slide 2.1 chaffey et al., digital marketing: strategy, implementation and practice, 5 th edition ©...

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Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013

Chapter 2

Online marketplace analysis:Micro-environment

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Learning objectives• Identify the elements of an organisation’s online

marketplace that have implications for eveloping a digital marketing strategy

• Evaluate techniques for reviewing the importance of different actors in the microenvironment: customers, intermediaries, suppliers and competitors as part of the development of digital marketing strategy

• Review changes to business and revenue models enabled by digital markets.

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Questions for marketers• What are our capabilities for understanding our online

marketplace? • How relevant is the behaviour of the actors in the micro-

environment to the future of our business?• How do I complete a marketplace analysis and how

does this inform our digital marketing planning?• How are customers’ needs changing as digital platforms

develop and what are the implications of such changes?• How do I compare our online marketing with that of our

competitors?• How do we find suitable intermediaries at the planning

stage of a digital marketing strategy?

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Scenario for marketplace analysis• You have been appointed by Blackcircles.com

as digital marketing manager.• Your task is to create a digital marketing plan for

the next year and beyond• What would you need to review about the online

marketplace to help create your plan?

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Figure 2.1 Blackcircles.com

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Figure 2.2 The Internet marketing environment

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Figure 2.3 An online marketplace map

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Figure 2.4 Correlation between search volume in Google Trends and retail sales volumeSource: Chamberlin (2010)

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Example searches – implications?

Table 2.1 Top 10 search terms for all retailing and for apparel

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Tools for marketplace analysis

• Google Agency Tookit– http://www.google.com/ads/agency/toolkit.html – Key Tools:

http://www.smartinsights.com/marketplace-analysis/google-tools-you-may-not-know-about/

• Alexa: www.alexa.com or www.compete.com

• Hitwise: www.hitwise.com

• Nielsen: www.nielsen-netratings.com

• Comscore: www.comscore.com Press releases

• IMRG: www.imrg.org

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Issues in analysing the online marketplace

Table 2.3 The micro-environment: issues for digital marketers

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Figure 2.5 A model of the Internet marketing conversion process. It shows key traffic or audience measures (Q0 to Q4), first-time visitors (Q2) and repeat visitors (Q2R) and key conversion efficiency ratios

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Figure 2.6 An example of a conversion model

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Evaluating demand levels

• Level of Internet access– Includes type of access – broadband and mobile

• Consumers influenced by using online channel– Includes understanding type of sites which have

influence

• Transact online– Includes different types of transactions, not just

sales, e.g. support, forum comments, etc.

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Figure 2.7 Model showing conversion between the digital channel and traditional channels during the buying process

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Figure 2.8 Research Online Purchase Online exampleSource: Google, 2010

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Figure 2.9 Variation of broadband penetration in different countries Source: OECD (http://www.oecd.org/sti/ict/broadband)

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Figure 2.10 Consumer Internet ActivitiesSource: http://internet2go.net/ (accessed 31 May 2011)

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Figure 2.11 Development of experience in Internet use

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Figure 2.12 Reasons for and for not purchasing over the Internet in the UKSource: Chamberlin 2010

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Consumer characteristics• Demographics:

– Age, gender, social group• Webographics

– Access methods and times• Personas:

– Dulux example

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Figure 2.13 Internet use by businesses in European countriesSource: European Commission, 2009

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Dulux persona example• Aims:

– The aim was to position Dulux.co.uk (Figure 2.13) as “the online destination for colour scheming and visualisation to help you achieve your individual style from the comfort of your home”. Specific outcomes on the site are to browse colours, add colours to a personal scrapbook, use the paint calculator and find a stockist. Further aims were to ‘win the war before the store’i.e. to provide colour help tools that can help develop a preference for Dulux before consumers are in-store and to prompt other ideas to sell more than one colour at a time.

– Specific SMART objectives were to increase the number of Unique Visitors from 1M p.a. in 2003 to 3.5M p.a. in 2006 and To drive 12% of visitors to a desired outcome (e.g. ordering swatches).

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Figure 2.14 Dulux site (www.dulux.co.uk)

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Target audience variation

• Would be adventurous 25-44 women, online• Lack of confidence with previous site:• - Gap between inspiration (TV, magazines, advertising) and lived

experience (Large DIY sheds,nervous discomfort)• - No guidance or reassurance previously available currently on their

journey• Colours and colour combining is key• Online is a well-used channel for help and guidance on other topics• 12 month decorating cycle• Propensity to socialise• Quality, technical innovation and scientific proficiency of Dulux is a

given

Based on research, it was found that the main audience for the site was female with these typical demographics and psychographics:

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Example personas• First time buyer.

