Lecture 8

Slide 8.
Chapter 8
Digital marketing
Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
Slide 8.2
Learning outcomes
• Assess the need for separate digital business

and digital marketing strategies
• Create an outline digital marketing plan intended
to implement the digital marketing strategy
• Distinguish between marketing communication
characteristics of traditional and new media
Slide 8.3
Management issues
• How do we integrate traditional marketing

approaches with digital marketing?
• How can we use electronic communications to
differentiate our products and services?
• How do we redefine our marketing and
communications mixes to incorporate new
media?
Slide 8.4
Digital marketing
• The definition of marketing by the Chartered

Institute of Marketing (http://www.cim.co.uk/) is:
Marketing is the management process

responsible for identifying, anticipating and
satisfying customer requirements profitability.
• Which e-marketing tools can assist?

– Web, e-mail, databases, wireless and digital
television
Slide 8.5
Operational processes of digital marketing
Figure 8.1 The operational and management processes of digital marketing

Source: E-consultancy (2008).
Slide 8.6
Management processes of digital marketing
The operational and management processes of digital marketing

Figure 8.1
(Continued)
Source: E-consultancy (2008).
Slide 8.7
Hierarchy of plans
Figure 8.2 The digital marketing plan in the context of other plans
Slide 8.8
Content Marketing
Figure 8.6 Content Marketing Chaffey,

Matrix th
Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing Insights Limited 2015
Source: Smart Insights (2012).
Slide 8.9
Digital Marketing Plan
Figure 8.7 SOSTAC

®
®
– a generic framework for digital marketing planning
Source: PR Smith’s SOSTAC Planning Model (1990). Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
Slide 8.10
Situation Analysis
Figure 8.8 Inputs to the digitalChaffey,

marketing plan from situation analysis th
Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing Insights Limited 2015
Slide 8.11
SWOT analysis
Figure 8.9 Example SWOT analysis

Slide 8.12
SWOT analysis – con't
Figure 8.9 Example SWOT analysis (Continued)
Slide 8.13
Demand analysis
• What percentage of customer businesses have access to the

Internet?
• What percentage of members of the buying decision in these
businesses have access to the Internet?
• What percentage of customers are prepared to purchase your
particular product online?
• What percentage of customers with access to the Internet are
not prepared to purchase online, but are influenced by web-
based information to buy products offline?
• What is the popularity of different online customer
engagement devices such as Web 2.0 features such as blogs,
online communities and RSS feeds?
• What are the barriers to adoption amongst customers of
different channels and services and how can we encourage
adoption?
Slide 8.14
Demand analysis – con't
Figure 8.10 Customer demand analysis for the car market

Slide 8.15
Competitor analysis
Review of digital business services offered by

existing and new competitors and adoption by
customers.
Benchmarking of competitors' online services and

strategy is a key part of planning activity.
Slide 8.16
Perspectives of competitor benchmarking
• Review of internal capabilities

• From core proposition through branding to online value
proposition
• Different aspects of the customer life cycle
• Qualitative to quantitative
• In-sector and out-of-sector
• Financial to non-financial measures
• From user experience to expert evaluation
Slide 8.17
Benchmark comparison: an example
Figure 8.11 Benchmark comparison of corporate websites

Source: Bowen Craggs & Co (www.bowencraggs.com).
Slide 8.18
Objective setting
The relationship objectives, strategies and performance indicators for a

Table 8.3
B2B company (in order of priority)
Slide 8.19
Objective setting
The relationship objectives, strategies and performance indicators for a

Table 8.3
B2B company (in order of priority) (Continued)
Slide 8.20
Objective setting - ORC
Assessment of the future online promotion contribution and online

Figure 8.12
revenue for a B2B company, for Product A, Europe
Slide 8.21
Objective setting - Metrics
Example Internet marketing objectives within the balanced scorecard

