Search and Display Marketing

Search Marketing

Search engine marketing is the practice of marketing a business using paid advertisements that appear on search engine results pages (or SERPs). Advertisers bid on keywords that users of services such as Google and Bing might enter when looking for certain products or services, which gives the advertiser the opportunity for their ads to appear alongside results for those search queries.

A digital marketing strategy, search marketing uses paid and unpaid techniques to earn your business increased visibility across the Internet. A few examples of these techniques include pay-per-click (PPC) advertising and SEO.

These ads, often known by the term pay-per-click ads, come in a variety of formats. Some are small, text-based ads, whereas others, such as product listing ads (PLAs, also known as Shopping ads) are more visual, product-based advertisements that allow consumers to see important information at-a-glance, such as price and reviews.

Search engine marketing’s greatest strength is that it offers advertisers the opportunity to put their ads in front of motivated customers who are ready to buy at the precise moment they’re ready to make a purchase. No other advertising medium can do this, which is why search engine marketing is so effective and such an amazingly powerful way to grow your business.

Search Marketing is divided into two main categories:

  • SEO (Search Engine Optimization): Gaining search engine listings via unpaid tactics.
  • PPC (Pay-per-click or paid advertising): Gaining search engine listings via paid tactics.

Display Marketing

Digital display advertising is graphic advertising on Internet websites, apps or social media through banners or other advertising formats made of text, images, flash, video, and audio. The main purpose of display advertising is to deliver general advertisements and brand messages to site visitors.

According to eMarketer, Facebook and Twitter will take 33 percent of display ad spending market share by 2017. Google’s display campaigns reach 80 percent of global internet users. Desktop display advertising eclipsed search ad buying in 2014, with mobile ad spending overtaking display in 2015.

Digital display advertising is an outbound display advertising format where you target predefined audiences with images or banners. There’s also native ads and text ads in the mix in there. You target them on different websites, on social media platforms, and on mobile apps.

Note that outbound advertising is a concept where the advertiser targets the audience and sends their message out to them as opposed to something like inbound, which would be search where the audience comes to you. So, there’s a key difference between the type of marketing that display is. It’s an outbound advertising format.

Value

Awareness and interest

When we visualize a funnel, it’s quite clear to see where display fits in the consumer intent journey. We begin with awareness and interest. This is where display fits in. We’re sending our message out there to people, to audiences who may potentially be interested in the product.

Retention

With a retention piece, the remarketing fits back in there too, because if you think about remarketing, we’re sending ads out to pre-existing customers or people who’ve been in that site before. So, if we want to retain these people as repeat customers, it makes sense to kind of remarket out to them with special offers for people who have been on the site before.

Consideration and conversion

As we move down the funnel, as they get more and more aware, as they align it to their needs, we start moving into the consideration and conversion areas. So, consideration and conversion can be with around channels like remarketing, and shopping, as well as search as well.

Target

In order to uniquely identify anonymous users, online advertisers today tend to make use of cookies, which are unique identifiers of specific computers, to decide which ADs to serve to a particular consumer. Cookies can track whether a user left a page without buying anything, so the advertiser can later retarget the user with ADs from the site the user visited.

As advertisers collect data across multiple external websites about a user’s online activity, they can then combine this information to create a picture of the user’s interests to deliver even more targeted advertising. This aggregation of data is called behavioral targeting. Advertisers can also target their audience by using contextual and semantic advertising to deliver display ADs related to the content of the web page where the ADs appear. Retargeting, behavioral targeting, and contextual advertising all are designed to increase an advertiser’s return on investment, or ROI, over untargeted ads.

As advertising needs become more sophisticated, display ADs can also be personalized based on a user’s geography through geotargeting. Basic information such as a user’s IP address can indicate a user’s rough location with a limited degree of accuracy. This information can be supplemented further through the use of a phone’s GPS or the location of nearby mobile towers to have a clearer indication of the user’s current position for a mind boggling array of advertising possibilities.

Programmatic, Real time bidding (RTB)

Programmatic display advertising, or real time bidding (RTB), transformed the way digital display advertising is bought and managed in recent years. Rather than placing a booking for advertising directly with a website, advertisers will manage their activity through a (demand side platform), and bid to advertise to people in real time, across multiple websites, based on targeting criteria. This method of advertising quickly gained popular, as it allows for more control for the advertiser (or agency), including of the individual target audience, rather than just the website. It has become a threat to website operators and generally the cost paid for advertising in this way is less than the old method and so the earning potential for them is reduced.

Programmatic is not without its drawbacks, as without the appropriate management adverts can appear against unsavoury content or inappropriate news topics. This issue became front-page news in February 2017, when advertisers on YouTube were found displayed on terror group websites and fake news sites. As a result, a number of major advertisers paused all of their online advertising until they could put the appropriate measures in place to prevent this occurring again.

it is important to choose the right format because it will help to make the most of the medium. It is also possible to add:

  • Video;
  • Rich Media Ads: flash files that may expand when the user interacts on mouseover (polite), or auto- initiated (non-polite);
  • Overlays: ads that appear above content and that are possible to remove by clicking on a close button;
  • Interstitials: Ads that are displayed on web pages before expected content (before the target page is displayed on the user’s screen);
  • Sponsorship: including a logo or adding a brand to the design of a website. This can also can fall under Native advertising, which is an ad that can seem like Editorial, or “In-Feed”, but has really been paid for by the advertiser.

Types

  • Banner Ads: One of the oldest and traditional forms of advertising, banner ads usually appear at the top of websites in a “banner” format.
  • Interstitial Ads: These ads appear as web pages that are served to users before they are directed to the original page they requested.
  • Rich Media: These ads include interactive elements, such as video, audio and clickable elements.
  • Video Ads: The YouTube advertising platform, as well as social networks like Instagram and Facebook, have opened a whole new avenue for marketers. Video ads allow you to reach your audience and connect with them on a personal level, and are well worth investing in.

Advantages

  • Diversity: Display ads come in many shapes and sizes. And as you’ve seen above, they can be presented in a number of formats, too. This means you can choose a style and advertising format that will help you achieve your goals.
  • Reach: Thanks for the Google Display Network (GDN), you can access millions of sites straight from your Google Ads account.
  • Targeting: Because of GDN’s extensive reach, you can also target the right audience by placing your ads on the right websites. This includes demographic and geo-targeting, along with specific interests of your target audience.
  • Measurable: Clicks, impressions and conversions can all be tracked from Google Ads, as well as Google Analytics for more granular performance and engagement tracking.

