Blogpost (Digital Marketing)

clarencekwa

Seminar3-OnlineconsumersBusinessmodels-2.pdf

Home >Business & Finance homework help >Marketing homework help >Blogpost (Digital Marketing)

12/28/18

Understanding Social Media Consumers MKTG1415/1427: Seminar 3

Presented by Torgeir Aleti

Key topics

• Why do people participate in SM? What are some key motives? • What do consumers do in SM? • Segmentation of SM users • Building customer profile from

social media • Social media marketing

strategies for different segments

Why do people participate in social media?

• Uses and gratification approach: • Consumers motivations to use media are inferred from

their actual usage behaviour (i.e. gratification) which they get by using the media

Emotional

Motives

E nte rtain m e nt

So cial co n n e ctio n C o m m u n ity d evelo p m ent Se lf actu alisatio n Se lf exp re ssio n

Rational

(Heinonen 2011)

In fo rm atio n Kn o w le d ge sh arin g A d vo cacy

Sensis Social Media Report, June 2018

Reasons for not using social media

Sensis Social Media Report, June 2018

Social media sites stopped using

Sensis Social Media Report, June 2018

12/28/18

Hodis, M. A., Sriramachandramurthy, R & Sashittal H. C. (2015): Interact with me on my terms: a four segment Facebook engagement framework for marketers, Journal of Marketing Management, DOI: 10.1080/0267257X.2015.1012535

Six significant iConsumer Trends

• Device shift • Communications shift • Content shift • Social shift • Video shift • Retail shift

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Device shift

• Mobile phones and tablets make up 44% of all personal computing time (and increasing) • Usage doubled between 2008-2013

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Communications shift • From voice to data and video:

• Email and telephonic voice have fallen from over 80% to about 60% of our “communications portfolio”,

• Social network time has doubled; ¼ of all our communication.

• 20% of phone-time is for talking (over 60% 5 years ago), • Majority used for data-centric activities such as

streaming music, browsing websites and playing games.

• Mobile carriers face challenges in re-orienting their business models to focus on data rather than voice

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Content shift • From bundled to fragmented • “The long tail is accessible to anyone” (more

single-purpose apps)

• Bundles are being eroded (e.g. newspapers, TV networks) • Opportunities for niches: “eclectic,

fragmented media”

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

12/28/18

Social shift

• From growth to monetisation (small declines in both total audience and levels of engagement in developed economies • Many social networks already reached

maturity

• Shifting their business models away from focus on “audience” and more towards $$$

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Video shift • From programmed to user-driven • Live, linear programming is flat • Consumers moving towards: • Time-shifting • Place-shifting • Device-shifting

• Pressure on traditional advertising models

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Retail shift • Growth in eCommerce

(although still only 5% of all retail sales) • Increasing use of mobile

devices for retail research • Massive change upon us?

Duncan, E., Hazan, E. & Roche, K. (2013). "iConsumer: Digital Consumers Altering the Value Chain". McKinsey & Company.

Digital Business Models

A Business Model is… • “… a set of planned activities designed to result in

profit in a marketplace” (Laudon & Traver, 2007)

• “… a business model is the method of doing business by which a company can sustain itself -- that is, generate revenue” (Rappa, 2009)

• A value exchange program

• Simple models involve straight transactions/exchanges • Many Digital Business models are quite complex

12/28/18

Functions of Business Models

• Articulate the value proposition • Identify a market segment • Define the structure of the value chain • Estimate the cost structure and profit

potential of the above • Describe the position of the firm with the

value network linking suppliers and customers • Formulate the competitive strategy

C h e s b ro u g h , H . & R o s e n b lo o m , R .S . (2 0 0 2 ). “T h e ro le o f th e b u s in e s s m o d e l in c a p tu rin g v a lu e fro m in n o v a tio n :

E v id e n c e fro m X e ro x C o rp o ra tio n ’s te c h n o lo g y s p in -o ff c o m p a n ie s ”, In d u s tria l a n d C o rp o ra te C h a n g e , 1 1 (3 ), p p .5 3 3 -5 3 4 .

