FUNDAMENTALS OF DIGITAL MARKETING

Unit I- Chapter Three: The Consumer For Digital Marketing

Table of Contents
• THE CONSUMER FOR DIGITAL
Evolution of Consumer Behaviour
MARKETING Models

• Evolution of Impact of Digital Technology on Consumer Behaviour

Consumer Behavior
Models Attributes of Online Buying Behaviour
Influence of the Web Experience
• Managing Consumer
Demand Marketing Intelligence from User’s Online Data
• Integrated Marketing
Communications

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
Evolution of Consumer Behaviour Models
Impact of Digital Technology on Consumer Behavior - 1
Evolution of Consumer Behavior Models

Consumer Behaviour is defined as “the behaviour that consumers display in searching for, purchasing, using, evaluating and disposing of
products and services that they expect will satisfy their needs.” The four key stages of ‘Engel, Blackwell and Miniard (EBM)’ Model include:
1. Information input stage
2. Information processing stage
3. Decision process stage
4. Variables influencing the decision process

Impact of Digital Technology on Consumer Behavior

Digital consumers have the following characteristics which differentiate them from the traditional (offline) consumer:
5. Higher potential for profiling
6. Development of consumer personas
7. Possibility to gather unsolicited feedback
8. Availability of real-time expert/peer influence
9. Use online data to target loyal offline customers

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
Evolution of Consumer Behaviour Models
Impact of Digital Technology on Consumer Behavior- 2
Passive and Active Digital Influences
Passive influences are those on which the consumer does not have much control and which they receive in an unsolicited manner. Active
influences, on the other hand, are the ones which a consumer actively seeks out while they are evaluating or finalizing a purchase.

Passive Digital Influences include:

1. Influencing through more marketing channels
2. Influencing through customized content
3. Influencing through targeted/re-targeted advertising
4. Influencing through social networks
5. Influencing through real-time information

Active Digital Influences include:

6. Influencing through social communities
7. Influencing through expert information
8. Influencing through product customization
9. Influencing through data-driven promotions

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Evolution of Consumer Behaviour Models
Attributes of Online Buying Behavior

Attributes of Online Buying Behavior

Lewis and Lewis (1997) in their studies have spotted five different kinds of web users:
1. Directed information-seekers
2. Undirected information-seekers
3. Directed buyers
4. Entertainment seekers
5. Bargain hunters

Three key influencing factors or attributes which any online marketing activity must offer to be a success include:
6. Price
7. Trust
8. Convenience

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Evolution of Consumer Behavior Models
Influence of the Web Experience

Influence of the Web Experience

The five stages are crucial to developing web experience online include:
1. Exposure
2. Attention
3. Comprehension and Perception
4. Yielding and Acceptance
5. Retention

The building blocks of Web Experience include:

1. Functionality Factors: Factors enhancing online experience by presenting the virtual client with a good functioning, easy-to-explore, fast,
and interactive website. Functionality includes elements of ‘Usability’ and ‘Interactivity’.
2. Psychological Factors: Websites must communicate integrity and credibility in order to persuade customers to stop exploring them and
interacting online. Includes ‘Trust’ element.
3. Content Factors: Factors referring to creative and marketing mix-related elements of the website. They are divided in two sub-categories
‘Aesthetics’ and ‘Marketing Mix.’

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Evolution of Consumer Behavior Models
Marketing Intelligence from User’s Online Data
Marketing Intelligence from User’s Online Data
Consumer behavior data typically resides across multiple repositories and platforms and marketers need appropriate tools and technologies
to gather, integrate, and analyze that data. Four key stages to understand how marketing intelligence is derived from multiple sets of data:
1. Online data collation: discusses key concepts of owned, earned, and paid media
2. Consumer data repository creation: collating all the data obtained from the first stage and integrating it into a consumer data repository.
3. Consumer segments development: in this stage consumer segments are formed
4. Application areas identification: key application examples of application areas identification include:
1. Target channels/sites: Marketing intelligence on key customer segments helps brand marketers decipher the most effective target
channels/sites through which they can push their marketing message, for it to be really received and acted upon.
2. Customized messaging: With knowledge of likes/dislikes, attitudes, influences and motivations of key consumer groups, marketers
can customize their messages both across paid channels and earned media for higher interaction.
3. Campaign intelligence: To run an effective marketing campaign, it is essential that marketers understand the routines and patterns
of consumer’s purchase cycle and align/target campaigns with matched resources and investments.
4. Sentiment analysis: Through advanced analytics tools, it is possible to understand consumer sentiment across any property and
channel to decipher the impact of marketing messages received and products browsed.
5. Advertising exposure: Helps marketers decide the nature and extent of marketing exposure needed for varied consumer segments.
6. Product optimization: Involves optimizing products based on consumer’s previous buying patterns and comments/feedback across
varied online channels.
7. Data-driven promotions: Marketers can use technology in a real-time manner to target promotions based on location and intent to
help improve conversions.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
Table of Contents
• THE CONSUMER FOR DIGITAL
Managing Consumer Demand
MARKETING
Understanding Consumer Demands
• Evolution of Consumer
Behavior Models Demand-Led Product Development Process
Brand Building on the Web
• Managing Consumer
Demand Web-Tracking Audits and Forecasting

