The Digital Micro- Environment

Manir ZamanDepartment of Marketing, Faculty of Business and EconomicsLecture 2

Learning Objectives

After completion of this module, you will be able to: Identify the different elements of an organisation’s

online marketplace that have implications for developing a digital marketing strategy

Complete an online marketplace analysis (situation analysis) to assess customer, intermediary and competitor use of the Internet as part of strategy development

Evaluate the business and revenue models enabled by digital markets.

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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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The Internet marketing environment

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Macro-micro environment – Internet related

Macro-environment Micro-environment

•Social•Technological•Economic•Political, legal, ethical and taxation

•The marketplace•The organisation•The customers•The suppliers•Competitors•intermediaries

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An online marketplace map

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Issues in analysing the online marketplace

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Conversion Marketing

Using marketing communications to maximise conversion of potential site visitors into actual visitors and then convert them into leads, customers and repeat customers

Conversion measurement indicators:– Awareness efficiency– attractability efficiency– Contact efficiency– Conversion efficiency– Retention efficiency

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A model of the Internet marketing conversion process

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An example of a conversion model

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Model showing conversion between the digital channel and traditional channels during the buying process

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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 2.3. Marketplace analysis and Figure 2.10 Consumer Internet activities

3. Consumers that transact online– Includes different types of transactions, not just sales,

e.g. support, forum comments, etc.4. Consumer familiarity with the Internet

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Broadband penetration in different countries

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Information sources used to select retailers

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Percentage (by category) who bought online after researching online

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Development of experience in Internet usage

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Customer Characteristics (B2C)

Psychographic segmentation– Realistic enthusiasts; confident brand shoppers;

carefree spenders; cautious shoppers; bargain hunters; unfulfilled

Demographic characteristics: sex, age, social class, or income

– Webographics • Usage location; access device; connection speed;

experience level; usage type

Personas: description of a type of user, eg. First time buyer, single mum etc.

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Discussion – 7minutes

Type of micro-environmental analysis for developing a digital marketing strategy for Qantas?

Online market opportunities for a hair dressing company

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Online consumer behaviour models

1. Information/experience seeking behaviour models

2. Hierarchy of response buying process models

3. Multichannel buying models

4. Trust based models

5. Social interaction communication models

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1. Information/experience seeking behaviour models

Specific behavioural traits of the users: Directed information seekers Undirected information seekers Directed buyers Bargain hunters Entertainment seekers

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2. Hierarchy of response buying process models

Stages of the buying process:– Awareness– Interest – Evaluation– Trial– Adoption– Post purchase evaluation

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Impact of Internet on the buying process

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3. Multichannel buying models

• involves multiple channels such as SEM, affiliate marketing (pay per performance), interactive display ads etc

• Needs to develop integrated online services and communications compatible with consumer behaviour

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4. Trust-based models

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5. Social Interaction Communication models

Participation and sharing information to socialise and share experiences e.g. facebook, myspace, twitter etc.

Objective: to engage an online audience and promote participation

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Alternative Perspectives on Business Models

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Next Lecture

Digital Macro- environment

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