Digital Marketing Mix and Relationship Management Tactics of Stokers Company - Essay Example

? Stokers Company Contents Contents Introduction 3 Situation analysis and clearly defined objectives 3 Defined target audiences/stakeholders and a positioning strategy 6 A clearly identified Internet value proposition for identified audiences 6 Clearly defined digital marketing mix and relationship management tactics 6 An illustration of how offline and online strategies will be integrated 8 An implementation plan including evaluation and control mechanisms 10 An indication of where revenue/benefits will be achieved and where costs incurred 12 Conclusion 13 References 14 Introduction Stokers Fine Furniture is a part of the Pratt’s Fine Furnishing which was established in 1895 by Christopher Pratts. The company operates 10 stores and has a turnover of 40 million GBP. Other stores under the Pratts umbrella brand are Annett’s Furniture World, Fredmans, Russell Dean, Young’s Furnishers, W&T Nettleton, Christopher Pratts, Gregory and Porritts Fine Furniture which account for 80% of turnover of the company. The furniture brand is a trusted brand in UK. Stokers Fine Furniture is coming up with new strategies to capture the potential untapped market, especially the style conscious families. The brand falls in the category of expensive and traditional product brand. Situation analysis and clearly defined objectives The market for fine furniture in the United Kingdom is rising strongly due to the effect of the country recovering from property market affects. The housing market industry is in a buoyant mode with increased demand for home furniture and furnishing. The store sales as well as the online sales of this industry have accelerated. The market has been highly influenced by the advent of the internet. The customers are more oriented towards electronic commerce due to their preference of buying from the home without having to go to the stores. The future of the UK furniture industry is showing positive trends. Consumers are likely to renew their homes much more frequently than before, therefore surging up the demand for stylish furniture. Earlier home wares like furniture and carpets were kept for a long time, but now the trend shows that they are replaced within a few years (Forbes, 2012). A SWOT analysis is conducted for the company to assess the internal and the external factors affecting the business. Since the business can control the internal factors, it may gain competitive advantage by improving upon its strengths and weaknesses. By transforming the weaknesses into strength, the company can also take up opportunities and offset the threats. Strengths: Strong brand name, cost and competitive advantage over other players in the market are core strengths of the company. Sufficient resources are available within the business for creating and maintaining a dynamic website and an extensive database system. The company can provide strong customer service from their team dedicated towards the digital marketing strategies. Weaknesses: Implementation of technology in the corporate culture, the business runs in a seasonal pattern. Opportunities: Digital marketing is the keyword for ensuring more success. It is an inexpensive marketing model aimed to capture a potential untapped market. Use of innovative technologies is another opportunity for the business. Threats: Competitors are also implementing the digital marketing strategy, expensive software upgrades resulting from pending security laws. There is stiff competition for the SCF market. The main competitors of Stokers fine furnishing are Sofa.com, Sofa and Stuff, Next, John Lewis, Marks and Spencer. The macro environmental analysis for the business is done through the PESTEL Analysis. Political: The corporate and consumer taxes regulation by the authorities highly impact the company’s income after tax. In UK, taxation is done as 30% of the profits for the businesses operating there. Since the company is more dependent on local suppliers than imported goods, therefore the trade barriers and tariffs have negligible impact on the business. Economic: The market has gown immensely and the accelerating economies have resulted in higher standards of living and increases disposable income of the customers. The market shows a trend of more growth in the future. Social: The cultural and social changes have changed the consumer behaviour which is now dominated by the demand for easy to assemble and trendier furniture. The social changes are also noted in the mode of buying where customers prefer online buying, read reviews from the internet and research about the products they want to buy from the information available on the reviews, company websites and blogs. Technological: The new innovations in technology have led to the increased popularity of online shopping, mobile shopping and the use of e-gift cards. The consumers now have a number of choices regarding safe online payment modes. The social media has emerged as a popular and unconventional marketing channel. Environmental: The business is expected to meet environmental standards regarding manufacturing, disposal of wastage, supplier behaviour and recycling processes. Legal: The activities of the company including its digital marketing strategies should comply with the legislative requirements in the industry. The company has to effectively analyze its existing marketing plans, distribution and promotional plans before embarking on the digital marketing foray. In general, any objective in a Digital Marketing plan should be a SMART Objective: Specific Task (what is to be accomplished), Measurable quantity (how much), Actionable, Realistic in nature and a specified Time frame (by when).The Digital Marketing plan aims to fulfil the following objectives: increase market share, reduce costs, improve databases, achieve customer relationship management goals, achieve branding goals, improve supply chain management and increase sales revenue. Defined target audiences/stakeholders and a positioning strategy The identified target group for the Stokers Fine Furnishing Company is the mature dreamers which are composed of more affluent, older and traditional group of people. The main drivers in their purchase decision making process are comfort, style, quality, service and price. The company should be positioned in digital marketing as unique and with sustainable competitive advantages over its competitors in the market. A clearly identified Internet value proposition for identified audiences The value proposition for this target market can be gained by creating a unique value proposition (UVP) factor for the digital marketing model. This uniqueness can be achieved by the company through implementing specific strategies of online marketing. The company can start online polls assessment of the company and its product performances. This will instil the belief in the customers that the company values the feedback of its customers. The company should also create a unique selling proposition (USP) to create interest among the target customers. Clearly defined digital marketing mix and relationship management tactics The digital marketing mix is done to find out. The Marketing mix strategy deals with the 4P’s and relationship management by creating strategies around the offer (product), value (pricing), distribution (place) and communication (promotion). Product Strategies: The Company can sell their goods and list their after sales services in the sites. Other product strategies may include adopting an e-business model like online auctions. New brands may be created for the online market like Stokers has created mysofa.co.uk with the objective of moving to a desired target market base without compromising the current markets. Pricing Strategies: There are two online pricing trends: Dynamic pricing which allows the company to charge lower prices allows and gain higher margins on the products. The company can also use the dynamic pricing technique to monitor the consumer behaviour patterns and design the offers according to their findings. The company may also make changes in the prices and give periodic discounts to adjust to demand and cost movements. Another pricing strategy is the online bidding in which the products are listed on the website in an auction format where the potential buyers bid on the products and the highest bidder can buy the product for the amount he has placed as the bid. Distribution Strategy: The Company may use the Internet to increase the efficiency among the members of their supply chain. The company can use direct marketing techniques or agency e-business models to implement their digital marketing plan. Promotional and Advertising Strategies: The Company can use websites and emails to communicate with the target segment as well as the business alliances. The use of blogs, write-ups, paid advertisements in social sites such as Face book and Twitter can help to increase the awareness about the company and its products and also build up a strong brand image. The company can position its products using the website and email marketing among other online promotional strategies. Digital marketing communication strategies are aimed at building up relationships between the company and its customers as well as with the supply chain members and strategic partners of the business. This can be achieved by the implementation of Customer Relationship Management (CRM) software. Information technology systems are particularly useful for automating the digital marketing processes. Effective information gathering strategies are important to derive data for the information systems. These strategies may involve the use of online surveys, feedback gathering through electronic mail and by providing survey forms in the websites. Business Intelligence and analytics software can be used by the company to evaluate the competition, industry trends and other market forces. An illustration of how offline and online strategies will be integrated The various digital marketing strategies that can be implemented by Stokers Fine Furniture are: Email Marketing: Email marketing which is one of the first launched strategies of digital marketing. This strategy works on database marketing i.e. the customer data is segregated and analyzed to formulate personalized messages for the different groups of customers (Kim, 2004, p. 54). Stokers can deliver electronic