acknowledgements - ubibliorum.ubi.pt2.3 outbound marketing vs. inbound marketing 7 2.4 the inbound...

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Acknowledgements

I would like to thank the Magnolia Silver Jewellery team for having welcomed me with

open arms at their office and providing me with this educational experience. A special thanks

goes to Joana Matias, Margarida Baptista, Ana Pereira and Alexandre Silva for their

willingness to include me in all their departments and showing me the different tasks required

to running a business. I sincerely thank them for their treasured guidance and for providing me

with all the support and information without which this dissertation would have never been

possible.

I am also grateful for Prof. Carlos Alves da Rosa and Prof. Nelson Pinheiro Gomes for

their support and advice regarding the structure and progress of this internship report. I would

further like to thank Prof. Carlos Alves da Rosa for his time and effort to explain and provide

me with some theories necessary to channelize my study in an appropriate way.

Lastly, I would like to express my deep sense of gratitude to my family, friends, and

especially my flatmates who have directly and indirectly helped me in this dissertation.

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Abstract

This internship report served as a case study, concentrating on the question of how

Magnolia Silver Jewellery can improve their digital impact. Literature review showed how

different digital marketing strategies and activities can lead to a strong online presence.

Research studied the current Magnolia customers by an explorative inquiry and a confirmatory

focus group. Findings in their user experience led to the identification of several aspects

regarding Magnolia’s online channels that could be improved. As expected in this report,

Magnolia customers prefer to purchase jewellery at a physical store rather than online,

explaining Magnolia’s low volume in online sales. Furthermore it was confirmed that the

customers are not being inspired by Magnolia’s presence on social media to shop online. It

was concluded that Magnolia Silver Jewellery can use improvements for their website and

social media management in order to improve their digital impact. Therefore this report ends

with the proposal of 11 recommendations for Magnolia Silver Jewellery to consider.

Keywords: Digital marketing, consumer behavior, inbound marketing, online brand

management

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INDEX 1. Introduction ....................................................................................................................... 1

2.Theoretical framework ........................................................................................................ 3

2.1 relevance of digitalization 3

2.2 ZMOT – The Zero Moment Of Truth 4

2.3 Outbound marketing vs. inbound marketing 7

2.4 The inbound methodology 10

2.5 Fundamentals of inbound success 12

The buyer’s journey 12

Remarkable content 13

2.6 Managing digital marketing activities 15

Reach 16

Act 16

Convert 17

Engage 17

2.7 Inbound channels 17

Inbound channel 1 - Search Engine Optimization 17

Inbound channel 2 - Blogging 21

Inbound channel 3 - email 22

Inbound channel 4 – social media 23

2.8 Return of Investment of inbound marketing 25

3. Internship description – Magnolia Silver Jewellery ............................................................27

3.1 Company profile 27

3.2 Values, Mission and Vision 28

3.3 Brand History 28

3.4 Customers 29

3.5 Products and services 29

3.6 Merchandising strategy 30

4. Case diagnosis .................................................................................................................32

4.1 Initial SWOT analysis 32

4.2 Business Model Canvas 34

4.3 Dynamic Swot 35

4.4 Descriptive memory 36

4.5 The opening of Magnolia’s online store. 40

4.6 Problem definition 42

The ROPO effect 42

Lack of exclusive online promotions 43

Social media channels 45

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Company structure 46

5. Methodology .....................................................................................................................47

5.1 Research plan and design 47

5.2 Conceptual model and research hypotheses 48

5.3 Participants 50

5.4 Procedures 52

5.5 Research instrument 53

6. Results analysis ...............................................................................................................55

6.1 Quantitative results analysis 55

Buyer persona 55

Online consumer behavior 56

Magnolia’s online presence 59

6.2 Qualitative research analysis 61

Brand characteristics 62

Competition 62

Behavior on social media 63

Influence of social media 64

Online vs. physical stores 65

Word of Mouth 66

7. Discussion ........................................................................................................................67

Conclusions 69

References ...........................................................................................................................75

Attachments .........................................................................................................................84

Attachment A – Invitation for focus group 84

Attachment B – Questionnaire 85

Attachment C – Guide focus group 91

Attachment D – Product information page 95

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Figure index

Figure 1. Moments of Truth 5

Figure 2. The inbound marketing methodology 11

Figure 3. The buyer's journey 13

Figure 4. The advantages of content 14

Figure 5. Content offering on a landing page 15

Figure 6. RACE planning framework 16

Figure 7. Traffic source to jewellery sites 19

Figure 8. Paid vs. organic search 19

Figure 9. Most effective channel for lead nurturing. 22

Figure 10.Traffic and lead increase 26

Figure 11. Magnolia organizational chart 27

Figure 12. Handmade jewellery by exclusive designers 29

Figure 13. Magnolia kiosks 30

Figure 14. Initial SWOT 32

Figure 15. Business Model Canvas 34

Figure 16. Dynamic SWOT 36

Figure 17. Promotional sign 37

Figure 18. Black Friday newsletter in November 38

Figure 19. Instagram post 39

Figure 20. Site visits and purchases in October 42

Figure 21. Shopping behavior – site abandonments 45

Figure 22. Engagement rates 45

Figure 23. Methodological design: phases and tasks 47

Figure 24. Reasons to buy jewellery 55

Figure 25. Social media preferences 57

Figure 26. Online payment preferences 58

Figure 27. Sources to Magnolia website 60

Figure 28. Buyer persona - middle aged female 70

Figure 29. Buyer persona - male customer 71

Figure 30. Buyer persona - young female 71

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Table index

Table 1. Magnolia online channels 49

Table 2. Demographical characteristics of the quantitative sample 50

Table 3. Demographical characteristics of the qualitative sample 52

Table 4. Brand related shares per age group 58

Table 5. Reasons to use social media per age group 59

Table 6. Interests in fashion related posts 61

Table 7. Characteristics of Magnolia 62

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1. Introduction

This report describes the experience of Florbela Cruz during the internship at Magnolia

Jewellery Portugal which serves as a complement and final work to the knowledge and skills

gained during the master’s degree in Fashion Branding and Design at IADE – Universidade

Europeia and Universidade da Beira Interior. The internship in the marketing department had

the main objective to analyse and improve the presence of Magnolia on its online

communication channels. The objective for this internship report was defined based on the fact

that the brand only launched their online store and its social network channels by the beginning

of 2016 and was in need of reorganization. During an early stage of the internship it was noticed

that their customers did not tend to purchase jewellery online. On average, it takes about 11000

monthly visits to reach 40 online orders. The total of these 40 online orders contribute to

average revenue of 1500€ per month (Google Analytics, October 2016). This means that in

average Magnolia makes 50€ per day with online orders for an average of 366 daily visitors

on the website. Considering the fact the average value of an order is 39€, shows that Magnolia

only has a few order per day. On Facebook, the brand has 191.700 likes in total while the

engagement rate usually lies between one and five percent. The engagement rate is the

number of people who liked, commented, shared or clicked on a post. It is important for the

brand to realize why consumers are not making online orders to understand how it can be

improved. There are some factors that may be contributing to the fact that Magnolia is not

generating many online sales which will be explained more thoroughly later on in the report.

The problem diagnosis in this report will lead to the understanding that Magnolia can use some

improvements both on their website as on other online channels.

Research shows that maximizing the digital impact of a brand is not simply done by

sending out more messages on social media and building a better website (Dauriz, Michetti,

Sandri, & Zocchi, 2013). Many brands are still trying to figure out how to use the power of

social media (Mirchevska & Morkova, 2011) or are unable to make the connection between

social media activities and desired outcomes for the brand (Coiné & Babbitt, 2014, pg.203).

Even some big and luxurious brands have not yet figured out exactly how to optimize their

online channels. An example is Hermès, of which the brand manager, Axel Dumas, announced

the year 2017 to be the year of change in which the brand is going to rethink their digital

strategy and re-design their e-commerce website (Muret, 2017).

The real challenge is to understand how to communicate and interact with consumers,

which is the main reason for this thesis report to focus on the question:

‘How can the digital impact of Magnolia Jewellery Portugal be improved?’

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During the internship, the candidate formed some main hypothesis for why Magnolia is not

generating a high online sales volume. The brand is known for frequent promotions at the

stores, such as, ‘buy 2, take 3’ or ‘buy 1 and receive X% discount on your next purchase’ or

small gift offers for purchases from a certain amount. Several aspects concerning the website,

digital marketing activities and consumption habits are expected to have an influence in the

amount of online sales.

Report structure

This report starts with a theoretical framework with main theories, focusing especially

on the perspectives of Jim Lecinski, Brian Halligan, Grand Fishkin and Seth Godin about

inbound marketing and its most used channels. Topics will mainly focus on various digital

marketing activities and how to analyse them, the change in consumers and the role of social

media in enhancing engagement. Then, a short introduction of the brand is made to provide

more information about Magnolia Silver Jewellery and the principal tasks conducted during the

internship itself. To provide a better understanding of the brand, a brief overview is given of

their company profile, values, mission and vision, the brand history, target customers, their

business model and a SWOT analysis. Further, it will contain an interview with the CEO of

Magnolia Portugal, Joana Matias, about the opening of the online webstore and their social

network accounts in 2016 / 2015. After an introduction to the brand, a diagnostic part follows,

describing the main reasons for the weak online presence of Magnolia Jewellery Portugal.

Retrieved data from websites such as Google Analytics and insights from the Magnolia

business facebook will be used to demonstrate the weak points in the current online presence

of the brand. Knowledge in branding, retailing, consumer behavior and marketing obtained

during the master’s degree also allowed the candidate to identify some weak points regarding

Magnolia’s digital marketing strategy. Exploratory and confirmatory information will be

retrieved from a consumer inquiry and a focus group held with Magnolia customers in order to

gain an understanding about Magnolia’s online presence, user experience and what could be

improved. After a descriptive analysis of the results, a set of recommendations follows

containing strategies and future activities for the brand to improve its digital impact.

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2. Theoretical framework

2.1 relevance of digitalization

Research shows that almost three quarters of all luxury purchases are influenced by

what consumers do online, even if the purchase takes place in a physical store (Kansara,

2016). Digital will have an increasing influence on consumers buyer behavior in the future, the

expectation is that 99% of purchases will in some way be influenced by online experiences.

The e-commerce of different categories like online fashion (55,6%), greeting cards (40%),

photo printing (27%), shoes (17%) and household furniture (13,3%) have all experienced a

quick growth in the past ten years (Peixoto, 2010, pg. 15-16). Still, it was not expected that

fashion brands would succeed with e-commerce; online fashion retailing would not work

because consumers liked to feel and try-on fashion products before buying. For many women,

shopping is a social experience and it serves as a recreational activity and therefore online

shopping would not appeal to most of these women. This expectation has proven to be wrong

as the amount of fashion products sold through the internet has been growing each year

(Rowley, 2009, pg. 350). Since 2000, fashion revenues for online sales are still growing with

17% on a yearly basis in June (IMRG, 2016).

The global consulting firm McKinsey & Company predicts that luxury sales in fashion

will triple in the next ten years, by 2025, the share of online luxury sales will be 18% compared

to the 6% of today (Kansara, 2016). After China and the US, e-commerce will be the third

largest luxury market. The trends that have developed in the apparel sector are also becoming

reality in the jewellery sector. Dauriz, Remy and Tochtermann (2013) are expecting a growth

for the branded jewellery industry – since 2003 its share has doubled to 20% of the overall

jewellery market. In contrast to fine and local jewellers, branded jewellery will continuously

grow in the upcoming years and account for 30 to 40 percent of the market in 2020. The growth

for branded jewellery will especially be driven by younger consumers who enjoy using brands

as a means of self-expression and self-realization. Considering that many luxury purchases

are influenced by online experiences, jewellery brands should focus on using digital platforms

to shape their brand identity, provide information and to build customer relationships. Jewellery

is a luxurious product and the majority of luxury shoppers have stated that they frequently

search for information or advice online / on social media before making an actual purchase

(Dauriz, Remy, & Tochtermann, 2013). A new consumer culture has risen consisting of

independent consumers who have better access to opinions and information and who are

exposed to a bigger social pressure (Gomes, 2014). A brand in itself has lost its power and

therefore has to base itself more and more on a narrative and on the quality of the product.

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In Portugal, businesses are understanding the relevance of well managed online

channels. This can be seen by the amount of digital communication agencies that have opened

in the past years and the rise in professions such as web strategist or social media manager

(Peixoto, 2010, pg. 46). Research by Peixoto has shown that most businesses in Portugal

already understand that consumers are spending more and more time online and that they can

no longer ignore this fact. The business community in Portugal is for 99% formed by small and

medium-sized enterprises (SME), which are enhancing their online presence even though they

still have a long way to go. Small businesses are exactly the ones that will profit the most from

having an effective online marketing strategy. SME’s have a bigger margin to adapt their

strategies and their products to the needs of their consumers. The problem behind it is that,

according to Augusto Morais, president of the National Association of SME, only 25% of the

national SME’s have the financial resources to meet the standards of their European

correspondents (Peixoto, 2010, pg. 47). Regarding the economic situation in Portugal, it is

exactly these small to medium sized businesses that will profit the most from investing in their

online channels. Not only the economic situation but also the general behavior of consumers

in Portugal shows that digital plays a major role in their lives. 93% of the Portuguese population

uses internet every day and 28% of the population spends between 1 and 2 hours online per

day (Marktest, 2016). Of all internet users in Portugal, 3.1 million are online shoppers who

spend in average €1,079 per year and in 2015 the total value of e-commerce sales reached

€3,3 billion, showing a growth of 15,9% in e-commerce (Ecommerce Europe, 2015).

To summarize, digital has a relevant impact on consumer buying behavior and it will

be hard for brands to avoid having a well-defined digital marketing strategy. The increasing

popularity in online fashion sales will most probably encourage more and more brands to invest

more in their online channels which is why it is so crucial for Magnolia to understand how to

improve their digital impact. What could the brand do to win the attention from other online

competitors?

2.2 ZMOT – The Zero Moment Of Truth

The buying behavior of consumers has changed and the digital environment has made

it hard for brands to reach shoppers at the right time, the right place and with the right content.

The shopper has evolved, the buyer decision journey has changed, word of mouth is stronger

than ever and consumers switch devices and channels regularly before making their buying

decision (Lecinski, 2012, pg. 12). A study by Shopper Sciences has revealed that in 2010 the

average shopper would use up to 5,3 sources to make a decision while one year later, in 2011,

the average would be 10,4 sources of information (Google/Shopper sciences, 2011).

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The number of sources has doubled in just one year which shows the difficulty for marketers

to grab the attention of the ‘new’ consumer.

In his book, Lecinski (2011) describes a new moment crucial in decision making which

is called ZMOT – the Zero Moment of Truth and occurs continuously on mobile phones,

laptops, tablets and other connected devices. The Zero Moment of Truth is defined as the

consumer decision-making moment before the actual moment of in-store or online purchase

(Google/Shopper Sciences, 2011). Before ZMOT, the mental model of marketing would exist

out of three steps: [1] Stimulus (TV advertisement / email / newspaper article) [2] First Moment

of Truth (product in store / salesperson) [3] Second Moment of Truth (product usage /

experience). The big difference with the buyer’s journey of today is the moment between

stimulus and the First Moment of Truth which is crucial for any kind of product category. Figure

1 shows all the different moments of truth in the new buyers journey (Rosa, 2016).

The buyers journey starts with a stimulus which can be anything from advertisements

on tv, newspapers, magazines, emails, advertisements on websites, billboards etc., their

function is to create awareness of the product or brand. Afterwards comes the Zero Moment

of Truth; this is the moment when consumers in 50% of the cases use an online search engine

to find more information about the stimulus they have just seen (Google/Shopper Sciences,

2011). ZMOT includes conversations with friends and family about the product, the comparison

of products online, brand / retailer websites, product reviews, becoming a follower of a brand,

etc. When the consumer arrives at the First Moment of Truth, he or she is ready to make a

decision, in contrast to the old mental model. The First Moment of Truth can occur at the store

by looking at the product package, read a brochure about a product in the store, talk with a

salesperson in the store, chat online with customer service, etc. (Lecinski, 2011, pg. 18-20).

Figure 1: Moments of Truth. Source: Rosa, 2016

Figure 2. The inbound marketing methodology (Halligan & Shah, 2014)Figure 3. Moments of Truth (Rosa, 2016)

Figure 2: The inbound marketing methodology Source: Halligan & Shah, 2014

Figure 4: The buyer's journey. Source: Gomes & Mesquita, 2017Figure 5: The inbound marketing methodology. Source: Halligan & Shah, 2014.

Figure 6. The inbound marketing methodology (Halligan & Shah, 2014)Figure 7: Moments of Truth. Source: Rosa, 2016

Figure 8. The inbound marketing methodology (Halligan & Shah, 2014)Figure 9. Moments of Truth (Rosa, 2016)

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The Second Moment of Truth happens when the consumer tries the product for the first

time. It is the way in which the product is experienced which will lead to the Ultimate Moment

of Truth [UMOT] (Rosa, 2016). During UMOT, the consumer will share his or her experiences

about the product or brand and this will eventually form the ZMOT for other consumers.

Research findings show that online reviews are read before buying products by more than 90%

of the consumers and, the average consumers reads at least four reviews before making a

purchase (Godes & Silva, 2012). The study by Shopper Sciences shows that 84% of the

shoppers stated that ZMOT forms their decisions and the three things people search most

during ZMOT are: [1] more information about the product, [2] experiences others have had

with the product and [3] offers, discounts and coupons (Google/Shopper Sciences, 2011).

Consumers like to make decisions based on the opinion of strangers because they are

based on the opinions of people like themselves. Word of mouth always has been the medium

to talk about knowledge, products or brands and (especially digital word of mouth) has

significant power because the information goes from one-to-millions (Lecinski, 2011, pg. 32).