Market Segmentation Definition, Objectives, Importance, Advantages, Limitations

Market Segmentation is the process of dividing a broader market into distinct subsets of consumers who share similar needs, preferences, or characteristics. This strategic approach allows businesses to tailor their marketing efforts to specific groups, enhancing customer satisfaction and increasing the effectiveness of their campaigns. Segmentation can be based on various criteria, including demographics (age, gender, income), psychographics (lifestyle, values), geographic location, and behavioral factors (purchase behavior, brand loyalty).

Objectives of Market Segmentation:

  • Enhancing Customer Understanding:

One of the primary objectives of market segmentation is to gain a deeper understanding of the diverse needs, preferences, and behaviors of different customer groups. By analyzing these segments, businesses can identify trends and insights that inform product development and marketing strategies.

  • Improving Marketing Efficiency:

Market segmentation allows companies to allocate their resources more effectively. By focusing on specific segments, businesses can optimize their marketing campaigns, ensuring that the right messages reach the right audiences. This targeted approach reduces waste and maximizes return on investment (ROI).

  • Developing Tailored Products and Services:

Different segments often have unique needs and preferences. By identifying these differences, businesses can create or modify products and services that specifically cater to the demands of each segment. This customization increases customer satisfaction and can lead to higher sales.

  • Increasing Market Share:

By effectively targeting specific segments, businesses can attract new customers and increase their overall market share. Understanding the distinct characteristics of various market segments allows companies to develop strategies that appeal directly to those groups, ultimately leading to enhanced sales and brand loyalty.

  • Enhancing Competitive Advantage:

Market segmentation enables companies to identify and exploit niches within the broader market. By focusing on under-served segments or unique customer needs, businesses can differentiate themselves from competitors. This competitive advantage can lead to increased customer loyalty and higher profitability.

  • Facilitating Effective Communication:

Different segments respond to different messaging styles and channels. Market segmentation allows businesses to tailor their communication strategies to resonate with specific audiences. By understanding the preferred communication methods of each segment, companies can engage more effectively and build stronger relationships with customers.

  • Identifying New Opportunities:

Continuous analysis of market segments can reveal emerging trends, changing consumer behaviors, and untapped markets. By staying attuned to these shifts, businesses can adapt their strategies and capitalize on new opportunities for growth. This proactive approach helps companies stay relevant in a dynamic market environment.

Importance of Market Segmentation:

  • Enhanced Customer Insights

Market segmentation provides businesses with a clearer picture of their target audience. By analyzing various consumer demographics, psychographics, and behaviors, companies can identify patterns and preferences that inform product development and marketing strategies. This deeper understanding enables businesses to create more relevant offerings that align closely with customer expectations.

  • Resource Optimization

By concentrating on specific market segments, businesses can optimize their resources, including time and budget. Targeting a niche audience allows for more efficient marketing efforts, as campaigns can be designed to specifically appeal to that group. This focused approach can lead to a higher return on investment (ROI) by reducing wasted expenditure on broad advertising that may not resonate with all consumers.

  • Product Development and Innovation

Market segmentation drives innovation by highlighting specific needs within each segment. Companies can develop tailored products and services that meet the unique demands of different consumer groups. This focused innovation not only satisfies existing customers but can also attract new ones seeking specialized solutions.

  • Strategic Pricing

Understanding different segments allows businesses to implement strategic pricing models that cater to various consumer sensitivities. For instance, premium segments may be willing to pay more for exclusive features, while price-sensitive segments might respond better to discounts and value offers. This nuanced pricing strategy can help maximize revenue across diverse market segments.

  • Brand Loyalty and Customer Retention

By addressing the specific needs and preferences of targeted segments, businesses can foster brand loyalty. When consumers feel that a brand understands and caters to their unique requirements, they are more likely to return for future purchases. This increased customer retention can significantly boost long-term profitability.

  • Effective Communication Strategies

Market segmentation enables businesses to craft tailored marketing messages that resonate with different audience segments. By understanding the language, tone, and channels preferred by each group, companies can enhance engagement and ensure their messages are more impactful. This effective communication can lead to higher conversion rates and stronger relationships with customers.

  • Market Expansion Opportunities

Ongoing analysis of segmented markets can reveal new opportunities for expansion. By identifying emerging trends and shifts in consumer preferences, businesses can adapt their strategies to penetrate new segments or geographic areas. This proactive approach to market segmentation can facilitate growth and diversification, ensuring long-term sustainability.

Advantages of Market Segmentation:

  • Improved Targeting

Market segmentation allows businesses to identify specific groups of consumers based on their characteristics, behaviors, and preferences. This focused approach ensures that marketing efforts are directed toward the right audience, increasing the likelihood of engagement and conversion. By targeting the most relevant segments, companies can optimize their marketing strategies for better results.

  • Enhanced Customer Satisfaction

By understanding the unique needs and preferences of different market segments, businesses can tailor their products and services accordingly. This customization leads to enhanced customer satisfaction, as consumers are more likely to purchase offerings that directly address their specific requirements. When customers feel valued and understood, their loyalty to the brand increases.

  • Effective Resource Allocation

Market segmentation enables companies to allocate their resources more efficiently. Instead of spreading marketing budgets thin across a broad audience, businesses can concentrate their efforts on the segments that offer the greatest potential for growth and profitability. This strategic focus reduces waste and maximizes the return on investment (ROI) for marketing campaigns.

  • Increased Market Share

By targeting specific segments, businesses can position themselves effectively within those markets. This focused strategy allows companies to tap into niche markets or underserved segments, leading to increased market share. Gaining a foothold in specific areas can create opportunities for brand loyalty and customer retention, ultimately contributing to long-term success.

  • Competitive Advantage

Market segmentation allows businesses to differentiate themselves from competitors by catering to the unique needs of specific groups. By addressing gaps in the market or offering tailored solutions, companies can create a competitive advantage that sets them apart. This differentiation can enhance brand reputation and attract new customers.

