Digital

Marketing
Management
DMM - Session 3
Digital media
• Digital equivalents of these traditional media
• Display ads
• Pay-per-click (PPC)
• Search engine optimisation (SEO)
• Affiliate marketing
• Email marketing
RACE
Using digital media
channels to support
business
Six categories of
digital communications
tools or media channels
6 ‘I’ s of e-marketing mix
• Digital marketing communications differ significantly from
conventional marketing communications
• Digital media enables new forms of interaction and new models for
information exchange
• Practical benefits of digital marketing
• Interactivity
• Intelligence
• Individualization
• Integration
• Independence of location
• Industry structure
Key communications concepts for digital marketing

1. Permission marketing
2. Content marketing
3. Customer engagement
Online marketplace analysis:
micro - environment
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

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 Introduction
• The demands on marketers who are responsible for planning
digital marketing strategies are growing considerably as they
work out how to manage the complexities of the competitive
marketplace, digital social communities and innovative
technologies.
• The growth in use of digital media and technology has led to
new paths-to-purchase that are highly complex as purchase
decisions are potentially influenced by many touchpoints.
• Paths-to-purchase are the different sites, channels and devices
and information sources that consumers use to inform their
purchase decision for a product or service.

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 Introduction…
• Potential customers are using multiple devices (sometimes simultaneously) to gather
information that will inform their purchase decisions. This process is known as multi-
screening .
• Online marketplace: Exchanges of information and commercial transactions between
consumers, businesses and governments completed through different forms of online
presence such as search engines, social networks, comparison sit
• eWOM (electronic word of mouth): is an extension of traditional face-to-face word-of-
mouth, whereby communication exchanges between individuals take place in digital
environments.
• Digital marketing practitioners often use social media networks and blogs to engage
their target audience in eWOM conversations.

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Situation analysis for digital marketing
• Situation analysis is the collection and review of information about an
organisation’s external environment and internal resources and processes in order
to refine its strategy
• The digital marketing environment or ‘online marketplace’ that an organisation
competes in is complex and dynamic.
• Organisations should carefully analyse the market context in which they operate,
identify opportunities and then plan how they can compete effectively.
• Understanding an organisation’s environment is a key part of situation analysis ,
and forms a solid foundation for all types of marketing planning but especially
when devising a digital marketing strategy

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What should be reviewed in situation analysis?
A. Customers. Digital marketing propositions and communications should be based
around the customer – their characteristics, technology usage, behaviours,
needs and wants.
B. Marketplace analysis. Including intermediaries, influencers and potential
partners. There are many influences to consider, including search engines,
publisher media sites, blogs, review sites and social networks. Marketplace
analysis also involves reviewing opportunities and threats from digital media
and technology, including new business and revenue models.
C. Competitors. It is essential to understand how organisations compete;
benchmarking customer propositions and communications activities against
direct and indirect competitors and out-of-sector businesses can identify
opportunities for new approaches and digital marketing activities that need to
be improved.
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What should be reviewed in situation
analysis?
D. Wider macro-environment. including social, legal, environmental,
political and technological influences.
E. Internal review. of the effectiveness of existing digital marketing
approaches. This will include reviewing current results from digital
marketing by review of key performance indicators (KPIs) and
dashboards and the organisational capabilities and processes used to
manage digital marketing, summarised as strengths and weaknesses.

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The digital marketing environment
➢The (digital) marketing environment involves two major elements:
1. Micro-environment(also known as the operating environment)The players and
their interactions, which influence how an organisation responds in its
marketplace. These players include the customers whose needs and wants are to
be satisfied, along with the competitors, intermediaries and suppliers.
2. Macro-environment (sometimes known as ‘the remote environment’) Broad
forces affecting all organisations in the marketplace largely beyond the
immediate control of an organisation, including social, technological, economic,
political, legal and ecological influences

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Situation analysis for digital marketing

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Situation analysis for digital marketing

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The digital marketing environment
• While digital has become mainstream and the distinction between
on-and offline has been eroded, it is important to recognise that not
all organisations are fully digitally engaged and the importance of
digital channels differs between industry sectors.
• Therefore, each organisation has its own unique space within the
online and offline world, which should be considered when analysing
its marketing environment and planning a digital marketing strategy.