However, most brands are still anxious about using online ratings and reviews and therefore

have no comment section on their own websites. This anxiety has proven often to be misplaced

as shown by the following quote by Brett Hurt of Bazaarvoice; a company which provides

customer conversion services:

We’ve found that the worldwide average for product reviews is a 4.3 out of a 5,0 and 80% of all

reviews are four to five stars. We find that there is a new version of the 80 – 20 rule: 80% of reviews on

the site of a given retailer are written by the top 20% of their customers by lifetime value (as read in

Lecinski, 2011, pg. 32).

Rosa (2016) describes the customer lifetime value as the sum of the value of purchases +

value of new customers from referrals + value of insights + value of support + value of ideas

minus the cost of acquisition for this same customer. The value of a customer for a brand is

defined by the relationship and the involvement that is established between both. By

deepening the relationship with customers and maintaining an ongoing dialogue, the customer

lifetime value and loyalty can be increased (Shaw & Stone, 1988).

Even if there will be negative reviews, these will add authenticity and it can increase

conversion rates because when people see negative reviews it will give them the feeling that

the brand has nothing to hide and they are shopping at an honest place (Coiné & Babbit, 2014,

pg. 147). Reviews are not only useful for consumers but also for businesses and brands

because it allows them to see exactly what people are saying to each other about them.

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People are already talking online and brands cannot stop the conversation, therefore it would

be better to engage in it rather than allowing a competitor to engage and win the attention of

consumers.

Lecinski (2012) points out not only to invest in branded advertisements but also to

invest in non-brand advertisements. The reason behind it are generic searches; these are the

searches of people who do not know a specific brand yet and therefore would search for ‘’silver

jewellery’’ instead of ‘’Magnolia’’. Advertisements which are only running on brand names will

not reach these generic searchers which are equally important for a brand to capture. Non-

brand campaigns are relevant to reach this market and also because, eventually, generic

searchers will start associating the brand with their search term, and eventually, visit the

brand’s site.

To conclude, ZMOT is the new step in the buyer’s journey which allows consumers to

form their decision in a fast and smart way, before even going to the store (offline or online).

During their journey, consumers switch devices and channels regularly, considering different

resources and especially the reviews and rating of others. This is all done in a few moments

of time while in the past the buyer’s journey could take a couple of days. Consumers are

actively chasing down the information they want to require and therefore the rules of marketing

have changed, as stated by Kim Kadlec, the worldwide vice president of Global Marketing

Group Johnson & Johnson:

We’re entering an era of reciprocity. We now have to engage people in a way that’s useful or

helpful to their lives. The consumer is looking to satisfy their needs, and we have to be there to help

them with that. To put it in another way: How can we exchange value instead of just sending a message?

(as read in Lecinski, 2011, pg. 21).

2.3 Outbound marketing vs. inbound marketing

Back in 1450 the technique of printing was invented and the first real book was

published by Johann Gutenberg. This was an important moment in the history of

communication because print allowed for a one-to-many mass communication (Leboff, 2011,

pg. 10-11). For the very first time, print allowed the work of one single person to be distributed

amongst many readers in various places. In the 20th century there were more inventions

changing the way in which people used to communicate. Television, radio and cinema affected

the way people scheduled their days and the topics they would talk about. The biggest

advantage was that with these ‘new’ channels of communication it was easier to reach a

massive audience but, unfortunately, that audience would still be a passive receiver of the

message. Published content was still being controlled by the people who had the money to

use the available distribution channels. It was a traditional marketing belief that brands used

marketing communications to control their message (Hanna, Rohm, & Crittenden, 2011, pg.

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266). During this time brands had full control of which information was being spread about

them because people could not share their opinion with a wider audience than their own family,

friends or colleagues. The main target for marketeers and ad agencies would be the mass

audience watching popular TV shows. Their main goal was to develop powerful

advertisements which would imprint on the mind of consumers (Court, Gordon & Perrey, 2005).

Traditional marketing tools would be day-after recall (a metric which tracks how well

consumers remembered advertisements) or the audience Response system (ARS – this

measured the influential impact of new messages compared with those of competitors).

However, in the late 1990’s the market started to change due to fragmenting media and

changes in consumer behavior. According to Yankelovich Partners, consumers started to

become more suspicious about which advertisements to trust, 65% of them felt ‘’constantly

bombarded with too much advertising, ‘’ 96% were ‘’ interested in products or services that

would help skip or block marketing,‘’ and 54% ‘’avoided buying products that were

overwhelmed with advertising and marketing‘’ (as read in Court, Gordon and Perrey, 2005).

Even if they were aware of these problems, it took marketeers some time before they would

recognize the need to adjust their way of communication with consumers. During the 2004

meeting of the American Association of Advertising Agencies Jim Stengel, the company’s

global marketing officer already recognized this problem:

I believe today’s marketing model is broken. We’re applying antiquated thinking

and working systems to a new world of possibilities (Stengel, 2004, pg. 5).

In other words, the internet has clearly changed the role of consumers, making them

more empowered than ever. Digital technologies have changed the way consumers think and

communicate, not only with each other but also with brands (Rosendale, 2015, pg. 50-51).

Consumers in the 21st century have access to many more media and information channels and

they can obtain this information whenever it is most suitable to them instead of when it suits a

company to deliver their message. Leboff (2011, pg. 23) compares communication strategies

before and after the invention of the internet. Due to a scarcity in choice and information,

consumers would be willing to listen to any message a brand would broadcast at them through

telemarketing, direct mail, TV, radio etc. But as Leboff continues, it becomes clear that in the

21st century some brands are set to continually irritate their potential customers because many

still apply a marketing strategy that works on repetition. Busy lifestyles have made traditional

marketing techniques less effective because people are getting better in blocking these

interruptions. Consumers these days are not only free to decide which content they want to

consume but also how they want it and when (Gomes & Mesquita, 2017).

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To summarize, outbound marketing is all about pushing a message into consumers;

the objective is to persuade potential customers that they need a product. This includes

different types of direct marketing methods such as advertising, paid branding, cold calling,

direct mail, TV ads, cold mail, billboards etc.

The term inbound marking was formulated for the first time in 2005 by Brian Halligan,

the CEO of HubSpot. However, the concept behind it has been going around a few longer.

Seth Godin defined it under a different name in his book ‘Permission Marketing’ in 1999. Long

before the existence of social media, Godin already noticed that the direct marketing methods

were becoming less and less effective (Godin, 2007, pg. 24). The solution to this problem is

what he called Permission Marketing which relies on the idea of turning strangers into friends

and friends into customers. To acquire customers, a brand would have to a create something

of relevance to attract strangers, a bait. To have access to this bait, potential customers need

to give permission for the brand to contact them. Once permission is given, a brand can reach

higher permission levels by following three essential rules in communication:

1. Anticipated – People must look forward to hear from the brand;

2. Personal – The messages are directly related to the reader;

3. Relevant- The message must be about something the reader is interested in

(Godin, 2007, pg. 27).

Inbound marketing is following the permission marketing concept in a digitalized world

which is defined as the method of attracting strangers to a website and converting them into

potential customers (Halligan & Shah, 2014 pg. 7). The main goal is about getting customers

to a brand’s website without paying for them; this includes traffic which comes from organic

search results, content and social media (Fishkin, 2011). Inbound marketing has the

competitive advantage of having a much lower Customer Acquisition Cost than outbound

marketing – this is the cost of acquiring a new customer. Actually, one of the biggest concerns

regarding outbound marketing is that it costs 61% more per lead than inbound marketing

(Abraham, 2015). Besides a higher cost, brands which are using outbound marketing

techniques will automatically have to compete with thousands of other brands that are doing

the same thing which makes it harder to grab the consumers’ attention.

Brian Solis talks about the concept of Digital Darwinism which is the evolution of

consumer behavior whereby society and technology are evolving faster than the ability of

brands to adapt and how this is changing the landscape of business (Solis, n.d). Consumers

can change their minds rapidly when validating experiences which can be attributed to the

effects of word-of-mouth and word-of-keyboard (Rosa, 2014, pg. 46). Having more access to

the opinions of others and own previous experiences, leads to customers continuously

redefining their needs regarding the level of expected service because multiple channels allow

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for a 24/7 interaction between brands and consumers. Rosa (2014) argues in his book that this

always on mentality allows for a new way of brand management based on co-creation, co-

participation and creative intelligence whereby consumers are involved in the process of

marketing content creation. The continuous dialogue between brands and consumers make it

possible for brands to constantly work on improvements and innovations. According to Kotler,

Kartajaya, & Setiawan (2016, pg. 11-12) the power has shifted to connected consumers. Both,

flow of innovation and consumer trust have become horizontal instead of vertical. Today, the

market provides new ideas and companies or brands commercialize these ideas. Consumers

nowadays believe more in the word of friends, family, Facebook friends and other strangers

on social media than in marketing campaigns.

Brands should reconsider their traditional interruptive marketing strategies because it

does not provide a good user experience for the consumer. The ones sticking to their old

strategies and refusing to adapt to the evolved consumer will cease to exist (Coiné & Babbit,

2010 pg. 80-88). In essence, outbound marketing has been proven to be less effective because

of a shift in consumer behavior whereby people are more in control about the information they

receive and how. Inbound marketing recognizes the shift in power has made consumers more

empowered and adapted its strategy and marketing activities to this fact.

2.4 The inbound methodology

Inbound marketing is all about attracting visitors to a site and converting them to

potential customers through remarkable content and it is usually applied by following the

inbound methodology. The objective is to create useful content which actually provokes a

genuine interest in consumers. This content can be found at any moment when searching the

internet for solutions or to fulfil a need (Price, 2016). Permission marketing and inbound

marketing are built around the same assumption: the consumer is free to choose which content

he or she wants to consume and the advertiser no longer has the power to interrupt. Gomes

and Mesquita (2017) provide great examples of inbound marketing cases. According to them,

in 2016 it would make more sense to create a blog post about for example ‘’how to combine

gold and silver jewellery’’ instead of producing banners promoting ‘’ Set of rings in silver & gold

39€’’. The first approach is actually what consumers might search on search engines while the

second is probably going to be blocked by an ad blocker. Lecinski (2011, pg. 47) agrees on

this as he mentions the importance of answering the questions people are asking. Sometimes,

promotional advertisements can be powerful, but not when the consumer is still looking for

information and not ready to buy yet. The inbound marketing methodology targets consumers

at different stages of the buyer’s journey and different levels of brand and product awareness

(Kelly, 2013).

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This methodology is useful, not only in that it helps generate traffic, but also because it

helps to maintain customers. Figure 2 shows the four stages of the methodology together with

the most used tools per stage to convert consumers further down the inbound methodology

which will be explained shortly.

Attract - The objective of the attract stage is to attract visitors who can become potential

customers. The key to attract visitors is by creating high quality content which can mainly be

done by blogging, social media, keyword utilization, and website optimization (Halligan & Shah,

2014, pg. 28).

Convert - Conversion is the process of stimulating the visitors on a site to engage

further with the brand or company (Halligan & Shah, 2014, pg. 110-113). A higher conversion

rate means that a higher amount of consumers actually become a potential customer after

seeing the content. After attracting visitors to a website, the next step is to convert them into

Marketing Qualified Leads (MQL’s) by collecting their contact information, especially their

names and email (An & Brudner, 2016). Visitors can be encouraged to leave their details by

providing them again with valuable content, although this time it would be content that they will

only receive after filling in a form. Content can vary from eBooks, whitepapers, seminars,

podcasts, webinars, infographics etc. (Kelly, 2013). The best way to get contact information is

by irresistible, notable and action oriented Calls-To-Action (CTA) (Halligan & Shah, 2014, pg.

111). CTA’s make it clear to the visitor what they will receive and how, whenever they fill in

their details by clicking on buttons such as ‘’Download the new collection lookbook’’ or ‘’ receive

a size guide’’. Testing different versions of an experience (in this case different CTA’s) in order

to optimize the conversion rate is called A/B testing (Optimizely, n.d). It can provide relevant

insights about which messaging an audience prefers or if CTA’s should be links or buttons. Of

course, when the site can only be accessed by the IT department of a company it will be harder

to perform these tests in order to improve the conversion rate. The pages where website



Figure 12. The inbound marketing methodology (Halligan & Shah, 2014)




Figure 17. The inbound marketing methodology (Halligan & Shah, 2014)


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visitors can leave their contact details in exchange for content are called landing pages. By

tracking these landing pages on metrics such as unique visitors, page visits and resulting

conversions, landing pages can also be optimized for maximum results. In general, the

conversion rate of a landing page should be at least 15% (Halligan & Shah, 2014, pg. 115 –

123).

Close - The next step in the inbound marketing methodology is to convert leads into

customers. The most used tools in this stage are mail and CRM to help sell to the right potential

customers in the right time (Halligan & Shah, 2014. pg. 31). This is because not all customers

are equal; some might be ready to buy on the same day while for others it can take some

weeks or months. Halligan and Shah (2014, pg. 125) refer to the quality of leads which are

leads that are likely to become good customers. In this stage lead nurturing is an essential

process to maintain interactions with those leads so that when they are ready to buy, the brand

will be at the top of their minds (Gomes & Mesquita, 2017). The idea of lead nurturing is to

maintain those potential customers interested by sending them relevant content on a regular

basis in the form of personalized emails, newsletters, blog posts etc. It will increase trust

towards the brand which eventually could increase the number of sales. 41% of the marketeers

using lead nurturing already saw an increase in sales compared to non-nurtured leads

(Thibeault, n.d).

Delight - In this stage, the objective is to turn customers into loyal fans and eventually

perhaps even promotors of the brand. Delight is a very important step in the process because

it builds trust and loyal customers. Most brands pay less attention to this step and focus on

acquiring new customers while this costs far more money than retaining existing customers

(Kilens, n.d). Excellent after sales services, social media engagement, exclusive offers,

surveys, etc., are all tools to not only satisfy the customer but to delight them even further

(Gomes & Mesquita, 2017).

2.5 Fundamentals of inbound success

The buyer’s journey

Thibeault (n.d) states that before applying inbound marketing strategies it is essential

to know exactly who the customers are in order to have success. In inbound marketing, there

are some fundamental aspects which will help to deliver the right kind of content to the right

type of customer. To put it shortly, buyer personas and the buyer’s journey can be used as

guidelines to define how to create remarkable content for them.

First of all buyer personas are semi-fictional representations of the ideal customer

based on real and speculated information (Rockcontent, n.d.). By doing research into buyer

personas, a brand can position itself in the mind-set of their customers and figure out what

their goals, motivations and behaviors are. By understanding the possible problems or

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challenges buyer persona’s might have, a brand is able to offer useful content which cannot

be done by focusing solely on benefits, which, are mostly about the product or service (Leboff,

2011, pg. 54 -58). As mentioned before, not all customers are always ready to buy which will

have an influence on what they want to see. For example, someone may not want to buy a

brand new set of jewellery today, but instead may want to know how to combine jewellery with

their wardrobe. Every buyer is finding itself in a different stage and each interaction they have

with a brand or company should be adapted to where they are in the buyer’s journey (Gomes

& Mesquita, 2017). The buyer’s journey consists of three different stages, showing the different

experiences that consumers are going through, as shown in figure 3.

Consumers realize that they have a need in the awareness stage but they are not quite

sure yet what that need is. In this stage consumers will start to search for information to fulfil

this need. They are looking for facts or advice; therefore it is useless to start selling products

in this stage. Instead, it is more efficient to offer information or solutions to their possible

problems. In the second stage, the consideration stage, consumers have identified their need

and decided they want to do something about it. Different options are being evaluated as they

are not sure yet what product to choose and from who. Relevant content for this stage includes

lists or rankings of different options or possible solutions. In the decision stage, the consumer

has made up their mind and it is only at this stage where marketeers should start offering

content which talks about why their product, brand or service is the best solution.

Remarkable content

The second fundamental of inbound marketing is the creation of remarkable content

(Halligan & Shah, 2014, pg. 23). Remarkable content is content that genuinely interests

consumers; it inspires them to read it, share it and come back for more. Remarkable content

is a reason for one website to add links directing to another website which will eventually attract

more visitors to that website. Therefore, one of the major advantages is that remarkable

content attracts visitors but, as explained later on, it also stimulates Google to rank the website

Figure 3: The buyer's journey Source: Gomes & Mesquita, 2017

Figure 3. The buyer's journey (Gomes & Mesquita, 2017)

Figure 3: The buyer's journey Source: Gomes & Mesquita, 2017

Figure 3. The buyer's journey (Gomes & Mesquita, 2017)

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for relevant keywords. Fishkin (2012) explains that content is extremely relevant because it

creates loyalty and trust which will lead consumers to share content on their own social

networks. With content, marketeers are able to create value for every channel and, on the

contrary to paid advertising, marketeers do not need to pay every month to have their content

online. The more content a website is publishing, the better because with each piece of content

the process becomes easier and more effective. In figure 4, Fishkin (2012) summarizes the

different advantages of publishing content. Brands do not need to pay to have their content

online which will mean that the right content could increase the organic search rankings in

search engines. This is also due to more referring links from other websites linking to content

they found relevant to mention.

Champion (n.d-A) mentions some necessary steps to consider when producing

remarkable content without having to spend lots of money on interrupting potential customers.

Before starting to create content it is recommendable to have a plan; the content process

usually has four steps: [1]plan, [2]create, [3]distribute and [4]analyse. When planning content

there are three things to keep in mind: its purpose, format and topic. Content can serve for

various purposes, for example, it could serve to attract more visitors to a site. This is done by

providing video’s, blogposts, quizzes, etc., on the internet which can be accessed by everyone.

Another thing happens when the content has the purpose to convert visitors into potential

customers; which is usually done by content offers on a landing page. The brand will only

provide the promised content after the visitor has filled in their contact details which will be

automatically added to the brand’s database. An example of this tactic is the fact that most

retailers apply a landing page on their website where visitors can apply for their newsletter, as

shown in figure 5. Attractive and relevant landing pages are especially important for first time

visitors to a website. Remarkable content could influence them to leave their contact because

they are interested in receiving more information. Websites with a lack of landing pages will

have a harder time in converting visitors to possible customers because it will be harder to

obtain the visitors contact information (Halligan & Shah, 2014, pg. 115).

