Glossary terms: PESTEL

PESTEL analysis, which is sometimes referred as PEST, is a concept in marketing principles. Moreover, this concept is used as a tool by companies that are planning to launch a new product or service. It includes the Political, the Econimical, the Social, the Technological, the Environmental, and the Legal factor.

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It gives a view of the whole environment from many different angles that the business wants to check and keep a track of while contemplating on a certain plan.

The importance of each of the factors may be different to different kinds of industries, but it is clue to any strategy company wants to develop that they conduct the PESTEL analysis as it forms a much more completed version of the SWOT analysis.

Let’s see the factors we have mentioned:

  • Political: These factors determine the extent to which a government may influence the economy or a certain industry. Specifically, political factors has areas including tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability.

  • Economic: These are determinants of an economy’s performance that impacts a company and affects in a long term way. That includes the economic growth, interest rates, exchange rates, the inflation rate. These factors greatly affect how businesses operate and make decisions.

  • Social: It talks about determinants like cultural trends, demographics, population analytics etc. High trends in social factors affect the demand for a company’s products and how that company operates.

  • Technological: Referes to the innovations in technology that may affect the operations of the industry and the market favorably or not. This point in the industries lead to their innovation.

  • Environmental: Include all those that influence or are determined by the ecological and environmental aspects such as weather, climate, and climate change.

  • Legal: There are certain laws that affect the business environment in a certain country, in a way  of discrimination law, consumer law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.

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SEGMENTATION

SEGMENTATION BASES:
First it is necessary to define the different consumer profiles of a market:

1) divide the market
2) define the segment
3) classify the products in that segment
4) and for each segment make a differentiated strategy


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REQUIREMENTS FOR EFFECTIVE SEGMENTATION
• Measurable: it has to be possible to quantify the chosen criterion 
• Accessible: it has to be possible to reach the market through already established groups
• Cost effective: the market should carry enough potential to get benefits
• Differentiable: the market should differ from other segments
• Programmable: it should be possible to develop concrete strategies for action


CONCEPT OF SEGMENTATION:
A segmentation consists in deviding the market into groups of consumers with related characteristics in order to implement a concrete and differentiated strategy 

SOME MORE TARGETING CRITERIA USED
1) Geographic segmentation
2) targeting consumer characteristics
3) segmentation by product-related criteria
4) targeting distribution channels


CONSUMER SEGMENTATION BY FEATURES
• Demographic: 
seo / family size / age / cycle of family / marital status ...
• Socioeconomic:
level of income / education / profession / religion
• Psychographic:
class / lifestyle / personality / activities / opinions / values

These things are easily measurable, less the psychographic facts which are difficult to quantify

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SEGMENTATION IN CRITERIA RELATING TO THE PRODUCT
Form groups from consumer buying behavior
• Benefits pursued with the purchase of quality, service, performance, safety, security, design, durability, etc.
• Frequency of use of purchased products: single, low, medium, high, very high
• User Category: markets can be segmented distinguishing between new users, ex-users, potential users, first-time users
• Purchase Type: differentiate between first purchase and repeat purchase
• Brand loyalty: No, medium, strong, full
• Shopping location

The segmentation based on product-related criteria is the most direct one

Segmentation distribution channels
consits in determining:
- How to reach the consumers
- Which selling points are to be used
- Through what channels of distribution

Glossary- Media Mix

What exactly is Media Mix?

Media Mix is basically the combination of several advertising channels that a brand uses in the promotion of a product or a service. When an Advertising Agency works on a campaign, the media mix is everything created by them for that product’s promotion.

For a Media Mix to be effective, the target segmentation must be done right. If a product’s demographic is well studied then this product will be better promoted. The better a Media Mix reflects its target, the more successful and well represented it is.

 

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Image 1: Media Plan. The different ways to promote a product.

 

 

The various Media modes are:

-Print Media (Newspaper, Magazines)

-Digital Media

-Broadcast Media (Radio, Television)

-Network (Telephone)

-Display Media  (Billboards)

-Events

 

 

BUT the most important Media platform nowadays is the Digital Media. Everyone is ONLINE and the most effective marketing techniques are online.

AND in the Digital Media we can find 3 types of Media related to someone’s products or services:

-Purchased Media

-Earned Media

-Owned Media

 

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The Purchased/Paid/Bought Media is “traditional” kind of advertising, where the company pays strangers to have their product or service shown in multiple platforms.

The Owned Media is the first thing a company should have set up. It’s their website and their social media. These are the first things a customer is going to search for ,and so, they need to be a big part of the Media Mix.

