INFS5885 E-Business T1 2022
Week 5 Lecture
EB Market Analysis and Marketing Strategies
Lecturer: Zixiu Guo
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2Week 5
Learning
Objectives
L1
Understand the fundamental concepts of marketing concepts
including the 4P’s and 4C’s of marketing, product- and customer-
based marketing strategies as well as mass marketing.
L2
Why Market Segmentation is Important
L3
Understand key components of EC marketing, and use digital
marketing framework to understand customer decision making
journey
L4
Application of Means-End-Chain Theory and laddering interview
technique for marketing strategy development
3Week 5 Lecture Milestone
• 4P’s and 4C’s
• Product-based, customer-based and mass-marketing
• Market segmentation
Key marketing
concepts
• Why EC marketing?
• Digital marketing framework
• The marketing funnel and consumer decision journey
• Trust and loyalty in EC
• eWOM
Marketing in EC
• Means-End-Chain (MEC) Theory
• Laddering Analysis Technique
• Developing Marketing Strategies based on Laddering Analysis
Findings
Market analysis
framework
4❖ Readings for Week 5
– Textbook Chapter 4
– Digital Marketing: Social Media and Mobile
Marketing Online Tutorial (HBP online tutorial)
– Dollar Shave Club case (Week 2 provided)
– Xiao, L., Guo, Z. & D’Ambra, J. Benefit-based O2O
commerce segmentation: a means-end chain
approach. Electron Commerce Research, 19, 409–
449 (2019)
Reading
List Week 5
2-5
• 4P’s and 4C’s
• Product-based, customer-based and mass-marketing
• Market segmentation
Key marketing
concepts
• Why EC marketing?
• Digital marketing framework
• The marketing funnel and consumer decision journey
• Trust and loyalty in EC
• eWOM
Marketing in EC
• Means-End-Chain (MEC) Theory
• Laddering Analysis Technique
• Developing Marketing Strategies based on Laddering Analysis
Findings
Market analysis
framework
Week 5 Lecture Milestone
Figure 1.1 A simple model of the marketing
process
Armstrong, G., Denize, S., Volkov, Adam, S., Kotler, P., & Ang, H. S. 2021. Principles of
Marketing. 8 ed: Pearson Australia, pg
7Three Key Objectives of (EC) Marketing
https://marketingland.com/attract-convert-retain-2-0-93753
Drivers of Marketing – Needs & Wants
Self-actualisation
Esteem
Emotional
Safety
Physiological
Deficiency
Growth
Adapted from Maslow, A. H. (1943). A theory of human motivation. Psychological Review, 50, 370.
Hierarchy of Needs
9Marketing Mix is one of the most commonly
used marketing strategies: 4Ps and 4Cs
If you don’t know how to market your products, then your products have no market.
10
The Four P’s of Marketing
https://marketingmix.co.uk/4ps-marketing/
11
Product-Based
Marketing
Strategies
❖ Firms often think in terms of products and services
sold
• This is a useful Web site design when
customers use product categories
• Web site examples: Kmart, Woolworths
• This may not be a useful Web site design when
customers look to fulfill a specific need
• For instance, Hellofresh
• Customers' "job to be done" is the key for
identifying value proposition
❖ Design online websites(online platforms) to meet
individual customer needs, for instance, IKEA
• Offer alternative shopping paths
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The Four C’s of Marketing
CUSTOMERS
Find what customer wants and
needs. Then create the product,
service and solution. (customer
needs)
COSTS
Consider all costs involved in
satisfying your clients, including
costs that clients themselves will
have to incur to satisfy their needs.
COMMUNICATIONS
All interactions between your
organization and clients.
CONVENIENCE
How and where does the customer
want to purchase? (product and
service distribution)
Target Market
To delight your
customers
through
interactive
communication
at their
convenience that
will enable you
to increase
customer value
at a lower cost.
https://www.cleverism.com/understanding-marketing-mix-concept-4ps/
13
Customer-Based
Marketing Strategies
• Web sites to meet various types of customers’ specific
needs
– Initial step: identify customer groups sharing common
characteristics (customer segmentation)
– Make site more accessible and useful for each group to
meet their specific needs
• Companies need to take view beyond internal perspective
– e.g., UNSW website for the needs of different stakeholders
(current students, prospective students, parents of students,
potential donors, faculty)
• Products/service (Pipeline) to Platform:
– Amazon: retailer to Amazon Marketplace
– Google: search engine to search advertising
– Apple: iPod to iTunes Store in 2003 and the App Store in
2008.