Figure 4: Advantages of content Source: Fishkin, 2012

Figure 20: Content offering on a landing page. Source: www.pandora.netFigure 21: Advantages of content. Source:Fishkin, 2012

Figure 4. Advantages of content (Fishkin, 2012)


Figure 4: Advantages of content Source: Fishkin, 2012


Figure 4. Advantages of content (Fishkin, 2012)


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After deciding on the purpose of the content, the format is chosen. Some examples

are: blog articles, whitepapers, videos, webinars, infographics, visuals, podcasts, case studies,

e-books, templates, checklists etc. By looking at buyer personas and where they like to spend

their time online, the decision can be made about the content’s format. Finally, the content’s

topic needs to be tailored to [1] the buyer persona and [2] where they are in the buyer’s journey;

in general, educational content works well in the awareness and consideration stage while

promotional content only works in the decision stage.

2.6 Managing digital marketing activities

One crucial aspect, not only for inbound marketing but for digital marketing in general,

is to manage and analyse all digital activities. Royle and Laing (2014) speak about a skills gap

in digital marketing whereby there exists a lack of knowledge in the exact skills that are needed

for digital marketing jobs. In fact, research has revealed that in 50% of the cases companies

or brands do not have a defined digital marketing strategy with clear objectives and KPI’s

(Chaffey & Bosomworth, 2016). Since 2011 an enormous rise has taken place regarding brand

activity and investment on social media and consumers increasingly started to follow brands

and campaigns on social networks (Williamson, 2011). Leeflang, Verhoef, Dahlstrom and

Freundt (2014) investigated the digital marketing skills gap whereby many brands or

companies are still facing challenges regarding the management of their digital marketing

department. The biggest challenges include [1] the inability to prove the effectiveness of digital

marketing activities, [2] the threatening power of social media for brands and consumer

relationships and [3] the effective usage of customer insights and data to compete.

Figure 5: Content offering on a landing page Source: www.pandora.net

Figure 5. Content offering on a landing page (www.pandora.net)

Figure 5: Content offering on a landing page Source: www.pandora.net

Figure 5. Content offering on a landing page (www.pandora.net)

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There exists a talent gap in the knowledge about how to analyse digital marketing activities in

order to provide brands with a clear understanding about how these activities can lead to a

stronger performance in the online environment (Leeflang et al., 2014).

Chaffey (2016) proposes the digital marketing planning framework RACE to help

manage and improve results from digital marketing. RACE stands for Reach, Act, Convert and

Engage. These four steps cover the full customers’ lifecycle whereby each step is representing

different digital marketing activities. Before managing and optimizing digital channels it is

necessary to plan and create branded content, which is why this model is sometimes referred

to as PRACE – Plan, Reach, Act, Convert, and Engage. Figure 6 shows the four steps of the

RACE framework metrics with the main KPI’s for each step in the customer lifecycle.

Reach

Reach has to goal of building awareness for a brand, its products and services, which can be

done on social media websites, search engines, blogs and offline media (Chaffey, 2016).

Branded and relevant content will drive people to visit different online channels such as the

brand’s website or social media pages. The bounce rate is a very important metric at this stage

because the goal is for visitors to visit more than just one single page.

Act

In this step the goal is to influence those new site visitors to take the next action instead of

leaving the site immediately. Encouraging consumer interaction and participation on websites

or social media has proven to be one of the biggest challenges for online marketers (Leeflang

et al., 2014). Converting visitors into potential customers can be done by inspiring visitors to

find out more about the brand or its services, searching for a product on the site, reading a

blog post or customer reviews, register as a member etc. (Chaffey, 2016).

Figure 6: The RACE planning framework Source: Chaffey, 2016

Figure 6. The RACE planning framework (Chaffey, 2016)

Figure 6: The RACE planning framework Source: Chaffey, 2016

Figure 6. The RACE planning framework (Chaffey, 2016)

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Convert

This involves the whole ecommerce process, product, price, and promotion. The most

important goal at this step is to turn potential customers into paying customers, which is also

referred to as conversion to sales. (Chaffey, 2016). At this step, but also in the previous step,

it is very important to optimize the site and its landing pages in order to have clear navigation

pathways to prevent visitors from leaving the site.

Engage

Engage serves the purpose to develop long term relationships with new customers in order to

build customer loyalty and increase the amount returning customers. Active customers are the

most important for social media marketing, social proof and referrals of a brand. At this stage

it is important to maintain contact with the customers by communications on the website,

emails, social media presence, etc., which can all boost the customer lifetime value (Chaffey,

2016). The most important KPI’s at this stage are repeat purchases, satisfaction and brand

referrals.

It is further important to mention that without analysing digital marketing activities and

produced content, a brand will never know what gained the most attention amongst consumers

and what their preferences are regarding content. Champion (n.d – A) mentions some more

metrics to consider when optimizing for content:

Share-ability – this analyses if the content was interesting enough to be shared by

consumers on their own networks. Topics with a high share-ability are great content for

a brand;

Inbound links – measuring inbound links gives an indication of how many external

websites are linking to the produced content. A high amount of inbound links can help

build credibility.

2.7 Inbound channels

In the inbound marketing theory, there are four most used channels to attract visitors

and engage with customers: Search Engine Optimization (SEO), blogging, email marketing

and social media. The following subchapter will describe each one of them, in random order,

to gain a deeper insight about how inbound marketing can be applied as a digital marketing

strategy.

Inbound channel 1 - Search Engine Optimization

SEO is a marketing process focussing on improving the visibility of a website through

organic (non-paid) search results from search engines whereby companies or brands strive to

be in the top ranking (Fishkin, 2015). For this chapter the focus will only be on Google, since

Google is the greatest leader in world web with 80% of the market share which means it can

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have the greatest effect on Magnolia Jewellery. When people search on Google or other

search engines, they will find two types of search results in the SERP (Search Engine Results

Page): the ‘organic’ search results and the paid or sponsored results – usually the first 1-4

results. The paid results are all advertisements which are also called the ‘’pay per click ads’’.

In the last decade, many marketeers have paid Google to send visitors to their websites and

the price they payed was dependent on how many others were competing for the same

searchers. Competing to get listed among the top results of google has become very important

because of the shift in consumer behavior. The first place for people to start online shopping

or gather information is through search engines such as Google, Yahoo and Bing (Lecinski,

2011). Further, Google receives over 3.3 billion searches every day which means that there is

a lot of competition between brands to appear on the top 10 organic results of Google. Organic

search results are not based on payments, but on the quality of content and on which pages

Google believes offers the most value for the search request. This indicates that it would be

better to receive visitors from Google through organic search because it is free. Also, paid

online advertisements will only stay on top of the SERP during the time slot that is been paid

for them to appear there. After this, the ads will disappear, while the organic search results can

attract traffic even years after its original publication date (Abraham, 2015).

Top organic results

A study by MarketingSherpa and Enquiro shows that the majority of people are not

clicking on the paid results they see on a SERP; 75% of the searchers click on the organic

results while only 25% would click on the paid results (as read in Halligan, 2007). This clearly

demonstrates how brands should put a brake on investments in paid research because

basically no one clicks on them, especially in the jewellery industry. Similar Web compared the

paid and organic results for various industries in order to demonstrate how to effectively target

online shoppers. The study looked at the Global jewellery industry and included brands such

as Swarovski, Tiffany & Co, Fossil, Cartier, Pandora, Rolex, Swatch, etc. Figure 7 shows that

search engines are responsible for 51.64% of all global desktop visits to global jewellery

websites and figure 8 shows 94,05% of the visitors reaches these websites by clicking on

organic search results.

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If most jewellery brands are being found on Google by the organic search results it

should serve as a clue for Magnolia to start attracting new visitors by improving their website

visibility. The goal is to be listed in the top 10 organic results by Google because these are

receiving the most clicks; only 6% of search engine users click through the second page on

Google (Champion, n.d-B). It is extremely relevant to appear in the top search results because

it is one of the most commonly used means of driving visitors to sites (de Chernatony, 2003,

p. 242). Further, achieving top search engine ranking can actually help build a brand because

consumers tend to associate top search engine rankings with leadership brands (iProspect,

2002). Search engines are still the mostly used by internet users, even more than social media

and therefore it is advisable to strive for site optimization.

Ranking system

After typing a search request in Google, Google will rank all the results in order of page

quality. The ranking is based on combination of relevance and authority. Relevance measures

the match between the search terms and the actual web page. To rank for relevance, Google

looks at aspects such as the page title, the page content and the anchor texts of links to the

page. Authority measures the importance and authenticity of a given page. A page with a high

authority has many links coming from other high-authority sites, for example, a site about the

future trends in fashion for 2017 will only be rated as a high authority website when some of

Figure 7: Traffic source to jewellery sites Source: Zand & Cohen, 2016

Figure 28: Paid vs. organic search. Source: Zand & Cohen, 2016.Figure 29: Traffic source to jewellery sites. Source: Zand & Cohen, 2016

Figure 7. Traffic source to jewellery sites (Zand & Cohen, 2016)


Figure 7: Traffic source to jewellery sites Source: Zand & Cohen, 2016


Figure 7. Traffic source to jewellery sites (Zand & Cohen, 2016)


Figure 8: Paid vs. organic search Source: Zand & Cohen, 2016

Figure 36: Most effective channel for lead nurturing. Source: Neely, 2016Figure 37: Paid vs. organic search. Source: Zand & Cohen, 2016.

Figure 8. Paid vs. organic search (Zand & Cohen, 2016)


Figure 8: Paid vs. organic search Source: Zand & Cohen, 2016


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the best bloggers in the industry link to it. If such a site would have nobody linking to it, Google

would have no evidence that its content is reliable and worthy (Halligan & Shah, 2014, pg. 48-

49).

Keywords

To strive for a high ranking, content needs to be created around certain keywords.

Keywords are the words or phrases typed in the search engine when searching for information

or a specific webpage (Champion, n.d-B). There are some things to keep in mind when

deciding which keywords to optimize for. When picking a keyword it is important to have an

idea of how many times people search for that keyword on Google, this is called the estimated

search volume. If barely anyone uses a certain keyword to search for something then there is

also no point in having a high ranking for that keyword. For many keywords it is difficult to rank

on the first page because of strong competitors that are already ranked on the first page.

Therefore brands should pick keywords which [1] are not too difficult to rank for and [2] have a

reasonable search volume. It is recommendable to start ranking for keywords which are lower

in competition in order to be able to reach the first page so a site can first start building authority

through these less popular keywords. Long tail keywords are more specific keywords existing

of 3-4 words which will make it easier to compete while having less competition optimizing for

the same keyword. To finish, Fishkin (2015) warns for keyword abuse which means that

whenever a website is using too much of the same keyword, Google will refer it as spam and

the ranking will go down. The preferable keyword density lies around 2 and 3 percent of its

whole content.

On page optimization

One of the Search Engine Optimization practices consists of on-page optimization with

the help of keywords. Both Patel (n.d - A) and Fishkin (2015) recommends to use keywords in

the following parts of a website:

At least one in the title page – this is what shows up at the top of the browser

window;

The meta description tag – this is the brief summary of what a user can expect

to see on a page;

The URL

All the alt tags of images; search engines cannot read images, adding keywords

in their alt-tags allows the search engine to understand the image;

The first twenty-five words of a page;

The last twenty-five words of a page.

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Off page optimization

Off page optimization is the process of earning inbound links which are links coming

from other webpages. Not only should there be many inbound links on the website but in order

to have a high ranking on Google it is important to receive links from the ‘right’ websites. Moz

Open Site Explorer is a tool that can be used to discover which websites are authoritative

(Fishkin, 2015). This will teach a company or brand which sites to approach or link to, in order

to enhance the chance to receive an inbound link back from them. Other factors that influence

the value of inbound links are the number of other links on that page. The more inbound links

a certain page has on their site, the less SEO credit each link has.

The anchor text of the link is also very important; this is the text that the user sees on

the page and is clickable. When ranking for a certain keyword, the most valuable links are the

ones which have that specific keyword in their anchor text. Halligan and Shah (2014, pg. 65)

recommend to track the progress in ranking by using a free tool on the Grader website. This

allows a brand or a company to measure their number of inbound links and the number of

organic keywords that are producing traffic to their site, it also allows to compare with

competitors.

Inbound channel 2 - Blogging

Business blogs have become a very important marketing channel; it is a site that allows

to regularly post new content regarding the industry or business. It is a great way to increase

online visibility; many blog posts will make it easier for people to discover a particular brand or

service (Wainwright, 2013). Business blogs allow to write interesting facts about a certain

industry or helpful content such as guidelines. Blog posts definitely do not always need to be

about products or services. In fact, this is even the most frequent reason for why blogs fail

(Halligan & Shah, 2014, pg. 36). By providing content which is not transactional, a brand or

company can establish authority amongst their consumers. Providing relevant content which

can answer their questions or solve their problems will increase trust which makes it more

likely that visitors will become customers because they will remember when a brand was

relevant to them, even before being interested in purchasing anything.

Neil Patel (n.d-B) mentions guest-blogging as another way to increase the authority of

a business blog. Guest-blogging invites other experts or influencers to write on the blog, the

advantage for those guest-bloggers is that they will get exposed to a new audience plus they

will receive a new inbound link back to their own blog. New blog posts can very easily be

shared on social media by adding social media buttons on each post, this will eventually also

improve the social media presence and the reach of blog posts (Halligan & Shah, 2014, pg.38).

By including a CTA in each blog post, for example; by asking people to share it on their own

social networks, it is possible to generate traffic to the website not only after publishing but also

in the long term. Wainwright (2013) calls these posts with a long term effect ‘’compounding

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posts’’ and states that one out of ten blog posts will have long term effects. Finally, blog posts

also help to gain or maintain a high ranking in search engines by [1] the increasing amount of

inbound links coming from others sharing different blog posts and, [2] by using unique

keywords in each post so it will be easier to reach or stay at the top results.

Inbound channel 3 – email

Email marketing is one of the oldest marketing channels and more closely related to

the traditional outbound methods of marketing, especially direct email. There has been

ongoing discussion in the literature whether if email marketing is still relevant. In fact, 70% of

all emails send are categorized as spam. It is a common phenomenon in the marketing industry

to buy lists and send endless emails to people who are not interested at all (Moche, n.d.).

However, 80% of the marketeers state that email marketing is still the most effective channel

for lead generation and sales conversion (Salesforce, as read in Terry, 2017). There are

several reasons for the fact that email marketing is being widely used and the relevance has

been proven by various facts. First of all, 77% of the consumers prefer to receive marketing

communications by email as 95% of online consumers use their email every day (Terry, 2017).

Further, email allows to be extremely personal when the right content is combined with the

right context and timing by always considering someone’s place in the buyer’s journey before

sending out emails (Moche, n.d). When email is done correctly it can not only generate leads

but also convert them into potential customers by nurturing them. A survey by Ascend2 has

shown that email marketing is still one of the most effective online channels for generating

leads as shown by figure 9 (Neely, 2016).

Figure 9: Most effective channel for lead nurturing Source: Neely, 2016

Figure 9: Most effective channel for lead nurturing Source: Neely, 2016

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These controversial statistics about email marketing might indicate that there is some

misunderstanding in how to use this channel in the correct way. To launch a successful

marketing campaign it is necessary to segment contacts into similar groups to avoid sending

uninteresting mails to a group of subscribers. In their article, Bwam and Nath (2014, pg. 250-

251) propose an efficient model for effective email marketing. By closely monitoring the

behavior of email subscribers, different email campaigns can be send to different segments.

For successful and highly personalized emails they recommend to cluster on the following

factors:

Open rate – the percentage of consumers who have opened an email;

Click rate – the percentage of consumers who clicked through the website;

Purchase history – this can be a valuable predictor of the consumer’s next move;

Impression on products – this looks at the consumer’s behavior on the website and at the clicks

on various products or other links (Bwam & Nath, 2014).

Inbound channel 4 – social media

Social media is a crucial part of the inbound marketing strategy as it has a strong

influence on the visibility of the web presence of a brand or company. Social media is used

more and more and it has become an important part of people’s lives. Even in the world of

business it has become indispensable not to be active on any of the social media networks.

According to Pew Research Center, 90% of the adults in the age between 18 and 29 are using

social media and by 2018 it is expected that social media will reach 2.5 billion users (Stanley,

2016). Social media actually started out as an online entertainment tool but it did not take long

before it has developed itself into one of the major marketing tools due to many remarkable

advantages. In 2009, when brands started to offer their products on social media, Dell earned

2,1 million euros by selling computers through Twitter and Burger King invested 35 thousand

euros on Facebook to end up making 290 million euros (Peixoto, 2010, pg. 67). This has

pointed out only to be the beginning of social media marketing as statistics from Brandwatch

show that by 2015 social media had earned an estimated 8,3 billion from advertising.

Organisations and brands are now eager to work on their social media presence.

Since 2015, an increasing number of organizations are planning to spend more than

20% of their total advertising budgets on social media channels (Smith, 2016). In a very short

amount of time social media has become the best tool to reach customers over the whole world

and to receive their valuable feedback. It started to become increasingly popular during the

second quarter of 2008 when 75% of the internet users started joining social networks (Kaplan

& Haenlein, 2010, pg. 59). In 2016, it has become impossible to imagine the world without

social media; internet users are spending in average 2 hours per day on social networking and

messaging (Buckle, 2016).

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Just like Google or other search engines, social media is a great way to reach and

engage with potential customers. In short, social media networks are about people connecting,

interacting and sharing online through various sites, each with their own characteristics such

as: Facebook, Twitter, LinkedIn, Instagram, Snapchat, YouTube, Google +, Pinterest etc.

There are a lot of social networks and it would not be efficient to have an account on all of

them. More importantly is to understand the target first and to know on which platforms the

majority spends their time (Hanna et al., 2011, pg. 271-272). The best way to discover these

platforms is by identifying the platforms on which the personas are active on. Facebook and

LinkedIn are still mostly used for professional purposes while Instagram, Pinterest and

Snapchat are more perceived as personal channels (An & Brudner, 2016).