– Penny Edwards, Age: 27, Partner: Ben, Location: North London, Occupation: Sales Assistant

• Part time Mum. – Jane Lawrence, Age: 37, Husband: Joe, Location:

Manchester, Occupation: Part time PR consultant

• Single Mum. – Rachel Wilson, Age: 40, Location: Reading,

Occupation: Business Analyst

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Business consumer characteristics• Variation in organisation characteristics

– size of company (employees or turnover)– industry sector and products– organisation type (private, public, government, not-for-profit)– application of service (which business activities do purchased

products and services support?)– country and region.

• Individual role– role and responsibility from job title, function or number of staff

managed– role in buying decision (purchasing influence)– department– product interest– demographics: age, sex and possibly social group.

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Consumer behaviour models• Information / experience seeking behaviour

models• Hierarchy of response buying process models• Multi-channel buying models• Trust-based models• Community participation models

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1. Information / experience seeking behaviour models

• Directed information-seekers. These users will be looking for product, market or leisure information such as details of their football club’s fixtures. They are not typically planning to buy online.

• Undirected information-seekers. These are the users, usually referred to as ‘surfers’, who like to browse and change sites by following hyperlinks. Members of this group tend to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements.

• Directed buyers. These buyers are online to purchase specific products online. For such users, brokers or cybermediaries that compare product features and prices will be important locations to visit.

• Bargain hunters. These users (sometimes known as ‘compers’) want to find the offers available from sales promotions such as free samples or competitions. For example, the MyOffers site (www.myoffers.co.uk) is used by many brands to generate awareness and interest from consumers.

• Entertainment seekers. These are users looking to interact with the Web for enjoyment through entering contests such as quizzes, puzzles or interactive multi-player games.

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2. Hierarchy of response buying process models

Figure 2.15 A summary of how the Internet can impact on the buying processfor a new purchaser

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Figure 2.16 Initial product search showing e-retailers availableSource: Google, 2011

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Figure 2.17 Currys’ product category page (www.currys.co.uk)

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3 Multichannel buying models

Table 2.5 The impact of channel experience on customer relationship

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4 Trust-based models

Figure 2.19 Segmentation based on information need and trustSource: Adapted from Forrester (2006) Teleconference Driving Sales With SegmentationAnalyst: Benjamin Ensor of Forrester Research, 27 February 2006

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Competitor benchmarking• Activity – which aspects of a competitors online

marketing activity should be reviewed?– – – – – –

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Suggested benchmarking activities

Benchmarking tools:See: http://www.smartinsights.com/marketplace-analysis/competitor-analysis/online-competitor-benchmarking-tools/

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Figure 2.20 Benchmark comparison of corporate websitesSource: Bowen Craggs & Co (www.bowencraggs.com)

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Figure 2.21 Taobao (www.allthingsgreen.net)

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Types of portal

Table 2.8 Portal characteristics

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Figure 2.22 Disintermediation of a consumer distribution channel showing: (a) the original situation, (b) disintermediation omitting the wholesaler,and (c) disintermediation omitting both wholesaler and retailer

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Figure 2.23 From (a) original situation to (b) disintermediation or (c) reintermediation or countermediation

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Figure 2.24 Example of a channel chain map for consumers selecting anestate agents to sell their property

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Porter’s five forces

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Impact of the Internet on the five competitive forces

Table 2.7 Impact of the Internet on the five competitive forces

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Figure 2.25 Different types of online trading location

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Figure 2.26 Alternative perspectives on business models

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Publisher revenue models• Revenue from subscription access to content. • Revenue from Pay Per View access to documents.• Revenue from CPM display advertising on site (e.g. banners ads,

skyscrapers or rich media).• CPM stands for ‘cost per thousand’ where M denotes ‘Mille’. • Revenue from CPC advertising on site (pay per click text ads)• CPC stands for ‘Cost Per Click’. Advertisers are charged not simply

for the number of times their ads are displayed, but according to the number of times they are clicked.

• Revenue from Sponsorship of site sections or content types (typically fixed fee for a period) –

• Affiliate revenue (typically CPA, but could be CPC)• Affiliate revenue is commission based, for example if you display

links to Amazon books on your site, you can receive around 5% of the cover price as a fee from Amazon. Such an arrangement is sometimes known as Cost Per Acquisition (CPA). Amazon, and others offer a tiered scheme where the affiliate is incentivised to gain more revenue, the more they sell. Hence this is often called a pay-per-performance ad deal.

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Figure 2.27 Revenue model spreadsheetSource: SmartInsights.com

slide 2.1 chaffey et al., digital marketing: strategy, implementation and practice, 5 th edition ©...

Documents

digital marketing planning

digital marketing manager

online marketing

apparel slide

digital markets

digital platforms

online marketplace map

microenvironment slide