The digital marketing environment is composed of two parts:
- The micro-environment called operating environment
- The macro-environment called remote environment
Environmental scanning & Online marketplace analysis
This scanning describes the customer behavior or flow of online visitors between search engines, media sites, other intermediaries to an organisation and its competitors.
Here are the linkage between online business and customer journey:
- Customer segments or target segment
- Search intermediaries or search engines (typically Google)
- Intermediaries and media or publisher sites (aggregators and affiliates)
- Destination sites and platforms – where marketers are trying to attract visitors
The environment and online market place analysis is implemented by the understanding of the current trends and levels of use of the Internet.
Demand analysis & conversion marketing
This model of conversion marketing highlights how marketing communications help maximise conversion of potential customers into actual customers.
The demand analysis is a quantitative determination of the potential use and business value from online customers of an organisation. There is also a qualitative analysis of perceptions of online channels.
Evaluating demand levels
The access to digital platforms is essential while evaluating demand levels
- Location of access: network that provide user access to digital services are growing
- Type of access: broadband – people can use the Internet from a greater range of locations, with a greater range of applications and a greater range of devices
- Type of access: mobile – this option is a technological innovation that consumers are accustomed to now, and represent new opportunities for digital marketing
Consumer choices and digital influence
In order to get an overview of your customers and potential customers, you can conduct a Consumer behaviour analysis.
This consumer behaviour analysis consists out of:
- Understanding the potential and actual amount of visitors to your web page, and how many of these visitors translate into acual sales
- Understanding the digital experiences and behaviours of target customers, in order to place them in segmented markets.
By understanding how consumers are affected by different ways of online purchasing, a company will be able to provide the consumer with the best possible purchasing experience.
As convenience remains the biggest factor in online shopping, a company should always make this experience as convenient as possible
In order to properly understand your customer, it is important to keep in mind that on the web, you can use most of the segmentation variables that you would use offline. For instance, demographic, psychographic and behavioural variables.
In general, a customer wants for a web page to be easy to use, useful, beneficial and trustworthy.
Information processing refers to how the consumer deals with the available date, and how this will influence their future digital behavior.
A persona is an overview of an individual from a specific segment. By using this information, you will get a more realistic overview of who is in your segmented market as you will be able to relate to the person.
Online consumer behavior and implications for marketing
These are the steps that a customer will go through when purchasing a product, and how a company can make this experience easy and attract as much attention as possible from the consumer.
- The customer is unaware -> The company creates awareness (usually through mass media)
- Customer is aware of a need and Googles for info ->the company will position its products to appear on Google or a different search engine
- consumer searches for the supplier -> The company captures the consumer’s interest by providing more value than competitors
- Consumer evaluates alternatives -> The company must make sure it’s website is clear and has valid information
- Consumer purchases the product -> The company facilitates the customer to make the purchase experience as easy and trustworthy as possible
- Post purchase -> The company will use services in order to add value in order to retain the customer
Bargaining power of buyers
As people have the ability to review and judge the products that they have bought online, and share this with the rest of the world. Buyers now have a lot to say in the world of online marketing
Commoditisation is taking place, which refers to prices becoming more important than overall features and quality of the online products. This is because of websites that only compare products on price
Provide a list of companies working in the same market as our with:
- Their strengths
- What they’re good at
- Their weaknesses
- Their positioning on the market
- Their positioning within the industry
Is the comparison between companies regarding the using of digital marketing tools. Companies use benchmarking to analyze the behavior of their competitors.
Benchmarking is used for different purposes and goals. We can compare two companies on many different points, and the result won’t be the same each time. It is mainly due to the strategic positioning of companies (on price, quality for instance).
The Benchmarking has to be focused on specific services or factors of the company observed:
- Internal capabilities
- Different aspects of the customer lifecycle
- Qualitative vs. quantitative
- In-sector and out-of-sector
- Financial vs. non-financial measures
- From user experience to expert evaluation
New channel structures
- Intermediaries: The marketing intermediaries are the firms that help companies to promote, sell and distribute products or services.
- Typically, these online intermediaries are all the comparison websites, media sites, social networks, blog or others. The intermediary site is the link that facilitates
exchanges between consumers and suppliers
Business models for e-commerce
As in real life, a successful company has to have a successful business plan, especially when you are operating online.
The composition of a business plan for e-commerce is quite the same as a business plan for any business;
- The value proposition: This is what you offer to your customers
- Customer segments: To who you will sell to?
- Customer relationship: What type of relationship do you want with your customer ? Close? Serious? Professional? Fun…?
- Channels: It’s the distribution process.
- Key partners: With whom ? When operating online it is important to think large ! Boundaries are very tight on the web.
- Activities: What are the main activities that need to be performed for the good functioning of the company.
- Resources: Human, engine, raw materials, facilities and all the resources a company will need to produce and deliver.
- Cost structure: What are the fixed costs and the variable costs in the company.
- Revenue stream: How you will make money ? Especially online, you have to provide a good sight of how you will make revenues for your company and become profitable.
However, Timmers identified different types of business model online in order to make things more clear:
- e-shop:marketing of a company via the web
- e-procurement: B2B online
- e-auctions: the well known in this sector is eBay.
- Value chain service providers: company that provide services for specific part of the value chain as logistic, marketing for instance.
- Collaboration platforms: collaboration between businesses or individuals
- Information brokerage: provide information on
businesses, products or services.
- Trust and other services: websites which authenticate the quality of a website.
CPM: display advertising on sites. The e-commerce will earn money each time an ad will be played on his website.
CPC advertising on site: this how advertisers are paid. The cost per click comes in addition to the CPM. Each time someone will click on the ad, the advertiser will charge a pre-determinate fee to the website owner.
Sponsorship: when a company pay, for a period of time, to have an advertisement on an entire section of the website.
Affiliate revenue: (CPA or CPC) It is the cost the publisher will pay after a sale generated after a click on ad.
Transaction fee revenue: Fee for facilitating a transaction as Paypal for instance.
Subscription access to content services: When you have to subscribe to see the content or to have access to services.
Subscriber data for email marketing: basically you are supposed to know this one very well ! It’s all the times you have given your email to create an account to access to something, a content, an article for example. The email will serve to send newsletter with advertisement in it.
Pay-per-view access to document: when you have to pay for each documents or anything you can download.
NinjaMedia team thank you for reading this blog post. We hope you found some interesting information about the digital marketing environment. Do no hesitate leaving your comments below !