The Rise of the Online Marketing Mix
In the previous publication, ViralPlanet’s team discussed the issues of audience fragmentation, which has largely been facilitated by the digital revolution with new viewing platforms and mobile devices and the explosion of the number of digital, cable and satellite television channels which have been recently adopted by the general consumer.
This publication looks to review traditional marketing thinking and how this wisdom can be assimilated into online marketing channels and therefore what lessons can still be learnt from old media and transferred into the online marketing universe.
Traditional Marketing Thinking – ‘The Marketing Mix’
Excuse those professionals if I am ‘telling grandma how to suck eggs’, this section is largely for those that don’t know fully understand what the traditional marketing mix means, or for those of you who have grown up, just the online world. Traditional marketing thinking is largely hinged upon a model known as ‘The Marketing Mix‘.
The Marketing Mix is commonly regarded as the four P’s (which later became the seven P’s) are:
All of which may seem obvious to those marketing experts out there, however for those of you who don’t understand, the following is a brief summary of each of these:
Product: is absolutely vital, as the wrong product will simply just not sell; or not sell in the quantities predicted when the investment was made by the company to develop a concept (e.g. car) into a fully functioning consumer product. A great product will generally afford the consumer added value benefits that previous products did not provide; some of these benefits may not actually be physical function or form, but may also include ‘non-physical’ benefits such as prestige or perceived quality (e.g. Tag Heuer or Louis Vitton). An awesome product (e.g. Apple’s iPhone) should also probably lead a market and possibly should also be at the beginning of the new or revised PLC (‘product life cycle‘).
What determines whether a product is at the start or the end of the PLC? Well this is the value of the present number/percentage of product/market adoption against what the anticipated market size is likely to be; however as eluded to above, PLC’s are being continually extended or revised through adding additional product features (for example the Nintendo 3DS against the Nintendo DSi);
Place: in traditional thinking, this is the actual place (e.g. shop) that the product was purchased from; many say ‘location, location, location is absolutely vital’ à one would suggest that this is probably only true if the location fits with the consumer audience and the product that is on offer (e.g. Bentley’s being offered for sale in Mayfair), however in terms of the wider consumer audience, what has been vital to business in the past is to maximise the number of potential customers that can come through your shop door as possible (this is generally regarded as: ‘footfall’);
Promotion: is generally accepted as the marketing bit; it can include marketing activities such as distributing leaflets and money off coupons to much grander activities such as radio and television advertising. The key to this part of the marketing mix, is that it generates wide-scale and/or targeted ‘consumer awareness’ and effectively gets the product out there; the objective is that the targeted consumer knows all about the product (and the benefits that the product affords) coupled with the brand associated with the product on offer (e.g. Hoover, a brand synonymous with the Vacuum Cleaner);
Price: this is a lever that can be used as part of the marketing mix, it can be also used as a temporary lever (e.g. discounts and money off vouchers) in order to protect the product margins and the general market price. A permanent lever (a permanent discount to the generally accepted price level for a generic product) tends to signal to the competition that a new incumbent, a new player if you will has entered the market (a great example of this is what Alan Sugar did with Amstrad in the nineteen eighties with Amstrad’s PCW in the traditional commercial typewriter market). What is absolutely vital about price is that the consumer understands the overall product offering, the benefits that the existing product affords against the benefits that of a recently introduced product; these may include: function, form, operational effectiveness, quality and price and the differentiation of all of these factors.
Ok, there are millions of publications out there explaining all about the four P’s and the traditional marketing mix, so where are we going with this? Well simply put, because some online folk think that the traditional marketing mix is outdated and that it is no longer relevant… …hmmm, although I have been an internet marketing professional for over six years, I would still not entirely agree with the argument that the traditional marketing mix is no longer relevant in this technology driven consumer age. The reason I say this is because traditional marketing reasoning has evolved over many, many years and it generally involves and includes human emotions and the interactions that follow these emotions (e.g. buying jewellery for one’s lover); hence this would appear to be as true today as maybe it was four to five hundred years ago, a great example of this is why Shakespeare’s plays continue to be as relevant in our culture today, as they were many centuries ago.