Advantages and opportunities

Social media is ideal to use at every stage of the inbound methodology. It can be used

to attract visitors by sharing remarkable content on various channels. Visitors can be converted

into potential customers by offering them opportunities to subscribe and receive special offers.

It is also a great way to delight customers by continuously creating unique and personal ways

to engage with them (Alison, n.d). Different studies have focused on the advantages and

opportunities of social media for brands who want to improve their digital impact. First of all, it

has an enormous effect on increasing traffic to a website (Fishkin, 2011-B; Patel & Taylor,

2009). Another frequently cited benefit is its ability to improve brand awareness, building trust

and creating brand loyalty. Erdoğmuş and Çiçek (2012, pg. 1353-1360) focused on the

relationship between social media presence and brand loyalty. The results of the study showed

that brand loyalty is positively affected when a brand offers relevant content, beneficial

campaigns, popular contents and when the brand appears consistently on different social

media platforms. By actively publishing content on social media brands can increase

engagement which, according to Scheijbeler (2015), should be a primary goal because

engagement is the first step into creating relationships. In general, experiments focusing on

increasing engagement by optimizing the conversion rate have been proven to be an effective

way to increase revenue.

Various consumer studies have shown the importance of visuals in social media.

Content with relevant images gets 94% more views than content without relevant images.

Further, there has been a trend in publishing video’s instead of images which are shared by

66% more times than any other type of posts (Marktest, 2016). The interactive aspect of social

media not only allows brands to talk with their consumers and vice versa but, it also allows for

consumers to talk with each other. By sharing their experiences on different social networks,

consumers are contributing to the brand image or reputation. In the digital age it is already

widely known that it is no longer about what a brand says about itself, but it is about what

others are saying when they think the brand is not listening (Coiné & Babbit, 2014, pg. 88;

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Jones, Temperley & Lima, 2009, pg. 928; Kotler, Kartajaya, H., & Setiawan, I, 2010, pg. 43).

Several empirical studies have shown that the volume and quality of online consumer reviews

significantly impact product sales (Chen, Wang & Xie; 2011, pg. 239; Chen, Fay & Wang, 2011,

pg. 87; Duan, Gu & Whinston, 2008, pg. 235). Online recommendations or reviews are

perceived as being valuable, credible and honest by 60-70% of the consumers (Kirtis &

Karahan, 2011; pg. 264). According to Leboff (2011, pg. 134) this is because people tend to

believe that other customers write the truth about an experience they had. After all, another

customer has nothing to sell and therefore should have the same interests. Of these

consumers, 49% would make a purchase decision based on the information they found through

social media websites.

Finally, social media has a higher importance compared to websites when it comes to

word-of-mouth: 45% of the consumers who searched for information on social media would

talk about it with others whereas only 36% of the consumers who found something on a regular

website would engage into word-of-mouth or word-of-keyboard. These findings show just how

relevant online consumer behavior has become in the business world and why it is necessary

for brands to learn how to stimulate word of mouth on their social media channels.

2.8 Return of Investment of inbound marketing

In the state of inbound, study was conducted amongst different businesses (B2B, B2C,

small and middle sized) representing 132 different countries (An & Brudner, 2016). In general,

inbound businesses reported being more strategically effective compared with outbound

businesses. Most businesses which reported to already have applied the inbound marketing

theory are in the e-commerce sector (89%) followed by marketing agencies and software

companies. Hung (2013) captured the return on investment HubSpot customers have

experienced from applying the inbound marketing strategy. Its main findings were that 92% of

the businesses applying inbound marketing would experience 2,7 times more traffic per month

and 30,4 more leads per month. Furthermore, the lead-to-sale conversion was higher for 50%

of the cases. The growth in traffic and leads is already visible after four months for 65% of the

respondents. The report shows that blogging, search engine optimization, landing pages and

CTA’s are the inbound marketing practices with the most influence on traffic and lead increase

as shown by figure 10.

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Not only does inbound marketing have a positive effect on attracting more potential

customers, it also has the advantage of being a much more cost effective strategy than

outbound marketing. Several customers of the HubSpot inbound software have indicated that

their increase in inbound marketing activities has allowed them to be more profitable. One of

the respondents in Hung’s report stated the following:

We used to spend a lot of money on Google AdWords, and we do not spend any

money there anymore because our organic traffic sky rocketed after signing up with

HubSpot. We use the money now for branding and on other marketing activities

that work a lot better than Google AdWords did (Cathie Briggette, NSK Inc., as read in Hung,

2013).

In fact, Miller (2012) has revealed that inbound leads are costing a business 61% less per lead

than leads who got engaged through outbound marketing activities. Paid advertisements

(online and offline) are considered to be the most overrated marketing tactic. While it has

become clear that inbound marketing can be very beneficial for a company, it does not directly

mean that every brand should end their outbound marketing methods. What is important is to

find the right balance and determine which channels actually deliver the most desirable

outcomes.

Figure 10: Traffic and lead increase Source: Hung, 2013

Figure 10. Traffic and lead increase (Hung, 2013)

Figure 10: Traffic and lead increase Source: Hung, 2013

Figure 10. Traffic and lead increase (Hung, 2013)

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3. Internship description – Magnolia Silver Jewellery

The information in the following chapter is all retrieved from the Magnolia Silver

Jewellery brand archive which was composed by the CEO of Magnolia Silver Portugal, Joana

Matias, and the former CEO of Magnolia Silver Jewellery group, Tomer Reizberg. Permission

was allowed to access this information and use it for the academic purposes of this internship

report.

3.1 Company profile

Magnolia Silver Jewellery has been established as a jewellery brand specialized in

handcrafted Sterling Silver 925 jewellery. Magnolia Portugal works closely with the company’s

talented European and Mediterranean designers. The business is mostly run by women and it

is very passionate about inspiring and supporting their customers. The brand has 4 employees

at the head office and 14 store managers, each with a team of sales people at the different

stores spread over the country. Magnolia holds 14 kiosks distributed over various areas in

Portugal namely: Magnolia Braga Parque, Magnolia Mar shopping (Porto), Magnolia Arrábida

shopping (Porto), Magnolia Gaia shopping (Porto), Magnolia Forum Coimbra, Magnolia Alma

shopping (Coimbra), Magnolia Leiria shopping, Magnolia Loures shopping (Lisbon), Magnolia

Colombo (Lisbon), Magnolia Cascaishopping (Lisbon), Magnolia Armazéns do Chiado

(Lisbon), Magnolia Vasco da Gama (Lisbon), Magnolia Almada fórum (Lisbon) and Magnolia

Fórum Montijo. Figure 11 was created to show the organizational structure for Magnolia Silver

Jewellery Portugal with their CEO and the four employees responsible for managing all the

stores and its sales people.

Figure 11: Magnolia organization chart




Figure 11: Magnolia organizational chart

Figure 11: Magnolia organizational chart

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3.2 Values, Mission and Vision

Accessibility, Flow, Authenticity and Sparkle are currently considered the brand’s four

main values that guide them in all of their decision making processes and helps in measuring

the brand’s on-going performance. Each of the values can be traced back in the brand’s

language and consist of the following terms:

Accessibility - Approachability, simplicity, straightforwardness, warmth.

Flow - Streaming, diverse and constantly updated.

Authenticity - Genuineness, handmade

Sparkle - Shine, radiance and freedom.

‘’Sparkle every day’’ is Magnolia’s slogan and it reflects on the most deepest desires of

their customers by offering them the chance to feel themselves special and beautiful during

any day of the week. The brand wants to combine elegance and uniqueness with a sense of

accessibility and sensitivity. This approach allows women of all ages to enjoy the pleasure of

possessing an elegant and sophisticated piece of silver jewellery, with high quality, adjusted

to each ones personal preference. The brand aspires women of all ages to fully appreciate

their current time; each moment is a real celebration with Magnolia and it sees as their mission

to offer high quality jewellery for an accessible price to all kind of woman. The creative brand

language captures the ‘sparkle’ moment by simultaneously transmitting the values of

authenticity, accessibility and flow. The brand language and its logo represent the perfect

combination between the sense of comfort and simplicity with the right amount of enthusiasm

and delight.

3.3 Brand History

In 1996 the Magnolia Silver Jewellery brand was launched in Israel as a small family

business. The brand specialized in Sterling Silver 925 and today it is the market leader in silver

handmade jewellery. It is a privately owned company, owned by Markstone Capital Partners

LLC since 2007. Markstone Capital Partners is an $800 million private equity fund. The fund

seeks to achieve long-term capital growth through a value-oriented approach and invests in

strong enterprises of the traditional economy. For strategic reasons, Markstone decided to

launch the Magnolia concept internationally. In Portugal, the brand was launched in December

2008 and currently holds 14 stores in the most frequented shopping malls of the country.

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3.4 Customers

Magnolia targets women of all ages, especially between the age of 20 and 50. The

main focus is placed on the upper-class market but people from all social-demographic groups

are considered as potential customers. The woman Magnolia is targeting are females who like

to visit shopping malls and use jewellery every day or more precisely for special occasions.

The brand is aware that their target is more inclined to making rational buying decisions instead

of impulsive buying. However, the brand is not only targeting female who like to buy jewellery

for themselves but also other consumers who are looking for personal gifts. Their online target

is mainly aged between 25-34 (42%) and apparently not only woman tend to shop online as

20% of their online target is male (Google Analytics, n.d). This topic will be further evolved later

on by the recommendation of several buyer personas.

3.5 Products and services

The brand is specialized in silver and therefore they will only use silver of the very first

quality which means that 92,5% of each piece of jewellery consists of pure silver and the other

7,5% consist of copper, making it more robust. Their 925 stamp can be found in every single

piece as it is a sign of trustworthiness to indicate the silver quality and their respect for

international standards. Magnolia is highly confident in the quality of their products because

they only use high quality materials, such as 14 carat silver, 9 carat gold, precious and

semiprecious stones. The most used semiprecious stones are the Zirconia’s and the

Swarovski crystals. The making of Magnolia jewels is a very intense and careful process; each

piece receives a dedication of in average 11 hours, while some pieces can even take 25 hours

to create, as illustrated by figure 12. All of the jewellery undergoes rigorous testing by

accredited institutional laboratories, which is why Magnolia is the only silver jewellery retailer

that offers a product guarantee of two years for all of their jewellery.

Figure 12: Handmade jewellery by exclusive designers Source: Visual archive of Magnolia Silver Jewellery

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Magnolia also strives to offer an excellent customer service by investing strongly on

training sales women to offer a personalized service in order to mark a difference within the

shopping mall. Strong effort is put into creating a powerful network of loyal customers, maintain

them and keeping them up to date about the latest news. Some of these activities include: the

construction of a customer database (currently with over 140.000 members), E-newsletters,

product promotions and by offering vouchers for future purchases.

To make sure everyone can find jewellery fitted to their own personal tastes the brand

works with a local goldsmith who can adjust ring sizes, adjust stone colours and sizes, adjust

necklace length etc. On top of this, the brand has a separate personalized jewellery line with

necklaces and bracelets. These special pieces of jewellery allow the customer to engrave a

certain name, date or phrase onto the jewellery that they want to buy, making them original

and personal gift ideas.

3.6 Merchandising strategy

Magnolia Silver Jewellery has a unique concept in retailing by commercializing hand-

made silver jewellery which is exclusively being sold in Magnolia kiosks (since 2016, the brand

is also selling jewellery online). The reason behind the kiosks is because it would add extra

value in the form of a vibrant and integral experience inside a shopping mall. The kiosks

remove any physical or psychological barriers separating the shopping mall from their

consumers which makes it more appealing for visitors to approach the Magnolia brand. Figure

13 shows an example of two Magnolia kiosks during the day and evening.

Figure 13: Magnolia Kiosks Source: Visual archive of Magnolia Silver Jewellery

Figure 13. Magnolia Kiosks (Visual archive of Magnolia Silver Jewellery)

Figure 13: Magnolia Kiosks Source: Visual archive of Magnolia Silver Jewellery

Figure 13. Magnolia Kiosks (Visual archive of Magnolia Silver Jewellery)

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One of the most important factors in their merchandising is to aim for exclusivity; all

the jewellery are designed and handmade by a designated group of 25 designers solely

working for the Magnolia Silver Jewellery group. The jewellery is manufactured in limited series

as the brand works according to a strict stock policy which allows only one unit of each item in

each of their stores. With this policy, Magnolia can guarantee the uniqueness of their jewellery

for each of their customers and minimizes the chance that their customers will meet somebody

with exactly the same jewellery. The kiosks have a large merchandise of about 3000 items per

kiosk with 500 new items arriving every month in each of the selling points. In such a way,

customers can be sure to expect new and appealing jewellery each time they visit a kiosk.

Before distributing their jewellery internationally, the brand applies a pilot phase for each of

their products; only the most purchased products in Israel will be distributed to other regions.

By continuously monitoring sales, the brand is having an overview of which products are selling

less than expected in order to send them back to the headquarters in Israel. Magnolia only

wants to offer the products that are most valued by their customers.

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4. Case diagnosis

4.1 Initial SWOT analysis

The SWOT analysis gives a quick overview of the brand’s Strengths and Weaknesses

and possible Opportunities and Threats. It can be used to decide if a brand is facing problems

because of the need in revising its strategy or the need of improving its strategy (Chermack &

Kasshanna, 2007, pg. 383). Strengths and weaknesses give an idea of the brand’s current

performance and are considered to be internal factors that are either favourable or

unfavourable in achieving the brand’s objective (FME, 2013, pg. 11). Opportunities and threats

indicate the brand’s future by accounting for external environmental factors. The goal is to

understand which internal and external factors influence the brand’s practices, structure and

strategy. By looking at the strengths and opportunities in the SWOT analysis it is possible to

define some challenges for the brand. This technique is called matching which means that

strengths and opportunities are being matched to gain competitive advantage (FME, 2013, pg.

14). In order to analyse the case of Magnolia, an inicial SWOT analysis is made, as shown in

figure 14.

The desire for an emotional approach and exclusive purchases could be a competitive

advantage for Magnolia. A focus group held in 2015 with Magnolia customers, shows that

women use jewellery to define their own style and to increase feelings of attractiveness and

beauty.

Figure 14: Initial SWOT analysis





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Another main reason is because jewellery can represent someone or something very important

to the wearer e.g. ‘’The heart my husband gave me when my son was born’’ (Netsonda

Consumer channel, 2015). Magnolia’s handmade jewellery made by an exclusive group of

designers from Israel, their strict stock policy and their personal jewellery line which allows

customers to make personal jewellery with names and dates, are all strengths that can be

combined with the desire for emotional and exclusive purchases which could form a

competitive advantage of unique jewellery.

Weaknesses and threats can be converted into strengths or opportunities (FME, 2013,

pg. 14). In general, the major threat is the online presence of competitors who are already

enjoying a high reputation. According to Heggestuen and Danova (2013), brands with a strong

online presence on social media are able to influence consumers to spend more on their

brands than on competitors. Digital marketing brings several advantages to a brand and the

web can assist in brand building (Tiago & Versíssimo, 2014, pg.704), communicating brand

promises and emotional values (De Chernatony & Christodoulides, 2004, pg. 241). Magnolia

can convert their weaknesses into strengths by focusing on digital marketing activities, creating

strong interactive social media sites and optimizing their website in order to successfully

compete with others in the online environment.

Another important weakness for Magnolia was noticed during the focus group in 2015.

Compared with their competition, Magnolia is missing an own characteristic style (Netsonda

Consumer channel, 2015). This means that there is nothing which really makes the brand

stand out or by which the brand could be identified (e.g. Pandora is famous for their charms

and Swarovski for their crystals). A McKinsey analysis reveals that branded jewellery is on the

rise and it is expected to account for 30-40% of the total jewellery market by 2020 (Dauriz,

Remy, & Tochtermann, 2013). Many growth comes from the further development of

established jewellery brands such as Tiffany & Co or Cartier but growth can also come from

non-jewellery brands introducing new collections to expand their assortment, such as Luis

Vuitton, Dior or Hermès. To compete, Magnolia should put an effort into strengthening and

differentiating their brand by offering unique and distinctive designs. The low investment in

communication could be a reason for the uncharacterised style of Magnolia. Cost effective

online channels are already being used by the brand to show their products, values and

lifestyle inspiration, however more research is needed to find out how the brand could better

present itself online and how to create more awareness for their online channels.

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4.2 Business Model Canvas

The business model canvas in figure 15 was created to document the existing business

model of Magnolia Silver Jewellery. Clark, Osterwalder and Pigneur (2012) define a business

model as the logic by which an enterprise earns its livelihood.

Magnolia’s current business model sells to a customer segment existing almost exclusively

from women aged between 30 and 60 years old who shop at shopping malls and looking for

accessible jewellery for themselves or to buy as a gift. The value proposition for this customer

segment is exclusive handmade jewellery sold for an accessible price at Magnolia kiosks. The

kiosks hold an important role in the value proposition because of the excellent and personal

assistance provided by the well-trained salespeople. The customer segment values this

because it offers them the opportunity to try on different pieces of jewellery and receive

professional advice on the jewellery and its treatment. For returning customers this will lead to

long term relationships based on trust and loyalty with the salespeople in each kiosk. Other

than in the kiosks, customers can expect to interact with the brand on social media, through

the weekly newsletters or find the brand being advertised in various magazines or on various

TV shows. Revenue streams originate from asset sales (or in this case, jewellery sales) both

online and offline and the brand strives to deliver their value proposition by continuously

updating their merchandise and by providing post-purchase customer support.

Figure 15: Business Model Canvas Source: www.strategyzer.com


Figure 15. Business Model Canvas (www.strategyzer.com)




Figure 15. Business Model Canvas (www.strategyzer.com)


35

Magnolia works with a fixed pricing mechanism, resulting in transaction revenues from

ongoing customer payments.

