Unit 2: Online Buyer Behaviour and

Models

Topic : The Marketing Mix in online context

Subject Code : BBA 304

 Marketing Mix - Introduction

• Marketing Mix: The series of seven key variables – Product, Price, Place, Promotion,
People, Process and Physical evidence – that are varied by marketers as part of the
customer offering.
• Marketing mix provides a simple strategic framework for varying different elements of an
organisation’s product offering to influence the demand for products within target markets.
• Ex-if the aim is to increase sales of a product, options include decreasing the price and
changing the amount or type of promotion, or some combination of these elements.
• Marketing mix is a useful framework to inform strategy development.
• First, it gives a framework for comparing an organisation’s existing services with
competitors.
• Second, it can be used as a mechanism for generating alternative strategic approaches.
Elements of Marketing Mix
 Product: The element of the marketing mix
that involves researching customers’ needs and
PRODUCT developing appropriate products.

•Internet-related product decisions can be

usefully divided into decisions affecting the
core product and the extended product.

•Core product : The fundamental features of

the product that meet the user’s needs.
•Extended product : Additional features and
benefits beyond the core product.
 The main implications of the Internet
for the product aspect of the mix:

❑ options for varying the core

product;
PRODUCT ❑ options for changing the extended
product;
❑conducting research online;
❑velocity of new product
development;
❑ velocity of new product diffusion.
 Contd.

❑ Options for varying the core product : There may be options for new digital products
which will typically be information products that can be delivered over the web.
Ex- additional information to existing customer, addressing new customer segments by
repackaging current information using Internet
Internet also introduces options for mass customisation of products
Mass customisation: Using economies of scale enabled by technology to offer tailored
versions of products to individual customers or groups of customers.

❑Options for changing the extended product : Internet can be used for endorsements,
awards, customer comments, customer lists, warranties, guarantees, money back offers.
 Contd.

❑ Conducting research online : Through online focus group, questionnaire

survey, feedback or support forums, web logs.
❑ Velocity of new product development : Internet can be used to
accelerate new product development since different product options can
be tested online more rapidly as part of market research.
❑ Velocity of new product diffusion : Organisations will have to roll out
new products more rapidly to international markets to remain
competitive.
 • Attributes
PRODUCT • Branding
BENEFITS: • Support Services
• Labelling
 PRODUCT PRODUCT
ATTRIBUTES: BRANDING:
• Attributes include overall
quality and specific features.
INTERNET & BRANDING
• Product features can include Branding : The process of creating and evolving successful brands.
color, taste, style, size, and
speed of service. Brand : The sum of the characteristics of a product or service perceived by a
user.

• Benefits also are the same ⮚ A brand includes a name, symbol, or other identifying information.
features from a user ⮚ A trademark is a brand name.
perspective (that is what will
the attribute do to solve Three essential characteristics of a successful brand:
problems or meet needs and
❑ brand is dependent on customer perception;
wants. e.g. Facebook)
❑ perception is influenced by the added-value characteristics of the product;
❑ the added-value characteristics need to be sustainable.
Contd.
Brand experience : The frequency and depth of interactions with a brand can be enhanced through the
Internet.
Brand equity : The assets (or liabilities) linked to a brand’s name and symbol that add to (or subtract from)
a service.
Measures of brand equity (figure)
PRODUCT SUPPORT PRODUCT
SERVICES: LABELLING:
• Labels identify
⮚ Customer support, during and after purchases, is • Brand names
a critical component in the value proposition. • Sponsoring firms
⮚ Customer service reps help customers with • Product ingredients
installation, maintenance, product guarantees, • Provide instructions
service warranties, etc. to increase customer • Create product recognition
satisfaction.
⮚ Click-and-brick organization’s combine online • Labeling has digital equivalents in the online
and offline service to maximize the customer world.
experience and minimize downtime and
• Online labels provide information about
frustrations.
product usage and features.
⮚ Customer service as a product benefit is an • Online labels also provide extensive legal
important part of customer relationship
information about copyright use on their
management (CRM) webpage (Microsoft).
The Internet created a new set of consumer desired product benefits. Users expect:

⚫ Effective Web Navigation.

