Digital Marketing Strategy 2023 - Dr. Atallah F Alserhan PDF

Dr.Atallah F Alserhan All Customers Differ © Palmatier All Customers Change All Competitors React All Resources are Limited 1 Boston Consulting Group matrix  According to Bruce Henderson, founder of the Boston Consulting Group, ‘To be successful, a company should have a portfolio of produc...

Dr.Atallah F Alserhan All Customers Differ © Palmatier All Customers Change All Competitors React All Resources are Limited 1 Boston Consulting Group matrix  According to Bruce Henderson, founder of the Boston Consulting Group, ‘To be successful, a company should have a portfolio of products with different growth rates and different market shares’ (Henderson, 1970).  This model is similar to the brand perceptual model mentioned above – in that it uses a matrix. However, the Boston Consulting Group (BCG) matrix is used for a very different purpose.  The model categorizes products in a portfolio into stars, cash cows, dogs and question marks by looking at market share and market growth.  This is why it is sometimes called the growth–share matrix. It is used primarily to maximize long- term value creation in a business by maximizing high-potential areas and minimizing poor performers. 2  Dogs – low market share in a slow-growth environment Dogs are not the strongest part of the portfolio and can in fact be damaging for a business. They tend to break even and so do not offer a great deal of benefit to the business. Businesses will generally look to reduce dogs or sell them off and should be very wary of investing money into them as returns are unlikely.  Cash cows – high market share in a slow-growth environment Cash cows are strong and safe products. They generate money steadily in a market that is not growing at any pace and, as such, do not require much investment. As a result they are highly profitable. 3  Question marks – low market share in a high-growth environment Question marks are named as they can go in either direction. They are growing rapidly but have a low share so they consume a lot of cash and do not generate a great deal. A question mark can become a ‘star’ if it gains market share and then even a ‘cash cow’ if the market slows, but it also has the potential to be a ‘dog’ if the market slows before it has gained momentum. Decisions around what to do with question marks must be based on extensive analysis – to invest or not to invest.  Stars – high market share in a high-growth environment Stars generate cash due to having a strong market share but they also swallow up a lot of investment due to the high growth environment. Once the growth declines, stars become cash cows; therefore, having a range of stars in your portfolio that can become the next cash cows is an important strategy. 4 BCG matrix 5 to have a set of products that simply fall into one of these categories – and in fact a blend of these is important to be able to describe your portfolio as balanced:  Cash cows exist to supply funds that can be used to invest in the future of the company.  Stars, due to their high growth potential and high market share, are the products that build this future.  Question marks are items to steer into your next set of stars.  Dogs should be removed. 6 BCG matrix in digital marketing  What does this mean for digital marketing?  The BCG matrix will inform which products you should be selling through which methods and channels, which will influence your overall digital strategy. You can also use it to assess your digital channels themselves and understand, therefore, whether you are applying your focus effectively 7  SUMMARY OF THE CHAPTER  Digital marketing has moved forward at extreme pace over the last 20 years and the way that people’s lifestyles have changed in the last 20 years is arguably beyond how they had changed in the 50 years before that: the introduction of the internet, mass smartphone usage, tablets, every age group becoming digitally savvy and so on – and the pace is not slowing.  Understanding the marketing models that have been established for some time and how to apply them to your digital marketing strategy gives us a foundation to begin our strategy.  So there is a lot to think about but it is all meaningless unless we form a strategy that is integrated into our broader business strategy  – so we discuss that in the next chapter. 8 9 Dr.Atallah F Alserhan All Customers Differ © Palmatier All Customers Change All Competitors React All Resources are Limited 1 Chapter 2: Aligning with your business strategy No digital strategy can work independently of the organization it is built within. Integration is vital to any successful marketing strategy The key areas covered in this chapter are: 1. Customer centricity 2. Business model 2 Customer centricity  Being customer centric, in its purest form, means making your decisions around what is best for your customers. This might mean making some financial sacrifices, reducing profits or creating work that does not directly benefit the organization. If your business claims to be customer centric then a good question to ask yourself is whether you really are putting the customer decisions ahead of the financial decisions. This is not to say that putting your financial decisions ahead of your customer decisions is a bad thing. There are circumstances where this is entirely appropriate. For example, your shareholders may demand a profit or sales target that you are not likely to achieve without increasing your prices, or you may not be able to afford the improvements that the customer demands without compromising the financial performance of the business.  According to research by Deloitte Consulting and Deloitte & Touche, customer-centric organizations are 60 per cent more profitable than those that are not and they have lower operating costs (Deloitte, 2014). 