Online Marketplace Analysis:: Micro-Environment

Slide 2.
Chapter 2
Online marketplace analysis:
Micro-environment
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition Pearson Education Limited 2013
Slide 2.2
Learning objectives
Identify the elements of an organisations online
marketplace that have implications for eveloping
a digital marketing strategy
Evaluate techniques for reviewing the
importance of different actors in the
microenvironment: customers, intermediaries,
suppliers and competitors as part of the
development of digital marketing strategy
Review changes to business and revenue
models enabled by digital markets.
Slide 2.3
Questions for marketers

What are our capabilities for understanding our online
marketplace?
How relevant is the behaviour of the actors in the microenvironment to the future of our business?
How do I complete a marketplace analysis and how does this
inform our digital marketing planning?
How are customers needs changing as digital platforms
develop and what are the implications of such changes?
How do I compare our online marketing with that of our
competitors?
How do we find suitable intermediaries at the planning stage
of a digital marketing strategy?
Slide 2.4
Scenario for marketplace analysis

You have been appointed by Blackcircles.com
as digital marketing manager.
Your task is to create a digital marketing plan for
the next year and beyond
What would you need to review about the online
marketplace to help create your plan?
Slide 2.5
Figure 2.1
Blackcircles.com
Slide 2.6
Figure 2.2
The Internet marketing environment
Slide 2.7
Figure 2.3
An online marketplace map
Slide 2.8
Correlation between search volume in Google Trends and retail

sales volume
Figure 2.4
Source: Chamberlin (2010)
Slide 2.9
Example searches implications?
Table 2.1
Top 10 search terms for all retailing and for apparel
Slide 2.10
Tools for marketplace analysis

Google Agency Tookit
http://www.google.com/ads/agency/toolkit.html
Key Tools:
http://www.smartinsights.com/marketplaceanalysis/google-tools-you-may-not-know-about/
Alexa: www.alexa.com or www.compete.com

Hitwise: www.hitwise.com
Nielsen: www.nielsen-netratings.com
Comscore: www.comscore.com Press releases
IMRG: www.imrg.org
Slide 2.11
Issues in analysing the online marketplace
Table 2.3
The micro-environment: issues for digital marketers
Slide 2.12
A model of the Internet marketing conversion process. It shows key traffic or

audience measures (Q0 to Q4), first-time visitors (Q2) and repeat visitors (Q2R) and key
conversion efficiency ratios
Figure 2.5
Slide 2.13
Figure 2.6
An example of a conversion model
Slide 2.14
Evaluating demand levels

Level of Internet access
Includes type of access broadband and mobile
Consumers influenced by using online channel

Includes understanding type of sites which have
influence
Transact online
Includes different types of transactions, not just
sales, e.g. support, forum comments, etc.
Slide 2.15
Model showing conversion between the digital channel and traditional

channels during the buying process
Figure 2.7
Slide 2.16
Figure 2.8
Research Online Purchase Online example
Source: Google, 2010
Slide 2.17
Figure 2.9
Variation of broadband penetration in different countries
Source: OECD (http://www.oecd.org/sti/ict/broadband)
Slide 2.18
Figure 2.10
Consumer Internet Activities
Source: http://internet2go.net/ (accessed 31 May 2011)
Slide 2.19
Figure 2.11
Development of experience in Internet use
Slide 2.20
Figure 2.12
Reasons for and for not purchasing over the Internet in the UK
Source: Chamberlin 2010
Slide 2.21
Consumer characteristics
Demographics:
Age, gender, social group
Webographics
Access methods and times
Personas:
Dulux example
Slide 2.22
Figure 2.13
Internet use by businesses in European countries
Source: European Commission, 2009
Slide 2.23
Dulux persona example

