Emarketing Notes - Lecture notes, lectures 1 - 12 PDF

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Summary of all weeks lecture slides and information from the textbook, displayed in a nice and concise way. 64 pages. Received a Distinction for the course. Exam tips are also included....

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E-Marketing Lecturer and tutor: Jin Lecture 1 Digital Marketing Strategy Development Process

Need to Evaluate Performance (collecting measurements) Set Digital Marketing Objectives

Define Digital Marketing Strategy

Implement Digital Marketing Plan

Profile, Measure, Monitor and Improve

Assess Marketplace Need to set objectives, strategies and implementation based on digital marketing Need to know both online and offline competition even if the company is only based offline Digital marketing benefits • • • •

No time restriction Wider access to products and services Wider access to products to help in the decision making products Convenience

Digital marketing benefits for business • • • • •

Constant access to audience Constant market research access- more information about customer Boundaries are reduced of geographical locations “now-timing” instantaneous – info on delivery and customers multitudes of medium of communication eg social media- impact consumer decision making process

Applications of Digital Marketing • • • • • • •

Advertising Medium- corporate websites, make online advertisements Direct-response Medium – SEO, banner advertisements- signal of level of attention/reach Sales Transaction Platform – eg EasyJet sells flights to both consumers and business travellers Lead Generation Method – case by case decision- activity that is indicative of a potential customer Distribution Channel Customer Service Mechanism- their website, get feedback, provide service Relationship-Building Medium- use different platforms to gain a deeper relationship- getting more evolved eg using fb and twitter

Typing smartphones on google • • •

Methods of advertisement to generate a direct response to hopefully turn them into customers Sponsored ads and advertisements ads- pay per click Underneath- organic searches-

Mobile banner ads • Affiliate advertising- putting it on a 3rd party • eg ads in flappy bird game to target customers • eg putting a hairdresser advertisement on a beauty tip websites Example: Tesco • testmarket • constructed a digital grocery shop- flip through catalogue and scan barcode to purchase • at airport and then groceries will be delivered to them when they get home Example: Ideastorm • post idea and people can comment and rate Business Models

C2C- Eg Ebay, C2B- customers create value and businesses consume the value- customer gives idea to business eg offering ice cream flavours to messina

Digital Media Objectives • • • •

Reach: Build Awareness of brand, products and services both online and offline eg KPI’s: uniquie visitors, audience shares, revenue or value per visit Act: engage audience on own website or other online presence eg KPI’s: bounce rate, pages per visit, product page conversion Convert: achieve conversion to marketing goals eg leads and sales online and offline eg KPI’s: conversion rate, leads and sales, revenue and margin Engage: build customer relationships through time to achieve retention goals eg KPI’s: % of active customers, engagement, repeat conversion

Chapter 1: Digital Marketing Fundamentals

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Can’t use all techniques need to know which one is the most relevant Electronic customer relationship management: using digital communications technologies to maximise sales to existing customers and encourage continued usage of online services through techniques including personalised messages, email Multichannel marketing: using tradition and digital marketing techniques

Types of media channels • Paid media: eg an ad on a site, pay per click • Earned media: reached through editorial comments and sharing online • Owned media: different forms of online media controlled by a company eg websites, blogs, email Online Value Proposition: statement of the benefits of online services that reinforces the core proposition and differentiates from an organisations offline offering and those of competitors Benefits • Market Penetration- sell more products in more markets • Market development- new geographical markets • Product development- digital products • Diversification- sell new products in new markets • Cost saving • Growth sales • Extend the brand online Challenges of digital communications • Unclear responsibilities • cost • Complexity • Responding to changes in technology

Lecture 2:

Micro-Environment Issues for Digital Marketing

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need to always make sure that we provide a competitive advantage that appeals to customers need and lifestyle need to know competitive platforms- are they offline and online or just online need to do a full competitive analysis

additional segmentation is needed for an online company eg heavy users, time of day

manufacture or primary service provider

reseller/retail er

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marketplace/ exchange

Media Owner or publisher

Not-forprofit Orgnaisation

Virtual Communities

need to categories the users – to customise mass messages based on segments

Marketplace Position • • • • • • •

Manufacture- make the product Reseller- sell them Marketplace- set up a meeting place for buyers and sellers to contact each other Media owners- media outlets that provide content to individuals Not for profit- depend if they can afford to be online Virtual communities- eg FB Value Chain eg PayPal – not selling but providing a service

Internet Companies Worldwide • Google $377 billion • Facebook $157 billion • Amazon $144 Biggest Internet Companies by Country • •

US (Google) -410000m China (Alibaba)- 200000m

Non-Profits on the Web 1. National Public Radio 2. Smithsonian Institutes 3. Human Rights Campaign Mentions some organisation called KIVA- she is obsessed- mention it for brownie points Revenue Models Direct sales of product or service

subscription or rental of services

commision based services

Advertising

o Direct sales: selling their offerings and getting their revenue stream through this