communications to the customer groups regarding their new product launch, offers and discounts, catalogue of products and payment modes. The company can further record the response of the customers to these messages and study them for in-depth analysis of the effectiveness of their strategy. SEO (Search Engine Optimization): Search Engine Optimization is the process by which the frequency of visibility of websites in search engines can be increased. This is achieved by increasing the ranks of keywords and the volume of the keywords associated with the sites. The Search Engine Optimization techniques vary from blogging to content writing, on-site technical analysis and improvement and link building. Mobile Marketing: This strategy is one of the largest growth areas of the digital marketing process. In today’s world, the dependency on smart phones and tablets for quick information has increased by manifolds. Mobile marketing is a push strategy that when correctly implemented can be used as an efficient digital marketing strategy. Pay-Per-Click (PPC): Pay per click or paid search can be used by paying for the advertisement of the company in different popular websites. The paid advertisements will be typically placed above the other results that the relevant keywords find. The cost is directly proportional to the competitiveness of the keywords. The company has to employ efficient people for this strategy as the process calls for creativity in advertising, eye for the details as well as extensive knowledge about the digital market scenario (Ryan, 2012, p.149). Stokers can use the pay per click strategy for enhanced visibility through keywords related to furniture and furnishing. Social media: Social media marketing strategy is used to manage the image of the company through different social websites. The most popular social websites that can be used for digital marketing are Face book, Twitter, Pinterest, LinkedIn etc. Social media management has gained increased popularity over the years and is a complex strategy involving a number of tools and networks. Viral marketing: Viral marketing approach combines all the main elements of the marketing mix. It is also called content marketing because it is the process of popularizing an element of content in various channels. The viral marketing strategy uses blogs, videos on popular sites like YouTube, email marketing as well as popular social websites. Viral marketing is successful when the content captures the imagination of the audiences and then it is spread throughout the online communities by sharing and reposting. Online advertising: Online advertising can be done by paying other website owners to buy banner spaces on their websites. The payment is based on the number of clicks received by the advertisement or the number of impressions gained on the advertisement. Stokers should pay critical attention to place the right advertisement in the right place and at the right time. The company should invest in online advertising to redirect traffic to their website mysofa.co.uk. Blogging and News Feeds: Blogging is an effective digital marketing strategy which involves combining personal relations, social media, search engine optimization and website designs to ensure highly visible blogs. Blogging is a strategy in which organic traffic as well as social traffic is attracted through enhanced search with keywords. The consistent voice of the blog makes it visible and easily recognizable. Stokers can use blogging as an effective strategy to provide positive review about their products and after sales services. Affiliate marketing: Affiliate marketing is similar to online advertising, except for the feature that the payment for the advertisement is done to the hosting website only when a sale is made from the advertisement source. The payment is higher when the sales gained are higher so the website owners have an incentive on promoting the advertising prominently on their websites. Affiliate marketing encompasses a wide range of activities like banner advertising, electronic mail marketing and developing electronic commerce shops for the affiliate products. The company has to keep the level of costs low to ensure higher profit margins from the strategy. Stokers should identify the best possible opportunity to maximize the promotion level and affiliate with highly popular social sites to enhance the visibility of their products. An implementation plan including evaluation and control mechanisms The performance and effectiveness of the digital marketing plan can be measured by assessing the targets achieved based on the strategy. The performance metrics are used to evaluate the efficiency of the digital marketing plan. These performance metrics are Key Performance Indicators (KPI), Targets, Business objectives and dimensions. The main digital marketing goals that should be evaluated by the company are: the size of follower base on the social sites, the inbound website visitors directed from the social sites, the actual conversion rate, the number of positive reviews and the frequency of the company name on different websites and the number of shares of the blog posts for the company (Harvard Business Review, 2006). The