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Marketing’s 4Ps to 4Cs
? ? ? ?
15
Mass Marketing and
Market
Segmentation
• From mass marketing to personalised marketing
– Mass Marketing and Advertising
• Targeting at everyone
• Outbound marketing
– The ways that firms reach out to target consumers
– Benefits and challenges
– Market Segmentation
• Targeting at a subset of customers or prospects
• Three categories to identify market segments
– Geographic segmentation
– Demographic segmentation
– Psychographic segmentation
• Other segmentation methods
– Behavioral-based segmentation
» Based on consumer behavior to segment
» E.g., usage timing/occasion and usage rate etc.
– Attribute-based segmentation
» Based on product/services attributes to segment
» E.g., segment consumers based on e-retail store
design feature
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Motivation-Based
Segmentation
• What are the problems with above market segmentation
methods?
– They only explain what they prefer
– But not why they behave like that, i.e., no casual relationship is identified
• Motivation-based (benefit-based) segmentation
– Motivation is defined as a desire, need, or process that influences an
individual’s goal-directed behavior (Smith et al. 1982)
– A benefit refers to the total advantage or satisfaction offered by business
that meet the consumers' needs or wants (Part and Choi 2009)
– It is benefits, needs, desires, values, and goals that determine individual
behavior (McCarthy and Wright 2004)
– Why you shop online, what are your shopping needs to be fulfilled, what
are benefits you seek when you shop online.
– This explains not only what they do, but also why they do online, then e-
business owners know how they should design their e-business to fulfil
consumers’ needs
McCarthy, J., and Wright, P. C. 2004. Technology as Experience. Cambridge, USA: MIT Press.
Smith, R. E., Sarason, I. G., and Sarason, B. R. 1982. Psychology: The Frontiers of Behavior. New York: Harper & Row.
Park, J.-H., and Choi, H. J. 2009. "Factors Influencing Adult Learners’ Decision to Drop out or Persist in Online Learning," Educational Technology & Society
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Personalised
Marketing
Personalized marketing/Relationship
marketing/one to one marketing
• Focusing on cultivating deeper, more meaningful
relationships with customers to ensure long-term
satisfaction and brad loyalty.
• One-to-one marketing
– Marketing that treats each customer in a unique way
• How to achieve?
Week 7 Lecture Milestone
• 4P’s and 4C’s
• Product-based, customer-based and mass-marketing
• Market segmentation
Key marketing
concepts
• Why EC marketing?
• Digital Marketing Framework
• The marketing funnel and consumer decision journey
• Trust and loyalty in EC
• eWOM
Marketing in EC
• Means-End-Chain (MEC) Theory
• Laddering Analysis Technique
• Developing Marketing Strategies based on Laddering Analysis
Findings
Market analysis
framework
Traditional vs Digital Marketing
19 https://www.lyfemarketing.com/blog/digital-marketing-vs-traditional-marketing/
20
Digital
Marketing
Framework
Gupta, Sunil, and Joseph Davin. "Marketing Reading: Digital Marketing." Core Curriculum
Readings Series. Boston: Harvard Business Publishing 8224, 2015.
Company Consumers
Outbound Marketing
Inbound Marketing
Mobile
Technology
Social
Media
Three different types of channels
Media
Paid Earned Owned
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Digital
Marketing
Framework
• Outbound Marketing: the ways that firms reach out to
target customers
– Search Ads
– Display Ads
– Video Ads
• Inbound Marketing: the ways company ensure they can be
found when customers search for a service or product
– Position company as a target customers search for.
– Two drive forces:
• The diminished influence of advertising
• The rise of consumer search.
– Search engine optimisation (SEO)
• Getting found
• Creating content
• Optimising landing pages
• Social Media and Mobile Technologies (Week 8)
Gupta, Sunil, and Joseph Davin. "Marketing Reading: Digital Marketing." Core Curriculum
Readings Series. Boston: Harvard Business Publishing 8224, 2015.
Benefits
Personalised
Scalable
reach
Scalable cost
MeasurableTrackable
Valuable
insights
More
possibilities
Your
business
Brand
Goals
Marketing
goals
Target
audience
Budget
https://diggitymarketing.com/types-of-digital-marketing/
23
Marketing Funnel
● Multiple interpretations of the funnel, but
ultimately they all tell the same story—how to
convert your leads (potential customers) to
your consumers
● In practical terms, the questions are:
○ How does your digital strategy reach
audiences at each stage of the funnel?
