Digital Marketing: The Macro-Environmental Forces (Week 5) PDF

DIGITAL MARKETING THE DIGITAL MACRO‐ENVIRONMENTAL FORCES WEEK 5 Asst. Prof. Dr. Gülsüm VEZİR OĞUZ  DIGITAL MARKETING STRATEGY, IMPLEMENTATION AND PRACTICE Seventh Edition Part 1 Digital marketing fundamentals Chapter 3 Part 2...

DIGITAL MARKETING THE DIGITAL MACRO‐ENVIRONMENTAL FORCES WEEK 5 Asst. Prof. Dr. Gülsüm VEZİR OĞUZ  DIGITAL MARKETING STRATEGY, IMPLEMENTATION AND PRACTICE Seventh Edition Part 1 Digital marketing fundamentals Chapter 3 Part 2 The digital macro‐environmental forces (Economic,Political ,Legal,Social) 2  Chapter 3 The Digital macro‐environment Main topics: Economic forces Political forces Legal Forces Social Forces Case Study: Social media – Do celebrities call all the shots? 3  Economic Forces Market growth and employment Economic growths Interest and exchange rates Globalization Economic disruption 4  Market growth and employment Demographics is the study of populations, which uses measurable variables to monitor and analyse population trends. Demographic variables include: age profiles birth rates education levels gender household structures lifestage (e.g., single, married, divorced) total income and expenditure working patterns and occupations. In developed economies, populations are living longer and the age profile of a consumer market can be very important for the digital marketer’s business. 5  Economic disruption Gorell’s observations are that in order to be able to manage in periods of economic change business leaders should focus on developing the ability to: 1. anticipate and act on market uncertainty and unmet customer needs by applying a focused business model 2. focus on innovations and how they can deliver value to the company’s business model 3. expect opportunities to emerge from uncertainty and develop strategies which can maximise any emerging market advantage (Gorell, 2011). 6  Political forces Political control and democracy Internet governance Taxation Tax Jurisdiction 7  Political control and democracy Taking the UK as example, regulation of different marketplaces occurs through these groups: Financial Services Authority – controls providers of banking products such as current accounts, savings and loans. Ofgem – controls provision of energy such as electricity and gas. Ofcom – controls providers of mobile phone and broadband servi 8  Internet governance Internet governance describes the control put in place to manage the growth of the Internet and its usage. Governance is traditionally undertaken by government, but the global nature of the Internet makes it less practical for a government to control online. 9  Taxation How to change tax laws to reflect the globalisation through the Internet is a problem that many governments are grappling with. The fear is that the Internet may cause significant reductions in tax revenues to national or local governments if existing laws do not cover changes in purchasing patterns. 10  Tax Jurisdiction Tax jurisdiction determines which country gets tax income from a transaction. Under the current system of international tax treaties, the right to tax is divided between the country where the enterprise that receives the income is resident (‘residence’ country) and that from which the enterprise derives that income (‘source’ country). Laws on taxation are rapidly evolving and vary dramatically between countries. 11  Legal forces Data protection and privacy law Anti‐spam legislation Disability and discrimination law Brand and trademark protection Intellectual property rights Online advertising law 12  Significant laws that control digital marketing 13  Data protection and privacy law Privacy refers to a moral right of individuals to avoid intrusion into their personal affairs by third parties. Privacy of personal data such as our identities, likes and dislikes is a major concern to consumers, particularly with the dramatic increase in identity theft. Identity theft ; The misappropriation of the identity of another person, without their knowledge or consent. 14  Information collected online 15  Anti‐spam legislation Laws have been enacted in different countries to protect individual privacy and with the intention of reducing spam or unsolicited commercial e‐mail (UCE). Originally, the bestknown ‘spam’ was tinned meat (a contraction of ‘spiced ham’), but a modern version of this acronym is ‘sending persistent annoying e‐mail’. Spammers rely on sending out millions of e‐mails in the hope that even if there is only a 0.01% response they may make some money, if not get rich. 16  Disability and discrimination law Laws relating to discriminating against disabled users who may find it more difficult to use websites because of audio, visual or motor impairment are known as accessibility legis‐ lation. This is often contained within disability and discrimination acts. In the UK, the rele‐ vant act is the Disability Discrimination Act 2010. Web accessibility refers to enabling all users of a website to interact with it regardless of disabilities they may have or the web browser or platform they are using to access the site. The visually impaired or blind are the main audience that designing an accessible website can help 17  Brand and trademark protection Online brand and trademark protection covers several areas, including use of a brand name within domain names and use of trademarks within other websites and in online advert. Most companies are likely to own several domains, perhaps for different product lines or countries or for specific marketing campaigns. Domain name disputes can arise when an individual or company has registered a domain name which another company claims they have the right to. This is sometimes referred to as ‘cybersquatting’. 18  Intellectual property rights Intellectual property rights Protect the intangible property created by corporations or individuals that is protected under copyright, trade secret and patent laws. Trademark A trademark is a unique word or phrase that distinguishes your company. The mark can be registered as plain or designed text, artwork or a combination. In theory, colours, smells and sounds can also be trademarks. 19  Online advertising law Advertising standards that are enforced by independent agencies such as the UK’s Adver‐ tising Standards Authority Code also apply in the Internet environment (although they are traditionally less strongly policed, leading to more ‘edgy’ creative executions online which are intended to have a viral effect). The Out‐Law site produced by lawyers Pinsent Mason gives more information on online advertising law (www.out‐law.com/page‐ 5604). 20  Social forces Demographics Culture Social exclusion 21  Social exclusion Social exclusion Part of society is excluded from the facilities available to the remainder. They recommend that governments should focus on three aspects of e‐Inclusion: 1. The access divide (or ‘early digital divide’) which considers the gap between those with and those without access. Governments will encourage competition to reduce costs and give a wider choice of access through different platforms (e.g. mobile phone or interactive TV access in addition to fixed PC access). 2. The usage divide (‘primary digital divide’) concentrating on those who have access but are non‐users. Governments promote learning of basic Internet skills through ICT courses to those with the highest risks of disengagement. 3. The divide stemming from quality of use (‘secondary digital divide’) focusing on differen‐ tials in participation rates of those people who have access and are users. Training can also be used to reduce this divide. 22  Cultural forces The local language and culture of a country or region can dramatically affect the require‐ ments of users of a web service. We discuss this issue further in Chapter 7 on website design. The types of sites used (media consumption) and search engines used can also vary dramati‐ cally by country as discussed in Chapter 9. So it is important for situation analysis to review country differences. 23  Case study 3 Social media – do celebrities call all the shots? Questions: 1. Use the dimensions of the SMMF to analyse the following: a. Kylie Jenner’s cosmetics b. Shannon Coulter’s grabyourwallet 2. Suggest how the SMMF helps to: a. Interpret what is happening in the financial services industry in relation to its use of social media; b. Provide strategic solutions for the use of social media that might help to protect banks and building societies from the GAFAMs 3. Discuss the extent to which it is possible to strategically manage social media using case evidence 1 to 4. 24