Chapter Four
Digital Marketing Strategic Framework
Four-Phase Digital Marketing Framework
Key Concepts
• Introduction of Four-Phase Digital Marketing Framework • Description of Definition Phase of Digital Marketing Framework
• Segmentation and Targeting the Digital Consumer • Buying Triggers and Micro-moments
• Macro and Micro Conversions
Four-Phase Digital Marketing Framework Discussion Questions
1. What are the four phases in the digital marketing strategic framework?
2. What are the three questions that embody the phase one?
3. Define segmentation
4. What two functions does segmentation serve?
5. Why do firms segment?
6. Describe the five market segmentation strategies.
7. What are the tools that the marketer has to position its offering?
8. What are buying triggers or micro-moments?
9. Provide an example of a micro-moment.
10. Macro Conversions
11. What are micro conversions?
The Model
• Phase 1: Define
o To apply this framework to your business, start off by defining your audience, business goals and buying triggers. This is crucial to ensure you kick off on good ground.
• Phase 2: Implement
o Based on what you’ve defined in the first phase, you then implement the most appropriate digital marketing strategies through various channels to create awareness, engage, procure, and retain customers.
• Phase 3: Analyze
o Once you’ve ran your campaigns, you need to collect and analyze data (e.g. which channels generate more ROI, which audiences are more likely to purchase) in order to further optimize and boost your ROI.
• Phase 4: Optimize
o This is the crucial phase, where you make minor to major changes (e.g. from lowering your ad spend on a digital marketing channel to targeting different audience segments) based on your digital analytics data.
Phase One Template: Define
• Who’s going to buy from you?
o Describe, in detail, who your likely customer is?
• What will make them buy from you and when? (Micro-moments/Buying triggers)
o Why will this (these) customers buy from you?
o When are they likely to buy from you?
• What do you want them to do in order to buy from you? (Macro & Micro Conversions/KPIs/Goals)
o Before purchasing or buying, what steps should the customer accomplish before purchasing your products?
Audience Definitions
Defining your audiences at the beginning of your digital marketing campaign enables you to reach out to them via the correct digital channels and also create effective marketing collateral (video and written content (ebooks and helpful guides), ad creatives, electronic direct mails (EDMs), e-brochures, etc.) that they can resonate with.
The more you understand your targeted audience, the more detailed that you can be in the definition of your audiences.
Audience definitions may vary from industry to industry.
In traditional marketing terms this section answers the question: Who is our targeted customer? There is a process for that and to understand the process we must understand the fundamental marketing principle of STP or Segmenting, Targeting, and Positioning…. Specifically for this this section Segmenting and Targeting. This is one of the most fundamental concepts in marketing information to fully understand it follows:
• Segmentation
o It is the process of dividing customers into groups with similar characteristics.
o Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.
o The idea of segmentation is based on the idea that the effectiveness and efficiency of a company’s marketing activities can be improved by ignoring the non-essential differences among customers within each segment and treating these customers as if they were a single entity.
• Segmentations serves two main functions
o It optimizes the effectiveness of the offering by identifying the key differences among customers in order to develop a customized offering for each segment
o It optimizes the cost efficiency of the offering by identifying the irrelevant differences among customers in order to deliver the same offering to customers within each segment.
• An important issue in segmenting markets is determining the extent to which a market should be segmented and how large each segment should be.
o In general, segment size could potentially vary between a single segment encompassing the entire marker (mass marketing) and multiple segments of one customer each (on to one marketing).
o A general rule
Segmentation is beneficial when the incremental value from more effectively meeting the needs of resulting segments and from optimizing the communications and distribution strategies outweighs the costs of developing separate offerings for each segment.
o General rule
Good segmentation should yield segments that are mutually exclusive and collectively exhaustive; they should be sufficiently different from one another so that they do not overlap; at the same time; identified segments should include all customers in a given market.
• This can be achieved using well defined criteria to segment the market.
The process for grouping customers into distinct groups is very subjective and when segment boundaries are not well defined, the same customer could potentially be classified into different segments.
• Objectives of Market Segmentation segment
o Be able to define the three steps of target marketing: market segmentation, target marketing, and market positioning.
o Understand the major bases for segmenting consumer and business markets.
• Evaluating segments
o How attractive is the market segment?
Size and growth rate
o Competitors serving the segment
How many?
