ISYS6318 – E-business Concept

Week – 7
Digital Marketing
 LEARNING OUTCOMES
• Demonstrate the practical elements of e-business with selected
platforms and technologies, in a customized business model.
 OUTLINE
• What is digital marketing?
• Digital marketing planning.
• Situation analysis.
• Goal setting.
• Strategy.
• Focus on the characteristics of digital media communication.
• Digital marketing tactics.
• Focus on online branding.
• Action and control.
What is digital marketing?
• Chaffey (2013) defines digital marketing or digital marketing as an activity to
achieve marketing goals through the use of electronic communication
technology.
• The use of digital media in marketing is often referred to as inbound
marketing by professional marketers, which is defined as the activity carried
out by consumers who proactively seek information for their needs and
interactions with interested brands through content, search, and social
media marketing. [1]
• Digital marketing also emphasizes content. Content is useful for approaching
customers or potential customers to achieve business goals.
• In digital marketing, content is important.
Digital marketing planning
• Digital marketing planning in this course uses the SOSTAC (Situation
Analysis, Objectives, Strategy, Tactics, Actions, Control) strategic
framework from Paul Smith (1999).
SOSTAC Framework
• Basically there is no need for a separate marketing plan between
digital and non-digital.
• One marketing strategy plan is enough for the entire business.
• The digital marketing strategy includes:
• Situation analysis.
• Digital marketing goals.
• Strategy for target market.
• Tactics for marketing (product, price, place, promotion).
• Actions to be taken, monitoring and control.
Situation analysis
 Situation Analysis
• Situation analysis aims to examine environmental conditions,
ecosystems, internal processes, available resources to be input in
strategy formulation.
 SWOT Analysis
• SWOT or TOWS analysis is used in developing a marketing strategy to
identify strengths and weaknesses as well as opportunities and
threats for businesses in the competitive arena.
• This analysis is used to determine its current position in the arena,
from which the business development team can measure the gap that
exists if the business wants to move towards a certain position that
must be reached in the future.
• Usually after a SWOT analysis is complete, a gap analysis is conducted
to identify what needs to be pursued, studied or acquired in order for
the business to move into its intended position.
Organisasi Strength (S) Weakness (W)
1. Brand 1. Brand perception
2. Customer base 2. Use of intermediaries
3. Distribution 3. Technology / skills
4. Cross channel support
5. Churn rate
Opportunities (O) SO strategy WO strategy
1. Cross selling
Utilizing strength to maximize Anticipating weaknesses through taking
2. New market
opportunities = attack strategy advantage of opportunities = building
3. New service strength for offensive strategies
4. Alliance / co-branding
Threats (T) ST Strategy WT strategy
1. Customer choice (price)
Leveraging strength to minimize Anticipating weaknesses and threats =
2. New arrivals
threats = defense strategy building strength for a defense strategy
3. New competitive product
4. Channel conflict
5. Social network 
 Customer Demand Analysis
• Chaffey (2013) defines customer demand analysis in digital business
as an assessment of the demand for e-commerce services among
existing and potential customer segments.
 Customer Demand Analysis
• The following are core questions related to customer demand analysis:
• What percentage of business customers have access to the Internet?
• What percentage of purchasing unit members in this business have access to the
Internet?
• What percentage of customers are ready to buy your particular product online?
• What percentage of customers with access to the Internet are not ready to buy
online, but are influenced by web-based information to purchase products
offline?
• What is the popularity of various online customer engagement tools such as
Web 2.0 features such as blogs, online communities, and videos?
• What are the barriers to adoption among customers from different channels and
how can we drive adoption?
 Competitor Analysis
• Competitors must always be monitored and studied because in a digital
business the arena is very dynamic and can change at any time.
• Both competitors from the same industry and from outside the industry,
because in the digital world sometimes new players from outside the
industry have the ability to break into the market, and there is even a
possibility to change the rules of the business game.
• The method of competitor analysis that is commonly used is competitor
benchmarking, which is by comparing several business components and
assigning a value.
• Helper tools such as Alexa, Google Analytics and Unmetric can be used to
speed up the benchmarking process.
 Intermediary / Influencer Analysis
• The role of intermediaries in bridging transactions, as well as how
effective the role of influencers is in boosting sales must be studied
continuously because there are marketing costs involved there.
 Internal Marketing Audit (1)
• There are three things that must be reviewed continuously through
the internal marketing audit process, including:
• Business effectiveness. How big is the contribution of online
transactions from one site to the revenue and profit from the
business.
 Internal Marketing Audit (2)
• Marketing effectiveness. How effective are the marketing actions
taken for one particular product. Performed per product. The things
that are measured include:
• Leads.
• Sales.
• Customer acquisition costs. (cost of acquisition)
• Retention.
• Market share.
• Brand engagement and loyalty.
• Customer service.
 Internal Marketing Audit (3)
• The effectiveness of the internet. How the site is used by users varies
in its characteristics and how effectively it is in conveying the value
proposition to customers through the website.
Goal setting
• In goal setting, we can use a balanced scorecard framework.
• The steps for setting goals are as follows:
• First, we first set influential perspectives in our marketing activities, it doesn't
need to be too much, usually 3-5 is enough.
• After that in each perspective we place whatever we want to achieve in that
area.
• Establish a cause-and-effect relationship between these goals or outcomes.
• The end result is a strategy map.
• Whatever we want to set as a goal in digital marketing, it must
ultimately lead to a contribution to increased online revenue.
Strategy
• Chaffey (2013) says that the strategic elements of a digital marketing
plan determine how digital marketing goals will be achieved.
• The strategy definition must be integrated into the digital marketing
planning process because digital marketing planning is an iterative
process from situation analysis to strategy definition.
• After in the previous stage we have determined the strategic goals we
want to achieve, at this stage we design what we want to do to
achieve these goals.
 Strategy Initiative
No. Strategy Initiative
1 New customer proposition
(Product, Place and Price)
2 Customer acquisition strategic initiatives.

