Module-2 Digital Marketing

The Marketing Mix

 Online marketing mix can be defined as the set of
all those elements that an organization need to
promote its products online.
 Price
• List
Product • Discounts
 Quality • Credit
Features Promotion • Payment methods
 Branding, • Marketing • Free or value added
Image elements
communications
Packaging
• Personal
Labelling
promotion Place
 Variants, Mix
• Sales promotion • Trade channels
 Use occasion
• PR • Sales support
 Warranties
• Branding • Channel
Support
• Direct marketing number
 Customer
service • Segmented
channels
 Extended marketing-mix
People Process Physical evidence
• Individuals on • Customer focus • Sales/staff
marketing activities • Business-led
• Individuals on contact
• IT-supported Experience of
customer contact
• Recruitment • Design features brand
• Culture/ image • Research and • Interior, Exterior
• Training and skills development •Website
• Remuneration
layout/design
• Online
experience
4cs framework for customers
4Ps must match with the 4 Cs
customer needs and wants (from the product);
 cost to the customer (price);
 convenience (relative to place);
 communication (promotion).
PROSUMER
(‘producer’ + ‘consumer’) A person who helps to
design or customise the products they purchase:
 (‘producer’ + ‘consumer’) A person who creates goods for their own use and also possibly to sell:

BMW Z3 Roadster
Bundling is a further alternative. For example,
Easy Jet has developed a range of complementary travel-
related services including flights, packages and car
hire
Product
 A product is a bundle of benefits that satisfies needs of
organizations or consumers.
Includes goods, services, ideas, people, and places etc.
Products such as search engines are unique to the internet
while others simply use the internet as a new distribution
channel.
 Organizations use research to determine what is important to
customers when creating new products.
 The marketing mix and CRM work together to produce
relational and transactional outcomes with consumers.
 Google products: google search, google alert, google book,
language tools, news, scholar, adsense, google certification,
google apps, Blogger, hangouts, sms channel, youtube, analytics
PRODUCT
part of product CORE,
Internet-related product decisions can be usefully
divided into decisions affecting theCORE AND
EXTENDED/AUGMENTED PRODUCT
The core product refers to the main product purchased
by the consumer to fulfill their needs, while the
extended or augmented product refers to additional
services and benefits that are built around the core of
the product.
Product
 It is an element of the marketing mix that involves researching
customers’ needs and developing appropriate products.

 Core Product
 The fundamental features of the product that meet the users
needs’.
Example: Research>Core benefits> Personalization > Packaging >
Range Extension
 Extended Product
 Additional features and benefits beyond the core product.
 Example: Additional products and services > Credibility and Trust>
Customer service > Warranties > Testimonies
 Example: Free delivery, Add-on services – gift wrapping @
Amazon
 Digital Product decisions
I) Attributes
II) Branding
III) Labeling
IV) Support Services
Product Mix Strategies
 Firms will select one or more of the following strategies,
based on marketing objectives, risk tolerance, resource
availability, etc.

 Discontinuous innovations are new-to-the-world

products.
 New-product lines are new products in a different
category for an existing brand name.
 Additions to existing product lines.
 Improvements or revisions of existing products.
 Repositioned products can be targeted to different
markets or promoted for new uses.
 Me-too lower-cost products.
Product related decisions
 Individual product  Product-mix decisions
decisions
Product-mix - Set of all
products offered by a
company

Product line – Set of

closely related products
 Product-mix decisions
Length of product-mix

Width of product-mix

Depth of product-mix

Consistency of product-mix
Digital Pricing Strategies: The Online
Value
Price is the sum of all values that buyers exchange
for the benefits of a good or service.
Throughout history, prices were negotiated; fixed
price policies are a modern idea.
The internet is taking us back to an era of dynamic
pricing, varying prices for individual customers.
The internet also allows price transparency ….
both buyers and sellers can view prices online.
Pricing: Buyer View
 The meaning of price depends on viewpoints of the
buyer and the seller.
 Buyer’s costs may include money, time, energy, and
psychic costs.
 But they often enjoy many cost savings:
The internet is convenient and fast.
Self-service saves time.
One-stop shopping & integration save time.
Automation saves energy.
Pricing: Seller View
 The seller’s perspective includes internal and external
factors.
Internal factors include pricing objectives, marketing
mix strategy, and information technology.
External factors include market structure and market
efficiency.

 Pricing objectives may be:

Profit oriented
Market oriented
Competition oriented
Upward Pressure on Prices
Online customer service is an expensive
competitive necessity.
Distribution and shipping costs.
Affiliate programs add commission costs.
Site development and maintenance.
Social media maintenance.
Customer acquisition costs (CAC)
Downward Pressure on Prices
 Firms can save money by using internet technology for
internal processes.
Self-service order processing.
Competing online for discounts.
Just-in-time inventory.
Customer acquisition discounts.
Price comparison online (junglee.com,policy bazaar)
Overhead. (shop over heads)
Customer service.
Printing and mailing.
Digital product distribution.
 These efficiencies usually result in lower prices for
customers online.
Pricing Strategies
 Price setting is full of challenges and has become an art as
much as a science.
 How marketers apply pricing strategy is as important as
how much they charge.
 Marketers can employ all traditional pricing strategies to
the online environment.
 Fixed pricing
 Dynamic pricing
 Segmented pricing
 Value pricing
Payment Options
 Electronic money uses the internet and computers to exchange
payments electronically.

