FODM - Resources - Chapter 4

FUNDAMENTALS OF DIGITAL MARKETING
Unit II- Chapter Four: Digital Marketing Assessment Phase

Table of Contents
• DIGITAL MARKETING
Elements of the Assessment Phase
ASSESSMENT PHASE
Marketing Strategy and its Digital Shifts
• Elements of the
Assessment Phase The Assessment Phase Elements
Macro-Micro Environment Analysis
• Digital Marketing Internal Marketing Situation Analysis
Assessment
• Digital Marketing Objectives

Planning
Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
Marketing Strategy and its Digital Shifts
Marketing Strategy and its Digital Shifts

Marketing strategy, by definition, has the goal of increasing sales and achieving sustainable competitive advantage. The key differences in
marketing strategy/framework creation traditionally and with the advent of digital media include:
(a) Knowledge of customer preferences
(b) Leveraging traditional brand presence
(c) Reactive to predictive approach
(d) Disintermediation of value chains/life cycle
(e) Impact of prosumerization
(f) Brand to channel attribute alignment
(g) Unique digital-connect concepts
(h) Follow-the-customer model (attribution concepts)
The Need for Digital Strategy

Scenarios for Digital Strategy Inclusion to Traditional Marketing:
• Scenario 1: Traditional brand with product/service well established
• Scenario 2: Traditional brand with product/service not well established
• Scenario 3: New product/service in market with brand to be developed
The Assessment Phase Elements
Understanding The Assessment Phase

The assessment phase can be divided into four key elements based on the nature and interaction of all forces impacting digital marketing
objectives development:
(a) External analysis: Includes the analysis of macro-micro environment (entities which surround and influence the firm, its products,
operations, and opportunities) and market situation analysis (referring to market and competition analysis, specific to the industry where the
firm and its product are operating).
(b) Internal analysis: Involves an analysis of factors which are internal to a company and within their control to influence their goal setting
and create successful and realistic digital marketing objectives. It includes four main analysis areas—offerings mix, marketing mix, resources
mix, and competencies mix.
(c) Digital presence analysis: It is a 2 × 2 matrix which helps firms identify their present digital state through a combined analysis of external
and internal factors.
(d) Objectives development and review: Involves setting high-level digital marketing objectives based upon the specific digital state in which
the firm is present. The review stage consists of activities that involves monitoring, evaluating, and controlling marketing activities
continuously.
Macro-Micro Environment Analysis
Understanding Macro-Micro Environments

The terms macro and micro environments are classic marketing environment terminologies used to bunch and analyze key factors that
impact a firm’s ability to build and maintain a profitable business and relationship with customers. A macro environment, by definition,
includes variables and factors outside of business which have a positive or negative influence on growth and continued existence of business.
The four key elements of macro environment and their impact include:
(a) Political
(b) Economic
(c) Socio-cultural
(d) Technological
Micro environment factors include those entities which directly impact the firm and its growth prospects and are closer to the company’s
ecosystem than the macro factors.
(e) Suppliers
(f) Partners
(g) Intermediaries
(h) Customers
Marketing Situation Analysis
Application of Market Research

Two basic types of Market Research include:
(a) Primary research: consists of a collection of original primary data collected from the field by the researcher using questionnaires, focus
group discussions, interviews, etc.
(b) Secondary research: involves the summary, collation and synthesis of existing research available from multiple sources like research
papers, previous experiments, articles, etc.
Industry Analysis
(a) Market segment analysis: conducting research to understand the market segment and its data points
(b) Opportunity analysis: market opportunity sizing exercise with the help of research data
Competition Analysis
(c) Category analysis: maps specific category of a product to understand key competitors and defining elements which would make the
product stand apart in the wake of competition
(d) Opportunity analysis: involves conducting an analysis of key brand attributes against competing brands to realize intangible factors like
brand value, imagery, perception, and other unique value elements which differentiate it in the market
Table of Contents
Digital Marketing Internal Assessment
ASSESSMENT PHASE
Analyzing Present Offerings Mix
• Elements of the Assessment
Phase Marketing Mix Analysis
Internal Resource Mapping
• Digital Marketing
Internal Assessment Core Competencies Analysis
• Digital Marketing Objectives

Planning
Analyzing Present Offerings Mix
Offerings and Marketing Mix

Relates to any firm’s analysis of present offerings at hand and how well they are able to analyze and compare the marketing mix of
segmentation, targeting, and positioning (STP) to establish themselves online. Marketing in online world differs from offline:
(a) Products are virtual in the digital world
(b) Nature of target audience differs
(c) Brand switching is quite high
(d) Digital requires different communication elements
(e) Products in control of intermediaries/aggregators
Understanding D-SWOT Analysis

The concept of a Digital-SWOT improvizes on the base SWOT framework to make sure that all of the four analyses on Strengths, Weaknesses,
Opportunities, and Threats are done with a digital lens and should include only those traditional elements. For executing a D- SWOT, we
should also consider and include key transferable attributes from offline to online.
Key elements of the D-SWOT model include:

(f) Strengths: eg - Strong and stable media presence: highly visited website, social media page, admired blog, a micro-blogging strategy, etc.
(g) Weaknesses: eg - Low or very negligible historical online presence; Online Value Proposition not uniquely defined
(h) Opportunities: eg - Consumer adoption of mobile communications and increased online penetration
(i) Threats: eg - Presence in a highly competitive segment with slow growth rate
Marketing Mix Analysis
Marketing Mix and the 8Ps

A typical marketing mix analysis looks at the four classic Ps of Product, Price, Place, and Promotion along with an STP (Segmenting, Targeting,
and Positioning) analysis. With the growth witnessed across online platforms a new set of four more Ps have been added specifically for
digital marketing including People, Process, Programs and Performance. Explanation of four new Ps:
1. People: reflects internal marketing and the fact that employees are critical to marketing success.
2. Process: includes the creativity, discipline, and structure brought to marketing management in terms of a planned marketing and
campaign process.
3. Programs: relates to consumer-directed activities which a firm organizes.
4. Performance: relates to capturing and measuring the range of possible outcome measures with financial and non-financial implications
Understanding STP Basics

The STP process demonstrates links between the overall market and how a company chooses to compete in that market.
(a) Segmentation: It is defined as the process of splitting a market into smaller groups with similar product needs or identifiable
characteristics, for the purpose of selecting appropriate target markets.
(b) Targeting: It refers to an organization’s proactive selection of a suitable market segment (or segments) with the intention of heavily
focusing the firm’s marketing offers and activities towards this group of related consumers.
(c) Positioning: It is the target market’s perception of the product’s key benefits and features, related to the offerings of competitive
products.
Internal Resource Mapping
Internal Resource Mapping
A resource is defined as a source or supply from which benefit is derived or produced. Resources for any organization could be classified as:
Input Driven; Economic; Human, Technology, Intellectual, Partner/Intermediary.
VRIN Framework helps any company benchmark its resources to know which of them are more strategic than others and which of them would
stand the test of competition more effectively. The VRIN Framework (Valuable, Rare, Inimitable, Non-Substitutable) derives its roots from the
RBV (Resource-Based View) of viewing the firm. RBV theory postulates the firm to be a bundle of resources including assets, capabilities,
organizational processes, firm’s attributes, information, and knowledge. It believes that the firm can utilize a mix of these resources taking an
inside-out approach as the starting point of the analysis of the internal environment of any organization.
According to the VRIN model (Barney 1991), a firm should display four key attributes and only if these conditions hold can the firm sustain
above average returns. These four elements are described as:
(a) Valuable: A resource must enable a firm to employ a value-creating strategy, by outperforming competitors or reducing weaknesses.
(b) Rare: Resources drive competitive advantage only when they are relatively scarce. While a resource does not need to be unique to only
one firm, it must not be widely available.
(c) Inimitable: A resource is termed to be inimitable, if it is controlled by only one firm. A resource can provide sustainable competitive
advantage only if competitors are not able to duplicate this asset perfectly and lack the capability to obtain them.
(d) Non-substitutable: Even if a resource is rare, potentially value-creating and imperfectly imitable, an equally important aspect is lack of
substitutability.
Core Competencies Analysis
Core Competencies Analysis

The development of core competencies falls in perfect order as the fourth element of internal analysis where present offerings have been
developed, marketing mix defined, and internal resources analyzed for competitiveness.
Differences between Resources and Capabilities

Resources are a stock of available factors that are owned or controlled by the organization, and capabilities are an organization’s capacity to
deploy resources.
Understanding Competitive Advantage and Core Competencies

Core competency as a management concept was introduced by C.K. Prahalad, Julian Kriviak, and Gary Hamel. It can be defined as a
harmonized combination of multiple resources and skills that distinguish a firm in the marketplace. A core competency, thus, is a bundle of
skills that enable an organization to provide particular benefits to customers. There are three tests to identify core competencies:
(a) Relevance: The competence must give the customer something that strongly influences him/her to choose a firm’s product or service. If it
does not, then it has no effect on competitive position and is not a core competence.
(b) Difficulty of imitation: The core competence should be difficult to imitate. This allows the firm to provide products that are better than
competition. And, through continuous work to improve these skills, a company’s competitive position can be sustained.
(c) Breadth of application: It should be something that opens up a good number of potential markets. If it only opens up a few small, niche
markets, then success in these markets will not be enough to sustain significant growth.
Table of Contents
Digital Marketing Objectives Planning
ASSESSMENT PHASE
Digital Presence Analysis
• Elements of the Assessment
Phase Digital Presence Analysis Matrix
Digital Marketing Objectives Development
• Digital Marketing Internal
Assessment Digital Marketing Objectives Review
• Digital Marketing
Objectives Planning
Digital Presence Analysis
Digital Presence Analysis

The four key drivers for any firm to consider its presence on digital platforms:
(a) Stakeholder-driven needs: It includes factors which are business/stakeholder-driven which necessitates a firm to move its product
portfolio online.
(b) Market-driven needs: external or market environment has a huge role to play in driving firms online.
(c) Customer-driven needs: The most immediate and relevant trends driving brands online are posed by customers themselves in the way
their consumption patterns evolve.
(d) Competitor-driven needs: It is competition too which drives brands to move towards digital channels.
Digital Presence Analysis Matrix
Digital Presence Analysis Matrix

Digital presence is defined as the relative extent to which a company is present on digital channels in comparison to direct competition,
based on comparison of key competitive factors.
The DPA (Digital Presence Analysis) Matrix provides the base for developing Digital Marketing objectives. The Digital Presence Analysis is a
2X2 matrix, which has been developed across two axes— Extent of Digital Presence and Market Standing wrt (with respect to) Competition. It
has been developed with the earlier competitive comparison as the base and introduces four key states (in the form of matrices and a fifth
state related to a new launch) through which the extent of digital presence of a firm can be established and used for digital marketing
applications. The four key digital states which can also be called DLs include:
(a) Digital laggard: This is the first quadrant of the DPA Matrix (bottom-left) which relates to firms which have no or minimal digital presence
and are lagging their respective market/ industry segment wrt to direct competitors.
(b) Digital ladder: The second quadrant of the DPA Matrix (top-left) would be the second state of the DPA matrix, wherein firms themselves
are in a much better shape w.r.t. competition (as they are market leaders across some key products), but they still do not have substantial
digital presence.
(c) Digital leverage: This is the third quadrant of the DPA Matrix (bottom-right) and represents companies that have a strong digital presence
(in comparison to competition in their sector) but are still lagging behind in terms of a market share.
(d) Digital leader: The final quadrant (top-right) belongs to firms which are market leaders in their segments and have leveraged digital to the
best possible extent.
Digital Marketing Objectives Development
Digital Marketing Objectives Development

Digital Marketing Objectives set on a yearly basis, during the yearly marketing plan creation are followed, reviewed, and revised at a weekly
level to ensure that firms are on track.
SMART Objectives Creation

Objectives creation as an exercise has to be clear, rigorous, and at the same time, achievable in the time-frame it has been set to achieve. The
most widely used framework across management circles for objectives creation is commonly attributed to Peter Drucker in his “management
by objectives” concept which is also termed as the SMART criteria:
(a) Specific: Targets a specific area for improvement

(b) Measurable: Quantifies or at least suggest an indicator for progress
(c) Assignable: Specifies who will do it
(d) Realistic: States what results can realistically be achieved, given the available resources
(e) Time-related: Specifies when the results can be achieved
Digital Marketing Objectives Review
Digital Marketing Objectives Review

A typical marketing objectives review consists of activities that involve monitoring, evaluating, and controlling marketing activities
continuously. According to Philip Kotler, there are four types of marketing controls needed by companies to monitor and review their
marketing activities:
(a) Annual plan control: It involves reviews to ensure that firms achieve the targets set for sales, market share, and other such financial goals
set up across the key digital channels.
(b) Profitability control: It involves understanding the digital channels where the company is making profits and those where it is losing out.
Profitability is measured across products, territories, customer segments, and business to business (B2B) channels.
(c) Efficiency control: Post annual plan and profitability control, marketers have a much better idea on how best they can improve spending
and allocate resources and efforts to channels which might yield them more efficient results.
(d) Strategic control: It involves periodically re-assessing a firm’s strategic approach through market effectiveness reviews, strategic re-
orientation, operation efficiency analysis, and digital marketing audits across all key products and markets.
Key to Chap 4: Review Questions
S.No Question Reference Section
Q1 Explain five key differences in marketing strategy which occurred Markteting Strategy and its Digital
with the advent of digital media. Shifts
Q2 Compare and contrast the three different scenarios in the chapter The Need for Digital Strategy
which showcase how digital strategy supports and
extends traditional marketing strategy.
Q3 Explain at a high level the four key elements of the ASCOR Understanding the Assessment Phase
Assessment Phase.
APPENDIX- 1 Q4 What is PEST? Describe these four key elements of Macro Understanding Macro-Micro
Environment Analysis. Environments
Q5 What are the key micro-environment impact factors? Explain the Understanding Macro-Micro
factors in detail. Environments
Q6 Explain the two key components of Market Situation Analysis and Marketing Situation Analysis
their key elements in detail.
Q7 What are the four major types of Internal Analysis of the ASCOR Digital Marketing Internal
Assessment Phase? Explain two of them in detail. Assessment
Q8 What is D-SWOT? Explain the key elements of D-SWOT model in Understanding D-SWOT Analysis
detail.
Q9 Marketing Mix and the 8Ps
What are the 8Ps of Marketing Mix analysis? Name the 8Ps and
explain five of them in detail.
Q 10 How would you classify resources for any organization? Explain in Internal Resource Mapping
detail the VRIN Model.
Key to Chap 4: Review Questions
S.No Question Reference Section
Q 11 Explain the concept of Core Competency. Mention the three Core Competencies Analysis
tests through which the core competencies of a firm can be
identified. Explain the concept using the
example of Google/Apple.
Q 12 Which are the four key drivers for any firm to consider its Digital Presence Analysis
presence on digital platforms? Explain any one of them in detail.
Q 13 What do we mean by Digital Presence. Name at least six Digital Presence Analysis Matrix
Competitive Comparison Factors for Digital Presence.
Q 14 Explain the Digital Presence Analysis Matrix. Describe the four Digital Presence Analysis Matrix
APPENDIX- 1 Q 15
key Digital States of the Matrix.
Explain the SMART Objectives acronym for Digital Marketing
Objective Development? Take up one of the four Digital
Digital Marketing Objectives
Development
Marketing Objectives Types to detail the typical Objectives.
Q 16 Which are the four types of marketing controls needed by Digital Marketing Objectives Review
companies to monitor and review their marketing
activities as per Philip Kotler (Marketing Management,
Millennium Edition)? Please explain two of them.
THANK YOU
For any suggestions, please reach out to:
Email: connect.fodm@gmail.com
Skype ID: puneet.bhatia75

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FUNDAMENTALS OF DIGITAL MARKETING

Unit II- Chapter Four: Digital Marketing Assessment Phase

• Digital Marketing Objectives

Marketing Strategy and its Digital Shifts

The Need for Digital Strategy

Understanding The Assessment Phase

Understanding Macro-Micro Environments

Application of Market Research

• Digital Marketing Objectives

Offerings and Marketing Mix

Understanding D-SWOT Analysis

Key elements of the D-SWOT model include:

Marketing Mix and the 8Ps

Understanding STP Basics

Core Competencies Analysis

Differences between Resources and Capabilities

Understanding Competitive Advantage and Core Competencies

Digital Presence Analysis

Digital Presence Analysis Matrix

Digital Marketing Objectives Development

SMART Objectives Creation

(a) Specific: Targets a specific area for improvement

Digital Marketing Objectives Review

For any suggestions, please reach out to:

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