⚫ Quick Download Speeds

⚫ Clear Site Organization

⚫ Attractive And Useful Site Design

⚫ Secure Transactions

⚫ Privacy

⚫ Free Information Or Services

⚫ User-friendly Web Browsing And E-mail Reading.

 Byju’s Product
• It sell its products under 5 broad categories, and each of these serves as
separate product lines. All of its products are sold under the brand name of
BYJU s App Spreading Love for Learning.

• BYJU s App Spreading Love for Learning sells products that are highly
differentiated, with various features offered to customers that competitors
don’t offer. Its products are therefore considered to be unique.

• Its products are perceived to be of higher quality than that of competitors.

Therefore, customers are willing to pay a higher price for these.
• BYJU s App Spreading Love for Learning sells products that are famous for its
traditional design that is also practical for customers to use
Byju’s kit
Byju’s App
 Price : The element of the marketing mix that involves
defining product prices and pricing models.

Main implications of the Internet for the price aspect

of the mix :
PRICE ❑ increased price transparency and its implications on
differential pricing;
❑ downward pressure on price (including
commoditisation);
❑ new pricing approaches (including dynamic pricing
and auctions);
❑ alternative pricing structure or policies.
 Increased price transparency:

❑Customer knowledge about pricing increases due to increased availability of pricing

information is called price transparency.
• Differential pricing :Identical products are priced differently for different types of
customers, markets or buying situations.
• A supplier can use the technology for differential pricing, for example, for
customers in different countries. However, if precautions are not taken about price,
the customers may be able to quickly find out about the price dis- crimination and
they will object to it.
Offering reduced prices to customers who bring in a coupon and sending them a
rebate check after a purchase are other examples of types of differential pricing.
 Increased price transparency:

• Commoditization : The process whereby product selection becomes more

dependent on price than on differentiating features, benefits and value-
added services.
• Satisficing behaviour : Consumers do not behave entirely rationally in
product or supplier selection. They will compare alternatives, but then may
make their choice given imperfect information.
 Downward pressure on price :

❑Internet also tends to drive down prices since

Internet-only retailers which do not have a Kotler (1997) suggests that in the face of price cuts
physical presence do not have the overhead of from competitors in a market, a company has the
operating stores and a retailer distribution following choices which can be applied to e-
network. commerce:
In a perfect market, organisation will be less able to (a) Maintain the price (assuming that e-
control prices, but must respond to competitors’ commerce-derived sales are unlikely to decrease
pricing strategies. greatly with price since other factors such as
A range of options that are available for setting customer service are equally or more important).
pricing : (b) Reduce the price (to avoid losing market
• Cost-plus pricing share).
• Target-profit pricing (c) Raise perceived quality or differentiate
product further by adding-value services.
• Competition-based pricing
(d) Introduce new lower-priced product lines.
• Market-oriented pricing
New pricing approaches

1. Forward auctions :

● Item purchased by highest bid made in bidding period.

● In an ordinary auction (also known as a 'forward auction'), buyers compete to
obtain goods or services by offering increasingly higher prices.
● Forward auctions are, essentially, eAuctions in which bidding starts with the
lowest possible price and the bid value increases gradually.
● Such auctions usually feature a single supplier offering goods or services and
buyers competing against each other by submitting higher bids. The highest
bid wins.
New pricing approaches

2. Reverse auctions :
● Item purchased from lowest-bidding supplier in bidding period.
● in a reverse auction, the sellers compete to obtain business from
the buyer and prices will typically decrease as the sellers
underbid each other.
● An on-line Reverse Auction (RA) is an internet-based (electronic
commerce) acquisition tool that allows the government to
procure goods and services from suppliers in a competitive
environment in which sellers, anonymously, bid prices down until
the auction is complete.
New pricing approaches

