Consumer Behaviour

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The resulting digital marketing plan creates the most efficient path to compete on the web and to win. The competitor analysis allows marketers to gain the market and competitive information they need to make the right decisions and eclipse the web competition.

There are several reasons why a competitor analysis is crucial to a digital marketing strategy:

- Markets and competitive landscapes always change.

- Players and people within specific industries change.

- There is a clear shift to a younger generation of decision-makers familiar with digital marketing.

- Majority of purchasing decisions are based on previous online research.

- It is easy to adapt to change by adjusting the digital strategy to ever-changing requirements.

- Transparent tracking and measurement of marketing spend and results.

- Ability to target specific geographies and buyer personas.

Competitive Benchmarking

‘Benchmarking’ is the term used for structured comparison of e-commerce services within a market. Its purpose is to identify threats posed by changes to competitor offerings, but also to identify opportunities for enhancing a company’s own web services through looking at innovative approaches in non-competing companies. Competitor benchmarking is closely related to developing the customer experience and is informed by understanding the requirements of different customer personas

Traditionally competitors will be well known. With the internet and the global marketplace there may be new entrants that have the potential to achieve significant market share. This is particularly the case with retail sales. For example, successful new companies have developed on the internet, who sell books, music, CDs and electronic components. As a consequence, companies need to review the internet-based performance of both existing and new players. Companies should review:

- Well-known local competitors,

- Well-known international competitors, and

- New internet companies local and worldwide.

When undertaking scanning of competitor sites, the key differences that should be watched out for are:

- New approaches from existing companies,

- New companies starting on the internet, and

- New technologies, design techniques and customer support on the site which may give a competitive advantage.

- Objective Setting

Any marketing strategy should be based on clearly defined corporate objectives, but there has been a tendency for internet marketing to be conducted separately from other business and marketing objectives. Many companies, responding to distorted market signals, have used ‘rampant experimentation’ that is not economically sustainable. This has resulted in the failure of many ‘dot-com’ companies and also poor investments by many established companies. It is suggested that economic value or sustained profitability for a company is the final arbiter of business success.

As a starting point for setting specific objectives, it is useful to think through the benefits of the internet channel so that these benefits can be converted into objectives. It is useful to identify both tangible benefits, for which monetary savings or revenues can be identified, and intangible benefits, for which it is more difficult to calculate financial benefits and costs, but are still important, e.g., customer service quality.

Frameworks for Objective Setting

A significant challenge of objective setting for internet marketing is that there will potentially be many different measures and these will have be to grouped to be meaningful. Categorisation of objectives into groups is also useful since it can be used to identify suitable objectives.

Different frameworks for identifying objectives are as follows:

- Balanced Scorecard: Some larger companies will identify objectives for internet marketing which are consistent with existing business measurement frameworks. Since the balanced business scorecard is a well-known and widely used framework it can be helpful to define objectives for internet marketing in these categories. It can be used to translate vision and strategy into objectives and, then, through measurement assessing whether the strategy and its implementation are successful. In part, it was a response to over-reliance on financial metrics such as turnover and profitability and a tendency for these measures to be retrospective rather than looking at future potential as indicated by innovation, customer satisfaction and employee development. In addition to financial data the balanced scorecard uses operational measures such as customer satisfaction, efficiency of internal processes and also the organisation’s innovation and improvement activities including staff development.

- Performance Drivers: Specific performance metrics are used to evaluate and improve the efficiency and effectiveness of a process. Key Performance Indicators (KPIs) are a special type of performance metric which indicate the overall performance of a process or its sub-processes. It can be seen that this KPI is dependent on performance drivers such as number of site visits or average order value which combine to govern this KPI. Note that the definition of KPI is arbitrary and is dependent on scope. So, overall conversion rate could be a KPI and this is then supported by other performance drivers such as engagement rate, conversion to opportunity and conversion to sale.

- Strategy Formulation

Strategy formulation involves the identification of alternative strategies, a review of their merits and then selection of the best candidate strategies. Since the internet is a relatively new medium, and many companies are developing a strategy for the first time, a range of strategic factors must be considered in order to make the best use of it. Although at the height of the dot-com bubble it was suggested by some commentators that companies should entirely re-invent themselves, for most companies internet marketing strategy formulation typically involves making adjustments to marketing strategy to take advantage of the