3 Business model  Your business model could be one of many and ensuring your digital strategy fits into this is crucial. Creating an aggressive e- commerce strategy for a relationship-based B2B business would not be a good fit. Likewise, leading with a pure content and social media strategy for a sales-focused retailer is highly unlikely to deliver the sales volumes you need to achieve. It is vital that you therefore fit your strategy to your business model. There are many different definitions of business model and within those there are many models. Below is a list of three common business models, some of their qualities and how they apply to your digital marketing strategy. 4 Types of Business model 1.  Mass market B2C This model includes organizations that sell products that appeal to a broad range of consumers at an affordable price. An example of this type of business is fast-moving consumer goods (FMCG) companies. Selling a large number of products such as food, clothing or toys involves being able to attract a high volume of customers to your website and stores. This means creating awareness through above- the-line advertising, acquiring visitors and converting them into customers. This would also require a robust customer service process. Therefore all digital channels are relevant here. 5 Types of Business model 2.  Niche B2C This model is a direct-to-consumer business that has a highly targeted service. This could include products for people living with a specific disability or products to ultra-high-net-worth individuals. Whilst this model also appeals directly to consumers, it works with a specific niche such as those in a specialist trade or ultra-high-net- worth individuals. Using broadcast media is not relevant in most of these scenarios as the majority of the viewers will not be potential customers. Creating trust and advocacy is essential, however, so a deep content strategy and firstclass experience are crucial to success. 6 Types of Business model 3. B2B  The B2B model includes organizations such as wholesalers or technology resellers that are selling directly to other businesses. Here you are dealing with other business people rather than end consumers. These business people are of course still individuals and it is important not to forget that human psychology still applies.  They do, however, have very different expectations. You may be seen less as a brand and more as a supplier, which creates a very different relationship. Your customers may be more cynical or aggressive than B2C customers as they have specific objectives and goals to achieve. You may find that traditional marketing messages and sales techniques are less well received. Therefore the focus should be more on relationships through CRM, content and direct value-added discussions rather than through advertising. It is still important, however, for these customers to be able to find your site and the information they need to get to. 7 Types of Business model 4.  Freemium One interesting trend in business models in recent years is the freemium model. This model has grown in popularity and is essentially the method of attracting users by giving a percentage of your product or service for free and offering a more interesting, deeper experience for a price. A good example of this is the music- streaming industry with businesses such as Spotify and Deezer employing this technique. One other point here is that business models can shift and shape over time. There are many examples of this such as IBM, but there are also some more recent changes in the digital space. 8 Changing business models (examples)  Facebook is a great example of a business model that has had to adapt quickly. imagine that even Mark Zuckerberg was surprised by the speed at which Facebook grew from being one of many college social networks to the leading global hub for a significant percentage of the world to share their lives on. The initial model of providing a network for college students had to develop a broader appeal once the growth became inevitable. As this growth took hold it was clear that costs would also accelerate and, with no obvious income, something had to be done and so the business pages and advertising models had to be developed. These shifts in the way that the business has had to change to deal with its own growth have been both significant and impressive in their speed and success. This is an excellent example of how adapting your strategy to meet the changing needs of your consumers and the evolution of your business is vital. Facebook has had to do this through the above changes to their website and user experience 9 Changing business models  It is hard to believe that Google spent a long time with no real income channel. The initial business model was successful by creating the best search engine in terms of accuracy and simplicity. Google became a verb as people realized that googling something would give better results than using another engine. However, a source of income needed to be developed. This is why Adwords(google ads) was introduced in 2003 and that has gone on to become the foundation of the growth of every other arm of the Google we know today – a business with an incredibly diverse and profitable range of services. This has led to Google having to closely manage its brand and how it is perceived, which it has done with significant success. Their digital marketing strategy has been a minimalist approach. They promote their service and products such as Adwords and Chrome through display advertising and CRM but they do not broadcast as much as most organizations of a similar size. This is because much of their success is through word of mouth. This networking approach has been encouraged by supporting businesses that use their products, through strong and personalized customer service, networking and learning events and training materials. This personalized and deep-content digital marketing has ensured that people have trust, belief and understanding of their products, which further encourages word of mouth. 