How large/strong?
o Segment Structure attractiveness
Level of competition
Substitute products
Power of buyers
Powerful suppliers
o Fit with company objectives
Fit with company strengths
• resources
• capabilities
• skills
• areas of competitive advantages
• Requirements for Effective Segmentation
o Measurable
Size, purchasing power, and profile of segment
o Accessible
Can be reached and served
o Substantial
Large and profitable enough to serve
o Differentiable
Respond differently
o Actionable
Effective programs can be developed
• Important reasons why businesses should attempt to segment and target their markets carefully:
o Better matching of customer needs
Customer needs differ. Creating separate offers for each segment makes sense and provides customers with a better solution
o Enhanced profits for business
Customers have different disposable income. They are, therefore, different in how sensitive they are to price. By segmenting markets, businesses can raise average prices and subsequently enhance profits
o Better opportunities for growth
Market segmentation can build sales. For example, customers can be encouraged to “trade-up” after being introduced to a particular product with an introductory, lower-priced product
o Retain more customers
Customer circumstances change, for example they grow older, form families, change jobs or get promoted, change their buying patterns. By marketing products that appeal to customers at different stages of their life (“life-cycle”), a business can retain customers who might otherwise switch to competing products and brands
o Target marketing communications
Businesses need to deliver their marketing message to a relevant customer audience. If the target market is too broad, there is a strong risk that (1) the key customers are missed and (2) the cost of communicating to customers becomes too high / unprofitable. By segmenting markets, the target customer can be reached more often and at lower cost
o Gain share of the market segment
Unless a business has a strong or leading share of a market, it is unlikely to be maximizing its profitability. Minor brands suffer from lack of scale economies in production and marketing, pressures from distributors and limited space on the shelves. Through careful segmentation and targeting, businesses can often achieve competitive production and marketing costs and become the preferred choice of customers and distributors. In other words, segmentation offers the opportunity for smaller firms to compete with bigger ones
• Targeting
o Targeting reflects the decision to select a particular segment
o Key issue in strategic targeting analysis is
Identifying which criteria to use in selecting target customers.
o Three types of targeting criteria can be distinguished:
The inherent attractiveness of the customers in a given segment
The segment’s compatibility with the company’s strategic goals, competencies, and assets,
A company’s ability to serve the segment better than the competition.
o The inherent attractiveness of the customers in a given segment
Segment attractiveness reflects the ability of a particular segment to deliver value to the company and its collaborators.
Segment attractiveness is a function of two key factors:
• The long-term revenue potential of the customers in this segment
o The revenue potential of the segment is typically determined by factors such as:
Segment size,
Growth,
Buying power,
Inherent loyalty.
• The ease of reaching these customers.
o The ease of reaching customers in the segment is a function of the company’s ability to effectively and cost-efficiently communicate and deliver the offering to these customers.
o The segment’s compatibility with the company’s strategic goals, competencies, and assets
Segment compatibility
• Reflects the ability of the company to deliver value to the target customers in a way that enables the company and its collaborators to achieve their strategic goals.
Segment compatibility is a function of two key factors:
• The degree to which serving this segment is consistent with the company’s strategic goal(s) and
• The degree to which the company has the resources (i.e., competencies and assets) necessary to serve this segment.
o A company’s ability to serve the segment better than the competition.
Competitive advantage
• Reflects the company’s ability to fulfill the needs of target customers better than the competition.
• A company’s competitive advantage is, to a large degree,
A function of the extent to which the competencies and assets necessary to deliver value to the target segment are unique and difficult to imitate by competitors.
o Targeting strategies usually can be categorized as one of the following:
Single-segment strategy – also known as a concentrated strategy.
• One market segment (not the entire market) is served with one marketing mix.
• A single-segment approach often is the strategy of choice for smaller companies with limited resources.
Selective specialization, also known as a differentiated strategy.
• Different marketing mixes are offered to different segments.
• The product itself may or may not be different – in many cases only the promotional message or distribution channels vary.
Product specialization- the firm specializes in a particular product and tailors it to different market segments.
Market specialization- the firm specializes in serving a particular market segment and offers that segment an array of different products.
Full market coverage – the firm attempts to serve the entire market.
o The following diagrams show examples of the five market selection patterns given three market segments S1, S2, and S3, and three products P1, P2, and P3.
o A firm that is seeking to enter a market and grow should first target the most attractive segment that matches its capabilities.
Once it gains a foothold, it can expand by pursuing a product specialization strategy, tailoring the product for different segments, or by pursuing a market specialization strategy and offering new products to its existing market segment.
o Another strategy whose use is increasing is individual marketing, in which the marketing mix is tailored on an individual consumer basis.
While in the past impractical, individual marketing is becoming more viable thanks to advances in technology.