Table 8.4
framework for a transactional e-commerce site
Slide 8.22
Goal setting
• Business effectiveness. Contribution of site to

revenue (see objective setting), profitability and any
indications of the corporate mission for the site. The
costs of producing and updating the site will also be
reviewed, that is cost-benefit analysis.
• Marketing effectiveness. These measures may
include:
– leads; sales; retention; market share; brand
enhancement and loyalty.
• Customer service
– These measures will be assessed for each of the
different product lines delivered through the web site.
The way in which the elements of the marketing mix
are utilised will also be reviewed.
Slide 8.23
Goal setting – con't
• Internet effectiveness. These are specific

measures that are used to assess the way in
which the web site is used, and the characteristics
of the audience
– Such measures include specialist terms such as
hits and page impressions that are collected from
the log file, and also more typical techniques such
as focus groups and questionnaires to existing
customers. From a marketing point of view, how
clear the value proposition of the site is for the
customer should be noted.
Slide 8.24
Strategy
Table 8.5Summary of typical focus for main types of e-commerce-related strategic

initiatives
Slide 8.25
Strategy – con't

initiatives (Continued) th
Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6 edition © Marketing Insights Limited 2015
Slide 8.26
Strategy – con't

initiatives (Continued)
Slide 8.27
de Kare-Silver ES Test
1. Product characteristics. Does the product need to

be physically tried, or touched before it is bought?
2. Familiarity and confidence. Considers the degree
the consumer recognises and trusts the product and
brand.
3. Consumer attributes. These shape the buyer’s
behaviour – are they amenable to online purchases
in terms of access to the technology skills available
and do they no longer wish to shop for a product in
a traditional retail environment?
Slide 8.28
de Kare-Silver ES Test – con't
Table 8.6 Product scores in de Kare-Silver (2000), Electronic Shopping Potential Test
Slide 8.29
Target market strategies
Figure 8.14 Stages in target marketing strategy development th

Slide 8.30
Options for targeting customers
Table 8.7 A range of targeting and segmentation approaches for a digital campaign
Slide 8.31
Online value proposition
• A clear differentiation of the proposition from competitors

based on product features or service quality.
• Target market segment(s) that the proposition will appeal
to.
• How the proposition will be communicated to site visitors
and in all marketing communications. Developing a tag
line can help this.
• How the proposition is delivered across different parts of
the buying process.
• How the proposition will be delivered and supported by
resources – is the proposition genuine? Will resources
be internal or external?
Slide 8.32
Example OVPs
• ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com)

• ‘Earth’s biggest selection’. Amazon (www.amazon.com)
• ‘Search the largest inventory of cars and trucks on the
Internet. More than 1.5 million listings, updated daily’
(www.autotrader.com)
• The Citibank site design (www.citibank.com) uses a
range of techniques to illustrate its core proposition and
OVP. The main messages are
– Welcome to Citibank: The one-stop solution for all your
financial needs
– Look for a product or service; Learn about a financial
product; Find a location.
Slide 8.33
Characteristics of digital media

communications
• Interactivity
• Intelligence
• Individualisation
• Integration
• Industry restructuring
• Independence of location
Slide 8.34
Characteristics (con’t) - Interactivity
Figure 8.16 Summary of communication models for (a) traditional media, (b) new
media
Slide 8.35
Characteristics (con’t) - Individualisation
Summary of degree of individualisation for (a) traditional media (same

Figure 8.17
message), (b) new media (unique messages and more information exchange
between customers) th
Slide 8.36
Characteristics (con’t) - Integration
Figure 8.18 Channels requiring integration as part of integrated digital marketing

strategy Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
Slide 8.37
Characteristics (con’t) - Integration
Figure 8.19 Channel integration required for digital marketing and mixed-mode
buying Chaffey, Digital Business and E-commerce Management Powerpoints on the Web, 6th edition © Marketing Insights Limited 2015
Slide 8.38
Tactics – marketing mix
Figure 8.20 The elements of the marketing mix
Slide 8.39
Issues with varying the mix online
• Do we vary the mix online or replicate offline?

• Is the offer clear – brand proposition, online
offer?
• Is online differentiation defined?
• Is online differentiation communicated?
• Key online mix variables
– Product
– Price
– Place
– Promotion
– Service: People, Process, Physical evidence.
Slide 8.40
Marketing mix – long-tail concept
Zipf’s law, showing decrease in popularity of items within an ordered

Figure 8.21
sequence
Slide 8.41
Online mix options - Product
Options for product variability

• Core product
• Extended product
• Mass customisation
• Bundling
Slide 8.42
Online mix options - Price
Implications of the Internet

–Increased price transparency and its implication on
differantial pricing
• Offering different prices
• Price elasticity
Examples:
• Reduce online prices (easyJet)
• Maintain price to avoid cannibalisation of
offline sales (Dixon)
–Downward pressure on price
• Commodisation (e.g. Automotive -
DaimlerChrysler)
Slide 8.43
Online mix options – Price (con’t)

