Slide 2.
Chapter 2
Online marketplace analysis:
micro-environment
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.2
Learning objectives
• Identify the elements of an organisation’s online
marketplace that have implications for
developing 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.
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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 micro-
environment 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?
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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 and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.5
Figure 2.1 Blackcircles.com
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Slide 2.6
Figure 2.2 The digital marketing environment
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.7
Figure 2.5 An online marketplace map
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Slide 2.8
Correlation between search volume in Google Trends and retail
Figure 2.6
sales volume
Source: Chamberlin (2010)
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.9
Examples of top ten Search Terms for all
retailing and Apparel
Table 2.1 Top 10 search terms for all retailing and for apparel
Source: Chamberlin (2010)
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.10
Tools for marketplace analysis
• Google Agency Tookit
– http://www.google.com/ads/agency/toolkit.html
– Key Tools:
http://www.smartinsights.com/marketplace-
analysis/google-tools-you-may-not-know-about/
• 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.
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Slide 2.11
Issues in analysing the online marketplace
Table 2.3 The micro-environment: issues for digital marketers
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Slide 2.12
Figure 2.7A 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
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Slide 2.13
Figure 2.8 An example of a conversion model
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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.
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Slide 2.15
Model showing conversion between the digital channel and traditional
Figure 2.9
channels during the buying process
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Slide 2.16
Figure 2.10 Research Online Purchase Online example
Source: Google (2010)
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Slide 2.17
Consumer characteristics
• Demographics:
– Age, gender, social group
• Webographics
– Access methods and times
• Personas:
– See Personas with wings mini case study 2.1.
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.18
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).
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Slide 2.19
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 is a
given.
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Slide 2.20
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, sex and possibly social group.
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Slide 2.21
1. Information/experience seeking behaviour
models
• 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.
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Slide 2.22
2. Digital media and the buying process
A summary of how digital media can impact on the buying process
Figure 2.14
for a new purchaser
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Slide 2.23
Figure 2.15 Initial product search showing e-retailers available
Source: Google (2015)
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Slide 2.24
Figure 2.16 Currys’ product category page (www.currys.co.uk)
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Slide 2.25
3. The impact of channel experience on
customer relationship
Table 2.4 The impact of channel experience on customer relationship
Source: Menteth et al., 2005. Reprinted by permission of Macmillan Publishers Ltd: Interactive Marketing, 6(4) 317–25, copyright 2005, published by Palgrave Macmillan.
(The new name of this journal is Journal of Direct Data and Digital Marketing Practice)
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.26
4. Trust-based models
Figure 2.18 Segmentation based on information need and trust
Source: Adapted from Forrester (2006) Teleconference driving sales with segmentation analyst: Benjamin Ensor of Forrester Research, 27 February 2006
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.27
Competitor benchmarking
• Activity – which aspects of a competitors online
marketing activity should be reviewed?
–
–
–
–
–
–
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.28
Figure 2.19 Benchmark comparison of corporate websites
Source: Bowen Craggs & Co. (www.bowencraggs.com)
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.29
Figure 2.20 Taobao (www.taobao.com)
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Slide 2.30
Disintermediation of a consumer distribution channel showing:
Figure 2.21
(a) the original situation, (b) disintermediation omitting the wholesaler,
and (c) disintermediation omitting both wholesaler and retailer
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.31
From (a) original situation to (b) disintermediation or
Figure 2.22
(c) reintermediation or countermediation
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.32
Porter’s five forces
Bargaining
powers of
customers
Power of Threat of
The business
suppliers subsitutes
Extent of rivalry
Threat of new
between
entrants
competitors
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Slide 2.33
Impact of the Internet on the five
competitive forces
Table 2.6 Impact of the Internet on the five competitive forces
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Slide 2.34
Figure 2.25 Alternative perspectives on business models
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Slide 2.35
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 pay-per-performance ad deal.
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Slide 2.36
Figure 2.26 Revenue model spreadsheet
Source: SmartInsights.com
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