Digital Product & Service

Marketing

Prof. Dr. Dr. Ruth Stock-Homburg

Summer Term 2022

https://pixabay.com/de/vectors/e-mail-e-mail-marketing-newsletter-4284157/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 1
 Lecture Structure

1.1 Introduction to Digital Marketing

Module 1
Digital Marketing - Fundamentals 1.2 Macro- & Micro-Environment

2.1 Digital Marketing Strategy

Module 2
Digital Marketing - Strategy 2.2 Digital Marketing Mix
2.3 Relationship Marketing

3.1 The Digital Customer – Marketing

Module 3 Communications
Digital Marketing - Implementation
3.2 Planning, Evaluation & Improvement

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/ https://pixabay.com/de/vectors/ziel-schie%C3%9Fen-sport-kreis-158129/https://pixabay.com/de/vectors/hinweise-detektiv-suchen-glas-150586/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 2
 pre-recorded, digital live exercise
Lecture Schedule

27.04.2022 04.05.2022 11.05.2022 18.05.2022 25.05.2022 01.06.2022

Introduction Introduction Macro- & Digital Guest lecture Digital

to Digital Micro- Marketing Marketing Mix
Marketing Environment Strategy

Exercise 1

08.06.2022 15.06.2022 22.06.2022 29.06.2022 06.07.2022 13.07.2022

Digital
Digital Group work Guest lecture The Digital Digital
Marketing Mix
Marketing Mix Customer Marketing
Live Demo
Digital
Insights from Planning,
Relationship
Practice Evaluation &
Marketing 1 Exam
Improvement
preparation
Digital
Relationship Changes to the Exercises
Marketing 2 schedule are possible!

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 3
 Our Pathway (and Schedule) to Understand the
Digital Marketing Mix in Real Businesses

▪ Next week (15 June), you will watch pre-recorded videos on the following
topics
▪ Digital Marketing Mix
▪ Digital Relationship Marketing 1
▪ Digital Relationship Marketing 2

▪ On 22 June, we will do a group work live in class

▪ The pre-recorded guest lecture will be rescheduled to 29 June

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 4
 Lecture Structure

1.1 Introduction to Digital Marketing

Module 1
Digital Marketing - Fundamentals 1.2 Macro- & Micro-Environment

2.1 Digital Marketing Strategy

Module 2
Digital Marketing - Strategy 2.2 Digital Marketing Mix
2.3 Relationship Marketing

3.1 Digital Customer – Marketing

Module 3 Communications
Digital Marketing - Implementation
3.2 Planning, Evaluation & Improvement

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/ https://pixabay.com/de/vectors/ziel-schie%C3%9Fen-sport-kreis-158129/https://pixabay.com/de/vectors/hinweise-detektiv-suchen-glas-150586/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 5
 2.2 Digital Marketing Mix

▪ Chapter 1: Marketing Mix - Basics

▪ Chapter 2: Marketing Mix - Price

▪ Chapter 3: Marketing Mix - Place

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 6
 2.2 Digital Marketing Mix

Marketing Mix - Basics

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 7
 The Marketing Mix

DEFINITION

Marketing Mix

Series of seven key variables – product, price,

place, promotion, people, process, and physical
evidence – that are varied by marketers as part
of the customer offering
Chaffey & Ellis-Chadwick (2019), p. 192

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 8
 From 4 P to 7 P of the Marketing Mix

Product Product

Physical
Price
evidence

Jerome McCarthy
Marketing
Promotion Price Marketing
Mix
Mix

Process Place

Place People Promotion

Chaffey & Ellis-Chadwick (2019); Chaffey & Smith (2017) https://opusmarketplace.com/marketing-mix/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 9
 Digital Media & Technology

Competitive
Advantage

Application

Market
Position

Relationships
Continuity

Chaffey & Ellis-Chadwick (2019) https://pixabay.com/de/illustrations/social-media-soziale-marketing-5187243/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 10
 Mixing the Mix – Example: Reevoo

Reevoo

Consumer product rating site

https://www.reevoo.com/shopping

Chaffey & Smith (2017) https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 11
 Mixing the Mix – Example: Bizrate

Bizrate

Online shopping
comparison site

https://www.bizrate.co.uk/

Chaffey & Smith (2017) https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 12
 Marketing Mix - Product

DEFINITION

Product

The element of the marketing mix that involves

researching customers‘ needs, developing
appropriate products and communicating their
features and benefits
Chaffey & Ellis-Chadwick (2019), p. 193

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 13
 Marketing Mix - Product

Market Core vs.