The most important key resource is know-how, especially in brand management and

the Portuguese market. Other important key resources are the exclusive jewellery designers

and human resources to hire high quality sales people for the kiosks. Key activities include

product design, supply chain management and marketing & communication. Marketing and

communication is of value for developing and maintaining customer relationships. Supply chain

management is essential in order to plan, control, execute and monitor logistical activities for

the 14 different kiosks spread over the country. Magnolia is not able to fulfil all the marketing

and communication activities alone and therefore the key partners are mainly focused on this

aspect. As shown in figure 15, key partners include bloggers and a public relations agency

called Ganesh. The most important costs inherent to this business model are the rent and

salaries, distribution costs and investments related to marketing and communication. Since

Magnolia is a value-driven brand, the business model does not focus on minimizing all costs

but rather focusses on creating value for their products and services.

4.3 Dynamic Swot

Figure 16 represents a dynamic SWOT for Magnolia created with the template for

dynamic SWOT with strategic lines by Rosa (2014). The dynamic SWOT crosses all the

aspects of the SWOT analysis to form various strategies:

1. Strengths and Opportunities Development strategy

2. Weaknesses and Threats Survival strategy

3. Weaknesses and Opportunities Growth strategy

4. Strengths and Threats Maintenance strategy

Figure 16 shows an overview of the three most important Strengths, Weaknesses,

Opportunities and Threats which are retrieved from the initial SWOT analysis. The results are

demonstrated in the shape of four possible strategies for the brand to focus on.

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4.4 Descriptive memory

Between September and February I was placed for an internship at the Magnolia Silver

Jewellery office in Portugal. The main objective was to assist in the marketing department but

regarding the fact that the team in the office only consisted of four people, I had the chance to

work and learn from each department. During the whole internship, follow up in a professional

context was provided by the tutor; Margarida Araújo Baptista – Marketing Executive. Except

from having tasks involved with marketing, I also provided tasks for other departments such

as accounting and logistics. The possibility to work and learn from different departments in the

office contributed to a fuller sense of knowledge and experience about how to manage a brand.

The master in branding and design provided me with a comprehensive knowledge of branding

which helped in accomplishing the tasks. Branding is about brands and how to create them.

Figure 16: Dynamic SWOT (Rosa, 2014)

Figure 16: Dynamic SWOT (Rosa, 2014)

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In general, brands should continuously being constructed and reconstructed therefore it could

be said that branding equals brand management. The general goal was to understand how the

Magnolia brand is managed with an emphasis on assisting in their online marketing.

During the first weeks of the internship I assisted my tutor Margarida in all of her tasks

including customer service, planning and creating newsletters and promotions, changing

banners on the website, manage E-commerce orders, planning and creating social media

posts and maintaining the blog. The goal was to understand the whole process in order to be

able to fulfil all her tasks independently during the time that my tutor was on honeymoon leave.

For more specific issues I could still count on the support from the other two employees in the

office and the CEO of Magnolia Portugal. During the period where I was responsible for

managing the marketing department by myself, I was able to acquire many communication

skills and experience in the planning and approving of newsletters and promotional campaigns.

Part of my daily tasks were communicating with the headquarters in Israel to send requests

explaining precisely the content of each newsletter and promotional sign, see an example in

figure 17 and 18. Before approving, all the materials send to me from Israel had to be controlled

to see if there was no missing information or mistakes in the text, after confirming with the CEO

of Portugal the materials would be approved and scheduled. This allowed me to learn a lot

about the brand’s marketing activities.

Figure 17: Promotional sign Source: Visual archive of Magnolia Silver Jewellery)

Figure 14: Promotional sign. Source: Visual archive of Magnolia Silver Jewellery.

38

Meanwhile, the Magnolia customer service mail account had to be constantly

maintained which allowed me to further develop my skills in responding to complaints,

problems, emergencies or badly clarified situations placed by email. Another important part of

my tasks in the marketing department was managing the social media accounts. The business

page on Facebook allowed me to keep up with the private conversations on messenger and

to schedule posts for the coming weeks. Previously learned theories in branding and marketing

where being put in practice by applying a personal approach on social media and striving for

a fast responsive rate.

The brand language was studied thoroughly to understand how the brand likes to

communicate with their consumers. Research in their customer database and the most

interactive and engaging posts provided me with an idea of what the consumers appreciate

and this was strongly taken into consideration when designing new social media posts or when

writing new blog posts. With the objective to increase interaction between the consumers and

Magnolia, new types of content were posted (video, quizzes, blog posts, user generated

content, questions etc.) and of course all comments on each post had to be liked and answered

by the same day. On Instagram, the brand would not only post images related with jewellery

but also lifestyle and other inspirational pictures as shown in figure 19.

Figure 18: Black Friday newsletter in November Source: Visual archive of Magnolia Silver Jewellery

Figure 18: Black Friday newsletter in November Source: Visual archive of Magnolia Silver Jewellery

39

Theory and knowledge in consumer behaviour have made it clear that it is highly

important to assure nothing goes wrong with E-commerce orders, especially when it is a

consumer’s first time ordering from the Magnolia website. I learned how important it is to

always keep the customer highly informed about their order(s) by sending emails in each step

of the process: confirmation of the order, tracking email, time of delivery, ready for pick-up in

the store, etc. By focusing on frequently asked questions regarding online orders I could define

several topics that needed some improvement. During the weekly meetings these topics would

be discussed and together with the rest of the team we would brainstorm on solutions. More

technological problems regarding the website would have been passed through to Israel. For

example, when orders for the same product were placed shortly after each other while there

was only one item in stock. Instead of directly showing that the product was sold out, the

product would still appear as available and ready to order. This would mean that a customer

could order a product that was actually already sold out. During the internship it also became

clear that online orders to be picked up in the store were not always occurring without

problems. It became clear that due to the continuous arriving and leaving of sales assistants

in the stores there was a lack of available information about how to handle online orders in the

store. Together with my tutor we developed a manual for every kiosk in Portugal about the

procedures of online orders. To goal was to provide a step by step procedure which would be

equal in all the stores; the manual would include information about how to recognize an online

order, a reminder to always check to ID of the customer during the pick-up, tips for potential

cross-selling etc.

Figure 19: Instagram post Source: Visual archive of Magnolia Silver Jewellery

.

Figure 19. Instagram post (Visual archive of Magnolia Silver Jewellery)

.

Figure 19: Instagram post Source: Visual archive of Magnolia Silver Jewellery

.

Figure 19. Instagram post (Visual archive of Magnolia Silver Jewellery)

.

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In general, this internship has given me a very broad and basic knowledge of how it is

like to manage a brand with both physical and online selling points. Having done different tasks

from different departments each day, has provided me with wide insight into the brand’s

strategy which made it possible to identify not only their strengths but also some weaknesses.

Obtained knowledge in marketing and branding strategies during master study in fashion

branding and design helped in analysing some aspects of the brand which could be improved.

4.5 The opening of Magnolia’s online store.

During the internship it became clear how the brand went digital and launched its online

store. In an interview with the CEO of Magnolia Portugal, Joana Matias, a clear explanation is

given for their motives to open the online store and the steps the brand took to generate an

online audience before actually opening the online store. The interview was recorded and

notes were taken immediately during the interview regarding the main points of their launching

process.

The brand always had a strong focus on the retailing market and it turned out Magnolia

has done this more effectively than other brands in the Portuguese market. Why? Because

other brands strongly focused on merchandising. The Inditex group has a strong influence on

the Portuguese retail market and it can be seen that other brands tend to follow them. In the

big retail stores like Zara, Mango, H&M etc., a lot of shopping assistants are not paying

attention to their customers because instead they are busy arranging the store and folding

garments to make sure everything looks perfectly well. This means that they are overly focused

on the product itself. What differentiates Magnolia from other retail brands is that Magnolia is

especially focused on the customer. All their employees receive an intensive training about all

the products and materials, how to provide a spectacular service to the customer and how to

give them proper advice about jewellery.

The online store only opened in May 2016 and the reason it took Magnolia a long time

to start with E-commerce was because it was extremely difficult for them to let go of the idea

of one person selling to another. The brand is extremely focused on getting the best employees

for their stores, providing new employees with seminars and training about how to

communicate with customers, how to make them feel special and how to make them want to

buy. With E-commerce, all of a sudden, this will no longer be necessary. Online there will be

no person selling the items and argumenting about what makes the product so good or perfect

for the customer. This is the main reason why it took so long for Magnolia to open up their own

web shop, a decision that, according to the CEO of Portugal, should have been made already

five years ago. She stated that basically they are five years behind with their E-commerce;

indicating a strong need for improvements on this area and relevance for the topic of this thesis.

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Preparation and launching of the online store

In September 2015 Magnolia decided to start working on opening their online store

because it became clear that this was necessary in order to not stay behind and keep an

interesting position in the market. In total it took about nine months to develop the whole

website and launch it online. By recognizing the online store just as another store, it would

function just like another store with a big advantage that this one would always be open. More

advantages were that with an online shop there would be no rent to pay and neither would

there be employees to pay. This saves a lot of money because in average about 25% of the

income would go to the employees and about 17% of the income is needed to pay the rent.

But Magnolia also saw some disadvantages in opening an online store. Firstly, customers

would no longer have personal contact with the brand and secondly, to make people aware of

the website a lot of money needed to be invested in online and offline marketing.

Before actually opening their online shop, the brand worked on building an online

audience on their Facebook page to make sure they already had on online customer basis.

The brand made wise use of Google Ads, SEO research and digital influencers. Especially the

last one had a major influence on creating awareness for the online shop. The amount of

followers went from 3000 in January to 75,000 eighteen months later because they used social

influencers in their communications. The first time Magnolia worked with a social influencer, it

saw an increase of 12.000 followers on Facebook in just one hour. Together with the opening

of their online shop, Magnolia had created a loyalty program for their customers called

Magnolia Exclusive for which customers could register with their email. To inform customers

about the Magnolia Exclusive Club the brand instructed all the sales people in the stores to

talk with their customers about the new online shop. Customers would be asked to join the

Exclusive Club in order to stay up to date about the latest news regarding the opening of their

web shop and to enjoy special offers and discounts. In the daily sales report, an extra KPI was

added showing the percentage of how many Exclusive Club members the store had registered.

The amount of club members went from 5000 in January 2015 to 35.000 in September 2015

and this kept growing. When the website eventually opened Magnolia already had an extensive

online database consisting of customers who were already going to the Magnolia kiosks which

were now being targeted to buy their jewellery online.

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4.6 Problem definition

During an early stage of the internship it was recognized that consumers did not tend

to purchase jewellery online and it was decided to investigate how this could be improved.

Even though Magnolia opened their online store very recently; there was still a big difference

between the number of visitors on the site and the amount of online sales. As shown in figure

20, during the month October it took about 11000 monthly visits to reach 39 online orders, the

total of these orders reach an average of a monthly 1500€. Magnolia has the goal to improve

the amount of online orders within a year. The first six months, the objective is to reach 100

monthly orders and in the second six months these should be even further increased to 150

monthly orders.

During the first six months of the online store, from May to October, the site received about

29000 visits to reach 375 online orders. During this time interval Magnolia had an average of

62 orders per month. This shows that the site is having many visitors but Magnolia keeps

having difficulties in getting their consumers to buy online. It is important for the brand to realize

why consumers are not making online orders to understand how it can be improved. There are

different factors that may be possible reasons for the fact that Magnolia has a weak online

presence which are explained further in this chapter.

The ROPO effect

The principal expectation for the low number in online sales is the ROPO effect:

Research Online, Purchase Offline (Dauriz, Michetti, et al., 2013). There are 14 Magnolia

stores in Portugal, mostly easy accessible and in large urban centers. Customers may be

searching online but because of the ease of going to the shops, it is expected that customers

end up buying offline, especially because they can try on the product. For luxurious fashion

brands, the real-life shopping experience has always been regarded as an essential part of the

brand’s equity. According to Doran (2013) the thing luxury shoppers miss the most when

shopping online is the ability to have human interaction and to touch and try-on the product.

Figure 20: Site visits and purchases in October Source: www.analytics.google.com

Figure 20: Site visits and purchases in October Source: www.analytics.google.com

43

This is why it has been such a challenge for brands to make strong online connections with

consumers.

In the jewellery industry, there used to be a very strict line between fine jewellery

(precious metals and stones) and fashion jewellery (plated mixture of metals and crystal

stones) but these boundaries are starting to blur (Dauriz, Remy, & Tochtermann, 2013).

Currently, online jewellery sales holds 4 to 5% of the market and, at least for fine jewellery, it

is expected to reach until 10% by 2020 but it will not grow much more than that (Dauriz, Remy,

& Tochtermann, 2013). This is due to the fact that consumers prefer to buy expensive items

from physical stores because it gives them the opportunity to see the products in real-life and

because it feels more reliable to them. However, it is expected that fashion jewellery will grow

more than fine jewellery and that by 2020 it will reach 10 to 15% of the online jewellery market.

For Magnolia this is a good sign because their jewellery is affordable and the brand is

constantly receiving new designs from Israel. The brand is currently offering sterling silver

jewellery for affordable prices, combined with new product lines and materials, this could lead

to the interest of the younger and less affluent consumer. There is a big market of potential

online customers that Magnolia could reach to. Consumers aged between 18 and 34 are the

main users of online commerce. Yearly, this group spends more money online than any other

age group and despite having lower incomes than older adults, they spend around 2000€

annually on e-commerce (Smith, 2015).

Lack of exclusive online promotions

Another reason for the low number of online sales might be the possible lack of

perception of the benefits for an online purchase. To increase online shopping consumers

should have a motivation, for example, X% discount only in case of an online purchase.

Otherwise, as mentioned above, the tendency will be to prefer to purchase the products in the

physical store. When consumers search and compare products online, they are fast in making

their purchase and tend to buy it on the same day they conducted the online search (Doran,

2013). One third of the participants stated they would purchase the product in the store while

the remaining would buy it online. Magnolia is known for having many promotions at their

kiosks which might motivate people even more to finish their purchase at the store instead of

online. Considering the fact that Magnolia holds 14 stores in Portugal, all in the most frequently

visited shopping malls of the country, it could mean that consumers who are not living in these

areas also cannot profit from these promotions. Apart from a younger consumer market,

Magnolia could also be missing out on a potential market consisting of consumers living in the

more rural areas of the country by focusing too much on their promotions in the store.

44

Search engine ranking

Most visitors reach the Magnolia site by organic search; these account for about 6000

of the monthly sessions and it has an e-commerce rate of 0.54% which leads to a revenue of

in average 1200€ monthly. In relation to organic traffic, after doing some search engine

research it has become clear that Magnolia does not appear in the top results of Google when

searching for ‘online jewellery in Portugal’ or ‘online jewellery shop in Portugal’. According to

Lecinski (2011), this indicates that the brand is missing out on generic searchers – in this case,

potential customers who are using search engines to find new online jewellery brands. In fact,

previous SEO research for Magnolia Silver Jewellery done by Websystems (2016) has shown

that the most used keywords for organic search are brand related words. This means that the

website is poorly optimized and that Google does not generate much traffic other than from

people who already know the brand name. During the internship, this problem was already

recognized by the employees and the help of a SEO specialist was consulted. Regarding the

fact that Magnolia is already taking care of their SEO, no further attention will be paid to this

topic in the methodology and results analysis.

Online payment method

The shopping behavior analysis in figure 21 shows the visitors’ flow through the various

stages of the online shopping experience. At each stage the report shows the number of

sessions that entered, the number of sessions that abandoned and the number of sessions

that moved on to the next stage. Figure 21 shows that the Magnolia website has an extremely

high abandonment rate in the check-out stage of 99,96%. In a total of 13,150 sessions, 2,545

abandon the website at the check-out stage which is high considering that 31% of the sessions

continue to the check-out stage while from the check-out stage to the transaction stage only

0,31% continues. One assumed reason for this high abandonment rate could be the fact that

once arriving to the check-out stage, consumers will find out that the only payment options are

by credit card or with a PayPal account. Those who have neither of these options are therefore

forced to abandon a site and cannot continue with their online purchase. Several studies have

indicated that the lack of a preferred payment method was a reason to abandon a website

(Hokannen, 2017; Leggatt, 2014; Papageorgiou; 2013). Leggatt (2014) is describing a study

by the company Skrill who surveyed 2000 consumers about the reasons to abandon their

online purchases. More than a quarter stated to abandon their purchase if their preferred

payment method was not available and among younger shoppers (18-24) this percentage

would even rise to 32%. In Portugal, online payments with ATM services have proven to be

the most preferred method with 53% (SIBS, 2016).

45

Social media channels

Not only could the brand generate more online sales but it could also strive for more

engagement on their social media channels. On Facebook, the brand has 191.700 likes in total

while the engagement rate usually lies between one and five percent. Compared to other

similar pages on Facebook (the jewellery brands Pandora and Stone by Stone), Magnolia has

the lowest engagement rate as shown in figure 22. Notice that despite a lower amount of likes,

the brand Stone by Stone has a higher engagement rate than Magnolia which could mean that

the brand is doing something which Magnolia has not been able to achieve jet.

According to Dauriz, Remy and Sandri (2013) user-friendly websites and strong banner

ads will not be sufficient anymore to attract consumers. The most successful brands are

engaging and influencing consumers through targeted use of social media and work on

building a strong mobile presence.

Google analytics gives an overview of how many traffic the magnolia site gets from

social media and its engagement & conversion rates over time.The report for social media

Figure 21: Shopping behavior - site abandonments Source: www.analytics.google.com

Figure 44: Engagement rates. Source: www.facebook.com/MagnoliaPortugalFigure 45: Shopping behavior - site abandonments Source:www.analytics.google.com

Figure 21. Shopping behavior - site abandonments (www.analytics.google.com)

Figure 46: Engagement rates. Source: www.facebook.com/MagnoliaPortugalFigure 47: Shopping behavior - site abandonments Source:www.analytics.google.com

Figure 22: Engagement rates Source: www.facebook.com/MagnoliaPortugal

46

channels shows there are only two social media channels leading traffic to the website which

account for 16% of the total traffic. The bounce rate of 15,12% shows the sessions in which

the person left the site after visiting just one single page. Users visiting the Magnolia website

by clicking links on social media usually visited more than one page, in average 16 pages are

visited and the average time spend on the site was 4 minutes. However, the conversion rate

shows that Instagram made 0.00€ revenue whereas Facebook made €441.60 during the

month of November 2016 (Google analytics). Considering the time and effort that is being

invested on their social media channels every single day, Magnolia is not making a big revenue

through these channels.

