Digital Marketing Models

Parul Jain
10 min readAug 4, 2018

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7 Ps of Marketing

The marketing mix is the combination of the four controllable factors which affect your company profits: product, place, promotion, and price (the four Ps) which are required to achieve the desired target audience. These four Ps are required to sell the product rather than services, support and operation of the products. Later on, in the 60’s, three more Ps were added by Boons and Pitner which are people, processes (Physical Evidence and people) and performance. For most of the companies who are looking for the analysis of the product and services associated with the products, mostly follow the 7 Ps model. Now, let’s explore each Ps of the Digital Marketing mix.

  • Product: The product is the service or tangible good which satisfies the need of the target audience. Before developing any product, market analysis is required. The core product is something which is the main profit source of the company. A product is identified by its unique quality, features, branding, services, support, warranties, occasion & use.
  • Place: The place means the location of the product. This includes online and offline stores, eCommerce websites and social media channel.
  • Promotions: Promotion includes Advertising, Digital Marketing, PR, Event Marketing, Direct Marketing, Personal Selling, Channel Marketing, and Alliances.
  • Price: Price consist of the policies regarding basic price, upgrades, discounts and coupons, distributor price etc.
  • Process: This section ensures that the operations of the company i.e. How you are going to deliver your products? How to provide support and rectify the issue, if any problem occurs.
  • Physical Evidence: This section include the physical presence of the the company, which include offline stores, company building, online stores etc.
  • People: ‘People’ includes all those people who are associate with the company, the people whom you have hired, the people who recruit for your company, training department, support and customer care executives, people whom you want to target in the market etc.

Usp:

Unified selling product is the unique quality of the brand or product which makes them different from other competitive companies. Most of the people like brands based on its value and unique features. People love to buy products with superior quality and have good usp, even though they have to pay more than the other products. Usually usp comes with the product quality and support provided by the company.

Boston consulting group matrix:

In 1970 Boston Consulting Group developed a matrix called growth-share matrix, this matrix is also known as product portfolio matrix. The main focus of the growth-share matrix is to focus on the analysis of the business unit. Which is helpful for resources allocation and being used as an analysis tool in the brand management, product management, portfolio management, portfolio analysis etc..

This matrix is further divided into four regions, Cash cows, dogs, Question mark and star.

Cash cows: The companies which have high market share and slow growth, generate a high amount of cash to run the business. These companies need proper investment in order to run the company.

Dogs: These are the people with a low market share in a mature, slow-growth industry. This unit does not generate cash for the company but provides social benefits to provide jobs and assisting others.

Question Mark: Question marks are also known as problem children or Wild cats. These are businesses operating with a low market share in a high-growth market. They are the starting points for most businesses. Question marks have the potential to gain market share and become stars, Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.

Stars: Stars are units with a high market share in a fast-growing industry. They have graduated question marks with a market- or niche-leading trajectory.

Brand positioning map

These are the set of perceptions, impressions, ideas and feelings that consumers have for the product compared with competing products. It's important to achieve planning, strategy and competitive analysis of the brand. Perceptual Maps are useful for four key reasons:

1. Assessing strengths and weaknesses relative to competing brands along with certain criteria important to the customer

2. Identification of competitive advantage for the brand

3. Identifying market opportunities

4. Checking how ideal points are moving

Customer lifetime value model:

Customer lifetime value (CLV) is the prediction of the net profit attributed to the entire future relationship with the customer. It also defined as the monetary value of a customer relationship based on the present value of the projected cash flow from the customer.

Ansoff matrix:

Ansoff matrix is the strategic planning tool which is named after Russian American Igor Ansoff. This matrix provides a framework to help the marketers and social media managers to design and create a strategy for the growth and development of the company.

Ansoff matrix is divided into a further four growth strategy which are:

  1. Market Penetration
  2. Market Development: In this section, the company tried to expand its market in the new market area.
  3. Product development: In this section, the company developed its product and improve the existing product.
  4. Diversification: The company tries to grow its marketing strategy by introducing a new offering to the new market. This stage is required in order to develop the product in the market.

Loyalty ladder

The loyalty ladder is a relationship marketing concept that sees customers gradually moving up through relationship levels, starting at the bottom as prospects (those who have the intent to purchase but have not yet done so) and ending up at the top as advocates (intensely loyal brand champions).

Pestle

A PESTEL analysis is an acronym for a tool used to identify the external forces that create an impact on the organisation. PESTLE stands for Political, Economic, Social, Technological, Environmental and Legal.

Political Factors:

These determine the extent to which government and government policies may impact on an organisation or a specific industry. This would include political policy and stability as well as trade, fiscal and taxation policies too.

Economic Factors:

These factors impact on the economy and its performance, which in turn directly impacts on the organisation and its profitability. Factors include interest rates, employment or unemployment rates, raw material costs and foreign exchange rates.

Social Factors:

These factors focus on the social environment and identify emerging trends. This helps a marketer to further understand their customers’ needs and wants. Factors include changing family demographics, education levels, cultural trends, attitude changes and changes in lifestyles.

Technological Factors:

These factors consider the rate of technological innovation and development that could affect a market or industry. Factors could include changes in digital or mobile technology, automation, research and development. There is often a tendency to focus on developments only in digital technology, but consideration must also be given to new methods of distribution, manufacturing and also, logistics.

Environmental Factors:

These factors relate to the influence of the surrounding environment and the impact of ecological aspects. With the rise in importance of CSR (Corporate Sustainability Responsibility), this element is becoming more important. Factors include climate, recycling procedures, carbon footprint, waste disposal and sustainability.