The Earned Media is basically the “fame” and the status the company has. The more people talk about the brand and the more people share or repost things related to the company, the more the company’s customer base grows.

 

FOR A BRAND TO BE SUCCESSFUL, THEY HAVE TO FIT EVERY KIND OF MEDIA, AND FOR A PRODUCT OR SERVICE TO BE WELL RECEIVED IN THE MARKETPLACE, THEY HAVE TO FIT ALL THE CRITERIA ABOVE.

Share of voice

SHARE OF VOICE

Share of voice it’s a level of participation about a Company, user or Brand in a specific channel versus our competitors.

In marketing Online it’s very important to know what is the impact (repercussion) of our actions.

THE MOST IMPORANT ITEMS WE SHOULD KNOW ARE:

  1. If we are partaker
  2. If the users speak about us
  3. How they speak about us (in what way)
  4. How often they do it
  5. When they speak about us it’s in a positive or negative way?

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STEPS TO MEASURE THE SHARE OF VOICE

  1. Define goals
  2. Choose indicators
  3. Choose tools
  4. Implement
  5. Analyze
  6. Adjust

 

 HOW WE CAN MEASURE OUR SHARE OF VOICE?

We have to measure the repercussion that we have with the Share of voice which basically is “the level of participation that a user has in a specific channel”.  It’s a fundamental tool (metrics) because once we have measured that we will obtain the information about:

  • How important we are
  • What percentage of communication is about us?
  • How much attention generate our content?

 

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To be more specific than before, we could understand in marketing online that the share of voice show the percentage share of an advertiser in a market defined with a limited time.

 

TOOLS TO MEASSURE OUR SHARE OF VOCE

These are the principal tools to measure the number of conversations about us versus our competitors

  • Social Mention
  • Google Alerts
  • Rankur
  • SamePoint
  • Xopie
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THE MOST IMPORTANT METRICS TO MEASSURE THE RESULTS

We have to know that the most important part it’s choose the right metrics to measure our actions and it’ll be the base of our success. The most common are:

  1. Feedback: Number of users they clicked “Me gusta” in our publications
  2. Number of followers in each social network
  3. Number of times people share our brand
  4. Number of mentions: number of times my brand ins named in different social network (tool: Social mention)
  5. Value of our post (tool: PostRank Analytics)

http://www.juanmerodio.com/2011/metricas-que-te-ayudaran-a-medir-tus-resultados-en-social-media/

 

EXAMPLE ABOUT SHARE OF VOICE

If during the month of October on Twitter the conversation about Ginebra has been about 1.000 twits and our brand has been in 500 of them it means that we have a 50% percent of share of voice in Twitter.

 

SHARE OF VOICE SIMILAR TO MARKET SHARE

This example it’s easy to understand if we compare the share of voice with the Market Share where the item that we measure is the percentage of sales that we have from the whole market.

The unique difference is that in market share we want to know the magnitude of our sales relative to the market and in the share of voice we want to know the magnitude and repercussion of our communication in a specific channel.

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Designing services

We are all familiar with the symptoms of a service failure. Your laptop comes back from the customer service repaired, but with a corner damaged. Your mood goes from happiness to anger, now you will have to argue with the employee, but you have no proof of that so, for you, it will be a long morning…

Examples of poor service are widespread. But, the way managers face them can determinate the success or the failure of the business. Neither blaming the customer for being a liar, nor the employee for being the problem, will help solving the issue.

Even though services can fail because of the incompetence of the people, the reality shows a major problem. There is not a method designed for control, so it’s totally up to the manager.

In the Internet era, when a customer can buy everything with just a click, designing services and analyzing its ROI, (return of investment) can make the difference between getting chosen or skipped.

Modomoto

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Modomoto is nothing but a curated shopping service for men, with two main services. First one, the customer doesn’t have to go shopping, they do it. Second, the customer will only pay for those outfits he wants to keep. Give backs are for free. And the customer doesn’t have any obligation on keeping at least one.

By doing that, they can analyze if what’s been suggested by its team is being accepted, (and getting sales from it) or if not, they will have them back, receiving an indicator of customers disapproval.

Modomoto is just an example of an e-commerce which put the focus on the final user, key in the Internet era. They developed a new concept, but doing things as easy as possible to help the customer through all the website experience.

When we talk about designing services, we talk about customer needs and how the brand can satisfy them. It’s building an atmosphere in which the user feels comfortable. The manager has to know that it’s all about the user interaction with the brand. The business success depends from its result. So make people feel special!  