  • Facilitated Marketing Communication

Segmentation enables companies to craft targeted marketing messages that resonate with specific audiences. By understanding the preferences and pain points of different segments, businesses can communicate more effectively, increasing engagement and conversion rates. Tailored messaging fosters a stronger connection with consumers, making them more likely to respond positively.

  • Identification of Emerging Trends

Continuous analysis of market segments can help businesses identify emerging trends and shifts in consumer behavior. By staying attuned to these changes, companies can adapt their strategies and offerings to capitalize on new opportunities. This proactive approach ensures that businesses remain relevant in a dynamic market environment, fostering innovation and growth.

Limitations of Market Segmentation:

  1. Over-Simplification of Consumer Behavior

Market segmentation often relies on generalized categories, which can oversimplify the complexity of consumer behavior. Consumers may not fit neatly into predefined segments, leading to misinterpretations of their preferences and needs. This oversimplification can result in missed opportunities to engage with diverse customer profiles.

  1. Costly and Time-Consuming

Conducting thorough market segmentation research can be both costly and time-consuming. Gathering and analyzing data to identify segments requires significant resources, including time, manpower, and finances. Smaller businesses, in particular, may struggle to afford the extensive research needed to effectively segment their markets.

  1. Dynamic Consumer Preferences

Consumer preferences and behaviors are constantly evolving. Segments that may have been relevant at one time can quickly become outdated. Businesses that rely too heavily on static segmentation may find themselves unable to adapt to changing market conditions, leading to ineffective marketing strategies.

  1. Risk of Market Fragmentation

Over-segmenting the market can lead to fragmentation, where too many small segments are created. This fragmentation can dilute marketing efforts, making it challenging to achieve significant impact in any one segment. Companies may end up spreading their resources too thin, resulting in ineffective marketing campaigns.

  1. Ignoring Inter-Segment Dynamics

Market segmentation often focuses on distinct segments without considering the interactions between them. Consumers may belong to multiple segments or exhibit behaviors that cross traditional boundaries. Ignoring these inter-segment dynamics can lead to incomplete insights and ineffective marketing strategies.

  1. Limited Focus on Broader Market Trends

Focusing too heavily on specific segments can cause businesses to overlook broader market trends and opportunities. Companies may become so absorbed in catering to niche segments that they miss out on larger trends that could benefit their overall business strategy. This narrow focus can limit growth potential.

  1. Challenges in Implementation

Implementing segmentation strategies can be complex, particularly in larger organizations. Coordinating marketing efforts across different segments requires collaboration among various departments, which can be difficult to achieve. Misalignment between teams may hinder the effectiveness of segmented marketing campaigns.

  1. Dependence on Data Quality

The effectiveness of market segmentation relies heavily on the quality of data used to identify and define segments. Poor-quality data can lead to inaccurate segment definitions, resulting in misguided marketing strategies. Businesses must invest in high-quality data collection and analysis to ensure effective segmentation.

Advertising on Internet

Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising which uses the Internet to deliver promotional marketing messages to consumers. Many consumers find online advertising disruptive and have increasingly turned to ad blocking for a variety of reasons.

When software is used to do the purchasing, it is known as programmatic advertising.

Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising (including web banner advertising), and mobile advertising. Like other advertising media, online advertising frequently involves a publisher, who integrates advertisements into its online content, and an advertiser, who provides the advertisements to be displayed on the publisher’s content. Other potential participants include advertising agencies who help generate and place the ad copy, an ad server which technologically delivers the ad and tracks statistics, and advertising affiliates who do independent promotional work for the advertiser.

Many common online advertising practices are controversial and, as a result, have been increasingly subject to regulation. Online ad revenues also may not adequately replace other publishers’ revenue streams. Declining ad revenue has led some publishers to place their content behind paywalls.

Email

The first widely publicized example of online advertising was conducted via electronic mail. On 3 May 1978, a marketer from DEC (Digital Equipment Corporation), Gary Thuerk, sent an email to most of the ARPANET’s American west coast users, advertising an open house for a new model of a DEC computer. Despite the prevailing acceptable use policies, electronic mail marketing rapidly expanded and eventually became known as “spam.”

Display ads

Online banner advertising began in the early 1990s as page owners sought additional revenue streams to support their content. Commercial online service Prodigy displayed banners at the bottom of the screen to promote Sears products. The first clickable web ad was sold by Global Network Navigator in 1993 to a Silicon Valley law firm. In 1994, web banner advertising became mainstream when HotWired, the online component of Wired Magazine, and Time Warner’s Pathfinder (website) sold banner ads to AT&T and other companies. The first AT&T ad on HotWired had a 44% click-through rate, and instead of directing clickers to AT&T’s website, the ad linked to an online tour of seven of the world’s most acclaimed art museums.

Search ads

GoTo.com (renamed Overture in 2001, and acquired by Yahoo! in 2003) created the first search advertising keyword auction in 1998. Google launched its “AdWords” (now renamed Google Ads) search advertising program in 2000 and introduced quality-based ranking allocation in 2002, which sorts search advertisements by a combination of bid price and searchers’ likeliness to click on the ads.

Recent trends

More recently, companies have sought to merge their advertising messages into editorial content or valuable services. Examples include Red Bull’s Red Bull Media House streaming Felix Baumgartner’s jump from space online, Coca-Cola’s online magazines, and Nike’s free applications for performance tracking. Advertisers are also embracing social media and mobile advertising; mobile ad spending has grown 90% each year from 2010 to 2013.

According to Ad Age Datacenter analysis, in 2017 over half of agency revenue came from digital work.

Web banner advertising

Web banners or banner ads typically are graphical ads displayed within a web page. Many banner ads are delivered by a central ad server.

Banner ads can use rich media to incorporate video, audio, animations, buttons, forms, or other interactive elements using Java applets, HTML5, Adobe Flash, and other programs.

Frame ad (Traditional banner)

Frame ads were the first form of web banners. The colloquial usage of “banner ads” often refers to traditional frame ads. Website publishers incorporate frame ads by setting aside a particular space on the web page. The Interactive Advertising Bureau’s Ad Unit Guidelines proposes standardized pixel dimensions for ad units.

Pop-ups/pop-unders

A pop-up ad is displayed in a new web browser window that opens above a website visitor’s initial browser window. A pop-under ad opens a new browser window under a website visitor’s initial browser window. Pop-under ads and similar technologies are now advised against by online authorities such as Google, who state that they “do not condone this practice”.