Company structure

It looks like Magnolia is missing an online focus and a dedicated team for online

marketing. This might form another reason for why the brand has a weak online presence. The

online database consists mainly of customers who already visited the Magnolia kiosks. There

is an unbalanced amount between offline and online promotions. The site could be more user

friendly regarding navigation and payment methods and the lack of engagement on social

media compared with competitive brands, all are facts contributing to this statement.

Furthermore, the current company structure might not be capable of maximizing their digital

impact. First of all, the brand has only one employee (fulltime) who is mainly responsible for

handling all e-commerce orders. There is another employee (part-time) who is responsible for

both online and offline marketing. Apart from handling the e-commerce orders and the digital

marketing activities, both of these employees have many other daily tasks resulting in them

not being fully focused on Magnolia’s online channels and digital marketing. According to the

inbound marketing theory, in order to fully maximize the digital impact, constant optimizations

must be made for the actions carried out in order to improve content, email marketing, website

visits and social media engagement. This is necessary to understand if shifts in investments

are needed so that online campaigns can be improved, obtain a higher conversion rate and,

consequently, a higher number of online orders. It has been proved that employees do not feel

familiar with social networking and do not have the technical skills to use it (Leeflang et al.,

2014). Skills needed for marketing jobs are technical skills, awareness of internet marketing

and customer relationship management. The kind of digital marketing skills which are needed

include website construction, maximising the potential of social media, SEO, mobile

applications, customer conversion and knowledge of digital analytics to evaluate the

effectiveness of a digital presence. Without these skills it will be impossible for Magnolia to

communicate and connect quickly with online customers, to convert a website visitor into a

customer and it will be hard to understand which digital approaches are working best for their

brand.

47

5. Methodology

5.1 Research plan and design

As mentioned earlier, Magnolia very recently launched their online store and the brand

is still trying to figure out how to capture an online audience and generate more online sales.

Based on the theoretical framework the aim for this part of the internship report was to discover

the online buying habits of Magnolia customers, how Magnolia’s online presence is being

perceived and how it can be improved, on the basis of a case study. A mixed methods

methodology was chosen with a quantitative and a qualitative research phase to acquire more

information about the usability and possible improvements for Magnolia’s current online

channels. The first phase of the methodology consisted of quantitative research which was

done by an exploratory inquiry. This has been chosen as the most suitable technique in order

to gain a wide understanding about the user experience of the Magnolia website and their

social networks. The second phase consisted of qualitative research which was done by a

confirmatory focus group in order to gain a more in-depth insight to the main findings of the

inquiry. Figure 23 shows a visual representation of the research plan.

After both research phases had been conducted, a thorough, descriptive analysis of

the results would follow in Microsoft Excel. The whole focus group was typed out in different

excel sheets. Each sheet would demonstrate all the answers to one question, which were

categorized by numbers to facilitate the analysis. By comparing the results of both phases it

was possible to decide if the hypothesis were to be confirmed or not. Analysing the results of

both the questionnaire and the focus group further allowed to form some recommendations

which were also based on the theoretical framework.

Figure 23. Methodological design: phases and tasks

48

5.2 Conceptual model and research hypotheses

After reviewing the new digital way of communicating with consumers and, how the use

of inbound marketing as a digital strategy is proven to be cost effective and, how different

inbound marketing channels can be used to attract and delight customers, the exploration of

how Magnolia could improve their online channels was determined as the main objective of

this internship report. Considering the theoretical analysis, the following fundamental question

arises:

How can the digital impact of Magnolia Silver Jewellery Portugal be improved?

Considering the fact that the research question is an explanatory question, this research can

be seen as a case study research as it studies the case of Magnolia Silver Jewellery and their

digital improvement. According to Yin (1994 pg. 2-3) most case studies focus on qualitative

data but case studies can also be based on a mixture of qualitative and quantitative data and

he defines a case study as the following:

It is a way of investigating an empirical topic by following a set of predefined procedures. The case study

inquiry [1] copes with the technically distinctive situation in which there will be many more variables of

interests than data points, and as one results [2] relies on multiple sources of evidence, with data

needing to converge in a triangulating fashion and as another result [3] benefits from the prior

development of theoretical propositions to guide data collection and analysis. (Yin, 1994 pg. 13).

Many times it is assumed that a case study must have a qualitative research design, though

case studies can be based on any mix of qualitative and quantitative data. As stated above in

the light of this inquiry data will be recovered from a focus group and a questionnaire seeking

categorical rather than numerical responses.

In order to be fully able to explore this topic, the term ‘digital impact’ must be specified

in further detail. For the purpose of this internship report, digital impact was seen as the ability

to attract and engage online with consumers and to increase their purchase intentions.

Purchase intention refers to the tendency of consumers to purchase a certain product or

service (Coursaris, Van Osch, & Balogh, 2016). Essential for a high digital impact is the

distribution of content, Schneider (2016) argues the importance of distributing consistent

content across a number of channels to ensure as many consumers see it as possible. Table

1 was created to identify which online channels Magnolia is using and in which frequency.

49

To decide on which aspects Magnolia could improve their digital impact, this research

focussed on Magnolia’s website and social media accounts to study its effects on the consumer

behavior of current customers. For this part of the research it was chosen to focus only on the

most used online channels to be able to discover how they are currently being experienced by

Magnolia customers and on what aspects they could be revised. This part of the research was

in essence an exploratory study and therefore it did not have the objective to validate

hypotheses. However, as supported by the theoretical framework and by the problem analysis

of this internship report, the following hypotheses were put forward for the target sample of this

case study:

Channel Management by Magnolia

Magnolia’s website:

https://www.magnolia-jewellery.com/eu/

Magnolia has their online website which mainly

consist of their online shop. Furthermore it offers a

blog, brand info, contact info, service info. There is

few interaction and updated content available such as

presentations of new collections or, ‘latest news’ or

other industry related content. Social sharing buttons,

landing pages or CTA’s are not used.

Facebook:

https://www.facebook.com/MagnoliaPortugal/

The Facebook is used very frequently with 2

scheduled posts per day or 3 posts on

special/commemorative dates. New blog posts are

promoted on the Facebook page. Videos are used to

promote exceptional pieces. Other posts include

special promotions, comparisons between 2 pieces

asking to ‘vote for your favourite’ or showing social

influencers wearing Magnolia jewellery.

Instagram:

https://www.instagram.com/magnolia_jewellery_pt/

Instagram is used two times per day, in the morning

and evening. Posts include more inspirational pictures

of either social influencers or actual customers

wearing the jewellery. ‘The Colour of the Week’

includes a series of posts promoting a certain colour

with exceptional jewellery and other inspiring lifestyle

pictures in the same colour.

Pinterest

https://nl.pinterest.com/magnoliajewel/

Created but not frequently used.

YouTube:

https://www.youtube.com/channel/UCiUF-0m-

cigUqaoCWHXRvHw

Created but not frequently used.

Table 1 Magnolia's online channels

https://www.magnolia-jewellery.com/eu/

https://www.facebook.com/MagnoliaPortugal/

https://www.instagram.com/magnolia_jewellery_pt/

https://nl.pinterest.com/magnoliajewel/

https://www.youtube.com/channel/UCiUF-0m-cigUqaoCWHXRvHw

https://www.youtube.com/channel/UCiUF-0m-cigUqaoCWHXRvHw

50

H1. Magnolia has a low amount of online sales due to the ROPO effect.

H2. Customers are not satisfied about the Magnolia website and its payment method.

H3. Customers are not being inspired by Magnolia’s social media channels to buy

online.

H4. Online reviews have a strong influence on the buying decision.

H5. The best potential online target lies in the age group of 20 until 39 years.

5.3 Participants

The composition of the collected sample for the first research phase was 543

participants, which present the following composition profile regarding gender and age, as

shown by the table 2.

GENDER

Absolute frequency Relative frequency Cumulative frequency

Masculine 31 5,7 5,7

Feminine 512 94,3 100

TOTAL 543 100

AGE


Until 19 13 2,4 2,4

20 – 29 193 35,5 37,9

30 – 39 185 34,1 72

40 – 49 107 19,7 91,7

50 – 59 36 6,6 98,3

Above 60 9 1,7 100

TOTAL 543 100

` RESIDENCE AREA

Absolute frequency Relative frequency

Aveiro 26 4,8

Beja 1 0,1

Braga 43 7,9

Table 2 Demographic characteristics of the quantitative sample

51

Bragança 1 0,1

Castelo Branco 4 0,8

Coimbra 53 9,8

Évora 4 0,8

Faro 8 1,5

Guarda 5 1,0

Leiria 34 6,3

Lisboa 172 31,2

Portalegre 2 0,4

Porto 124 22,8

Santarém 15 2,8

Setúbal 34 6,3

Viana do Castelo 6 1,3

Vila Real 1 0,1

Viseu 10 2,0

TOTAL 543 100

The majority of the participants were female aged between 20 and 39, from Lisbon.

The fact that the majority of the participants were aged between 20 and 39 can be attributed

to the way in which the research was published, through the social media channels of

Magnolia. Leitão (2011) refers to the utilization of social media in Portugal and shows that in

terms of gender, there is a slight dominance in the female gender with 60,7% according to

dates in 2010. Regarding age, Leitão (2011) shows that almost 75% of the social media users

in Portugal are aged between 15 – 24 years followed by almost 60% of users aged between

25 – 34 years old. By looking at the areas of residence it could be stated that the majority of

the sample lives in the bigger cities, namely Lisbon, Porto and Coimbra. Note that the cities

with a low number of participants also do not have a Magnolia kiosk in the neighbourhood. To

finalize, 50% of the respondents indicated to be working as an employee in the private sector

while 14% indicated to be unemployed.

The composition for the collected sample of the second research phase was 7

participants which present the following composition profile regarding gender and age, as

shown by table 3. Just as in the previous research phase, the majority of the sample was

female and aged between 20 and 39.

52

GENDER


Masculine 1 14,3 14,3

Feminine 6 85,7 100

TOTAL 7 100

AGE


20 – 29 3 42,8 42,8

30 – 39 2 28,6 71,4

40 – 49 1 14,3 85,7

50 – 59 1 14,3 100

TOTAL 7 100

5.4 Procedures

Firstly, during the exploratory phase of the research, a questionnaire was created on

Google Forms which, after pre-testing, was shared by Magnolia Jewellery on their social

network channels and email database in order to add credibility to the research. The

questionnaire was posted for the first time on Magnolia’s Facebook account on the 2nd of

February 2017 and it was send out as their weekly newsletter on the 7th of February 2017. The

questionnaire remained open 24/7 for answers during 2,5 weeks, until the 21st of February

2017. This allowed to collect the measures of the perception of quality and satisfaction and

behavioural intention of the customers regarding Magnolia’s online presence.

Magnolia customers were asked to participate in a consumer behavior research by

filling in a short questionnaire. The customers were asked to provide clear and genuine

answers as the questionnaire was assured to be anonymous and data would only be used for

academic reasons. The target consisted of both female and male customers of Magnolia

Jewellery and the exclusion criteria was whether or not respondents were following the brand

on social media, continuing only with the respondents who indicated to follow Magnolia.

Therefore the sample is considered as a convenience sample and it allows to replicate the

study to the whole database of online customers.

Table 3 Demographic characteristics of the qualitative sample

53

During the confirmatory phase of the research, qualitative data was collected through

a focus group. Data selection was done by publishing a post on the 1st of March on Magnolia

Jewellery’s Facebook page inviting customers to participate in a face-to-face interview. It was

chosen to describe the event as a face-to-face interview in order to prevent ambiguities

concerning the term ‘focus group’ amongst the customers. Customers interested to participate

were asked to respond by sending an email to [email protected] with their

names, age and phone number. During the following days, a total of 7 participants were

randomly selected and called on their phone to provide further information. On the phone, the

purpose and some topics of the interview would be explained. Two exclusion questions were

asked which were whether or not the customer followed Magnolia Jewellery on social media

and if the customers ever bought something online. Afterwards the customers’ presence would

be confirmed for the focus group and a confirmatory email was send with all the necessary

information, an example can be found in attachment A. The focus group was held on the 7th of

March 2017 at one of the study rooms in IADE – Universidade Europeia. One day prior to the

interview, all participants were contacted again for one last confirmation and with the exact

room number of where the interview would be conducted.

The interview was attended by Margarida Baptista who was presented as the brand’s

representative to take anonymous notes, and Joana Matias who was presented as the

candidate’s tutor. Some general rules were explained before the start of the interview and the

participants were asked to provide genuine answers and not to worry about providing negative

feedback. It was ensured that any kind of comments would be welcomed and that participants

did not need to answer in order to please the brand. The structure of the interview and its

duration were explained and participants were asked not to hold private conversations but to

share everything with the group. Finally, confidentially issues would be reinforced by assuring

that none of the participants would be identified in the results analysis and data would only be

used for academic purposes. At the end of the interview all participants received a voucher to

use in any of the Magnolia stores.

For a descriptive analysis of both quantitative and qualitative data, Microsoft Excel 2013

was used.

5.5 Research instrument

In the exploratory phase of the research, a questionnaire was created as the research

instrument for the inquiry. The questionnaire was divided into three aspects: the first part

consisted of 13 items including demographic and behavioural questions to identify a buyer

persona, the second part contained 6 items with questions about online consumption habits

and the third part consisted of 9 items with questions related to Magnolia’s online presence.

mailto:[email protected]

54

The first questions included questions to require personal information such as age, profession,

leisure activities etc. According to Leboff (2011) an effective marketing strategy includes

knowing the buyer persona in order to offer information that is useful for the customer. In the

second part questions were asked in order to understand the online consumption habits such

as content and search preferences, reasons to buy jewellery, reasons to use social media,

behavior on social media and preferred payment methods. The last part of the questionnaire

contained questions to study the experiences on Magnolia’s website and social media

channels, and to discover how customers discovered the brand and its website. Questions

would vary between multiple choice, thick all, and open rate questions, and 1 to 5 Likert scale

(1 – totally not suitable; 2 – not suitable; 3 – neutral; 4 – suitable; 5 – totally suitable) about

Magnolia’s online presence on social media. A complete version of the questionnaire can be

found in attachment B.

In the research phase posterior to the exploratory phase, a guide was created for the

focus group to serve as the research instrument, see attachment C for a complete version of

the focus group guide. The first part of the interview included some introductory questions to

allow the participants to present themselves. The second part of the interview included

questions about consumption habits, social media and Magnolia’s presence on social media.

In the third part of the interview some final questions would be discussed before thanking all

the participants for their collaboration. All questions were open rate questions and ‘yes’ or ‘no’

questions were avoided. For a deeper explanation from the participant’s side, secondary

questions were asked such as ‘Can you give an example?’ ‘Why is that important for you?’

‘For which reason?’. This was also done in order to define different types of arguments for the

statements or opinions given by the participants.

55

6. Results analysis

This part of the research provides a descriptive analysis of the quantitative results

obtained during the explorative research phase followed by a descriptive analysis of the

qualitative results obtained during the confirmatory research phase.

6.1 Quantitative results analysis

Buyer persona

The first part of the questionnaire included questions to identify buyer persona(s) which

studied their leisure activities (Q7), shopping behavior (Q8, Q9) motivations to buy jewellery

(Q10), reasons to shop online (Q13) and the most consumed types of content on the internet

(Q14, Q15).

In relation to leisure activities, 415 of the 543 respondents (76%) indicated cinema to

be their preferred leisure activity. This is followed by open air activities which is named 331

times and 318 respondents indicated shopping to be one of their favourite activities.

Figure 24 shows there are two main reasons to buy jewellery, either to buy a gift for

someone or to buy jewellery for daily use. Both reasons were named 239 times by the

respondents showing two clear reasons to buy Magnolia jewellery. Another frequently named

reason to buy jewellery is to wear on a special event or a special day, this reason was named

in total 170 times by the sample.

The questions regarding shopping behavior revealed that 342 of the 543 respondents

(63%) usually shop more than 10 times per year, not including the supermarket. Only 25

respondents indicated to go shopping 2 times per year. When shopping, 65% indicated to

spend until 25% of their income and 24% indicated to spend 10% or less of their income in

shopping expenditures.

0

50

100

150

200

250

300

To offer For day-by-day use

To wear on aspecial event

Promotion Other

# re

spo

nse

s

Reasons to buy jewellery

Figure 24. Reasons to buy jewellery

56

The most searched types of content on the internet include health and wellness, news,

entertainment, and fashion which are all indicated by more than 50% of the sample. When

asked where this content is usually being searched for, there was a clear majority with 433

respondents indicating to search on search engines such as Google or Yahoo and 401 of the

respondents usually search for content on social media rather than on specific websites or

newsletters mailed to them.

Of all male respondents, 81% indicated to buy Jewellery because they want to offer it

to someone and 74% of them indicated to shop more than 10 times per year. Of the online

male shoppers, 65% indicated already to have visited and bought something from Magnolia’s

website. The most named reasons for male respondents to shop online is either because it is

considered as faster and easier or because there are products online that they cannot find in

the store. Compared with the total sample, men tend to search less on social media (70%) but

more often use search engines to find information (87%).

The female respondents more often tend to buy jewellery for themselves because they

are looking for something to wear day-by-day. Fashion, wellness and health are the most

searched content when searching for information online. For 60% of the female respondents,

going shopping is one of their favourite leisure activities. 83% said to have visited the Magnolia

website, while just 54%, indicated to frequently shop online. These statistics indicate the ROPO

effect somehow accounts for a part of Magnolia’s customers who do not usually shop online

but this will be further confirmed and studied during the focus group

Online consumer behavior

This part of the questionnaire had the objective to discover typical consumer habits,

focusing especially on online consumer behavior. One goal was to discover how respondents

usually search for new information (Q16), furthermore it also studied their favourite social

media networks and motivations (Q17, Q18), their engagement intention, reason to unfollow a

brand (Q19, Q20) and their preferred online payment method (Q21).

