Information Technology and its Relationship to Marketing and

Marketing Relationships

Mairead Brady, Dublin Institute of Technology, DublinMichael Saren, University ofStrathclyde, UK

Nikolaos Tzokas, University ofStrathclyde, UK

Abstract

Information technology (IT) and its use in marketing is radically altering how companies

practice marketing. The widespread availability of information and heighten

communication abilities are changing the relationships between marketing and other

functions and between marketing and suppliers and customers. Marketing in the 90s

operates in a totally altered landscape demanding a radical rethink and redirection for

marketing.

As IT in marketing develops and moves from automational use to transformational use

these changes will be magnified. There are conflicting views u^ to the impact of IT on

marketing with many heralding the widespread acceptance and use of IT as the

beginning of the end of marketing, or as the greatest threat to the marketing department.

Others view this development more positively and see IT as the saviour of marketing,

which can now assume its glorious and central position in the company, with an

increased customer and relationship focus.

This paper traces the impact of IT on the marketing function and discusses the major

implications of the new IT enhanced marketing practices. It reports a study of 204

marketing personnel in medium to large companies in Ireland It confirms the perception

that marketing is changing, and to a certain extent benefiting from the introduction and

use of IT, though predominate!) to reinforce existing behas iour rather than initialing

radical ne\\ directions for marketing development

1 * Correspondence- Mairead Brady, Dublin Institute of Technology. 23 Mountjoy Square. Dublin 1, Ireland Telephone: 00 3531 2830032, e-mail: MBrady(o/dit.ie.

in McLoughlin, Da mien, and C. Horan (eds.). Proceedings of The 15'1' Annual IMP Conference,University College, Dublin 1999

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Introduction

A current view of marketing is that the search for a new marketing paradigm has begun,

with relationship marketing as the new transformational marketing model (Gronroos,

1997; Gronroos, 1996; O'Malley and Patterson, 1998; Piercv and Craven. 199S Sennit/

etal., 1996; Piercy, 1998; Snow, 1997; Payne, 1995; I/okas and Saren. 1997: Sheth and

Parvatiyai, 1995). Relationship marketing is seen as a IKXL-V,UV lor MJIIIC companies and

industries (Gronroos, 1996) and 'a clear sign of the bright future' for marketing ( 1 /okas

and Saren, 1997; 105).

Paralleling this development, marketing is, and will continue to be, heavily influenced

by IT, with much speculation that marketers who do not adapt to this new technological

era will not survive (Bruce et al., 1996; Boshoff and Terbanche, 1996; Furness, 1996;

Fletcher, 1995; Komenar, 1997; Rapp and Collins, 1995). Some see IT playing a

dominant role in the reshaping of marketing (Bruce et al 1996) as 'the cornerstone of

new approaches to marketing1 (Talvinen and Saarinen, 1995:18) and particularly

important in relationship marketing (Gronroos, 1996). IT's importance lies in spanning

the boundaries between marketing and other functions, and companies and their

environment, by connecting customers and partners to the firm IMtimatcK the ne\\

management model could be the virtual organisation, with groups of separate enterprises

linked through high-speed networks (Byrne et al , 1993. Pieic) and ( iu\en>>, I'^

Schlegelmilch and Sinkovics, 199X), the network and interactions approach to

relationship marketing (Gronroos, 1996).

Marketing Reorganisations

Marketing is in a state of change, redirection, refocus searching for relevance and

applicability in this era (Brownlie et al., 1999; Thomas, 1994; Brownlie and Saren,

1997). From a practical perspective increased marketing reorganisations in companies

highlights a major marketing rethink and a threat to the marketing department (Mitchell,

1994; Thomas, 1996; Piercy and Cravens, 1995; Bruce et al., 1996). There appears to be

a move away from the functional perspective. Traditionally marketing was hierarchical

within a functionally divided company (Mitchell, 1994). Doyle, (1995) argues that

marketing's difficulties are due to this functional focus, rather than viewing marketing as

an integrated business process, with sole responsibility for some tactical issues, bin in

in McLoughlin, Damitn. and C . Horan (eels.). Proceeding oj The 15"' Animal IMP C onjerence,tniversit) College, Dublin 1999

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general needing co-operation with other departments. Marketing should never have had

a functional perspective (Thomas, 1996) and should permeate throughout the

organisation (Gummesson, 1987).

This relates to customer oriented management, which of itself is a goal of the marketing

concept, viewing all staff and particularly staff that interact with customer as part-time

marketers (Gummesson, 1991). It could be that 'the presence of new information

networks may indeed be seen in the future as the single greatest facilitator of the

marketing concept, with their potential to alter both the relatnc balance ofpoucr and

the directness of contact between firms and customers' (Peattie and Peters, 1997 145).