Floating ad

A floating ad, or overlay ad, is a type of rich media advertisement that appears superimposed over the requested website’s content. Floating ads may disappear or become less obtrusive after a pre-set time period.

Expanding ad

An expanding ad is a rich media frame ad that changes dimensions upon a predefined condition, such as a preset amount of time a visitor spends on a webpage, the user’s click on the ad, or the user’s mouse movement over the ad. Expanding ads allow advertisers to fit more information into a restricted ad space.

Trick banners

A trick banner is a banner ad where the ad copy imitates some screen element users commonly encounter, such as an operating system message or popular application message, to induce ad clicks. Trick banners typically do not mention the advertiser in the initial ad, and thus they are a form of bait-and-switch. Trick banners commonly attract a higher-than-average click-through rate, but tricked users may resent the advertiser for deceiving them.

News Feed Ads

“News Feed Ads”, also called “Sponsored Stories”, “Boosted Posts”, typically exist on social media platforms that offer a steady stream of information updates (“news feed”) in regulated formats (i.e. in similar sized small boxes with a uniform style). Those advertisements are intertwined with non-promoted news that the users are reading through. Those advertisements can be of any content, such as promoting a website, a fan page, an app, or a product.

Some examples are: Facebook’s “Sponsored Stories”, LinkedIn’s “Sponsored Updates”, and Twitter’s “Promoted Tweets”.

This display ads format falls into its own category because unlike banner ads which are quite distinguishable, News Feed Ads’ format blends well into non-paid news updates. This format of online advertisement yields much higher click-through rates than traditional display ads.

Internet Marketing, Techniques, e-cycle of Internet Marketing

Internet Marketing, also known as online or digital marketing, refers to promoting products, services, or brands using digital channels such as websites, search engines, social media, email, and online advertising. It includes various strategies like Search Engine Optimization (SEO), Pay-Per-Click (PPC) advertising, content marketing, social media marketing, affiliate marketing, and email campaigns. Internet marketing enables businesses to reach a global audience, target specific demographics, and track real-time performance using analytics. Compared to traditional marketing, it is cost-effective, interactive, and provides measurable results. A well-planned internet marketing strategy enhances brand visibility, customer engagement, and business growth.

Techniques of Internet Marketing:

  • Search Engine Optimization (SEO):

SEO improves website visibility in search engine results through keyword optimization, quality content, backlinks, and technical improvements. It includes on-page, off-page, and technical SEO to enhance rankings and organic traffic.

  • Pay-Per-Click (PPC) Advertising:

PPC involves running paid ads on platforms like Google Ads and Facebook Ads. Advertisers pay for each click, ensuring targeted reach and immediate traffic.

  • Content Marketing:

This technique focuses on creating and sharing valuable content (blogs, videos, infographics) to engage audiences, build brand authority, and improve search engine rankings.

  • Social Media Marketing (SMM):

Businesses use platforms like Facebook, Instagram, and LinkedIn to promote products, interact with customers, and increase brand awareness through organic posts and paid ads.

  • Email Marketing:

Sending personalized emails to potential and existing customers helps nurture leads, promote offers, and build strong customer relationships through automated campaigns and newsletters.

  • Affiliate Marketing:

Businesses partner with affiliates who promote their products and earn commissions for every sale generated through their referral links, expanding reach without upfront costs.

  • Influencer Marketing:

Collaborating with social media influencers helps brands reach targeted audiences through authentic endorsements, increasing brand credibility and trust among followers.

  • Video Marketing:

Platforms like YouTube and TikTok are used to engage audiences with informative or entertaining video content, enhancing customer trust and conversions.

  • Mobile Marketing:

Focuses on reaching users through mobile apps, SMS campaigns, and mobile-friendly websites to improve engagement and drive sales.

  • Online Public Relations (PR):

Involves managing brand reputation through press releases, media outreach, and engaging with online communities to maintain a positive image.

e-cycle of Internet Marketing:

E-Cycle of Internet Marketing refers to the systematic process businesses follow to attract, engage, convert, and retain customers online. It consists of key stages that help companies build strong digital marketing strategies. The main components of the e-cycle include Awareness, Interest, Desire, Action, Retention, and Advocacy.

1. Awareness (Attracting Visitors)

The first step is to make potential customers aware of a brand, product, or service. Businesses achieve this through:

  • Search Engine Optimization (SEO): Optimizing content for search engines to increase visibility.
  • Social Media Marketing (SMM): Using platforms like Facebook, Instagram, and LinkedIn to reach audiences.
  • Pay-Per-Click (PPC) Advertising: Running paid ads on Google, Facebook, or LinkedIn.
  • Content Marketing: Creating blogs, videos, infographics, and educational materials to attract visitors.
  • Influencer Marketing: Partnering with influencers to promote brand awareness.

A strong online presence ensures that a business reaches the right audience at the right time.

2. Interest (Engaging the Audience)

Once potential customers become aware of a business, the next step is to capture their interest. Engagement techniques include:

  • Interactive Content: Quizzes, surveys, and engaging blog posts encourage participation.
  • Email Marketing: Sending newsletters, updates, and promotional offers.
  • Social Media Engagement: Responding to comments, hosting Q&A sessions, and running polls.
  • Personalized Ads: Retargeting users who have previously interacted with the website.

Keeping users engaged increases the chances of conversion.

3. Desire (Building Trust and Consideration)

At this stage, businesses need to build trust and convince customers to choose their brand over competitors. Effective techniques include:

  • Customer Testimonials and Reviews: Showcasing positive experiences from existing customers.
  • Case Studies and Success Stories: Demonstrating how products or services solve problems.
  • Webinars and Live Demonstrations: Providing in-depth product knowledge.
  • Comparison Guides: Highlighting unique features and benefits.

A strong value proposition helps create desire for the product or service.

4. Action (Conversion and Purchase)

This stage focuses on converting leads into customers. Conversion optimization techniques include:

  • Clear Call-to-Action (CTA): Encouraging users to sign up, buy, or subscribe.
  • Landing Page Optimization: Creating compelling and user-friendly landing pages.
  • Discounts and Offers: Providing incentives like free trials, discounts, or free shipping.
  • Easy Checkout Process: Simplifying payment methods and reducing form fields.

