Digital Marketing Mix : Challenges & Implications

This presentation introduces the online marketing mix concept. It takes you through the challenges faced with the digital marketing mix and how 7P's of marketing are applied in the digital arena.

1. Unit -2 Online Marketing Mix Puneet Bhatia – Digital Marketing Made By : Priyanka Gautam

2. Digital Marketing Mix

3. Internet users in India have grown beyond 566 million (87% are regular users ) 87% are regular users : 293 mn (Urban) & 200 mn (Rural) By 2020 : around 627 million 67% < 35 yrs & 33% > 35 yrs The Indian e-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. (desire for convenience, lack of brand loyalty, willingness to switch, explore other products, take risks, double income in families has given rise to an era of e-commerce) Understanding the Marketing Mix

4. Understanding the optimal utilisation of the internet for enhanced marketing efficiency Designing the best possible way to position products and servuces in the online domain for greater marketing productivity Creating a value proposition in which the product and price meet the consumers’ expectations Challenges

5. The online marketing mix

6. Value proposition offered to customer Value – product experience, individual beliefs of the customer, & customer expectations E-Products Operating only in online domain & sell products only through online media Exist in physical as well as on internet for promoting products E.g. Amazon, ebay etc. E.g. P&G, LG, HUL etc.

7. High levels of convenience for consumers Offers good customer service Saves consumer time and money Provides an enjoyable shopping experience Merchandises in the context of product offerings and product information Provides site design and transaction security Characteristics of online offer

8. 1) Attributes physical components of the product – shape, size, colour, features and quality offered by the Internet mass customisation and personalisation. Can help in one-to-one customer engagement for product proliferation & sale volume Medium : online websites, blogs, online communities and social networks 2) Branding Customers interact in online space, engages with it, and advocates the brands to others - leading to customer relationship with the brands 3) Co-creation A creative and active collaboration btw producers and consumers to generate value both for firm and the consumers. For e.g. asking feedbacks, suggestions from consumers and other parties solving problems related to designs, quality etc. Significant product dimensions

9. Pure Tangible Goods Tangible products primarily in physical form and mostly commodity in nature. E.g. Sugar, steel, a basic accessory etc No service element Consumers are unable to build a connect to the product Tangible goods and related services Tangible goods with a decent service element to it. E.g. Mobiles, automobiles, furniture etc. (aesthetics, features, customisation, conveniences etc) Products sold through e-commerce sites Products sold in physical form with good amount of intangible elements like information, history, positive customer references, demo videos, etc. Offering Mix(Product-Service)

10. 3. Hybrid Model Offering having equal mix of product & service elements E.g. Hospitality services like theme park, restaurants, Apple, Samsung etc. Very few firms (as they need to have strong product and service elements in their portfolio that is hard to achieve & sustain) 4. Major service with few goods Intangible part forms the core service, while the tangible part is built up as a support element. E.g. Air travel – additional services or supporting goods like snacks and drinks are sold. Service oriented companies moving to a productized format wherein each of their key features and processes are being broken down and sold as product in itself. (banking, insurance etc) 5. Pure Service Offering having complete intangible attributes. E.g. Spa and wellness services, online consulting, support helplines , etc.

11. Distribution Types of online channel intermediaries Length of the online channel Functions performed by members of the online channel Physical and informational systems that link the channel members and provide for coordination and management of their collective effort to deliver the collective product or service Marketing Segmentation Consumer segmentation - based on need, website characteristics search & pre-purchase judgement Consumer Segmentation - based on consumer traits & online shopping issues E-Place

12. Consumer Traits Willingness to take risk Seeking joy in surfing internet Saving time while shopping Feeling socially aware Likes playing games and using trendy apps with pleasant colour schemes Enjoys voicing their opinions Feeling smart in front of their peers Emotionally satisfying experience Online shopping issues Product risk issues Interactive risk issues Transaction security issues Privacy issues

13. Targeting Two main strategies: 1) Niche Marketing : a company selects a target segment and develops one or more marketing mixes to meet the needs of the segment 2) Micro Marketing or individualised targeting : a company tailors all or part of the marketing mix to a small number of people. Positioning Creating image of the company & products Positioning among the competitors to carve out own market niche Positioning on the basis of service attributes, innovative technology image, benefits, user categories, or comparisons with competitors

14. Factors affecting costs in online domain are : Online customer service, which can be expensive High distribution costs for specific customers as products need to be shipped separately Affiliate programmes tend to be expensive as they involve rewarding the referring parties Maintenance and development of websites involve costs The Internet spells low-order processing fee due to self-service Just-in-time inventories and low overheads Costs of distribution of certain digital products like music which is downloadable online are very low Animated shop bots offer online customer service at low cost by replacing service personnel E-Price

15. Fixed pricing Price Leadership : lowest priced product entry in a particular category. In online domain, low prices are a function of low costs of small time organisations their products through the Internet Promotional pricing : Targeted email messages allow organisations to follow promotional pricing to promote a first time purchase Dynamic pricing Pricing can be devised based on order size and timing, demand and supply levels, and other preset decision factors. Using cookie files, online sellers recognise individual and experiments with offers and prices to motivate transactions. For example, any person who books a flight within seven days of departure is quoted the full price The online value

16. Goals of online marketing promotion include the following : Driving the prospects to the website Increasing website registrations Increasing online transactions Building consumer engagement and involvement Online promotion Mix Online advertisement, Personalised selling, Online promotion using online coupons, Sweepstakes contests Product samples online Online exhibitions along with virtual tours E-newspapers & Magazines Emails Interactive websites Online display ads Fliers E-Promotion

17. Promotional channels across key marketing funnel stages

18. People – developing online teams with a mix of digital marketing expertise, technology know-how, multi-channel experience, knowledge of automation tools, and target customer insights, as well as understand of human impulse and desire. Processes – developing rigorous process-driven marketing organisation – clear steps to identify target customer clusters, Develop integrated supplier-customer processes Manage campaigns Aligning goals to consumer funnel Extended 4P’s

19. Programs : consumer –driven programs which run in a holistic manner online and offline to meet a firm’s marketing objectives. Includes multi-channel initiatives targeting all stages Performance : setting up systems and ways to measure performance and desired output at each stage of the marketing activity

20. E-product Digitisation allows firms to create virtual marketplaces Helps firms to present expanded assortment of products options Direct and immediate delivery of digitizable products has created new opportunities to wireless services such as bill payment, maps etc. Organisation selling products that can be evaluated adequately prior to purchase have a higher success rate E-price Wider and easier availability of price information increases consumer power in the marketplace and create a tendency of price levels to decrease. The seller-provided advertised reference prices is reduced in the online environments because of greater transparency. Digitisation and Implications of online marketing mix decisions

21. E-promotion When and where an ad is placed during an online session can significantly impact advertising effectiveness Firms must devote considerable efforts to develop and implement an online advertising and promotion strategy Carefully coordinated ads on channels like television, radio, and print can lead to good returns and will add to firm’s online visibility E-place The retention rate of customer can vary significantly depending upon the specific channel in which that customer was initially acquired. Compared to radio, television, and direct mail, websites is associated with higher retention rates Consumers who shop access multiple channels provide higher revenues, higher share of wallet, and tend to be more active than single-channel customers.