The Online Marketing Strategy
So, the major question is can we assimilate the traditional marketing mix and traditional marketing thinking with the Online World and develop a hybrid Online Marketing Strategy?
The words evolution, adaption, and assimilation are all similar and the following and I would suggest that the following could become a new model standard for developing a successful online marketing strategy:
- Product > Illustrating New Products’ Features:
The online world can better highlight the consumer benefits & features of a new product.
Examples include online video campaigns, which provide greater flair to the masses, but can also include greater detail to the enthusiast.
- Place & Footfall > The WWW & Online Traffic
The new Place is now The Online World as I like to refer to it or more commonly referred to as the World Wide Web (WWW). The WWW has now largely replaced the traditional shop in terms of offering a fully functioning and interactive retail experience.
What was traditionally known as footfall has assimilated into online traffic, what this generally means is that the greater level of (relevant) online traffic to your website, the much greater chance of generating consumer sales (this is true whether you have a branded site, e.g. www.Apple.com or an ecommerce site, e.g. www.Play.com).
It would therefore appear reasonable to argue that in this current digital consumer age, product websites that have greater levels of online traffic will probably be far more successful than those without high levels of consumer traffic
- Promotion > Online Consumer Awareness
As part of the Promotional part of the marketing mix, promotion in the online world
he new Place is now The Online World, i.e. the world wide web which has now largely replaced the traditional shop in terms of offering a fully functioning and interactive retail experience.
- Corporate Push > Consumer Awareness
- Social Media Platforms
- Online Video Advertising
- Consumer Pull > Search Engines
- Corporate Push > Consumer Awareness
- Price > It is always about the price… …well isn’t it?
Recant paradigm shifts in technology and the adoption of this technology have altered certain industries for ever. A fantastic example of this is the Music Industry, where previously people used to pay £3-£4 for a UK CD single (about 3-4 songs) and about £12-£14 for a UK CD Album (about 10-14 songs). Following the introduction of the iPod, Apple also introduced the iTunes music shop, which changed the pricing of (legal) music forever. People were only ever interested consuming music media and actually the delivery of that media (hard copy, e.g. CD vs. soft copy music download) was irrelevant, hence Apple caught onto this and changed the pricing model. The introduced the fact that people could download a single track from an Album for 99 pence (or 99 cents in the USA); this major shift in industry pricing meant that music song writers could no longer get away with writing two or three great songs and then filling the remainder of the Album with relatively mediocre material, because people can now pick and choose with tracks they want to purchase, hence if they only wanted to buy three tracks, then that would cost say £3 (via Apple’s iTunes download shop), instead of say £12 buying the hard copy CD from HMV. The price hasn’t really changed, it was always about £1 for each track, what has changed is that technology has changed the balance of power away from the large music corporations (Universal, EMI, Sony etc) and more towards the consumer, through the use of the iTunes music shop.
This industry shift has not just happened in the music industry, it has also changed in the gaming industry; as the video gaming industry is estimated at being at least double the size of both the Music and Film industries. Again a major shift in the video gaming market, however this could probably fall into two camps: (i) high-end, very high-quality video games (e.g. Microsoft Xbox and Sony PlayStation 3): and (ii) lower-end, high-volume video games (Nintendo DS and Nintendo Wii). Whilst the higher-quality video gaming consoles have adopted multi-player facilities, through internet connectivity, the lower-quality video gaming providers have been caught napping. Examples include the failed launch of the Nintendo 3DS, which was probably due to success of Apple’s App Store, as higher-quality and much-lower priced (e.g. £2-3 for an Apple App game compared with £20-£25 for a Nintendo 3DS game) video games which can be bought seamlessly from Apple’s store has meant that Nintendo have had to slash the cost of their 3DS gaming console, as well as slash the retail price of their games. This further demonstrates the power that Apple has brought to the consumer, as they have created a market whereby: (i) creative artists can work flexible hours and earn good money from their expertise, without the need for an office and/or employer; and (ii) consumers now have access to useful iPhone Applications and entertaining video games (over half a million).
