Internet Macro Environment

3/13/2012
Welcome!
Introducing: Karen Lurati! MMK737 Online Marketing
Workshop 2
Karen Lurati
MMK737 Online Marketing Karen Lurati 1 MMK737 Online Marketing Karen Lurati 2
Week 2 (chapter 2&3)
Assessment Queries????
MMK737 Online Marketing Karen Lurati
Learning objectives Chapter 2

The Internet micro-environment Situation analysis
Identify the different elements of the Internet environment that impact on an organisations Internet marketing strategy Complete an online marketplace analysis to assess customer, intermediary and competitor use of the Internet as part of strategy development Evaluate the relevance of changes in trading patterns and business models enabled by digital channels
MMK737 Online Marketing Karen Lurati 5 MMK737 Online Marketing Karen Lurati 6
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Questions for marketers

How do I complete a situation analysis as part of planning for digital marketing? How are the competitive forces and value chain changed by the Internet? How do I assess the demand for Internet services and customer behaviour? How do I compare our online marketing with that of competitors? What is the relevance of the new intermediaries?
MMK737 Online Marketing Karen Lurati 7
Figure 2.1 The Internet marketing environment
Understanding customer search behaviour
See http://www.davechaffey.com/seo-keyword-tools
Figure 2.2 An online marketplace map
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Figure 2.4 An example of a conversion model
Figure 2.3 A model of the Internet marketing conversion process
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Figure 2.5 Model showing conversion between the digital channel and traditional channels during the buying process
Figure 2.6 i-to-i showing prominent phone numbers (http://www.i-to-i.com)
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Evaluating demand levels
1. Level of Internet access

Includes type of access broadband and mobile
2. Consumers influenced by using online channel:

Includes understanding type of sites which have influence see Fig 2.2. Marketplace analysis and Figure 2.9 Information sources
3. Transact online
Includes different types of transactions, not just sales, e.g. support, forum comments, etc. MMK737 Online Marketing 15
Karen Lurati
Figure 2.7 Variation of broadband penetration in different countries Source: OECD (http://www.oecd.org/sti/ict/broadband) MMK737
Online Marketing Karen Lurati
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Figure 2.9 Information sources used to select retailers Source: EIAA (2008)
MMK737 Online 17 Figure 2.8 Usage of mobile phones in Europe and US (data for 3-month period ending Marketing August 2006) Source: M:Metrics, 2006 Karen Lurati
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Figure 2.10 Percentage (by category) who bought online after researching online Source: EIAA (2008) MMK737 Online
Marketing
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Figure 2.12 Development of experience in Internet usage MMK737
Karen Lurati
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Aims:
Dulux persona example
Consumer characteristics
Demographics:
Age, gender, social group
Webographics
Access methods and times
Personas:
Dulux example
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 storei.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 Drive 12% of visitors to desired outcome MMK737 Online Marketing 22 (e.g.order swatches). Karen Lurati
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 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 MMK737 Online Marketing 23 is a given
Karen Lurati
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,MMK737 sex andOnline possibly social group. Marketing 26
Karen Lurati
Figure 2.13 Dulux site (www.dulux.co.uk)
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Figure 2.14 Internet usage by businesses in European countries Source: European Commission, 2008.
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1. Information / experience seeking behaviour models
Consumer behaviour models

1. Information / experience seeking behaviour models 2. Hierarchy of response buying process models 3. Multi-channel buying models 4. Trust-based models 5. Community participation models
Directed information-seekers. These users will be looking for product, market or leisure information such as details of their football clubs 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. MMK737 Online Marketing 30
Karen Lurati
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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 process for a new MMK737 Online Marketing 31 purchaser Karen Lurati
MMK737 Figure 2.16 Initial product search showing e-retailers available
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3. Multichannel buying models
Figure 2.17 Comet product comparison facility (www.comet.co.uk): example page MMK737 Online
Marketing
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Karen Lurati
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4 Trust-based models
Figure 2.18 A model of the relationship between different aspects of trust MMK737 Online Marketing 35 and consumer response based on the categories of Bart et al. (2005) Karen Lurati
Figure 2.19 Segmentation based on information need and trust Source: Adapted from Forrester (2006) Teleconference Driving Sales With Segmentation Analyst: Benjamin Ensor of Forrester Research, February 27th 2006 MMK737 Online Marketing 36
Karen Lurati
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Figure 2.21 Performance benchmark example for Canadian banks Source: Gomez (http://www.gomez.com/products/viewbenchmark.php?btype=9) MMK737 Online
Marketing
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Figure 2.22 All Things Green (www.allthingsgreen.net)
Karen Lurati
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Figure 2.24 Kelkoo.com, a European price comparison site MMK737
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Porters five forces

Bargaining powers of customers
Power of suppliers
The business
Threat of subsitutes
Extent of rivalry between competitors
Threat of new entrants