Value Chain Service Provider

o Subscription: eg newspapers o Commission: connect the buyer and the seller then earn commission from that o Advertising: frequent use of revenue stream for online firms- google sells advertising space eg banner spaces o Can sell information about customers to marketing firms that does direct marketing to earn money o Need to able to make your marketspace good so people want to advertise on it Amazon Prime Members Heavily Outspend Non-Prime Customers - people who pay for membership pay more People still preferring watching free videos online o Percentage of time spent viewing • YouTube 48% • NetFlix 22% o Firms are struggling to find a balance between ads and happy customers o Need to look at conversion rateso If you pay a premium there is no ads but if its free there is so they can still make money Spotify is not profitable ☹ o Intermediary supplying a service o Their profits is heavily dependant on their cost component o 60%-70% of revenue is put towards the music industry to be able to stream it Industry Analysis

o competitive analysis on the market o Porter’s 5 forces to understand the industry competitiveness o 5 separate forces but interrelated o criticisms: assumes there is competition, no indications of market or product development (no aspects for areas of growth)

o still the most widely used framework Commoditisation

o 3 strategies to gain a competitive advantage ▪ achieve operational excellence at a lower cost ▪ product excellence- making the best product ▪ customer intimacy- relationship o most B2B transactions are negotiated as its not as clear cuts as product on shelves- being online companies has more access to suppliers o forward options- buyer competes for the product- increase the selling price of product o reverse options- buyers state what the want to purchase and the sellers gather and give them their products- lower price o pricing is used as a product value- strategically suppliers deliberately puts their prices higher then supplier to show they have high quality o quality of supplier is difficult to see- need to check their qualifications o General Motors has had 8.4mil in recalls- would you want to buy from them?

Directories

Search Engines

Virtual Resellers

Financial Intermediarie s

Social Networks

o Firms are diving up the supply base- so they have a pool of dozen supplierssplit up suppliers so in the long run it benefits supplier, company and cost efficient to maintain a good supplier base Digital Intermediaries o Directories- digital yellow pages o Virtual resellers- online stores o Evaluators- comparison website, customer evaluations

Evaluators

Customer Analysis o Demand analysis o Digital customer behaviour

• engagement efficiency: stage between transition from individuals coming on to the website and how engaged they are e.g. people who spend at least 5 minutes on the website- if not then they are disengaged • conversion efficiency: proportion of people who make a purchase to the people who could potentially be a purchaser • managerial decisions: how to divide the activities for people to be engaged to make a purchase • google makes over $100 million a day with search advertising—noiceeee

will need to know how to work out clicks and conversion rate and things like that • bubbles towards the right are more effective • Facebook drives 20times as much traffic as twitter does- already established a great network that even with annoying ads people wont stop using it because of it Chapter 2: Online Marketplace Analysis: Micro-environment • Situation Analysis: organisation external and internal analysis • Microenvironment: actors and their interactions which influence how an organisations respond to the marketplace- stakeholders • Macroenvironment: broad forces affecting organisations in the marketplace eg social, technological, political, economical • Click ecosystem: describes the customer behaviour of online visits between search engines, media sites—analysing the online marketplace

The shape and nature of online competitive markets • Bargaining powers of buyers➢ increased in customer power is a threat to electronic trading ➢ ratio of buyers to seller ➢ if a lot more buyers and little sellers products can be higher ➢ if buying more has more bargaining power • Bargaining powers of supplies- opportunity • Threat of substitute products and services • Barriers to entry- online entrants are a threat for retailers • Intensity of rivalry Marketing intermediaries: firms that can help a company to promote, sell and distribute its products eg search engines and social networks • Portals: online publisher that acts as a gateway to information and services available on the internet by providing search engines and personalised news • Channel structures: configuration of partners in a distribution channel • Disintermediation: removal of intermediaries such as distributors or brokers that formerly linked a company to its customers- taking out the middle men • Reintermediation: creation of new intermediaries between customers and suppliers providing services such as supplier search and product evaluation – putting in new middle men • The internet can encourage the formation of new channel structuresdisintermediation and reintermediation • Regular competitive benchmarking should be conducted to compare services • Customer analysis is important part of situational analysis- involves assessing demand for online services, characteristics of existing online customers and the multichannel behaviour of customers as they select and purchase products • Only a third of the world’s population is online • Taken down geographical boarders • revenue models: methods of generating income for an organisation CPM- cost per thousand- site owner charges a fee for advertising CPC- cost per click- the cost to the advertiser of each click of a link to a thirdparty site CPA- cost per acquisition- the cost to the advertiser for each outcome such as a lead or sale generated after a click to a third-party site Pay per view- single access to e.g. a video or music clip •

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Week 3

Macro-Environmental Factors • • • • •

Technological- changes in technology Political and Legal Economic Social Environmental