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The digital marketing environment
• The marketing environment can have a profound impact on performance; hence, an
organisation should continually monitor both micro and macro influences.
• This process is called environmental scanning in traditional marketing and online.
Marketplace analysis helps to define the nature of the digital competitive market, or
click ecosystem.
• Online market ecosystem the interactions between different online systems related
to a specific hardware or software technology, which may be independent or
developed by a particular brand.
• Major online players have developed their own infrastructure or online market
ecosystems that connect websites through data exchange, giving opportunities to
enhance the customer experience and extend the firms’ reach and influence.

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 Understanding how customers interact with
digital markets
• In the physical world, ‘going to the shops’ is a well-understood concept, but less is
known about the range of triggers and influences (devices) that can shape a
shopper’s journey and inform their ultimate purchase decision.
• In the digital world, the same basic principles are true, but the online customer
encounters many more ‘touchpoints’ which influence their decision making (e.g.,
websites, social media content and blogs) and can influence purchase decisions
before, during and after a shopping encounter.
• To help understand customers’ interactions with physical and digital touchpoints,
triggers and influences, journeys maps are increasingly used to model behaviour
of different types of target audiences.

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An example of a customer journey map

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Understanding customer in digital markets
• It is useful to produce an online marketplace map which summarises how
target customer segments might be influenced by different types of digital
sites.
• The main elements of the online marketplace map are:
• Customer segments
• Search intermediaries: The main search engines are typically Google, Yahoo!,
Bing and Ask, but others are important in some markets such as China (Baidu)
• Intermediaries, influencers and media or publisher sites
• Destination sites and platforms: These are the sites that the marketer is
trying to attract visitors to.

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Customer analysis to understand the digital
consume
• In marketing, understanding the trading situation is very important
not only to consider customers’ behaviour but also to know how to
analyse reactions and responses.
• In the digital world, customer actions are highly trackable and
quantifiable, so digital marketers should know how to measure
customer behaviour in relation to marketing objectives in highly
accurate ways.
• The specific measurement and analysis tools will vary depending
on the desired marketing outcomes.

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Customer analysis to understand the digital
consume
• Customer behaviour analysis involves research into the motivations, media
consumption preferences and selection processes used by consumers as they
use digital channels together with traditional channels to purchase online
products and use other online services.
• Customer segments Groups of customers sharing similar characteristics,
preferences and behaviours that are meaningful in terms of various market
propositions, and which are defined as part of target marketing strategy and
planning.

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 Customer analysis to understand the digital
consume
➢ Customer behaviour analysis can be considered from two perspectives:
1. Demand and gap 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: it is understand the needs, characteristics and digital
experiences or behaviours of target consumers. Based on this analysis, customer
segments can be created that will be used to develop targeting approaches as part
of strategy and planning

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Consumer choice and digital influence
➢Consumer choice and the succeeding decision making are crucial
to the purchasing process (online and offline) but digital media
now plays an increasingly important role in buying decisions.
➢Many buyers visit online first to find information that will inform
what they buy, so the web and social media are:
1. A vital part of the research process, as internet users now spend
longer researching products online;
2. Used at every stage of the research process from the initial scan
to the more detailed comparison and final checking of
specifications before purchase.
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Consumer choice and digital influence
• The result of this change in behaviour means that buyers are more informed,
and refer to a multiplicity of sources to find information that will inform their
final purchasing decision, e.g. brand websites, social media, review sites,
traditional print media and personal recommendations
• Digital sources of information now play a more important role in shaping
purchase decisions.
• So, companies have to think carefully how they can maximise the value of
positive comments and reviews and reinforce consumer perceptions through
product quality, and service experiences both on and offline.

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 Customer characteristics
• Understanding the individual nature of customers is
fundamental to marketing practice and planning.
• Many factors that influence online behaviour and over time
the market segments that use the Internet and digital services
have changed significantly
• Today, digital markets have global reach and have penetrated
every type of market segment.
• it is increasingly important to precisely identify target
markets.
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Customer characteristics
➢Research suggests a fruitful place to begin identifying consumer target markets is to
consider:
1. Demographic variables: Key elements of a consumer’s demographic
profile that have been found to influence online behaviour include
variables such as: income, education, race, age, gender and lifestyle,
cultural and social make-up that influences online behaviour
2. Psychographic and behavioural variables: Any aspect of a
consumer’s perceptions, beliefs and attitudes that might influence
online behaviour, and in particular a consumer’s intention to shop.