• Integrated Marketing
Communications

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Managing Consumer Demand
Understanding Consumer Demands

Understanding Consumer Demands

Consumer demand as a term is generally used to denote the overall demand for a product or a service in the market . There are mainly eight
types of demand patterns which have to be taken into consideration by marketing teams:
(a) Negative demand: consumers dislike the product and may even pay a price to avoid it
(b) Non-existent demand: consumers may be unaware or uninterested in the product
(c) Latent demand: consumers may share a strong need that cannot be satisfied by an existing product
(d) Declining demand: consumers begin to buy the product less frequently or do not buy at all
(e) Irregular demand: consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis
(f) Full demand: consumers are adequately buying all products available in the marketplace
(g) Overfull demand: more consumers would like to buy the product than can be satisfied
(h) Unwholesome demand: consumers may be attracted to products that have undesirable social consequences

There are four key factors impacting consumer demand:

1. Consumer Factors: This area refers to factors impacting a typical consumer of the product at hand.
2. Product Factors: This category includes product/brand-specific factors that impact a consumer’s choice for it.
3. Micro Factors: Key micro-factors include the price of related goods (in competition with the product/brand, wherein marketers can
compare and match prices with their nearest competitor to improve demand), consumer expectations of increase/decrease of prices in
the near future, specific tastes and preferences of an audience and other aspects like product advertisement or channels of marketing.
4. Macro Factors: involves ecosystem factors which actually define key consumer segments and typically cannot be impacted by marketers.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Managing Consumer Demand
Demand-Led Product Development Process
Demand-Led Product Development Process
Marketers have traditionally relied on superior product attributes, thoughtful communication, advertising, and other public relations
platforms to create a demand for their product. This approach lacked qualitative indicators like:
(a) The kind of experience people had
(b) How they went about searching for the product
(c) Which features in their view differentiated the products from competition
(d) The nature of demand behind the purchase: was it for a specific occasion; was there a context to the purchase; what kind of specific
keywords a customer used while searching for the product; what was the scale of customer satisfaction post purchase

Marketers are applying multiple demand analysis techniques to the data gathered through these online consumer interactions:
(a) Consumer feedback/comments: One of the more relied ways in which consumer comments across various websites, e-commerce forums,
review sites, blogs, etc., is collated and consumer sentiment towards a particular product is analyzed.
(b) Social media mentions: Community development tools are becoming crucial to gauge trending factors which influence communities as a
whole rather than just individuals. For example, analyzing Twitter mentions are becoming crucial for brands to gauge whether their products
are in demand (being conversed) or falling out of favor.
(c) Product purchase analysis: With large amounts of historic product purchase data trends available through APIs (Application Programming
Interfaces) shared by top online merchants, it has become important to keep a tab on the purchase analysis for specific regions and markets.
(d) Facebook page likes: These days through crowd sourcing (gathering thoughts from a large crowd for business applications), new ideas can
be developed and tested with top influencers (top 2 per cent of the intended audience) to forecast future demand and potential.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Managing Consumer Demand
Brand Building on the Web
Brand Building on the Web
A brand according to classic marketing definition is the “name, term, design, symbol, slogan , packaging, or any other mix of such elements
that identifies one seller’s product distinct from those of other sellers”. The six main criteria for choosing brand elements which any firm can
use to build a brand include a) Memorable b) Meaningful c) Likeable d) Transferable e) Adaptable f) Protectable

The four steps in the Keller’s CBBE model contain the six building blocks that must be in place along with specific questions which need to be
answered at each stage to develop a successful brand:
1. Salience dimension includes creating brand salience or ‘awareness,’ to make the brand stand out so that customers recognize it.
2. Performance dimension defines how well a firm’s product meets its customer’s needs.
3. Imagery dimension refers to how well a brand meets its customer’s needs on a social and psychological level.
4. Judgment dimension refers to judgments made by customers about a brand
5. Feeling dimension: A brand evokes feelings, but customers respond emotionally to how a brand makes them feel about themselves.
6. Resonance dimension: relates to consumers’ feeling of a deep psychological bond with the brand.

