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Slide 4.1
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Part 2
Digital marketing strategy
development
Chapter 4
Digital marketing strategy
Slide 4.2
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Learning objectives
• What approaches can be used to create digital
marketing strategies?
• How does digital marketing strategy relate to
other strategy development?
• What are the key strategic options for digital
marketing?
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Slide 4.3
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Questions for marketers
• Relate digital marketing strategy to marketing
and business strategy
• Identify opportunities and threats arising from
digital technology platforms
• Evaluate alternative strategic approaches for
using digital platforms
Slide 4.4
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Q. What are organisational problems if no
E-marketing strategy?
• Underestimated demand for online services
• Market share loss
• Resource duplication
• Insufficient resource
• Insufficient customer data
• Efficiencies available through online marketing
• Opportunities for applying online marketing tols
• Changes required to internal IT systems
• Inadequate tracking
• Senior management support limited
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Slide 4.5
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Michael Porter on the Internet
• ‘The key question is not whether to deploy
Internet technology – companies have no choice
if they want to stay competitive – but how to
deploy it.’
Porter, M. (2001) Strategy and the Internet,
Harvard Business Review, March 2001, 62–78.
Slide 4.6
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
What is a digital marketing strategy?
• What is strategy?
– “Defines how we will meet our objectives”
– “Sets allocation of resources to meet goals”
– “Selects preferred strategic options to
compete within a market”
– “Provides a long-term plan for the development of
the organisation”
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Slide 4.7
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Digital marketing strategy essentials• Digital marketing strategy is a channel strategy
• Objectives for online contribution %- sales, service, profitability should drive our strategy
• Digital marketing strategy defines how we should:1. Communicate benefits of using this channel
2. Prioritise audiences targeted through channel
3. Prioritise products available through channel
4. Hit our channel leads & sales targets
– Acquisition, Conversion, Retention
• Channel strategies thrives on differentials
• BUT, need to manage channel integration
Slide 4.8
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.1 Internal and external influences on digital marketing strategy
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Slide 4.9
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Table 4.1 Summary of typical focus for main types of e-commerce-related strategic initiatives
Slide 4.10
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.2 HSBC Expat Explorer (http://www.expatexplorer.hsbc.com)
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Slide 4.11
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Challenges of digital marketing
• Gaining buy-in and budget
• Conflicts of ownership ad tensions
• Coordination with different channels
• Managing and integrating customer information
• Achieving consistent reporting
• Structuring the specialist digital team
• ‘time to market’
• Insourcing vs. outsourcing
• Staff recruitment and retention
Slide 4.12
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.3 Hierarchy of organisation plans including e-marketing plans
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Slide 4.13
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.4 The SOSTAC® planning framework applied to digital Digital marketing strategy developmentSource: Chaffey and Smith (2008)
Slide 4.14
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.6 A generic digital channel-specific SWOT analysis showing typical
opportunities and threats presented by digital media
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Slide 4.15
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.8 An example of a digital channel specific SWOT for an established multichannel brand showing how the elements of SWOT can be related to strategy formulation
Slide 4.16
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Strategy Formulation
• Strategy formulation involves the identification of
alternative strategies, a review of the merits of
each of these options and then selecting the
strategy that has the best fit with a company’s
trading environment, its internal resources and
capabilities.
– typically involves making adjustments to marketing
strategy to take advantage of the benefits of online
channels rather than wholescale changes
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Slide 4.17
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Strategy Formulation
Decision 1: Market and product development strategies
Decision 2: Business and revenue models strategies
Decision 3: Target marketing strategy
Decision 4: Positioning and differentiation strategy
(including the marketing mix)
Decision 5: Customer engagement and social media
strategy
Decision 6: Multichannel distribution strategy
Decision 7: Multichannel communications strategy
Decision 8: Online communications mix and budget
Decision 9: Organizational capabilities (7S framework) and
governance
Slide 4.18
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.12 Using the Internet to support different organisational growth strategies
Decision 1: Market and Product Development
Strategies
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Slide 4.19
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Decision 2: Business and Revenue Models Strategies
• Business model: a summary of how a company
will generate revenue, identifying its product
offering, value-added services, revenue sources
and target customers.
• Revenue model: describes methods of
generating income for an organization.
Slide 4.20
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.15 Stages in target marketing strategy development
Decision 3: Target Marketing Strategy
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Slide 4.21
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Common online targeting options
– Brand loyalists – convert online
– Not brand loyal – encourage trial
– Most profitable – deepen relationships
– Larger companies (B2B) – extranet
– Smaller companies(B2B) – can reach these
companies more cost effectively
– Key members of the buying unit (B2B) -
detailed information on the web site about the
product, services etc.
– Difficult to reach using other media
Slide 4.22
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.16 Dell Singapore site segmentationSource: http://www.ap.dell.com/content/default.aspx?c=sg&1=en&s=gen. © 2012Dell Inc. All Rights Reserved.
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Slide 4.23
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.17 Customer lifecycle segmentation
Slide 4.24
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.18 Euroffice e-mail (www.euroffice.co.uk)Source: Adapted from the company website press releases and Revolution (2005a)
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Slide 4.25
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.19 Alternative positionings for online services
Decision 4: Positioning and Differentiation Strategy
Slide 4.26
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.20 WeBuyAnyCar (www.webuyanycar.co.uk) clearly communicates its
proposition
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Slide 4.27
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Decision 5: Customer Engagement and Social Media
Strategy
• Customer engagement strategy
• Social media strategy
1. Who are our target audience?
2. What are the content preferences of our audiences?
3. Strategic business goals for social network presences?
4. Which content types should have priority?
5. How to differentiate the social channel from other communications
channels?
6. How to integrate social channels?
7. Content frequency and editorial calendar?
8. Sourcing content?
9. How to manage publication and interaction?
10. Software for managing the publishing process?
11. Tracking the business impact of social network activity?
12. How to optimize the social presence?
Slide 4.28
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.21 Strategic options for a company in relation to the importance of the
Internet as a channel
Decision 6: Multichannel distribution strategy
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Slide 4.29
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.23 Influences on customers of multichannel decision makingSource: adapted from Dholakia et al. (2010)
Decision 7: Multichannel Communications Strategy
Slide 4.30
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.24 Channel coverage map showing the company’s preferred strategy for communications with different customer segments with different value
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Slide 4.31
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Decision 8: Online Communications Mix and Budget
• Performance drivers:
1. Attraction
– size of visitor base, visitor acquisition cost and visitor
advertising revenue
2. Conversion
– Customer base, customer acquisiton costs, customer
rate, number of transactions per customer, revenue per
transaction, revenue per customer…
3. Retention
– Similar measures to conversion customers (cost of
repeat customer, revenue per repeat customer, repeat
customer churn rate, repeat customer conversion rate)
Slide 4.32
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Decision 9: Organizational Capabilities (7 S
Framework) and Governance
• Main challenges:
– Strategy: limited capabilities to integrate into Internet
strategy
– Structure: structural and process issues
– Skills and staff: difficulties in finding specialist staff or
agencies.
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Slide 4.33
Chaffey et al., Digital Marketing: Strategy, Implementation and Practice, 5th edition © Pearson Education Limited 2013
Figure 4.26 Example of risk–reward analysis