Security and stability interoperability • ICANN- to registering and maintaining and coordinating internet addressdomain system Website Security Issues • Validation of input and output data - needs to be validated • Direct data access (and theft)- avoid storing data that you do not need on the website • Data poisoning- if users can amend or delete data and this is the used to update internal systems, business information is being lost • Malicious file execution- uploaded files or other data feeds may not be what they seem • Authentication and session management -websites rely on identifying users to provide access permissions to data and functions • Phishing -users are misled into believing some other entity belongs to an own organisation • Denial of service - locking out valid users accounts or those caused by coding problems • System information leakage • Error handling - make sure not to display any system information to the user when handling an error Approaches To developing secure systems • •

digital certificates- keys made up of large numbers that are used to uniquely identify individuals digital signatures- method of identifying individuals or companies using publickey encryption

• multiple studies have shown that a significant proportion of consumers research online before buying offline • objective of this study was to quantify the level of Research Online Purchase Offline, and to benchmark the incremental in-store sales against the online sales generated

• online research and search engine marketing —> increased number of visitors to store —> purchase of a product researched opine —> increased store sales

• to find out if they have looked online: ask at point of purchase, increased activity on website and increased offline sale • organisations with a chief marketing technologist are generally ahead of their peers in digital marketing maturity and experimentation to create competitive advantage. they spend on average one third more of their total marketing budge on digital and twice as much of it on innovation

Truste Clients- be in good condition- data privacy management platform New emerging technologies creating a buzz in the industry: • big data- high volume, velocity data- requires cost efficient innovation to effectively process the amount of data to help and guide managerial decisions • payment and digital businesses- 3d manufacturing getting increased attention (widely used in medial research)- changing how business operations can be conducted and the geographic footprint of the physical layout and distribution channels work • mobile- mobility relates aspects the enhance the experience e.g. wireless and 5g • IoT- internet of things- looks at physical consumer products that are wired firms optimistic of its usage and the transformations of businesses operations • Technology trigger- first phase- generates interest • peak of inflated expectations- over enthusiasm and unrealistic expectations • trough of disillusionment- fail to meet expectations and become unfashionable • slope of enlightenment- try understand the benefits and practical application of the technology • plateau of productivity- benefits becomes widely demonstrated and acceptedbecomes stable and there will be second and third generation spending on goods and services is expected to increase by $12 trillion globally

emerging markets • brazil, russia, india and china • growing economies that has seen a lot of attention by fast moving consumer goods companies • Brazilian Facebook users are less promotion orientated than their US counterparts • 27 million Brazilian shops online-retailers are trying to catch up with them • firms have the ability to be able to segment the visitors by time spend on particular pages

• legal aspects try to avoid illegal marketing practices • 4 types of information to collect -contact informations, profile information, platform usage information and behaviour information social, cultural and environmental • clear cut divide between those that do and dont have information • who dont have bad quality lift • trying to reduce the gap between the access of digital technologies and ones that don't • one laptop per child- $100 laptop- cheap and sturdy with basic things to people who dont have easy access to technology eg in developing countries • fly carbon neutral- how much we care about the environment- we have some type of corporate social responsibility • can do this internally (making operations environmentally friendly- making products more green, turning lights off in offices) - a lot of places in the supply

chain that they can tap into and externally (partnerships with green organisations -cosmarketing ) • eg virgin airlines- travellers can pay more to offset- donating to organisation that makes the environment better- tasmanian land conservancy

Textbook • • • •

Internet- the world Intranet- Company only Extranet- suppliers and customers Internet governance: control of the operation and use of the internet

Week 4: Consumer Behaviour

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What factors are emphasized in order to make decisions using technology

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Why people don’t by? New products and marginally new products (not as innovative) Firms can decide to scrap the product in the middle of innovation if it is likely to fail or wont work Commercial failures: is taken out of the market, not making a profit Why new products might fail  Wrong target market marketed  Increased competition  Already well established alternatives  Overprices  High switching costs  Poorly advertised  Faults  Misallocation of resources  Macro environmental factors Consumer bias- consumers systematically overweigh the benefits of existing product that then underweights the new products benefits by 2-3 times

Prospect theory  Help understand psychological processes of consumers  people make decisions based on the potential value of losses and gains rather than the final outcome, and that people evaluate these losses and gains using certain heuristics  relative advantage: key driver of new product innovation  current state- status quo

leads to changes in behavior- new products leads to changes in behavior and consumers need to adjust – eg credit card- changes how we carried money and how we think about paying  loss something they have to give up to get the product  4 rules 1. gains and losses- they think about it as this- relative calculationindividual evaluate these gains and losses based on salience reference points2. reference points- different based on economic status 3. decreasing marginal sensitivity- concave curve in terms of the gains, convex in terms of the losses 4. losses loom larger than gains- EG you pay $100 to get more benefits but you have to pay for it or if you find $100 and then loose is—the loss is a heavier weight  firms perspective- developers curse1. they already use to it- in their status quo- not have it is a huge loss 2. difference in knowledge- what they don’t know that I know and how would they react  implications 

No t mu c hc h a n g e s b u t r e q u i r et h e mt o c h a n g eal o t o f t h e i r b e h a v i o u r d o n t wa n t t od ot h i s

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