Aims:
The aim was to position Dulux.co.uk (Figure 2.13) as the
online destination for colour scheming and visualisation to help
you achieve your individual style from the comfort of your
home. Specific outcomes on the site are to browse colours,
add colours to a personal scrapbook, use the paint calculator
and find a stockist. Further aims were to win the war before
the storei.e. to provide colour help tools that can help develop
a preference for Dulux before consumers are in-store and to
prompt other ideas to sell more than one colour at a time.
Specific SMART objectives were to increase the number of
Unique Visitors from 1M p.a. in 2003 to 3.5M p.a. in 2006 and
To drive 12% of visitors to a desired outcome (e.g. ordering
swatches).
Slide 2.24
Figure 2.14
Dulux site (www.dulux.co.uk)
Slide 2.25
Target audience variation

Based on research, it was found that the main audience for the site
was female with these typical demographics and psychographics:
Would be adventurous 25-44 women, online

Lack of confidence with previous site:
- Gap between inspiration (TV, magazines, advertising) and lived
experience (Large DIY sheds,nervous discomfort)
- No guidance or reassurance previously available currently on their
journey
Colours and colour combining is key
Online is a well-used channel for help and guidance on other topics
12 month decorating cycle
Propensity to socialise
Quality, technical innovation and scientific proficiency of Dulux is a
given
Slide 2.26
Example personas
First time buyer.
Penny Edwards, Age: 27, Partner: Ben, Location:
North London, Occupation: Sales Assistant
Part time Mum.

Jane Lawrence, Age: 37, Husband: Joe, Location:
Manchester, Occupation: Part time PR consultant
Single Mum.
Rachel Wilson, Age: 40, Location: Reading,
Occupation: Business Analyst
Slide 2.27
Business consumer characteristics

Variation in organisation characteristics
size of company (employees or turnover)

industry sector and products
organisation type (private, public, government, not-for-profit)
application of service (which business activities do purchased
products and services support?)
country and region.
Individual role
role and responsibility from job title, function or number of staff
managed
role in buying decision (purchasing influence)
department
product interest
demographics: age, sex and possibly social group.
Slide 2.28
Consumer behaviour models

Information / experience seeking behaviour
models
Hierarchy of response buying process models
Multi-channel buying models
Trust-based models
Community participation models
Slide 2.29
1. 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 clubs 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. For example, the MyOffers site (www.myoffers.co.uk) is
used by many brands to generate awareness and interest from consumers.
Entertainment seekers. These are users looking to interact with the Web for
enjoyment through entering contests such as quizzes, puzzles or interactive
multi-player games.
Slide 2.30
2. Hierarchy of response buying process models
A summary of how the Internet can impact on the buying process

for a new purchaser
Figure 2.15
Slide 2.31
Figure 2.16
Initial product search showing e-retailers available
Source: Google, 2011
Slide 2.32
Figure 2.17
Currys product category page (www.currys.co.uk)

Slide 2.33
3 Multichannel buying models
Table 2.5
The impact of channel experience on customer relationship
Slide 2.34
4 Trust-based models
Figure 2.19
Segmentation based on information need and trust
Source: Adapted from Forrester (2006) Teleconference Driving Sales With SegmentationAnalyst: Benjamin Ensor of Forrester Research, 27 February 2006
Slide 2.35
Competitor benchmarking
Activity which aspects of a competitors online
marketing activity should be reviewed?
Slide 2.36
Suggested benchmarking activities
Benchmarking tools:
See: http://www.smartinsights.com/marketplace-analysis/competitor-analysis/online-competitor-benchmarking-tools/
Slide 2.37
Figure 2.20
Benchmark comparison of corporate websites
Source: Bowen Craggs & Co (www.bowencraggs.com)
Slide 2.38
Figure 2.21
Taobao (www.allthingsgreen.net)
Slide 2.39
Types of portal
Table 2.8
Portal characteristics
Slide 2.40
Disintermediation of a consumer distribution channel showing: (a) the

original situation, (b) disintermediation omitting the wholesaler,
and (c) disintermediation omitting both wholesaler and retailer
Figure 2.22
Slide 2.41
From (a) original situation to (b) disintermediation or