Research Extended
Product

Product
Service / Transformations
Branding

Mass
Customization Bundling

Chaffey & Ellis-Chadwick (2019) https://pixabay.com/de/illustrations/gesch%C3%A4ft-gesch%C3%A4ftsgr%C3%BCndung-startup-3639450/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 14
 Marketing Mix - Promotion

DEFINITION

Promotion

The element of the marketing mix that involves

communication with customers and other
stakeholders to inform them about the product
and the organisation
Chaffey & Ellis-Chadwick (2019), p. 220

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 15
 Marketing Mix - Promotion

Integrated
Approaches

Digital
Technologies

Communications
Strategy

Chaffey & Ellis-Chadwick (2019) https://pixabay.com/de/illustrations/soziale-medien-social-media-3408791/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 16
 Promotion – Example: Brand Storytelling

Storytelling by WestJet – Christmas Miracle, almost 50 million clicks. https://youtu.be/zIEIvi2MuEk

Chaffey & Smith (2017) https://pixabay.com/de/vectors/buch-lesen-offen-ver%C3%B6ffentlicht-147292/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 17
 Marketing Mix – People, Process, & Physical Evidence

DEFINITION

People, Process, & Physical Evidence

Reviewing the principal ideas where the focus is

on how these elements of the mix relate to
customer relationship management and
managing an organisation‘s digital presence
Chaffey & Ellis-Chadwick (2019), p. 192

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 18
 Marketing Mix – People, Process, & Physical Evidence

“Service Elements“ Key Issues

https://pixabay.com/de/vectors/auszeichnung-anerkennung-exzellenz-1781445/

Chaffey & Ellis-Chadwick (2019) https://pixabay.com/de/vectors/vorlage-layout-webseite-blog-1599665/ https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 19
 The Marketing Mix

Take Away in a Nutshell

➢ The Marketing Mix has expanded from 4 Ps to 7 Ps, now

consisting of

➢ Product, price, place, promotion → basics

➢ People, physical evidence, and process → extensions

➢ Digital media and technological innovations have an

impact on the marketing mix

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 20
 Further Readings and Videos

Readings
➢ Chaffey & Ellis-Chadwick (2019): Chapter 5

➢ Jackson, G., Ahuja, V. (2016). Dawn of the digital age and the evolution of the
marketing mix. Journal of Direct, Data and Digital Marketing Practice 17, 170–186.
https://doi.org/10.1057/dddmp.2016.3

Videos
➢ The Marketing Mix (Extended): https://www.youtube.com/watch?v=oMZMrnNWY-A

➢ Storytelling by WestJet – Christmas Miracle, almost 50 million clicks.

https://youtu.be/zIEIvi2MuEk

https://pixabay.com/de/vectors/schach-st%C3%BCck-k%C3%B6nigin-silhouette-26780/
https://pixabay.com/de/vectors/hinweise-detektiv-suchen-glas-150586/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 21
 Insights from Practice: Airbnb

First ventures in 2007

Two-sided marketplace Disruptive innovation

Legal issues

Guttentag, D. A., & Smith, S. L. (2017). Assessing Airbnb as a disruptive innovation relative to hotels: Substitution and comparative performance expectations. International Journal of Hospitality Management, 64, 1-10.
Guttentag, D. A. (2015). Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current Issues in Tourism, 18(12), 1192-1217. https://www.bloomberg.com/graphics/2020-airbnb-ipo-challenges/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 22
 Airbnb in a Nutshell
▪ Founded: 2008 / San Francisco

▪ Purpose:
− Community-based online platform for listing and renting local homes.
− Connecting hosts and travelers and facilitates the process of renting without owning any rooms itself.
− Cultivating a sharing-economy by allowing property owners to rent out private flats.