This building and managing of relationships is the corner stone of relationship

marketing (Ford, 1990; Gronroos, 1996). Bruce et al., (1996:203) contend that 'this

would weaken marketing as a function as IT can facilitate such a reconfigurement of

marketing activities', as marketing tasks are diffused throughout the organisation. As

O'Driscoll, (1997:4) states 'marketing can no longer boast of its pre-eminence position

in the firm' nowadays it must focus on 'embracing relationships, networks, new forms of

communication and organisation 1 .

Marketing's Lack of Change

Within the discussion of marketing reorganisations and redirection resides the

contention that marketing has been slow to change with much criticism and debate on

the lack of marketing development and growth (Marion, 1993, Mint/berg et al., 1995,

Brownlie and Saren, 1997; Mitchell, 1994; O'Malley and Patterson. 199S; Bro\\nlie et

al., 1999). This has led to the contention that marketing may be heading for extinction

(see Brown, 1996). Brownlie et ,al., (1994:8) concluded that, 'marketing as u domain of

knowledge and practice is itself becoming as myopic, complacent and inward looking as

all the once great but now defunct myopic companies' It is clear that there is a

transformation in marketing but the question is 'how might marketing translorm itself in

order to continue to have relevance into the next century and beyond 1 (Brownlie et ,al.,

1994:8).

Is Marketing Adopting IT?

/'// VlcLoughlin, Damien. and C . Horan (eds.). Proceedings oj The 15"' Annual IMP Conference,University College, Dublin 1999

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p>The preceding discussion is also mirrored in the IT and marketing literature, \\ith the

view that marketing has been slower than other function^ to embrace 11 ( MiiJu'll, I 9 (;4

Peattie and Peters 1997; Ranchhod and Hackey. 1990. I c\cnck ct al , !^9N)

Palihawadana and Delfmo (1994) found that the use of IT in marketing was 'still quite

patchy1 and 'still in its infancy1 More positively research does show that marketing

intends to adopt IT further (Bruce et al., 1996; Shaw, 1994).

The use of IT by marketing has had a predominantly automational focus, used for

routine and tactical activities to improve efficiency (Teng et al., 1994; Bruce et al.,

1996; Leverick et al., 1998; Peattie and Peters, 1997; Hewson and Wilson, 1994). It can

be argued that marketing development was limited by the lack of speed and applicability

of IT, but that as connectivity, speed, power and diffusion issues are overcome,

marketing personnel will see the real impact and benefits of IT (Ranchhod and Hackey,

1996; Peattie and Peters, 1996; Butler et al., 1997; Mooney et al., 1995).

Though research centring on IT and marketing is scarce, there are numerous studies on

the general impact of IT in business (see Leverick, et al., 1996). Ihe\ contend that the

impact of IT on marketing is similar to its impact on other functions. Other disagree and

emphasis that marketing is different, citing the creative nature of marketing (Hvans,

1992), that marketing people are different (Holtham, 1994), that marketing staff have

limited knowledge of technology (Shaw, 1994), but the ultimate difficulty may lie in the

fact that IT threatens traditional marketing approaches (Martell, 1988).

Is IT Marketing's Saviour?

Though the introduction of IT into companies is predominantly assumed to be positive,

many companies in actuality find IT baffling, and to some extent it appears that

expectations are high and actual benefits are low (Bird, 1994; Brynjolfsson. 1993. Hitt

and Brynjolfsson, 1996; Peppard and Rowland, 1995, Van (jrembergen and Van

Bruggen. 1997; Walsham. 1993. Harl and Feene\. 199"7 ) with mam riskv cosu and

problems hindering the successful introduction and use of I'l (C apon and tjla/ier. I9N"7 ,

Drummond, 1998; Galliers and Baets, 1998).

Douzou and Legare (1994) argue that network technologies can actually serve to

reinforce existing practices rather than to change them, and that IT on its own will not

in McLoughlin, Damien. and C. Hoi an (eds.). Proceedings of The 15"' Annual IMP Conference,University College, Dublin 1999

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change practices. This was also affirmed by Bjom-Andersen (1994) who contends that

the introduction of IT showed only marginal effects on structure and performance.

Applegate (1994) emphasises that organisational change must occur first and only then

can IT enable change. Davies and Mitchell (1994:243) emphasis the dual nature o| 11 as

an enabler but equally as a constrainer of organisational change They stale categorically

that IT 'has no singular inherent ability to enhance or control organisational

transformation'. An important aspect of IT is the power and control ol II and the

dominant authority on the level and use of 11 \\ithin firms. Scarbourough (I99M) Juund

that many of the decisions on marketing related IT, came from the IT specialist, related

to technical spefications, rather than from marketing. This has enormous implications

for marketing and its use of IT as Gronroos (1996:9) states, 'computerised systems and

IT ... have to be designed from a customer-service perspective and not only or mainly

from internal production and productivity-oriented viewpoints'.

