Lecture 3 FOA182

E-commerce and digitalization

Andreas Pajuvirta
 Agenda
• Check-in
• Digital Marketing with the right touch
• Sostac
• Check-out
Digital marketing
Social, inbound, and content marketing are at
the heart of digital marketing today.
Right touching
Re-mix
All the elements of the marketing mix are affected
by digital marketing.
5Is (Peppers and Rogers 1997):
• Identification – customer specifics
• Individualization – tailored for lifetime purchases
• Interaction – dialogue to learn about customers’
needs
• Integration – of knowledge of customers into all
parts of the company
• Integrity – developing trust through non-intrusive
marketing such as permission marketing.
Sustainability
 Positioning
• Positioning entails changing both
• the actual offering (innovating products or
reducing manufacturing costs) and
• the perceived offering (building a new brand
image).

Nearly every marketing mix decision, including

product, price, place (channel), and product activities
(often termed the 4Ps), that managers make affects
the positioning of the firm’s offering in customers’
minds.
 Targeting V Positioning
• A well-positioned product should offer target customers the best fitting solution,
relative to competitors; in many cases, it, therefore, provides a robust barrier to future
competitive attacks.
• In essence, targeting is a coarse selection process: firms select a customer segment that
roughly matches their offering and existing brand image.
• But positioning is the fine-tuning adjustment process that firms can use to adjust
perceptions of their own offering and change customers’ actual preferences or decision
criteria to best align their offerings with the target segment’s preferences.
• Positioning strategies are implemented over time and may take years to achieve.
 QR
• Quick Read (QR) codes can add another layer to existing
products and services by connecting a customer with online
information.
• QR codes can also enhance two of the ‘Ps’: Promotion and
Place.
• In addition QRs can enhance customer experience (CX)
 The extended product
The different elements of the extended product can be highlighted or delivered online.
What other products and services would a customer really value?
• The extended product also includes incorporating tools to help users during their
use of the product or service.
• The extended product contributes to perceptions of quality.
• Credibility requires quality products and services:
• Endorsements
• Awards
• Testimonies
• Customer lists and numbers
• Customer comments
• Warranties
• Guarantees
• Money-back offers
• White papers
• Staff photographs
• Social proof such as the number of subscribers, circlers, fans or followers on social
networks.
 SOSTAC
PR Smith’s SOSTAC® is a planning process
framework to help structure and manage
implementation of plans. SOSTAC® stands for
Situation,
Objectives and
Strategy,
Tactics,
Action and
Control
Originally developed by PR Smith for marketing
communications planning.
 Situation
analysis
•Where are we
now?

Control Objectives
•How do we
•Where do we
monitor
want to be?
performance?

Action Strategy
•Who does
•How do we get
what and
there?
when?

Tactics
•How exactly
do we get
there?
 Situation
• SWOT
• PESTLE (Political, Economic, Sociological, Technological,
Legal, Environmental)
• Situation B2B, B2C, C2C, or C2B
 The connected world
Marketplace

Digital marketing platforms

Electronic • Desktops, Laptops and notebooks
• Mobile phones and tablets
Marketplace • Other hardware
 Benefits of digital marketing How it is delivered Examples

• Sell – Grow sales • Through wider distribution, promotion and • Achieve 10% of sales
sales online
• Serve – Add value • Through giving customers extra benefits • Increase conversion rate
online or inform product development through by 5%
online dialogue and feedback • Grow email coverage to
• Speak – Get closer to
customers • By tracking them, asking them questions, 50% of current customer
creating a dialogue, learning about them database
• Through online email communication, sales • Generate 10% more
• Save – Costs
and service transactions to reduce staff, print sales for same
and postage costs communications budget
• Sizzle – Extend the brand • Through providing a new proposition and new • Add two new significant
online experience online while at the same time enhancements to the
appearing familiar customer online
experience
 Using the internet as a sales tool