3. Aggregated buying :
● A form of customer union where buyers collectively purchase a
number of items at the same price and receive a volume discount.
● The Buyer Aggregator brings together large numbers of individual
buyers so that they can gain the types of savings that are usually
the privilege of large volume buyers.
 Alternative pricing structure or policies :

Further pricing options which could be varied online include:

• basic price
• Discounts
• add-ons and extra products and services
• guarantees and warranties
• refund policies
• order cancellation terms.
 Byju’s Price
• Competitive based pricing strategy. This is because the data on
competitors is easily available due to a large number of
competitors that exists within the industry.
• Sells its products at a higher price than competitors. This is
because it offers more features, and the high price makes up for
these.
• It currently uses product bundle pricing as well, where products
are bundled together and sold at prices lower than the total of
individual items.
• It also uses an optional product pricing strategy for certain
products, where it offers a price for the base product and
separate prices for the accessories that come along with it.
Prices of course offered
 Place : The element of the marketing mix that
involves distributing products to customers in
line with demand and minimising cost of
inventory, transport and storage.

Main implications of the Internet for the Place

aspect of the mix are:
PLACE
❑ place of purchase;
❑ new channel structures;
❑ channel conflicts;
❑ virtual organisations.
Place of purchase :
Locations for purchase include:
Place of purchase :

Evans and Wurster (1999) have argued that there are three aspects of ‘navigational
advantage’ that are key to achieving competitive advantage online. They are :
Reach : how many customers a business can connect with and how many products it
can offer to those customers.
Richness : This is the depth or detail of information which is both collected about the
customer and provided to the customer.
Affiliation : This refers to whose interest the selling organisation represents –
consumers or suppliers – and stresses the importance of forming the right partnerships.

Localisation : Tailoring of web site information for individual countries or regions.

New channel structures :

❑It covers:
• Distintermediation
• Reintermediation
• Countermediation
Channel conflicts:

❑Disintermediation gives a company the opportunity to sell direct and increase

profitability on products, it can also threaten distribution arrangements with
existing partners.
• To avoid channel conflicts, the appropriate combination of channels must be
arrived at.
• Internet channel strategy will, of course, depend on the existing arrangements for
the market.
❑If a geographical market is new and there are no existing agents or distributors,
there is unlikely to be channel conflict in that there is a choice of distribution
through the Internet only or appointments of new agents to support Internet
sales, or a combination of the two.
 Virtual organisations:

❑Kraut et al. (1998) suggest the following features of a virtual

organisation:
• Processes transcend the boundaries of a single form and are not
controlled by a single organisational hierarchy.
• Production processes are flexible, with different parties involved at
different times.
• Parties involved in the production of a single product are often
geographically dispersed.
• Given this dispersion, coordination is heavily dependent on
telecommunications and data networks.
 Byju’s Place/Distribution
• It sells product through two marketing channels,
• first is where it sells directly to its customer through its online website and
• second is to sells wholesalers who then sell to different retailers located all over the
country.
• Its products present on over 500 retailers throughout the country and It
follows an intensive marketing strategy where it tries to include its products on
as many retailers as possible.
• App easily available for download on both android and ios and online website
to log in easily.
• It follows an omni-channel distribution system where it has integrated its
online and offline stores to allow customers easy access to its products.
 Promotion :The element of the marketing
mix that involves communication with
customers and other stakeholders to inform
them about the product and the
organisation.

Main elements are:

PROMOTION • advertising;
• sales promotion;
• personal selling;
• public relations;
• direct marketing.
 Contd.

