essay markting

timer Asked: Nov 6th, 2016

Question description

Here is the question from the slide lecture below

(( Discuss the impact of the Internet on the Product element of the marketing mix. ))

and the answer of this question should be as an assignment in 400 words only no more than that please

13/10/2016   Traditional vs. Digital Marketing mix Ewelina Lacka THE  ELEMENTS  OF  THE  MARKETING   MIX Marke5ng  mix-­‐  set  of  marke1ng  tools  that  the  firm  uses  to  pursue  its  marke1ng   objec1ves  in  the  target  market   4  Ps  vs.  4  Cs Product: ◦  Customer needs/wants —  Price: ◦  Cost to customer —  Promotion: ◦  Communication —  Place: ◦  Convenience —  1   13/10/2016   Elements  of  a  product   Augmented Intangible Tangible Delivery Core and credit Installation Positioning Packaging Brand name Core   Benefit   or   Service   Quality After-sales service Aesthetics Country of Origin Warranty •  6  main  implica1ons  of  the  Internet  on  the  Product   Variable   No  1.  Op1ons  for  varying  the  core  product   Op1ons  for  varying  the  core  product:   1. Product  informa5on     Before  adding  ‘digital  value’  to  your  product  ask  yourself:   1)  Can  I  offer  addi5onal  informa5on  or  transac1on  services  to  my  exis1ng  customers?   2)  Can  I  address  the  needs  of  new  customer  services  by  repackaging  my  current   informa5on?   3)  Can  I  use  my  ability  to  generate  new  sources  of  revenue  such  as  adver5sing  or  sales   of  complimentary  products?   4)  Will  my  current  business  be  significantly  harmed  by  other  companies  providing  some   of  the  value  I  can’t  offer?     2.  ‘Mass  customisa5on’    part  of  the  move  to  ‘prosumer’     3.  Bundling  (offering  complementary  service)       •  6  main  implica1ons  of  the  Internet  on  the  Product   Variable   No  2.    Op1ons  for  offering  digital  products   •  Subscrip5ons  –  a  tradi1onal  publisher  revenue  model,  but  subscrip1on   can  poten1ally  be  offered  for  different  periods  at  different  price  points,   e.g.  three  months,  12  months  or  two  years.     •  Pay-­‐per-­‐view  –  a  fee  for  a  single  download  or  viewing  session  at  a  higher   rela1ve  price  than  the  subscrip1on  service,  e.g.  music  product  form   iTunes.     •  Bundling  –  different  channels  or  content  can  be  offered  as  individual   products  or  grouped  at  a  reduced  price  compared  to  pay-­‐per-­‐view.     •  Ad  supported  content  –  There  is  no  direct  price  set  here,  instead,  the   publisher’s  main  revenue  source  is  through  adverts  on  the  site.   2   13/10/2016   •  6  main  implica1ons  of  the  Internet  on  the  Product   Variable   No  3.  Op1ons  to  change  extended  product   Warran1es   Guarantees   Money  back  offers   Customer  service  (see   people,  process  and   physical  evidence)   Incorpora1ng  tools  to   help  users  during   their  selec1on  and   use  of  the  product   –  Endorsements   –  Awards   –  Tes1monies   –  Customer  lists   –  Customer   comments   –  Informa1on  –   extranets     •  6  main  implica1ons  of  the  Internet  on  the  Product   Variable   No  4.  Op1ons  to  conduct  research  online   The  Internet  enables  marketers  too:   •  Learn  about  new  product  preferences  –  low  cost  market  research.   •  Collect  Market  Research  –  discover  customer  percep1ons  of  products  and   services.   •  New  Product  Development  –  move  towards  co-­‐crea1on  of  products.   Op5ons  for  NPD  online  research:   a)  Online  focus  group  –  can  be  conducted  to  compare  customers    experience   of  product  use.   b)  Online  ques5onnaire  survey  –  typically  focus  on  the  site  visitors’   experience,  but  can  also  include  ques1ons  rela1ng  to  products.   c)  Customer  feedback  or  support  forums  –  may  give  sugges1ons  about   future  product  informa1on.   d)  Web  analy5cs  –  a  wealth  of  marke1ng  research  data  available  form  e-­‐mail   and  search  campaigns  and  the  website  itself.   •  6  main  implica1ons  of  the  Internet  on  the  Product   Variable   No  5.  Speed  of  New  product  Development   •  Collect  data  quicker  and  typically  at  a  lower  cost–  ability  to  collect  data  in   real  1me  through  innova1ve  digital  technologies  and  the  companies  own   consumer  panels.   •  Own  consumer  panels  –  used  to  test  the  opinion  of  customers  rela1ng  to   various  aspects  including  the  product  and  service  offering.   •  The  network  effect  –  the  Internet  enables  companies  to  form   partnerships  more  readily  and  impacts  the  velocity  of  new  product   development.   3   13/10/2016   •  6  main  Implica1ons  of  the  internet  on  the  Product   Variable   No  6.  Speed  of  New  Product  Diffusion   Tipping  point  –  using  science  of  social  epidemics  explains  principles  that   underpin  the  rapid  spread  of  ideas,  products  and  behaviours  through  a   popula6on.      Three  laws  of  the  Tipping  Point:     1.)  The  Law  of  Few  –  speed  of  new  product  depends  on  ini1al  adop1on  by   ‘connector’  no.  of  shares,  likes,  blogs,  clicks...   2.)  The  S1ckiness  Factor  –  refers  to  characteris1cs  and  abributers  of  the   product  excellence,  uniqueness,  aesthe1cs,  engagement,  expressive  value,   nostalgic  value,  cost,  func1onal  value,  associa1on  and  personifica1on   (Morris  &  Mar1n,  2000)   3.)  The  Power  of  Context-­‐  the  product  should  fit  the  context,  situa1on  or   occasion  of  use.     Branding Branding is a process of creating and evolving successful brands. Successful brand should: à Depend on consumer perception à Add value to the product à Add value characteristics needed to be sustainable Brand includes: - Rational values - Emotional values - Promised brand experience- frequency and depth of interactions with a brand. Success  factors  for  brand  sites   Brand Advocates - a customer who has favourable perceptions of a brand who will talk favourably about a brand to their acquaintances to help generate awareness of the brand or influence purchase intent. Flores (2004) methods to encourage visitors to return: - Create a compelling, interactive experience including rich media which reflects the brand. -  Consider how the site will influence the sales cycle by encouraging trial. -  Developing an exchange (permission marketing) programme on the website. 4   13/10/2016   Price:  4  Implica1ons  of  the  Internet   No.  1  Increased  Price  Transparency  &  Differen1al  Pricing   Price  Transparency  –  customer  knowledge  about  pricing  increases  due  to   increased  availability  of  pricing  informa1on.   Differen5al  Pricing  –  Iden1cal  products  are  priced  differently  for  different  types  of   customers,  markets  or  buying  situa1ons.     Commodi5sa5on  –  the  process  whereby  product  selec1on  becomes  more   dependent  on  price  than  on  differen1a1ng  features,  benefits  and  value-­‐added   services.     To  reduce  emphasis  on  cost:    -­‐  develop  trust,  familiarity  &  perceived  service  levels       Price:  4  Implica1ons  of  the  internet   No.  2  Downward  pressure  on  Price   Downward  pressure  on  price  is  caused  by:    -­‐  price  transparency    -­‐  increased  no.  of  compe1tors    -­‐  aggregators  &  comparison  sites     Factors  to  assist  in  pricing       1.)  Precision  –  iden1fy  the  price-­‐indifference  band  in  order  to  maximise  profit.   2.)  Adaptability  –  the  ability  to  respond  more  quickly  to  the  demands  of  the   marketplace  with  online  pricing.   3.)  Segmenta5on  –  refers  to  pricing  differently  for  different  groups  of  customers.     Price:  4  Implica1ons  of  the  internet   No.  3  New  pricing  approaches  (including  auc1ons)   Considera5ons:   •  Forward  auc5ons  –  item  purchased  by  highest  bid  made  in  bidding  period.   •  Reverse  auc5ons  –  item  purchased  from  lowest  bidding  supplier  in  bidding   period.   •  Aggregated  buying  –  a  form  of  customer  union  where  buyers  collec1vely   purchase  a  number  of  items  at  the  same  price  and  receive  a  volume   discount.   •  Dynamic  Pricing  –  prices  can  be  updated  in  real  1me  according  to  the  type   of  customer  or  current  market  condi1ons.   •  Shipping  Fees  –  Lewis  et  al.  (2006)  suggest  that  shipping  fees  can  have  a   drama1c  effect  on  conversion  rate  and  profitability.     5   13/10/2016   Price:  4  Implica1ons  of  the  internet   No.  4  Alterna1ve  Pricing  Structures   When  reviewing  price  ask:     1.)  How  many  compe1tors  are  there?     2.)  