short essay

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timer Asked: Nov 23rd, 2016

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using the slide lecture below answer this question in 200 words only (Discuss the importance of the Internet in the marketing micro environment.)

17/10/2016' Marketing Environment Traditional vs. Digital Dr Ewelina Lacka Ewelina.Lacka@strath.ac.uk Traditional marketing environment actors and forces that affect firm’s ability to build and maintain successful relationships with customers. Macro-environment Known as ‘remote environment’, includes forces affecting organisations in the marketplace (i.e. social, technological, economic, political, legal and ecological influences) Micro-environment Known as ‘operating environment’, focuses on the stakeholders which shape trading environment and influence how an organisation responds in its marketplace ! Organisations should continuously monitor and analyse the environment! The marketing environment ! Organisations should continuously monitor and analyse the online environment! To analyse the online environment you need to follow the marketplace map 1' 17/10/2016' Consumer analysis Consumer behaviour analysis involves research into motivations, media consumption preferences and selection processes used by consumers as their digital channels together with traditional channels to purchase online products/ use online services Consumer behaviour analysis types: 1. Digital consumer behaviour understanding needs, characteristics and digital experiences or behaviour of target consumers. 2. Demand analysis understanding current trends and level of use of the Internet and different online services as well as factors affecting how consumers use digital services on offer (e.g. cost of access, value proposition, perception of ease of use, perception of security), it involves understanding potential and actual volume of visitors On the basis of consumer analysis it is possible to assess the consumer characteristics, needs, wants and demands and the propensity to engage with digital platforms. Conversion models: to convert potential consumers into actual consumers The model assumes that different types of communication can be used to based on the stage of consumer purchasing decision process. ! While building conversion models both online and offline consumer behaviour has to be considered! Evaluation of B2C demand levels How does the consumer access digital platform? Demand based on types of access 1.  Location access: refers to the networks which provide access to digital services 2. Channel access: refers to channels through which consumers access digital services. Which websites influence consumer buying decision? Demand based on consumer choice Why does the consumer engage in activities on digital platform? Demand based on consumers transactions 2' 17/10/2016' Evaluation of consumer behaviour How does the consumer behave? 1. Create personas Personas ( a digital tool) help to understand online consumer characteristics, needs, motives etc. 2. Develop consumer scenario Consumer scenario ( a set of alternative tasks or outcomes required by a consumer) help to understand different information needs of different consumer types at different stages of buying process. Evaluation of consumer behaviour. 1.  -  -  -  Build personal attributes into personas: Demographic e.g age, gender, education, occupation or company size Psychographic e.g. goals, tasks, motives Webographic e.g. web experience, usage location, usage platform, usage frequency, favourite sites 2. Set up models of characteristics and environment -  Design targets -  Set up stereotypes -  Assign primary persona 3. Develop scenario for each persona -  Information seeking scenario -  Purchase scenario (new vs. existing consumers) Assessment of online consumer characteristics The assessment of online consumer characteristics can be based on: Consumer characteristics: 1. Demographic variables (e.g. age, gender, income, education, cultural and social make-up etc) 2. Psychographic and behavioural variables (e.g. consumers’ perception, attitudes, beliefs) Consumer experience: - Ease of use, - Usefulness, - Perceived control - Interactivity - Intrinsic motivation Consumer online behaviour 3' 17/10/2016' Assessment of online consumer behaviour Information/ experience –seeking behaviour models - Directed information-seekers. These users will be looking for product, market or leisure information such as details of their football club’s fixtures. They are not typically planning to buy online. - Undirected information-seekers. These are the users, usually referred to as ‘surfers’, who like to browse and change sites by following hyperlinks. Members of this group tend to be novice users (but not exclusively so) and they may be more likely to click on banner advertisements. -Directed buyers. These buyers are online to purchase specific products online. For such users, brokers or cybermediaries that compare product features and prices will be important locations to visit. - Bargain hunters. These users (sometimes known as ‘compers’) want to find the offers available from sales promotions such as free samples or competitions. - Entertainment seekers. These are users looking to interact with the Web for enjoyment through entering contests such as quizzes, puzzles or interactive multiplayer games. Assessment of online competitive markets According to Porter's five forces 1.  Bargaining power of buyers - Consumer have greater access to information - Consumer can evaluate products/ compare prices 2. Bargaining power of suppliers - Supplier can increase its efficiency - Suppliers power is reduced 3. Threat of substitute products and services -  New digital products/ services can be developed easily 4. Barriers to enter -  Reduced barriers to entry 5. Intensity of rivalry -Increased competition Competitor analysis Competitor benchmarking is a structured comparison of digital marketing approaches of an organisation’s service within a market. It allows to identify threats and opportunities for enhancing company's offers Different perspectives on benchmarking ! 1.  2.  3.  4.  5.  6.  Internal vs. external capabilities! Different aspects of consumer lifecycle ! Qualitative to quantitative ! In-sector and out-of-sector! Financial to non-financial measurements! From user experience to expert experience ! 