Indirect online revenue contribution

% of sales influenced by
digital communications
Asnoff matrix
Measure customer engagement online
Engagement metric Engagement tactic
• % of non-home page entry visits • Use run-of-site OVP message
• Bounce rate • Use and run-of-site sign up
• Duration • Use heatmaps or overlays to assess
management
• Marketing outcomes
• Get your scent right
• Micro or step conversion rates
• Interactive sales advisers
• Brand search-term strength
• Refined touch strategy
• Email activity level • Personalize by activity or lifecycle of
• Define activity levels or hurdle rates content
• Emotional response • Multivariate testing
• Outcomes • Use secondary navigation to highlight next
steps
Using the internet as a customer service tool
Adding value to B2B services – Seybold (1999)

”Let customers help themselves”

- Delivery of product, after-sales support

”Help customers do their jobs”

- Give content about best practises to
help professionals complete their day-
to-day work and develop their
professional careers
Using digital media channels to speak with your
audiences on other sites
• Search engine marketing (SEM).
• search engine optimization (SEO)
• Pay Per Click (PPC) basis.

• Online PR.
• Online partnerships.
• Interactive advertising.
• Opt-in email
• Social media marketing
 Digital marketing strategy
Digital marketing strategy
• Clear prioritization to how the channel
should be used
• Identify target markets, positioning, OVP,
mix of digital media channels to acquire
new customers and contact strategies to
welcome and develop existing customers
Channel strategy where
electronic channels and
digital media support other
communications and Creating differential value
distribution channels
 Digital marketing
“We like the term ‘digital marketing’ since it
suggests the challenges and opportunities from
managing digital media, digital technology and
gaining insights from digital interactions with
consumers that happen on digital devices.”
Control
Seven Cs of effective Website design
1. Context – Layout and design
2. Content – Text, pictures, sound and video
3. Community – user-to-user communication ways
4. Customization – tailor the site to different users
5. Communication – site-to-user, user-to-site, or two way
communication
6. Connection – connected to different sites
7. Commerce – enable commercial transactions

Constant change!
 KPI’s
• Sales
• Units, revenue, market share
• Leads/enquiries
• Unique visitors, repeat visitors, quality enquirers, registrations,
actual enquiries, value of engquiries
• Conversion rates
• From enquiries, from registrations, trial purchases, from channel
sources
• Churn rates
• Attrition rate (cancelling contract), unsubscribe (e-mail/newsletter
 Situation Swot, PESTLE
analysis
•Where are we
now?

Control
KPIs, competetive •How do we
Objectives
10% sales growth
•Where do we
intelligence monitor
performance?
want to be?

Action Strategy
Implementation •Who does
what and
•How do we get
there?
Identify target
when?
markets, OVP
Tactics etc.
•How exactly
do we get
there? Website, E-mail etc.
 Omnichannel challenges
• Unifying customer experience across multiple channels (Larke
et al., 2018)
• Resource allocation across a range of touchpoints (Baxendale
et al., 2015)
• Introducing ship-to-store service can have different impact on
sales and returns across a retailer’s channels(Akturk et al.,
2018)
 The digital product
• Products that are digital by composition;
• Software, computer games and music

• Products that can be presented in digital form;

• Those that exist only in digital format; e.g. an airline e-ticket
• Those that can be digitized; e.g. a newspaper

• The product information

• That developed for offline purposes but transferred using the
Internet as a medium for tranmission; e.g. a Mintel report
• That prepared and presented purely for online tranmission; e.g
an E-book
• Tthat prepared in response to an online request and transmitted
using Internet technology; e.g. a bespoke report
 In order to change
• Managerial commitment
• Project team characteristics
• Champion(s)
• Training, training and training
 Getting the management buy-in
Articulate the digitalization benefits to the organization
• What does it offer the organization’s stakeholders?
• What are the costs to the organization?
• Calculate the marketing benefits
• Evaluate the expected digital value added