• Positioning
o Manipulating the four p’s (place, product, promotion, and price) to appeal to the targeted segment.
o The place the product occupies in consumers’ minds relative to competing products.
o Typically defined by consumers on the basis of important attributes
o Choosing a Positioning Strategy:
Identifying possible competitive advantages
• Products, services, channels, people or image can be sources of differentiation.
Choosing the right competitive advantage
• How many differences to promote?
o Unique selling proposition
o Positioning errors to avoid
• Which differences to promote?
o Choosing a Positioning Strategy:
Developing a positioning statement
• Positioning statements summarize the company or brand positioning
• EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference).
Communicating the chosen position
o Positioning challenge
Determine what consumers currently think about your product (wrt competing products)
Decide what you want consumers to think about your product.
Figure out how to reposition.
o Can position along many dimensions, such as:
Product Attributes (Certs, with Retsin)
Product effects (Rembrandt gets teeth 5X whiter)
Price (“Budget Gourmet frozen dinners)
User (baby shampoo vs. gentle shampoo)
Usage (Coke in the morning)
Relation to other products (7 Up is the uncola)
Arbitrary (“Weekends are for Michelob”)
Defining Buying Triggers/ Micro-Moments
A micro-moment or buying trigger is when a consumer discovers a problem and acts on it.
A trigger is an event that causes a buyer to have a clear need, which usually converts into a sense of purpose and urgency in their buying process. As an example in your own personal life, you might have had a vague interest in getting a new camera.
Other examples of triggers:
• You hard disk fails, and you realize you need a better backup system
• You have a burglary, and realize you want a far better video security system
• Your company grows beyond a certain size, and your old manual HR systems can no longer cope
The specific trigger that gets their buyers going is not only different from startup to startup, but also different depending on their role in the organization.
Having a very clear understanding of these triggers helps you:
• Recognize who to target
• Improve your messaging to those target prospects
• Do a better job of qualifying who is really ready to buy
• Gives you the ability to help a customer recognize when a trigger has happened.
Working with Triggers to improve marketing
There are four steps:
1. Identify the different buyer persona that buy your product
2. Identify the trigger or triggers that typically get them into a serious buying mode
3. Create messaging and content for each persona & trigger combination
4. Look to see if you can create the trigger event, or help them recognize that one has occurred
A buying trigger example: Home Depot got powerful results when it used location extensions for display ads to reach home and garden enthusiasts on mobile. The brand reached consumers in their intent-rich moments—when they were looking for outdoor garden products—and brought them into nearby stores. – think with Google.
Your job as a marketer is to identify these micro-moments and be present when they happen.
Moment based
In recent years, digital marketers have coined new terms such as “Moment marketing” and “Right-time marketing” that have transformed our perceptions of how and when we market to our consumers. According to eMarketer, Moment marketing refers to marketing delivered at the right time, but not always created in real-time.
Micro Moments
Those “intent-rich moments when a person turns to a device to act on a need to know, go, do or buy” are called micro-moments. Micro-moments aren’t merely a trend but a shift in buyer behavior, making a huge impact on consumer decision. Micro-moments occur when people reflexively turn to a device—increasingly a smartphone—to act on a need to learn something, do something, discover something, watch something, or buy something. They are intent-rich moments when decisions are made and preferences shaped.
As of January 2018, global mobile population amounted to 3.7 billion unique users. In addition, mobile internet traffic as a share of global online traffic is a staggering 51.2%. Further, an average user checks his or her mobile device about 150 times a day. During these moments, consumers are most receptive to ads. This opens a new frontier on its own for marketers to reach their customers at the exact moment, with the exact information that the customers are looking for.
• A New Digital Practice: Micro-Moment Marketing. … This marketing model refers to the decision-making points where a buyer looks to an online device to help act on a need—to do something, to watch something, to buy something, to discover something, etc.
• Micro-moments occur when people reflexively turn to a mobile device to explore, discover, research, and buy. They are high-intent moments when preferences are shaped and decisions are made. Think of all those times when a shopper will whip out a smartphone to compare prices and check reviews after seeing a product on a store shelf, or ask a voice Helpant to locate nearby shops and restaurants.
• It’s happening more and more often, as people increasingly rely on their mobile devices to get things done. One in five American adults now rely solely on smartphones to stay connected, and 52.2% of worldwide website traffic is generated through mobile devices.
• According to Content Strategy Director Mark Traphagen, micro-moments tend to fill one of four immediate needs:
o I want to know when someone is exploring or researching a product or service, but is not yet in purchase mode
o I want to go when the consumer is looking for a local business or considering buying a product from a nearby store
o I want to do when someone needs help completing a task or trying something new
o I want to buy when a shopper is ready to make a purchase but needs help with the “where” and “how”
• As Google explains it:
o “In these moments, consumers’ expectations are higher than ever. The powerful computers we carry in our pockets have trained us to expect brands to immediately deliver exactly what we are looking for when we are looking. We want things right, and we want things right away.”