A seamless buying experience ensures higher conversion rates.

5. Retention (Building Customer Loyalty)

Retaining customers is more cost-effective than acquiring new ones. Strategies for customer retention include:

  • Email Follow-Ups: Sending thank-you emails and product recommendations.
  • Loyalty Programs: Offering rewards and exclusive discounts for repeat purchases.
  • Customer Support: Providing quick and efficient post-purchase assistance.
  • Personalized Content: Sending tailored offers based on customer behavior.

Happy customers are more likely to make repeat purchases.

6. Advocacy (Encouraging Word-of-Mouth Marketing)

Loyal customers become brand advocates by promoting products to their networks. Advocacy techniques include:

  • Referral Programs: Offering incentives for referring friends and family.
  • User-Generated Content (UGC): Encouraging customers to share reviews and experiences.
  • Social Media Sharing: Running hashtag campaigns and contests.
  • Influencer Collaborations: Turning satisfied customers into brand ambassadors.

Advocacy helps businesses gain organic growth and trust within their audience.

Introduction to Macro-Environment: Demographic, Natural, Political, Social, Cultural, Economic, Technological, International and Legal

Macro-environment encompasses the broader societal forces that influence an organization’s ability to operate effectively. The macro-environment includes external factors that can impact the entire industry or sector. Understanding the macro-environment is crucial for businesses to develop strategies that align with external conditions and ensure sustainable growth. The macro-environment is often categorized into several key dimensions: demographic, natural, political, social, cultural, economic, technological, international, and legal.

Functions of Macro-environment:

  • Influences Business Strategy

The macro-environment shapes a company’s strategic decisions by providing the broader context in which it operates. Factors such as economic trends, technological advancements, and political regulations compel businesses to adjust their long-term goals and operational plans. For instance, a downturn in the economy may force a company to adopt cost-cutting strategies, while a technological breakthrough could prompt innovation. Businesses continuously scan the macro-environment to identify potential threats and opportunities, ensuring their strategies remain relevant and competitive in a dynamic global landscape.

  • Affects Consumer Behavior

Macroeconomic elements like inflation, employment rates, income distribution, and cultural shifts directly influence consumer preferences and purchasing habits. For example, in a booming economy, consumers may spend more on luxury items, whereas in a recession, demand shifts to basic necessities. Similarly, societal values, demographics, and lifestyle changes can impact how and what consumers buy. Understanding these macro-level influences helps businesses tailor their products, marketing messages, and customer engagement strategies to better meet evolving consumer needs and maintain relevance in changing markets.

  • Determines Regulatory Framework

The macro-environment sets the regulatory boundaries within which businesses must operate. Governments establish laws and regulations concerning labor, taxation, trade, environmental protection, and corporate governance. These regulations create a structured legal environment that promotes fair competition, protects consumers, and ensures corporate accountability. Businesses must comply with these rules to avoid penalties and sustain their operations. As policies evolve, firms must adapt quickly, making awareness of the legal and political macro-environment critical for long-term sustainability and ethical operation.

  • Drives Innovation and Technological Change

Technological advancements in the macro-environment push industries to evolve through innovation. Emerging technologies like AI, automation, and green energy solutions present new ways to improve efficiency, reduce costs, and create value. Businesses that actively monitor and adopt relevant technologies can gain a competitive edge and meet changing customer expectations. Conversely, failure to adapt to technological changes can lead to obsolescence. The macro-environment thus acts as a catalyst for innovation, encouraging continuous improvement and the adoption of cutting-edge practices.

  • Shapes Competitive Landscape

The macro-environment influences the intensity and nature of competition in an industry. Globalization, trade policies, and technological advancements can increase the number of market players, altering competitive dynamics. For example, deregulation may attract new entrants, while changes in consumer trends can redefine industry standards. A business must monitor macro-level changes to anticipate shifts in competition, identify new competitors, and refine its positioning. By understanding the broader environment, companies can better differentiate themselves and maintain a sustainable competitive advantage.

Demographic Environment:

Demographic environment consists of the characteristics of the human population, including age, gender, income, education, and family structure. Changes in demographic trends can significantly impact businesses and their market strategies.

  • Age Distribution:

Different age groups have varying preferences, needs, and spending habits. For instance, millennials might prefer technology-driven products, while older generations may value traditional services. Companies must tailor their products and marketing strategies to appeal to specific age demographics.

  • Population Growth:

The growth rate of a population can influence demand for goods and services. A rapidly growing population may lead to increased demand in sectors like housing, education, and healthcare.

  • Income Distribution:

Income levels within a population helps businesses position their products appropriately. For example, luxury brands target higher-income consumers, while discount retailers cater to budget-conscious shoppers.

Natural Environment:

Natural environment includes all living and non-living things occurring naturally, encompassing factors like climate, natural resources, and ecological systems.

  • Resource Availability:

Businesses are dependent on natural resources for production. Scarcity of resources, such as water, raw materials, and energy, can affect operational costs and product availability. Companies must consider sustainability and resource management in their strategies.

  • Environmental Regulations:

Increasing awareness of environmental issues has led to stricter regulations concerning pollution, waste management, and sustainability practices. Companies must adapt to these regulations to avoid legal repercussions and enhance their corporate image.

  • Climate Change:

Changes in climate patterns can impact agricultural productivity, transportation logistics, and operational efficiencies. Businesses must assess their vulnerability to climate change and develop contingency plans.

Political Environment:

The political environment comprises the influence of governmental policies, regulations, and political stability on business operations.

  • Government Stability:

A stable political environment fosters investor confidence and business growth. Conversely, political unrest or instability can disrupt supply chains and deter investment.

  • Regulatory Framework:

Government regulations can significantly affect industries. Policies on labor laws, trade tariffs, taxation, and environmental protection shape the business landscape. Companies must stay informed about changes in legislation and adapt accordingly.

  • Lobbying and Advocacy:

Businesses often engage in lobbying efforts to influence government policies that affect their operations. Building relationships with policymakers can be beneficial in navigating the political landscape.

Social Environment:

The social environment encompasses societal norms, values, attitudes, and demographic trends that influence consumer behavior.

  • Cultural Values:

Societal values dictate consumer preferences and behaviors. Understanding cultural nuances is essential for businesses operating in diverse markets. For example, marketing strategies that work in one culture may not be effective in another.