3 Customer conversion and strategic customer experience initiatives.

4 Customer development and growth strategic initiatives.

5 Marketing channel integration.

6 Increased marketing capabilities through improved site infrastructure.

• Strategy is of course related to product positioning in the market.
• According to Gosh (1998) businesses need to build new products or add digital
value to their customers.
• Chaffey (2013) argues that we need to ask the following two things in building
digital products:
• What new transaction information or services can I provide to my existing
customer base?
• Can the needs of a new customer segment be met by repackaging existing
information assets or by creating new business propositions using the Internet?
• What abilities could be used to attract customers and create new sources of
income such as from advertising or complementary products?
• Can the business be threatened by other businesses offering the same novelty?
• The next step after positioning the product in the market is selecting
the customer segment. Which segment of the customer do we want
to target our product marketing. There are several variables that can
be taken into consideration in determining customer segments,
including:
• Behavior.
• Attitudes and preferences.
• Lifestyle and psychography.
• Demographic data profile.
• Seybold (1999) describes five (5) important questions in building a
marketing strategy that is still quite relevant for digital business:
• Who are our customers?
• How have their needs changed?
• Which one is our target?
• How do we build added value?
• How can we be the first choice?
Focus on the characteristics of digital media
communication
 Interactivity
• Communication media in digital marketing are used interactively, not
in a one-way monologue like in TV commercials.
• Promotional messages, marketing campaigns or advertisements are
encouraged or sent to customers and customers can interact, from
visiting the website to live chat with the customer service team.
• In the world of e-commerce, from advertisements that appear on
social media, customers can directly interact with the stores in the
advertisement for pre-transaction assessment.
• There are two types of communication used in digital marketing:
• Pull: Consumers are proactive in interacting with the company
through actively seeking information or entertainment on the
company website or social media sites through search engines,
comparison brokers, or live navigation.
• Push: Communication broadcast from the advertiser to the consumer
of the message, which is a passive recipient.
 Intelligence
• We can use data that is created from digital marketing activities as a
basis for conducting marketing research or customer research. We can
take advantage of external analysis tools like GA (google analytics) or
build our own analysis infrastructure.
 Personalization
• Personalization became very important in the early decade of 2010.
Business models that offer personalized solutions are becoming
increasingly popular, including in the IT field.
• In digital marketing too, this is very important.
• Messages sent, whether through marketing campaigns,
advertisements or information must be personalized to an individual
level.
• The role of search engines, customer analytics and CRM is very
important to support this.
Integration and Mixed Models
Integration Between Channels
 Industrial Restructuring
• This industry restructuring is linked to a digital business model that
involves intermediaries.
• We still have to see which model fits disintermediation,
reintermediation and countermediation and whether it is necessary to
adopt them.
 Not Depends on Location
• Electronic media and the Internet make the commercial transaction
process no longer familiar with place and time.
• Even a bank can run a branchless business. In addition, the marketing
target of the business immediately changes in scope, from local to
international.
• Once the digital business is online, it will be accessible from anywhere
in the world.
• This of course will change the way we do business and deal with it.
Digital marketing tactics
 Marketing Tactics
• Tactics are detailed plans and actions of a strategy that can be
executed in a shorter period of time. In marketing the 4P, 7P and 4C
concepts are known as tactics.
• The concept of 4P (product, price, place, promotion) was introduced
by Jerome McCarthy (1960), which was later developed into 7P