4' 17/10/2016' New channel structure Channel structure describes the way a manufacturer or seller delivers product/ service to its consumer In the online environment Channel structure is subject to disintermediation Disintermediation refers to the removal of intermediaries such as distributors (b). Disintermediation can be reversed (reintermediation) Reintermediation refers to creation of new intermediaries (c) Macro- environment forces Technological forces changes in technology which influence marketing objectives; create new product development opportunities; introduce new ways to access target markets through channel integration; create new forms of access platforms and applications Economic forces cause variation in economic conditions: affect trading opportunities; influence consumer spending and business performance; have significant implications for digital marketing planning Political forces national governments and transnational organisations have an important role in determining the future adoption and control of the Internet and the rules by which it is governed Legal forces determine the methods by which products can be promoted and sold online. Laws and ethical guidance that seek to safeguard individuals’ rights to privacy and business to free trade Social forces cultural diversity among digital communities, which influence use of the Internet and the services business provided online Responding to macro- environment forces Strategic agility- the process based on reviewing marketplace opportunities and threats on the basis of which the appropriate strategy options can be selected which derives capacity to innovate and so gaining competitive advantage within a marketplace. Strategic agility can be achieved by: 1.  Collection, dissemination and evaluation of different information sources from the macro- and micro- environment 2.  Process for generating and reviewing the relevance of new strategies based on creating new value for consumers 3.  Research into potential consumer value against the business value generated 4.  Implementation of prototypes of new functionality to deliver consumer value 5.  Measurement and review of results from prototypes to revise further to improve proposition or to end a trial 5' 17/10/2016' Macro- environment forces 1. Technological forces: Internet www.strath.ac.uk' World Wide Web Domain-name refers to the name of the web server. It is usually selected to be the same as the name of the company. Domain-name extension. It indicates domain type, commonly known as the generic top-level domain (gTLD) Common gTLDs: - .com (an international or American company) - .org (not-for-profit organisations) - .net (network provider) - .co.uk (company based in the UK) - .de or .fr (company based in Germany or France) - .ac.uk (UK based university) !Domain names are part of company’s brand property! 1.  Technological forces Web page standards; content ' Types of content: - Text information- HTML (Hypertext Markup Language); an international standard established to ensure that any web page written according to the definitions in the standard will appear the same in any web browser - Text information and data –XML (eXtensible Markup Language) facilitates creation of new forms of markup tags for search and exchange information - Graphical images (GIP, JPEG and PNG files) standard file formats most commonly used to present images on web page. - Animated graphical information (Flash and plug-ins), additional programs that work in association with the web browser to provide features not presented in the basic web browser (e.g. Adobe Acrobat) - Audio and video standards 1.  Technological forces Infrastructure components of the Internet ' 6' 17/10/2016' 1.  Technological forces Internet, Intranet or Extranet ' Intranet- an application of the Internet. It is a network within a single company that enables access to company information using the familiar tools of the Internet such as email and web browsers. Only staff within the company can access the intranet, which is password protected Extranet- an application of the Internet. It is formed by extending the intranet beyond a company to consumers, suppliers, collaborators or even competitors, It is passwordprotected to prevent access by general internet users. 1.  Technological forces Digital security ' Security risk involved in an e-commerce transaction: ! Confidential details or password accessed on user’s computer ! Transaction or credit card details stolen in transit ! Consumers’ credit card details stolen from merchant’s server ! Consumers’ details accessed by company staff ! Merchants or consumers are not who they claim to be Axes of uncertainty: ! Growth in the global economy and in the digital markets will occur in emerging economies ! Governance of the Internet will be subject to occasional Internet disruptions ! Change in consumer behaviour ! Change of technology usage ! Change of Internet access price 1.  Technological forces Digital security development ' To increase digital security: ! Digital certificates (consists of keys made up of large numbers that are used to uniquely identify individuals) - secret- key/ symmetric encryption - public-key/ asymmetric encryption ! Digital signatures (a method of identifying individuals or companies using public-key encryption) ! The public- key infrastructure and certificate authorities ( a certificate is a valid copy of a public key of an individual or organisation together with identification information) ! Secure electronic transaction (a standard for public key encryption intended to enable secure e-commerce transactions, lead- developed by MasterCard and Visa) 7' 17/10/2016' 1.  Technological forces Evaluating the marketing value of technology innovation ' Assessment of the marketing value of technology innovation can be based on the diffusion- adoption curve, which helps: - Understand the stage at which consumers are in adoption of a technology and/ or product - Look at adoption of a new technique by other businesses. 1.  Technological forces Evaluating the marketing value of technology innovation ' Hyper cycle is a graphic representation of the maturity, adoption and business application of specific technologies. 2. Economic forces ' Economic forces include: 1.  Market growth , assesses on the basis of demographic variables (e.g. age profiles, birth rates, education levels, gender, household structures, lifestyle, total income expenditure, working patterns and occupations.) 2.  Employment and working patterns 3.  Income and expenditure What is the effect of globalisation on digital strategy? Globalisation refers to the move towards international trading in a single global marketplace and increase of shared social and cultural values. 8' 17/10/2016' 3. Political forces ' Political actions that aim to control adoption of the Internet: ! Promoting the benefits of adoption the Internet for consumers and business to improve a country’s economic prosperity ! Sponsoring research leading to dissemination of best practice among companies ! Enacting legislation to regulate the environment ! Involvement in setting up international bodies to coordinate the Internet. E-government - the use of Internet technologies to provide government service to citizens 3. Legal forces ' 3. Legal forces and type of information collected online ' 9' 17/10/2016' 4. Socio- cultural forces ' ‘information haves’ vs. ‘information have-nots’ Social exclusion (part of society is excluded from the facilities available to the reminder) CULTURE??? Reading! ! ! ! Chapter 2 & 3 from Chaffey D. and Ellis-Chadwick F. ‘Digital Marketing; Strategy, Implementation and Practice’ ! 10'

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