Part 2 Digital marketing strategy development. Chapter 4 Digital marketing strategy
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1 Slide 4.1 Part 2 Digital marketing strategy development Chapter 4 Digital marketing strategy Slide 4.2 Learning objectives What approaches can be used to create digital marketing strategies? How does digital marketing strategy relate to other strategy development? What are the key strategic options for digital marketing? 1
2 Slide 4.3 Questions for marketers Relate digital marketing strategy to marketing and business strategy Identify opportunities and threats arising from digital technology platforms Evaluate alternative strategic approaches for using digital platforms Slide 4.4 Q. What are organisational problems if no E-marketing strategy? Underestimated demand for online services Market share loss Resource duplication Insufficient resource Insufficient customer data Efficiencies available through online marketing Opportunities for applying online marketing tols Changes required to internal IT systems Inadequate tracking Senior management support limited 2
3 Slide 4.5 Michael Porter on the Internet The key question is not whether to deploy Internet technology companies have no choice if they want to stay competitive but how to deploy it. Porter, M. (2001) Strategy and the Internet, Harvard Business Review, March 2001, Slide 4.6 What is a digital marketing strategy? What is strategy? Defines how we will meet our objectives Sets allocation of resources to meet goals Selects preferred strategic options to compete within a market Provides a long-term plan for the development of the organisation 3
4 Slide 4.7 Digital marketing strategy essentials Digital marketing strategy is a channel strategy Objectives for online contribution % - sales, service, profitability should drive our strategy Digital marketing strategy defines how we should: 1. Communicate benefits of using this channel 2. Prioritise audiences targeted through channel 3. Prioritise products available through channel 4. Hit our channel leads & sales targets Acquisition, Conversion, Retention Channel strategies thrives on differentials BUT, need to manage channel integration Slide 4.8 Figure 4.1 Internal and external influences on digital marketing strategy 4
5 Slide 4.9 Table 4.1 Summary of typical focus for main types of e-commerce-related strategic initiatives Slide 4.10 Figure 4.2 HSBC Expat Explorer ( 5
6 Slide 4.11 Challenges of digital marketing Gaining buy-in and budget Conflicts of ownership ad tensions Coordination with different channels Managing and integrating customer information Achieving consistent reporting Structuring the specialist digital team time to market Insourcing vs. outsourcing Staff recruitment and retention Slide 4.12 Figure 4.3 Hierarchy of organisation plans including e-marketing plans 6
7 Slide 4.13 Figure 4.4 The SOSTAC planning framework applied to digital Digital marketing strategy development Source: Chaffey and Smith (2008) Slide 4.14 Figure 4.6 A generic digital channel-specific SWOT analysis showing typical opportunities and threats presented by digital media 7
8 Slide 4.15 Figure 4.8 An example of a digital channel specific SWOT for an established multichannel brand showing how the elements of SWOT can be related to strategy formulation Slide 4.16 Strategy Formulation Strategy formulation involves the identification of alternative strategies, a review of the merits of each of these options and then selecting the strategy that has the best fit with a company s trading environment, its internal resources and capabilities. typically involves making adjustments to marketing strategy to take advantage of the benefits of online channels rather than wholescale changes 8
9 Slide 4.17 Strategy Formulation Decision 1: Market and product development strategies Decision 2: Business and revenue models strategies Decision 3: Target marketing strategy Decision 4: Positioning and differentiation strategy (including the marketing mix) Decision 5: Customer engagement and social media strategy Decision 6: Multichannel distribution strategy Decision 7: Multichannel communications strategy Decision 8: Online communications mix and budget Decision 9: Organizational capabilities (7S framework) and governance Slide 4.18 Decision 1: Market and Product Development Strategies Figure 4.12 Using the Internet to support different organisational growth strategies 9
10 Slide 4.19 Decision 2: Business and Revenue Models Strategies Business model: a summary of how a company will generate revenue, identifying its product offering, value-added services, revenue sources and target customers. Revenue model: describes methods of generating income for an organization. Slide 4.20 Decision 3: Target Marketing Strategy Figure 4.15 Stages in target marketing strategy development 10
11 Slide 4.21 Common online targeting options Brand loyalists convert online Not brand loyal encourage trial Most profitable deepen relationships Larger companies (B2B) extranet Smaller companies(b2b) can reach these companies more cost effectively Key members of the buying unit (B2B) - detailed information on the web site about the product, services etc. Difficult to reach using other media Slide 4.22 Figure 4.16 Dell Singapore site segmentation Source: Dell Inc. All Rights Reserved. 11
12 Slide 4.23 Figure 4.17 Customer lifecycle segmentation Slide 4.24 Figure 4.18 Euroffice ( Source: Adapted from the company website press releases and Revolution (2005a) 12
13 Slide 4.25 Decision 4: Positioning and Differentiation Strategy Figure 4.19 Alternative positionings for online services Slide 4.26 Figure 4.20 WeBuyAnyCar ( clearly communicates its proposition 13
14 Slide 4.27 Decision 5: Customer Engagement and Social Media Strategy Customer engagement strategy Social media strategy 1. Who are our target audience? 2. What are the content preferences of our audiences? 3. Strategic business goals for social network presences? 4. Which content types should have priority? 5. How to differentiate the social channel from other communications channels? 6. How to integrate social channels? 7. Content frequency and editorial calendar? 8. Sourcing content? 9. How to manage publication and interaction? 10. Software for managing the publishing process? 11. Tracking the business impact of social network activity? 12. How to optimize the social presence? Slide 4.28 Decision 6: Multichannel distribution strategy Figure 4.21 Strategic options for a company in relation to the importance of the Internet as a channel 14
15 Slide 4.29 Decision 7: Multichannel Communications Strategy Figure 4.23 Influences on customers of multichannel decision making Source: adapted from Dholakia et al. (2010) Slide 4.30 Figure 4.24 Channel coverage map showing the company s preferred strategy for communications with different customer segments with different value 15
16 Slide 4.31 Decision 8: Online Communications Mix and Budget Performance drivers: 1. Attraction size of visitor base, visitor acquisition cost and visitor advertising revenue 2. Conversion Customer base, customer acquisiton costs, customer rate, number of transactions per customer, revenue per transaction, revenue per customer 3. Retention Similar measures to conversion customers (cost of repeat customer, revenue per repeat customer, repeat customer churn rate, repeat customer conversion rate) Slide 4.32 Decision 9: Organizational Capabilities (7 S Framework) and Governance Main challenges: Strategy: limited capabilities to integrate into Internet strategy Structure: structural and process issues Skills and staff: difficulties in finding specialist staff or agencies. 16
17 Slide 4.33 Figure 4.26 Example of risk reward analysis 17
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