 Off-line e-money payment systems include:

Smart chips in cell phones.
Mobile wallets.
 For one-time payments, PayPal has become the industry
standard with over 113 million accounts worldwide.

 Example: Net banking, credit card, debit card , CoD, EMI,

 Gift cards, voucher and promotional codes
 Purchase methods of digital products: Purchase, Rental,
subscription, Pay per use
Distribution Channel Overview
 A distribution channel is a group of interdependent firms
that transfer product and information from the supplier
to the consumer.
Producers
Intermediaries
Buyers
 The structure of the channel can make or impede
opportunities for marketing on the internet.
Online Channel Intermediaries
 Wholesalers buy products from the manufacturer and resell
them to retailers.
 Retailers buy products from manufacturers or wholesalers
and sell to consumers.
 Brokers facilitate transactions between buyers and sellers.
 Agents may represent either the buyer or seller.
 Manufacturer’s agents represent the seller.
 Purchasing agents represent the buyer.
Functions of a Distribution Channel
 Channel functions can be characterized as follows:
 Linking the producer directly to the customer.
 Oversee actual transfer of ownership
 Finding and communicating with prospective buyers
 Regrouping activities like sorting, breaking bulk etc.
 Gathering information about potential customers and
competitors
 Reaching agreements on price and return terms
 Promotion of product in its territory
 Provide storage and movement of physical goods
 Providing on time customer service
Digital Marketing Communication
 Integrated Marketing Communication (IMC)
 IMC is a cross-functional process for planning, executing,
and monitoring brand communications.
 The goal is to profitably acquire, retain and grow customers.
 IMC strategy requires a thorough understanding of target
markets, the brand, its competition, and other internal and
external factors.
 Goals of digital marketing promotion include the following:
 Driving prospects to the website
 Increasing website registration
 Increase online transactions
 Build consumers engagement and involvement
Digital Communication Mix Tools

 Advertising: Interactive display ads, pay-per-click, search advertising

 Personal Selling: Virtual sales staff, site merchandising, chat and
affiliate marketing
 Sales promotion: Incentives such as coupons, rewards, online loyalty
schemes
 Public relations: Online editorial, blogs, feeds, e-newsletters, social
networks, links and viral campaigns
 Sponsoring an online event, site or service
 Direct mail: Opt-in e-mail using e-newsletters
 Exhibitions: virtual exhibitions and whitepaper distribution
 Packaging, Virtual tours, real packaging is displayed online
 Viral marketing, affiliate marketing, e-mail a friend, links
Owned Media
Owned media carry communication messages
from the organization to internet users on owned
channels.
Primary goals are to
 Engage consumers with positive brand content.
 Entice them to pass along content to others.
 Exercise CRM (customer relationship
management).
Owned Media Performance Metrics
 Marketers use Web analytics for company-owned Web sites
and blogs.
 For owned media, sales promotions, and direct marketing,
there are also appropriate metrics.
 Podcasts: number of downloads and length of time
listening.
 Branded mobile apps: number of downloads, updates and
actions.
 Visits to sales promotion game sites.
 Communication opt-in from content participants
 Number of email messages read or forwarded to a friend.
Paid Media
 Paid media are properties owned by others who are paid to
carry promotional messages.
 The terms “paid media” and “advertising” are often used
interchangeably.

 Media ads: Display ads, Sponsorships, Classified ads,

Product placement, Social media ads, Mobile ads, SEO:
Paid search
Earned Media
Earned media are when individual conversations
become the channel.
Earned media are like physical word-of-mouth on
social media.
Can be initiated by the company through quality
content, news sites, and press releases.
Earned Media Performance Metrics
In addition to metrics such as number of likes and
shares on company-owned channels, there are a
number of metrics that can be applied to earned media.
General earned media metrics: number of users who
interact with an application, time spent viewing a
video, social media fan growth, etc.
Actions taken by users: Number of downloads of a
white paper, ring tones, number of games played,
polls voted, etc.
Conversations on blogs and elsewhere: Tweets/retweets,
positive/negative comments, etc.
People
People elements refers to how an organization’s
staff interact with customers and other stake
holders
During sales, presales and post sales
communication

Happy Staff = Happy Customers

Process
The process element of the marketing mix
refers to the methods and procedures
companies used to achieve all marketing
functions.
New product development
Promotions
Sales
Customer service
Physical Evidence
The Physical evidence variable of the
marketing mix refers to the tangible expression
of a product and how it is purchased and used.
 In an online context, ‘physical evidence’ refers
to the customer’s experience of the company
through the website.
 It includes issues such as site ease of use or
navigation, availability and performance