MK211x – Digital Marketing Strategy

Prof. Shainesh G

Week 1

People spend a lot of time on the mobile phones, on the computers and in different
digital and social media channels to collect information, connect with others and research
about destinations, about restaurants, book tickets, buy products and services. So, it is
quite apparent that businesses big or small new or old actually want to also engage with
customers.

They want to leverage the digital and social media channels to connect with prospects,
get them to buy their products, engage with customers, enhance the customer experience.
However it is important to recognize that while organizations want to connect and
leverage digital there is too much of information overload for individuals.

So, “marketing can no longer be about the stuff that we make that we want to sell but
about the stories that you tell”. And once the story is also sort of get amplified it helps
the brands. But before we try to leverage internet and the digital channels to tell our
stories it is important to step back and understand the value delivery process.

Every organization especially a commercial entity exists to create value for someone.
Once you create value there is an opportunity to appropriate value. So, it is important to
understand this value delivery process. So, I am going to use the first stage process to
explain this value delivery. The first stage of the value delivery process is choose value,
the second stage is provide value, the third stage is communicate value and the fourth
stage is sustained value.

Let us look at each of them, each of the stage, the activities involved in them and then
sort of understand this whole value delivery process. Choose value is the strategic aspect
of marketing. Segmentation, targeting and positioning; so, in segmentation typically a
marketer divides the market into homogeneous groups.

Groups that are similar it customers are similar on some characteristics demographics,
psychographic, lifestyle, values, behavior all of those and that is applicable for both
consumer as well as business markets B2C as well as B2B markets. Once you do the

© All Rights Reserved. This document has been authored by Professor Shainesh G and is permitted for use only within the course
"Digital Marketing Strategy" delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data,
illustrations, pictures, scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic,
mechanical, photocopying, recording or otherwise – without the prior permission of the author.
 MK211x – Digital Marketing Strategy

Prof. Shainesh G

Week 1

segmentation you have to decide which segments you want to focus and that is called as
market selection or targeting.

But you also recognize that when you target a particular segment your competitors are
targeting similar segments. And that is where you have to decide your positioning. The
value positioning focuses on the target segment, but gives them the reason to buy you or
choose you instead of competition.

So, value positioning is simply targeting plus differentiation the reasons why your target
customer should buy from you and not from competitors. So, choose value is really the
strategic aspect of marketing. Moving on to the next stage or the next step provide value.
Once you have understood the target segments requirements, the needs and you have
decided your positioning you will incorporate them those features, those benefits, those
values into your product or service or solution.

So, product development and service development follows STP or Segmentation

The third stage of provide value is pricing decision. And that is when you would
typically involve finance, operations and other departments in the organization. But
pricing has to actually meet the customer’s expectations, be competitive and at the same
time help the company recover its costs with a margin. So, pricing has three legs the
customer the competitors and the company and the company’s perspective it is the cost
that it incurs.

Once you have decided the pricing you would go and decide whether you should do it
yourself or outsource it. So, lots of companies manage the operations themselves, they
manufacture products themselves, they run factories, but several other companies

© All Rights Reserved. This document has been authored by Professor Shainesh G and is permitted for use only within the course
"Digital Marketing Strategy" delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data,
illustrations, pictures, scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic,
mechanical, photocopying, recording or otherwise – without the prior permission of the author.
 MK211x – Digital Marketing Strategy

Prof. Shainesh G

Week 1

outsource it to others. Apple is a great example it designs, it markets, it has retail stores,
but manufacturing is done by its partners globally.

The next stage or next step in provide value is about distributing and servicing which
means that how do you how do customers access your product, how are you how are you
going to make it available? And that is where you have an opportunity to think about
new channel sub distribution.

For example, from physical to digital channels or make sure that the Omnichannel
experience is very good whether you are selling in physical stores, E-commerce outlets
or your own website and digital channels. If it is a durable or if it is a service which
requires support you will have channels for servicing and supporting the products and
services. So, that sort of covers the second stage from choose value to provide value.
Now how does the prospects and the customers come to know about you?

So, you would have to communicate value. So, that is the third stage, then the third stage
we focus on communicating. So, recall that you know you have to do the initial part
which is choose value and provide value before you move into the third stage which is
communicating. In communication you typically use your sales force it can be telesales,
it can be in person, in business markets typically your sales force will go and meet your
prospects and existing customers.

And they would communicate why these customers should buy your product. Companies
also run several promotions, they offer incentives and that is part of sales promotion.
And increasingly companies target customers using integrated marketing
communication, which cuts across traditional channels like TV, radio, billboards,
newspapers, magazines and digital channels, social media, internet, E-mails whole bunch
of them.

But what is integrated in IMC. Integrated means that the message is consistent its
integrated across channels and when the prospects and customers come across this
communication they get a consistent view about the brand and the company and the
© All Rights Reserved. This document has been authored by Professor Shainesh G and is permitted for use only within the course
"Digital Marketing Strategy" delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data,
illustrations, pictures, scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic,
mechanical, photocopying, recording or otherwise – without the prior permission of the author.
 MK211x – Digital Marketing Strategy

Prof. Shainesh G

Week 1

offering. Finally, the fourth stage which is sustain value. Now recall that the markets are
very competitive which means customers have lots of choice.

So, what worked a few months back or 6 months back or 1 year back does not
necessarily work now. Because customers have changed computers have introduced new
products and services. So, how do you prevent value erosion? So, the first step in
sustaining value is prevent value erosion. And that is where you can use a lot of digital to
get insights about the market, use those insights to tweak your product, upgrade your
product, come up with new innovations.

In competitive markets branding gives a lot of advantage. So, you have to invest in your
brand, enhance its equity such that customers have favorable associations, they are aware
of your brand, it helps you increase your market share and you are able to come on the
price premium. And finally, you need to build relationship with customers who bought
your products and services.

You have to engage with customers who have used your product and they should
continue to buy from you. So, sustained value has three distinct activities preventing
value erosion which focuses on innovation, new product development and co creation in
the digital age, brand equity and finally building customer relationships.

© All Rights Reserved. This document has been authored by Professor Shainesh G and is permitted for use only within the course
"Digital Marketing Strategy" delivered in the online course format by IIM Bangalore. No part of this document, including any logo, data,
illustrations, pictures, scripts, may be reproduced, or stored in a retrieval system or transmitted in any form or by any means – electronic,
mechanical, photocopying, recording or otherwise – without the prior permission of the author.