Some firms are reaping benefits from IT, but mainly where it reinforces good existing

management approaches (Willcocks, 1996). Ultimately there are limits to what IT can

do without the benefit of good marketing (Burnstein and Kline, 1995). IT based systems

'cannot work miracles. They will not offset a poorly conceived or poorly executed

marketing strategy. They will not compensate for an inferior sales force, and the) will

not sell inferior products' (Moriarty and Swartz, 1989,180). II on its ovsn \\ill nut

deliver benefits, what is need is a transformation in marketing activities to harness the

opportunities from IT (Ward et al., 1996). Ultimately with IT 'the wisdom of its use,

depends on the wisdom of the user' (Glaser, 1997:251).

So though it is generally argued that IT is radically altering marketing practices 'what is

less clear is, inter alia, the extent to which such changes are being realised, the

implications of such changes for marketing management and strategy, and the costs of

such changes in terms of finance, resources and time' (Bruce et al., 1996:194).

Research Methodology

This exploratory study, which is part of a larger study, with the aim of assessing the use

of IT in marketing, was conducted through a quantitative postal survey of 500 marketing

personnel in Ireland. The sample was selected randomly from the membership database

in McLoughlin, Damien. and C. Horan (eds.)< Proceeding* oj T/ie /5'" Annual IMP ( onfereiu-i-.I niversit) College, Dublin 1999

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of the Marketing Institute of Ireland. The questionnaire was pretested with I 5 marketing

managers. The final version was sent to marketing managers and 204 useable

questionnaires were returned, yielding an effective response rate of 41%. The firms,

were predominately medium to large in employment numbers, consisting of 39%

manufacturing and 61% service companies.

Of interest to this paper are the levels of communication and information sharing IT in

marketing, the perceptions of marketing managers to 17' in marketing and the major

beneficial usage of IT in marketing.

Automation, Information and Transformation

Within the research a three stage framework of automation, information and

transformation (Zuboff, 1988, Mooney et al., 1995), was utilised to track the impact of

IT. These stages are similar to Haeckel's (1985) efficiency, effectiveness, unthinkable,

and Hammer and Mangurian's (1989) efficiency, effectiveness and innovation and traces

business benefits from IT. The transformational stage defines a company with new

business operations and practices and it is at this stage that marketing reap the most

benefits (Brady et al., 1999).

Enhanced Communication and Information Sharing through IT

A range of information and communication technologies (R'T) were researched, a

sample appears in figure 1.

in McLoughlin, Damien. and C. Horan (eds.). Proceedings of The 15"' Annual IMP Conference,University College, Dublin 1999

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Table 1; ICT Use and Type of I'se by Marketers in Ireland

Communications

Email for internal use

Email to customers

Own company web

site

Helplines

Computer Links

with suppliers

with customers

Use

80%

64%

62%

35%

33%

43%

Type of Use

Automate

15%

14%

4%

9%

26%

2 1 %

Informate

44%

41%

74%

63%

33%

36%

Transformate

41%

45%

22%

28%

41%

43%

Valid Number

of firms

163

128

129

71

69

84

Use of information and communication technologies are growing but with widely

different stages of development and benefit. Email is popular and as expected is used

more for internal communications than links with customers and is probably indicative

of the fact that certain customer bases do not have email. Email for internal and

customer use provided information but was also transformational, which leads us to

contend that it is starting to alter the way that marketing is performed, rather than simply

used for efficiency gains (Thomas, 1993).

Computer links is a focus on specialised company to supplier or company to customer

links, including EDI. Computer links with suppliers is low, predominantly

manufacturing companies with a cross section of automational, informational and

transformation benefits. This highlights the slow development of external networks and

online links, and the delayed realisation of the incredible business potential of hi.)],

while also confirming the varied rate oi adoption and impact across different sectors and

types of organisation (see Naude and Holland, \W) Compulci link.-, u> cuMomei^ ,n<.

higher and but with no difference between manufacturing and ser\ ice companies.

Customer on line development is growing and this is indicated here, and with a stronger

//; McLoughlin, Damien. and C. Horan (eds.), Proceedings of The 15"' Annual IMP Conference,University College, Dublin 1999

Page 7ofl7

transformational benefits though these findings also highlight the growth in

manufacture/distributor links.

Own company website were predominantly viewed as providing information. I his may

be explained by the lack of e-commerce and trading over the Internet, highlighted in

previous reports (Ellis, 1998; Brody, 1995). Finally helplines are used mainly for

obtaining information about the customers. As customer helplines can be percei\ed as

an opportunity for direct contact with customers and a forum for discussion of the

customers 1 problems and concerns, we would have expected this technology to be used

for knowledge creation and decision making. This research has shown that this is not the

case. It seems that although helplines provide additional information on the customer

base, they are not perceived as transforming the relationship.

