Digital marketing Place

Place tactics as part of the digital marketing Mix

The digital marketing space consists of new Internet companies that have emerged as the Internet has developed, as well as those pre-existing companies that now employ digital marketing approaches as part of their overall marketing plan. For some companies the Internet is an additional channel that enhances or replaces their traditional channel(s). For others the Internet has provided the opportunity for a new online company.

• Agents e.g. Avon Representatives. There are a number of different types of agents. One well known example is that of Avon cosmetics and their workforce of extremely loyal representatives. The representatives are in reality agents. digital marketing allows customers to choose between the services of their traditional Avon rep or the Avon Online Shop i.e. using an agent or going direct.
• Franchises e.g. KFC. There are many examples of franchises. The online equivalent of a franchise is an affiliation or ‘affiliate.’ This gives the franchise owner the opportunity to develop a network of affiliates that display goods, services or solutions on the affiliate website. A commonly cited example is that of Amazon.com. So if you are a golf enthusiast, and you have developed a site that give tips on how to play better golf, then you can apply to Amazon.com for an affiliation that allows you to place tailored Amazon ad boxes on your site. They can be adapted to sell golfing books, and you as the site owner can adapt the ads to match the feel of your site. For every golf book sale that your leads generate, you are paid a commission.
• Vending and automated retailers e.g. Coke machines. Vending is very much based upon the physical location of machines near to where they are most likely to sell product. However, vending machines can use IT and the Internet to communicate with a central server, giving information on what is currently selling well, or what might need replacing.

New Internet companies.

These companies only trade on the Internet.

• New online retail brand e.g. Amazon, Lastminute.com – Essentially these companies could not have been conceived without the creation of the Internet. New companies sprang up as the Internet began to be adopted. Entrepreneurs were investing heavily in all sorts of start-ups. Some were successes, most were not.

• New online manufacturer brand e.g. Dell.com – Entrepreneurs saw opportunities for developing online manufacturers’ brands that took advantage of online technologies that enabled innovative new products to be adapted to customer preferences, and by using IT to enable efficient and effective operations such as assembly and logistics.
• Online Auction e.g. eBay. In common with new online retail brands, before the emergence of Internet technologies, this concept was not possible. Essentially eBay is a Consumer-to-Consumer (C2C) business. For more information on how online auctions work, see the lesson on Digital Marketing and Price.

Pre-existing companies that have adopted digital marketing.

These are traditional companies that trade on the Internet.

• Banking and financial Services e.g. HSBC Bank. Banks and financial services have benefited tremendously from the popularity of Internet usage. There is a mixture of new online banks and traditional banks, both offering online banking services. Essentially banks no longer need to invest in high cost, high street selling units i.e. old fashioned town-based banks. Labor costs have also been reduced since much of the traditional banking bureaucracy is done using IT, and the use of overseas call centers has meant that salaries are much lower. Software also means that customers can be retained by using Customer Relationship Management (CRM) eMarketing approaches.

• Existing online retail brand e.g. Wal-Mart, took advantage of this new mode of distribution by extending products and services to consumers via the medium of the Internet. digital marketing enhances their traditional marketing.
• Direct distribution channel e.g. New York Yankees’ shop. Organizations have access to consumers worldwide. So brand loyal consumers such as sports fans are now able to buy directly from their preferred club, which pockets the entire profit without having to give a cut to intermediaries.
• Wholesalers e.g. C and S wholesale Grocers. IT allows retailers to order directly from their wholesale partners via their website. Retailers can check stocks and look at current promotions. This approach is more effective than depending entirely on merchandisers.