○ Most importantly, how does it move
them through the funnel?
● From theory to execution, the marketing
funnel often forms the basis of your digital
marketing strategy
Discovery/Awareness
Consideration/evaluation
Purchase decision
https://www.uscreen.tv/video-business-school/marketing-funnel-vod-sell-videos/
24
Is Traditional
Marketing Funnel
still Working in
EC?
• No longer, as customers become more
informed, connected, and empowered than
before.
• The buying process is no longer linear
• What are consumers' new decision journey in
digital age?
• The key focus is on customer's experience,
rather than purchase*
• Decision journey: circular
• Orbit: pull customers in, create gravity (inbound)
• Relationships: more important than transaction
• Experience: leads to loyalty , gravity and WoM.
*Marketing Can No Longer Rely on the Funnel, Cara France and Mark Bonchek, 2014, HBR
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-decision-journey#
https://hbr.org/2012/03/how-top-brands-pull-customers
25
Marketing Funnel in Digital Marketing
https://www.uscreen.tv/video-business-school/marketing-funnel-vod-sell-videos/
Inbound Marketing
Trust in E-Commerce
26
Trust
• The psychological status of
willingness to depend on
another person or organization
Online trust
• The belief that an online website
or other digital entities can
deliver what they promise so
that the recipient trusts them
• Why is trust so important in e-
commerce?
• What can cause loss of trust?
• If trust is lost, can it be
regained?
FIGURE 4-2 Trust in three communication modes
How to Increase Trust in E-Commerce
• Improve Your Website
• Establish Trustworthiness
– Integrity, competence, security
– E.g., Dell offered online secure guarantee to online shoppers
• Affiliate with an Objective Third Party
– Online privacy seal program: BBB (better business bureau) marketing focused,
TRUSTe privacy focused
• Leverage on Word of Mouth (WOM) or eWOM
– Systems used to establish trust among members of online communities where
parties with no prior knowledge of each other use the feedback from their peers
to assess the trustworthiness of the peers in the community
– e.g., through reviews, tweets, blog posts, “likes,” “pins,” images, video
testimonials
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Tru
st
Turban et al, page 436
Loyalty in E-Commerce
• Why is loyalty important?
– Customer loyalty
• A deep commitment to repurchase or re-patronise a preferred product/service continually
in the future, thereby causing repetitive same-brand or same brand-set purchasing,
despite situational influences and marketing efforts that have the potential to cause
switching behavior
• Examples of loyalty program?
– E-loyalty
• Customer loyalty to an e-tailer or loyalty programs delivered online or supported
electronically
• How do we assess e-loyalty?
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31
Five Stages of Customer Loyalty
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Electronic Word-of-Mouth (eWOM)
What is eWOM?
“ The dynamic and ongoing information exchange process between potential, actual, or former
consumers regarding a product, service, brand, or company, which is available to a multitude of
people and institutions via the Internet.”
– Informal communications directed at consumers through internet-based technology(online)
– Ongoing and dynamic information exchange as messages can spread online spontaneously
– Driven by the rapid growth of online communication (e.g., social media, websites, blogs, etc).
– Anonymous and interactive nature of online communication allows the influence of eWOM on
consumers’ brand and product choices
Ismagilova E., Dwivedi Y.K., Slade E., Williams M.D. (2017) Electronic Word-of-Mouth (eWOM). In: Electronic Word of
Mouth (eWOM) in the Marketing Context. SpringerBriefs in Business. Springer, Cham
33
Differences between Traditional WOM and eWOM
Characteristics
Size of the
network
In traditional WOM communication information is shared between small groups of individuals and
societies while the impact of eWOM can reach further than local community, because consumers all
over the world can have an access to it via the Internet.
Context Traditional WOM communications usually happen in a face-to-face context, while eWOM takes place
in a more complex computermediated environment.
Tie strength While traditional WOM happens between relatives, friends, and acquaintances (strong ties), most of
eWOM occurs between strangers (weak ties).
Privacy In traditional WOM, conversations are mostly private in nature, while in eWOM they are more visible.
Anonymity While in traditional WOM reviewer is known, in eWOM reviewer is mostly anonymous.
Speed of
diffusion
In traditional WOM, people share information amongst small groups of individuals in synchronous
mode. eWOM involves multiway information sharing in asynchronous mode, which results in high
speed of diffusion.
Persistence and
accessibility
eWOM communications are more persistent and accessible for an indefinite period of time.
Measurability eWOM communications are more measurable comparing to traditional WOM.