It must be noted that previous research on the main uses of IT by marketers did not

show any internal communication uses of IT by marketing (Bruce, et al., 1996; Higby

and Farah, 1991, Shaw, 1994) though external links (EDI) were mentioned (Bruce,

1996). This research shows a greater ICT focus and use by marketers in Ireland.

Benefits of IT within Marketing

Linking to the discussion on marketing and change, most respondents fell that marketing

had changed. Contrary to much of the previous discussion marketing managers

considered themselves to be very technofriendly with the majority agreeing that IT in

marketing had made marketing easier and better, and that IT in marketing contributed to

their success. It was interesting that only half of the respondents felt that marketing was

highly dependent on using IT. More importantly the marketers who were highly

dependent on using IT were the companies who were experiencing transformational use

of IT. There is a contention that IT is increasingly viewed as simply a part of normal

business operations (Van Der Zee, 1997; Willcocks, 1996; Webber, 1993; Furness,

1996) and a majority of respondents agreed with this.

Benefits to Marketing from IT

Increased information and increased efficiency and effectiveness were percei\ed as the

major IT contributions, which indicates the movement through the trajectory of IT

in IMcLoughlin, Damien. and C Horan (eds.)> Proceeding of The 75"' iiunial IMP (. onfen'm r,I ni\ersit> College, Dublin 19M9

Ha <s "I I

flbenefits (see figure 2). It is heartening from a marketing point of view that improved

customer relationships were mentioned, but with a low score. The advances in internal

communication shows increased contact via IT from the marketing department to other

departments and vica versa. This could be indicative of the marketing concept in

operation with more open communication between departments and concurs with the

Bruce et al. (1996) study which showed an increased visibility of marketing and

increased demands on marketing from other departments.

Figure 2 - Main IT benefits to Marketing

Increased information

More efficient and effective

Improved customer relationshipImproved internal communications

Product developmentAccess to International markets

With a more specific focus on actual marketing practices and IT, the ability to hone in

on target markets was highlighted. Increased targeting ability has been suggested as the

main benefit of IT and the required marketing focus of this era (Schmitz and Rovner,

1992; Furness, 1997; Komenaar, 1997). Other benefits related to efficiency and

effectiveness of the marketing function and the speed and access to information and

improved customer relationships were mentioned.

Figure 3 The Main Benefits to Marketing Practices

More target marketing

More efficient and effective

Increased informationImproved customer relationships

Tracking and monitoring of results

24",,T)c> (i

IS",,

8%4",,

Discussion of Results and Implications

This research explores the use of IT in marketing in Irish firms. This was initiated by the

fact that despite widespread acceptance of the benefits of IT for marketing, our

knowledge of the way marketers use IT and its eventual benefits for marketing are not

well understood. Following Zuboffs (1998) framework we can conclude that IT is

prevalent in Irish marketing, but not all marketers make use of the full potential of some

of the technologies. The vast majority of IT is still used for automation and information

in McLoughlin, Damien. and C. Horan (eels.), Proceeding* oj The 15lh Annual IMP Conference,University College. Dublin 1999

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purposes. We would not deny that this is a critical step to\\ard.s any efforts to increase

the marketing knowledge of" the firm (Morns, 1990, /uboll, I9ssj Yet. lor

transformation to happen, firms need to approach IT as a means for questioning

marketing assumptions and existing practices.

In general the research portrayed a very positive attitude to IT and its influence on

marketing The benefits of IT to marketing must centre on successful IT management,

changes in processes (Fletcher, 1995), the use of unfamiliar and challenging IT, and

creative innovative strategies to cope with this different and dynamic market

(Schlegelmilch and Sinkovic, 1998).

We can state that, business use of IT is only at the development stage and there will be

further challenges, difficulties, opportunities and benefits (Cjalliers and Baets, 1998;

Komenar 1997; Peattie and Peters, 1997) As l.e\ei'Kk el al (199".92) Uatc-, 'mum <ii

the more adventurous IT applications (virtual stores, customer participation in product

design, and so on) apparently remain to be exploited' With this continued development,

marketing and relationship marketing needs to embrace IT for marketing benefit and

realise 'given that change is inevitable, the real issue for managers is whether that

change will happen belatedly, in a crisis atmosphere, or with foresight, in a calm and

considered manner ... whether transformation will be spasmodic and brutal or

continuous and peaceful 1 (Hamal and Prahalad, 1994: 128). IT is imperative as we enter

the new millennium that marketing can 'encompass all of the new market and

organisational contexts to which it is now being applied' (Brownlie et al., 1994:10), and

links to and uses IT to this end.

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