  • Lifestyle Changes:

Changes in lifestyle, such as increased health consciousness or environmental awareness, can shape market demand. Businesses that align their offerings with these trends can gain a competitive edge.

  • Social Movements:

Social movements, such as those advocating for equality or environmental sustainability, can influence public perception of brands. Companies must be aware of these movements and respond appropriately to maintain their reputation.

Cultural Environment:

Cultural environment refers to the shared values, beliefs, and practices of a society that influence consumer behavior and business practices.

  • Cultural Diversity:

In a globalized world, businesses must navigate diverse cultural contexts. Understanding cultural differences is crucial for developing effective marketing strategies and avoiding miscommunications.

  • Consumer Preferences:

Cultural factors often dictate consumer preferences, impacting product design, branding, and messaging. Companies must conduct thorough market research to understand cultural influences on consumer behavior.

  • Adaptation:

Successful businesses often adapt their products and marketing strategies to align with local cultural values. This flexibility enhances their appeal and relevance in different markets.

Economic Environment:

The economic environment comprises the broader economic factors that affect consumer purchasing power and business operations.

  • Economic Growth:

Economic growth rates can indicate consumer confidence and spending behavior. In a growing economy, consumers are more likely to spend on non-essential items, while economic downturns often lead to reduced spending.

  • Inflation and Interest Rates:

Inflation affects purchasing power, while interest rates influence borrowing costs for businesses and consumers. Companies must adapt their pricing strategies based on economic conditions.

  • Unemployment Rates:

High unemployment rates can lead to decreased consumer spending and affect demand for goods and services. Businesses must monitor labor market trends to adjust their workforce and marketing strategies.

Technological Environment:

The technological environment encompasses the rapid advancements in technology that affect how businesses operate and interact with customers.

  • Innovation:

Technological innovations can create new products, services, and business models. Companies that embrace innovation can gain a competitive advantage by offering superior solutions.

  • Digital Transformation:

The rise of digital technologies has transformed marketing, sales, and customer service. Businesses must adopt digital strategies to engage consumers effectively and streamline operations.

  • Cybersecurity:

As businesses become more reliant on technology, the importance of cybersecurity grows. Protecting customer data and maintaining trust is crucial in a technology-driven marketplace.

International Environment:

The international environment encompasses global factors that affect business operations and market opportunities.

  • Globalization:

The interconnectedness of markets has opened new opportunities for businesses. Companies can expand their reach by entering international markets, but they must understand the complexities of operating in diverse cultural and regulatory environments.

  • Trade Policies:

International trade policies, including tariffs and trade agreements, can impact market access and pricing strategies. Businesses must stay informed about changes in trade regulations that may affect their operations.

  • Foreign Exchange Rates:

Fluctuations in currency exchange rates can impact profitability for businesses operating internationally. Companies must develop strategies to mitigate risks associated with currency volatility.

Legal Environment:

The legal environment includes the laws and regulations that govern business practices.

  • Compliance:

Companies must ensure compliance with various laws, including consumer protection, labor laws, and environmental regulations. Non-compliance can result in legal penalties and damage to reputation.

  • Intellectual Property:

Protecting intellectual property rights is crucial for innovation-driven businesses. Companies must navigate patent laws and copyright regulations to safeguard their creations.

  • Contract Law:

Understanding contract law is essential for business transactions. Ensuring that contracts are legally binding and enforceable protects the interests of all parties involved.

Key differences between Macro-Environment and Micro-Environment:

Aspect Macro-Environment Micro-Environment
Scope Broad Narrow
Control Uncontrollable Partially controllable
Nature External forces Immediate actors
Influence Indirect Direct
Change Rate Slow to moderate Fast
Impact Long-term Short-term
Focus Area Society-wide Industry-specific
Key Factors PESTLE 5 Forces
Decision Making Strategic level Operational level
Adaptability Low High
Examples Economy, culture Customers, suppliers
Effect on Strategy Broad planning Day-to-day tactics
Predictability Less predictable More predictable

Foundation of Digital Marketing Osmania University B.com 3rd Semester Notes

Unit 1 Digital Marketing Foundations {Book}
Digital Marketing Foundations VIEW
Digital Marketing Strategy VIEW
Exploring Digital Marketing VIEW
Starting with the Website VIEW VIEW
Foundations of Analytics VIEW
Search Engine Optimization VIEW VIEW
Search and Display Marketing VIEW
Social Media Marketing VIEW
Video Marketing VIEW

 

Unit 2 Optimizing Marketing Emails, Mobile Marketing Foundations and Content Marketing Foundations {Book}
Email Marketing Tools and Setup VIEW
Email Marketing Segmentation VIEW
Personalization and Mobile friendly design VIEW
Content Marketing foundations VIEW
Blogs for Content Marketing VIEW
Content Marketing for staying relevant VIEW
Newsletters for Content Marketing VIEW
Mobile Marketing foundations VIEW

 

People and Physical Evidence in Service Marketing

People

The interactive aspect of service creation and consumption brings customer and service creator in direct contact with each other in many cases. Consider services such as beauty treatment, surgery, education, and dine in restaurant. All these services require customer-employee contact.

In goods marketing this kind of interaction is rare; instead there is interaction between the customer and the good. The intensity and duration of this contact varies. For instance, in psychotherapy the customer- provider contract tends to be intense and long in comparison to fast food restaurants.

Customer contact brings to the fore two distinct aspects unique to services ’what’ and ‘how’ of service product. ‘What’ represents the technical outcome that is created for customer such as the time taken in delivery of a packet or the timeliness of an airline, whereas ‘how’ refers to the process aspect of service creation like how a customer is treated by hotel personnel in check in, room service, check out, restaurant, and club. ‘How’ aspect determines the perception of ‘what’ aspect or the technical aspect of service quality. A highly competent surgeon or doctor who is excellent in technical aspect of service is unlikely to be perceived so if his process of treating the patient is cold, gruff, and unsympathetic.

Management of service personnel assumes importance for their role as service marketer and creator. They are the service organization to customers.

The following issues are important:

(i) Any compromise on employee skills and attitude is likely to produce quality variations or heterogeneous service performance. The lack of consistency works counter to creating a cohesive brand image.