Promotion element of the mix:

• reviewing new ways of applying each of the elements of the
communications mix
• assessing how the Internet can be used at different stages of the buying
process;
• using promotional tools to assist in different stages of customer relationship
management from customer acquisition to retention.
 The Promotion element of a marketing plan also requires three
important decisions about investment for the online promotion or
the online communications mix:

• Investment in site promotion compared to site creation and

maintenance
• Investment in online promotion techniques in comparison
to offline promotion
• Investment in different online promotion techniques
Online Advertising

Paid Social media Advertising

Paid Search Advertising
Native Advertising

Pre- and Mid-Roll Advertising

 Online sales promotion Online Customer contact

Online public relation

 Byju’s Promotion mix
• It uses traditional media, which includes an advertisement on
television and radio due to its large reach and ability to attract a
large number of people.
• It advertises on various social media platforms with a focus on
YouTube, Facebook and Twitter due to the high monthly usage of these.
It has over one hundred thousand likes or customer following on these
pages, which are exposed to frequent content uploaded by BYJU s App
Spreading Love for Learning.

• BYJU s App undergoes various sales promotion taking part in various

trade exhibitions and events around the year.

• BYJU s App undergoes personal selling, with a large sales force to

increase its presence in retail stores.
 People : The element of the marketing
mix that involves the delivery of service
to customers during interactions with
customers.
Main consideration for the People
element of the mix is the review of how
staff involvement in the buying is
PEOPLE changed, either through new roles such
as replying to e-mails or online chat
enquiries or through them being
replaced through automated online
services.
 Contd.
Some options are :
• Autoresponders.
• E-mail notification.
• Callback facility.
• Online chat.
• Co-browsing.
• Frequently asked questions (FAQ).
• On-site search engines.
• Product selection tools.
• Virtual assistants
 Byju’s People
• It has sales team that play a vital role in its marketing efforts.
These people have been trained in persuasive techniques, but
also to show respect to the business customers taking into
consideration their preferences.

• People working in its customer service department. These are

contacted by customers in case of any issues within the product,
and these people guide customers through the process of getting
the issues resolved. These people are trained to respect the
customers and try their best to get their issues resolved.

• BYJU s App Spreading Love for Learning has people working at

retail stores who help the customer on site, by answering any
questions or helping them decide the product that best suits their
needs.
 • The process component of the marketing
mix refers to process adapted by the
company to co-ordinate all the marketing
activities which are covered under price,
place, promotion and people.
• It is very important for Internet marketing
PROCESS too. You need to ask if you have resiliency
in your site, the ability to handle large
number of customers, the proper support
at all times, and a system to answer
FAQs.
 Byju’s Process
• It make sure that its products are always available at retail stores has systems
installed where retailers can notify when their inventory levels are low.
• BYJU s App Spreading Love for Learning provides them with more products
while ordering its productions to replenish its stock. This ensures that products
are always available to customers when needed.
• It has an online delivery process, where orders are received in the computer
system and based on these orders, the relevant product from the inventory is
shipped to the delivery service provider. Easy download of app on mobile.

• It is actively involved in researching market opportunities in order to

understand customer needs. It also develops understanding regarding customer
needs through feedback collected at store, its helpline or social media pages.
 • The element of the marketing mix that involves
the tangible expression of a product and how it
is purchased and used.
• Online, it is difficult for the customer to know
how the product is going to benefit them.
• So it will be necessary to communicate in a way
PHYSICAL that the customer will be able to feel confident
EVIDENCE in purchasing a product or service.
• You can do reports and articles that will excite
the customers about the product and the
service.
• Video and images also help the customer feel
comfortable.
 Byju’s Physical Evidence
• BYJU s App Spreading Love for Learning has an online website that is user-friendly and
allows customers to view its products in high quality images taken from various
angles.
• BYJU s App Spreading Love for Learning sells its products in a distinct color packaging
that easily identifiable
Website
 7P’s Marketing Mix (internet context):

Product : Opportunities for varying the core product through

new information-based services and also the extended
product should be reviewed.
Price: The Internet leads to price transparency and
commoditisation and hence lower prices.

SUMMARY Place: Place refers to place of purchase and channel structure

on the Internet.
Promotion : online promotion
People, process and physical evidence.