objective strategy matrix is another way of evaluating the performance of an implemented digital marketing model. The objective-strategy matrix represents a company’s Digital marketing strategies and the expected objectives as represented below: Online Goals Online Advertising Database marketing Direct E-mail Online Sales Viral Marketing Find Affiliates No No No No Yes Gather customer information No Yes Yes Yes Yes Improve customer service No Yes Yes Yes No Increase Brand Awareness Yes Yes Yes Yes Yes Sell Goods or Services Yes Yes Yes Yes Yes The Balanced Scorecard is another critical tool in measuring the performance of the plan in four broad areas: Customers, innovation, internal and financial aspects. The Balanced scorecard can be used as a performance management tool for the digital marketing segment. The allocation of Internet marketing objectives within the balanced scorecard framework for a transactional e-commerce site is shown below: Balanced Scorecard Sector Efficiency Effectiveness Customers Value Online reach Cost of Acquisition Propensity to defect New customers Sales per customer Customer loyalty index Online market share Innovation & learning Value Internal e-marketing Internal satisfaction level Tested novel approaches Performance appraisal review Deployed novel approaches Operational Value Average order value Email active percentage Support response time Fulfilment time Financial Value Channel profitability Channel costs Direct online contribution Indirect Online contribution An indication of where revenue/benefits will be achieved and where costs incurred While devising a digital marketing plan, it is important for the company to match the returns against the costs incurred. The expected returns from the investment should be identified as a critical part of the strategy planning. In this rising era of electronic commerce, Stokers is likely to generate a high return on the investment made in digital marketing. During the plan implementation, the company should closely study the revenues and expenses to map the objective- strategy goals. The company should establish the forecast for sales to estimate the revenues from the digital marketing strategy in the short, medium and long-term (Raphael, 2001, p.4). The website traffic level over a period can be forecasted in the plan. This level of website traffic is the key driver for the revenue generated from the website. The different sources of revenue for the company can be the direct sales from their website mysofa.co.uk, the subscription fees, the affiliate referrals, the sales at the affiliate sites, commissions and other fees and the advertising sales. The digital marketing costs are mainly the costs for programming, establishing hardware, internet access, hosting services, marketing communication, training and recruiting specialists. But a lot of money can be saved from this mode of marketing as the internet can be used as a cost efficient resource. The intangible befit gained from the digital marketing process would be an increased level of brand awareness among people. Conclusion Before the advent of the internet, the electronic media like radio and television were mainly used for advertising of products and services by the businesses. But with the introduction of internet, the process of information sharing has undergone a metamorphosis. The evolution of digital marketing has created new opportunities for companies and has created innovative ways of marketing and promoting a brand and its products or services whereas traditional media was used as a push marketing strategy, digital marketing has evolved as a pull marketing strategy where the customers are attracted and drawn by the use of effective marketing strategies through different strategies like SEO, pay per click, and affiliate marketing, email marketing, social media marketing, blogging, video streams, search engine marketing, instant response marketing and so on. As in the case of Stokers, the company should effectively use digital marketing strategies to gain a sustainable competitive edge over the other players in the market as well as to build a strong brand image in the minds of their customers. References Forbes. 2012. 5 Steps to Evaluate Your Company's Digital Marketing Strategy. [Online]. Available at: http://www.forbes.com/sites/theyec/2012/10/13/5-steps-to-evaluate-your-companys-digital-marketing-strategy/. [Accessed on 29 November, 2013]. Harvard Business Review. 2006. Customer value propositions in business markets. [Online]. Available at: http://hbr.org/2006/03/customer-value-propositions-in-business-markets/. [Accessed on 29 November, 2013]. Kim, D. 2004. Development of e-business models with different strategic positions and comparisons of business performances with the models. [Pdf]. Available at: http://www.sbaer.uca.edu/research/allied/2004/academySciences/pdf/09.pdf. [Accessed on 29 November, 2013]. Raphael, A. 2001. Value creation in e-Business. [Pdf]. Available at: http://www.uazuay.edu.ec/bibliotecas/e-business/Value_Creation_in_E-Business.pdf. [Accessed on 29 November, 2013]. Ryan, D. 2012. Understanding Digital Marketing: Marketing Strategies for Engaging the Digital Generation. London: Kogan Page. Read More