(people, process, physical evidence) by Booms & Bitner (1981).
• The 7P framework can be used to do a combination of elements as in
the following figure.
 4C
• Meanwhile, the 4C concept from Lautenborn (1990) is similar to 4P,
but from a customer perspective, here are the points:
• Customer needs and wants - a website is a mechanism for explaining how a
product proposition meets these needs and wants.
• Cost to the customer (prices) - online customers tend to compare prices with
other websites and traditional sources of purchase.
• Convenience (relative to place) - online this is the quality of the customer
experience in terms of the ordering process and its fulfillment.
• Communication (promotion) - the website itself is combined with methods for
driving traffic to the site, such as search engine marketing and email
marketing.
Focus on online branding
 Brand
• Branding is the process of creating and shaping the success of a
brand.
• The brand or brand itself is the number of characteristics of the
product or service that users perceive.
• It is the duty of every business to cultivate the strength of its brand in
the market.
 Strong Brand Characteristics
• There are three characteristics to form a strong brand, including:
• Brand depends on customer perception;
• Perception is influenced by the characteristics of the added value of the
product;
• The added value characteristic must be sustainable.
 Brand Equity & Experience
• Aaker and Joachimsthaler (2000) offer the concept of brand equity,
which means assets or liabilities associated with a brand name and
symbol, which are added to a service.
• Brand experience is defined by Chaffey (2013) as the frequency and
depth of interaction with a brand that can be increased through the
Internet.
 Brand Identity
• Aaker and Joachimsthaler (2000) also emphasize the importance of
brand identity, which is defined as the totality of associations with a
brand including names and symbols, which must always be
communicated.
• A strong brand is usually memorized by customers and is associated
with the products represented, for example Honda where in certain
areas it is linked to motorbikes, as well as Aqua and Indomie which
are associated with all bottled mineral water products and instant
noodles.
 Creating a Strong Brand
• In digital marketing, creating a strong brand in the market is related to
creating a positive customer experience, where the key aspects are:
• Quality content.
• Adequate website infrastructure performance in terms of availability and
download speed.
• Ease of contacting companies for support.
• Quality of response to email inquiries and quality of fulfillment.
• Acknowledgment of customer privacy.
• Reflects and supports the characteristics of the official brand.
Action and control
• The final stage is the determination of action and control.
• The actions that will be taken in digital marketing refer to the actions
of managers and executives in executing the marketing strategy plan.
• Questions that need to be resolved when taking action include:
• What level of Internet channel investment is sufficient to provide this service?
How big is his revenue contribution?
• What staff training is required?
• What new responsibilities are required for effective Internet marketing?
• Are changes in the organizational structure required to provide Internet-based
services?
• What activities are required in building and maintaining a website?
• Control in the execution of digital marketing strategies requires access
to monitoring tools.
• This monitoring tool can be in the form of an analytical dashboard
that provides important feedback for the marketing strategy team to
be able to justify whether an action, tactic or even strategy has been
effective or has deviated from its goal. If it is identified that there is
storage or it is not on target, it must be immediately corrected.
 REFERENCES
• Chaffey, Dave. (2013). Digital Business and e-Commerce
Management: Strategy, Implementation and Practice. 6. Pearson.
United Kingdom. ISBN: 978-0-273-78654-2.
• Jelassi, Tawfik. Martinez-Lopez, Francisco J. (2020). Strategies for e-
Business: Concepts and Cases on Value Creation and Digital Business
Transformation. 4. Springer. ISBN: 978-3-030-48949-6.
• Chaffey, D. (2013, January 18). Online competitor benchmarking tools.
Smart Insights. https://www.smartinsights.com/marketplace-
analysis/competitor-analysis/online-competitor-benchmarking-tools/.