(c) reintermediation or countermediation
Figure 2.23
Slide 2.42
Example of a channel chain map for consumers selecting an

estate agents to sell their property
Figure 2.24
Slide 2.43
Porters five forces

Bargaining
powers of
customers
Power of
suppliers
The business
Extent of rivalry
between
competitors
Threat of
subsitutes
Threat of new
entrants
Slide 2.44
Impact of the Internet on the five

competitive forces
Table 2.7
Impact of the Internet on the five competitive forces
Slide 2.45
Figure 2.25
Different types of online trading location

Slide 2.46
Figure 2.26
Alternative perspectives on business models

Slide 2.47
Publisher revenue models

Revenue from subscription access to content.
Revenue from Pay Per View access to documents.
Revenue from CPM display advertising on site (e.g. banners ads,
skyscrapers or rich media).
CPM stands for cost per thousand where M denotes Mille.
Revenue from CPC advertising on site (pay per click text ads)
CPC stands for Cost Per Click. Advertisers are charged not simply for the
number of times their ads are displayed, but according to the number of
times they are clicked.
Revenue from Sponsorship of site sections or content types (typically fixed
fee for a period)
Affiliate revenue (typically CPA, but could be CPC)
Affiliate revenue is commission based, for example if you display links to
Amazon books on your site, you can receive around 5% of the cover price as
a fee from Amazon. Such an arrangement is sometimes known as Cost Per
Acquisition (CPA). Amazon, and others offer a tiered scheme where the
affiliate is incentivised to gain more revenue, the more they sell. Hence this is
often called a pay-per-performance ad deal.
Slide 2.48
Figure 2.27
Revenue model spreadsheet
Source: SmartInsights.com

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Slide 2.

Questions for marketers

Scenario for marketplace analysis

The Internet marketing environment

An online marketplace map

Correlation between search volume in Google Trends and retail

Source: Chamberlin (2010)

Example searches implications?

Top 10 search terms for all retailing and for apparel

Tools for marketplace analysis

Alexa: www.alexa.com or www.compete.com

Issues in analysing the online marketplace

The micro-environment: issues for digital marketers

A model of the Internet marketing conversion process. It shows key traffic or

An example of a conversion model

Evaluating demand levels

Consumers influenced by using online channel

Model showing conversion between the digital channel and traditional

Research Online Purchase Online example

Source: Google, 2010

Variation of broadband penetration in different countries

Source: OECD (http://www.oecd.org/sti/ict/broadband)

Consumer Internet Activities

Source: http://internet2go.net/ (accessed 31 May 2011)

Development of experience in Internet use

Source: Chamberlin 2010

Internet use by businesses in European countries

Source: European Commission, 2009

Dulux persona example

Dulux site (www.dulux.co.uk)

Target audience variation

Would be adventurous 25-44 women, online

Part time Mum.

Business consumer characteristics

size of company (employees or turnover)

Consumer behaviour models

1. Information / experience seeking

Directed information-seekers. These users will be looking for product,

2. Hierarchy of response buying process models

A summary of how the Internet can impact on the buying process

Initial product search showing e-retailers available

Source: Google, 2011

Currys product category page (www.currys.co.uk)

3 Multichannel buying models

The impact of channel experience on customer relationship

Segmentation based on information need and trust

Suggested benchmarking activities

Benchmark comparison of corporate websites

Source: Bowen Craggs & Co (www.bowencraggs.com)

Disintermediation of a consumer distribution channel showing: (a) the

From (a) original situation to (b) disintermediation or

Example of a channel chain map for consumers selecting an

Porters five forces

Impact of the Internet on the five

Impact of the Internet on the five competitive forces

Different types of online trading location

Alternative perspectives on business models

Publisher revenue models

Revenue model spreadsheet

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