▪ Story:
− Founders: Joe Gebbia and Brian Chesky (Nathan Biecharczyk was invited to join later), and 3 air
mattresses
− Their problem: they couldn’t pay rent.
− Solution: They set up a simple website with a map and rented out three mattresses and promised home-
made breakfast. Three people came and they decided to build on it.

▪ Success Story:
− 2008: Refinement of website with money from selling cereal boxes during the presidential campaign, and
took high-quality pictures of the rented space to boost click-rates.
− 2012: Airbnb overtakes Hilton Hotels in nights booked.
− 2015: Value of Airbnb was $25.5 billion.
− 2022: 2.9 million hosts on Airbnb in over 200 countries.

https://bmtoolbox.net/stories/airbnb/; https://appinventiv.com/blog/airbnbs-business-model-and-revenue-source/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 23
 Airbnb – Business Model

https://bmtoolbox.net/stories/airbnb/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 24
 Airbnb – The Problems

https://bmtoolbox.net/stories/airbnb/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 25
 Airbnb – The Future

Goal:
1 billion travelers annually by 2028.

Solution:
- Taking over the hotels business
- Adding more cities to the list

Business plans for Airbnb:

(1) Flexible destinations:
Recommendation of certain unique
types of homes, such as castles.
(2) Faster checkout process, updated
review systems, and clearer
cancellation policies.
(3) Double the number of customer
support representatives.
https://appinventiv.com/blog/airbnbs-business-model-and-revenue-source/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 26
 Your Turn to Understand the Digital Marketing of Airbnb

Please continue this

research on Airbnb

Please continue focus on the following digital marketing mix elements:

- (1) place, (2) product, (3) price, (4) promotion

What are the most important competitors (besides hotels) for Airbnb?

What are the most important success factors of Airbnb in terms of

customer relationship management?

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 27
 Insights from Practice: Amazon

Founded in 1994

Customer focus Get big fast strategy

Ethical issues
Ritala, P., Golnam, A., & Wegmann, A. (2014). Coopetition-based business models: The case of Amazon. com.
Industrial Marketing Management, 43(2), 236-249.
https://ethicalunicorn.com/2019/01/12/how-ethical-is-amazon/
Kannan, P. K. (2017). Digital marketing: A framework, review and research agenda. International Journal of
Research in Marketing, 34(1), 22-45. https://www.theguardian.com/technology/2021/may/04/amazon-sales-income-europe-corporation-tax-luxembourg

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 28
 Amazon in a Nutshell
▪ Founded: 1994

▪ Purpose:
− Objective to create an “online everything store“
− Since 2000, small companies can sell their goods through Amazon
− Value propositions: low price, fast delivery, wide selection of products

▪ Story:
− Founder: Jeff Bezos
− Amazon started with selling books, but quickly expanded to other goods, such as videos, household
items, music or games.
− They create a community of consumers through recommendation tools and review options.

▪ Success Story:
− 1995: Amazon reached 180,000 accounts in their first year.
− 1997: Amazon became a public company.
− 1998: Amazon‘s revenue is at $610 million.
− 2021: Amazon‘s net sales are at about $ 470 billion.

https://businessmodelanalyst.com/amazon-business-model/
https://www.insiderintelligence.com/insights/amazon-revenue/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 29
 Amazon – Business Model

https://bstrategyhub.com/how-does-amazon-makes-money/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 30
 Amazon – The Future

▪ 1) Expanded features for brand registry

▪ 2) Strategic use of technologies

▪ 3) Online grocery big player

▪ 4) Killing the middlemen: ad industry disrupt

▪ 5) Entertainment giant

▪ 6) Going green and sustainable

▪ 7) An influx on more sellers

▪ 8) More acquisitions

▪ 9) Amazon voice service

https://financesonline.com/amazon-trends/

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 31
 Your Turn to Understand the Digital Marketing of Amazon

Please continue this

research on Amazon

Please continue focus on the following digital marketing mix elements:

- (1) place, (2) product, (3) price, (4) promotion

What are the most important competitors for Amazon?

What are the most important success factors of Amazon in terms of

customer relationship management?

TU Darmstadt | FG Marketing & Human Resource Management | Lecture Digital Product & Service Marketing Summer Term 2022 | 32