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Figure 2.25 Value creation model
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Figure 2.26 Two alternative models of the value chain: (a) traditional value chain model, (b) revised value chain model MMK737 Online Marketing 43 Karen Lurati
Figure 2.27 Lonely Planet online shop (http://shop.lonelyplanet.com)
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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 2.30 Screentrade insurance intermediary (www.screentrade.com)
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From (a) original situation to (b) disintermediation or (c) reintermediation or countermediation
Different types of online trading location
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Alternative perspectives on business models
Countermediation
Creation of a new intermediary Example:
B&Q www.diy.com Opodo www.opodo.com Boots www.wellbeing.com www.handbag.com
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Publisher revenue models

1. Revenue from subscription access to content. 2. Revenue from Pay Per View access to documents. 3. 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. 4. 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.
Business-to-business publisher EConsultancy (www.e-consultancy.com)
5. Revenue from Sponsorship of site sections or content types (typically fixed fee for a period) 6. 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.MMK737 This is often called a pay-per-performance ad deal. Online Marketing 51
Karen Lurati
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Peer-to-peer lending exchange, Zopa (www.zopa.com)
Tutorial activities
Tutorial 2 Case Study 2, Text pp. 118-20, Discussion question.
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Chapter 3
The Internet macro-environment
Learning objectives
Identify the different elements of the Internet macro-environment that impact on an organisations Internet marketing strategy and execution; assess the impact of legal, moral and ethical constraints and opportunities on an organisation and devise solutions to accommodate them; evaluate the significance of other macroeconomic factors such as economics, taxation and legal constraints.
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Questions for marketers

How do I complete a situation analysis as part of planning for digital marketing? Which factors affect the environment for online trading in a country? How do I make sure my online marketing is consistent with evolving online culture and ethics? How do I assess new technological innovations? Which laws am I subject to when trading online?
Waves of change different timescales for change in the environment

Figure 3.1
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HSBC Virtual Forest (www.hsbc.co.uk)
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Ethical issues
Ethical issues concerned with personal information ownership have been usefully summarised by Mason (1986) into four areas: Privacy what information is held about the individual? Accuracy is it correct? Property who owns it and how can ownership be transferred? Accessibility who is allowed to access this information, and under which conditions?
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Legislation Summary
1 Applies to consumer marketing using e-mail or SMS messages 2 Is an opt-in regime (consent required) 3 Requires an opt-out option for all communications 4 Does not apply to existing customers when marketing similar products 5 Requires that contact details must be provided 6 Requires clear From 7 Applies to direct marketing communications 8 Restricts the use of cookies MMK737 Online Marketing 65
Karen Lurati
Information flows that need to be understood for compliance with data protection legislation
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Figure 3.6 Cruises.co.uk
Comparison of number of blog postings for three consumer brands

Source: Nielsen BuzzMetrics BlogPulse (www.blogpulse.com)
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Information exchange between a web browser and a web server
Basic home page index.html for The B2B Company in a web browser showing the HTML source in a text editor
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The relationship between access to intranets, extranets and the Internet
Public-key or asymmetric encryption
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Using a proximity device, such as a Hypertag, to download music tracks
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Gartner hype cycle
Diffusionadoption curve
Source: Gartner (2005) Gartners Hype Cycle Special Report for 2005
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Alternative responses to changes in technology Tutorial activities
Tutorial 2 Ch.3, pg.192 - Self Assessment questions -1-6
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Internet Macro Environment

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3/13/2012

Introducing: Karen Lurati! MMK737 Online Marketing

Week 2 (chapter 2&3)

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Learning objectives Chapter 2

Questions for marketers

MMK737 Online Marketing Karen Lurati

Understanding customer search behaviour

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Figure 2.4 An example of a conversion model

Figure 2.3 A model of the Internet marketing conversion process

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Figure 2.6 i-to-i showing prominent phone numbers (http://www.i-to-i.com)

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Evaluating demand levels

1. Level of Internet access

2. Consumers influenced by using online channel:

Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Figure 2.12 Development of experience in Internet usage MMK737

Online Marketing Karen Lurati

Dulux persona example

Target audience variation

Part time Mum.

Business consumer characteristics

Figure 2.13 Dulux site (www.dulux.co.uk)

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

1. Information / experience seeking behaviour models

Consumer behaviour models

2. Hierarchy of response buying process models

MMK737 Figure 2.16 Initial product search showing e-retailers available

Online Marketing Karen Lurati

3. Multichannel buying models

MMK737 Online Marketing Karen Lurati

Figure 2.22 All Things Green (www.allthingsgreen.net)

MMK737 Online Marketing Karen Lurati

Figure 2.24 Kelkoo.com, a European price comparison site MMK737

Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Porters five forces

Extent of rivalry between competitors

Threat of new entrants

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Figure 2.30 Screentrade insurance intermediary (www.screentrade.com)

MMK737 Online Marketing Karen Lurati

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

Different types of online trading location

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Alternative perspectives on business models

MMK737 Online Marketing Karen Lurati

MMK737 Online Marketing Karen Lurati

Publisher revenue models

Business-to-business publisher EConsultancy (www.e-consultancy.com)