online business models and market strategy

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Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

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Presentation adapted from original by Pinny Gniwisch for McGill Online Marketing Course

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Page 1: Online Business Models and Market Strategy

Text

Strategy without tactics is the slowest route to victory.

Tactics without strategy is the noise before defeat.

Page 2: Online Business Models and Market Strategy

A strategy is a long term

plan of action in order to

achieve a particular

outcome.

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A tactic is a specific method or action that contributes to achieving a goal.

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8 Keys to a business

model

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1. Value Proposition“The brand promise”

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Success

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Find the info I need quickly and easily

Get breaking news as it happens

Find practically any item.

You can do it. We can help

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• Brand Personality

• User Values

• Emotional Rewards

• Functional Benefits

• Product Features

Brand Pyramid

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• Smart. Innovative. Honest.

• Efficient. Effective

• I feel smarter. My curiosity is satisfied

• I find stuff faster. It’s easy

• Fast, accurate

Brand Pyramid

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Examples of Value propositions:

• Better prices

• Fast and attentive customer service

• Superior quality

• Easy to use / convenient

• Huge selection

• Customizable

• Community

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2. Revenue Model

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Types of Revenue Models

• Ad Revenue: AOL

• Subscription: Netflix

• Mixed Ad/Subscription: New York Times

• Sales- Retail: Amazon

• Transaction Fee: E*Trade

• Affiliate: Linkshare

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3. Market Opportunity

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4. Competitive Environment

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What do they have in common?

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When it comes to competitors

REMEMBER THE INFORMATION ECONOMY.

Who is competing with you on

CUSTOMER ATTENTION.

You might be surprised.

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5. Competitive Advantage

5. Competitive Advantage

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Types of competitive advantage:

• Cost leadership: Make it / sell it cheaper

• Differentiation: Unique value that customers will pay a premium for.

• Focus Strategy: Targeted, niche products or markets

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FIRST MOVER ADVANTAGE?

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6. Marketing Tactics

Search SEO/SEM Email

Comparison

Shopping Engines

Viral / ContentMarketin

g

Social Media / WOM

Affiliates

Media

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7. Organizational Development

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8. Management team

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Internet Business Models

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B2C B2B

C2C/C2B

Internet business models

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P

PEOPLE

The 4 P’s of Marketing

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Products

• Products can be digital (e.g. software)

• Technology aids with developing new products, whether digital or not

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Price

• Easier access to comparative websites allows consumers to find lowest price

• Organisations need to differentiate themselves, but should not rely on price

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Place(ment)

• Digital products can be digitally distributed (e.g. download MP3)

• Stores can be online (e.g. Amazon)

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Promotion

• The Internet provides a wealth of promotional tools

• Advertising, personal sales, promotions, public relations and more can be conducted online

• Importantly: customers as promoters

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What about “new” Ps?

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Idris Mootee’s 4 New P’s

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1. Personalization

Internet allows for Mass Customization

• Marketing

• Products

• Experience

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Converse allows customers to create their own shoes.

Text

1. Personalization

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2. Participation

• Social media and user generated content

• Consumers collaborate with companies to create products

• Rapid feedback loop

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2. Participation

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Doritos Participation

• Crash the SuperBowl - UGC Ads

• Viralocity: Name The Flavour

• SuggestionBox / Facebook Page

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Ratings and Reviews

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3. Predictive modeling

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Peer-to-Peer• Most trusted is “someone like

me”

• Social networks encourage interactions

• Word of mouth can be more easily tracked

• Equip engaged users with tools to share and promote

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Developing a marketing plan

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1. Know yourself and your market

• Who are we as a brand and offering?

• Who are our customers and what are their needs?

• What is the social context?

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2. Strategic analysis

Thorough market analysis

• Strengths

• Weaknesses

• Opportunities

• Threats

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Porter’s 5 Forces

1.Competitors:Those sites that offer the same product, service, or information as your site.

2.Potential new entrants: Your site-less off-line competitors as well as new companies entering the industry via a Website.

3.Customers: Visitors and potential visitors to your Website and your competitors’ sites.

4.Suppliers: Those companies that supply you with the products (or parts if you are a manufacturer) and/or services offered on your site. Other suppliers are the Web hosting, software, etc.

5.Substitutes: Other means and sources for the same products, services, or information as your Website provides.

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3. Set objectives

•What are the desired outcomes?

•What are the specific goals?

•How will success be measured (KPIs)?

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4. Generate strategies and tacticsSTRATEGY

What are you trying to do?

TACTICS

How, when and where are you going to do it?

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5. Evaluate tactical plan

• Budget and Resources

• Prioritize

• Develop

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6. Implement

Just do it

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7. Track, Analyze, OptimizeCapture KPIs:

• Ad metrics (impressions, clicks, CTR, CPC, CPA)

• Website experience (visits, PPV, bounce %, TOS, CR)

• Sales metrics (Revenue, AOV, Margin %, $PV, A/S, ROA)

• Lead generation metrics (Leads, Opt-ins, Followers, Fans)

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7. Track, Analyze, OptimizeTurn the data on its head:

• Look for +/- anomalies

• How does day / time impact results?

• Which targets perform best?

• What communication elements are working or not?

• Which pages convert best?

• What products generate the highest conversion rate

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7. Track, Analyze, OptimizeTweak your efforts mid-stream

• Scheduling / day-parting

• Update creative

• Change offers

• Adjust media budgets and placements

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ANATOMY OF A MARKETING CAMPAIGN

REACH > ENGAGE > CONVERT > SHARE

EMAIL

FACEBOOK PAGE

GOOGLE ADWORDS

BANNER ADVERTISING

ORGANIC SEARCH

LANDING PAGE

SOCIAL MEDIA

EMAIL

OFFLINE W.O.M.