 

Useful links

Example of customer-centric innovation. (very interesting)

 

Adrià Cabiscol

ONLINE VALUE PROPOSITION

What’s an Online Value Proposition?

An online value proposition is closely related to our brand positioning which answers questions like: who we are, what we offer, which markets do we serve, what makes us different?

In simple terms, a value proposition is a statement of how our product or service will benefit our customer. It clearly defines what we will do for our ideal customer and why we’re better than our competitors.

An adequate online value proposition is a crucial way to maintain visitors in our web and prevent people decide to leave our site. According to ChartBeat, you have between 5 to 30 seconds to hold the attention of a viewer.

 

We need an online value propositions for these reasons…

  • We must be the bests and we need to attract new visitors in the shortest time we can, but there’s only a way: give them a strong online value proposition.
  • A good online value proposition separates our website from our competitors.
  • It helps to provide a focus to marketing efforts to be clear about the purpose of our site.
  • If the proposition is clear, it can be used for facilitate the word-of-mouth and promote the propositions of our company or product.

 

How to create a strong Value Proposition?

  1. Review potential OVPs: unique value propositions are created in two phases: the first one is where we internally decide on the unique benefits of our web site or service, and the second one where we must elaborate a unique message containing the benefit we assure.
  1. Select your target audience: we must know which is our audience and then, create defined personas to find the common needs.
  1. Research your audience: we should ask those personas, what they need and want. It’s important to involved and understand our customers and obtain feedback on early concepts and ideas.
  1. Benchmark OVPs: time to study successful companies of all types and understand their online value proposition. How are they different in the market?
  1. Define your OVP: we should select a main message (headline) and more detailed value messages, but we should think also about images, videos or animations to help engage and entertain. A well designed navigation can define the OVP too.
  1. Communicate OVPs: which messages and channels we will use to communicate OVP’s. OVP’s can be communicated in the search results, in the web, social media, blogs… 
  1. Deliver, review and improve: we must make sure we are in a good position to deliver on our unique value proposition. The Online Value Proposition should reinforce the core brand proposition, and also shows what can a visitor get from your online services that they can’t get from we offline or from competitors.

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OVP example:

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  • What is the company selling?

Online creative courses.

  • What is the benefit of using it?

Learn a new creative skill online on your own time.

  • Who is the target customer for this product or service?

People who want to learn new skills but can’t or don’t want to commit to a physical location.

  • What makes the online offering different from competitors?

Rather than simply saying “learn new skills” or “take online courses” they make it clear that it’s for learning creative skills and in a short period of time. They also use a background video that shows people learning and practicing their newfound skills.

Which are Beroomers OVP’s?

beroomers

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  • What is the company selling?

Beroomers is a marketplace of student rooms, where people can look for an accommodation and book it on-line, and be in contact with their future roommates.

  • What is the benefit of using it?

Find an ideal home and partners online in the easy and fast conditions.

  • Who is the target customer for this product or service?

Students from 18 to 25 interested in accommodation for a period of time mainly in cities like Madrid, Barcelona, Valencia, London, New York and Boston.

  • What makes the online offering different from competitors?

They use a short headline (find your ideal home), a subheadline (book your housing online and start living your experience!) and a representative image. They also use a clear call to action to book online and they explain easily how the web works. Moreover, the web contains own content that is given in the Beroomers blog too. Finally, there’s an option to receive personalized accommodation.

 

Content

Years ago, Marketing has been about interruption. Interrupting a movie you were watching at Tv, an unwanted call… But that is changing… Push is dead! It’s time for Pull! We want costumers to get messages on their own, because we create value for them and they are interested in what we say.

“Content is King” was said by Bill Gates in 1996 but it is now when this is more relevant than ever.

Over time, we have seen he was right with that statement to which he added: Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting.”

We have to know that by the year 2017, 74% of the Internet traffic will be video.

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Content marketing is a marketing technique consisting in creating and distributing valuable content to #attract. We have to create content that customers seek out and share. We are always looking for important things, we share them online and we appreciate this good content.

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If our brand is not creating content, we are missing a great opportunity to create #engagement,  offer #insights and information and gain customer’s trust.

In addition to that, content can help a brand to #differentiate in a noisy marketplace.

If we are constantly adding relevant, useful and new content to our target, they will like to visit our website or social networks continuously.

For creating good content, it’s important to find the spot between what customers do and what they love.  And for that, we have to know very well our consumers.

Here are some interesting videos which explain the story of content, the importance of it and some examples to understand its utility: