Online Marketplace Analysis: Micro-Environment

Slide 2.
Chapter 2
Online marketplace analysis:
micro-environment
Chaffey and Ellis-Chadwick, Digital Marketing: Strategy, Implementation and Practice, 6e © Pearson Education Limited 2016
Slide 2.2
Learning objectives
• Identify the elements of an organisation’s online

marketplace that have implications for
developing a digital marketing strategy
• Evaluate techniques for reviewing the
importance of different actors in the
microenvironment: customers, intermediaries,
suppliers and competitors as part of the
development of digital marketing strategy
• Review changes to business and revenue
models enabled by digital markets.
Slide 2.3
Questions for marketers
• What are our capabilities for understanding our online

marketplace?
• How relevant is the behaviour of the actors in the micro-
environment to the future of our business?
• How do I complete a marketplace analysis and how does this
inform our digital marketing planning?
• How are customers’ needs changing as digital platforms
develop and what are the implications of such changes?
• How do I compare our online marketing with that of our
competitors?
• How do we find suitable intermediaries at the planning stage
of a digital marketing strategy?
Slide 2.4
Scenario for marketplace analysis
• You have been appointed by Blackcircles.com

as digital marketing manager.
• Your task is to create a digital marketing plan for
the next year and beyond.
• What would you need to review about the online
marketplace to help create your plan?
Slide 2.5
Figure 2.1 Blackcircles.com
Slide 2.6
Figure 2.2 The digital marketing environment
Slide 2.7
Figure 2.5 An online marketplace map
Slide 2.8
Correlation between search volume in Google Trends and retail

Figure 2.6
sales volume
Source: Chamberlin (2010)
Slide 2.9
Examples of top ten Search Terms for all

retailing and Apparel
Table 2.1 Top 10 search terms for all retailing and for apparel
Source: Chamberlin (2010)
Slide 2.10
Tools for marketplace analysis
• Google Agency Tookit

– http://www.google.com/ads/agency/toolkit.html
– Key Tools:
http://www.smartinsights.com/marketplace-
analysis/google-tools-you-may-not-know-about/
• Alexa: www.alexa.com or www.compete.com
• Hitwise: www.hitwise.com
• Nielsen: www.nielsen-netratings.com
• Comscore: www.comscore.com Press releases
• IMRG: www.imrg.org.
Slide 2.11
Issues in analysing the online marketplace
Table 2.3 The micro-environment: issues for digital marketers
Slide 2.12
Figure 2.7A model of the Internet marketing conversion process. It shows key
traffic or audience measures (Q0 to Q4), first-time visitors (Q2) and repeat
visitors (Q2R) and key conversion efficiency ratios
Slide 2.13
Figure 2.8 An example of a conversion model
Slide 2.14
Evaluating demand levels
• Level of Internet access

– Includes type of access – broadband and mobile
• Consumers influenced by using online channel
– Includes understanding type of sites which have
influence
• Transact online
– Includes different types of transactions, not just
sales, e.g. support, forum comments, etc.
Slide 2.15
Model showing conversion between the digital channel and traditional

Figure 2.9
channels during the buying process
Slide 2.16
Figure 2.10 Research Online Purchase Online example

Source: Google (2010)
Slide 2.17
Consumer characteristics
• Demographics:
– Age, gender, social group
• Webographics
– Access methods and times
• Personas:
– See Personas with wings mini case study 2.1.
Slide 2.18
Dulux persona example
• Aims:
– The aim was to position Dulux.co.uk (Figure 2.13) as ‘the
online destination for colour scheming and visualisation to help
you achieve your individual style from the comfort of your
home’. Specific outcomes on the site are to browse colours,
add colours to a personal scrapbook, use the paint calculator
and find a stockist. Further aims were to ‘win the war before the
store’, i.e. to provide colour help tools that can help develop a
preference for Dulux before consumers are in-store and to
prompt other ideas to sell more than one colour at a time.
– Specific SMART objectives were to increase the number of
Unique Visitors from 1M p.a. in 2003 to 3.5M p.a. in 2006 and
To drive 12% of visitors to a desired outcome (e.g. ordering
swatches).
Slide 2.19
Target audience variation

Based on research, it was found that the main audience for the site
was female with these typical demographics and psychographics:
• Would be adventurous 25–44 women, online
• Lack of confidence with previous site:
– Gap between inspiration (TV, magazines, advertising) and lived
experience (Large DIY sheds, nervous discomfort)
– No guidance or reassurance previously available currently on their
journey
• Colours and colour combining is key
• Online is a well-used channel for help and guidance on other topics
• 12 month decorating cycle
• Propensity to socialise
• Quality, technical innovation and scientific proficiency of Dulux is a
given.
Slide 2.20
Business consumer characteristics
• Variation in organisation characteristics

– Size of company (employees or turnover)
– Industry sector and products
– Organisation type (private, public, government, not-for-profit)
– Application of service (which business activities do purchased
products and services support?)
– Country and region.
• Individual role
– Role and responsibility from job title, function or number of staff
managed
– Role in buying decision (purchasing influence)
– Department
– Product interest
– Demographics: age, sex and possibly social group.
Slide 2.21
1. Information/experience seeking behaviour

models
• Directed information-seekers: These users will be looking for product,
market or leisure information such as details of their football club’s fixtures.
They are not typically planning to buy online.
• Undirected information-seekers: These are the users, usually referred to as

‘surfers’, who like to browse and change sites by following hyperlinks.
Members of this group tend to be novice users (but not exclusively so) and
they may be more likely to click on banner advertisements.
• Directed buyers: These buyers are online to purchase specific products

online. For such users, brokers or cybermediaries that compare product
features and prices will be important locations to visit.
• Bargain hunters: These users (sometimes known as ‘compers’) want to find

the offers available from sales promotions such as free samples or
competitions. For example, the MyOffers site (www.myoffers.co.uk) is
used by many brands to generate awareness and interest from consumers.
• Entertainment seekers: These are users looking to interact with the Web for
enjoyment through entering contests such as quizzes, puzzles or interactive
multi-player games.
Slide 2.22
2. Digital media and the buying process
A summary of how digital media can impact on the buying process

Figure 2.14
for a new purchaser
Slide 2.23
Figure 2.15 Initial product search showing e-retailers available

Source: Google (2015)
Slide 2.24
Figure 2.16 Currys’ product category page (www.currys.co.uk)
Slide 2.25
3. The impact of channel experience on
customer relationship
Table 2.4 The impact of channel experience on customer relationship

Source: Menteth et al., 2005. Reprinted by permission of Macmillan Publishers Ltd: Interactive Marketing, 6(4) 317–25, copyright 2005, published by Palgrave Macmillan.
(The new name of this journal is Journal of Direct Data and Digital Marketing Practice)
Slide 2.26
4. Trust-based models
Figure 2.18 Segmentation based on information need and trust

Source: Adapted from Forrester (2006) Teleconference driving sales with segmentation analyst: Benjamin Ensor of Forrester Research, 27 February 2006
Slide 2.27
Competitor benchmarking
• Activity – which aspects of a competitors online

marketing activity should be reviewed?
–
–
–
–
–
–
Slide 2.28
Figure 2.19 Benchmark comparison of corporate websites

Source: Bowen Craggs & Co. (www.bowencraggs.com)
Slide 2.29
Figure 2.20 Taobao (www.taobao.com)
Slide 2.30
Disintermediation of a consumer distribution channel showing:

Figure 2.21
(a) the original situation, (b) disintermediation omitting the wholesaler,
and (c) disintermediation omitting both wholesaler and retailer
Slide 2.31
From (a) original situation to (b) disintermediation or

Figure 2.22
(c) reintermediation or countermediation
Slide 2.32
Porter’s five forces

Bargaining
powers of
customers
Power of Threat of
The business
suppliers subsitutes
Extent of rivalry
Threat of new
between
entrants
competitors
Slide 2.33
Impact of the Internet on the five

competitive forces
Table 2.6 Impact of the Internet on the five competitive forces
Slide 2.34
Figure 2.25 Alternative perspectives on business models
Slide 2.35
Publisher revenue models
• Revenue from subscription access to content.

• Revenue from Pay Per View access to documents.
• Revenue from CPM display advertising on site (e.g. banners ads,
skyscrapers or rich media).
• CPM stands for ‘cost per thousand’ where M denotes ‘Mille’.
• Revenue from CPC advertising on site (pay per click text ads).
• CPC stands for ‘Cost Per Click’. Advertisers are charged not simply for the
number of times their ads are displayed, but according to the number of
times they are clicked.
• Revenue from Sponsorship of site sections or content types (typically fixed
fee for a period).
• Affiliate revenue (typically CPA, but could be CPC).
• Affiliate revenue is commission based, for example, if you display links to
Amazon books on your site, you can receive around 5% of the cover price
as a fee from Amazon. Such an arrangement is sometimes known as Cost
Per Acquisition (CPA). Amazon, and others offer a tiered scheme where the
affiliate is incentivised to gain more revenue, the more they sell. Hence this
is often called a pay-per-performance ad deal.
Slide 2.36
Figure 2.26 Revenue model spreadsheet

Source: SmartInsights.com

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Slide 2.

• Identify the elements of an organisation’s online

Questions for marketers

• What are our capabilities for understanding our online

Scenario for marketplace analysis

• You have been appointed by Blackcircles.com

Figure 2.1 Blackcircles.com

Figure 2.2 The digital marketing environment

Figure 2.5 An online marketplace map

Correlation between search volume in Google Trends and retail

Examples of top ten Search Terms for all

Tools for marketplace analysis

• Google Agency Tookit

Issues in analysing the online marketplace

Table 2.3 The micro-environment: issues for digital marketers

Figure 2.8 An example of a conversion model

Evaluating demand levels

• Level of Internet access

Model showing conversion between the digital channel and traditional

Figure 2.10 Research Online Purchase Online example

Dulux persona example

Target audience variation

Business consumer characteristics

• Variation in organisation characteristics

1. Information/experience seeking behaviour

• Undirected information-seekers: These are the users, usually referred to as

• Directed buyers: These buyers are online to purchase specific products

• Bargain hunters: These users (sometimes known as ‘compers’) want to find

2. Digital media and the buying process

A summary of how digital media can impact on the buying process

Figure 2.15 Initial product search showing e-retailers available

Figure 2.16 Currys’ product category page (www.currys.co.uk)

Table 2.4 The impact of channel experience on customer relationship

Figure 2.18 Segmentation based on information need and trust

• Activity – which aspects of a competitors online

Figure 2.19 Benchmark comparison of corporate websites

Figure 2.20 Taobao (www.taobao.com)

Disintermediation of a consumer distribution channel showing:

From (a) original situation to (b) disintermediation or

Porter’s five forces

Impact of the Internet on the five

Table 2.6 Impact of the Internet on the five competitive forces

Figure 2.25 Alternative perspectives on business models

Publisher revenue models

• Revenue from subscription access to content.

Figure 2.26 Revenue model spreadsheet

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