. In this proposal, it will be perfect enough to indicate the research approach that would be used, data collection technique and the tool for data analysis.

3.1 Research Approach

The project has three alternatives from which one method can be selected. The three include the qualitative research, the quantitative method and the mixed methods research. As mentioned in the scope and limitations of this research, the project would desire to retain an explorative approach, which builds conclusions based on the insights developed into a problem (Savin-Baden, and Major, 2013; Maxwell, 2012). The most convenient method that can meet the requirements includes the qualitative research. This method largely refers to meanings, definitions and concepts that can be developed towards a given research problem. Its non-numerical nature makes it suitable to researches that are boundless as the research process attracts views and contributions from another sect. The key advantage of this method is that it relatively simple because of lack of numerical analysis, which is normally witnessed in the quantitative method.

3.2 Data Collection

Data collection is an important part of the research. It entails collection of the findings from the field, which can be cross-checked with the theoretical side of the research. In this context, the research thought through the primary data research and secondary data research. The latter is based on the case studies and materials that were or have been published by other authors. The key advantage of the secondary data research is that it consumes less time and it is less expensive. However, the major drawback for this approach is that most of the findings may not be justified. Primary data research is quite convincing because it gets in touch with the original source of information. Details that are more credible can be extracted from primary research. Based on this, the proposal picks on the most significant tool for data collection, which can reflect on the characteristics of the primary research (Gill et al., 2008; Delport et al., 2011). The research will make use of the questionnaires as the key tool in collecting information from the field. The questionnaires will be designed in a way that reflects the aim and objectives of the research as indicated in the introduction part of the proposal. The questionnaires will be distributed among a selected group of the millennials who are fond of using both the mobile technologies and internet.

3.3 Data Analysis

After collecting the findings, it is always important that one should extract meaning from them. Data analysis is important and plays a focal role in extracting meanings before making conclusions (Guest et al., 2011). This research will rely in thematic coding as the key tool for data analysis.

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