Legal Factors:

An organisation must understand what are the legal factors and compliance need to follow and allowed within the territories they operate in. They also must be aware of any change in legislation and the impact this may have on business operations. Factors include employment legislation, consumer law, health and safety, international as well as trade regulation and restrictions.

Political factors do cross over with legal factors; however, the key difference is that political factors are led by government policy, whereas legal factors must be complied with.

Porter five force

Porter’s Five Forces are simple but powerful tool for understanding the competitiveness of your business environment, and for identifying your strategy’s potential profitability.

This is useful, because, when you understand the forces in your environment or industry that can affect your profitability, you’ll be able to adjust your strategy accordingly. For example, you could take fair advantage of a strong position or improve a weak one, and avoid taking wrong steps in future.

Porter recognized that organizations likely to keep a close watch on their rivals, but he encouraged them to look beyond the actions of their competitors and examine what other factors could impact the business environment. He identified five forces that make up the competitive environment, and which can erode your profitability. These are:

Competitive Rivalry: This looks at the number and strength of your competitors. How many rivals do you have? Who are they, and how does the quality of their products and services compare with yours?

Where rivalry is intense, companies can attract customers with aggressive price cuts and high-impact marketing campaigns. Also, in markets with lots of rivals, your suppliers and buyers can go elsewhere if they feel that they’re not getting a good deal from you. On the other hand, where competitive rivalry is minimal, and no one else is doing what you do, then you’ll likely have tremendous strength and healthy profits.

Supplier Power: This is determined by how easy it is for your suppliers to increase their prices. How many potential suppliers do you have? How unique is the product or service that they provide, and how expensive would it be to switch from one supplier to another?

The more you have to choose from, the easier it will be to switch to a cheaper alternative. But the fewer suppliers there are, and the more you need their help, the stronger their position and their ability to charge you more. That can impact your profit.

Buyer Power: Here, you ask yourself how easy it is for buyers to drive your prices down. How many buyers are there, and how big are their orders? How much would it cost them to switch from your products and services to those of a rival? Are your buyers strong enough to dictate terms to you?

When you deal with only a few savvy customers, they have more power, but your power increases if you have many customers.

The Threat of Substitution: This refers to the likelihood of your customers finding a different way of doing what you do. For example, if you supply a unique software product that automates an important process, people may substitute it by doing the process manually or by outsourcing it. A substitution that is easy and cheap to make can weaken your position and threaten your profitability.

The threat of New Entry: Your position can be affected by people’s ability to enter your market.

So, think about how easily this could be done. How easy is it to get a foothold in your industry or market? How much would it cost, and how tightly is your sector regulated?

Product life cycle:

Product life-cycle management (PLM) is the succession of strategies by business management as a product goes through its life-cycle. The conditions in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages.

There are the following major product life cycle stages:

Introduction: In this stage, the product has been introduced first time in the market and the sales of the product start to grow slowly and gradually and the profit received from the product is nominal and non-attained. The market for the product is not competitive initially and also the company spends initially on the advertisement and uses various other tools for promotion in order to motivate and produce awareness among the consumers, therefore generating discerning demands for a particular brand. The products start to gain distribution as the product is initially new in the market and in this stage the quality of the product is not assured and the price of the product will also be determined as low or high.

  1. costs are very high
  2. slow sales volumes to start
  3. little or no competition
  4. demand has to be created
  5. customers have to be prompted to try the product
  6. makes little money at this stage

Growth Stage:

In the growth stage, the product is present already in the market and the consumers of the products are habitual of the product and also there is quick growth in the product sales as more new and new customers are using and trying and are becoming aware of the product. The customers are becoming satisfied with the product and they bought it again and again. The ratio of the product repetition for the trial procurement risen and also at this level, the competitors have started to overflow the market with more appealing and attractive inventions. This helps in creating increased competition in the market and also results in decreasing the product price.

  1. costs reduced due to economies of scale
  2. sales volume increases significantly
  3. profitability begins to rise
  4. public awareness increases
  5. competition begins to increase with a few new players in establishing market
  6. increased competition leads to price decreases

Maturity stage:

In the maturity stage, the cost of the product has been decreased because of the increased volume of the product and the product started to experience the curve effects. Also, more and more competitors have seen to be leaving the market. In this way, very few buyers have been left for the product and this results in fewer sales of the product. The decline of the product and cost of attaining new buyers at this level is more as compared to the resulted profit. The brand or the product differentiation via rebating and discounts in price support in recalling the outlet distribution. Also, there is a decline in the entire cost of marketing through enhancing the distribution and promotional efficiency with switching brand and segmentation.

  1. costs are decreased as a result of production volumes increasing and experience curve effects
  2. sales volume peaks and market saturation is reached
  3. increase in competitors entering the market
  4. prices tend to drop due to the proliferation of competing products
  5. brand differentiation and feature diversification is emphasized to maintain or increase market share
  6. industrial profits go down

Decline stage

  1. In this stage, the profit, as well as the sales of the product, has started to decline because of the deletion of the product from the market. The market for the product in this stage started to show a negative rate of growth and corroding cash flows. The product at this stage may be kept but there should be fewer adverts, costs become counter-optimal
  2. sales volume decline.
  3. prices, profitability diminishes.
  4. profit becomes more a challenge of production/distribution efficiency. than increased sales.

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Parul Jain

Love to talk about the content Marketing, SEO, Brand Marketing, Analytic, Product management