(ii) It is not only important to invest in development of technical service skills, but customer contact employees must also be trained in interpersonal aspects. This requires building customer orientation, interactional skills, and other soft aspects such as attitude and empathy.

Physical Evidence in Service Marketing

Physical evidence assumes significance because services are intangible. A physical object defines itself but an intangible is not able to do. The evidence that is discernible by senses associated with a service is carrier of meaning. That is, customer’s bank upon physical evidence to extract what a service is all about.

For instance, the service provided by two restaurants or hotels is not known with experience. However, the evidence that surround these services conveys meaning and suggests how they are different from each other. Physical evidence is a collection of tangible cues that signals service quality. Although physical evidence belongs to operations or production area, it becomes a domain of interest to marketing because of its ability to impact customers.

Cleanliness, wall colour, dress of staff, equipment appearance, signboards, stationery, toilet condition, as well as smells and paint on wall convey what a hospital is all about in terms of its quality standards and position in relation to competition.

There are two types of evidences essential and peripheral

(i) Essential Evidence

It represents those things associated with a service that are essential to its creation. Their core nature does not allow a service to be conceived without its presence. For instance, aircraft is essential to airline service and car is essential to a rent a car company.

These are so core to service that they are not passable to customers; however customer may enjoy temporary access to them. The importance of essential evidence stems from the fact that customers form their core opinion or image based on the core evidence. A rent a car company is likely to be perceived poorly if its cars are not maintained properly.

(ii) Peripheral Evidence

Evidence in this case is marginal or operates at the fringe of image-making process. Anything that does not get categorized as essential falls into this category. For instance, newspapers, receipts, magazines, dust on the window panes, and floor mats all form peripheral evidence in case of a rent a car operations. Customers make a perception about restaurant on the basis of table linen and decor.

Three things important to the creation of place of service delivery are ambience, spatial arrangement, and social setting. Ambience refers to stimuli that customer senses are sensitive about such as lighting, sound, scent, temperature, and touch. All these sensory elements must be coordinated in line with the overall service positioning.

The space dimension is about how spatial utilization. How things are to be arranged in restaurant or retail outlet depends upon the service concept. For instance, in CCD outlets the furniture is arranged in a way to facilitate conversation. Finally, social setting means what kind of social environment is created.

For instance, a service may create a formal setting while another service may promote informality. In this regard people, their behaviour, sound conditions, decor, and spatial arrangement play a defining role. The difference in social setting is discernible when a quick service restaurant is compared with fine formal dine in restaurant.

Role of service evidence

A distinction is made in services marketing between two kinds of physical evidence:

  • Peripheral evidence
  • Essential evidence

(i) Peripheral Evidence

Peripheral evidence is actually possessed as part of the purchase of a service. It has however little or no independent value. Thus a bank cheque book is of no value unless backed by the funds transfer and storage service it represents.

An admission ticket for a cinema equally has no independent value. It merely confirms the service. It is not a surrogate for it. Peripheral evidence ‘adds to’ the value of essential evidence only as far as the customer values these symbols of service.

The hotel rooms of many large international hotel groups contain much peripheral evidence like directories, town guides, pens, notepads, welcome gifts, drink packs, soaps and so on. These representations of service must be designed and developed with customer needs in mind. They often provide an important set of complementary items to the essential core service sought by customers.

(ii) Essential Evidence

Essential evidence, unlike peripheral evidence, cannot be possessed by the customer. Nevertheless essential evidence may be so important in its influence on service purchase it may be considered as an element in its own right. The overall appearance and layout of a hotel; the ‘feel’ of a bank branch; the type of vehicle rented by a car rental company; the type of aircraft used by a carrier are all examples of physical evidence.

Managing the Evidence

Service organizations with competing service products may use physical evidence to differentiate their service products in the marketplace and give their service products a competitive advantage. A physical product like a car or a camera can be augmented through the use of both tangible and intangible elements.

A car can be given additional tangible features like a sliding roof or stereophonic radio equipment; a camera can be given additional tangible features like control devices which enable use in a wide variety of light conditions.

A car may be sold with a long life antirust warranty or cost- free service for the first year of ownership; a camera with a long-life warranty or free lens insurance. Tangible and intangible elements may be used to augment the essential product offer. In fact organizations marketing tangible dominant products frequently use intangible, abstract elements as part of their communications strategy.

Service marketing organizations also try to use tangible clues to strengthen the meaning of their intangible products.

Integration of Marketing, Sales and Distribution

Integrated marketing is the process of arranging your different marketing channels to work in tandem to promote your products or services, typically through a strategic campaign. Integrated marketing also works to align the primary brand message that’s being delivered through your marketing channels and assets.

Integrated Marketing is an approach to creating a unified and seamless experience for consumers to interact with the brand/enterprise; it attempts to meld all aspects of marketing communication such as advertising, sales promotion, public relations, direct marketing, and social media, through their respective mix of tactics, methods, channels, media, and activities, so that all work together as a unified force. It is a process designed to ensure that all messaging and communications strategies are consistent across all channels and are centered on the customer.

Different channels have different strengths and weaknesses, and different types of content suit different channels better Twiter is good for short, witty and pithy messages, whilst Pinterest is great for content related to design, and aspirational content works best on Instagram. So why not play to each individual channel’s strengths and design marketing for that channel specifically, rather than attempting to integrate all channels?

The answer is customers don’t care enough to pay attention to all your different messaging, and by not using one clear communications strategy to amplify your brand, your message will simply be lost in the constant stream of content that all consumers are subject to every day. For example, the brand storytelling report showed that 85% of consumers couldn’t name a memorable story told to them by a brand.

That means all of the thousands of brand’s storytelling efforts were completely forgotten by over four out of five people. You may think your marketing is the best thing in the world, but the reality is pretty much everyone is going to forget it very quickly. To make an impact you have to coordinate messaging. Have you ever wondered why McDonald’s are constantly advertising? Everyone knows who McDonald’s are. Everyone knows what McDonald’s offer and there is one on every street corner. So why do they advertise? Because there is power in reminding consumers about your brand, even if they already know that it exists. And of course, they may want to change the perception of its values and what it offers. This is why consistent messaging across channels is so critical. Without it, your message will fail to make an impact and you will just be yelling into a gale.

While integrated marketing campaigns can differ in their goals (e.g. converting views, building brand awareness, etc.), they should all have one component in common: to align your marketing channels to present a united marketing “front”.