Let us look at a structured mechanism to build web-specific components of a brand:

(a) Knowing the online audience
(b) Developing brand elements specific to the audience
(c) Web communication strategies to build the brand
(d) Reinforcing brand values and attributes
(e) Converting loyalists to brand advocates

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Managing Consumer Demand
Web-Tracking Audits and Forecasting

Web-Tracking Audits and Forecasting

A web-tracking audit implies using web visitor tracking tools to analyze visit behavior on a website. Any web-tracking process typically
involves a code that tracks each user’s visit pattern and with the resulting data on consumer behavior helps provide targeted content and
experiences that make the website and the brand experience more personal and interactive.

Need for Web-Tracking Audits

Web-tracking audits are important to:
(a) Improve consumer interaction
(b) Understand consumer preferences
(c) Develop successful campaigns
(d) Improve site performance
(e) Track consumer data leakage

Understanding Web Cookies and the Web-Tracking System

Cookies are small bits of text that are downloaded to consumer browsers as they surf the web. Their purpose is to carry bits of useful
information about consumer’s interaction with the website that sets them.
Web tracking is done by looking and combining data collected through these cookies and other sources like flash trackers, server logs, and
web beacons. A web-tracking tool typically analyses these trackers to understand relevant consumer behavior and at the same time manage
a list of approved vendors who can place their cookies (third party trackers) onto the website.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
Table of Contents
• THE CONSUMER FOR DIGITAL
Integrated Marketing Communications
MARKETING
Basics of Integrated Marketing Communications (IMC)
• Evolution of Consumer
Behavior Models Channels for Integrated Marketing Communications

• Managing Consumer
Four Pillars of the IMC Construct
Demand
Impact of Digital Channels on IMC
• Integrated Marketing
Communications

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Integrated Marketing Communications
Basics of Integrated Marketing Communications (IMC)

Basics of Integrated Marketing Communications (IMC)

“IMC is a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the
strategic roles of a variety of communications disciplines (for example, general advertising, direct response, sales promotion, and public
relations) and combines these disciplines to provide clarity, consistency, and maximum communications impact.”

According to Tom, Duncan; Caywood, Clarke (1996), the following trends and changes have been the key factors behind the adoption of
integrated marketing communication:
(a) Decreasing message impact and credibility
(b) Decreasing cost of using databases
(c) Increasing client expertise
(d) Increasing mergers and acquisitions of agencies
(e) Increasing mass media costs
(f) Increasing media and audience fragmentation
(g) Increasing global marketing
(h) Increased number of competitive products

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 Integrated Marketing Communications
Channels for Integrated Marketing Communications

Channels for Integrated Marketing Communications

Key channels which can be included as a part of IMC:
(a) Advertising: It includes broadcasting/mass advertising (print, internet advertising, radio, television commercials) and outdoor advertising
(billboards, street furniture, stadiums, rest areas, subway advertising, taxis, transit).
(b) Sales promotion: Contests, coupons, product samples (freebies), premiums, prizes, refunds/rebates, special events, bonus packs, loyalty
programs, sales materials (sell sheets, brochures, presentations), installation, customer help, returns and repairs, billing.
(c) Public relations: includes special events, interviews, conference speeches, industry awards, press conferences, testimonials, news
releases, publicity stunts, community involvement, charity involvement, and events.
(d) Direct marketing: refers to direct mail, telemarketing, catalogs, shopping channels, internet sales, emails, text messaging, websites,
online display ads, fliers, catalog distribution, promotional letters, outdoor advertising, telemarketing, coupons, direct mail, direct selling,
grassroots/community marketing, mobile.
(e) Digital/internet marketing: This being the latest addition to IMC includes all the digital marketing and communication channels like
search, display, content, community, partner, communication, partner marketing

It is primarily the addition of digital/internet marketing and communication channels which has brought about the value differentiators of
customer centricity and audience-driven inputs to the overall IMC process.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Integrated Marketing Communications
Four Pillars of the IMC Construct