–New pricing options (software, music):
• Dynamic pricing (Concert tickets)
• Aggregated buying
–Alternative pricing structure or policies
• Payment per use
• Rental as a fixed cost
• Add-ons and extra services
• Guarantees
• Refund policies
• Order cancellation terms
Slide 8.44
Online mix options – Price - Elasticity
Figure 8.22 Price elasticity of demand for a relatively elastic product
Slide 8.45
Online mix options – Price - Elasticity
Figure 8.23 Price elasticity of demand for a relatively inelastic product
Slide 8.46
Online mix options - Place

–Place of purchase
–New channel structures
–Channel conflicts
–Virtual Organisations
Slide 8.47
Online mix options - Promotion

Main elements of the promotional mix
– Advertising – Direct mail
– Selling – Exhibitions
– Sales promotion – Merchandising
– Public relations – Packaging
– Sponsorship – Word-of-mouth
Investment decisions for the promotions
– Investment in promotion compared to site creation and
maintenance
– Investment in online promotion techniques in comparison
to offline promotion
– Investment in different online promotion techniques
Slide 8.48
Online mix options

People, Process, Physical Evidence
• Service
– People
• Automate – use web self-service,
offer customer choice
– Process
• Change process for service – contact strategies
– Physical evidence
• Site design – differentiate or support brand
• Fulfilment quality.
Slide 8.49
Branding
Leslie de Chernatony and Malcolm McDonald

described ‘brand’ in their classic 1992 book, Creating
Powerful Brands, as:
‘An identifiable product or service augmented

in such a way that the buyer or user perceives relevant
unique added values which match their needs most
closely. Furthermore, its success results from being
able to sustain these added values in the face of
competition.’
Slide 8.50
Branding from an alternative perspective

Brand equity:
The assets linked to a brand's name and symbol that add to service.
Table 8.9 Traditional measures of brand equity and online measures of brand equity

Lecture 8

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Slide 8.

• Assess the need for separate digital business

• How do we integrate traditional marketing

• The definition of marketing by the Chartered

Marketing is the management process

• Which e-marketing tools can assist?

Operational processes of digital marketing

Figure 8.1 The operational and management processes of digital marketing

Management processes of digital marketing

The operational and management processes of digital marketing

Figure 8.6 Content Marketing Chaffey,

Digital Marketing Plan

Figure 8.7 SOSTAC

Figure 8.8 Inputs to the digitalChaffey,

Figure 8.9 Example SWOT analysis

SWOT analysis – con't

Figure 8.9 Example SWOT analysis (Continued)

• What percentage of customer businesses have access to the

Demand analysis – con't

Figure 8.10 Customer demand analysis for the car market

Review of digital business services offered by

Benchmarking of competitors' online services and

Perspectives of competitor benchmarking

• Review of internal capabilities

Benchmark comparison: an example

Figure 8.11 Benchmark comparison of corporate websites

The relationship objectives, strategies and performance indicators for a

The relationship objectives, strategies and performance indicators for a

Objective setting - ORC

Assessment of the future online promotion contribution and online

Objective setting - Metrics

Example Internet marketing objectives within the balanced scorecard

• Business effectiveness. Contribution of site to

Goal setting – con't

• Internet effectiveness. These are specific

Table 8.5Summary of typical focus for main types of e-commerce-related strategic

Table 8.5Summary of typical focus for main types of e-commerce-related strategic

Table 8.5Summary of typical focus for main types of e-commerce-related strategic

1. Product characteristics. Does the product need to

de Kare-Silver ES Test – con't

Target market strategies

Figure 8.14 Stages in target marketing strategy development th

Options for targeting customers

Online value proposition

• A clear differentiation of the proposition from competitors

• ‘Compare. Buy. Save’. Kelkoo (www.kelkoo.com)

Characteristics of digital media

Characteristics (con’t) - Interactivity

Characteristics (con’t) - Individualisation

Summary of degree of individualisation for (a) traditional media (same

Characteristics (con’t) - Integration

Figure 8.18 Channels requiring integration as part of integrated digital marketing

Characteristics (con’t) - Integration

Tactics – marketing mix

Figure 8.20 The elements of the marketing mix

Issues with varying the mix online

• Do we vary the mix online or replicate offline?

Marketing mix – long-tail concept

Zipf’s law, showing decrease in popularity of items within an ordered

Online mix options - Product

Options for product variability

Online mix options - Price

Implications of the Internet

Online mix options – Price (con’t)