A Key to E-commerce – Right NICHE Product and Customer Experience

Once you know your target market, you have to develop various ‘personas’, which represent the needs, characteristics and expectations of different types of your customers. This method will enable you to choose the right niche products and make you stop think of your customer as yourself, since customers and their wants differ from yours. Niche is a term used to describe the opposite of general. A niche product targets a specific group of customers, who seek a unique and original experience. Providing niche products will decrease your competition issues significantly. It is also proven to ensure a greater customer loyalty.

The process of creating personas can take a while. They are based on a primary data research, which means that you do the research (such as interviews) yourself. Besides the primary data, secondary data should be gathered as well. That can happen online or one can acquire it from third parties, such as research agencies. Once all the data is gathered, an objective decision-making process has to take place. You have to have a clear idea of whom you are reaching.

Do not drop the idea of personas, as their taste might change over time. Many businesses don’t bother to take personas into consideration anymore, once they are half way through the marketing process. When it comes to the actual creation of personas, you have to start asking yourself questions like: who they are, how many of them there are, how do they differ, what are their preferences, what are their demographic features, etc. Then you try to place them into specific situations and you react to them.

As far as the niche side of your business, you have to avoid the general strategies, such as trying to reach the greatest amount of consumers. This requires a lot of resources related to marketing, competition and the customer loyalty is radically lower than in the niche market.

The aim of an e-commerce marketer is to make prospects into customers, in other words, ensuring the conversion. To make this happen, customers have to be provided with an excellent online experience.

As an example of a niche company, we can look, for example, at a company named Zumiez. This company offers unique products related to surfing, skateboarding and snowboarding.

The next company is a niche e-commerce site focusing primarily on luxury knitting yarns. It has grown significantly. The owner has successfully applied SEO (search engine optimization). The readwriteweb.com article suggests that she continues by focusing on site’s content and engaging her customers with the company through blog or classes.

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Why Social and Not Marketing Experience ???

This class first covered online micro and macro environment. Let’s take a look at it then. Microenvironment includes all the stakeholders. That is, just like in the traditional microenvironment, suppliers, customers, competitors and employees. All the issues concerning these stakeholders are pretty much the same as in the offline world. The difference comes with the interaction, as it happens online – new social media, networks and platforms are launching every day.

Macro-environment can be identified by using the PEST/LE analysis just like in any other business area. The PEST/LE factors are as follows: political, economic, social, technological, legal and ethical. All these areas have to be covered if a thorough analysis of macro-environment is to be carried out.

Now, what are the benefits of internet marketing? They are usually formulated as being Adaptive (can be changed at any moment); providing Real Time Data; having a possibility of a specific Targeting; having a wide Scope (a large variety of ever-changing tools); being capable of an instant Conversion (make a browsing visitor into a customer); being Proliferating (enabling campaign across variety of SM tools) and having an ability to Reach large numbers of web users.

Why is Social Media undergoing such a boom? Look at the word itself. Media – it provides digital places for publication. Social – it enables social interaction and sharing.

Marketer can LEVERAGE/ ENGAGE IN/ PROFIT FROM the online conversations. The ain magic behind the Social Media is the audience fragmentation. It creates communities, sense of belonging and incents interaction.

What does “Streisand effect” mean among the online community? It is an example of how nothing can be withdrawn from the internet. The more effort we put into withdrawing it, the more it spreads. Barbra Streisand demanded that her house isn’t included in a collection of photos of the CA coast. As a result, pictures of her house spread on the web so much, that it is no longer possible to track and delete them all.

What about some interesting example of SM in practice? In 2008, Starbucks launched an online platform called Mystarbucksidea.com. This interactive website has been used to generate customers ideas on how to improve the services Starbucks provides. Starbucks fans simply write their idea, which is then voted up or down by the other visitors. The most popular concepts are to be implemented by Starbucks itself. However, an article on starbucksmelody.com, which is a Starbucks fan blog, suggests that there are more cons than pros with the Mystarbucksidea site, one of the problems being frequent repeats of ideas.

Another example of utilizing Social Media strategy can be found with Dell Computer Corp. As described on socialmediatoday.com, Dell disposes of three SM initiatives – Social Operations and Service (customer service), Social Media and Community and Command Center. The Social Media and Community is a team providing SM guidance for the rest of the company through certificates and training at Social Media and Community University. The Command Center is a group of 12 employees who monitor social data across the globe in 11 languages. The interesting thing about Dell’s SM approach is that no single department is completely responsible for the SM of the company. Instead, there are teams that train employees and monitor data, but every single department is encouraged to utilize SM to do their jobs better.

E-commerce OTAKU theory

What are the pros and cons of e-commerce? As far as I understood from the lecture, the most valuable factors of having an e-commerce website as opposed to a traditional mortar store are the lowered costs and the amount of potential customers that can be reached. And exactly which costs am I talking about? ‘Cause setting up an e-commerce platform can cost a fortune, nowadays.

Well, to start with, let’s mention the difference between e-commerce setup/maintenance and the rent, inventory, facilities and warehousing associated with a mortar store. This itself can be quite a significant difference in favor of e-commerce. On top of that, we need to consider the possibility of distributing directly to the public. In other words, the direct web business model can be implemented so that the manufacturers sell straight to their customers. This tactic has been successfully used by Dell Computer Corp. Basically, it cuts on the costs associated with too many intermediaries in the marketing channel (retailers, brokers etc.). Another interesting example of this method in use is a company called Flowerbud. It is a floricultural business based in Oregon, USA. This company grows flowers and sells them through very well designed and much praised e-commerce site Flowerbud.com. Flowerbud’s web illustrates greatly the concept of tailoring the site’s content to appeal to a niche market, OTAKUs or early adopters. This great idea is presented in an excellent lecture given by Seth Godin.

