Online marketplace analysis:

Macro-environment
Unit 34 – Level 5
Lecturer:
 TOPIC
OUTLINE
01Technological forces

02Economic forces

03Political & Legal forces

04Social forces
Technological forces
Digital Marketing
Internet technology
 Internet: The physical network that links computers across the globe. It consists of the
infrastructure of network servers and communication links between them that are used to hold and
transport the vast amount of information.
 Web content is stored on web server computers and then accessed by users who run desktop or
mobile web browser software such as Google Chrome, which display the information and allow
users to interact and select links to access other websites.
 Rich media, such as audio or video content, can also be stored on a web server, or a specialist
streaming media server.
 Promoting website addresses is important to marketing communications. The technical name for
web addresses is uniform (universal) resource locator (URL)
Digital Marketing
Cyber security
Security is a key technology factor for marketers to consider as it is a major concern for Internet users
everywhere.
From a consumer point of view, these are the main security risks involved in an e-commerce transaction:
1. Confidential details or passwords accessed on user’s computer
2. Transaction or credit card details stolen in transit
3. Customer’s credit card details stolen from merchant’s server;
4. Customer’s details accessed by company staff (or through a hacker);
5. Merchants or customers are not who they claim to be, and the innocent party can be drawn into a
fraudulent (fake) trading situation

 Digital marketers should ensure a safe digital environment for their users
Digital Marketing
Mobile Apps
 Mobile apps: A software application that is designed for use on a mobile
phone, typically downloaded from an App store such as Google Play or
App
 Research shows that 90% of mobile time is used in mobile apps.
Perhaps not surprising since the majority of app time is in social media
applications.
 Through reviewing the types of apps that have proved popular, businesses
can assess the potential for them to develop applications for their
audiences.

Image: Mobile App of The Coffee House

Digital Marketing
Mobile Apps

 Social location-based marketing:

Where social media tools give users the
option of sharing their location, and hence
give businesses the opportunity to use
proximity or location-based marketing to
deliver targeted offers and messages to
consumers and collect data about their
preferences and behaviour
Digital Marketing
Mobile Apps
 QR Codes (Quick Response code): A two-dimensional code used for direct response
 used in promotional initiatives to allow target consumers to have quick access to a variety of information,
such as instant access to email addresses, phone numbers or business cards.

Case study:
Campaign SOUND OF SUMMER of Coca-cola to
drive people to the Coke Studio™, where they can
scan and access live music streaming, VIP events,
and more.
Digital Marketing
Mobile Apps
Discussion:
1. Are apps a strategic priority for everyone?
 The goal of apps for most organisations will be to increase awareness and sales, or publisher’s
revenue from advertising or subscriptions.

2. Do we build our own app and/or leverage existing apps?

 advertising and sponsorship options may be a more cost-effective method to build reach and awareness
of a brand.

3. How to best promote mobile apps?

 the most popular methods of app discovery are:
 searching the app store;
 recommendations from friends and family;
 mention on device or network carrier page;
 email promotion;
 offline mention in TV and print.
Economic forces
Digital Marketing
Economic Forces
 Globally, economic influences affect the level of success of business.
 Economic forces affect supply and demand and consequently it is important for digital markets to identify
which economic influences they need to monitor.
 Economic Forces include:
• Market growth and employment:
• Economic growth
• Interest and exchange rates
• Globalization
Digital Marketing
Economic Forces
 The impact of changes in demand can have far-reaching implications for digital marketing initiatives as
this will affect the strength of market growth.
 Sophisticated technology enables companies to analyse purchasing patterns and forecast future
demand. But this is only part of the picture of consumption that drives modern global economies.
 It is also important to monitor changes to trends in order to be able to make realistic predictions about
how consumers and companies are going to behave in the future.
Digital Marketing
Economic Growth
 Throughout history there have been periods of strong economic growth followed by eco-nomic downturn
and recession.
 The “dot.com” period of boom and bust (beginning of the 21st century) highlighted the fragility of high-
tech markets and many of the emerging Internet companies, which had high-value stock market
valuations, crashed and no longer exist.
 When there is economic growth during periods of boom, companies should be prepared to experience
increased demand for their products and services.
 During periods of slump, sales may decline as customers revaluate their needs and spending
requirements.
 The challenge is predicting the next boom or slump as they need to consider investments, research
and development and if they fail to correctly anticipate the changing state of the economy they may
encounter difficulties or miss opportunities.
Digital Marketing
Globalization
 In the digital world, globalisation reflects the move towards international trading in a single global
marketplace and the blurring (less) of social and cultural differences between countries.
 A major driver of Internet adoption by commercial organisations is the opportunity for market expansion
in domestic and international markets.
 However, digital marketers need to be aware of the implications of trading in global markets and
consider whether to develop bespoke (customized approach) branding and marketing campaigns
Political & Legal forces
Digital Marketing
Political forces
 The political environment is shaped by the interplay of government agencies, public opinion and
consumer pressure groups and industry-backed organisations. Interaction between these organisations
helps to create a trading environment with established regulations and privacy controls
 Political forces include:
 Internet governance
 Taxation
 Tax Jurisdiction
Digital Marketing
Taxation
 How to change tax laws to reflect the globalisation through the Internet is a problem that many
governments are grappling with.
 The fear is that the Internet may cause significant reductions in tax revenues to national or local
governments if existing laws do not cover changes in purchasing patterns.
 In the past both Google and Amazon have been accused of routing their tax affairs through low-tax
jurisdiction economies; Amazon has been found to be paying 11 times less corporation tax in the UK
than other bookstores.
Digital Marketing
Legal forces
 Laws develop in order to provide a framework of control and regulations that aim to enable individuals
and businesses to go about their business in a legal and ethical manner.
 However, laws are open to interpretation and there are many legal and ethical considerations in the
online trading environments.
 Many laws aim to prevent unethical marketing practice, so marketers have to understand and work
within this regulatory framework.
Digital Marketing
Legal forces
The most important legal issues for digital marketers:
1. Data protection and privacy law: Anti-spam legislation
2. Disability and discrimination law
3. Brand and trademark protection
4. Intellectual property rights
5. Online advertising law
Digital Marketing
Legal forces
Figure 3.10 suggests some of the issues that should be considered when a data subject is informed of
how the data will be used.

Important issues are:

● whether future communications will be sent
to the individual (explicit consent is required for
this in online channels; this is clarified by the
related Privacy and Electronic Communications
Regulation Act which is referred to below);
● whether the data will be passed on to third
parties (again explicit consent is required);
● how long the data will be kept.
Digital Marketing
Legal forces

Table 3.1:
Significant laws which control digital marketing
Social forces
Digital Marketing
Social forces
 Social forces are closely linked with culture and have significant implications for digital marketing.
 The key factors that make up these forces are social communities based on:
• Demographics
• Social exclusion
• Culture
Digital Marketing
Social forces
An indication of how social perceptions shape access is clear from a UK government-sponsored survey
(Booz Allen Hamilton, 2002) of perceptions in different countries. It noted that social barriers to adoption
of the Internet included:
 No perceived benefit
 Lack of trust
 Security problems
 Lack of skills
 Cost.
Digital Marketing
Social forces
Main obstacles for purchasing online of Vietnamese consumers:

Other 1%
Complex payment method 12%
Non-professional website 13%
Fear of low quality logistics service 23%
Fear of private information security 26%
Fear of low quality after sale services 27%
Fear of higher price 42%
Fear of private information security 58%
Fear of low quality products 72%
0% 10% 20% 30% 40% 50% 60% 70% 80%

Source: Vietnam e-commerce white book 2020 (iDEA, 2020)

Digital Marketing
Social forces
Common reasons of not buying online by Vietnamese eCommerce customers:

Complex purchasing system 11%

Lack of non-cash payment method 13%

Lack of goods's choices 15%

Lack of online purchase experience 17%

Lack of infomation to make purchase decision 23%

Fear of private information security 38%

Lack of trust in the seller 40%

Hard to check product's quality 47%

More convenience when shopping in outlet 55%

0% 10% 20% 30% 40% 50% 60%

Source: Vietnam e-commerce white book 2020 (iDEA, 2020)

Digital Marketing
Social forces
Discussion:

1. How to know if customers are facing psychological barriers in the buying decision process?
Suggestion:
 Market research
 Consumer research
 Read report from Customer Services departments
 Analyze digital and ads report

2. How to overcome fear for purchasing online of Vietnamese consumers?

Suggestion:
 Improve quality of online communication
 Referral programs
 Managing online and offline experience through CRM
 Managing online reputation
 Integrated online and offline communication/Omni channels
 Build a trusted website/app
Digital Marketing
Social forces
Discussion:

2. How to overcome fear for purchasing online of Vietnamese consumers?

Other 1%
Registered website/app with the Ministry of… 18%
Reputable label 21%
Information from trusted medium (TV,… 30%
Good review from other customers 56%
Referral from friends/family 67%

Reason to choose e-commerce platform to purchase

Source: Vietnam e-commerce white book 2020 (iDEA, 2020)
Digital Marketing
Social forces
Factors that influence online consumer behavior by Ph. Kotler (2003).
Activity:
Investigate the influence of the digital environment for effective marketing of business organisations