1 Which strategic marketing assumptions and decisions arguably made Boo.com’s failure inevitable? Contrast these with other dot-com-era survivors that are still in business, for example lastminute.com, Egg.com and Fire box.com. 2 Use the framework of the marketing mix to
appraise the marketing tactics of Boo.com in the areas of product, pricing, place, promotion, pro- cess, people and physical evidence.
3 In many ways, the vision of Boo’s founders were ‘ideas before their time’. Give examples of e-retail techniques used to create an engaging online customer experience which Boo adopted that are now becoming commonplace.
Summary
1 The constantly changing online environment should be monitored by all organisations in order to be able to respond to changes in the micro-environment or the immediate marketplace. The micro-environment is largely within the reach of an organisation and therefore digital marketers should be aware of the management implications that arise from this arena. To be successful it is important to understand consumer and competitor behaviour and which suppliers and intermediaries offer services that will enable a company to achieve its digital marketing goals.
2 In this chapter, we have explored each of the groups of players in the micro- environment.
From a consumer perspective we have identified variables that are likely to be the most effective foundation for developing targeting strategies. We have also considered how to analyse consumer demand and the importance of developing conversion strategies.
3 Competitors are an importance group of actors in the micro-environment and the Internet has created major changes to the competitive environment. This chapter has considered how organisations should deploy tools such as Porter’s five forces to assess the nature and structure of competition in online markets.
4 We have examined techniques for competitive benchmarking and how to analyse competitor behaviour, which has highlighted how important it is to understand the potential strengths and weaknesses of the companies a business might compete with online.
5 Suppliers and intermediaries also have an important role to play in digital marketing.
We have explored the services provided by these actors and considered the opportuni- ties provided.
6 Finally, we considered the impact of the Internet on marketing channels. The Internet can encourage the formation of new channel structures. These include disintermedia- tion within the marketplace as organisations’ channel partners such as wholesalers or retailers are bypassed. Alternatively, the Internet can cause reintermediation as new intermediaries with a different purpose are formed to help bring buyers and sellers together in a virtual marketplace or marketspace .
7 This chapter has provided a foundation for analysing the immediate trad- ing environment and provides a foundation for Chapter 3 , which focuses on the macro-environment.
8 A business model is a summary of how a company will generate revenue, identifying its product offering, value-added services, revenue sources and target customers.
Exploiting the range of business models made available through the Internet is impor- tant to both existing companies and startups.
9 The Internet may also offer opportunities for new revenue models such as commission on affiliate referrals to other sites or banner advertising.
10 The opportunity for new commercial arrangements for transactions includes negoti- ated deals, brokered deals, auctions, fixed-price sale, and pure spot markets; barters should also be considered.
11 Customer analysis is an important part of situation analysis. It involves assessing demand for online services, characteristics of existing online customers and the multichannel behaviour of customers as they select and purchase products.
12 Regular competitive benchmarking should be conducted to compare services.
13 The role of intermediaries like publishers, media sites, comparison sites and bloggers should also be carefully reviewed as part of strategic analysis.
Summary
Self-assessment exercises
1 Explain the components of the digital market environment.
2 Why is environmental scanning necessary?
3 Summarise how each of the micro-environment factors may directly drive the content and services provided by a website.
4 How would you analyse demand for digital marketing services?
5 Why is it important to understand conversion marketing models?
6 What is the difference between demographic variables and behavioural variables?
7 What are the main aspects of customer adoption of the Internet that managers should be aware of?
8 What are the main changes to channel structures that are facilitated through the Internet?
9 How should a marketing manager benchmark the online performance of competitors?
10 How can the Internet be used to support the different stages of the buying process?
Essay and discussion questions
1 Competition is intensified when trading online. Discuss the extent to which you feel this assertion is true.
2 Internet access varies from country to country; explain the key factors which might influence different levels of access.
3 Discuss how an Internet entrepreneur might identify market opportunities online.
4 Perform a demand analysis for e-commerce services for a product sector and geographical market of your choice.
5 Perform competitor benchmarking for online services for an organisation of your choice.
Examination questions
1 The relationship between intermediaries, suppliers and resellers are crucial to every business. Discuss how the Internet potentially changes supply-chain relationships?
2 Trading online increasingly involves developing multichannel strategies. Give three examples of potential channel conflicts that might arise from using the Internet.
Illustrate your answer with examples.
3 Discuss the extent to which it is possible to operate as a virtual organisation.
4 Using examples, suggest different ways that a company might use the Internet to build market share.
5 There are numerous variables which can be used to identify potential target segments that can be used for marketing strategy and planning. Suggest which variables have the most potential for identifying online consumers and justify your answer with examples.
6 Discuss the extent to which Porter’s five forces model is applicable for analysing competition in digital markets.
7 Compare the physical and digital trading environments by identifying the similari- ties and differences.
8 Imagine you are about to set up a business online. Explain how you would go about investigating the micro-environment as part of your situation analysis.
9 Suggest how you would advise a business that has a website which is not delivering a benefit to the company.
Exercises
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Weblinks
A directory of Internet marketing links, including sources for statistics from the Internet environment, is maintained by Dave Chaffey at www.smartinsights.com . Latest updates are available at http://bit.ly/smartstatistics .