With 70,5% the majority of the sample indicated to use search engines when searching

for a brand or a product they have never bought before. Of all the respondents, 265 have

indicated to visit physical stores making this the second most trusted resource when searching

for new information. As shown by figure 25, Facebook is the most used social network in this

sample with 94%, followed by Instagram with 53%. Pinterest was only named 8 times in total

which also happens to be one of the less used online channels by Magnolia.

57

The most named reason for using social media is ‘to maintain contact with friends,

family and colleagues’ in 92% of all the answers. Other most frequently named reasons were

‘to follow the news’ with 61%, and ‘to keep up with brands and receive promotions’ with 60%.

Keeping up with public figures or bloggers was named in 22% of the answers.

Apart from liking and leaving comments on the page of a brand’s social media account,

28% of the respondents indicated to have shared something on their own page which was

related to a brand or a specific product. Considering the fact that most users of this sample are

on social media to maintain contact with friends and family, too much publication from a brand

on their timelines could cause them to unfollow the brand. Repetitive and boring content was

the number one reason to unfollow a brand for 74% of the respondents. Irrelevant content and

a lack of engagement were also reasons for the respondents to become annoyed and stop

following a specific page.

As stated before the Magnolia website has been visited by a large part of the sample;

82% of the respondents said they regularly visit www.magnolia-jewellery.com, however, 52%

said that they do not shop online. When questioned about their favourite online payment

method, 62% of the respondents had the preference to pay with ATM services. Figure 26

shows how respondents voted for different online payment methods. Currently the Magnolia

website only offers payments with credit card or PayPal.

0 100 200 300 400 500 600

Facebook

Instagram

Google +

Snapchat

Twitter

Pinterest

Other

Social media preference

Figure 25: Social media preferences

http://www.magnolia-jewellery.com/

58

By cross analysing consumer behavior on social media with demographic data, a

relation can be identified between the openness towards brands on social media and age.

Table 4 shows the older the age group, the less brand related content was being shared.

Respondents aged between 20 and 39 were the most likely to post brand related content or to

share a brand’s original post.

Age Shared brand related content

Up to 20 0

20 – 29 61

30 – 39 61

40 – 49 26

50 – 59 5

Above 60 1

This corresponds to the findings in table 5 which shows that the same age group between 20

and 39 years old also most frequently indicated to use social media in order to keep up with

brands and receive promotions compared to other age groups.

Table 4 Brand related shares per age group

Credit card 17%

Paypal 14%

ATM reference

62%

Bank transfer7%

Preferred online payment

Figure 26. Online payment preferences

Figure 26. Online payment preferences

59

Magnolia’s online presence

This part of the questionnaire served to understand the customer’s opinion about

Magnolia’s online presence. The questions had the objective to study the customers’ first

contact with the brand and the website (Q22,Q23), reasons to follow Magnolia online (Q29),

engagement intention (Q27, Q28) evaluation of their social media channels (Q30 – Q32) and

evaluation of their online shop (Q25, Q26).

Age group Number

Up to 20 Maintain contact 11

Follow the news 7

Follow brands 8

Organize events 2

7

20 - 29 years Maintain contact 184

Follow the news 114

Follow brands 134

Organize events 20

Follow public figures or bloggers 63


Follow the news 109

Follow brands 106

Organize events 11



Follow the news 67

Follow brands 49

Organize events 4



Follow the news 25

Follow brands 22

Organize events 1


Above 60 years Maintain contact 8

Follow brands 3

Follow brands 1

Table 5. Reasons to use social media per age group

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Most of the respondents did not discover the Magnolia brand online, on the contrary,

82% of the sample indicated that their first contact with the brand was in a physical store. By

focussing only on how the respondents discovered about the Magnolia website, figure 27

shows that a big part of the sample indicated to know the website through social media or

heard about it in the stores.

The most named reasons for the respondents to follow Magnolia on social media were

[1] to stay updated about Magnolia, [2] brand love and [3] to receive promotions. The

respondents who have indicated to love the brand either liked the brand and its jewellery (98)

or they truly hold a passion for the brand and also recommend it to others (32). Compared to

the total sample there is a small number of active followers who not only recommend the brand

to others but also share Magnolia’s content on their own social network. 27% of the

respondents indicated to have shared a post of Magnolia or a piece of jewellery they had

bought from the brand on their own social networks. There is still a big majority who is not

engaging in such a way with Magnolia on social media for which the most named reasons were

the lack of the need to share, privacy reasons or because jewellery was bought as a gift for

someone else and would therefore not be shared on someone’s own social networks. It could

be stated that the sample engages in few word of mouth conversations, at least not online, but

this topic first needs to be studied further during the focus group to be able to drive conclusions.

When asked to rate Magnolia’s presence on social media, 72% of the respondents

indicated to find it suitable or very suitable on a 1 to 5 Likert scale. With 75% the majority also

agreed that Magnolia posts an appropriate amount of times per day and was therefore not

Search engines 19%

Bloggers5%

Campaigns 5%

Stores 29%

News 2%

Social media 30%

Reference 10%

Awareness of Magnolia website

Figure 27. Sources to the Magnolia website

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considered as being too intrusive. The respondents indicated their favourite posts to be about

jewels, promotions and trends in jewellery which were are named more than 300 times. Posts

with look inspirations are less popular which was named 194 times in total. When cross

analysing this data with different age groups, as shown in table 6 it can be seen that the

respondents aged between 20 and 29 were the most interested in these fashion related type

of posts by the brand, which is also the age group who most often searched online for fashion

related content. In accordance with earlier statistics it seems that a younger age group is more

interested in discovering brands online and fashion related content, indicating again that this

is an interesting age group for Magnolia to focus on with their online shop.

Age Likes posts regarding look inspirations

Until 20 3

20 – 29 86

30 – 39 70

40 – 49 24

50 – 59 9

Above 60 2

Regarding the website, the majority of the respondents was also satisfied about the

website, 82% indicated to experience the website positively or very positively and 85% would

recommend the site to others. These high positive results about user experience on the

website does not explain why the number in online sales is so low compared to the sales in

the stores, therefore the topic was brought under further exploration during the focus group.

6.2 Qualitative research analysis

The focus group is described according to the laddering technique, this technique is

used in semi-structured interviews. Laddering was first introduced in 1988 by Reynolds and

Gutman and it is used to understand the way in which the informant sees the world (Reynolds

& Gutman, 1988). By asking the participants ‘why is that important to you?’ it is possible to

determine different arguments of attributes (A), consequences (C) and values (V) which will

form a ladder for a specific statement or opinion. Attributes are considered as technical

arguments about product or brand features, consequences are functional arguments which

explain what benefit the consumer gets and values are considered to be emotional arguments

which explain how the consumer feels about a brand or product.

Table 6 Interest in fashion related posts

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Real citations by the participants were also added to the results analysis for a more in-

depth sketch of the situation and to demonstrate their thought-paths. As assured, the citations

are kept anonymously and are therefore solely showed in between quotation marks.

Brand characteristics

To start the focus group some introductory questions were made such as how the

participants got to know Magnolia. Four out of seven participants discovered the brand for the

first time in one of the shopping malls, two found out about Magnolia on social media and one

participant stated to be a fixed customer since she received a Magnolia present for the first

time. The participants were also asked to name three words which made them remember of

Magnolia. Table 7 shows the most named characteristics which are showed in bold. Each

ladder represents a characteristic with different arguments for why this characteristic

represents Magnolia Silver Jewellery.

Ladder 1 Ladder 2 Ladder 3

V Self-esteem

↑

C to look stylish

↑

C - to wear beautiful

jewellery

↑

A - design

V - Exclusiveness

↑

C - Refreshing

↑

C - Find jewellery that

others don’t have

↑

A - Originality

V – Feel like a good husband

↑

C – To show my appreciation

↑

C - Gives me security to

offer a good gift

↑

A - Quality

Ladder 4 Ladder 5 Ladder 6

V – Sense of belonging

↑

C – Most jewellery brands are

too expensive

↑

C – to be able to buy jewels

↑

A – Accessible price

V – Confidence

↑

C – sophisticated image

↑

C – feminine packaging

↑

A – Elegance

V – Security

↑

C – Many different jewellery

styles

↑

A – I can choose gifts for

any kind of person

↑

A – Versatility

Table 7 Characteristics of Magnolia

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Competition

The three most named competitor brands were Swarovski, Stone by Stone and Pedra

Dura. A technical argument for buying Swarovski would be the Swarovski crystals (A), the

luxurious stores (C) would be a functional reason to visit the brand and the emotional argument

for Swarovski was the totally different (more premium) shopping experience (V). The use of

different materials, natural stones and the cheaper price were reasons to visit Pedra Dura or

Stone by Stone (A). A cheaper price was valued, in particular, because it would be easier to

make an unplanned purchase.

‘’Na Stone by Stone costumam haver coisas mais económicas que se compram mais

rapidamente.’’

Interestingly, there was one participant who indicated not to aim for the direct competition but

rather likes to explore new brands on social media (A) because it would be easy to see if a

brand is interesting or not, by reading the comments (C). Online shopping is becoming safer

(V) and in general people will start paying less attention to brands by itself.

‘’Acho que hoje em dia as pessoas não tao assim tanto fidelizadas numa marca ao não ser que

a marca tenha programas de incentivo. Acho que hoje em dia baseamos muito mais em 'olha

esta peca é gira' e se houver um bom marketing ou publicidade por trás as pessoas compram.

Já não existe tanto aquele tabu do medo de usar o visa nas compras online.’’

Behavior on social media

Reasons to be on social media matched with the sample in the questionnaire confirming

that the contacts with friends, family and colleagues is the most important reason to use social

media, especially when it concerns long distance relationships. Interestingly, some participants

spoke about the influence of having their friends on social media. The participants agreed that

social media leads to having conversations with others, either virtually or personally and their

opinion is influenced by the opinion of others on social media.

‘’Hoje em dia é um meio de comunicação muito rápido quer virtualmente quer depois boca em

boca. O Facebook da muito para conversas boca em boca.’’

‘’Também é mais fácil de nos apercebemos da partilha de opinião. Os likes, por exemplo, numa

página de um marca que a gente nem conhece bem mas depois lá vimos que uma amiga(s)

nossa gosta da pagina e isso tem uma influencia na nossa opinião.’’

The interviewees agreed that their decision can be influenced by reading the opinion

of others, depending, however, on the situation. Reviews are especially being valued in the

catering and hotel industry and consulted at websites such as TripAdvisor, Booking and

Zomato, rather than on social media. These reviews have an effect in their decision to buy or

book something.

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When asked which type of reviews would have the most effect on their decision five of the

interviewees agreed negative comments would be the first they read. Whereas an extensive

list of negative reviews could stop some of the interviewees from buying something, positive

reviews (A) could have an encouraging effect on the buying decision (C). There were clear

differences between the customers who participated in the focus group. While the majority

indicated to trust more in what they saw in the stores, there are some interviewees who

indicated to always check for reviews because this would be more confidential than what the

salespeople tell (V). They have had experiences in the past in which positive reviews

influenced their opinion and made them buy what they had seen online.

‘’Eu não vou a lado nenhum sem ver os reviews todos. Eu sou aquela cliente que eu não pago

o meu dinheiro sem verificar TUDO e se vale mesmo a pena ou não, faco sempre uma analise

compreensiva nas redes sociais e se gostar do que vejo, encomendo.’’

‘’Se um restaurante por algum motivo me chamou a atenção, eu não deixo de ir só porque há

um feedback negativo. Mas se for muita gente a dizer mal se calhar já não vou. Em relação a

produtos, prefiro sempre ir a loja depois de ter lido os reviews.’’

Influence of social media

Publicity on social media had influenced two of the interviewees to buy something

online but the majority did not had online experiences that made them change their opinion

and buy what they had seen online. According to three of the interviewees, Facebook is getting

overloaded with publicity and it was considered as annoying to see publicity in the newsfeed

of brands that were not being followed. Essentially, the interviewees agree that the biggest

influence social media could have is to create brand awareness. If a product or a brand

appears many times on someone’s newsfeed it will stay in people’s mind and if done correctly

it might be the first thing to come to mind whenever the person is ready to buy. However, a

brand’s newsletter would have more influence in the buying decision than social media

according to four of the interviewees.

‘’Para mim o que tem mais influencia na minha decisão de compra é a newsletter.’’

‘’As marcas nas redes sociais só têm uma influencia pelo aparecer no meu newsfeed mas não

é porque vou ativamente a procura. Ainda não comprei nenhum produto imediatamente porque

tivesse visto nas redes sociais.’’

‘’Pode ser que estando numa rede social e se marca continuar a aparecer, ficamos nos, as

vezes inconscientemente, pensando naquela marca quando queremos uma coisa. É mesmo

para ficar no top of mind. Por isso as redes sociais podem ter um influencia porque marcas ou

produtos continuam a aparecer.’’

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Online vs. physical stores

In this part attention was paid to find reasons for why customers like to go to the physical

store after doing online research and what would it take to place an online order instead. The

most frequently named reasons were the fact that jewellery is something personal (V) which

can last for a long period (C) so it would always be a preference to visit a store in order to have

a real notion of the colour and its size (A). Also, the convenience of having a shop close by is

an extra reason for not shopping online. However, the interviewees believe to place more

online orders if they would not have a physical store nearby. There was a clear division

between two different types of customers, four of the interviewees had never bought from

Magnolia online and hold a strong preference for the kiosks. Nonetheless, the interviewees

indicated there were some things the brand could do in order to stimulate them to buy online.

‘’Uma coisa que me faz comprar mais online é quando uma empresa faz uma campanha onde

ta a oferecer portos. Porque se o produto tiver o mesmo preço na loja física ou na loja online,

eu posso ficar em dúvidas. Se os portos forem gratuitos em conjunto com mais alguma

promoção/campanha, a decisão é logo feita para o online.’’

‘’Para eu encomendar jóias online tem de haver mais um desconto na loja online que não há

na loja física, em cima dos portos gratuitos.’’

The idea of not having to pay for shipping costs was something very attractive for the

interviewees. In some cases it could even lead to more purchases when the shipping costs

are free from a certain price point. A technical argument (C) for this would be that the consumer

rather pays for an extra product than for shipping costs. The reason why is because it would

make the consumer feel good because he or she saved money on shipping costs (V), even if

the product would cost more than the actual shipping costs.

Another interesting fact is that the interviewees who stated not to buy jewellery online,

did sometimes order from other websites. When asked which websites, there was one website

which was named by everyone: La Redoute. The technical argument behind it was unanimous

for all; on every product page, the site shows reviews of actual clients who already had ordered

the product (C). This is again confirming the influence of reviews on buying decisions and it

enhanced the question how Magnolia could improve their own website in order to get more

online sales. The interviewees agreed the site should have a better visibility of the products

regarding its actual size. One of the participants mentioned that the competition, Stone by

Stone, shows pictures on their website with models wearing the jewels which is considered as

important for online shopping because it would make it more faithful (V). The interviewees

agreed it provides a better idea of the actual size of the jewellery and this kind of pictures could

also serve as inspiration about how to wear and combine different pieces of jewellery.

One more concern about the website was the difficulty to find jewellery which belongs

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to the same collection set; the website is not showing which earrings belong to which necklace.

According to the interviewees the site shows recommendations when looking at a product but

these are not perfect. If a product belongs to certain set of jewellery, the other pieces should

be shown under the recommended section because it was considered valuable to know the

exact pieces of the same jewellery set. Further, four of the interviewees would appreciate if it

would be easier to buy product separately from each other such as only the necklace or only

a pendant because it would give them more freedom to mix and match pieces with each other.

‘’Sugestões acertadas são muito importantes porque para mim deixa-me de influenciar para

comprar mais uma coisa que não estava a pensar em comprar antes.’’

Word of Mouth

Regarding word of mouth, the interviewees stated that if they would talk about

Magnolia, it would normally happen mouth to mouth and not online. When discussing which

type of posts would encourage customers to share them or talk online with one another, the

majority agreed it would either have to be something they could participate in or something

announcing major discounts.

‘’Por o causo o único post que me lembro de ter este efeito foi o post onde anunciarem este

inquérito presencial porque realmente foi a primeira que senti mesmo que podia contribuir com

qualquer coisa.’’

‘’Tem de ter um fator WOW qualquer. Por exemplo, estamos aqui a falar um pouco da Magnolia,

eles lançaram aqui há dias uma publicação para ajudar os homens a escolher a jóia perfeita.

Isso é um motivo não só para eu partilhar (porque foi alguma coisa diferente do que o habitual)

como para falar com um amigo... Nem que seja daqui á um mês ou dois.’’

If the interviewees would be Magnolia’s social media manager for one day, the majority

indicated to focus on exclusive online discounts or promotions. Interestingly, five of the

interviewees agreed to work on Magnolia’s loyalty program because they felt Magnolia’s

current loyalty club had low value and could be done much better. One of the interviewees

stated that she was not aware of the advantages of being a Magnolia loyalty member. Magnolia

does not have a club card (A) which some of the interviewees considered unfortunate because

they did have club cards from other brands which allowed them to collect points. According to

them this would be more useful (C) than the current promotions of ‘take three, pay two’ or ‘30%

discount’ in the stores. By collecting points in exchange for a discount or a certain gift, the

customer would feel more in control (V) because the discount could be used whenever it was

pleased and it would take away the pressure of having to buy something in a certain timeframe.

The Body Shop was named as an example of a brand with a good loyalty program because it

gives the interviewees the feeling that the more they buy, the more advantages they will have.

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7. Discussion

The main questions regarding Magnolia’s online presence and user experience, while

surveyed, were presented in the previous chapter. This chapter establishes the relationship

between the results of the research, the literature review and the main conclusions. After

discussing the results and hypothesis, limitations and future research, a conclusion follows

which will be given as a set of 11 recommendations for Magnolia Silver Jewellery to consider.