What  is  the  posi1on  in  the  product  lifecycle?     3.)  What  is  the  price  sensi1vity  or  elas1city  of  a  product?     4.)  What  level  is  pricing  set?     5.)  Are  rivals  monitoring  my  price?     6.)  Are  we  stuck  in  the  middle?     Place:  4  Main  implica1ons  in  the  online  environment   No.  1  Place  of  Purchase   3  aspects  of  Naviga5onal  Advantage  key  to  compe11ve  advantage:     • Reach.  This  is  the  poten1al  audience  of  the  e-­‐commerce  site.     • Richness.  This  is  the  depth  or  detail  of  informa1on  which  is  both  collected   about  the  customer  and  provided  to  the  customer.     • Affilia,on.  This  refers  to  whose  interest  the  selling  organiza1on  represents  –   consumers  or  suppliers     Place:  4  Main  implica1ons  in  the  online  environment   No.  1  Place  of  Purchase   Other  considera5ons  include:     • Syndica5on  –  content  or  product  informa1on  is  distributed  to  third  par1es.     Online  this  is  commonly  achieved  through  standard  XML  formats  such  as  RSS.   • Payment  mechanisms  –  tradi1onally,  online  purchases  will  occur  at  the  retailer   through  a  partnership  with  an  online  secure  payment  provider  such  PayPal.    The   transac1on  occurs  on  a  different  domain,  but  it  is  important  that  customers  are   reassured  that  the  payment  process  is  secure.   • Localisa5ons  –  tailoring  of  website  informa1on  for  individual  countries  or   regions.  Localisa1on  can  include  simple  transla1on,  but  also  cultural  adapta1on.     6   13/10/2016   Place:  4  Main  implica1ons  in  the  online  environment   No.  2  New  Channel  Structures   No.2  New  Channel  Structures   •  Disintermediation •  Reintermediation •  Countermediation When assessing which channel structure to adopt, marketers should consider potential channel conflicts. •  No.3  Channel  Conflicts   To assess channel conflicts it is necessary to consider the •  •  •  •  different forms of channel the Internet can take: A communication channel only. A distribution channel to intermediaries. A direct sales channel to customers. Any combination of the above. Place:  4  Main  implica1ons  in  the  online  environment   No.  4  Virtual  Organisa1ons   Kraut et al. (1998) suggest the following features of a virtual organisation: –  Processes transcend the boundaries of a single form and are not controlled by a single organizational hierarchy. –  Production processes are flexible, with different parties involved at different times. –  Parties involved in the production of a single product are often geographically dispersed –  Given this dispersion, co-ordination is heavily dependent on telecommunications and data networks. Place:  4  Main  implica1ons  in  the  online  environment   No.  4  Virtual  Organisa1ons   Different structures of virtual organizations •  Co-alliance model. Effort and risk is shared equally by partners. •  Star-alliance model. Here the effort and risk is centered on one organization that subcontracts other virtual partners as required. •  Value alliance model. This is a partnership where elements are contributed across a supply chain for a particular industry. •  Market alliance model. This is similar to the value alliance, but is more likely to serve several different marketplaces. 7   13/10/2016   Promo1on   Communica5on  Tool   Online  Implementa5on   Adver1sing   Interac1ve  display  ads,  PPC  search  adver1sing   Selling   Virtual  sales  staff,  site  merchandising,  chat  &  affiliate  marke1ng   Sales  promo1on   Incen1ves  such  as  coupons,  rewards,  online  loyalty  schemes   Public  Rela1ons   Online  editorial,  blogs,  feeds,  e-­‐newslebers,  newslebers,  social   networks,  links  and  viral  campaigns   Sponsorship   Sponsoring  an  online  event,  site  or  service   Direct  mail   Opt0in  e-­‐mail  using  e-­‐newslebers  and  e-­‐blasts  (solus  e-­‐mails)   Exhibi1ons   Virtual  exhibi1ons  and  whitepaper  distribu1on   Merchandising   Promo1onal  ad-­‐serving  on  retails  sites,  personalised   recommenda1ons  and  e-­‐alerts   Packaging   Virtual  tours,  real  packaging  is  displayed  online   Word-­‐of-­‐mouth   Viral,  affiliate  marke1ng.  E-­‐mail  a  friend,  links   Reading Chapter 5 from Chaffey and Ellis-Chadwick (2012) 8  

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