Flowerbud’s owners have always been big flower enthusiasts and they’ve never cared for selling cheap bouquets to people who don’t really share their passion for flowers. Instead, they focus on a target market, which consists of flower lovers, those who want to present others with fancy looking bouquets. A combination of this approach and the wonderful, niche design of their platform is bringing them ahead of their competition.

Internet World Stats  estimated the total amount of internet users to be over 2.2 billion people at the end of 2011. This obviously makes it possible to market to much greater number of potential customers than when operating from a mortar store. Just in the year of 2010, online transactions reached $186 billion.

Now, what are some of the disadvantages of e-commerce? We can get customers from anywhere in the world, for much cheaper than if we operated a store. The problem is that unlike in the case of mortar stores, we would be expected to provide a prompt delivery and easy online access with an exceptional customer service otherwise, customer could leave by a click of a mouse.

There are various issues and questions to ask oneself when planning for the launch of an e-shop. Most of them have to do with the SMART criteria – specific, measurable, attainable, result-oriented and time-bound. The meaning of each is obvious, but it is further described in various sources such as Wikipedia. Most issues revolve around business purpose, target market and how to market to it, and technical factors concerning the platform, the payment processing etc.

There are few more web business models besides the manufacturer (direct) one. Advertising model serves as a provider of content and services, which are mixed with banner ads that often generate most of the site’s revenue. Another model is the infomediary one, which functions as a marketing campaign support. It collects data about web users and their habits and then sells this data to those who want to utilize it for their marketing campaigns. Then there are various types of merchant model. Either businesses sell solely online, or they have both a mortar shop and an e-shop. Affiliate model stands for the type of web business that pays other sites for placing ads on their pages. Community model is based on the loyalty of the visitors and voluntary contributions. Subscription model charges its visitors fees.

The last important model is the brokerage. It is based on bringing online buyers and sellers together and facilitates the exchange. There are many types focusing on different things like auctions, transactions etc. The one we all know is the auction giant eBay.com. It grew from a small auction platform (1995) to have 55 million users and $15 billion in the value of transactions in 2002. The first quarter of 2012 meant $3,277 billion in revenue, which was $800 million in 2001. An article on the Internet Retailer conveys the notion that there is a Darwinian environment on the eBay, meaning that only the fittest will survive. In 2002, eBay faced an issue whether it is a good idea to allow large companies to operate among the small individuals. Small individuals, however, are still a significant part of the eBay’s business as we can see in the following video 😉

 

Digital Marketing Ice-cream?

What do digital marketing and ice-cream have in common? Nothing? That’s what I had thought, but then I came to my first digital marketing class and everything changed instantly. Even though I’d only known a little bit about the topic of digital marketing, the following video explained the core concept to me through a simple, yet ingenious metaphor.

     Another highlight of this first class was a short report on an eyewear producing company that decided not to use any traditional media, press in particular. Instead, they based their campaign solely on the “new media“. Burberry, the company I just mentioned, plans to unveil their product lines through YouTube, Facebook, Sina, Weibo, YouKu and Twitter throughout the year of 2012. We have a lot to look forward.

Besides learning about several other interesting examples of an Internet Marketing campaign, we were introduced to the IM theory, categories, objectives etc. Finally, we received a short overview of the basic marketing terms and principles in order to refresh our marketing spirits. Let me go through them shortly.

Segmenting / segment – is a group of people sharing one or more features, which lead them to the same need for a product or service.

Targeting / target market – is a group of people/organizations, for which a company creates and caries on a marketing mix. I found an interesting example of targeting. Even though most of you will initially grin, please, keep in mind that one day, if you’re lucky, you will be old as well. Cell phones for seniors clearly show how peculiar can targeting be.

Positioning – is a process of developing certain perception of the product in the mind a customer.

Consumer behavior – it is all the issues related to consumer purchase decisions. This category deals with decision making process. There are various factors, which affect consumer behavior such as previous experience, interest etc.

Market research – is a process, at the end of which we should be able to make marketing decisions of greater efficiency. It implies mainly gathering and analyzing data. Again, there are factors, which may affect it.

AIDA – is an abbreviation of Awareness, Interest, Decision and Action. It is a model, which describes the stages of customer’s involvement with the message of a product or a service.

PEST and SWOT – are two important models that help us analyze the internal and external environments related to our organization. They can be encountered in various business fields, not just in marketing. PEST is usually described as an abbreviation of Political, Environmental, Sociological and Technological aspects, which are mostly external to an organization. SWOT or Strengths, Weaknesses (internal) and Opportunities, Threats (external) can serve us as a tool for developing our marketing mix.

4P’s/7P’s – in other words Marketing Mix, is an abbreviation for Product, Price, Placement and Promotion in the short version. The upgraded version introduces 3 more P’s – People, Process and Physical evidence. Organizations use this model to meet customer’s needs more successfully. Developing new products, pricing them properly, distributing them efficiently and finally promoting them are all the basic elements of the Marketing Mix. The additional three P’s have been added, because, in the western world, marketing  has developed into a very customer oriented form.

At the end of the first class, we were advised on how to set up our own blogs. Blogging has taken an exceptionally important role in the internet marketing evolution, as it allows the corporate bloggers to keep their customers updated with the latest news as well as it allows the customers to provide a feedback and hence to take part in a two-way communication. Following tag will lead you to a list of the 10 most successful corporate blogs.

Wow, digital marketing’s exciting ;D