This internship report serves as a final work to complete the master’s degree in Fashion

Branding and Design at IADE – Universidade Europeia and Universidade da Beira Interior.

The aim is to investigate how Magnolia Silver Jewellery can improve their digital impact after

having discovered that the brand could use some reorganization in their digital marketing

strategy. The increasing importance of digital channels in the consumers’ buying decision has

led to a significant and fast change in consumer behavior (Gomes, 2014). In fact, this has

inspired many brands to invest more in online media channels, and to perform various digital

marketing activities. The critical point here is that despite of the increasing brand activity on

social media, most brands do not have a defined digital marketing strategy and are still

struggling with the challenge to encourage consumer interaction and participation on their

online channels (Chaffey, 2016; Leeflang et al., 2014).

According to Lecinski (2011) the Zero Moment of Truth is the new step in the buyer’s

journey which provides consumers with all kinds of information about a brand, product or

service before even making a purchase. Consumers trust more in the information they find

online and base their decisions on the opinions of others. This effect is also called word-of-

mouth, or, in the online environment word-of-keyboard (Rosa, 2014). This implies that it is

crucial for brands to have an online presence and to be noticed by consumers during their

online research or else the competition will capture their attention. Coiné and Babbit (2010)

state that brands or companies who refuse or fail to adapt to these new standards will not have

a long future ahead. By looking more closely at the buyer’s journey it becomes clear that even

though searching for information online, consumers are not always ready to buy. Transactional

marketing messages advertising products or services will therefore not always gain attention

because consumers might be looking for another type of information.

Marketing can no longer focus on simply pushing a message into consumers, which is

characteristic for the traditional outbound marketing theory. Empowered consumers are

switching devices, switching channels and looking for information whenever it suits them

instead of whenever it suits a company or a brand to deliver their message. Therefore the

theoretical framework focusses on the inbound marketing theory with the aim of discovering

what brands can do to attract strangers to their website and turning them into potential

customers. Different stages in the buyer’s journey require different digital marketing activities,

different online channels and different metrics to analyse for future improvements (Halligan &

68

Shah, 2014). After studying various inbound channels and how to use them effectively, it

becomes clear on what points Magnolia is missing out which could explain their low number in

engagement rates and online sales.

The exploratory study based on the case of Magnolia Silver Jewellery has to objective

to discover the user experience on their online channels and specific aspects on the website

and social media channels that need improvement. In accordance with the theoretical

framework the expectations are that Magnolia has a low amount of online sales due to the

ROPO effect - Research Online Purchase Offline (H1). It is further expected that customers

are not satisfied about Magnolia’s website and their online payment methods (H2) and that

Magnolia’s presence on social media is not inspiring customers to buy online (H3). It is also

expected that the buying decision is strongly influenced by online reviews (H4) and the best

potential online target is expected to be aged between 20 and 40 years (H5).

After a descriptive analysis of the results from the questionnaire and focus group, the

hypothesis are confirmed except hypothesis 2 which is only half confirmed. The results from

the questionnaire indicated that a large majority of the respondents rated the website positively,

on the contrary to what was expected. Regarding the payment method it can be confirmed that

customers are not satisfied since 62% indicated to prefer payments with ATM services, which

is not available at Magnolia’s website. This confirms the findings of the SIBS study (2016)

which states that online payments with ATM services are the most preferred in Portugal.

The confirmation of hypothesis 5 corresponds the theory from Smit (2015) who stated that the

most promising market for e-commerce lies between 18 and 34 years old as they spend more

money online than any other age group. It is found that online reviews do have a strong

influence on the buying decision which confirms the theory of Lecinski (2011) and the results

found by Godes and Silva (2012).

Before continuing with the recommendations to improve the digital impact of Magnolia,

some remarks have to be made about limitations in this study and future research. First of all,

the skewed sample distribution regarding gender causes some difficulties in generalizing the

results to the whole population. Furthermore, the chosen methodology for the questionnaire

whereby categorical responses are applied rather than numerical responses made it harder to

conduct analysis and validate hypothesis. On top of this, the questionnaire included a couple

of thick-all questions whereas the study had the objective to discover different preferences

amongst consumers and therefore it would have been better to apply only multiple choice

questions. For future research it is also recommendable to shorten the questionnaire where

possible, the ideal length should not exceed 25 questions. The longitude of the questionnaire

could have had a negative impact on the answers of the respondents. An explanation for the

length of the questionnaire is the fact that it was made in cooperation with the brand and

therefore it was requested to include some questions which fitted better with other purposes

69

of Magnolia Silver Jewellery.

The research design was made in such a way that it studied the current customers and

their point of view on the digital marketing activities of the brand. This design is limited in that

it does not study the competitors or other brands who did succeed in maximizing their digital

impact. For future research it would be definitely recommended to adjust the research design

by adding benchmarking and investigating successful online brands. This can be done by one-

by-one interviews with the marketeers of those brands to gain a more detailed understanding

in different strategies, tactics and metrics which have proven to be successful in practice, rather

than what is proved by the literature.

The sequence of the methodological design might also be a limitation as an exploratory

phase was performed before the qualitative phase. This was done in order to first gain a wide

insight into the user experience at Magnolia’s online channels and to discover a set of main

concerns before focusing on more in-depth insights. However, the qualitative phase brought

along new topics and concerns which should be confirmed with another quantitative research.

Due to the time limitations for this final work it has not been possible to confirm the new findings

which have emerged from the focus group. In future research it is recommended to perform a

qualitative phase before the quantitative phase as this allows to deepen on the various aspects

of the problem and then confirm all the findings with confirmatory research. A recommendation

would be to first gain in-depth insights with one-by-one interviews or focus groups and test the

findings with an inquiry developed for a bigger sample. Further research on this topic should

also include a more extensive exploration of the literature regarding the complete buyer’s

journey by applying the pains and gains model of Osterwalder. This will allow for a better and

more in-depth description of the user experience.

Conclusions

The following recommendations are proposed for Magnolia Silver Jewellery to

consider. The recommendations are based on the theoretical framework of this report and

defined after a thorough exploration of the results analysis of the questionnaire and the focus

group. A division is made in general recommendations for Magnolia’s online presence,

recommendations for the website, recommendations for social media marketing and some

additional recommendations.

General recommendations

1. Magnolia should distinguish buyer personas in order to create remarkable

content which is relevant for different customer profiles. Quantitative result

analysis has provided information to propose three different buyer personas for

Magnolia Silver Jewellery which are demonstrated in the figures 28, 29, and 30. Each

buyer persona focusses on demographical facts, typical behaviors and, the needs and

70

goals are defined for each buyer persona. The buyer personas are created by the

support of the theories obtained during the master’s degree in Fashion Branding and

Design and Rockcontent (n.d). The three different buyer personas represent one for

the middle aged female customer who prefers to shop for jewellery at the physical

stores. The other two personas represent customers who have a preference to shop

online for various reasons, one persona for the male customer segment and the other

for the younger, female segment.

Figure 28. Buyer persona – middle aged female

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Figure 29. Buyer persona - male customer

Figure 30. Buyer persona - young female

72

2. The digital impact should be improved by adjusting the current company

structure or by employing the services of a digital marketing agency. Maintaining

a strong digital presence is difficult to manage along with other tasks required to running

a business. To maximize the overall ROI of Magnolia’s online channels, a dedicated

team is needed to take care of different tasks such as researching the target audience,

SEO optimization, producing content, analysing digital marketing activities and

managing social media accounts. As stated earlier in the problem definition, Magnolia

currently has one part-time employee who is responsible for digital marketing activities.

The brand became aware of their lack in employees responsible for digital marketing

and the importance of producing content. As a result, in January 2017 Magnolia started

a partnership with the online content creator NiT – New in Town. This organization will

be responsible for Magnolia’s content production for their social media accounts and

the blog.

3. Magnolia Silver Jewellery online should focus on a younger age group between

20 and 39 years. As confirmed by the quantitative result analysis, this age group is the

most likely to share or repost content from brands and it is the age group with the

highest interest in following brands on social media next to maintaining contact with

friends and family. Also, as confirmed by Smit (2015) in the theoretical framework, this

is the age group who spends the most money online compared to any other age group.

Website recommendations

4. As a development strategy Magnolia should offer an exclusive online collection.

Regarding the fact that the potential online market consists of younger age group it

means that this segment has less money to spend. Therefore it is proposed to keep

this exclusive online collection at a lower price point than in the stores. The idea is to

create a collection with simple jewellery and leaving out pieces with an extravagant

design or with an overwhelmingly use of precious stones. During the focus group it was

revealed that the younger age group feels Magnolia has an excessive amount of

jewellery which in their opinion is more suitable for an older age group. This collection

should maintain Magnolia’s elegant and simple style and add a bit of trendiness to

capture the younger customer who likes to express their own style by following the

latest trends in fashion.

5. Improve the product information pages. Qualitative analysis has revealed an

important reason for the ROPO effect. The lack of a clear product visibility on the

website causes customers to abandon the website and visit the closest store the see

the jewellery they had seen on the website. Attachment D includes an example of a

random product information page at the Magnolia website. The information page on

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the website includes details about the product, a size guide, zoom function, guarantee

information, information about deliveries and returns, recommendations and close-up

pictures of the jewellery which, in some cases, are shown from different angles. As a

recommendation to improve the product visibility it is proposed to add pictures on the

website with models wearing the jewellery, especially for the most expensive products.

This is recommendable because it would remove the concern of not knowing the actual

scale of the jewellery presented at the website. By adding pictures with a model wearing

their products, Magnolia can justify the actual size of the jewellery and it will put the

brand in a more faithful position.

6. Add a review option on the product pages. Both quantitative and qualitative

analysis, and the theoretical framework agree that the reviews of others play an

essential role in the buying decision. The brand might put itself at risk but in accordance

with the theoretical framework the fear for an overwhelming amount of negative reviews

is misplaced. Actually, by showing reviews, including negative reviews a brands shows

authenticity, confidence and truthfulness. During the qualitative results analysis

something very important became clear about the effect of these reviews. There was a

clear preference for one specific website where even the participants who did not enjoy

online shopping would order products. The reason for ordering from this website was

unanimous: every product page would show reviews from previous clients explaining

their experience.

7. Adjust the online paying options and add payments with debit card. Quantitative

analysis has proved this to be the preferred online paying method for 62% of the sample

which corresponds with the findings in the theoretical framework. The fact that several

studies have proved that the lack of a preferred payment system is reason to abandon

a website, emphasizes the relevance of this recommendation.

Social media recommendations

8. Create exclusive online promotions and announce them on all the online

channels. Jewellery is considered as a luxurious and personal product and therefore

the preference goes to purchase these items in a physical store. Magnolia should strive

to communicate the benefits of ordering jewellery online if it wants to improve their

sales through this channel. In accordance with the findings from the qualitative results

analysis, online promotions will motivate customers to buy online, even if it would mean

that the customer would visit physical store to try the products and return home to order

it from the website.

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9. Involve customers with User Generated Content. According to Kotler, Kartajaya and

Setiawan (2016) connected consumers and their opinions / reviews are more powerful

than the marketing messages delivered by brands. The new wave of consumers like to

base their decisions on the opinion of others like themselves. Therefore it is

recommendable for Magnolia to inspire their customers to share content wearing

Magnolia products. This allows other consumers to see how other clients have

experienced Magnolia and its products, and it could help these consumers in their

buying decision during their online research.

Additional recommendations

Although not proved by neither the questionnaire nor the focus group, based on the

theoretical framework the following two recommendations are left to be made.

10. Add social sharing buttons and a comment section to the Magnolia blog. As stated

by the theoretical framework, an important part of a digital marketing strategy is the

planning and production of content (Chaffey, 2016). This content has to be published on

various online channels to maximize its reach and create brand awareness. An effective

way to drive visitors to a website is by creating blog posts and distributing them through

the various channels on social media and email. These can easily be shared by visitors on

their own social media networks through social buttons at the beginning or end of a blog

post. By creating content and posting new blog posts for Magnolia it became clear that the

blog could use some improvements. Most importantly, the blog is lacking social sharing

buttons and a comments section which is necessary to encourage interaction and

maximize reach.

11. Add Calls to Actions and Landing Pages to website. Landing pages and calls to action

are necessary to convert visitors to potential clients because it allows to maintain contact

with new visitors (Chaffey, 2016; Halligan & Shah, 2014). Furthermore it has also been

proved that landing pages and calls to action are the digital marketing activities with the

most influence on traffic and lead increase (Hung, 2013). By navigating on the Magnolia

website it becomes clear that it lacks an engaging landing page inviting new visitors to

register for their newsletter. In this way, Magnolia is missing out on potential customers

who are visiting their website for the first time because these visitors are not being inspired

to leave their contact details for more information, newsletters and promotions.

75

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Attachments

Attachment A – Invitation for focus group

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Attachment B– Questionnaire

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Attachment C - Guide focus group

Interview script

This part will contain the script made prior to the face-toc-face interview. It was used

mainly as a guide during the interview and to manage the time spend on each topic.

Step 1: Preparation

Objective = Provide a deeper insight to questions in the questionnaire and

reduce ambiguities in its collected answers, especially about topics regarding online consumer

behavior. Gain an understanding about the opinion of Magnolia customers about Magnolia’s

image, and its presence on social media.

Schedule date and location

Invite customers

Step 2: Realization of the focus group

Introduction – Present myself and thank all participants for their time and collaboration.

Present Margarida Baptista as the brand’s representative with the aim of taking anonymous

notes. Present Joana Matias as the internship tutor. Explain all participants that the interview

will take about 90 minutes and that it will first start with some introductory questions in order for

everyone to presents themselves and ‘break the ice’. Afterwards the interview will contain

questions regarding three main subjects which will be consumption habits, social media and

Magnolia’s presence on social media. Before ending the interview some final questions will be

discussed and everyone will have the opportunity to share their last thoughts. At the end of the

interview all participants will receive their own Magnolia voucher. All participants will be asked

to answer as genuine as possible, any kind of feedback is welcome and they do not need to

worry themselves with giving the right answer. The idea is to answer exactly what they are

thinking and Magnolia does not want answers for gratify or delight. Explain everyone that the

interview is highly confidential, all answers will be kept anonymous and none of the participants

shall be identified during the results analysis. Finally, request participants to maintain the group

conversation and not evolve into private conversation with respect to the duration of the

interview.

Introductory questions:

- Podem apresentar-se ao grupo?

- Podem nomear três palavras que, na sua opinião, descrevem a Magnolia?

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Topic – Consumption habits

- Come teve o primeiro contacto com a Magnolia

- O que a/o levou a comprar na Magnolia? (e.g. qualidade, preço/promoções, proximidade,

novas colecções, design)

- Por qual razão principal costumam comprar jóias? (e.g. oferecer, promoção, data

especial)

- Qual o tipo de jóias que costumam comprar online? (anéis, pulseiras, fios ou colares,

brincos, conjuntos)

- Que outras marcas de jóias costuma comprar? Porque?

- Quais são as figuras públicas (mulher) com qual se identifica? Porque?

Estimated time: 19:00 – 19:20

Topic – Social media

For a brand to stay relevant for their consumers it is necessary to find out on which sites they are

spending their time and for what reasons. (Erdogmus & Cicek, 2012; Leboff, 2011; Mangold & Faulds,

2009).

- Quais as vossas redes sociais favoritas? Porque?

- Podem-me indicar 2/3 razoes por quais estão a utilizar as redes sociais?

- Por qual razão estão a seguir a Magnolia nas redes sociais?

Online reviews and social media have become an important factor for purchase decisions (Erdogmus &

Cicek, 2012; Hutchinson, 2017; Mangold & Faulds, 2009).

- Em quais canais de comunicação confia mais para fazer as suas decisões de

compra? Por qual razão? (e.g: Reviews de produto – blogs – redes sociais – publicidade – revistas –

jornais – lojas/vendedoras- websites – boca a boca)

- Qual a influência das redes sociais na sua decisão de compra?

- Entre as mensagens de comunicação de uma marca e os reviews de desconhecidos,

em qual informação confiaria mais? Por qual razão?


Topic – Magnolia’s presence on social media

Word of mouth is more important than what a brand is saying about themselves. Content needs to

motivate people to talk about it and recommend it to others

(Kirtis & Karahan, 2010; Leboff, 2011; Peixoto, 2010).

- Já recomendou a Magnolia a alguém? Por qual razão?

- Conversa com outras pessoas sobre coisas que viu nas redes sociais da Magnolia?

Consegue dar um exemplo de um post? (Se não, o que a levaria a falar..?)

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There are different types of social media users who all behave in a different way on social media as a

reaction to different types of content. Adjust content accordingly to the preferences of the customers in

order to stay relevant and gain their attention. The use of social influencers in a social media marketing

strategy engages the audience and it can generate new leads and even new customers. (Erdogmus &

Cicek, 2012; Hanna et al., 2011; Jackson, 2015; Kiezman et al., 2011)

- Consegue lembrar-se de algum post da Magnolia que a/o influenciou a comprar uma

jóia? Como é que este post teve uma influência?

- Qual acha que é a rede social que a influencia mais na sua decisão de compra? Por

qual razão?

- Pode dar a sua opinião sobre o conteúdo que a Magnolia partilha nas redes sociais?

Consegue dizer de qual é que gosta mais?


Final questions

- Se fosse gerente das redes sociais da Magnolia por um dia, o que fazia?

- Quais as marcas de moda com quem se sente mais envolvida/o através das redes

sociais?

Final word – check with all participants if anyone wants to share some additional

thoughts or questions. Conclude the interview and thank everyone for their time and

honest answers. Offer the Magnolia voucher to each of the participants and explain

how it works and its validity.

Estimated time 20:10 – 20:30

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Attachment D – Product information page

acknowledgements - ubibliorum.ubi.pt2.3 outbound marketing vs. inbound marketing 7 2.4 the inbound...

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