Linking micro-moments to customer journey
Search data and trends can provide insights as to what topics and types of content the customers are looking for. This helps them capture customers early in the decision-making process by creating content that suits the micro-moment need. This data also helps to create content that resonates, engages and is tailored to the conversion touch-points of the customer journey. In addition, it also aids in personalized ad-targeting.
For example, consider that a person has searched for a particular keyword that relates to your business. Now, we can be sure that the customer is interested in a particular product that you are offering. The next step would be to present him or her with personalized ads that would boost their awareness and consideration of the product. Further, we could also send e-mails regarding offers and discounts which would lead them to your website where they can be shown more information about the product or service; ultimately leading to a purchase.
Consider a scenario where a business is selling sunglasses for every occasion and a person searches for rugged-looking motor bikes. This will in turn be an opportunity to sell the person your product (sunglasses) as an add-on with the motor bike. This would be an example of targeting the latent need of the customer based on his behavior displayed in his or her search.
Leveraging micro-moments in businesses
Analyzing mobile-centric searches can lead to powerful insights. But the question still remains as to HOW we can leverage it. In its basic sense, micro-moments show relevant data to its users who search for something. In order to reach these consumers, we have to make ourselves relevant to what our customer base requires. Following are some of the methods that could be used to leverage micro-moments:
• SEO – A good Search Engine Optimization (SEO) leads to your page being at the top of the search results when a customer searches for something. This directly translates to more traffic to your website, thereby more conversions.
• PPC – Pay-per-click (PPC) advertising ensures quick results to increase traffic.
• Content generation – A good SEO without relevant content would lead to nothing. Hence having content to either grab the attention of customers or provide information or address problems is undisputed.
• Customer friendly website – Although you have great content, if the user finds it difficult to navigate through your website, chances are that the user will immediately close the site and go to the next site shown in the search results. Hence, having a user-friendly website, although does not connect directly to micro-moments, is a must if you want users to be engaged and not annoyed.
• Social media presence – Nowadays, any online marketing is incomplete without a social media strategy. With such a huge and diverse demography present in these networks, it becomes impossible to gain the competitive edge without a social media presence.
Defining Macro & Micro Conversions (KPIs)
Before purchasing or buying, what steps should the customer accomplish before purchasing your products?
It is important to define both macro and micro conversions early on in your digital marketing campaigns, in order to target the right audiences and marketing channels. You can view them as KPIs of your marketing activities.
What are macro-conversions?
A macro conversion is the primary conversion on a website, for example a completed sale on an ecommerce site or a completed lead generation form. A macro conversion is the most important part of any sale procedure on any website. It usually deals with the end goal of the website that the visitor will be clicking. In fact, the macro conversion is almost the final step before a sale is sealed. Tracking the macro conversions on any website allows the user to find out the success and popularity of any product. Examples macro conversion includes subscriptions and transactions. Since completion of these goals translates to revenue generation for a business, they can be taken as the deciding factor when monitoring the success rate of any experiment. Therefore, it is of crucial importance to monitor macro conversions very closely. Macro conversions are the big picture goals of a business. For example, growing the membership base of a paid subscription Software As A Services (SAAS) company.
Micro Conversions
Micro conversions are the milestones that eventually lead to the macro conversion. For example, a 30-day trial signup which may lead to a paid membership upgrade is an example of a micro conversion. A micro conversion relates to smaller engagements such as a newsletter sign up or a user watching a product video. Micro conversions can often precede the macro conversion. A micro conversion is a small step on the path of a visitor towards your primary conversion goal (usually called a macro conversion). For most websites, macro conversions are either making a purchase, giving a donation or providing a lead.
Sources:
• https://www.business2community.com/infographics/the-consumer-buying-behavior-in-the-digital-age-infographic-02122377
• https://blog.spiralytics.com/micro-moment-marketing
• https://medium.com/analytics-for-humans/the-evolution-of-consumer-behavior-in-the-digital-age-917a93c15888
• https://www.vendasta.com/blog/following-modern-customer-journey
• https://foundationinc.co/lab/psychology-sharing-content-online/
Question: Develop a case for the use of social media advertising for a small business.
Please complete the questions in this homework succinctly but with great care for completeness.The homework assignments are designed to get you to think about digital marketing trends and frameworks. This particular one investigates Social media Advertising. Please provide perspectives based on research and experiences.
Please use 12 pt font, Times New Roman and 1.5 spacing. 1-1.5page