10 11 Dr.Atallah F Alserhan All Customers Differ © Palmatier All Customers Change All Competitors React All Resources are Limited 1 Chapter 2: Aligning with your business strategy No digital strategy can work independently of the organization it is built within. Integration is vital to any successful marketing strategy The key areas covered in this lecture are: 1. Global strategy 2. Brand 2 1. Global strategy  Globalization can be a very challenging process for any organization. It can also take some companies by surprise as they outgrow their initial local plans. This brings cultural, language, process and many other challenges. With the growth of digital, almost all businesses have an international presence through the internet even if their target audience is very localized and so some aspect of global strategy should be included in almost every digital  strategy – even if that aspect is to ensure that global presence is minimized. 3 CONT. Global strategy A.  Culture There are many cultural differences around the world, too many to count, and the relevant ones must be understood when building a global strategy. This can range from religious beliefs to manners and it is impossible to know what we don’t know – so doing your research is important here. 4 CONT. global strategy  From a digital perspective there are several cultural considerations. You should look at whether each region you are targeting responds well to buying online and, if not, whether your strategy should focus on thought leadership, brand awareness and directing people to your offline conversion channels. Understanding the penetration of smartphones and tablets alongside mobile coverage will also influence your strategy. For example, at the time of writing, Google’s Consumer Barometer tells us that Norway has 79 per cent smartphone penetration whilst Japan, perhaps surprisingly, has only 54 per cent (Google, 2015). This could mean that moving to a responsive website is more or less of a priority for your business and you may not require the app that you have budgeted for. 5 CONT. Global strategy B. Language Language is perhaps the most obvious consideration but one that must be considered very carefully. To give a potent example of how important this is, some organizations have been guilty of not considering language when creating their global brand and identity Some interesting examples of this are that Galaxy chocolate in the UK is known as Dove in many other countries; Burger King in Australia is Hungry Jack’s; and T. K. Maxx is the international name for the company that is known as T. J. Maxx in the United States. For digital marketing, language is clearly important when considering digital presence. This is not only in ensuring that our call to actions are correct and powerful but also in dealing with languages with different characters to our own. For example English, Russian, Mandarin and Arabic are all widely spoken 6 CONT. Global strategy C. Payments  This is a very specific category but one that is worth highlighting as it can dramatically affect the result of your digital strategy. Payment methods are often overlooked when constructing a global strategy but it is very dangerous to assume that the world uses the same methods. Even countries that you would assume are very similar to your own may in fact be very different. One example of this is Germany where roughly 80 per cent of transactions are conducted in cash. For comparison, this figure in the United States is less than 50 per cent (Bagnall et al, 2014). Germans hold roughly twice the amount of cash in their wallets as people in France or Australia.  This behaviour is of course vitally important to appreciate when developing an e-commerce strategy. 7 2. Brand D. Brand  Your brand is one of the key parts of your business that you must align with at all times. There are, however, some vital reasons for this that are worth examining. we will talk about how considering your company’s brand as a person can be a powerful framework. The values of your company are like the values that you hold yourself. You may try to be polite to everyone you meet, you may be someone who wants to achieve a lot in life and you may be always looking to learn more and grow your knowledge. These values in a business could be translated as service, sales and innovation and they create the personality of your business.  brand to be – a visual identity. What is your logo and how does it look in different scenarios? What is your colour palette? How do you design your materials? Again, this could translate into what do you look like, do you keep fit, how do you dress and what are your favourite colours? By combining your values and visual identity you create your personality and look, and therefore your brand. 8 Cont. brand A.  Values As we have just discussed, the brand values of your organization are its personality, and having a consistent personality is important to enable consumers to understand you and therefore believe in you. Your digital strategy must therefore stay true to these values and to how they are expressed elsewhere (unless how they are expressed elsewhere is poor and you can drive improvement in those areas). 