Volume eWOM available online is more voluminous in quantity compared to traditional WOM.
Week 5 Lecture Milestone
• 4P’s and 4C’s
• Product-based, customer-based and mass-marketing
• Market segmentation
Key marketing
concepts
• Why EC marketing?
• Digital Marketing Framework
• The marketing funnel and consumer decision journey
• Trust and loyalty in EC
• eWOM
Marketing in EC
• Means-End-Chain (MEC) Theory
• Laddering Analysis Technique
• Developing Marketing Strategies based on Laddering Analysis
Findings
Market analysis
framework
35
Means-End-
Chain
(MEC) Theory
• MEC is used to obtain insights into consumer buying motivations, by
viewing consumers as a goal-oriented decision maker, who choose to
perform behaviors that seem most likely to lead to desired goals.
• The central tenet of the theory is that product, service or behaviour
meaning structures stored in memory consist of a chain of
hierarchically-related elements.
• Assumptions:
– People do not use products for the sake of the product, but for
the positive consequences that their consumption can provide,
which is, in turn, important for the fulfillment of their personal
goals
– Consumers make voluntary and conscious choices between
alternative products/services.
REYNOLDS, T. J. & GUTMAN, J. 2001. Advancements in laddering. In: OLSON, J. C. & REYNOLDS, T. J. (eds.) Understanding
consumer decison making: the means-end approach to marketing and advertising strategy. Mahwah, NJ: Erlbaum
36
MEC Theory
Applications
• The MEC theory has been successfully adopted by studies
exploring consumers’ buying motivations
• The attribute-consequence/benefit-value/goal sequence
explains how and why product attributes are important.
• An understanding of the structure of attributes,
consequences, and values depicted in MECs facilitates a
“motivational perspective” because it uncovers the
underlying reasons why certain attributes or expected
consequences are desired (Reynolds and Gutman 2001).
• Thus, MEC is a very popular marketing theory guiding
marketing communication and product development
Once again, knowing customers’ “jobs to be done” is the key.
37
https://www.slideshare.net/fahmej/consumer-behaviour-measuring-means-end-chains
38
Case Study:
Benefit-based O2O Commerce Segmentation
• Customer segmentation is the first step to generate value proposition.
• Why?
• How to segment your customers?
• Benefit-based segmentation
• By using MEC theory and “laddering interview technique”, this study
identified what attributes required for O2O business (how) in order to
meet customers’ needs (what they want), which, in turn, leads to their
value realization (why they want what they want)---- happy customers
Xiao, L. et al 2019 “Benefit-based O2O Commerce Segmentation: A Means-end Chain Approach”, Electronic Commerce Research
Case Study:
Benefit-based Online to Offline (O2O)
Commerce Seg entation

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41
2-42
Why is MEC Useful in Marketing Strategy Development?
• It allows you to understand why customers purchase
the products
– Their personal goals/values fulfilments
– This is where value propositions can be derived
• It allows you to develop different marketing strategies
for different segment customers
– In terms of 4C or 4P to develop marketing strategies
• It allows you to design different products to meet their
different needs (attributes/features)
43
Hierarchical Value Map of Positive Online Game UX
F10
Pleasure
F8
Personal
Growth
F6
Immersion
F9
Player
Engagement
F11
Pride
F12
Relatedness
F5
Game
Complexity
F4
Feedback
F2
Community
Engagement
F7
Novelty
F13
System
Quality
F3
Competence
F1
Autonomy
6
5
3 5
3 6 3
4 34
5
3
5
9
3
5
9 5
5
Positive UX
Attributes
Needs
WHY
WHAT
HOW
Benefits
Values/Goals
Attributes
44
Laddering Analysis Technique
• Workshop exercise
Week 5 Lecture Recap
• 4P’s and 4C’s
• Product-based, customer-based and mass-
marketing
• Market segmentation-Motivation based
segmentation
Key marketing concepts
• Why EC marketing?
• Digital Marketing Framework: outbound and inbound
marketing
• The marketing funnel and consumer decision journey
• Trust and loyalty in EC
• eWOM
Marketing in EC
• Means-End-Chain (MEC) Theory
• Laddering Analysis Technique
• Developing Marketing Strategies based on Laddering Analysis
Findings
Market analysis
framework
What Happens Next
• Week 6 is flexible week, no lecture, no workshop, and no discussion
forum
• Week 7 will be back to normal, with lecture and workshop
• No discussion forum for week 7
• Group assignment is available
47