If your marketing channels are players, consider your integrated marketing campaign the coach in charge of running plays and helping your channels work as a unified system not disparate ones.

It’s also more effective to run integrated marketing campaigns as compared to campaigns on individual channels. Integrated marketing campaigns are impactful for a few reasons:

  • They reach a wider audience than a single marketing channel.
  • They have a greater chance of being seen on multiple channels, thus keeping your brand top-of-mind and pushing visitors closer to conversion.
  • They build trust with visitors as they see a consistent message on multiple channels.
  • They save you money since assets can be shared between and repurposed for different marketing channels and, depending on your campaign, customers can help you market your product or service for you.
  • These goals should also relate to at least one of the following key performance indicators (KPIs) and their subsequent metrics, which you can track when you launch your campaign.

KPI

Related Metrics

Traffic/reach Unique page views by channel and source
Engagement Bounce rate; average time on page
Top (and falling) content Top page views; top exits
Impact Click-throughs; conversions; backlinks
Sentiment Comments; social shares
Lead generation Total leads; total sessions; session to lead conversion rate
Sales Lead to marketing qualified lead (MQL); MQL to sales qualified lead (SQL); customer purchase/closed-won business

Internal Marketing, Functions, Benefits, Examples

Internal Marketing is a management approach that focuses on aligning, motivating, and empowering employees within an organization to provide the best possible service to customers. It views employees as internal customers and emphasizes the importance of fostering a positive workplace culture, enhancing employee engagement, and ensuring that all staff are informed and aligned with the organization’s goals and objectives. By treating employees well and providing them with the necessary tools and support, organizations can ultimately improve customer satisfaction and loyalty, leading to better overall business performance.

Internal Marketing recognizes that employees play a crucial role in the delivery of the brand promise and customer experience. When employees are engaged and motivated, they are more likely to be productive, innovative, and committed to the organization’s success. This approach is particularly important in service-oriented industries where employee interactions directly impact customer perceptions and satisfaction.

Functions of Internal Marketing:

  • Employee Communication:

Internal marketing facilitates clear and effective communication within the organization. This includes regular updates on company goals, changes in policies, and new initiatives. Effective communication ensures that employees are informed, engaged, and aligned with the company’s objectives.

  • Training and Development:

A significant function of internal marketing is to provide ongoing training and professional development opportunities for employees. This helps them enhance their skills, stay updated on industry trends, and perform their jobs more effectively, ultimately leading to improved customer service.

  • Employee Engagement:

Internal marketing focuses on fostering employee engagement by creating a work environment that encourages participation, feedback, and collaboration. Engaged employees are more likely to be productive and motivated, positively impacting customer satisfaction.

  • Brand Alignment:

This function ensures that employees understand and embody the company’s brand values and mission. By aligning employees with the brand’s objectives, internal marketing helps create a cohesive brand experience for customers.

  • Recognition and Rewards:

Internal marketing emphasizes the importance of recognizing and rewarding employees for their hard work and contributions. This not only boosts morale but also motivates employees to continue performing at their best.

  • Team Building:

Internal marketing promotes team-building activities and initiatives that strengthen relationships among employees. Strong teamwork enhances collaboration and fosters a positive work environment, leading to improved customer interactions.

  • Feedback Mechanisms:

Internal marketing establishes feedback mechanisms that allow employees to share their thoughts and experiences. This feedback helps organizations identify areas for improvement, address concerns, and create a culture of continuous improvement.

Benefits of Internal Marketing:

  • Enhanced Employee Satisfaction:

By focusing on employee needs and engagement, internal marketing leads to higher job satisfaction. When employees feel valued and supported, they are more likely to be happy in their roles, which can reduce turnover and improve retention rates.

  • Improved Customer Service:

Engaged employees who understand the company’s goals and values are better equipped to serve customers effectively. This leads to improved customer service, which can enhance customer loyalty and satisfaction.

  • Stronger Brand Loyalty:

When employees are aligned with the brand’s values and mission, they become brand advocates. This strong internal alignment fosters a sense of pride among employees, leading to increased brand loyalty both internally and externally.

  • Higher Productivity:

Internal marketing initiatives that engage and motivate employees often lead to increased productivity. Motivated employees are more likely to go above and beyond in their roles, contributing to overall organizational success.

  • Reduced Turnover Costs:

Organizations that invest in internal marketing and employee engagement experience lower turnover rates. This reduces the costs associated with hiring and training new employees, ultimately benefiting the organization’s bottom line.

  • Innovation and Creativity:

A culture of engagement and open communication encourages employees to share their ideas and suggestions. This can lead to innovative solutions and improvements in processes, products, and services.

  • Positive Work Environment:

Internal marketing creates a positive workplace culture that encourages collaboration, respect, and support. A positive work environment contributes to employee well-being, satisfaction, and overall organizational performance.

Examples of Internal Marketing:

  • Zappos:

Zappos is well-known for its strong internal marketing initiatives. The company places a significant emphasis on employee culture, providing extensive training programs and fostering a supportive environment. Employees are encouraged to embody the company’s core values, which ultimately enhances customer service.

  • Google:

Google implements internal marketing by creating an engaging and innovative workplace culture. The company offers employees various benefits, including professional development opportunities and flexible work arrangements. This investment in employee satisfaction results in high levels of productivity and creativity.

  • Starbucks:

Starbucks focuses on internal marketing by referring to its employees as “partners.” The company provides extensive training programs, offers benefits such as healthcare and stock options, and fosters a sense of community among employees. This approach enhances employee engagement and results in exceptional customer experiences.

  • Southwest Airlines:

Southwest Airlines emphasizes internal marketing through its commitment to employee happiness. The company encourages open communication and provides opportunities for team-building and recognition. Happy employees lead to better customer service, contributing to the airline’s success.

  • IBM:

IBM invests in internal marketing by prioritizing employee training and development. The company provides ongoing learning opportunities and encourages employees to share their ideas and feedback. This focus on employee growth leads to increased innovation and customer satisfaction.

  • Salesforce:

Salesforce implements internal marketing initiatives by promoting a culture of transparency and collaboration. The company invests in employee well-being, offers professional development programs, and encourages open communication. This approach fosters employee engagement and loyalty, enhancing customer interactions.

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