Viral Marketing Integration 1

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

 Viral Marketing Integration 2

Table of Contents

Abstract 3

Overview of Classic Marketing 4

Overview of Viral Marketing 6

Integration of Viral Marketing and Classic Marketing 8

Viral Marketing is also a Multi-Disciplinary Practice 8

Viral Marketing is also a Problem-Solving Strategy 9

Viral Marketing also Benefits Customers as well as Organization/Stakeholders 9

Viral Marketing also Involves Social and Ethical Responsibilities 10

Conclusion 12

References 13
 Viral Marketing Integration 3

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.
 Viral Marketing Integration 4

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
 Viral Marketing Integration 5

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
 Viral Marketing Integration 7

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
 Viral Marketing Integration 9

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
 Viral Marketing Integration 10

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,
 Viral Marketing Integration 11

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 terrorism-

related 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.
 Viral Marketing Integration 13

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