Transcript Title in yellow

Slide 2.1
Chapter 2
Online marketplace analysis:
Micro-environment
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.2
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.
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.3
Questions for marketers
• What are our capabilities for understanding our online
marketplace?
• How relevant is the behaviour of the actors in the microenvironment 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?
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.4
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?
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.5
Figure 2.1
Blackcircles.com
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.6
Figure 2.2
The Internet marketing environment
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.7
Figure 2.3
An online marketplace map
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.8
Correlation between search volume in Google Trends and retail
sales volume
Figure 2.4
Source: Chamberlin (2010)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.9
Example searches – implications?
Table 2.1
Top 10 search terms for all retailing and for apparel
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.10
Tools for marketplace analysis
• Google Agency Tookit
– http://www.google.com/ads/agency/toolkit.html
– Key Tools:
http://www.smartinsights.com/marketplaceanalysis/google-tools-you-may-not-know-about/
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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
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.11
Issues in analysing the online marketplace
Table 2.3
The micro-environment: issues for digital marketers
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.12
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
Figure 2.5
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.13
Figure 2.6
An example of a conversion model
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.14
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.
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.15
Model showing conversion between the digital channel and traditional
channels during the buying process
Figure 2.7
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.16
Figure 2.8
Research Online Purchase Online example
Source: Google, 2010
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.17
Figure 2.9
Variation of broadband penetration in different countries
Source: OECD (http://www.oecd.org/sti/ict/broadband)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.18
Figure 2.10
Consumer Internet Activities
Source: http://internet2go.net/ (accessed 31 May 2011)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.19
Figure 2.11
Development of experience in Internet use
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.20
Figure 2.12
Reasons for and for not purchasing over the Internet in the UK
Source: Chamberlin 2010
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.21
Consumer characteristics
• Demographics:
– Age, gender, social group
• Webographics
– Access methods and times
• Personas:
– Dulux example
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Slide 2.22
Figure 2.13
Internet use by businesses in European countries
Source: European Commission, 2009
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.23
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).
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.24
Figure 2.14
Dulux site (www.dulux.co.uk)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.25
Target audience variation
Based on research, it was found that the main audience for the site
was
female with these typical demographics and psychographics:
• Would be adventurous 25-44 women, online
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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
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.26
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
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.27
Business consumer characteristics
• Variation in organisation characteristics
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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.
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.28
Consumer behaviour models
• Information / experience seeking behaviour
models
• Hierarchy of response buying process models
• Multi-channel buying models
• Trust-based models
• Community participation models
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.29
1. Information / experience seeking
behaviour models
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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.
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.30
2. Hierarchy of response buying process models
A summary of how the Internet can impact on the buying process
for a new purchaser
Figure 2.15
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.31
Figure 2.16
Initial product search showing e-retailers available
Source: Google, 2011
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.32
Figure 2.17
Currys’ product category page (www.currys.co.uk)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.33
3 Multichannel buying models
Table 2.5
The impact of channel experience on customer relationship
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.34
4 Trust-based models
Figure 2.19
Segmentation based on information need and trust
Source: Adapted from Forrester (2006) Teleconference Driving Sales With SegmentationAnalyst: Benjamin Ensor of Forrester Research, 27 February 2006
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.35
Competitor benchmarking
• Activity – which aspects of a competitors online
marketing activity should be reviewed?
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Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.36
Suggested benchmarking activities
Benchmarking tools:
See: http://www.smartinsights.com/marketplace-analysis/competitor-analysis/online-competitor-benchmarking-tools/
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.37
Figure 2.20
Benchmark comparison of corporate websites
Source: Bowen Craggs & Co (www.bowencraggs.com)
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.38
Figure 2.21
Taobao (www.allthingsgreen.net)
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Slide 2.39
Types of portal
Table 2.8
Portal characteristics
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.40
Disintermediation of a consumer distribution channel showing:
(a) the original situation, (b) disintermediation omitting the wholesaler,
and (c) disintermediation omitting both wholesaler and retailer
Figure 2.22
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.41
From (a) original situation to (b) disintermediation or
(c) reintermediation or countermediation
Figure 2.23
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.42
Example of a channel chain map for consumers selecting an
estate agents to sell their property
Figure 2.24
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.43
Porter’s five forces
Bargaining
powers of
customers
Power of
suppliers
The business
Extent of rivalry
between
competitors
Threat of
subsitutes
Threat of new
entrants
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.44
Impact of the Internet on the five
competitive forces
Table 2.7
Impact of the Internet on the five competitive forces
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.45
Figure 2.25
Different types of online trading location
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.46
Figure 2.26
Alternative perspectives on business models
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Slide 2.47
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 payper-performance ad deal.
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5 edition © Pearson Education Limited 2013
th
Slide 2.48
Figure 2.27
Revenue model spreadsheet
Source: SmartInsights.com
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013