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 Customer characteristics
➢An important point to consider is that past experiences will provide the basis
for future evaluations.
➢The online experience consist of an important list of concepts that can
positively or negatively influence or motive the consumer to engage with a
digital offer:
1. Information processing (IP). This is very important as it shapes how a
consumer deals with available data and information that will shape their
future behaviour. IP involves the mental processes and senses an individual
uses to interpret the world they inhabit
2. Perceived ease-of-use. This 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

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Customer characteristics
3. Perceived usefulness. This refers to the extent to which the digital
offer fits with the customer’s daily life – for instance, shopping,
online booking train tickets, banking. It is here that the digital
marketer can really start to develop a path to consumer benefits.
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.

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Customer characteristics
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.
6. Skill. This refers to the customer ability to use the technology to
achieve their desired goals. >> individuals learn by doing in the
Internet environment and so build their skill set over time – for
example, the more frequent the visitor is to a website the greater
their exposure and the higher their ability to engage with this
digital content.

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Customer characteristics
7. Trust and risk. They play an important role in how a customer
behaves online.
Inexperienced Internet users can feel vulnerability and fear.
Customers should be able to achieve their buying goals with or
without feeling they are exposed to undue risk (e.g., financial risk,
social risk, personal risk). >> Marketers should seek to find ways to
limit the risk of engaging with their online offer and seek to build
trust through developing online relationships
8. Enjoyment. This is an outcome of a positive online experience.
➢ These 8 antecedents can influence how the customer thinks
(cognitive state) and feels (affective state) about their online
experience and affect the outcomes of any subsequent behaviour.

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Framework for understanding online customer
experiences

Source: Rose and Hair (2011)

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Social media and emotions
• social media influence capturing and sharing consumer
experiences and it is a major conduit through which
consumers share, recommend and feedback on their
product and service, choices and experiences.
• Social media networks are giving access to personalised
recommendations in real time, based on individual personal
experiences, which can be highly influential (both positive
and negative depending on the nature of the
recommendations).

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Social media and emotions

• The use of social media networks, such as Facebook,

Instagram, Twitter and LinkedIn, have risen substantially
since 2008.
• Social media has become important as a means of
communicating and interacting online and also as a source
of peer recommendations.
• The capacity of social media networks to display our
personal feelings is extensive.

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 Consumer personas
• Personas: Fictional profiles that represent a particular target audience ;
thumbnail summary of the characteristics, needs, motivations and
environment of typical website users.
• Personas are a tool, which can help understand online customer
characteristics and behaviour and then create communications more
relevant to your audience.
• Creating personas is a powerful technique for developing customer
centered online strategies, company presences and campaigns and forms
part of marketplace analysis.
• Personas are essentially a ‘thumbnail’ description of a type of person.
• ( include illustrative pictures and fictional names that make them tangible
to digital designers and marketers)
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Example of Persona
• The Red Bull student persona is:
• ‘The thrill seeker
He’s 24 years old
Graduated from college, 2 years ago with an English degree
He is currently the assistant manager at a ski & board shop
He makes £30,000 a year.

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The Buying Process
• According to Kotler there are different stages in the buying process.
At each stage the purpose (from both the buyer and supplier
perspective) is a particular outcome:
• Awareness;
• interest;
• evaluation;
• trial;
• adoption.

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The Buying Process
• This set of outcomes has been considered in the digital
market and Chaffey and Smith (2017) describe them as:
• Problem recognition;
• Information search;
• evaluation;
• Decision;
• Action (sale or use of online service);
• Post purchase.

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A summary of how digital media can impact on the buying
process in a new purchase
PPC ads : Pay-Per-Click ads / E-PR : E- Public Relation/ SEO Search Engine Optimization

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Competitors: The shape and nature of
online competitive markets
➢the well-established Porter’s five forces model still provides a solid
foundation for understanding how technology is reshaping
competition and industry structure. The five competitive forces are:
1. Bargaining power of buyers
2. Bargaining power of suppliers
3. Threat of substitute products and services
4. Threat of new entrants (barriers can go down when completely new digital
products and services bypass the existing ones in a market)
5. Intensity of rivalry (intense competion)