Consumer Awareness & Online Video Adverting
So, we have established that there are two major advertising methods and these can be simply shown as follows:
- Company Push à Consumer Awareness:, TV, Radio, Banners, PR & Online Video Adverting; and
- Consumer Pull à Consumer Demand: Google, Yellow Pages, 118118 etc.
In terms of the marketing mix, Online Video Advertising is now becoming the fastest growing medium for facilitating the ‘Company Push’. This is because, (unlike Facebook for example), it can provide the audience with the aesthetics and the high-level benefits of the given product, but at the same time product greater detail through the use of CTF (the click through facility). The CTF is what makes Online Vide Advertising, the most powerful form of consumer awareness campaign, because unlike TV, it can immediately connect a far more targeted audience with the details of the product (for example if it was a car) and potentially where it can be purchased from (e.g. a list of distributors). A great example of this is the Range Rover eVogue campaign, where at the end the campaign asked: “…want to book a test drive?”, then you needed to complete just two fields: (i) your mobile number and (ii) your email address. By keeping the data requests succinct and simple, this meant that Land Rover (the company that makes the Range Rover eVogue) in effect received many thousands of enquires for booking the test drive, hence this viral campaign was deemed by the Brand and the Advertiser as highly successful because of the intersection of Consumer Awareness and between Consumer Demand.
What May the Future Hold for Interactive Consumer Awareness Campaign’s
Online Video Advertising is just the start of interactive media, there are two further technologies that could involve the consumer far more:
- Augmented Reality
- Holographic Imaging
Google have launched ‘Project Glass’ as an augmented reality technology. This technology enables the user to wear a pair of glasses and by pointing you head, hence your eyes and the glasses that you are wearing; therefore by pointing at say shops, shops could show what offers are on sale or what are the latest product being launched by that shop; thereby integrating hardware devices, with the internet and ‘brick based’ retail outlets. Although in its infancy, this technology can be hugely powerful; however a major drawback to this technology could be the physical appearance of wearing these glasses, similar technologies include the blue-tooth mobile ‘phone headsets, although very useful fast became uncool to wear hence its adoptions with the masses did not occur. Therefore, although the technology maybe powerful, Google’s main drawback will be making it cool to wear these glasses, in the same way that Apple made it cool to wear ‘white headphone’ for their Apple iPod.
Holographic imaging can be a powerful tool for higher-end products, for example high-end prefabrication homes, such as the Huff Haus (House). These products are currently being marketed online, and using other forms of consumer awareness strategies, however if people were able to use a holographic imaging device to walk around a virtual Huff Haus; if Huff were to have an exclusive (possibly invite only) event in say a Central London Railway Station (St Pancras Hotel & International Rail Gateway, would be a great idea); then Huff Haus could potentially showcase: (i) Holographic Imaging as a high-tech means of enabling their target audience to enjoy and understand their product; and (ii) showcase their product using a technology method that no-one has used before. Although this is a technology that is complex, because 3D imagery is becoming a much wider used technology in gaming and television devices, the understanding of the power of this technology is now much more widely used.
No matter how great a marketing strategy is; no matter how good the Online Video Campaign is delivered and no matter how well the consumer awareness is, product is always key and without the right product is will just not sell in the quantities required to make a profit. And when a new product is introduced, it is likely to supersede an already great product (for example, Microsoft’s Xbox vs. Nintendo’s Wii) and no matter what amount of marketing one a company does, consumer preference coupled with great customer service win always win out.
This is becoming progressively true, especially as we enter the period of Interactive Social Video Media; which enables the audience to share products they like and discuss issues that they may have had with various companies’ products and their respective after-sales service.
It would appear that the Consumer Awareness race is vital to ensure that a company obtains ‘first-mover advantage’, however with an ever more connected global society, which is driving the market forward, consumer adoption rates is quickening at a tremendous pace, hence companies need to be aware of this to ensure that they are not left behind by product innovation and market creation…. …it will be the consumers, as ever that will have the final word on this matter and in Part 2 Viral Planet will explore how great customer service and poor after-sales services can affect the value of a brand, through the Social Media Conversation.