CH.3.pptx DIGITAL MARKETINGSTRATEGY, IMPLEMENTATION AND PRACTICESeventh Edition

Copyright © 2019, 2016, 2012 Pearson Education, Inc. All Rights Reserved
Chapter 3
Online marketplace analysis:
micro-environment
Part 1
Digital marketing fundamentals
DIGITAL MARKETING
STRATEGY, IMPLEMENTATION AND PRACTICE
Seventh Edition

Capter 3 - Online Marketplace analysais:
micro- environnement
Main Topics:
• Situation analysis for digital marketing
• Digital marketing environment
• Understanding customer in digital markets
• Consumer. Choice and digital influence
• Customer characteristics
• Competitors
• Suppliers
• New channel structures
• Digital business models for e-commerce

Situation analysis for digital marketing

situation analysis: Collection and review of information
about an organization's external environment and internal
resources and processes in order to refine its strategy.

analysis should review these factors which we cover in this chapter::
A. Customers : Digital proposition and communications should be based around the
customer their characteristics, behaviors, needs and wants. So our view is that marketers
should start with the customer when analyzing the situation.
B. Marketplace analysis including intermediaries, influencers and potential partners .
This s a summary of the main online influences on purchase during the customer journey or
path to purchase. We will see that there is a wide range of influences including search
engines, publisher media sites, blogs, review sites and social networks which should all
be considered.
c. Competitors . Benchmarking customer propositions and communications activities
against competitors can identify opportunities for new approaches and digital marketing
activities that need to be improved.
D. Wider macro-environment . These are the broader strategic influences we cover in
Chapter 4 , including social, legal, environment, political and technology influences. Another
major part of situation analysis involves an inward-looking, internal review of the
effectiveness of existing digital marketing approaches. This will include reviewing

digital marketing environment
The digital marketing environment involves two major
elements:
(1) micro-environment
(2) macro-environment

digital marketing environment
Micro-environment Macro-environment
Micro-environment
The players (stakeholders)
and their interactions
which influence how an
organization responds in
its marketplace.
Macro-environment
Broad forces affecting
all organizations in the
marketplace, including
social, technological,
economic, political, legal
and ecological influences.

Understanding customer in digital markets
• Customer segments
• Search intermediaries
• Intermediaries, influencers and media or publisher sites
• Destination sites and platforms

Elements of the online marketplace
map
The main elements of the online marketplace
map presented
1. Customer segments. The marketplace analysis helps identify
and summaries different target segments for an online business in
order to understand their online media consumption, behaviour and the
type of content and experiences they want online.
2 Search intermediaries. These are the main search engines in each
country. Typically Google, Yahoo!, Bing and Ask, but others are
important in some markets such as China (Baidu), Russia (Yandex)
and South Korea (Naver).

Elements of the online marketplace
map
3. Intermediaries, influencers and media or publisher sites. Media
sites and other intermediaries such as individual influencers, social
networks, aggregators and affiliates are often successful in attracting
visitors via customer search or direct to their websites.
4 Destination sites and platforms. These are the sites that the
marketer is trying to attract visitors to, including transactional sites by
retail, financial service, travel, manufacturers and other companies or
non-transactional sites, such as brand or relationship building sites

Understanding customer journeys

Purchase decision flow for digital consumers

Figure 2.3 An online marketplace map

Customer analysis
From the micro-environment perspective, customers are important actors in
a company’s immediate trading environment, and analysis of their behaviour is
central to understanding of the trading situation and ultimately digital planning.
Consumer behaviour analysis

Customer analysis
can be considered from two perspectives:
1. Demand analysis. This involves understanding the potential and actual
volume of visitors to an online presence and the extent to which prospects
convert to tactical and strategic outcomes, e.g. lead generation and sales.
2. Digital consumer behaviour. Here a marketer wants to understand the
needs, characteristics and digital experiences or behaviours of target
consumers. These variables are often collectively referred to as customer
insight. Based on this analysis, customer segments can be created which
will be used to develop targeting approaches as part of strategy and
planning (described in Chapter 4 onwards).

online marketplace map
The key ratios to consider are:
• Awareness efficiency: target web users/all web users;
• Attractability efficiency: number of individual
visits/number of seekers;
• Engagement efficiency: number of active visitors/number
of visits;
• Conversion efficiency: number of purchases/number of
active visits.

Figure 2.4 Model Showing conversion
between the digital channel and traditional
channels during the buying process

Consumer choice and digital influence
• Customer characteristics:
A. Demographic variables
B. Psychographic and behavioural variables
• Social media and emotions
• Consumer Personas
• The buying process

Customer characteristics
 There are two key areas which can prove very fruitful
when aiming to identify consumer variables:
1. Demographic variables . any personal attributes that tend to
remain static throughout an individual’s lifetime, or evolve
slowly over time – such as age, gender, race etc.
2. Psychographic and behavioral variables . Any aspect of a
consumer’s perceptions, beliefs and attitudes that might
influence online behavior, and in particular a consumer’s
intention to shop.

Figure 2.9 Framework for understanding
online customer experiences
Source: Rose and Hair (2011)

influence or motivate the consumer to engage
with a digital
An important list of concepts which can positively or negatively influence or motivate the
consumer to engage with a digital offer:
1. Information processing (IP) is very important as it shapes how a
consumer deals with available data and information that will influence their
future behavior
2. Perceived ease of use also needs consideration by digital marketers, as
the easier a website or mobile site is to use the more likely a customer will
have a positive online experience.
3. Perceived usefulness refers to the extent to which the digital offer fits
with the customer’s daily life, for instance, shopping, booking train tickets,
banking.
4. Perceived benefits: if a customer feels they will be rewarded in some
positive way by Engaging with a digital offer this is likely to generate support
for an online brand.
5. Perceived control: if a customer is a skilled user of the digital technology
in question then they will feel they are able to function successfully in this
environment. Earlier in

Figure 2.10 A summary of how digital media can
impact on the buying process in a new purchase

buying process in a new purchase
Digital media support the consumer buying process as
follows:
1. Consumer: unaware. Company: generates awareness (of
need, product or service)
2. Consumer: aware of need, develops specification.
Company: position features, benefits and brand.
3. Consumer: supplier search. Company: generate leads
(engage and capture interest)
4. Consumer: evaluate and select. Supplier: assist
purchase decision

buying process in a new purchase
5. Consumer: purchase. Company: facilitate purchase
6. Consumer: post-purchase evaluation and feedback.
Company: support product use and retain business

Competitors
The shape and nature of online competitive markets
competitor analysis and benchmarking

Suppliers
Digital marketing intermediaries
Online intermediary sites

New channel structures

Digital business model for e-commerce
Source: SmartInsights.com with permission.

Figure 2.15 Alternative perspectives on
business models

Case study; Boo hoo – learning for the
largest dot com failure
Questions
1) Discuss which strategic market assumptions and decisions led to
Boo.com’s inevitable failure?
2) Compare and contrast the marketing strategy of Boo.com with
successful online travel and leisure retailer lastminute.com. Suggest
what made the difference between success and failure
3) Use the framework of the marketing mix to appraise the marketing
strategy and tactics of Boo.com
4) In many ways the vision of Boo’s founders was ‘ideas before their
time’. Give examples of e-retail techniques adopted by boo.com that
are now common place.

CH.3.pptx DIGITAL MARKETING STRATEGY, IMPLEMENTATION AND PRACTICE Seventh Edition

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