Four Pillars of the IMC Construct

The four elements of IMC as defined by Kliatchko (2008) include stakeholders, content, channels, and results:
(a) Stakeholders: The term ‘stakeholders’ refers to all relevant publics or multiple markets with which the firm interacts. The term ‘publics’
include both external and internal audiences. External audiences may refer to customers, consumers, prospects, intermediaries, and
other entities outside the organization, while internal audiences consist of those within the organization, such as employees, managers,
etc.
(b) Content: The development of content in IMC flows from a deep knowledge and understanding of multiple markets that an IMC program
is intended to address. Understanding consumers beyond traditional marketing descriptors, such as demographic and psychographic data
is essential.
(c) Channel: There are two main determinants to consider in deciding which marketing or brand communication channel to utilize in
preparing an integrated media plan: relevance and preference
(d) Results: Measuring results of marketing communications programs against set objectives has always been the norm for business
organizations.
At the heart of IMC, therefore, is the drive for accountability, that is, IMC programs must be accountable for business results. This is done
through a process of customer valuation and by estimating return-on-customer-investments, or ROCI (that is predicted incremental sales
achieved by investing in specific customers), which are then verified and evaluated at certain points over time, to track the effectiveness of
IMC programs.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Integrated Marketing Communications
Impact of Digital Channels on IMC

Impact of Digital Channels on IMC

Following are the impacts digital channels have on overall marketing communications:
(a) Intent-based marketing (search marketing): With the incorporation of search-based marketing communication, not only do firms get to
know the top keywords which are important to their customer set with regards to the products they aim to sell, but it is also the most
credible medium to take customers from an intent to the consumption stage in the least possible time.
(b) Brand marketing (display/digital advertising): With display having the power to track all online customer actions and send them
targeted messages based upon each marketing- funnel stage interaction, this form of advertising extends a creative and immersive angle
to other integrated communication channels.
(c) Content marketing (website, blog, native content): Digital content as also in the case of traditional content is a powerful addition to the
marketer’s communication armoury and with the emerging usage of native content and advertorials.
(d) Community-based marketing (social media, business platforms): With digital community channels providing a quick, responsive, and
immediately accessible word-of-mouth option, it has grained a lot of prominence in improving brand trust
(e) Partner marketing (affiliate marketing, sponsorships, PR): Partner marketing helps the overall IMC program reach out to customers with
varied interests on the online destinations they like to visit.
(f) Communication channel marketing (e-mail, messaging, sms): Through details collected from traditional visits and feedback forms,
companies now have options to pursue personal data for permission-based marketing, wherein communications are guided by seeking
customer permissions rather than pushing the product onto the consumer.
(g) Platform-based marketing (mobile, video, media platforms kiosks, In-apps): With new technology platforms being developed there are
tremendous possibilities to improve reach, extend branding, customized interaction, all of which form the core of IMC exercise.

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Key to Chap 3: Review Questions
S.No Question Reference Section
Q1 What is consumer behavior? Can you describe the four traditional Evolution of Consumer Behavior
consumer behavior models? Models
Q2 Explain the four key stages of “Engel, Blackwell and Miniard (EBM)” Evolution of Consumer Behavior
Model in detail. Models
Q3 Name some of the characteristics that differentiate a digital Impact of Digital Technology on
consumer from a traditional (offline) consumer. Consumer Behavior
Q4 Can you compare passive and active digital influences stating at Impact of Digital Technology on
least two examples for each? Consumer Behavior

APPENDIX- 1 Q5 According to Lewis and Lewis, what are the five different kinds of
web users as discussed in the chapter?
Explain the five stages during which information that is presented
Attributes of Online Buying Behavior

Q6 on a website is processed by the human mind?

Influence of the Web Experience

Q7 Describe the key stages by which marketing intelligence is derived Marketing Intelligence from User’s
from multiple user data sets. Online Data
Q8 What is consumer demand? Which eight types of demand patterns Understanding Consumer Demands
need to be taken into consideration by marketers?
Q9 Understanding Consumer Demands

Explain in detail the four factors impacting consumer demand.

Q 10 What is a brand? What are the six main criteria for choosing brand Brand Building on the Web
elements which can be used by a firm for brand
building?

Fundamentals of Digital Marketing Copyright © 2018 Pearson India Education Services Pvt. Ltd
 Key to Chap 3: Review Questions
S.No Questions Reference Section
Q 11 What are web-tracking audits? Why are they important?
Web-Tracking Audits and Forecasting

Q 12 How did the Integrated Marketing Communications (IMC) Basics of Integrated Marketing
concept emerge? What trends and changes have Communications (IMC)
resulted in the adoption of integrated marketing
communication?
Q 13 Explain at least five key differences between Traditional Channels for Integrated Marketing
Communication and IMC Approaches. Communications
Q 14 Share the advantages and limitations of any four major media Four Pillars of the IMC Construct
APPENDIX- 1 Q 15
types.

Explain the four key pillars of the IMC construct.

Four Pillars of the IMC Construct

Q 16 State five distinct impacts of digital on Integrated Marketing Impact of Digital Channels on IMC
Communications.

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