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Competitor analysis and benchmarking
➢Competitor analysis Involves identifying the companies that
are competing for our business and then reviewing what
they are good at, what are their strengths, where are their
weaknesses, what are they planning, where do they want to
take the company and how do they behave when other
companies try to take their market share.
➢ Competitor benchmarking A structured analysis of the
online services, capabilities and performance of an
organisation within the areas of customer acquisition,
conversion, retention and growth.
➢Competitor benchmarking is closely related to developing
the customer proposition and brand experience and is
informed by understanding the requirements of different
customer personas.
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 Suppliers: Digital marketing
intermediaries
➢Marketing intermediaries Firms that can help a company to promote,
sell and distribute its products or services, for example publisher or
media sites, comparison sites, search engines, social networks and
blogs.
➢Destination sites are sites typically owned by merchants, product
manufacturers or retailers providing product information.
➢Online intermediary sites Websites that facilitate exchanges between
consumer and business suppliers.
➢Online intermediaries are businesses that support business and
consumer audiences, so they can serve both B2B and B2C
information exchanges. Auction sites are another type of online
intermediary that support the B2B and the C2C exchanges
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New Channel Structures
➢ Channel structure: The configuration of partners in a distribution
channel.
➢ Traditionally, a distribution channel will consist of one or
more intermediaries, such as wholesalers and retailers
➢A company selling business products may have a longer
distribution channel involving more intermediaries
➢The Internet offers a means of bypassing some of the
channel partners. This process is known as
disintermediation.

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New Channel Structures
➢Disintermediation: The removal of intermediaries such as
distributors or brokers that formerly linked a company to its
customer. For example: Pearson.

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New Channel Structures
➢Reintermediation: The creation of new
intermediaries between customers and suppliers
providing services such as supplier search and
product evaluation.

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Macro Environment
Situation analysis for digital marketing

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Situation analysis for digital marketing

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 The rate of environmental change

• In the digital world, changes in market

forces are increasingly rapid. Firms
should respond to these changes,
emerging opportunities and threats by
developing strategic agility.
 Technological forces
• In the digital world, changes in market forces are increasingly
rapid. Firms should respond to these changes, emerging
opportunities and threats by developing strategic agility.

Key factors to consider:

• Internet technology
• Cyber security
• How to develop secure systems
• Mobile and SMS messaging and applications
• Mobile Apps
• Wi-Fi and Bluetooth wireless applications
• Emerging technologies
 Emerging Technologies

Assessing the marketing value of technology innovation.

Hype cycle is a graphic representation of the maturity, adoption and business
application of specific technologies.
1. Technology trigger. The first phase of a hype cycle is the ‘technologytrigger’ or breakthrough,
product launch or other event that generates significant press and interest.
2. Peak of inflated expectations. In the next phase, a frenzy of publicity typically generates over-
enthusiasm and unrealistic expectations. There may be some successful applications of a
technology, but there are typically more failures.
3. Trough of disillusionment. Technologies enter the ‘trough of disillusionment’ because they fail to
meet expectations and quickly become unfashionable. Consequently, the press usually abandons
the topic and the technology.
4. Slope of enlightenment. Although the press may have stopped covering the technology, some
businesses continue through the ‘slope of enlightenment’ and experiment to understand the
benefits and practical application of the technology.
5. Plateau of productivity. A technology reaches the ‘plateau of productivity’ as the benefits of it
become widely demonstrated and accepted. The technology becomes increasingly stable and
evolves in second and third generations. The final height of the plateau varies according to whether
the technology is broadly applicable or benefits only a niche market.
Commercial application of the diffusion of
innovation curve

Source: Gartner Group

 Economic Forces

• Economic growths
• Market growth and employment
• Interest and exchange rates
• Globalization
• Economic disruption
 Political forces

• Political control and democracy

• Internet governance
• Taxation
• Tax Jurisdiction
 Legal forces

• Data protection and privacy law

• Anti-spam legislation
• Disability and discrimination law
• Brand and trademark protection
• Intellectual property rights
• Online advertising law
 Social forces

• Demographics
• Culture
• Social exclusion
Social Media Marketing Framework (SMMF)
This framework offers a holistic way to consider the strategic application of social media. Felix et al.
(2016) propose there are four dimensions to social media marketing:
• Scope. This dimension focuses on the extent to which social media platforms are used as a one-way
communications tool, which provides content to entertain and inform end-users, or as an authentic
collaborative environment, which facilitates reciprocal interactions between end-users and companies.
• Culture. This dimension distinguishes between use of social media as a traditional massmarketing
channel or a more modernist approach of being open and flexible and embracing the style of social
media platforms.
• Structure. This dimension looks at organisation and how social media is deployed: is its application
subject to centralised control and clearly defined protocols to assigned employees, or is it
decentralised and the responsibility of all employees, which removes the need for the role of a
marketing director?
• Governance. This dimension relates to company rules and to what extent employees are told what
they can and cannot say on social media platforms. This framework seeks to highlight the complexities
underlying the use of social media, and the importance of taking a multidimensional approach towards
its application and management.
Homework
• Read the 4th Chapter