The value proposition

Target customer

Value proposition Capabilities

has needs

value for

presupposes

enable

O sterw alder, A . & P igneur, Y. (2002). “A n e-business m odel ontology for m odeling

e-business”, E lectronic C om m erce C onference, S lovenia, July 17-19.

Value

• Customer Value: • The difference between the benefits the customer

gains from owning and using a product and the costs of obtaining the product.

Kotler, Brown, Adam, Burton, Armstrong (2007): Marketing 7e, Pearson Education Australia

Four types of customer value • C o rre ct / a ccu rate attrib u te s

• A p p ro p riate p e rfo rm a n ce s

• A p p ro p riate o u tco m e s

Functional / Instrumental

Value

• Se n so ry

• E m o tio n al

• So cia l / re latio n a l

• E p iste m ic

Experiential / Hedonic

Value

• Se lf id e ntity / w o rth

• Pe rso n a l m e a n in g

• Se lf exp re ssio n

• So cia l m e a n in g

• C o n d itio n a l m e a n in g

Symbolic / Expressive

Value

• Eco n o m ic (p rice )

• Psych o lo gica l

• Pe rso n a l inve stm e nt

• R isk

Cost / Sacrifice Value

Source: Smith and Colgate (2007) Customer value creation: a practical

framework, Journal of Marketing Theory and Practice, vol. 15, no. 1, pp. 7–23.

A co-creation view of customer value

Jamie Carlson, Jessica Wyllie, Mohammad M. Rahman, Ranjit Voola, 2018. Enhancing brand relationship performance through customer participation and value creation in social media brand communities, Journal of Retailing and Consumer Services, https://doi.org/10.1016/j.jretconser.2018.07.008

Same value, different interface?

https://doi.org/10.1016/j.jretconser.2018.07.008

12/28/18

Internet revenue models (Big 5)

• Advertising • Fees paid by advertisers (google.com)

• Subscription • Fee for content or services (afr.com.au)

• Transaction fee (e.g. auctions, e-commerce) • Fee for enabling or executing transaction (ebay.com)

• Sales • Selling goods, information or services

(colesonline.com.au) • Affiliate

• Referral fee or share of revenue (godaddy.com)

e-Business Models (Michael Rappa)

• Brokerage Model • Advertising Model • Subscription Model • Infomediary Model • Merchant Model • Community Model

www.digitalenterprise.org/models

Other alternative: https://w w w.sm artinsights.com /digital-m arketing-strategy/online- business-revenue-m odels/online-revenue-m odel-options-internet-business/

Brokerage Model

• Pre-dates e-Business! • A space where buyers and sellers

meet to purchase and exchange goods and services • Primary revenue model: Transaction

fees

• Example: www.ebay.com.au

Advertising Model

• Traditional media model – free or cheap content • Original internet business model! • Primary revenue model: Advertising

• Example: http://www.theguardian.com/au

Subscription Model

• Provides access to software-based services to clients • Primary revenue model: Subscription

• Example: http://www.emeraldinsight.com http://www.netflix.com.au http://www.dropbox.com

Infomediary Model

• An intermediary that specialises in the capture, analysis application and distribution of information • “Information intermediary” • Primary revenue model: Transaction

fees (e-commerce)

• Example: www.nielsen-online.com, http://mailinglists.com.au

http://www.digitalenterprise.org/models

https://www.smartinsights.com/digital-marketing-strategy/online-business-revenue-models/online-revenue-model-options-internet-business/

http://www.ebay.com.au/

http://www.theguardian.com/au

http://www.emeraldinsight.com/

http://www.netflix.com.au/

http://www.dropbox.com/

http://www.nielsen-online.com/

http://mailinglists.com.au/

12/28/18