9 Cont. brand B. Visual identity  Your visual identity can be difficult to control and easy to compromise online and so discipline is important. There are many opportunities to stretch your logo or tweak your colour palette to fit in with another website or digital opportunity, and staying true to your guidelines is vital here wherever possible.  To that point it is key to remember that your guidelines must work for digital , but some guidelines still are not built with digital in mind. An understanding of accessibility rules for colours, challenges around using your logo on other sites such as affiliates, and creation of logos or icons that work in limited spaces, must be built into your guidelines. Your identity may already be in use in newspapers, on television, in direct mail and on stationery. Your consumers will be seeing these in their day-to-day lives and so ensuring consistency with these is vital. 10 11 Dr.Atallah F Alserhan All Customers Differ © Palmatier All Customers Change All Competitors React All Resources are Limited 1 Chapter 2: Aligning with your business strategy No digital strategy can work independently of the organization it is built within. Integration is vital to any successful marketing strategy The key areas covered in this lecture are: 1. Vision 2. Research and insight 2 1. Vision  This is the statement that must embody everything your business is striving to achieve and everything it represents. Your company is likely to have a vision in place and if not you should consider whether it is appropriate for you to review this with your leadership team. This summary of what you stand for can be powerful when talking to investors, shareholders and customers alike. Whatever your company vision, it is important that every strategy within your organization fits within this vision, otherwise you run the risk of delivering something that does not align with the direction of your business. 3 CONT. vision A vision would read something like this:  ‘To be Earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.’ (Amazon vision)  ‘To bring JOY to the lives of our customers, whether they are kids or kids at heart.’ (Toys’R’Us vision)  You can ensure that your strategy aligns with your vision by adjusting some of your goals, channels and messaging. Using the above examples your strategy could be adjusted as follows. If you were building a digital strategy for Amazon you may want to ensure that you have robust service response processes in place on social media and through other channels and you should consider everything we discussed above on customer centricity.  For Toys’R’Us on the other hand, you would want to look at how your site can create enjoyment through the experience of accessing it and to ensure that there are activities for all ages. Understanding the needs of children as well as the adult shoppers is also important in order to be able to create a fun and therefore enticing experience.  So we can see from this that the focus for Amazon would be on personalization and service whilst for Toys’R’Us it would be on content and experience. This is of course oversimplifying the facts, but it is clear that aligning to these visions will have an impact on your strategy. 4 2. Research and insight  Research is a driving force behind any strategy and so understanding what your data is telling you is vital to the success of your strategy. You may have a specific research function and separate insight team, both together or neither. Whatever the capabilities within your organization it is important to bring broader research into your digital strategy.  Figure 2.1 is an interesting piece of digital research that clearly demonstrates that the percentage of consumers buying online is, in most countries, far beyond the percentage of businesses selling online. Understanding this data for your specific market will allow you to understand where the gaps are for your business to exploit. 5 Figure 2.1 : the percentage of consumers buying online 6 Quantitative research vs Qualitative research  Quantitative research is usually used when trying to gather data to validate a hypothesis or support a business case. This is the type of research that some would consider more ‘real’ in terms of there  being a clear story backed up by undisputable facts. The limitation of quantitative research is that whilst it can give you a clear view of the ‘what’ it does not always tell you the ‘why’. So if 100 people were to visit your website from a competitor and 300 from a news website then you will be able to make some decisions about media buying such as whether to continue your display advertising on the news website and expand to other news sites or whether to put more resource into competing with your competitors more effectively on the search channel. Without understanding why this happened, however, you cannot get to the bottom of the issue and therefore cannot understand if this will be an ongoing trend or a single peak. 7 Quantitative research vs Qualitative research  Qualitative research has quite the opposite challenge. With this research method you can gain a deep understanding of the motivations and thoughts of customers and consumers. You can understand what they like and do not like about you or your marketing materials. You can understand what excites them and what really gets them down. You cannot, however, directly apply this to sales. If someone says they don’t like your advertising then this does not necessarily mean that they will not buy your product.  One commonly used research method is therefore to use both qualitative and quantitative together. An example of this is to circulate a data collection method such as an online questionnaire in order to gain quantitative data from which to construct a qualitative piece of research. That research would then be gathered from the same participants and the data could tell a more compelling story. 8 9